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 March 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 May 15, 1995,  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 - March 31, 1995
           and June 30, 1994....................................................3
  
           Consolidated Statements of Operations - Three
           Months Ended March 31, 1995 and 1994.................................5
  
           Consolidated Statements of Operations - Nine
           Months Ended March 31, 1995 and 1994.................................6
  
           Consolidated Statements of Shareholders' Equity -
           Nine Months Ended March 31, 1995 and The
           Year Ended June 30, 1994.............................................7
  
           Consolidated Statements of Cash Flows - Nine
           Months Ended March 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.................................11
  
  PART II. Other Information.
  
  Item 1.  Legal Proceedings...................................................14
  
  Item 2.  Changes in Securities...............................................14
  
  Item 3.  Defaults Upon Senior Securities.....................................14
  
  Item 4.  Submission of Matters to a Vote of Security
           Holders.............................................................14
  
  Item 5.  Other Information...................................................14
  
  Item 6.  Exhibits and Reports on Form 8-K....................................14
  
  
  
  
  <PAGE>3
  
                           PART I - FINANCIAL INFORMATION
  
  ITEM 1.
                    NUCLEAR RESEARCH CORPORATION AND SUBSIDIARY
                            CONSOLIDATED BALANCE SHEETS
                                    (UNAUDITED)
  
  <TABLE>
  <CAPTION>
                                       ASSETS
  
                                                         March 31, 1995                   June 30, 1994
                                                         --------------                   -------------
  <S>                                               <C>                             <C>
  CURRENT ASSETS
      Cash                                               $    21,454                     $   163,273
      Accounts receivable                                  3,380,943                       3,760,778
      Costs and Estimated
        Earnings in Excess
        of Billings (Note 5)                                 908,289                          -
      Other Receivable (Note 4)                                  -                           695,335
      Inventory (Note 3)                                   4,442,894                       4,780,386
      Prepaid expenses and
        other current assets                                 256,615                          26,113
                                                          ----------                      ----------
         Total Current Assets                              9,010,195                       9,425,885
  
  PROPERTY, PLANT AND EQUIPMENT 
      (net of accumulated depre-
       ciation and amortization of 
       $2,339,330 at March 31, 
       1995 and $2,079,495 at
       June 30, 1994)                                      1,443,554                       1,456,620
  
  OTHER ASSETS
      Patents (net of accumulated
      amortization of $55,521
      at March 31, 1995 and
      $48,726 at June 30, 1994                               132,655                         127,483
  
      Other                                                   13,685                          14,706
                                                         -----------                     -----------
  
         Total Other Assets                                  146,340                         142,189
                                                         -----------                     -----------
  
  TOTAL ASSETS                                           $10,600,089                     $11,024,694
                                                         ===========                     ===========
  </TABLE>
  
  
                   See Notes to Consolidated Financial Statements
  
  
  
  <PAGE>4
  
  
  
                    NUCLEAR RESEARCH CORPORATION AND SUBSIDIARY
                            CONSOLIDATED BALANCE SHEETS
                                    (UNAUDITED)
  
  <TABLE>
  <CAPTION>
                        LIABILITIES AND SHAREHOLDERS' EQUITY
  
  
                                                       March 31, 1995                         June 30, 1994
                                                       --------------                         -------------
  <S>                                              <C>                                    <C>
  CURRENT LIABILITIES
      Short-term borrowings                              $ 1,500,000                           $ 2,375,000
      Current portion of
        long-term debt                                       313,004                              344,282
      Accounts payable                                     2,296,078                            1,980,046
      Accrued expenses                                       324,779                              510,640
      Accrued payroll and
        payroll taxes                                        376,136                              424,570
      Taxes payable on income                                159,775                              106,251
                                                         -----------                           ----------
  
      Total Current Liabilities                            4,969,772                             5,740,789
  
  LONG-TERM DEBT                                             489,071                               738,870
  
  DEFERRED INCOME TAXES                                       29,274                                29,274
  
  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 capital                              517,010                               517,010
        Retained Earnings                                  4,497,950                             3,901,739
        Less: treasury stock,
           3,698 shares at cost                              (62,353)                              (62,353)
                                                         -----------                           ----------- 
  
      Total Shareholders' Equity                           5,111,972                             4,515,761
                                                         -----------                           -----------
  
  TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY                                   $10,600,089                           $11,024,694
                                                         ===========                           ===========
  </TABLE>
  
  
  
  
  
                   See Notes to Consolidated Financial Statements
  
  
  
  <PAGE>5
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (UNAUDITED)
  
  <TABLE>
  <CAPTION>
                                                                             Three Months Ended
                                                                                   March 31,
  
                                                                      1995                          1994
                                                                      ----                          ----
  <S>                                                          <C>                           <C>
  NET SALES                                                       $6,917,256                   $4,559,238
  
  COST OF SALES                                                    5,459,182                    3,730,619
                                                                  ----------                   ----------
  GROSS PROFIT                                                     1,458,074                      828,619
  
  SELLING AND ADMINISTRATIVE
     EXPENSES                                                        453,950                      313,986
  
  RESEARCH AND DEVELOPMENT
     EXPENSES                                                        211,612                      218,642
  
  INTEREST EXPENSE                                                    92,936                       36,200
                                                                  ----------                    ---------
  INCOME FROM OPERATIONS                                             699,576                      259,791
  
  OTHER INCOME                                                         6,181                        2,090
                                                                  ----------                    ---------
  INCOME BEFORE INCOME TAXES                                         705,757                      261,881
     LESS: TAXES ON INCOME                                           290,497                      100,459
                                                                  ----------                    ---------
  NET INCOME                                                      $  415,260                    $ 161,422
                                                                  ==========                    =========
  
  PRIMARY EARNINGS PER SHARE                                      $    12.73                    $    5.23
                                                                  ==========                    =========
  WEIGHTED AVERAGE COMMON SHARES                                      32,621                       30,855
                                                                  ==========                    =========
  </TABLE>
  
  
  
                   See Notes to Consolidated Financial Statements
  
  
  
  <PAGE>6
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (UNAUDITED)
  
  <TABLE>
  <CAPTION>
                                                                             Nine Months Ended
                                                                                   March 31,
  
                                                                      1995                          1994
                                                                      ----                          ----
  <S>                                                           <C>                       <C>
  NET SALES                                                       $16,600,710                  $12,315,962
  COST OF SALES                                                    13,205,661                   10,002,551
                                                                  -----------                  -----------
  GROSS PROFIT                                                      3,395,049                    2,313,411
  
  SELLING AND ADMINISTRATIVE
     EXPENSES                                                       1,444,871                    1,134,882
  
  RESEARCH AND DEVELOPMENT
     EXPENSES                                                         733,628                      749,594
  
  INTEREST EXPENSE                                                    223,747                      203,631
                                                                  -----------                   ----------
  INCOME FROM OPERATIONS                                              992,803                      225,304
  
  OTHER INCOME                                                         11,943                        6,290
                                                                  -----------                   ----------
  INCOME BEFORE INCOME TAXES                                        1,004,746                      231,594
     LESS: TAXES ON INCOME                                            408,535                       86,893
                                                                  -----------                   ----------
  NET INCOME                                                      $   596,211                   $  144,701
                                                                  ===========                   ==========
  
  PRIMARY EARNINGS PER SHARE                                      $     18.28                   $     4.69
                                                                  ===========                   ==========
  WEIGHTED AVERAGE COMMON SHARES                                       32,621                       30,855
                                                                  ===========                   ==========
  </TABLE>
  
  
  
  
  
  
                   See Notes to Consolidated Financial Statements
  
  
  <PAGE>7
  
  
  
                    NUCLEAR RESEARCH CORPORATION AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
       FOR THE NINE MONTHS ENDED MARCH 31, 1995 AND YEAR ENDED JUNE 30, 1994
                                    (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       $3,279,386         $(62,353)        $3,893,408
    June 30, 1993
  
    Net Income for
      the year ended
      June 30, 1994                 -             -               -             622,353             -               622,353
                                  ------       -------         -------        ---------           ------          ---------
  Balance at
    June 30, 1994                 28,175       159,365         517,010        3,901,739          (62,353)         4,515,761
  
    Net income for
      the nine months
      ended March 31,
      1995                          -             -               -             596,211             -               596,211
                                  -------      -------         -------        ---------           ------          ---------
  
  Balance at
    March 31, 1995                28,175      $159,365        $517,010       $4,497,950         $(62,353)        $5,111,972
                                  ======      ========        ========       ==========         =========        ==========
  </TABLE>
  
  
  
  
  
  
                   See Notes to Consolidated Financial Statements
  
  
  
  
  
  
  <PAGE>8
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF CASH FLOW
                                    (UNAUDITED)
  
  <TABLE>
  <CAPTION>
                                                                                       Nine Months Ended
                                                                                            March 31,
  
                                                                                   1995                   1994
                                                                                   ----                   ----
  <S>                                                                     <C>                    <C>
  CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                                               $  596,211              $   144,701
    Adjustments to reconcile net
    income to net cash provided by
    (used by) operating activities:
      Depreciation and amortization                                             266,625                  337,125
      (Increase) Decrease in:
         Accounts receivable                                                    379,835                  (58,539)
         Costs and Estimated
           Earnings in Excess
           of Billings                                                         (908,289)                     -
         Other receivable                                                       695,335                 (896,191)
        Inventory                                                               337,492                 (138,460)
         Prepaid expenses and other
           current assets                                                      (230,502)                  84,781
      Increase (decrease) in:
         Accounts payable, accrued
           expenses and payroll taxes                                            81,737                  740,101
         Taxes payable - on income                                               53,524                    -
                                                                             ----------              -----------
  NET CASH PROVIDED BY OPERATING
    ACTIVITIES                                                                1,271,968                  213,518
                                                                             ----------              -----------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
     Capital expenditures                                                      (258,731)                (121,315)
                                                                             ----------              ----------- 
  
  NET CASH USED BY INVESTING ACTIVITIES                                        (258,731)                (121,315)
                                                                             ----------              ----------- 
  
  CASH FLOWS FROM FINANCING ACTIVITIES
     Net proceeds (payments) on line of
       credit                                                                  (875,000)                 125,000
     Payments on long-term debt                                                (281,077)                (234,532)
     Decrease in Other Assets                                                     1,021                    -
                                                                             ----------              -----------
  
  NET CASH USED BY FINANCING
     ACTIVITIES                                                              (1,155,056)                (109,532)
                                                                             ----------              ----------- 
  
  NET DECREASE IN CASH                                                         (141,819)                 (17,329)
                                                                             ----------              ----------- 
  
  CASH - beginning                                                              163,273                   73,957
                                                                             ----------              -----------
  
  CASH - ending                                                              $   21,454              $    56,628
                                                                             ==========              ===========
  </TABLE>
  
  
                   See Notes to Consolidated Financial Statements
  
  
  
  <PAGE>9
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARY
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  
                         March 31, 1995 and March 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 March 31, 1995 and June 30, 1994 and
  the  consolidated  results of  operations  and cash flows for the three and nine
  months  ended  March  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 three and nine months ended March
  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 and NRC Acquisition Corporation,  hereafter referred to collectively
  as the "Company." All significant  inter-company  accounts and transactions have
  been eliminated in consolidation.
  
  Note 3.  Inventory.
                                                   (UNAUDITED)
                                        March 31,              June 30,
                                           1995                  1994
                                          ------                ------
  Inventory consists of:
  Work-In-Process
    United States Government
      contracts                         $6,902,039            $5,955,568
    Commercial contracts                   607,162               722,299
  Purchased and manufactured
    parts                                1,354,410               923,972
                                        ----------            ----------
                                        $8,863,611            $7,601,839
  
  Less:  Progress payments
    on United States
    Government contracts                 4,420,717             2,821,453
                                        ----------            ----------
           Total                        $4,442,894            $4,780,386
                                        ==========            ==========
  
  
  
  <PAGE>10
  
  
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARY
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  
  Note 3.  Inventory (continued)
  
  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  March  31,  1995,  reported
  inventories  would have been higher by $1,021,818 and the reported  income would
  have been higher by $88,641 ($2.72 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 nine months ended March 31, 1995:
  
                    Gross Profit                                $3,543,109
                                                                ==========
  
                    Income from Operations                      $1,140,863
                                                                ==========
  
                    Net Income                                  $  684,852
                                                                ==========
  
  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.
  
  Note 5.  Costs and Estimated Earnings in Excess of Billings.
  
  The Company uses the  percentage-of-completion  method of income  recognition to
  account for a multi-year contract.
  
  
  
  <PAGE>11
  
  ITEM 2.
  
                      MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
  Liquidity and Capital Resources
  
       During  the nine  months  ended  March  31,  1995,  decreases  in  accounts
  receivable  of  $379,835,  a reduction  in inventory of $337,492 and in an other
  receivable of $695,335  combined with an increase in accounts  payable,  accrued
  expenses and payroll taxes of $81,737 were the principal  factors affecting cash
  provided by operating  activities.  The decrease in the other receivable was the
  result of the final  settlement of the Company's  insurance claim related to the
  partial roof collapse in the Dover Division  facility (see Note 4). Increases in
  costs and  estimated  earnings in excess of  billings  of  $908,289  and prepaid
  expenses and other current assets of $230,502  offset cash provided by operating
  activities for the nine months ended March 31, 1995.
  
       The costs and  estimated  earnings in excess of billings  resulted from the
  Company using the  percentage-of-completion  method for income  recognition of a
  multi-year contract. Additionally,  during the nine months ended March 31, 1995,
  the Company had capital  expenditures of $258,731 to purchase  manufacturing and
  computer  equipment,   to  make  building   improvements  and  to  make  certain
  expenditures  associated with patents. Cash used by financing activities for the
  nine  months  ended  March 31,  1995  increased  by  $1,155,056,  as a result of
  payments on the line of credit of $875,000 and on long term debt of $281,077.
  
       The Company's backlog of orders as of April 30, 1995 and April 30, 1994 was
  $24,177,000 and $35,281,000, respectively.
  
       The Company  increased its line of credit  availability by $500,000 raising
  the  maximum  available  under  its line of credit to  $3,500,000.  The  Company
  believes  that funds from  operations  and amounts  available  under its line of
  credit will be sufficient to satisfy the Company's cash requirements.
  
  Results of Operations.
  
       Sales for the  three  months  ended  March 31,  1995  were  $6,917,256,  an
  increase of  $2,358,018  compared to sales of  $4,559,238  for the three  months
  ended March 31, 1994.  The increase in sales was  primarily due to the Company's
  ability to operate at normal  shipping levels as compared to the prior year when
  the partial roof collapse at the Company's Dover Division facility prevented the
  Company from maintaining normal shipping levels.
  
  
  
  <PAGE>12
  
       Income from  operations  increased  to $699,576  for the three months ended
  March 31, 1995 from  $259,791 for the three months ended March 31, 1994,  due to
  an  increase  in gross  profit.  The  increase  in gross  profit  was  offset by
  increases in selling and administrative  expenses.  Gross profit as a percentage
  of sales  increased  to 21.08% at March 31,  1995 as  compared to 18.17% for the
  three  months  ended  March 31,  1994 as a result of the  Company's  ability  to
  operate at normal shipping levels, combined with increased shipments of products
  with higher gross margins.
  
       Selling and administrative  expenses increased $139,964 to $453,950 for the
  three months ended March 31, 1995.  The increase was  primarily due to increased
  marketing and commission expenses.  As a percentage of sales,  however,  selling
  and administrative  expenses decreased to 6.56% for the three months ended March
  31, 1995 as compared to 6.89% for the three months ended March 31, 1994.
  
       Research  and  development  expenses  decreased  $7,030 to $211,612 for the
  three  months  ended March 31, 1995 as compared to the three  months ended March
  31, 1994. As a percentage of sales,  research and development expenses decreased
  to 3.06% for the three  months ended March 31, 1995 as compared to 4.80% for the
  three months ended March 31, 1994.
  
       Interest  expense  increased  $56,736 to $92,936 for the three months ended
  March 31, 1995.  The increase can be accounted for by higher  interest rates and
  costs associated with letters of credit for a multi-year contract.
  
       Sales for the nine  months  ended  March  31,  1995  were  $16,600,710,  an
  increase of $4,284,748 from sales of $12,315,962 for the nine months ended March
  31, 1994.  The increase in sales was primarily  due to the Company's  ability to
  operate at normal shipping levels as compared to the prior year when the partial
  roof collapse at the Company's  Dover  Division  facility  prevented the Company
  from maintaining normal shipping levels.
  
       Income from  operations  increased  to $992,803  for the nine months  ended
  March 31, 1995 from  $225,304  for the nine months  ended  March 31,  1994.  The
  increase in income from  operations  was  primarily  due to an increase in gross
  profit which was partially  offset by an increase in selling and  administrative
  expenses. Gross profit as a percentage of sales increased to 20.45% for the nine
  months  ended March 31, 1995  compared to 18.78% for the nine months ended March
  31, 1994.  The increase is  attributed  to the  Company's  ability to operate at
  normal shipping levels combined with increased shipments of products with higher
  gross margins.
  
  
  <PAGE>13
  
       Selling and  administrative  expenses  increased $309,989 to $1,444,871 for
  the nine  months  ended  March 31,  1995.  The  increase  was  primarily  due to
  increased  marketing   expenses,   commission  expenses  and  costs  related  to
  negotiating an enhancement of the Company's credit facility.  As a percentage of
  sales,  selling  and  administrative  expenses  decreased  to 8.70% for the nine
  months ended March 31, 1995 as compared to 9.21% for the nine months ended March
  31, 1994.
  
       Research and  development  expenses  decreased  $15,966 to $733,628 for the
  nine months  ended  March 31,  1995 as compared to $749,594  for the nine months
  ended  March 31,  1994.  As a  percentage  of sales,  research  and  development
  expenses decreased to 4.42% for the nine months ended March 31, 1995 as compared
  to 6.09% for the nine months  ended March 31, 1994.  The decrease was  primarily
  due to the fact that all  programming  costs were fully amortized as of June 30,
  1994.
  
       Interest  expense  increased  $20,116 to $223,747 for the nine months ended
  March 31, 1995 as a result of higher interest rates and related costs associated
  with letters of credit for a multi-year contract.
  
  
  
  <PAGE>14
  
  
  
                            PART II - OTHER INFORMATION
  
  
  Item 1.  Legal Proceedings.
  
           Not Applicable.
  
  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.
  
           Not Applicable.
  
  Item 5.  Other Information.
  
           Not Applicable.
  
  Item 6.  Exhibits and Reports on Form 8-K.
  
           (a)      Exhibits.
  
                    Not applicable.
  
           (b)      Reports on Form 8-K.
  
                    No reports on Form 8-K were filed  during the quarter
                    ended March 31, 1995.
  
  
  
  
  <PAGE>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:  May 15, 1995
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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 quarterly period ended March 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 May 15, 1995,  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 - March 31, 1995
           and June 30, 1994....................................................3
  
           Consolidated Statements of Operations - Three
           Months Ended March 31, 1995 and 1994.................................5
  
           Consolidated Statements of Operations - Nine
           Months Ended March 31, 1995 and 1994.................................6
  
           Consolidated Statements of Shareholders' Equity -
           Nine Months Ended March 31, 1995 and The
           Year Ended June 30, 1994.............................................7
  
           Consolidated Statements of Cash Flows - Nine
           Months Ended March 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.................................11
  
  PART II. Other Information.
  
  Item 1.  Legal Proceedings...................................................14
  
  Item 2.  Changes in Securities...............................................14
  
  Item 3.  Defaults Upon Senior Securities.....................................14
  
  Item 4.  Submission of Matters to a Vote of Security
           Holders.............................................................14
  
  Item 5.  Other Information...................................................14
  
  Item 6.  Exhibits and Reports on Form 8-K....................................14
  3
  
                           PART I - FINANCIAL INFORMATION
  
  ITEM 1.
                    NUCLEAR RESEARCH CORPORATION AND SUBSIDIARY
                            CONSOLIDATED BALANCE SHEETS
                                    (UNAUDITED)
  ASSETS
  
                                                         March 31, 1995                   June 30, 1994
                                                         --------------                   -------------
  CURRENT ASSETS
      Cash                                               $    21,454                     $   163,273
      Accounts receivable                                  3,380,943                       3,760,778
      Costs and Estimated
        Earnings in Excess
        of Billings (Note 5)                                 908,289                          -
      Other Receivable (Note 4)                                  -                           695,335
      Inventory (Note 3)                                   4,442,894                       4,780,386
      Prepaid expenses and
        other current assets                                 256,615                          26,113
                                                          ----------                      ----------
         Total Current Assets                              9,010,195                       9,425,885
  
  PROPERTY, PLANT AND EQUIPMENT 
      (net of accumulated depre-
       ciation and amortization of 
       $2,339,330 at March 31, 
       1995 and $2,079,495 at
       June 30, 1994)                                      1,443,554                       1,456,620
  
  OTHER ASSETS
      Patents (net of accumulated
      amortization of $55,521
      at March 31, 1995 and
      $48,726 at June 30, 1994                               132,655                         127,483
  
      Other                                                   13,685                          14,706
                                                         -----------                     -----------
  
         Total Other Assets                                  146,340                         142,189
                                                         -----------                     -----------
  
  TOTAL ASSETS                                           $10,600,089                     $11,024,694
                                                         ===========                     ===========
  See Notes to Consolidated Financial Statements
  4
  
                    NUCLEAR RESEARCH CORPORATION AND SUBSIDIARY
                            CONSOLIDATED BALANCE SHEETS
                                    (UNAUDITED)
  LIABILITIES AND SHAREHOLDERS' EQUITY
  
                                                       March 31, 1995                         June 30, 1994
                                                       --------------                         -------------
  CURRENT LIABILITIES
      Short-term borrowings                              $ 1,500,000                           $ 2,375,000
      Current portion of
        long-term debt                                       313,004                              344,282
      Accounts payable                                     2,296,078                            1,980,046
      Accrued expenses                                       324,779                              510,640
      Accrued payroll and
        payroll taxes                                        376,136                              424,570
      Taxes payable on income                                159,775                              106,251
                                                         -----------                           ----------
  
      Total Current Liabilities                            4,969,772                             5,740,789
  
  LONG-TERM DEBT                                             489,071                               738,870
  
  DEFERRED INCOME TAXES                                       29,274                                29,274
  
  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 capital                              517,010                               517,010
        Retained Earnings                                  4,497,950                             3,901,739
        Less: treasury stock,
           3,698 shares at cost                              (62,353)                              (62,353)
                                                         -----------                           ----------- 
  
      Total Shareholders' Equity                           5,111,972                             4,515,761
                                                         -----------                           -----------
  
  TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY                                   $10,600,089                           $11,024,694
                                                         ===========                           ===========
  See Notes to Consolidated Financial Statements
  5
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (UNAUDITED)
  Three Months Ended
                                                                                   March 31,
  
                                                                      1995                          1994
                                                                      ----                          ----
  NET SALES                                                       $6,917,256                   $4,559,238
  
  COST OF SALES                                                    5,459,182                    3,730,619
                                                                  ----------                   ----------
  GROSS PROFIT                                                     1,458,074                      828,619
  
  SELLING AND ADMINISTRATIVE
     EXPENSES                                                        453,950                      313,986
  
  RESEARCH AND DEVELOPMENT
     EXPENSES                                                        211,612                      218,642
  
  INTEREST EXPENSE                                                    92,936                       36,200
                                                                  ----------                    ---------
  INCOME FROM OPERATIONS                                             699,576                      259,791
  
  OTHER INCOME                                                         6,181                        2,090
                                                                  ----------                    ---------
  INCOME BEFORE INCOME TAXES                                         705,757                      261,881
     LESS: TAXES ON INCOME                                           290,497                      100,459
                                                                  ----------                    ---------
  NET INCOME                                                      $  415,260                    $ 161,422
                                                                  ==========                    =========
  
  PRIMARY EARNINGS PER SHARE                                      $    12.73                    $    5.23
                                                                  ==========                    =========
  WEIGHTED AVERAGE COMMON SHARES                                      32,621                       30,855
                                                                  ==========                    =========
  See Notes to Consolidated Financial Statements
  6
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (UNAUDITED)
  Nine Months Ended
                                                                                   March 31,
  
                                                                      1995                          1994
                                                                      ----                          ----
  NET SALES                                                       $16,600,710                  $12,315,962
  COST OF SALES                                                    13,205,661                   10,002,551
                                                                  -----------                  -----------
  GROSS PROFIT                                                      3,395,049                    2,313,411
  
  SELLING AND ADMINISTRATIVE
     EXPENSES                                                       1,444,871                    1,134,882
  
  RESEARCH AND DEVELOPMENT
     EXPENSES                                                         733,628                      749,594
  
  INTEREST EXPENSE                                                    223,747                      203,631
                                                                  -----------                   ----------
  INCOME FROM OPERATIONS                                              992,803                      225,304
  
  OTHER INCOME                                                         11,943                        6,290
                                                                  -----------                   ----------
  INCOME BEFORE INCOME TAXES                                        1,004,746                      231,594
     LESS: TAXES ON INCOME                                            408,535                       86,893
                                                                  -----------                   ----------
  NET INCOME                                                      $   596,211                   $  144,701
                                                                  ===========                   ==========
  
  PRIMARY EARNINGS PER SHARE                                      $     18.28                   $     4.69
                                                                  ===========                   ==========
  WEIGHTED AVERAGE COMMON SHARES                                       32,621                       30,855
                                                                  ===========                   ==========
  See Notes to Consolidated Financial Statements
  7
  
                    NUCLEAR RESEARCH CORPORATION AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
       FOR THE NINE MONTHS ENDED MARCH 31, 1995 AND YEAR ENDED JUNE 30, 1994
                                    (UNAUDITED)
  Common Stock          Additional                                            Total
                                                              Paid In         Retained                         Shareholders'
                                  Shares       Amount         Capital         Earnings       Treasury Stock        Equity
  Balance at                      28,175      $159,365        $517,010       $3,279,386         $(62,353)        $3,893,408
    June 30, 1993
  
    Net Income for
      the year ended
      June 30, 1994                 -             -               -             622,353             -               622,353
                                  ------       -------         -------        ---------           ------          ---------
  Balance at
    June 30, 1994                 28,175       159,365         517,010        3,901,739          (62,353)         4,515,761
  
    Net income for
      the nine months
      ended March 31,
      1995                          -             -               -             596,211             -               596,211
                                  -------      -------         -------        ---------           ------          ---------
  
  Balance at
    March 31, 1995                28,175      $159,365        $517,010       $4,497,950         $(62,353)        $5,111,972
                                  ======      ========        ========       ==========         =========        ==========
  See Notes to Consolidated Financial Statements
  8
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF CASH FLOW
                                    (UNAUDITED)
  Nine Months Ended
                                                                                            March 31,
  
                                                                                   1995                   1994
                                                                                   ----                   ----
  CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                                               $  596,211              $   144,701
    Adjustments to reconcile net
    income to net cash provided by
    (used by) operating activities:
      Depreciation and amortization                                             266,625                  337,125
      (Increase) Decrease in:
         Accounts receivable                                                    379,835                  (58,539)
         Costs and Estimated
           Earnings in Excess
           of Billings                                                         (908,289)                     -
         Other receivable                                                       695,335                 (896,191)
        Inventory                                                               337,492                 (138,460)
         Prepaid expenses and other
           current assets                                                      (230,502)                  84,781
      Increase (decrease) in:
         Accounts payable, accrued
           expenses and payroll taxes                                            81,737                  740,101
         Taxes payable - on income                                               53,524                    -
                                                                             ----------              -----------
  NET CASH PROVIDED BY OPERATING
    ACTIVITIES                                                                1,271,968                  213,518
                                                                             ----------              -----------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
     Capital expenditures                                                      (258,731)                (121,315)
                                                                             ----------              ----------- 
  
  NET CASH USED BY INVESTING ACTIVITIES                                        (258,731)                (121,315)
                                                                             ----------              ----------- 
  
  CASH FLOWS FROM FINANCING ACTIVITIES
     Net proceeds (payments) on line of
       credit                                                                  (875,000)                 125,000
     Payments on long-term debt                                                (281,077)                (234,532)
     Decrease in Other Assets                                                     1,021                    -
                                                                             ----------              -----------
  
  NET CASH USED BY FINANCING
     ACTIVITIES                                                              (1,155,056)                (109,532)
                                                                             ----------              ----------- 
  
  NET DECREASE IN CASH                                                         (141,819)                 (17,329)
                                                                             ----------              ----------- 
  
  CASH - beginning                                                              163,273                   73,957
                                                                             ----------              -----------
  
  CASH - ending                                                              $   21,454              $    56,628
                                                                             ==========              ===========
  See Notes to Consolidated Financial Statements
  9
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARY
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  
                         March 31, 1995 and March 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 March 31, 1995 and June 30, 1994 and
  the  consolidated  results of  operations  and cash flows for the three and nine
  months  ended  March  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 three and nine months ended March
  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 and NRC Acquisition Corporation,  hereafter referred to collectively
  as the "Company." All significant  inter-company  accounts and transactions have
  been eliminated in consolidation.
  
  Note 3.  Inventory.
                                                   (UNAUDITED)
                                        March 31,              June 30,
                                           1995                  1994
                                          ------                ------
  Inventory consists of:
  Work-In-Process
    United States Government
      contracts                         $6,902,039            $5,955,568
    Commercial contracts                   607,162               722,299
  Purchased and manufactured
    parts                                1,354,410               923,972
                                        ----------            ----------
                                        $8,863,611            $7,601,839
  
  Less:  Progress payments
    on United States
    Government contracts                 4,420,717             2,821,453
                                        ----------            ----------
           Total                        $4,442,894            $4,780,386
                                        ==========            ==========
  10
  
                     NUCLEAR RESEARCH CORPORATION & SUBSIDIARY
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  
  Note 3.  Inventory (continued)
  
  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  March  31,  1995,  reported
  inventories  would have been higher by $1,021,818 and the reported  income would
  have been higher by $88,641 ($2.72 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 nine months ended March 31, 1995:
  
                    Gross Profit                                $3,543,109
                                                                ==========
  
                    Income from Operations                      $1,140,863
                                                                ==========
  
                    Net Income                                  $  684,852
                                                                ==========
  
  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.
  
  Note 5.  Costs and Estimated Earnings in Excess of Billings.
  
  The Company uses the  percentage-of-completion  method of income  recognition to
  account for a multi-year contract.
  11
  
  ITEM 2.
  
                      MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
  Liquidity and Capital Resources
  
       During  the nine  months  ended  March  31,  1995,  decreases  in  accounts
  receivable  of  $379,835,  a reduction  in inventory of $337,492 and in an other
  receivable of $695,335  combined with an increase in accounts  payable,  accrued
  expenses and payroll taxes of $81,737 were the principal  factors affecting cash
  provided by operating  activities.  The decrease in the other receivable was the
  result of the final  settlement of the Company's  insurance claim related to the
  partial roof collapse in the Dover Division  facility (see Note 4). Increases in
  costs and  estimated  earnings in excess of  billings  of  $908,289  and prepaid
  expenses and other current assets of $230,502  offset cash provided by operating
  activities for the nine months ended March 31, 1995.
  
       The costs and  estimated  earnings in excess of billings  resulted from the
  Company using the  percentage-of-completion  method for income  recognition of a
  multi-year contract. Additionally,  during the nine months ended March 31, 1995,
  the Company had capital  expenditures of $258,731 to purchase  manufacturing and
  computer  equipment,   to  make  building   improvements  and  to  make  certain
  expenditures  associated with patents. Cash used by financing activities for the
  nine  months  ended  March 31,  1995  increased  by  $1,155,056,  as a result of
  payments on the line of credit of $875,000 and on long term debt of $281,077.
  
       The Company's backlog of orders as of April 30, 1995 and April 30, 1994 was
  $24,177,000 and $35,281,000, respectively.
  
       The Company  increased its line of credit  availability by $500,000 raising
  the  maximum  available  under  its line of credit to  $3,500,000.  The  Company
  believes  that funds from  operations  and amounts  available  under its line of
  credit will be sufficient to satisfy the Company's cash requirements.
  
  Results of Operations.
  
       Sales for the  three  months  ended  March 31,  1995  were  $6,917,256,  an
  increase of  $2,358,018  compared to sales of  $4,559,238  for the three  months
  ended March 31, 1994.  The increase in sales was  primarily due to the Company's
  ability to operate at normal  shipping levels as compared to the prior year when
  the partial roof collapse at the Company's Dover Division facility prevented the
  Company from maintaining normal shipping levels.
  12
  
       Income from  operations  increased  to $699,576  for the three months ended
  March 31, 1995 from  $259,791 for the three months ended March 31, 1994,  due to
  an  increase  in gross  profit.  The  increase  in gross  profit  was  offset by
  increases in selling and administrative  expenses.  Gross profit as a percentage
  of sales  increased  to 21.08% at March 31,  1995 as  compared to 18.17% for the
  three  months  ended  March 31,  1994 as a result of the  Company's  ability  to
  operate at normal shipping levels, combined with increased shipments of products
  with higher gross margins.
  
       Selling and administrative  expenses increased $139,964 to $453,950 for the
  three months ended March 31, 1995.  The increase was  primarily due to increased
  marketing and commission expenses.  As a percentage of sales,  however,  selling
  and administrative  expenses decreased to 6.56% for the three months ended March
  31, 1995 as compared to 6.89% for the three months ended March 31, 1994.
  
       Research  and  development  expenses  decreased  $7,030 to $211,612 for the
  three  months  ended March 31, 1995 as compared to the three  months ended March
  31, 1994. As a percentage of sales,  research and development expenses decreased
  to 3.06% for the three  months ended March 31, 1995 as compared to 4.80% for the
  three months ended March 31, 1994.
  
       Interest  expense  increased  $56,736 to $92,936 for the three months ended
  March 31, 1995.  The increase can be accounted for by higher  interest rates and
  costs associated with letters of credit for a multi-year contract.
  
       Sales for the nine  months  ended  March  31,  1995  were  $16,600,710,  an
  increase of $4,284,748 from sales of $12,315,962 for the nine months ended March
  31, 1994.  The increase in sales was primarily  due to the Company's  ability to
  operate at normal shipping levels as compared to the prior year when the partial
  roof collapse at the Company's  Dover  Division  facility  prevented the Company
  from maintaining normal shipping levels.
  
       Income from  operations  increased  to $992,803  for the nine months  ended
  March 31, 1995 from  $225,304  for the nine months  ended  March 31,  1994.  The
  increase in income from  operations  was  primarily  due to an increase in gross
  profit which was partially  offset by an increase in selling and  administrative
  expenses. Gross profit as a percentage of sales increased to 20.45% for the nine
  months  ended March 31, 1995  compared to 18.78% for the nine months ended March
  31, 1994.  The increase is  attributed  to the  Company's  ability to operate at
  normal shipping levels combined with increased shipments of products with higher
  gross margins.
  13
  
       Selling and  administrative  expenses  increased $309,989 to $1,444,871 for
  the nine  months  ended  March 31,  1995.  The  increase  was  primarily  due to
  increased  marketing   expenses,   commission  expenses  and  costs  related  to
  negotiating an enhancement of the Company's credit facility.  As a percentage of
  sales,  selling  and  administrative  expenses  decreased  to 8.70% for the nine
  months ended March 31, 1995 as compared to 9.21% for the nine months ended March
  31, 1994.
  
       Research and  development  expenses  decreased  $15,966 to $733,628 for the
  nine months  ended  March 31,  1995 as compared to $749,594  for the nine months
  ended  March 31,  1994.  As a  percentage  of sales,  research  and  development
  expenses decreased to 4.42% for the nine months ended March 31, 1995 as compared
  to 6.09% for the nine months  ended March 31, 1994.  The decrease was  primarily
  due to the fact that all  programming  costs were fully amortized as of June 30,
  1994.
  
       Interest  expense  increased  $20,116 to $223,747 for the nine months ended
  March 31, 1995 as a result of higher interest rates and related costs associated
  with letters of credit for a multi-year contract.
  14
  
                            PART II - OTHER INFORMATION
  
  Item 1.  Legal Proceedings.
  
           Not Applicable.
  
  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.
  
           Not Applicable.
  
  Item 5.  Other Information.
  
           Not Applicable.
  
  Item 6.  Exhibits and Reports on Form 8-K.
  
           (a)      Exhibits.
  
                    Not applicable.
  
           (b)      Reports on Form 8-K.
  
                    No reports on Form 8-K were filed  during the quarter
                    ended March 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:  May 15, 1995