UNITED STATES
                   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 30, 1997
                                 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. 0-13576

                      ENCORE COMPUTER CORPORATION
        (Exact name of registrant as specified in its charter)
        Delaware                             04-2789167  
 (State of Incorporation)           (I.R.S. Employer Identification No.)
  6901 West Sunrise Blvd.
 Fort Lauderdale, Florida                                   33313     
(Address of Principal Executive Offices)                  (Zip Code)
Telephone:  954-587-2900

      Securities registered pursuant to Section 12(g) of the Act:
                         Title of each class
               Common Stock, par value $.01 per share

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.  X  Yes    No

The  number of shares outstanding of the registrant's
only class of  Common Stock as of  May 13, 1997 was
37,324,618.

                     Encore Computer Corporation
                                 Index
Page
Part I              FINANCIAL INFORMATION
Item 1              Condensed Consolidated Financial Statements       3
                    Notes to Condensed Consolidated
                    Financial Statements                              8
Item 2              Management's Discussion and Analysis of Financial
                    Condition and Results of Operations              14
Part II              OTHER INFORMATION                               18
Signature Page                                                       19


   
ENCORE COMPUTER CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands except per share data)
                                                   Three Months Ended
                                                   March 30, March 31,
                                                        1997      1996
Net sales:
 Equipment                                            $4,183    $6,571
 Service                                               4,150     5,143
  Total                                                8,333    11,714

Costs and expenses:
 Cost of equipment sales                               7,176     5,879
 Cost of service sales                                 4,269     4,961
 Research and development                              7,269     8,264
 Sales, general and administrative                     7,638     8,718
  Total                                               26,352    27,822

Operating loss                                       -18,019   -16,108
 Interest expense, principally
  related parties                                     -1,399      -690
 Interest income                                          29        41
 Other income/(expense), net                            -663      -140

Loss before income taxes                             -20,052   -16,897

Provision for income taxes                               -29         0

Net loss                                            -$20,023  -$16,897

Net loss per common share:

Net loss attributable to common
 shareholders                                      ($26,883) ($22,851)

Loss per common share                                ($0.72)   ($0.63)

Weighted average shares
 of common stock                                      37,276    36,350
    


The accompanying notes are an integral part of the condensed
consolidated financial statements.


ENCORE COMPUTER CORPORATION
Condensed Consolidated Balance Sheets
(in thousands except share data)
                                                  (Unaudited)
                                                   March 30,   Dec 31,
                                                        1997      1996
ASSETS
Current assets:
 Cash and cash equivalents                            $5,006    $3,936
 Accounts receivable, less allowance                  10,238    14,970
 Inventories (Note B)                                 12,100    13,896
 Prepaid expenses and other current assets               790     1,409
  Total current assets                                28,134    34,211

Property and equipment, net                           32,179    33,376

Other assets                                           1,553     1,669

  Total assets                                       $61,866   $69,256

LIABILITIES AND CAPITAL DEFICIENCY

Current liabilities:
 Curr. portion long term debt-rela parties(Note D)   $43,516   $72,659
 Current portion long term debt-other (Note D)           167       182
 Accounts payable and accrued liabilities (Note C)    30,651    28,665

  Total current liabilities                           74,334   101,506

Long term debt-other (Note D)                            445       476
Other liabilities                                      1,255     1,284

  Total liabilities                                   76,034   103,266

Capital deficiency:
 Preferred stock, $.01 par value; authorized 10,000,000 shares:
  Series A Convertible Participating Preferred, issued
   73,641 shares in 1997 and 1996                          1         1
  6% Cumulative Series B Convertible Preferred, issued
   728,722 in 1997 and 1996, with an aggregate
   liquidation preference of $72,872,200                   7         7
  6% Cumulative Series D Convertible Preferred, issued
   1,115,074 in 1997 and 1996, with an aggregate
   liquidation preference of $111,507,400                 11        11
  6% Cumulative Series E Convertible Preferred, issued
   1,139,782 in 1997 and 1996, with an aggregate
   liquidation preference of $113,978,200                 11        11
  6% Cumulative Series F Convertible Preferred, issued
   533,333 in 1997 and 1996, with an aggregate
   liquidation preference of $53,333,300                   5         5
  6% Cumulative Series G Convertible Preferred, issued
   572,289 in 1997 and 1996, with an aggregate
   liquidation preference of $57,228,900                   6         6
  6% Cumulative Series H Convertible Preferred, issued
   350,000 in 1997 and 1996, with an aggregate
   liquidation preference of $35,000,000.                  4         4
  6% Cumulative Series I Convertible Preferred, issued
   400,000 in 1997 with an aggregate
   liquidation preferenceof $40,000,000.                   4         0
 Common stock, $.01 par value; authorized 200,000,000 shares;
  issued 37,298,306 and 37,270,457 in 1997 and 1996,
  respectively.                                          373       373
 Additional paid-in capital                          486,929   447,068
 Accumulated deficit                                -501,519  -481,496
  Total capital deficiency                           -14,168   -34,010
  Total liab and cap'l deficiency                    $61,866   $69,256

The accompanying notes are an integral part of the condensed
consolidated financial statements.



ENCORE COMPUTER CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
                                                   Three Months Ended
                                                   March 30, March 31,
                                                        1997      1996
Cash flows from operating activities:
Net loss                                           ($20,023) ($16,897)
Adjustments to arrive at net cash used in operating activities:
 Depreciation and amortization                         2,043     2,899
                                                                                
Net changes in operating assets and liabilities:
 Accounts receivable                                   4,732      -372
 Inventories                                           1,796    -6,284
 Prepaid expenses and other current assets               619      -305
 Other assets                                             -5       167
 Accounts payable and accrued liabilities              1,823     6,363
 Other liabilities                                       -29        73
  Net cash used in operating activities               -9,044   -14,356
Cash flows from investing activities:
 Additions to property and equipment                    -725    -1,877
Cash flows from financing activities:
 Net borrowings under revolving loan agreements       10,857    14,846
 Principal payments of long term debt                    -46       -42
 Issuance of Common Stock                                 28       483
  Net cash provided by financing activities           10,839    15,287
Increase (decrease) in cash and cash equivalents       1,070      -946
Cash and cash equivalents, beginning                   3,936     2,797
Cash and cash equivalents, ending                     $5,006    $1,851

The accompanying notes are an integral part of the condensed
consolidated financial statements.



ENCORE COMPUTER CORPORATION
Condensed Consolidated Statements of Cash Flows
                                                   Three Months Ended
                                                   March 30, March 31,
                                                        1997      1996
Supplemental disclosure of cash flow information (in thousands):
 Cash paid during the period for interest                $29      $105
 Cash paid during the period for income taxes            485         0
Non-cash investing and financing activity:
 Indebtedness exchanged for preferred stock          $40,000        $0

The accompanying notes are an integral part of the condensed
consolidated financial statements.



ENCORE COMPUTER CORPORATION
Condensed Statements of Shareholders' Equity (Capital Deficiency)
(in thousands except share data)
                               Preferred Stock
               Series A    Series B        Series D      Series E
                     Par          Par             Par            Par
             Shares  Val  Shares  Val    Shares   Val   Shares    Val
Balance
Dec 31, 1996  73,641  $1  728,722  $7  1,115,074  $11  1,139,782  $11
Common stock options
 exercised, $.69 to
 $1.56 per share      
Issuance of Series I
 Convert. Preferred
 Stock (Notes D and E) 
Net loss
Balance
Mar 30, 1997  73,641  $1  728,722  $7  1,115,074  $11  1,139,782  $11

The accompanying notes are an intergral part of the condensed
consolidated financial statements.

                                 Preferred Stock
                 Series F    Series G    Series H       Series I 
                      Par          Par          Par            Par
              Shares  Val  Shares  Val Shares   Val    Shares  Val
Balance
Dec 31, 1996  533,333  $5  572,289  $6  350,000  $4        0     $0
Common stock options
 exercised,  $.69 to
 $1.56 per share    
Issuance of Series I
 Convert. Preferred
 Stock (Notes D and E)                                400,000    4
Net loss
Balance
Mar 30, 1997  533,333  $5  572,289  $6  350,000  $4   400,000   $4
                   Common Stock                           Shrhldrs'
                                     Addt'l                 Equity
                             Par    Paid-in      Accum     (Capital
                  Shares     Val    Capital     Deficit    Deficiency)
Balance
Dec 31, 1996     37,270,457  $373   $447,068   ($481,496)  ($34,010)
Common stock options
 exercised, $.69
 to $2.00/shar       27,849     0         28           0         28
Issuance of Series I
 Convertible Preferred Stock
 (Notes D and E)                      39,833           0     39,837
 Net loss                                        (20,023)   (20,023)
Balance
Mar 30, 1997     37,298,306  $373   $486,929   ($501,519)  ($14,168)


Encore Computer Corporation
Notes to Condensed Consolidated Financial Statements

A. Summary of Significant Accounting Policies
Basis of Presentation and Other Matters
The accompanying condensed consolidated financial statements
are  unaudited  and  have been prepared by  Encore  Computer
Corporation  ("Encore" or the "Company") in accordance  with
generally    accepted   accounting   principles.     Certain
information  and footnote disclosures normally  included  in
the  Company's annual consolidated financial statements have
been  condensed  or  omitted.  It is  suggested  that  these
condensed  consolidated  financial  statements  be  read  in
conjunction   with   the   audited  consolidated   financial
statements for the year ended December 31, 1996.

The  condensed  consolidated financial  statements,  in  the
opinion  of  the Company, reflect all adjustments (including
normal recurring accruals) necessary for a fair statement of
the  results for the interim periods.  All adjustments  made
during the interim periods are normal recurring adjustments.
The  year-end  condensed balance sheet data is derived  from
audited  financial  statements  but  does  not  include  all
disclosures   required  by  generally  accepted   accounting
principles.   Certain reclassifications have  been  made  to
conform prior period data to current period presentation.

The  results of operations for the interim periods  are  not
necessarily indicative of the results of operations for  the
fiscal years.

The accompanying condensed consolidated financial statements
have  been prepared assuming that the Company will  continue
as  a  going concern.  As discussed in Note D and E  of  the
Notes  to  Condensed Consolidated Financial Statements,  the
Company  has  borrowings under a $55,000,000 facility  which
matures  June 30, 1997.  Additionally, the Company does  not
have  a  committed  source  of financing  to  meet  expected
requirements  over  the  next  year.   These  matters  raise
substantial doubt about the Company's ability to continue as
a  going concern.  The consolidated financial statements  do
not  include  any  adjustments that might  result  from  the
outcome of these uncertainties.


   
Per Share Data
Per share data is calculated based upon the weighted average
number   of   shares  of  common  stock  and  common   stock
equivalents outstanding.  In fiscal periods which report net
losses,  the  calculation does not  include  the  effect  of
common  stock  equivalents such as stock options  since  the
effect  on  the  amounts  reported  would  be  antidilutive.
All  series of preferred stock have been determined  to
be  common  stock equivalents  but  are  not included in the
weighted average number of shares of  common stock and
equivalents or in the calculation of net loss  per share for
the periods presented because the effect would  be antidilutive.
    


Net loss per common share was determined by dividing the net
loss,  as  adjusted, by applicable shares outstanding.   The
loss  was  adjusted by the aggregate amount of dividends  on
the  Company's  preferred stock.  Preferred stock  dividends
amounted  to  $6,859,600 and $5,953,500 for the three  month
periods   ended   March  30,  1997  and  March   31,   1996,
respectively.  Based on the capital deficiency, the  Company
is  precluded  from paying dividends on its preferred  stock
outstanding.   Accordingly,  the  Company  has   accumulated
preferred  stock  dividends amounting to  $20,276,300.   All
preferred  stock dividends other than those  accumulated  at
March  30, 1997 have been paid in additional shares  of  the
appropriate shares of stock.

B. Inventories
Inventories consist of the following (in thousands):
                                   March 30,    December 31,
                                      1997          1996
                                                    
Purchased Parts                      $   3,736    $   9,357
Work in process                          5,825          306
Finished goods                           2,223        3,981
Loaned computer equipment and
 consignment inventory                     316          252
                                      $ 12,100     $ 13,896

Storage   Product  inventory  amounted  to  $6,866,000   and
$9,169,000  at  March  30,  1997  and  December  31,   1996,
respectively.   The  Company  continues  to  pursue  several
potential  OEM's  to  enhance distribution  of  the  Storage
Product.   No estimate can be made of a range of amounts  of
loss  that are reasonably possible should these efforts  not
be successful.

C. Accounts Payable and Accrued Liabilities;
Accounts payable and accrued liabilities consist of
the following (in thousands):
                                   March 30,    December 31,
                                     1997           1996
                                                    
Accounts payable                   $  4,916         $  4,976
Accrued salaries and benefits         4,770            4,034
Accrued interest-related parties     13,096           11,614
Accrued taxes                         1,858            2,760
Deferred income, principally                             
  maintenance contracts               1,659              879
Other accrued expenses                4,352            4,402
                                   $ 30,651         $ 28,665

Accrued  interest of $12,767,000 and $10,791,000 was payable
to   Gould  at  March  30,  1997  and  December  31,   1996,
respectively.   The balance of accrued interest  to  related
parties  is  being  amortized over the term  of  the  credit
agreement.

D.  Debt
Debt consists of the following (in thousands):
                                March 30,        December 31,
                                   1997              1996
                                                     
Debt to unrelated parties:                        
  Mortgages payable           $      612         $    658
  Current portion of debt           (167)            (182)
  Total long term debt to 
    unrelated parties         $      445         $    476
                                                     
Debt to related parties:                        
  Credit Agreement with Gould                        
    Electronics Inc.          $   43,516        $  72,659
  Current portion of debt        (43,516)         (72,659)
  Total long term debt to  
    related parties           $     -           $     -

Since  1989,  the  principal source  of  financing  for  the
Company  has  been provided by the Japan Energy Corporation,
through  its  wholly owned subsidiaries, Gould  Electronics,
Inc.  ("Gould") and EFI International ("EFI") (collectively,
the  "Japan  Energy Group").  The Japan Energy  Group  is  a
related party due to the significant financial interests  of
Gould  and EFI in the Company.  Assuming full conversion  of
preferred  stock  holdings as of March 30, 1997,  the  Japan
Energy  Group beneficially owns 83% of the Company's  common
stock.   The Company is dependent on the continued financial
support of the Japan Energy Group.  Should the Japan  Energy
Group  withdraw  its financial support, the Company  may  be
unable to continue its normal operations.

On  March  19,  1997, Gould as authorized  by  Japan  Energy
Corporation,  agreed to cancel $40,000,000  of  indebtedness
pursuant to their loan agreement (the "Credit Agreement") in
exchange for the issuance to Gould of 400,000 shares of  the
Company's Series I Convertible Preferred Stock ("Series I"),
as  discussed in more detail in Note E of Notes to Condensed
Consolidated  Financial Statements.  The Company  and  Gould
also agreed to amend the Credit Agreement to (i) reduce  the
maximum  amount  which can be borrowed by the  Company  from
$80,000,000  to  $50,000,000,  and  (ii)  provide  that  any
borrowings  in  excess of $41,915,869 (the principal  amount
outstanding  on March 19, 1997 after giving  effect  to  the
exchange of indebtedness for shares of Series I) may be made
only  at  the  discretion of Gould.  On May 12, 1997,  Gould
agreed to amend the Credit Agreement to increase the maximum
amount which can be borrowed by the Company from $50,000,000
to  $55,000,000.   As of May 13, 1997 the  Company  owed  to
Gould   $49,641,927   under  the  Credit   Agreement,   plus
$13,502,088 in accrued interest.  All borrowings  under  the
Credit Agreement, plus accrued interest, are due and payable
on  June  30,  1997.  In the event of default, the  rate  of
interest  to  be  applied will immediately  increase  by  an
additional 2%.

The credit facility bears interest at the prime rate plus 2%
(10.5%  at  March 30, 1997).  As of March 30,  1997,  Encore
owed to Gould $43,516,000 in principal, plus $12,767,000  in
accrued   interest.    Borrowings  are   collateralized   by
substantially  all of the Company's tangible and  intangible
assets   and   the  agreement  contains  various   covenants
including  maintenance of cash flow, leverage  and  tangible
net  worth  ratios and limitations on capital  expenditures,
dividend  payments and additional indebtedness.   Gould  had
waived  compliance  with  the  financial  covenants  in  the
agreement  until January 1, 1997 and has indicated  it  will
not extend the waiver beyond this date.

In connection with the various exchanges of indebtedness for
preferred stock discussed herein, the United States  Defense
Investigative Service ("DIS") has reviewed the  relationship
between the Company and the Japan Energy Group under revised
government   requirements  relating  to  foreign  ownership,
control  and  influence.  Given the current requirements  in
the  National  Industrial Security Program Operating  Manual
("NISPOM"),  DIS has decided to replace the previous  method
of  negation  of  Foreign Ownership Control  and  Influence,
accomplished  by  Board Resolution,  with  a  more  detailed
Security  Control  Agreement as prescribed  by  DIS  in  the
NISPOM,   which  is  currently  being  drafted  by  Encore's
counsel.

E.  Shareholders' Equity
As  discussed in more detail in Note D of Notes to Condensed
Consolidated Financial Statements, on March 19,  1997  Gould
canceled $40,000,000 of indebtedness in exchange for 400,000
newly-issued shares of Series I Convertible Preferred  Stock
("Series  I").  The principal terms of the Series I  are  as
follows:

(a)   holders of such shares are entitled to receive,  when,
as  and if declared by the Company's board of directors,  an
annual dividend per share equal to $6.00; provided, however,
that  if the number of authorized shares of common stock  of
Company is not increased to at least 300,000,000 on or prior
to  July 15, 1997, then such dividend per share is increased
to  $10; and, further provided, that if the number of shares
of authorized common stock of the Company is increased to at
least 300,000,000 at any time after July 15, 1997, then such
dividend per share is decreased from $10 to $6;

(b)  dividends on such shares are payable in cash; provided,
however,   under   certain  specified   circumstances   such
dividends  may  be  paid in additional shares  of  Series  I
Stock;

(c)  such shares are entitled to a liquidation preference of
$100  per  share plus an amount equal to accrued and  unpaid
dividends  on  such share, which liquidation  preference  is
senior in priority to the Company's common stock and to  all
other shares of Preferred Stock currently outstanding;

(d)   subject to certain specified restrictions, such shares
are  convertible, at the holder's option, at any time,  into
that number of shares of the Company's common stock equal to
(i)  the  liquidation  preference divided  by  $3.25,  which
amount  is  subject  to adjustment under  certain  specified
circumstances;

(e)   such shares are convertible, at the Company's  option,
in  accordance with the conversion methodology summarized in
paragraph  (d)  above, if (i) the last  sale  price  of  the
Company's common stock exceeded $3.90 for twenty consecutive
trading days and (ii) a buyer is contractually committed  to
purchase (x) for at least $3.90 per share, at least  50%  of
the shares of common stock into which the outstanding Series
I  are then convertible or (y) for at least $3.50 per share,
at  least  75% of the shares of common stock into which  the
outstanding shares of Series I are then convertible;

(f)   such shares are non-voting shares except as to matters
that would adversely affect the Series I Stock and except as
to  any  other  matters which, pursuant to  applicable  law,
holders of such shares may be entitled to vote; and

(g)  to the extent that there are not a sufficient number of
authorized shares of the Company's common stock to allow for
a  conversion  of  Series I into shares of common  stock  as
described  above  (after taking into  account,  among  other
things,  (x)  the  number  of options,  warrants  and  other
similar  rights  outstanding and (y)  135%  of  the  maximum
number of shares of common stock the Company may be required
to  issue on conversion of all the shares of each series  of
preferred stock then outstanding), then, to that extent, the
Series  I is convertible into shares of Series J Convertible
Participating  Preferred Stock of the Company  (the  "Series
J") at the rate of one share of Series J for each 100 shares
of common stock.

The principal terms of the Series J are as follows:
(a)   holders  of  such  shares are entitled  to  receive  a
dividend per share equal to 100 times the dividend  that  is
paid  by the Company with regard to a share of common  stock
of the Company;

(b)  such shares are entitled to a liquidation preference of
$1  per  share  plus an amount equal to accrued  and  unpaid
dividends  on  such share, which liquidation  preference  is
senior in priority to the Company's common stock, and, after
the  holders of common stock have received $0.01 per  share,
such  shares of Series J are further entitled to receive  an
amount equal to 100 times the amount per shares in excess of
that $0.01 received by the holders of the common stock;

(c)   subject to certain specified restrictions, such shares
are  convertible, at the holder's option, at  any  time,  in
that number of shares of the Company's common stock equal to
(i)  100 shares of common stock, which amount is subject  to
adjustment under certain specified circumstances;

(d)  such shares are voting shares and holders thereof shall
be  entitled  to  vote together with the holders  of  common
stock,  voting  as a single class, on all matters  presented
for  a vote of the holders of common stock, which each share
of  Series J being entitled to 100 times the number of votes
to which a share of common stock is entitled; and

(e)   the  Series J (i) rank prior to the shares  of  common
stock to the extent specifically provided in the Certificate
of  Designations,  Powers, Rights  and  Preferences  of  the
Series J, and in all other respects, rank on parity with the
common stock, (ii) are on parity with the shares of Series A
Convertible Participating Preferred Stock of the Company and
(iii)  are, and will be, junior to the shares of  all  other
series  of preferred stock of the Company, other than series
which  are expressly designated as ranking on a parity with,
or being junior to, the Series J.

Prior to the transaction, Japan Energy Corporation, and  its
wholly-owned subsidiaries including Gould (the "Japan Energy
Group") beneficially owned, on a fully-diluted basis,  81.6%
of  the Company's outstanding common stock.  Upon completion
of   this   transaction,  Japan  Energy  Group's  beneficial
ownership, on a fully converted basis, increased to 82.9%.

The  completion  of  these transactions  has  the  following
effect on the Company's financial statements:
(i)   shareholders'  equity  increased  by  $39,833,000   as
follows:

Reduction of debt                             $    40,000
Less:
  Par value of shares issued                           (4)
  Reversal of accrued interest                        
   on previous recapitalizations                      283
  Accrued interest on remaining Gould indebtedness
   for the remaining term of the agreements          (446)
  Increase in additional paid-in capital      $    39,833

F.  Liquidity
Based   on   current  estimates  of  available  cash   flow,
management does not believe it will have sufficient cash  to
make  the  mandatory  payment  on  June  30,  1997,  without
proceeds  from  the  sale  of assets  or  a  refinancing  or
restructuring  of the Credit Agreement prior to  such  date.
Additionally,  the Company does not have a committed  source
of  financing  to meet expected requirements over  the  next
year.   The Company has retained an investment banking  firm
to assist in exploring strategic alternatives which include,
among other things, a business combination, sales of assets,
strategic investment in the Company or a refinancing of  the
Credit  Agreement.   There  can be  no  assurance  that  the
Company will be successful in its attempt to consummate  one
of   the   strategic  alternatives  or  a   refinancing   or
restructuring of the Credit Agreement.  If the Company  does
not  make  the  required payment at maturity of  the  Credit
Agreement  or  is  unable to obtain a  committed  source  of
financing adequate to meet expected requirements, it may  be
unable  to  continue its normal operations,  except  to  the
extent  permitted by the Japan Energy Group.   Substantially
all  of  the  Company's tangible and intangible  assets  are
pledged as collateral under the Credit  Agreement.

Item 2
               Management's Discussion and Analysis
           of Financial Condition and Results of Operations
             for the Three Months Ended March 30, 1997
        Compared to the Three Months Ended March  31, 1996

The following is management's discussion and analysis of the
financial condition and the results of operations of  Encore
Computer  Corporation ("Encore" or the  "Company")  for  the
three  month  period ended March 30, 1997  compared  to  the
three month period ended March 31, 1996.  The Company's  net
loss  for  three months ended March 30, 1997 was $20,023,000
compared  to  the net loss for the same period  of  1996  of
$16,897,000.  The increased losses are attributable to lower
revenues  and gross margins as potential customers  continue
to express concerns over the Company's financial condition.

On  March  19,  1997, Gould as authorized  by  Japan  Energy
Corporation,  agreed to cancel $40,000,000  of  indebtedness
pursuant to their loan agreement (the "Credit Agreement") in
exchange for the issuance to Gould of 400,000 shares of  the
Company's Series I Convertible Preferred Stock ("Series I"),
as  discussed in more detail in Note E of Notes to Condensed
Consolidated  Financial Statements.  The Company  and  Gould
also agreed to amend the Credit Agreement to (i) reduce  the
maximum  amount  which can be borrowed by the  Company  from
$80,000,000  to  $50,000,000,  and  (ii)  provide  that  any
borrowings  in  excess of $41,915,869 (the principal  amount
outstanding  on March 19, 1997 after giving  effect  to  the
exchange of indebtedness for shares of Series I) may be made
only  at  the  discretion of Gould.  On May 12, 1997,  Gould
agreed to amend the Credit Agreement to increase the maximum
amount which can be borrowed by the Company from $50,000,000
to  $55,000,000.   As of May 13, 1997 the  Company  owed  to
Gould   $49,641,927   under  the  Credit   Agreement,   plus
$13,502,088 in accrued interest.  All borrowings  under  the
Credit Agreement, plus accrued interest, are due and payable
on June 30, 1997.

Based   on   current  estimates  of  available  cash   flow,
management does not believe it will have sufficient cash  to
make  the  mandatory  payment  on  June  30,  1997,  without
proceeds  from  the  sale  of assets  or  a  refinancing  or
restructuring  of the Credit Agreement prior to  such  date.
Additionally,  the Company does not have a committed  source
of  financing  to meet expected requirements over  the  next
year.   The Company has retained an investment banking  firm
to assist in exploring strategic alternatives which include,
among other things, a business combination, sales of assets,
strategic investment in the Company or a refinancing of  the
Credit  Agreement.   There  can be  no  assurance  that  the
Company will be successful in its attempt to consummate  one
of   the   strategic  alternatives  or  a   refinancing   or
restructuring of the Credit Agreement.  If the Company  does
not  make  the  required payment at maturity of  the  Credit
Agreement  or  is  unable to obtain a  committed  source  of
financing adequate to meet expected requirements, it may  be
unable  to  continue its normal operations,  except  to  the
extent  permitted by the Japan Energy Group.   Substantially
all  of  the  Company's tangible and intangible  assets  are
pledged as collateral under the Credit  Agreement.

RESULTS OF OPERATIONS:
Total net sales for the three month period of 1997 decreased
29%  to  $8,333,000  from $11,714,000 for  the  three  month
period  of  1996.  International net sales declined  21%  to
$4,096,000.  International sales for the three months  ended
March  30,  1997 were 49% of total net sales as compared  to
44% for the same period in 1996.

During  the  three  month  period  ended  March  30,   1997,
equipment  sales decreased $2,388,000 or 36% from  the  same
period  of  1996.  In the first quarter of 1997 net  Storage
Product  sales  were $1,233,000, including the  reversal  of
$954,000 associated with an international installation which
is  expected to be returned, compared to $1,400,000  in  the
first  quarter  of  1996.  Sales of the Company's  real-time
products declined by $2,221,000  to $2,950,000 in the  three
month  period ended March 30, 1997, from $5,171,000  in  the
three month period ended March 31, 1996.

For  the  three  month period ended March 30, 1997,  service
sales  declined  $993,000, or 19% from the  same  period  of
1996.   Continued  declining service  revenues  reflect  the
effect   on  the  service  business  of  (i)  the  Company's
prolonged  decline  in  equipment  sales,  (ii)  the   price
competitiveness of the marketplace, (iii) the completion  of
long    running    government   programs   and    subsequent
deinstallation  of systems and (iv) longer warranty  periods
for  equipment  sales  required to compete  in  the  storage
marketplace.

Cost  of equipment sales for the three month period of  1997
increased from the three month comparable period of 1996  by
$1,297,000  or 22%, despite lower revenues.  As a percentage
of net equipment sales, 1997 cost of equipment sales for the
three  month period was 172% compared to 89% for  the  three
month period of 1996.  These increases are the result of (i)
continued heavy discounting of Storage Products in an effort
to  penetrate  the  marketplace, (ii) under  utilization  of
manufacturing   capacity,  (iii)   higher   warranty   costs
associated  with the Storage Product and (iv) the  Company's
policy of not reversing cost of sales on returned equipment.
Cost of service sales for the three month period ended March
30,  1997  decreased from the comparable period of  1996  by
$692,000  or  14%.   All  service  sales  are  derived  from
installed  real-time products and the cost structure  within
the  service  department  is  highly  variable  due  to  the
utilization  of  service  partners.   While  the   real-time
service business continues to be profitable, service margins
were  reduced  for  investments  in  various  programs   and
infrastructure  necessary  to support  the  Storage  Product
line.  For the three month period ended March 30, 1997, this
investment was $1,400,000.  Therefore, cost of service sales
associated with real-time services was $2,869,000, resulting
in  an adjusted gross margin of $1,281,000 or 31% of service
revenues.

Research  and  development costs for the three month  period
ended  March 30, 1997, decreased from the comparable  period
of  1996 by $995,000 or 12% .  The decrease in 1997 spending
is attributable to lower labor costs and reduced development
material  costs.   However, as a percentage  of  net  sales,
research  and  development expenses were 87% for  the  three
month  period ended March 30, 1997 compared to 71%  for  the
comparable period of 1996.  The Company expects research and
development spending in the near term, to remain  relatively
constant.

Selling,  general and administrative expenses  decreased  by
$1,080,000  or 12% for the three month period of  1997  when
compared  to  1996.  The decrease is attributable  to  lower
labor  costs  in  the  administration  functions  and  lower
commissions due to the decline in sales.  As a percentage of
net   sales,  selling,  general  and  administrative   costs
continue  to  remain  high, 92% for the three  months  ended
March 30, 1997 compared to 74% for the comparable period  of
1996.

Interest expense for the three month period ended March  30,
1997 increased from 1996 levels by $709,000, reflecting  the
Company's higher debt level during the first quarter of 1997
due to the timing and value of the various recapitalizations
occurring in both years.

Other  expense for the three month period of 1997  increased
from 1996 by $523,000 due to higher foreign exchange losses.

LIQUIDITY AND CAPITAL RESOURCES:
During  the  past  five  years,  the  Company  has  incurred
significant operating losses and has been unable to generate
cash   flows  from  operating  activities.   Cash  used   in
operating activities for the first quarter of 1997  amounted
to $9,044,000 compared to $14,356,000 for the same period in
1996.

During  the  three month period ended March 30,  1997,  cash
used  in  operating activities decreased by $5,312,000  when
compared  to  the three month period ended March  31,  1996.
For  the  three month period ended March 30, 1997,  the  net
loss, as adjusted for non cash items, exceeded the net  loss
for  the  comparable period of 1996 by $3,982,000.  Accounts
receivable   and   inventories  decreased   $4,732,000   and
$1,796,000,  respectively, in the  first  quarter  of  1997,
while  in  1996, the Company invested heavily in inventories
to   improve   Storage   Product  availability,   increasing
inventory  by  $6,284,000.   Accounts  payable  and  accrued
liabilities  increased  $1,823,000 and  $6,363,000  for  the
first quarter of 1997 and 1996, respectively.

Expenditures for property and equipment for the three months
ended  March  30, 1997 and March 31, 1996 were $725,000  and
$1,877,000, respectively.  Spare parts required  to  support
customer  installations accounted for 43% of total  property
and equipment spending in the first quarter of 1997.  As  of
March  30,  1997,  there  were no material  commitments  for
capital expenditures.

Cash  used in operating and investing activities during  the
three  month period of 1997 and 1996 was principally  offset
by cash provided through financing activities of $10,839,000
and  $15,287,000,  respectively.  The  principal  source  of
financing  has been through various agreements  provided  by
the  Japan Energy  Group.  As discussed in Notes D and E  of
Notes  to  Condensed Consolidated Financial  Statements,  on
March  19,  1997,  the Company and Gould  agreed  to  cancel
$40,000,000 of indebtedness owed to Gould under  their  loan
agreement  (the  "Credit Agreement")  in  exchange  for  the
issuance to Gould of 400,000 shares of the Company's  Series
I   Convertible  Preferred  Stock  ("Series   I")   with   a
liquidation preference of $40,000,000.  In addition  to  the
exchange of indebtedness for shares of Series I, the Company
and  Gould also agreed to amend the Credit Agreement to  (i)
reduce  the  maximum  amount which can be  borrowed  by  the
Company  from  $80,000,000 to $50,000,000 and  (ii)  provide
that  any borrowings in excess of $41,915,869 (the principal
amount outstanding on March 19, 1997 after giving effect  to
the exchange of indebtedness for shares of Series I) may  be
made  only  at  the discretion of Gould.  On May  12,  1997,
Gould  agreed to amend the Credit Agreement to increase  the
maximum  amount  which can be borrowed by the  Company  from
$50,000,000 to $55,000,000.  As of May 13, 1997 the  Company
owed  to Gould $49,641,927 under the Credit Agreement,  plus
$13,502,088 in accrued interest.  All borrowings  under  the
Credit Agreement, plus accrued interest, are due and payable
on June 30, 1997.

Based   on   current  estimates  of  available  cash   flow,
management does not believe it will have sufficient cash  to
make  the  mandatory  payment  on  June  30,  1997,  without
proceeds  from  the  sale  of assets  or  a  refinancing  or
restructuring  of the Credit Agreement prior to  such  date.
Additionally,  the Company does not have a committed  source
of  financing  to meet expected requirements over  the  next
year.   The Company has retained an investment banking  firm
to assist in exploring strategic alternatives which include,
among other things, a business combination, sales of assets,
strategic investment in the Company or a refinancing of  the
Credit  Agreement.   There  can be  no  assurance  that  the
Company will be successful in its attempt to consummate  one
of   the   strategic  alternatives  or  a   refinancing   or
restructuring of the Credit Agreement.  If the Company  does
not  make  the  required payment at maturity of  the  Credit
Agreement  or  is  unable to obtain a  committed  source  of
financing adequate to meet expected requirements, it may  be
unable  to  continue its normal operations,  except  to  the
extent  permitted by the Japan Energy Group.   Substantially
all  of  the  Company's tangible and intangible  assets  are
pledged as collateral under the Credit  Agreement.

                 Part II - Other Information
                              
                              
                              
                              
Item 6.  Exhibits and Reports on Form 8-K
     (a)  Exhibits required by Item 601 of Regulation S-K
      
      Exhibit No. 11 - Statement re:  computation of per
      share earnings.  See page 20.
      
      Exhibit  No. 27 - Financial Data Schedule.  See page
      21.
      
     (b)  Reports on Form 8-K
      No reports on Form 8-K were filed by the Company
      during the quarter ended March 30, 1997.
      
      
                              
                              
                              
                 Encore Computer Corporation
      
      
      
      
      
                         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.

Encore Computer Corporation

                   KENNETH G. FISHER            EDWARD J. BAKER
                   _________________            _______________
                   Kenneth G. Fisher            Edward J. Baker
                   Chairman  of the Board       Corporate Controller
                   and Chief Executive Officer  Secretary
                                                Chief Accounting Officer
   
Date: October 31, 1997