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 quarterly period ended December 31, 1995
  
                                         OR
  
            TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934
  
            For the transition period from __________ to _________
  
                             Commission file No. 0-9613
  
                            NUCLEAR RESEARCH CORPORATION
               (Exact name of Registrant as specified in its charter)
  
          Pennsylvania                                            1343870
  (State or other jurisdiction                                (I.R.S. Employer
      of organization)                                        Identification No.)
  
       125 Titus Avenue, Warrington, Pennsylvania       18976
        (Address of Principal Executive Offices)      (Zip Code)
  
                                   (215) 343-5900
                (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
  
       As of February 14, 1996, the Registrant had 28,175 shares of its common
  stock outstanding.
  
  
  
  <PAGE>
  
                                        INDEX
  
  Number                                                                     Page
  
  PART I.           Financial Information.
  
  Item 1.           Consolidated Financial Statements.
  
                    Consolidated Balance Sheets - December 31, 1995
                       and June 30, 1995.......................................3
  
                    Consolidated Statements of Operations - Three
                       Months Ended December 31, 1995 and 1994.................5
  
                    Consolidated Statements of Operations - Six
                       Months Ended December 31, 1995 and 1994.................6
  
                    Consolidated Statements of Shareholders' Equity -
                       Six Months Ended December 31, 1995 and the
                       Year Ended June 30, 1995................................7
  
                    Consolidated Statements of Cash Flows - Six
                       Months Ended December 31, 1995 and 1994.................8
  
                    Notes to Consolidated Financial Statements.................9
  
  Item 2.           Management's Discussion and Analysis of Financial
                       Condition and Results of Operations....................12
  
  PART II.          Other Information.
  
  Item 1.           Legal Proceedings.........................................15
  
  Item 2.           Change in Securities......................................15
  
  Item 3.           Defaults Upon Senior Securities...........................15
  
  Item 4.           Submission of Matters to a Vote of Security
                       Holders................................................15
  
  Item 5.           Other Information.........................................15
  
  Item 6.           Exhibits and Reports on Form 8-K..........................15
  
  
  
                                         -2-
  
  <PAGE>
  
  
  
                           PART I - FINANCIAL INFORMATION
  
  ITEM 1.          NUCLEAR RESEARCH CORPORATION AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                                     (UNAUDITED)
  
                                       ASSETS
  <TABLE>
  <CAPTION>
                                            December 31, 1995  June 30, 1995
  <S>                                      <C>               <C>
  CURRENT ASSETS
      Cash                                    $    90,072     $    66,905
      Accounts receivable                       3,228,143       4,126,320
      Costs and estimated
        earnings in excess
        of billings
        on uncompleted contracts
        (Note 5)                                2,702,063       1,733,552
  
      Inventory (Note 3)                        3,539,733       3,509,290
      Prepaid expenses and
        other current assets                      574,260         165,715
                                              -----------     -----------
         Total Current Assets                  10,134,271       9,601,782
  
  PROPERTY, PLANT AND EQUIPMENT
      (net of accumulated depreciation
      and amortization of $2,609,547
      at December 31, 1995 and $2,440,061
      at June 30, 1995)                         1,746,292       1,405,459
  
  OTHER ASSETS
      Intangible assets (net of
      accumulated amortization of
      $9,448 at December 31,
      1995) (Note 2)                              404,512            --
  
  
      Patents (net of accumulated
      amortization of $67,137
      at December 31, 1995 and
      $60,987 at June 30, 1995)                   146,543         136,476
  
      Organization costs (net
      of accumulated amortization
      of $3,734 at December 31,
      1995)                                        33,608            --
  
      Other                                        29,151          24,951
                                              -----------     -----------
  
         Total Other Assets                       613,814         161,427
                                              -----------     -----------
  
  TOTAL ASSETS                                $12,494,377     $11,168,668
                                              ===========     ===========
  </TABLE>
  
                   See Notes to Consolidated Financial Statements
  
                                         -3-
  
  <PAGE>
  
  
  
                    NUCLEAR RESEARCH CORPORATION AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                                     (UNAUDITED)
  
                        LIABILITIES AND SHAREHOLDERS' EQUITY
  
  <TABLE>
  <CAPTION>
                                          December 31, 1995    June 30, 1995
  <S>                                       <C>              <C>
  CURRENT LIABILITIES
      Short-term borrowings                  $  2,625,000      $  1,850,000
      Current portion of
        long-term debt                            483,808           364,041
      Accounts payable                          1,526,530         1,554,882
      Accrued expenses                            612,591           466,015
      Accrued payroll and
        payroll taxes                             239,754           274,803
      Taxes payable on income                      11,188           457,055
                                             ------------      ------------
  
      Total Current Liabilities                 5,498,871         4,966,796
  
  LONG-TERM DEBT                                  351,419           379,131
  
  DEFERRED INCOME TAXES                            28,504            28,504
  
  MINORITY INTEREST IN EQUITY OF
  CONSOLIDATED SUBSIDIARY                         244,856              --
  
  COMMITMENTS AND CONTINGENCY
  (Note 6)
  
  SHAREHOLDERS' EQUITY
      Common Stock
        Stated value $5 per share, with
        60,000 shares authorized, 31,873
        shares issued and 28,175 shares
        outstanding                               159,365           159,365
        Additional paid in
        capital                                   517,010           517,010
        Retained Earnings                       5,756,705         5,180,215
        Less: treasury stock,
           3,698 shares at cost                   (62,353)          (62,353)
                                             ------------      ------------
  
      Total Shareholders' Equity                6,370,727         5,794,237
                                             ------------      ------------
  
  TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY                       $ 12,494,377      $ 11,168,668
                                             ============      ============
  </TABLE>
  
  
                   See Notes to Consolidated Financial Statements
  
                                         -4-
  
  
  <PAGE>
  
  
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (UNAUDITED)
  <TABLE>
  <CAPTION>
                                        Three Months Ended
                                            December 31,
                                         1995           1994
  <S>                                <C>            <C>
  NET SALES                           $6,132,531     $5,516,227
  COST OF SALES                        4,689,591      4,441,964
                                      ----------     ----------
  GROSS PROFIT                         1,442,940      1,074,263
  SELLING AND ADMINISTRATIVE
     EXPENSES                            760,642        531,963
  RESEARCH AND DEVELOPMENT
     EXPENSES                            296,996        314,004
  INTEREST EXPENSE                        76,766         78,860
                                      ----------     ----------
  INCOME FROM OPERATIONS                 308,536        149,436
  OTHER INCOME                             4,336          3,073
                                      ----------     ----------
  INCOME BEFORE MINORITY INTEREST        312,872        152,509
  
  MINORITY INTEREST IN LOSS OF
  CONSOLIDATED SUBSIDIARY                117,631           --
                                      ----------     ----------
     INCOME BEFORE INCOME TAXES          430,503        152,509
  
     LESS: TAXES ON INCOME               166,614         67,979
                                      ----------     ----------
  NET INCOME                          $  263,889     $   84,530
                                      ==========     ==========
  
  PRIMARY EARNINGS PER SHARE          $     7.71     $     2.64
                                      ==========     ==========
  WEIGHTED AVERAGE COMMON SHARES          34,236         31,980
                                      ==========     ==========
  </TABLE>
  
  
  
                   See Notes to Consolidated Financial Statements
  
                                         -5-
  
  <PAGE>
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (UNAUDITED)
  
  <TABLE>
  <CAPTION>
                                         Six Months Ended
                                            December 31,
                                         1995             1994
  <S>                               <C>            <C>
  NET SALES                           $12,343,174     $ 9,683,454
  COST OF SALES                         9,591,873       7,746,479
                                      -----------     -----------
  GROSS PROFIT                          2,751,301       1,936,975
  SELLING AND ADMINISTRATIVE
     EXPENSES                           1,320,681         990,921
  RESEARCH AND DEVELOPMENT
     EXPENSES                             488,701         522,016
  INTEREST EXPENSE                        150,414         130,811
                                      -----------     -----------
  INCOME FROM OPERATIONS                  791,505         293,227
  OTHER INCOME                              7,126           5,762
                                      -----------     -----------
  INCOME BEFORE MINORITY INTEREST         798,631         298,989
  
  MINORITY INTEREST IN LOSS
  OF CONSOLIDATED SUBSIDIARY              156,798            --
                                      -----------     -----------
  INCOME BEFORE INCOME TAXES              955,429         298,989
  
     LESS: TAXES ON INCOME                378,939         118,038
                                      -----------     -----------
  NET INCOME                              576,490     $   180,951
                                      ===========     ===========
  
  PRIMARY EARNINGS PER SHARE          $     16.84     $      5.66
                                      ===========     ===========
  
  WEIGHTED AVERAGE COMMON SHARES           34,236          31,980
                                      ===========     ===========
  </TABLE>
  
  
  
  
  
                   See Notes to Consolidated Financial Statements
  
                                         -6-
  
  <PAGE>
  
  
  
                    NUCLEAR RESEARCH CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
       FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 AND YEAR ENDED JUNE 30, 1995
                                     (UNAUDITED)
  
  
  <TABLE>
  <CAPTION>
                                  Common Stock           Additional                                      Total
                                                          Paid In       Retained                      Shareholders'
                             Shares         Amount        Capital       Earnings     Treasury Stock      Equity
  <S>                     <C>           <C>             <C>           <C>            <C>             <C>
  Balance at                  28,175     $  159,365     $  517,010     $3,901,739     $  (62,353)     $4,515,761
    June 30, 1994
  
    Net Income for
      the year ended
      June 30, 1995             --             --             --        1,278,476           --         1,278,476
                          ----------     ----------     ----------     ----------     ----------      ----------
  Balance at
    June 30, 1995             28,175        159,365        517,010      5,180,215        (62,353)      5,794,237
  
    Net income for
      the six months
      ended December
      31, 1995                  --             --             --          576,490           --           576,490
                          ----------     ----------     ----------     ----------     ----------      ----------
  
  Balance at
    December 31, 1995         28,175     $  159,365     $  517,010     $5,756,705     $  (62,353)     $6,370,727
                          ==========     ==========     ==========     ==========     ==========      ==========
  </TABLE>
  
  
  
  
  
  
                   See Notes to Consolidated Financial Statements
  
                                         -7-
  <PAGE>
  
  
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOW
                                     (UNAUDITED)
  
  <TABLE>
  <CAPTION>
                                                      Six Months Ended
                                                        December 31,
                                                    1995           1994
  <S>                                          <C>           <C> 
  CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                    $ 576,490      $ 180,951
    Adjustments to reconcile net
    income to net cash provided by
    (used by) operating activities:
      Depreciation and amortization                 188,858        171,611
      Minority interest in loss of
      consolidated subsidiary                      (156,798)          --
      (Increase) Decrease in:
         Accounts receivable                        898,177        211,100
         Costs and estimated
           earnings in excess
           of billings on
           uncompleted contracts                   (968,511)      (519,486)
         Other receivable                              --          695,335
       Inventory                                    (30,443)       (66,185)
         Prepaid expenses and other
           current assets                          (408,545)      (271,040)
         Prepaid taxes on income                       --          (49,961)
      Increase (decrease) in:
         Accounts payable, accrued
           expenses and payroll taxes                83,175        371,364
         Taxes payable - on income                 (445,867)      (106,251)
                                                  ---------      ---------
  NET CASH PROVIDED BY (USED BY) OPERATING
    ACTIVITIES                                     (263,464)       617,438
                                                  ---------      ---------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
    Capital expenditures                           (526,536)      (137,418)
    Increase in organization costs                  (37,342)          --
                                                  ---------      ---------
  NET CASH USED BY INVESTING ACTIVITIES            (563,878)      (137,418)
                                                  ---------      ---------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
    Net Proceeds (payments) on line of credit       775,000       (450,000)
    Net Proceeds (payments) on long-term debt        92,055       (173,366)
    Distributions                                   (12,346)          --
    Increase (decrease) in other assets              (4,200)         1,021
                                                  ---------      ---------
  
  NET CASH PROVIDED BY (USED BY)
    FINANCING ACTIVITIES                            850,509       (622,345)
                                                  ---------      ---------
  
  NET INCREASE (DECREASE) IN CASH                    23,167       (142,325)
                                                  ---------      ---------
  
  CASH - beginning                                   66,905        163,273
                                                  ---------      ---------
  
  CASH - ending                                   $  90,072      $  20,948
                                                  =========      =========
  
  SUPPLEMENTARY INFORMATION REGARDING
    NON-CASH INVESTING ACTIVITIES
  
    Acquisition of intangible assets              $ 414,000           --
                                                  =========      =========
  </TABLE>
  
                   See Notes to Consolidated Financial Statements
  
                                         -8-
  
  <PAGE>
  
  
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  
                       December 31, 1995 and December 31, 1994
  
  Note 1. The Consolidated Financial Statements of Nuclear Research Corporation
  have been prepared in accordance with the rules and regulations of the
  Securities and Exchange Commission ("SEC"). In the opinion of management, the
  accompanying Consolidated Financial Statements contain all adjustments
  (consisting of only normal recurring adjustments) necessary to present fairly
  the consolidated financial position as of December 31, 1995 and June 30, 1995
  and the consolidated results of operations and cash flows for the three months
  and six months ended December 31, 1995 and 1994. Certain information and
  footnote disclosures prepared in accordance with generally accepted accounting
  principles have either been condensed or omitted pursuant to SEC rules and
  regulations. These financial statements should be read in conjunction with the
  financial statements and the notes included in the Company's latest Annual
  Report on Form 10-K.
  
  The consolidated results of operations for the six months ended December 31,
  1995 and 1994 are not necessarily indicative of the results for the full year.
  
  Note 2.  Principles of Consolidation.
  
  The Consolidated Financial Statements include the accounts of Nuclear Research
  Corporation, NRC Acquisition Corporation and Northeast Nuclear, Ltd.,
  wholly-owned subsidiaries hereafter referred to collectively as the "Company."
  Also included in the Consolidated Financial Statements are the accounts of
  Measurement Dynamics LLC ("MDLLC").
  
  In July, 1995 the Company entered into an operating agreement to form MDLLC, a
  New Jersey limited liability company, the purpose of which is to develop,
  manufacture, produce and sell temperature measurement devices and other related
  products or services. Pursuant to the operating agreement, the Company
  contributed property, in the form of cash, inventory and other business assets
  having a fair market value of $300,000, in exchange for 42% of MDLLC. The
  Company will produce temperature measurement devices to be sold by MDLLC under a
  manufacturing agreement and will provide administrative services to MDLLC.
  
  In connection with the formation of MDLLC, the Company recorded an intangible
  asset of $414,000 which represents certain rights, proprietary information and
  intellectual property contributed by the minority interest in MDLLC. The
  intangible asset is being amortized over it's estimated useful life of twenty
  years.
  
  All significant inter-company accounts and transactions have been eliminated in
  consolidation.
  
                                         -9-
  
  <PAGE>
  
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  
  Note 3.  Inventory.
                                          (UNAUDITED)
                                  December 31,     June 30,
                                     1995            1995
  
  Inventory consists of:
  Work-In-Process
    United States Government
     contracts                    $3,710,629     $4,748,683
    Commercial contracts             702,949        496,603
  Purchased and manufactured
   parts                             516,753        637,739
                                  ----------     ----------
                                  $4,930,331     $5,883,025
  Less:  Progress payments
  on United States Government
  contracts                        1,390,598      2,373,735
                                  ----------     ----------
           Total                  $3,539,733     $3,509,290
                                  ==========     ==========
  
  The Company uses the last-in, first-out (LIFO) method to determine its material
  inventory costs. The following information will facilitate comparison with
  operating results of companies using the FIFO method. If the Company's inventory
  had been determined using the FIFO method at December 31, 1995, reported
  inventories would have been $954,268 higher and reported net income would have
  decreased by $48,110 ($1.41 per share). The pro forma effect relating to the use
  of the FIFO method would have resulted in the following balances for the
  statement of operations presentation for the three months ended December 31,
  1995:
  
           Gross Profit                                $2,676,696
  
           Income from Operations                      $  716,900
                                                       ==========
  
           Net Income                                  $  528,380
                                                       ==========
  
  Note 4.  Other Receivable.
  
  On March 15, 1993, a portion of the roof collapsed at the Company's Dover, New
  Jersey division resulting in the disruption of production at this facility. The
  property, inventory and business interruption losses resulting from the partial
  roof collapse were insured. The other receivable represents the final settlement
  as of June 30, 1994 of the Company's insurance claim related to the partial roof
  collapse. The claim was paid in the quarterly period ended September 30, 1994.
  
                                        -10-
  
  <PAGE>
  
  
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  
  
  Note 5.  Costs and Estimated Earnings in Excess of Billings on
           Uncompleted Contracts.
  
  The Company recognizes revenues on several fixed-price contracts using the
  percentage-of-completion method, measured by the percentage of cost incurred to
  date compared to the estimated total cost for the contracts. That method is used
  because management considers total cost to be the best available measure of
  progress on the contracts. Because of inherent uncertainties in estimating
  costs, it is at least reasonably possible that the estimates used will change
  within the near term.
  
  Contract costs include all direct material, direct labor and indirect costs
  related to contract performance. Provisions for estimated losses on the
  uncompleted contracts are made in the period in which such losses are
  determined. Changes in estimated job profitability resulting from job
  performance, job conditions, claims, change orders, and settlements, are
  accounted for in the period in which the changes occur.
  
  The asset, "Costs and estimated earnings in excess of billings on uncompleted
  contracts" represents revenues recognized in excess of amounts billed.
  
  Costs, estimated earnings, and billings on uncompleted contracts are summarized
  as follows:
  
           Costs incurred and estimated
            earnings on uncompleted
            contracts                                           $3,401,810
           Billings to date                                        699,747
                                                                ----------
                                                                $2,702,063
                                                                ==========
  
           Included in accompanying balance sheet under the following
           caption:
  
           Costs and estimated earnings
            in excess of billings on
            uncompleted contracts                               $2,702,063
                                                                ==========
  
  
  
                                        -11-
  
  <PAGE>
  
  
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  
  
  Note 6.  Commitments and Contingency.
  
  In September 1995, the Company was notified that MDLLC, Mark A. Sitcoske and a
  company controlled by Mr. Sitcoske, Measurement Dynamics, Inc., had been named
  co-defendants in a suit filed by Hanna Manufacturing, Inc. ("Hanna"), a Rhode
  Island Company that previously employed Mr. Sitcoske. The suit alleges that the
  defendants acted in violation of an existing employment and non-compete
  agreement between Hanna and Mr. Sitcoske and seeks to enjoin and obtain damages;
  however, Hanna has not yet sought a hearing to obtain injunctive relief.
  Although the matter is in its early stages, management expects that the
  resolution of this matter will have no material impact on the Company.
  
  
  ITEM 2.
  
                       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATION
  
  Liquidity and Capital Resources
  
       During the six months ended December 31, 1995, a decrease in accounts
  receivable of $898,177 was the principal factor which affected the cash provided
  by operating activities. The reduction in accounts receivable occurred due to
  the Company's ability to collect year-end receivables (typically the highest
  during the year). Increases in costs and estimated earnings in excess of billing
  on uncompleted contracts of $968,511 and prepaid expenses and other current
  assets of $408,545 combined with a decrease in taxes payable on income of
  $445,867 were the principal factors offsetting cash provided by operating
  activities for the six months ended December 31, 1995.
  
       The costs and estimated earnings in excess of billings on uncompleted
  contracts resulted from the Company using the percentage-of-completion method
  of income recognition for several multi-year contracts. Additionally, during the
  six months ended December 31, 1995, the Company had capital expenditures of
  $526,536 to purchase manufacturing and computer equipment, to make building
  improvements and to make certain expenditures associated with patents. Cash in
  the amount of $37,342 was also expended for organization costs associated with
  MDLLC. Cash provided by financing activities for the six months ended December
  31, 1995 increased by $850,509 as a result of borrowings on the line of credit
  of $775,000 and borrowings on long term debt of $92,055, partially offset by
  cash distributions associated with MDLLC of $12,346.
  
                                        -12-
  
  <PAGE>
  
  
  
       The Company's backlog of orders as of January 31, 1996 was $15,410,000
  compared to $29,399,000 as of January 31, 1995. The decrease in the backlog as
  of January 31, 1996 as compared to January 31, 1995 is largely attributed to the
  resumption of the Company's ability to operate at normal shipping levels as
  compared to prior years when the partial roof collapse at the Company's Dover
  Division facility prevented the Company from maintaining normal shipping levels.
  
       The Company believes that funds from operations and amounts available under
  its credit facilities will be sufficient to satisfy the Company's cash
  requirements for the foreseeable future.
  
  Results of Operations
  
       Sales for the three months ended December 31, 1995 were $6,132,531, an
  increase of $666,304 compared to sales of $5,516,227 for the three months ended
  December 31, 1994. The increase in sales is primarily attributable to increased
  shipments to the United States Government. The increase in sales for the three
  months ended December 31, 1995 represents a percentage increase of 11.17% as
  compared to the three months ended December 31, 1994.
  
       Income from operations increased to $308,536 for the three months ended
  December 31, 1995 from $149,436 for the three months ended December 31, 1994,
  due to a more favorable product mix and a higher sales volume. Gross profit as a
  percentage of sales increased to 23.53% for the three months ended December 31,
  1995 compared to 19.47% for the three months ended December 31, 1994.
  
       Selling and administrative expenses increased $228,679 to $760,642 for the
  three months ended December 31, 1995. The increase was primarily due to costs
  associated with MDLLC. As a percentage of sales, selling and administrative
  expense increased to 12.40% for the three months ended December 31, 1995 as
  compared to 9.64% for the three months ended December 31, 1994.
  
       Research and development expenses decreased $17,008 to $296,996 for the
  three months ended December 31, 1995 as compared to $314,004 for the three
  months ended December 31, 1994. The decrease can be accounted for by a reduction
  in customer-sponsored research. As a percentage of sales, research and
  development expenses decreased to 4.84% for the three months ended December 31,
  1995 as compared to 5.69% for the three months ended December 31, 1994.
  
       Interest expense decreased to $76,766 for the three months ended December
  31, 1995 as compared to $78,860 for the three months ended December 31, 1994.
  
       Sales for the six months ended December 31, 1995 increased $2,659,720 to
  $12,343,174 as compared to $9,683,454 for the six months ended December 31,
  1994. The increase in sales can be accounted for primarily by increased
  shipments to the United States Government. Additionally, as a result of more
  aggressive marketing abroad, foreign sales increased to $2,310,015 for the six
  months ended December 31, 1995 as compared to $1,456,160 for the six months
  ended December 31, 1994.
  
                                        -13-
  
  <PAGE>
  
  
  
       Income from operations increased to $791,505 for the six months ended
  December 31, 1995 as compared to $293,227 for the six months ended December 31,
  1994, due to a more favorable product mix and increased shipments. Gross profit
  as a percentage of sales increased to 22.29% for the six months ended December
  31, 1995 as compared to 20.00% for the six months ended December 31, 1994.
  
       Selling and administrative expenses increased $329,760 to $1,320,681 for
  the six months ended December 31, 1995. The increase was due primarily to costs
  associated with MDLLC. As a percentage of sales, selling and administrative
  expenses increased to 10.70% for the six months ended December 31, 1995 as
  compared to 10.23% for the six months ended December 31, 1994.
  
       Research and development expenses decreased $33,315 to $488,701 for the six
  months ended December 31, 1995 as compared to $522,016 for the six months ended
  December 31, 1994. The decrease can be accounted for by a reduction in
  customer-sponsored research. As a percentage of sales, research and development
  expenses decreased to 3.95% for the six months ended December 31, 1995 as
  compared to 5.39% for the six months ended December 31, 1994.
  
       Interest expense increased to $150,414 for the six months ended December
  31, 1995 as compared to $130,811 for the six months ended December 31, 1994. The
  increase can be accounted for by costs associated with letters of credit for a
  multi-year contract.
  
  
  
                                        -14-
  
  <PAGE>
  
  
  
                             PART II - OTHER INFORMATION
  
  
  Item 1.  Legal Proceedings.
  
       In September 1995, management was notified that MDLLC, Mark A. Sitcoske and
  a company controlled by Mr. Sitcoske, Measurement Dynamics, Inc., had been named
  as co-defendants in a suit filed on September 7, 1995 in the Superior Court of
  the State of Rhode Island by Hanna Manufacturing, Inc. ("Hanna"), a Rhode Island
  company that previously employed Mr. Sitcoske. The suit alleges that the
  defendants acted in violation of an existing employment and non-compete
  agreement between Hanna and Mr. Sitcoske and seeks to enjoin and obtain damages;
  however, Hanna has not yet sought a hearing to obtain injunctive relief.
  Although the matter is still in its early stages, management expects that the
  resolution of this matter will have no material impact on the Company.
  
  Item 2.  Changes in Securities.
  
           Not Applicable.
  
  Item 3.  Defaults upon Senior Securities.
  
           Not Applicable.
  
  Item 4.  Submission of Matters to a Vote of Security Holders.
  
       The Company held its 1995 Annual Meeting of Shareholders on December 11,
  1995. At the meeting, Earl M. Pollock, Dorothy S. Pollock and Charles H.
  Sulzberger were elected to the Company's Board of Directors; Shareholders cast
  22,717 votes for the election of each director; 3 votes were withheld with
  respect to the election of each director.
  
  Item 5.  Other Information.
  
           Not Applicable.
  
  Item 6.  Exhibits and Reports on Form 8-K.
  
            (a)  Exhibits.
  
                 27.  Financial Data Schedules
  
            (b)  Reports on Form 8-K.
  
                 No reports on Form 8-K were filed during the quarter ended
                 December 31, 1995.
  
  
  
                                        -15-
  
  <PAGE>
  
  
                                     SIGNATURES
  
  
       Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this Report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
  
                                      NUCLEAR RESEARCH CORPORATION
  
  
                                      By: /s/ Earl M. Pollock
                                         Earl M. Pollock
                                         President
  
  
                                      By: /s/ Mark S. Pollock
                                          Mark S. Pollock
                                          Treasurer
  
  
  Dated:  February 14, 1996
  
  
  
                                        -16-
  
  <PAGE>
  
  
  
                                    Exhibit Index
  
  Exhibit                                                     Method of Filing
  
    27.  Financial Data Schedules . . . . . . . . .           Filed Herewith
                                                              Electronically
  
  
                                        -17-
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 35300}]
metadata_filer: {"company-data": {"conformed-name": "NUCLEAR RESEARCH CORP", "cik": "0000073296", "assigned-sic": "3827", "irs-number": "231343870", "state-of-incorporation": "PA", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-09613", "film-number": "96520100"}, "business-address": {"street1": "125 TITUS AVE", "city": "WARRINGTON", "state": "PA", "zip": "18976", "phone": "2153435900"}, "mail-address": {"street1": "P O BOX H", "city": "WARRINGTON", "state": "PA", "zip": "18976"}}
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 quarterly period ended December 31, 1995
  
                                         OR
  
            TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934
  
            For the transition period from __________ to _________
  
                             Commission file No. 0-9613
  
                            NUCLEAR RESEARCH CORPORATION
               (Exact name of Registrant as specified in its charter)
  
          Pennsylvania                                            1343870
  (State or other jurisdiction                                (I.R.S. Employer
      of organization)                                        Identification No.)
  
       125 Titus Avenue, Warrington, Pennsylvania       18976
        (Address of Principal Executive Offices)      (Zip Code)
  
                                   (215) 343-5900
                (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
  
       As of February 14, 1996, the Registrant had 28,175 shares of its common
  stock outstanding.
  INDEX
  
  Number                                                                     Page
  
  PART I.           Financial Information.
  
  Item 1.           Consolidated Financial Statements.
  
                    Consolidated Balance Sheets - December 31, 1995
                       and June 30, 1995.......................................3
  
                    Consolidated Statements of Operations - Three
                       Months Ended December 31, 1995 and 1994.................5
  
                    Consolidated Statements of Operations - Six
                       Months Ended December 31, 1995 and 1994.................6
  
                    Consolidated Statements of Shareholders' Equity -
                       Six Months Ended December 31, 1995 and the
                       Year Ended June 30, 1995................................7
  
                    Consolidated Statements of Cash Flows - Six
                       Months Ended December 31, 1995 and 1994.................8
  
                    Notes to Consolidated Financial Statements.................9
  
  Item 2.           Management's Discussion and Analysis of Financial
                       Condition and Results of Operations....................12
  
  PART II.          Other Information.
  
  Item 1.           Legal Proceedings.........................................15
  
  Item 2.           Change in Securities......................................15
  
  Item 3.           Defaults Upon Senior Securities...........................15
  
  Item 4.           Submission of Matters to a Vote of Security
                       Holders................................................15
  
  Item 5.           Other Information.........................................15
  
  Item 6.           Exhibits and Reports on Form 8-K..........................15
  
                                         -2-
  PART I - FINANCIAL INFORMATION
  
  ITEM 1.          NUCLEAR RESEARCH CORPORATION AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                                     (UNAUDITED)
  
                                       ASSETS
  December 31, 1995  June 30, 1995
  CURRENT ASSETS
      Cash                                    $    90,072     $    66,905
      Accounts receivable                       3,228,143       4,126,320
      Costs and estimated
        earnings in excess
        of billings
        on uncompleted contracts
        (Note 5)                                2,702,063       1,733,552
  
      Inventory (Note 3)                        3,539,733       3,509,290
      Prepaid expenses and
        other current assets                      574,260         165,715
                                              -----------     -----------
         Total Current Assets                  10,134,271       9,601,782
  
  PROPERTY, PLANT AND EQUIPMENT
      (net of accumulated depreciation
      and amortization of $2,609,547
      at December 31, 1995 and $2,440,061
      at June 30, 1995)                         1,746,292       1,405,459
  
  OTHER ASSETS
      Intangible assets (net of
      accumulated amortization of
      $9,448 at December 31,
      1995) (Note 2)                              404,512            --
  
      Patents (net of accumulated
      amortization of $67,137
      at December 31, 1995 and
      $60,987 at June 30, 1995)                   146,543         136,476
  
      Organization costs (net
      of accumulated amortization
      of $3,734 at December 31,
      1995)                                        33,608            --
  
      Other                                        29,151          24,951
                                              -----------     -----------
  
         Total Other Assets                       613,814         161,427
                                              -----------     -----------
  
  TOTAL ASSETS                                $12,494,377     $11,168,668
                                              ===========     ===========
  See Notes to Consolidated Financial Statements
  
                                         -3-
  NUCLEAR RESEARCH CORPORATION AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                                     (UNAUDITED)
  
                        LIABILITIES AND SHAREHOLDERS' EQUITY
  December 31, 1995    June 30, 1995
  CURRENT LIABILITIES
      Short-term borrowings                  $  2,625,000      $  1,850,000
      Current portion of
        long-term debt                            483,808           364,041
      Accounts payable                          1,526,530         1,554,882
      Accrued expenses                            612,591           466,015
      Accrued payroll and
        payroll taxes                             239,754           274,803
      Taxes payable on income                      11,188           457,055
                                             ------------      ------------
  
      Total Current Liabilities                 5,498,871         4,966,796
  
  LONG-TERM DEBT                                  351,419           379,131
  
  DEFERRED INCOME TAXES                            28,504            28,504
  
  MINORITY INTEREST IN EQUITY OF
  CONSOLIDATED SUBSIDIARY                         244,856              --
  
  COMMITMENTS AND CONTINGENCY
  (Note 6)
  
  SHAREHOLDERS' EQUITY
      Common Stock
        Stated value $5 per share, with
        60,000 shares authorized, 31,873
        shares issued and 28,175 shares
        outstanding                               159,365           159,365
        Additional paid in
        capital                                   517,010           517,010
        Retained Earnings                       5,756,705         5,180,215
        Less: treasury stock,
           3,698 shares at cost                   (62,353)          (62,353)
                                             ------------      ------------
  
      Total Shareholders' Equity                6,370,727         5,794,237
                                             ------------      ------------
  
  TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY                       $ 12,494,377      $ 11,168,668
                                             ============      ============
  See Notes to Consolidated Financial Statements
  
                                         -4-
  NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (UNAUDITED)
  Three Months Ended
                                            December 31,
                                         1995           1994
  NET SALES                           $6,132,531     $5,516,227
  COST OF SALES                        4,689,591      4,441,964
                                      ----------     ----------
  GROSS PROFIT                         1,442,940      1,074,263
  SELLING AND ADMINISTRATIVE
     EXPENSES                            760,642        531,963
  RESEARCH AND DEVELOPMENT
     EXPENSES                            296,996        314,004
  INTEREST EXPENSE                        76,766         78,860
                                      ----------     ----------
  INCOME FROM OPERATIONS                 308,536        149,436
  OTHER INCOME                             4,336          3,073
                                      ----------     ----------
  INCOME BEFORE MINORITY INTEREST        312,872        152,509
  
  MINORITY INTEREST IN LOSS OF
  CONSOLIDATED SUBSIDIARY                117,631           --
                                      ----------     ----------
     INCOME BEFORE INCOME TAXES          430,503        152,509
  
     LESS: TAXES ON INCOME               166,614         67,979
                                      ----------     ----------
  NET INCOME                          $  263,889     $   84,530
                                      ==========     ==========
  
  PRIMARY EARNINGS PER SHARE          $     7.71     $     2.64
                                      ==========     ==========
  WEIGHTED AVERAGE COMMON SHARES          34,236         31,980
                                      ==========     ==========
  See Notes to Consolidated Financial Statements
  
                                         -5-
  NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (UNAUDITED)
  Six Months Ended
                                            December 31,
                                         1995             1994
  NET SALES                           $12,343,174     $ 9,683,454
  COST OF SALES                         9,591,873       7,746,479
                                      -----------     -----------
  GROSS PROFIT                          2,751,301       1,936,975
  SELLING AND ADMINISTRATIVE
     EXPENSES                           1,320,681         990,921
  RESEARCH AND DEVELOPMENT
     EXPENSES                             488,701         522,016
  INTEREST EXPENSE                        150,414         130,811
                                      -----------     -----------
  INCOME FROM OPERATIONS                  791,505         293,227
  OTHER INCOME                              7,126           5,762
                                      -----------     -----------
  INCOME BEFORE MINORITY INTEREST         798,631         298,989
  
  MINORITY INTEREST IN LOSS
  OF CONSOLIDATED SUBSIDIARY              156,798            --
                                      -----------     -----------
  INCOME BEFORE INCOME TAXES              955,429         298,989
  
     LESS: TAXES ON INCOME                378,939         118,038
                                      -----------     -----------
  NET INCOME                              576,490     $   180,951
                                      ===========     ===========
  
  PRIMARY EARNINGS PER SHARE          $     16.84     $      5.66
                                      ===========     ===========
  
  WEIGHTED AVERAGE COMMON SHARES           34,236          31,980
                                      ===========     ===========
  See Notes to Consolidated Financial Statements
  
                                         -6-
  NUCLEAR RESEARCH CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
       FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 AND YEAR ENDED JUNE 30, 1995
                                     (UNAUDITED)
  Common Stock           Additional                                      Total
                                                          Paid In       Retained                      Shareholders'
                             Shares         Amount        Capital       Earnings     Treasury Stock      Equity
  Balance at                  28,175     $  159,365     $  517,010     $3,901,739     $  (62,353)     $4,515,761
    June 30, 1994
  
    Net Income for
      the year ended
      June 30, 1995             --             --             --        1,278,476           --         1,278,476
                          ----------     ----------     ----------     ----------     ----------      ----------
  Balance at
    June 30, 1995             28,175        159,365        517,010      5,180,215        (62,353)      5,794,237
  
    Net income for
      the six months
      ended December
      31, 1995                  --             --             --          576,490           --           576,490
                          ----------     ----------     ----------     ----------     ----------      ----------
  
  Balance at
    December 31, 1995         28,175     $  159,365     $  517,010     $5,756,705     $  (62,353)     $6,370,727
                          ==========     ==========     ==========     ==========     ==========      ==========
  See Notes to Consolidated Financial Statements
  
                                         -7-
  NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOW
                                     (UNAUDITED)
  Six Months Ended
                                                        December 31,
                                                    1995           1994
  CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                    $ 576,490      $ 180,951
    Adjustments to reconcile net
    income to net cash provided by
    (used by) operating activities:
      Depreciation and amortization                 188,858        171,611
      Minority interest in loss of
      consolidated subsidiary                      (156,798)          --
      (Increase) Decrease in:
         Accounts receivable                        898,177        211,100
         Costs and estimated
           earnings in excess
           of billings on
           uncompleted contracts                   (968,511)      (519,486)
         Other receivable                              --          695,335
       Inventory                                    (30,443)       (66,185)
         Prepaid expenses and other
           current assets                          (408,545)      (271,040)
         Prepaid taxes on income                       --          (49,961)
      Increase (decrease) in:
         Accounts payable, accrued
           expenses and payroll taxes                83,175        371,364
         Taxes payable - on income                 (445,867)      (106,251)
                                                  ---------      ---------
  NET CASH PROVIDED BY (USED BY) OPERATING
    ACTIVITIES                                     (263,464)       617,438
                                                  ---------      ---------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
    Capital expenditures                           (526,536)      (137,418)
    Increase in organization costs                  (37,342)          --
                                                  ---------      ---------
  NET CASH USED BY INVESTING ACTIVITIES            (563,878)      (137,418)
                                                  ---------      ---------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
    Net Proceeds (payments) on line of credit       775,000       (450,000)
    Net Proceeds (payments) on long-term debt        92,055       (173,366)
    Distributions                                   (12,346)          --
    Increase (decrease) in other assets              (4,200)         1,021
                                                  ---------      ---------
  
  NET CASH PROVIDED BY (USED BY)
    FINANCING ACTIVITIES                            850,509       (622,345)
                                                  ---------      ---------
  
  NET INCREASE (DECREASE) IN CASH                    23,167       (142,325)
                                                  ---------      ---------
  
  CASH - beginning                                   66,905        163,273
                                                  ---------      ---------
  
  CASH - ending                                   $  90,072      $  20,948
                                                  =========      =========
  
  SUPPLEMENTARY INFORMATION REGARDING
    NON-CASH INVESTING ACTIVITIES
  
    Acquisition of intangible assets              $ 414,000           --
                                                  =========      =========
  See Notes to Consolidated Financial Statements
  
                                         -8-
  NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  
                       December 31, 1995 and December 31, 1994
  
  Note 1. The Consolidated Financial Statements of Nuclear Research Corporation
  have been prepared in accordance with the rules and regulations of the
  Securities and Exchange Commission ("SEC"). In the opinion of management, the
  accompanying Consolidated Financial Statements contain all adjustments
  (consisting of only normal recurring adjustments) necessary to present fairly
  the consolidated financial position as of December 31, 1995 and June 30, 1995
  and the consolidated results of operations and cash flows for the three months
  and six months ended December 31, 1995 and 1994. Certain information and
  footnote disclosures prepared in accordance with generally accepted accounting
  principles have either been condensed or omitted pursuant to SEC rules and
  regulations. These financial statements should be read in conjunction with the
  financial statements and the notes included in the Company's latest Annual
  Report on Form 10-K.
  
  The consolidated results of operations for the six months ended December 31,
  1995 and 1994 are not necessarily indicative of the results for the full year.
  
  Note 2.  Principles of Consolidation.
  
  The Consolidated Financial Statements include the accounts of Nuclear Research
  Corporation, NRC Acquisition Corporation and Northeast Nuclear, Ltd.,
  wholly-owned subsidiaries hereafter referred to collectively as the "Company."
  Also included in the Consolidated Financial Statements are the accounts of
  Measurement Dynamics LLC ("MDLLC").
  
  In July, 1995 the Company entered into an operating agreement to form MDLLC, a
  New Jersey limited liability company, the purpose of which is to develop,
  manufacture, produce and sell temperature measurement devices and other related
  products or services. Pursuant to the operating agreement, the Company
  contributed property, in the form of cash, inventory and other business assets
  having a fair market value of $300,000, in exchange for 42% of MDLLC. The
  Company will produce temperature measurement devices to be sold by MDLLC under a
  manufacturing agreement and will provide administrative services to MDLLC.
  
  In connection with the formation of MDLLC, the Company recorded an intangible
  asset of $414,000 which represents certain rights, proprietary information and
  intellectual property contributed by the minority interest in MDLLC. The
  intangible asset is being amortized over it's estimated useful life of twenty
  years.
  
  All significant inter-company accounts and transactions have been eliminated in
  consolidation.
  
                                         -9-
  NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  
  Note 3.  Inventory.
                                          (UNAUDITED)
                                  December 31,     June 30,
                                     1995            1995
  
  Inventory consists of:
  Work-In-Process
    United States Government
     contracts                    $3,710,629     $4,748,683
    Commercial contracts             702,949        496,603
  Purchased and manufactured
   parts                             516,753        637,739
                                  ----------     ----------
                                  $4,930,331     $5,883,025
  Less:  Progress payments
  on United States Government
  contracts                        1,390,598      2,373,735
                                  ----------     ----------
           Total                  $3,539,733     $3,509,290
                                  ==========     ==========
  
  The Company uses the last-in, first-out (LIFO) method to determine its material
  inventory costs. The following information will facilitate comparison with
  operating results of companies using the FIFO method. If the Company's inventory
  had been determined using the FIFO method at December 31, 1995, reported
  inventories would have been $954,268 higher and reported net income would have
  decreased by $48,110 ($1.41 per share). The pro forma effect relating to the use
  of the FIFO method would have resulted in the following balances for the
  statement of operations presentation for the three months ended December 31,
  1995:
  
           Gross Profit                                $2,676,696
  
           Income from Operations                      $  716,900
                                                       ==========
  
           Net Income                                  $  528,380
                                                       ==========
  
  Note 4.  Other Receivable.
  
  On March 15, 1993, a portion of the roof collapsed at the Company's Dover, New
  Jersey division resulting in the disruption of production at this facility. The
  property, inventory and business interruption losses resulting from the partial
  roof collapse were insured. The other receivable represents the final settlement
  as of June 30, 1994 of the Company's insurance claim related to the partial roof
  collapse. The claim was paid in the quarterly period ended September 30, 1994.
  
                                        -10-
  NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  
  Note 5.  Costs and Estimated Earnings in Excess of Billings on
           Uncompleted Contracts.
  
  The Company recognizes revenues on several fixed-price contracts using the
  percentage-of-completion method, measured by the percentage of cost incurred to
  date compared to the estimated total cost for the contracts. That method is used
  because management considers total cost to be the best available measure of
  progress on the contracts. Because of inherent uncertainties in estimating
  costs, it is at least reasonably possible that the estimates used will change
  within the near term.
  
  Contract costs include all direct material, direct labor and indirect costs
  related to contract performance. Provisions for estimated losses on the
  uncompleted contracts are made in the period in which such losses are
  determined. Changes in estimated job profitability resulting from job
  performance, job conditions, claims, change orders, and settlements, are
  accounted for in the period in which the changes occur.
  
  The asset, "Costs and estimated earnings in excess of billings on uncompleted
  contracts" represents revenues recognized in excess of amounts billed.
  
  Costs, estimated earnings, and billings on uncompleted contracts are summarized
  as follows:
  
           Costs incurred and estimated
            earnings on uncompleted
            contracts                                           $3,401,810
           Billings to date                                        699,747
                                                                ----------
                                                                $2,702,063
                                                                ==========
  
           Included in accompanying balance sheet under the following
           caption:
  
           Costs and estimated earnings
            in excess of billings on
            uncompleted contracts                               $2,702,063
                                                                ==========
  
                                        -11-
  NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  
  Note 6.  Commitments and Contingency.
  
  In September 1995, the Company was notified that MDLLC, Mark A. Sitcoske and a
  company controlled by Mr. Sitcoske, Measurement Dynamics, Inc., had been named
  co-defendants in a suit filed by Hanna Manufacturing, Inc. ("Hanna"), a Rhode
  Island Company that previously employed Mr. Sitcoske. The suit alleges that the
  defendants acted in violation of an existing employment and non-compete
  agreement between Hanna and Mr. Sitcoske and seeks to enjoin and obtain damages;
  however, Hanna has not yet sought a hearing to obtain injunctive relief.
  Although the matter is in its early stages, management expects that the
  resolution of this matter will have no material impact on the Company.
  
  ITEM 2.
  
                       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATION
  
  Liquidity and Capital Resources
  
       During the six months ended December 31, 1995, a decrease in accounts
  receivable of $898,177 was the principal factor which affected the cash provided
  by operating activities. The reduction in accounts receivable occurred due to
  the Company's ability to collect year-end receivables (typically the highest
  during the year). Increases in costs and estimated earnings in excess of billing
  on uncompleted contracts of $968,511 and prepaid expenses and other current
  assets of $408,545 combined with a decrease in taxes payable on income of
  $445,867 were the principal factors offsetting cash provided by operating
  activities for the six months ended December 31, 1995.
  
       The costs and estimated earnings in excess of billings on uncompleted
  contracts resulted from the Company using the percentage-of-completion method
  of income recognition for several multi-year contracts. Additionally, during the
  six months ended December 31, 1995, the Company had capital expenditures of
  $526,536 to purchase manufacturing and computer equipment, to make building
  improvements and to make certain expenditures associated with patents. Cash in
  the amount of $37,342 was also expended for organization costs associated with
  MDLLC. Cash provided by financing activities for the six months ended December
  31, 1995 increased by $850,509 as a result of borrowings on the line of credit
  of $775,000 and borrowings on long term debt of $92,055, partially offset by
  cash distributions associated with MDLLC of $12,346.
  
                                        -12-
  The Company's backlog of orders as of January 31, 1996 was $15,410,000
  compared to $29,399,000 as of January 31, 1995. The decrease in the backlog as
  of January 31, 1996 as compared to January 31, 1995 is largely attributed to the
  resumption of the Company's ability to operate at normal shipping levels as
  compared to prior years when the partial roof collapse at the Company's Dover
  Division facility prevented the Company from maintaining normal shipping levels.
  
       The Company believes that funds from operations and amounts available under
  its credit facilities will be sufficient to satisfy the Company's cash
  requirements for the foreseeable future.
  
  Results of Operations
  
       Sales for the three months ended December 31, 1995 were $6,132,531, an
  increase of $666,304 compared to sales of $5,516,227 for the three months ended
  December 31, 1994. The increase in sales is primarily attributable to increased
  shipments to the United States Government. The increase in sales for the three
  months ended December 31, 1995 represents a percentage increase of 11.17% as
  compared to the three months ended December 31, 1994.
  
       Income from operations increased to $308,536 for the three months ended
  December 31, 1995 from $149,436 for the three months ended December 31, 1994,
  due to a more favorable product mix and a higher sales volume. Gross profit as a
  percentage of sales increased to 23.53% for the three months ended December 31,
  1995 compared to 19.47% for the three months ended December 31, 1994.
  
       Selling and administrative expenses increased $228,679 to $760,642 for the
  three months ended December 31, 1995. The increase was primarily due to costs
  associated with MDLLC. As a percentage of sales, selling and administrative
  expense increased to 12.40% for the three months ended December 31, 1995 as
  compared to 9.64% for the three months ended December 31, 1994.
  
       Research and development expenses decreased $17,008 to $296,996 for the
  three months ended December 31, 1995 as compared to $314,004 for the three
  months ended December 31, 1994. The decrease can be accounted for by a reduction
  in customer-sponsored research. As a percentage of sales, research and
  development expenses decreased to 4.84% for the three months ended December 31,
  1995 as compared to 5.69% for the three months ended December 31, 1994.
  
       Interest expense decreased to $76,766 for the three months ended December
  31, 1995 as compared to $78,860 for the three months ended December 31, 1994.
  
       Sales for the six months ended December 31, 1995 increased $2,659,720 to
  $12,343,174 as compared to $9,683,454 for the six months ended December 31,
  1994. The increase in sales can be accounted for primarily by increased
  shipments to the United States Government. Additionally, as a result of more
  aggressive marketing abroad, foreign sales increased to $2,310,015 for the six
  months ended December 31, 1995 as compared to $1,456,160 for the six months
  ended December 31, 1994.
  
                                        -13-
  Income from operations increased to $791,505 for the six months ended
  December 31, 1995 as compared to $293,227 for the six months ended December 31,
  1994, due to a more favorable product mix and increased shipments. Gross profit
  as a percentage of sales increased to 22.29% for the six months ended December
  31, 1995 as compared to 20.00% for the six months ended December 31, 1994.
  
       Selling and administrative expenses increased $329,760 to $1,320,681 for
  the six months ended December 31, 1995. The increase was due primarily to costs
  associated with MDLLC. As a percentage of sales, selling and administrative
  expenses increased to 10.70% for the six months ended December 31, 1995 as
  compared to 10.23% for the six months ended December 31, 1994.
  
       Research and development expenses decreased $33,315 to $488,701 for the six
  months ended December 31, 1995 as compared to $522,016 for the six months ended
  December 31, 1994. The decrease can be accounted for by a reduction in
  customer-sponsored research. As a percentage of sales, research and development
  expenses decreased to 3.95% for the six months ended December 31, 1995 as
  compared to 5.39% for the six months ended December 31, 1994.
  
       Interest expense increased to $150,414 for the six months ended December
  31, 1995 as compared to $130,811 for the six months ended December 31, 1994. The
  increase can be accounted for by costs associated with letters of credit for a
  multi-year contract.
  
                                        -14-
  PART II - OTHER INFORMATION
  
  Item 1.  Legal Proceedings.
  
       In September 1995, management was notified that MDLLC, Mark A. Sitcoske and
  a company controlled by Mr. Sitcoske, Measurement Dynamics, Inc., had been named
  as co-defendants in a suit filed on September 7, 1995 in the Superior Court of
  the State of Rhode Island by Hanna Manufacturing, Inc. ("Hanna"), a Rhode Island
  company that previously employed Mr. Sitcoske. The suit alleges that the
  defendants acted in violation of an existing employment and non-compete
  agreement between Hanna and Mr. Sitcoske and seeks to enjoin and obtain damages;
  however, Hanna has not yet sought a hearing to obtain injunctive relief.
  Although the matter is still in its early stages, management expects that the
  resolution of this matter will have no material impact on the Company.
  
  Item 2.  Changes in Securities.
  
           Not Applicable.
  
  Item 3.  Defaults upon Senior Securities.
  
           Not Applicable.
  
  Item 4.  Submission of Matters to a Vote of Security Holders.
  
       The Company held its 1995 Annual Meeting of Shareholders on December 11,
  1995. At the meeting, Earl M. Pollock, Dorothy S. Pollock and Charles H.
  Sulzberger were elected to the Company's Board of Directors; Shareholders cast
  22,717 votes for the election of each director; 3 votes were withheld with
  respect to the election of each director.
  
  Item 5.  Other Information.
  
           Not Applicable.
  
  Item 6.  Exhibits and Reports on Form 8-K.
  
            (a)  Exhibits.
  
                 27.  Financial Data Schedules
  
            (b)  Reports on Form 8-K.
  
                 No reports on Form 8-K were filed during the quarter ended
                 December 31, 1995.
  
                                        -15-
  SIGNATURES
  
       Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this Report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
                                      NUCLEAR RESEARCH CORPORATION
  
                                      By: /s/ Earl M. Pollock
                                         Earl M. Pollock
                                         President
  
                                      By: /s/ Mark S. Pollock
                                          Mark S. Pollock
                                          Treasurer
  
  Dated:  February 14, 1996
  
                                        -16-
  Exhibit Index
  
  Exhibit                                                     Method of Filing
  
    27.  Financial Data Schedules . . . . . . . . .           Filed Herewith
                                                              Electronically
  
                                        -17-