<PAGE>

                                   FORM 10-Q

                        SECURITIES AND EXCHANGE COMMISSION

                               Washington, DC  20549

            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended   JUNE 27, 1997
                           ---------------

Commission file number  0-20287
                       --------

                             NU-KOTE HOLDING, INC.
             ----------------------------------------------------
            (Exact name of registrant as specified in its charter)

                 DELAWARE                             16-1296153
     -------------------------------              ------------------
     (State or other jurisdiction of               (I.R.S. Employer
      incorporation or organization)              Identification No.)


   17950 PRESTON ROAD, SUITE 690, DALLAS, TEXAS              75252
   --------------------------------------------           ----------
     (Address of principal executive offices)             (Zip Code)


                                 (972) 250-2785
               ----------------------------------------------------
               (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant has (1) 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
        ---      ---

Number of shares of common stock of registrant outstanding at August 7, 1996:

                     Class                            Outstanding
                     -----                            -----------

     Class A common stock $.01 par value               21,775,302

<PAGE>

                             NU-KOTE HOLDING, INC.

                             INDEX TO CONSOLIDATED
                             FINANCIAL STATEMENTS


                                                                     PAGE
                                                                     ----
PART I - FINANCIAL INFORMATION
------------------------------

     Consolidated Balance Sheets as of
       June 27, 1997 and March 31, 1997                                3

     Consolidated Statements of Operations and Retained
       Earnings (Accumulated Deficit) for the Three
       Month Periods Ended June 27, 1997 and June 28, 1996             4

     Consolidated Statements of Cash Flows for the Three
       Month Periods Ended June 27, 1997 and June 28, 1996             5

     Notes to Consolidated Financial Statements                        6

     Management's Discussion and Analysis of Financial
       Condition and Results of Operations                             13

PART II - OTHER INFORMATION
---------------------------

     Other Information                                                 17

     Signature Page                                                    19





                                       2

<PAGE>

                    NU-KOTE HOLDING, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)

                                                          June 27,    March 31,
                                                            1997         1997
                                                         ----------  ----------
                    ASSETS

Current assets:
  Cash and cash equivalents                              $    7,556  $   12,275
  Accounts receivable, net                                   71,818      71,024
  Receivables from related party                              3,715       3,694
  Inventories, net                                           99,895      93,770
  Prepaid expenses                                            9,067      10,452
  Deferred income taxes                                       2,400       1,573
                                                         ----------  ----------
      Total current assets                                  194,451     192,788

Property, plant, and equipment, net                          74,030      75,683
Other assets and deferred charges                             4,750       4,386
Assets held for sale                                          4,482       4,482
Intangibles, net                                             19,221      19,698
                                                         ----------  ----------
          Total assets                                   $  296,934  $  297,037
                                                         ----------  ----------
                                                         ----------  ----------
        LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Bank loans and current portion of long-term debt       $      986  $    1,135
  Accounts payable                                           52,966      51,035
  Compensation related liabilities                            6,406       6,500
  Other accrued liabilities                                  38,567      37,726
                                                         ----------  ----------
      Total current liabilities                              98,925      96,396

Long-term debt, net of current maturities                   137,545     134,677
Other liabilities                                            11,228       9,995
Deferred income taxes                                         6,646       6,541
                                                         ----------  ----------
      Total liabilities                                     254,344     247,609
                                                         ----------  ----------
Shareholders' equity:
  Preferred stock, $.01 par value, 10,000,000 shares
    authorized; none issued
  Class A common stock, $.01 par value, 40,000,000 shares
    authorized; 22,325,302 and 22,325,302 shares issued         223         223
  Class B common stock, $.01 par value, 15,000,000
    shares authorized; none issued
  Additional paid-in capital                                 91,605      91,605
  Accumulated deficit                                       (42,582)    (36,610)
  Foreign currency translation adjustments                   (6,430)     (5,564)
  Treasury stock, at cost, 550,000 shares                      (226)       (226)
                                                         ----------  ----------
      Total shareholders' equity                             42,590      49,428
                                                         ----------  ----------
          Total liabilities and shareholders' equity     $  296,934  $  297,037
                                                         ----------  ----------
                                                         ----------  ----------


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


                                       3

<PAGE>

                    NU-KOTE HOLDING, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                  AND RETAINED EARNINGS (ACCUMULATED DEFICIT)
       FOR THE THREE MONTH PERIODS ENDED JUNE 27, 1997 AND JUNE 28, 1996
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)

<TABLE>
                                                                  June 27,       June 28,
                                                                   1997            1996
                                                               ------------    ------------
<S>                                                            <C>             <C>
Net sales                                                      $     79,727    $     87,457
Cost of sales                                                        63,944          62,230
                                                               ------------    ------------
    Gross margin                                                     15,783          25,227

Selling, general and administrative expenses                         14,690          17,370
Research and development expenses                                     1,788           2,560
Restructuring expense                                                 1,623           1,145
                                                               ------------    ------------
    Operating income (loss)                                          (2,318)          4,152

Interest expense                                                      2,965           1,868
Other expense (income) items, net                                       689            (711)
                                                               ------------    ------------
Income (loss) before income taxes                                    (5,972)          2,995
Provision for income taxes                                                            1,200
                                                               ------------    ------------
    Net income (loss)                                                (5,972)          1,795

Retained earnings (accumulated deficit) - Beginning of period       (36,610)        13,042
                                                               ------------    ------------
Retained earnings (accumulated deficit) - End of period        $    (42,582)   $     14,837
                                                               ------------    ------------
                                                               ------------    ------------
Net income (loss) per share of common stock                    $      (0.27)   $       0.08
                                                               ------------    ------------
                                                               ------------    ------------
Weighted average shares outstanding                              21,775,302      22,498,935
                                                               ------------    ------------
                                                               ------------    ------------
</TABLE>


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


                                       4

<PAGE>

                    NU-KOTE HOLDING, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
       FOR THE THREE MONTH PERIODS ENDED JUNE 27, 1997 AND JUNE 28, 1996
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)


                                                         June 27,     June 28,
                                                           1997        1996
                                                       ----------    ----------

Cash flows from operating activities:
  Net income (loss)                                    $   (5,972)   $    1,795
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
    Exchange (gains) losses                                   200          (859)
    Depreciation and amortization                           3,480         2,997
    Deferred income taxes                                                (1,751)
    Tax benefit from exercise of stock options                               75
    Other                                                     (11)         (675)
  Changes in working capital:
    Accounts receivable                                      (815)        7,638
    Inventories                                            (6,125)      (14,403)
    Prepaid expenses                                        1,385        (3,280)
    Accounts payable                                        1,931         2,437
    Compensation related liabilities                          (94)        1,051
    Other accrued liabilities                               2,256           286
    Cash paid for restructuring                            (1,415)       (1,313)
                                                       ----------    ----------
          Net cash used in operating activities            (5,180)       (6,002)
                                                       ----------    ----------
Cash flows from investing activities:
  Purchase of property, plant and equipment                (1,449)       (3,353)
  Sale of property, plant and equipment                                     317
                                                       ----------    ----------
          Net cash used in investing activities            (1,449)       (3,036)
                                                       ----------    ----------
Cash flows from financing activities:
  Borrowings on long-term debt and other loans              7,868        34,529
  Payments on long-term debt and other loans               (5,149)      (21,673)
  Exercise of stock options                                                 320
                                                       ----------    ----------
          Net cash provided by financing activities         2,719        13,176
                                                       ----------    ----------
Effect of exchange rate changes on cash                      (809)         (480)
                                                       ----------    ----------
Net increase (decrease) in cash                            (4,719)        3,658

Cash and cash equivalents at beginning of period           12,275         6,540
                                                       ----------    ----------
Cash and cash equivalents at end of period             $    7,556    $   10,198
                                                       ----------    ----------
                                                       ----------    ----------

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


                                       5

<PAGE>

                    NU-KOTE HOLDING, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)


1.   THE COMPANY

     Nu-kote Holding, Inc. ("Nu-kote") and its wholly-owned subsidiaries are
     referred to collectively as the "Company".  The Company is one of the
     leading independent manufacturers and distributors of impact and non-
     impact imaging supplies for office and home printing devices, including
     the manufacture and distribution of a full line of typewriter and printer
     ribbons, thermal fax ribbons, cartridges and toners for laser printers,
     facsimile machines and copiers, cartridges and ink for ink jet printers,
     specialty papers, calculator ink rolls, and carbon paper.

     The Company sells products primarily in the United States and Europe,
     directly to wholesale and retail markets, and also to original equipment
     manufacturers and distributors for resale under their brand names or
     private labels.  The Company distributes through virtually all major
     office supply marketing channels, including wholesale distributors, office
     products dealers, direct mail catalogs, office supply "super stores",
     warehouse clubs, information processing specialists, value added
     resellers, and mass market retailers.

     The consolidated balance sheet as of June 27, 1997 and the related
     consolidated statements of operations and retained earnings (accumulated
     deficit) and consolidated statements of cash flows for the three month
     periods ended June 27, 1997 and June 28, 1996 are unaudited.  However, in
     the opinion of management, all adjustments (consisting only of normal
     recurring accruals) necessary for a fair presentation of such financial
     statements have been included.  Interim results are not necessarily
     indicative of results for a full year.

     The financial statements and notes are presented as permitted by Form 10-
     Q, and do not contain certain information included in the Company's annual
     financial statements and notes.

2.   NET INCOME PER SHARE OF COMMON STOCK

     Net income (loss) per share of common stock for the three month periods 
     ended June 27, 1997 and June 28, 1996 is based on the weighted average 
     number of common shares outstanding during the period and the effect of 
     considering common stock equivalents (stock options) under the treasury 
     stock method.  Primary and fully diluted net income per share of common 
     stock are the same and, therefore, are not shown separately.


                                       6

<PAGE>

3.   ACCOUNTS RECEIVABLE

     Accounts receivable are reflected net of allowances for doubtful accounts
     of $4,372 and $3,741 at June 27, 1997 and March 31, 1997, respectively.

4.   INVENTORIES

     Inventories consist of the following:


                                                        June 27,     March 31,
                                                          1997         1997
                                                        -------      --------
     Raw materials                                      $41,810      $36,847
     Work-in-process                                     13,629       12,354
     Finished goods                                      44,456       44,569
                                                        -------      -------
         Total                                          $99,895      $93,770
                                                        -------      -------
                                                        -------      -------

     Since physical inventories taken during the year do not necessarily
     coincide with the end of a quarter, management has estimated the
     composition of inventories with respect to raw materials, work-in-process
     and finished goods.  It is management's opinion that this estimate
     represents a reasonable approximation of the inventory levels at June 27,
     1997.  The amounts at March 31, 1997 are based upon the audited balance
     sheet at that date.

5.   PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment are stated at cost and consist of the
     following components:


                                                        June 27,     March 31,
                                                          1997         1997
                                                       --------      --------
     Land                                              $  4,477      $  4,477
     Buildings and improvements                          19,645        19,417
     Machinery and equipment                             81,265        80,490
                                                       --------      --------

                                                        105,387       104,384
     Less accumulated depreciation                      (31,357)      (28,701)
                                                       --------      --------

         Total                                         $ 74,030      $ 75,683
                                                       --------      --------
                                                       --------      --------

     Depreciation expense amounted to $2,845 and $2,311 for the three month
     periods ended June 27, 1997 and June 28, 1996, respectively.


                                       7

<PAGE>

6.   INTANGIBLE ASSETS

     Intangible assets consist of amounts allocated as a result of purchases of
     existing businesses and are summarized as follows:

<TABLE>
                                         Amortization     June 27,      March 31,
                                            Period          1997          1997
                                         ------------     --------      ---------
      <S>                                    <C>            <C>           <C>

     Goodwill                              20 years       $ 9,880       $ 9,880
     Covenants-not-to-compete             3-5 years         5,636         5,636
     Trademark                             40 years         9,269         9,269
     Technology license                     8 years         1,272         1,272
                                                          -------       -------
                                                           26,057        26,057
     Less accumulated amortization                         (6,836)       (6,359)
                                                          -------       -------

     Total                                                $19,221       $19,698
                                                          -------       -------
                                                          -------       -------
</TABLE>

     Covenant-not-to-compete agreements have been recorded at their net present
     value using estimated discount rates of 7% and 16%.  The trademark has
     been recorded at its estimated value based upon royalty rates charged for
     its use, discounted at an estimated rate of return of 35%.  The technology
     license has been recorded at its estimated fair value based on forecasted
     discounted cash flows using a 16% discount rate.

7.   LINE OF CREDIT

     The Company has a line of credit in Colombia in the amount of $1,450.
     Borrowings against the line of credit amounted to $522 and $603 at June
     27, 1997 and March 31, 1997, respectively.  The line bears interest at the
     prevailing Colombia interest rate plus 2 percentage points.  Average
     interest rates at June 27, 1997 and March 31, 1997 were 17.0% and 17.5%,
     respectively.

8.   LONG-TERM DEBT

     Long-term debt of the Company consists of the following:


                                                        June 27,     March 31,
                                                          1997         1997
                                                       --------      --------
     Revolving lines of credit                         $136,785      $133,917
     Other items                                          1,224         1,292
                                                       --------      --------
                                                        138,009       135,209
     Less current portion                                  (464)         (532)
                                                       --------      --------

     Long-term debt, net of current portion            $137,545      $134,677
                                                       --------      --------
                                                       --------      --------


                                       8


<PAGE>


9.   INCOME TAXES
     
     Following are the approximate effective blended tax rates for significant
     jurisdictions:
  
                  North America                              40%
                  Switzerland                                22%
                  Germany                                    64%
                  United Kingdom                             33%
  
     The above resulted in a worldwide effective blended tax rate of 40% for
     the quarter ended June 28, 1996.  For the quarter ended June 27, 1997, no
     tax benefit has been provided with respect to any tax jurisdiction as it
     is currently not considered more likely than not that resulting deferred
     tax assets will be realized.
     
10.  CONTINGENCIES
     
     Three original equipment manufacturers ("OEMs") filed lawsuits against Nu-
     kote International, Inc. ("NII") alleging that certain NII ink jet
     replacement cartridges, refill inks and packaging infringe their
     trademarks, trade dress and patents and alleging, among other things,
     unfair competition and misleading representations.  The plaintiffs are
     seeking injunctive relief, monetary damages, court costs and attorney's
     fees. The complaint in one of the cases has been amended to name Nu-kote
     and Pelikan Produktions A.G. as defendants.  All of the lawsuits are in
     the discovery stage, and in management's opinion the potential losses
     related to these cases are not reasonably estimable.  All of the cases are
     being vigorously contested, and in each case the Company or NII has
     asserted affirmative defenses and counterclaims and has requested damages
     and affirmative injunctive relief.  In one of the cases NII's Motion for
     Summary Judgment of the unenforceablilty of four of the plaintiff's
     utility patents was granted although a Motion for Reconsideration with
     respect to the ruling is pending before the court that granted the motion.
     
     On May 9, 1997 Daniel M. Kerrane, an officer and director of the Company,
     filed suit against the Company in Texas State District Court.  He alleges
     that his Supplemental Employment Agreement with the Company entitled him
     to terminate his employment and receive a lump sum severance payment
     because the Company "substantially reduced" his authorities, powers and
     duties in April 1997.  Mr. Kerrane is seeking damages of $8,000, and
     injunctive relief.  The Company is vigorously defending this lawsuit.
     
     In addition, the Company is involved in various routine legal matters.
     
     In the opinion of management, all matters discussed above are covered by
     insurance or are without merit or the disposition is not anticipated to
     have a material effect on the Company's financial position;  however, one
     or more of these matters could have a material effect on future quarterly
     or annual results of operations or cash flow when resolved.

                                       9
<PAGE>

     In connection with Nu-kote's acquisition of the Office Supplies Division
     and the International Business Forms Division of Unisys Corporation
     ("Unisys"), Unisys agreed to retain all liabilities resulting from or
     arising out of any environmental conditions existing on or before January
     16, 1987 at the Company's Rochester, Macedon and Bardstown facilities and,
     additionally, to indemnify the Company for such.  State environmental
     agencies have alleged that environmental contamination exists at all three
     sites.  To date Unisys has handled all remediation efforts related to
     these properties.  In connection with Nu-kote's acquisition of the
     worldwide hardcopy supplies business of Pelikan, Pelikan agreed to
     indemnify Nu-kote for certain pre-closing environmental liabilities.  The
     Company has found environmental contamination at former Pelikan facilities
     in Derry, Pennsylvania and Franklin, Tennessee, and has asserted a claim
     for indemnification.  As a result of the indemnifications from Unisys and
     Pelikan, in the opinion of management, the ultimate cost to resolve these
     environmental matters will not have a material adverse effect on the
     Company's financial position, results of future operations or liquidity.
     
     This note contain various "forward looking statements" within the meaning
     of Section 27A of the Securities Act of 1933 and Section 21E of the
     Securities and Exchange Act of 1934, which represent the Company's
     expectations or beliefs concerning the possible outcome of the various
     litigation matters described herein and estimates of the Company's
     liabilities associated with identified environmental matters.  The Company
     cautions that the actual outcome of the various litigation matters could
     be affected by a number of factors beyond its control, including, without
     limitation, judicial interpretations of applicable laws, rules and
     regulations, the uncertainties and risks inherent in any litigation,
     particularly a jury trial, the nature and extent of any counter claims,
     and the scope of insurance coverage, and that the final resolution of such
     matters could differ materially from the Company's current evaluation of
     such matters.  The Company further cautions that the statements regarding
     identified environmental matters are qualified by important factors that
     could cause the Company's actual liabilities to differ materially from
     those in the forward looking statements, including, without limitation,
     the following:  (i) the actual nature and extent of contamination, if any;
     (ii) the remedial action selected; (iii) the actual cleanup level
     required; (iv) changes in regulatory requirements; (v) the ability of
     other responsible parties, if any, to pay their respective shares; and
     (vi) any insurance recoveries.

                                      10
<PAGE>

11.  RESTRUCTURING EXPENSE
     
     Restructuring activities commenced during fiscal 1997 (the "1997
     Restructuring") related primarily to the consolidation of impact product
     production into Scotland, Mexico and China; centralization of distribution
     primarily into Franklin, Tennessee and Duren, Germany; and the closure of
     one toner facility, and consolidation of toner manufacturing into
     Connellsville, Pennsylvania and Egg, Switzerland.
     
     Activity related to accrued restructuring costs for the 1997 Restructuring
     during the quarter ended June 27, 1997 is as follows:

<TABLE>
                                     Amount                                        Amount
                                    Accrued at       Amount       Current        Accrued at
      Description of               Beginning of     Paid in        Period          End of
  Restructuring Expense              Quarter        Quarter        Accrual         Quarter
  ---------------------            ------------     -------       --------       ----------
<S>                                <C>              <C>           <C>            <C>
Quarter Ended June 27, 1997:
  Severance                          $1,204         $  718         $  940          $1,426
  Lease cancellations                   430                                           430
  Facility maintenance
    and other                           247            697            683             233
                                     ------         ------         ------          ------
                                     $1,881         $1,415         $1,623          $2,089
                                     ------         ------         ------          ------
                                     ------         ------         ------          ------
</TABLE>

     The Company estimates that an additional $3,400 of restructuring expenses
     will be recognized in the remainder of fiscal 1998.  Most of this amount
     relates to expected severance and  relocation costs related to continuing
     consolidation efforts.  Management currently anticipates completion in
     fiscal 1998.
     
     During fiscal 1996, the Company substantially completed the merger of its
     operations with those of the Pelikan Hardcopy Division, which was acquired
     in February 1995.  That plan included, among other things, the closure of
     the Company's manufacturing, distribution and administration facility in
     Bardstown, Kentucky and merger of its operations into the Pelikan Hardcopy
     Division's facility in Franklin, Tennessee;  the termination of contract
     manufacturing and other contracts; closure of the Company's manufacturing
     facility in Deeside, Wales and merger of its operations with the Pelikan
     Hardcopy Division's operations in Scotland;  consolidation of certain
     toner manufacturing operations of ICMI's Connellsville, Pennsylvania
     facility and the Pelikan Hardcopy Division's Derry, Pennsylvania facility;
     and consolidation of sales and administrative organizations of the two
     companies.  The Company completed the merger activities in fiscal 1997.

                                       11
<PAGE>

     Activity related to accrued restructuring costs for the Pelikan merger
     during the quarters ended June 28, 1996 is as follows:
     

                                  Amount                       Amount
                                Accrued at       Amount      Accrued at
     Description of            Beginning of     Paid in        End of
  Restructuring Expense          Quarter        Quarter       Quarter
  ---------------------        ------------     -------      ----------
Quarter Ended June 28, 1996:
  Severance                        $ 71          $ 71           $  0
  Lease cancellations               425                          425
  Facility maintenance
   and other                        384            97            287
                                   ----          ----           ----
                                   $880          $168           $712
                                   ----          ----           ----
                                   ----          ----           ----

12.  NEW ACCOUNTING STANDARDS
     
     During March 1997, the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
     per Share", which establishes standards for computing and presenting
     earnings per share.  The disclosure requirements of SFAS No. 128 will be
     effective for the Company's financial statements in periods ending after
     December 15, 1997.  The Company's analysis of this new standard indicates
     that the standard will not have a material impact on the Company's
     calculation of fully diluted earnings per share.
     
     During March 1997, the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standards No. 129, "Disclosure of
     Information about Capital Structure", which establishes standards for
     disclosing information about an entity's capital structure.  The
     disclosure requirements of  SFAS No. 129 will be effective for the
     Company's financial statements in periods ending after December 15, 1997.
     
     During June 1997, the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standards No. 130, "Reporting
     Comprehensive Income" and Statement of Financial Accounting Standards No.
     131, "Disclosures About Segments of an Enterprise and Related
     Information".  Preliminary analysis of these new standards by the Company
     indicates that the standards will not have a material impact on the
     Company.  The standards are effective for financial statements for fiscal
     years beginning after December 15, 1997.

                                      12
<PAGE>

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS
                                       
                                       
RESULTS OF OPERATIONS
                                       
  QUARTER ENDED JUNE 27, 1997 COMPARED TO QUARTER ENDED JUNE 28, 1996

     Net sales for the quarter ended June 27, 1997 were $79.7 million, a
     decline of $7.7 million (8.8%) over the quarter ended June 28, 1996.  For
     the quarter ended June 27, 1997, sales by North American entities were
     $42.0 million, an increase of $0.3 million, as compared to sales in the
     previous year period.  Sales by European entities declined $8.1 million,
     or 18.0%, as compared to the previous year period and were $36.8 million.
     Sales of impact products in North America were up slightly as compared to
     the previous year period.  Sales of toner products in North America
     declined by nearly 20%, but the decline in sales of theses products was
     offset by increases in sales of ink jet and laser printer products.
     Approximately $0.9 million of the decline in sales in Europe was due to
     exchange rate fluctuations.  The balance of the decline in sales in Europe
     was due largely to the continuing decline in sales of impact products of
     $5.0 million and an across the board decline in sales of non-impact
     products, principally in the German market place, of $2.2 million over the
     previous year period.

     Worldwide sales of non-impact supplies accounted for approximately 59% of
     total sales for the quarter ended June 27, 1997, compared to 57% of total
     sales in the quarter ended June 28, 1996.  Sales of non-impact products as
     a percentage of worldwide sales increased largely because sales of impact
     products declined by $5.0 million (13.3%).

     In North America, sales of non-impact supplies amounted to $24.1 million
     in the quarter ended June 27, 1997, the same as in the previous year
     period, and represented 57% of total North American sales.  Sales of non-
     impact supplies in Europe were $23.0 million in the quarter ended June 27,
     1997 as compared to $25.8 million in the previous year period.
     Approximately $0.5 million of the decline in sales of non-impact products
     in Europe was due to exchange rate fluctuations.  The balance of the
     decrease, $2.2 million, was due largely to a decline in sales of ink jet
     products in the German market place.
     
     Cost of sales were $63.9 million (80.2% of net sales) for the quarter
     ended June 27, 1997, compared to $62.2 million (71.2% of net sales) in the
     previous year period.  Included in cost of sales for the quarter ended
     June 27, 1997 were $1.5 million (1.9% of net sales) of expenses resulting
     the transition of impact product production from the Company's German
     facility to the Company's facilities in Scotland, Mexico or China.  In
     addition, gross margin was adversely impacted during the quarter by $1.9
     million (2.4% of net sales), associated with increased customer
     allowances, rebates and outbound freight, principally in North America.

                                      13
<PAGE>

     For the quarter ended June 27, 1997, research and development expenses
     amounted to $1.8 million, (2.2% of net sales), as compared to $2.6 million
     (2.9% of net sales ) in the previous year period.  All of the decline in
     this expense category occurred in Europe where the Company has implemented
     an expense reduction program to maintain research and development expenses
     at approximately 2% of net sales.
     
     Selling, general and administrative expenses were $14.7 million in the
     quarter ended June 27, 1997 as compared to $17.4 million in the previous
     year period.  All of the reduction in these expenses resulted from the
     Company's implementation of worldwide expense reduction programs.
     
     Restructuring expenses amounted to $1.6 million in the current period and
     were in line with previous projections.  These expenses related primarily
     to: (1) consolidating impact product production into Scotland, Mexico and
     China; (2) centralizing distribution primarily into Franklin, Tennessee
     and Duren, Germany; and (3) closing one toner facility and consolidating
     toner manufacturing into Connellsville, Pennsylvania and Egg, Switzerland.
     
     Interest expense for the current fiscal quarter was $3.0 million, compared
     to $1.9 million for the previous year period.  The increase is the result
     of higher outstanding borrowings and higher interest rates.

     For the quarter ended June 27, 1997, the Company provided a tax valuation
     allowance of approximately $2.4 million against certain deferred tax
     assets pursuant to Statement of Financial Accounting Standards No. 109,
     "Accounting for Income Taxes" ("SFAS 109").  Under the provisions of SFAS
     109, the Company will recognize an income tax benefit when the deferred
     tax assets are actually realized or at such time as it is determined that
     realization of the deferred tax assets is more likely than not.  The
     Company reported tax expense of $1.2 million in the previous year period.
     
     For the quarter ended June 27, 1997, the Company recognized a net loss of
     $6.0 million compared to net income of $1.8 million in the previous year
     period.  The decrease in net income is directly attributable to the
     decrease in sales and the increased cost of goods sold as a percentage of
     sales combined with the restructuring charges and income tax valuation
     allowances discussed above.

  EFFECT OF CURRENCY EXCHANGE RATES AND EXCHANGE RATE RISK MANAGEMENT

     Because the Company conducts business in many countries, fluctuations in
     foreign currency exchange rates affect the Company's financial position
     and results of operations.  It is the Company policy to monitor currency
     exposures and enter into hedging arrangements to manage the company's
     exposure to currency fluctuations.  The Company reported $0.2 million in
     exchange losses in the quarter ended June 27, 1997 as compared to $0.9
     million in exchange gains in the previous year period.

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<PAGE>

  LIQUIDITY AND CASH FLOW

     For the quarter ended June 27, 1997 cash used by operations, primarily to
     fund increased inventory requirements amounted to $5.2 million.  Capital
     expenditures, primarily related to manufacturing equipment were $1.4
     million.
     
     As of August 4, 1997, borrowings outstanding under the Company's credit
     facilities amounted to $136.0 million, up $2.1 million from March 31,
     1997.  The Company had approximately $9.0 million available for future
     borrowings under the credit facilities.
     
     Management believes that working capital provided by operations and
     borrowings under the facilities will provide the Company with adequate
     cash flow to meet its obligations.  However, if the Company fails to
     reduce its expenses as planned, incurs any unexpected costs, or fails to
     meet its revenue projections the Company could experience severe liquidity
     problems.  In this regard it should be noted that the Company has been
     experiencing declining revenues for five of the last six fiscal quarters.
     If the Company experiences liquidity problems, it could be forced to delay
     its restructuring efforts which are critical to returning the Company to
     profitability, reduce its capital expenditures and/or reduce its research
     and development expenditures.  Additionally, the Company could go into
     default under the bank loan agreements.  No assurances can be given that
     the Company will be successful in efforts to address its cost structure
     issues or operate on a profitable basis in the long term.
     
  NEW ACCOUNTING STANDARDS

     During March 1997, the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
     per Share", which establishes standards for computing and presenting
     earnings per share.  The disclosure requirements of SFAS No. 128 will be
     effective for the Company's financial statements in periods ending after
     December 15, 1997.  The Company's analysis of this new standard indicates
     that the standard will not have a material impact on the Company's
     calculation of fully diluted earnings per share.
     
     During March 1997, the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standards No. 129, "Disclosure of
     Information about Capital Structure", which establishes standards for
     disclosing information about an entity's capital structure.  The
     disclosure requirements of SFAS No. 129 will be effective for the
     Company's financial statements in periods ending after December 15, 1997.

     During June 1997, the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standards No. 130, "Reporting
     Comprehensive Income" and Statement of Financial Accounting Standards No.
     131, "Disclosures About Segments of an Enterprise and Related
     Information".  Preliminary analysis of these new standards by the Company
     indicates that the standards will not have a material impact on the

                                       15
<PAGE>

     Company.  The standards are effective for financial statements for fiscal
     years beginning after December 15, 1997.

  CAUTIONARY STATEMENT
     
     The foregoing "Management's Discussion and Analysis of Financial Condition
     and Results of Operations" section contains various "forward looking
     statements" within the meaning of Section 27A of the Securities Act of
     1933 and Section 21E of the Securities Exchange Act of 1934, which
     represent the Company's expectations or beliefs concerning, among other
     things, future operating results and various components thereof and the
     adequacy of future operations to provide sufficient liquidity.  The
     Company cautions that such matters necessarily involve significant risks
     and uncertainties that could cause actual operating results and liquidity
     needs to differ materially from such statements, including, without
     limitation, general economic conditions, product demand and industry
     capacity, competitive products and pricing, manufacturing efficiencies,
     new product development, availability of raw materials and critical
     manufacturing equipment, new plant startups and the regulatory and trade
     environment.
     
                                      16
<PAGE>
                                       
                        PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

              See Item 3 - Legal Proceedings in the registrant's Annual 
Report on Form 10-K for the fiscal year ended March 31, 1997 and Note 10 of 
Notes to Consolidated Financial Statements for the three month periods ended 
June 27, 1997 and June 28, 1996 included elsewhere in this report.

ITEM 2 - INAPPLICABLE

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

              As of June 27, 1997, the Registrant was in technical default of 
its Amended and Restated Credit Agreement.  The technical default involved 
the failure to meet certain financial covenants, for which the Registrant 
obtained waivers.  On July 31, 1997 the Registrant entered into Second 
Amended and Restated Credit Agreements, as described in Item 5 below and in 
Note 8 of Notes to Consolidated Financial Statements in its Annual Report on 
Form 10-K for the fiscal year ended March 31, 1997, and is no longer in 
default upon its senior securities.

ITEM 4 - INAPPLICABLE

ITEM 5 - OTHER INFORMATION

              As reported in the Registrant's Annual Report on Form 10-K for 
the fiscal year ended March 31, 1997, on July 31, 1997 the Registrant entered 
into Amended and Restated Credit Agreements with its lenders.  These 
agreements are attached herein as Exhibits 10.1 through 10.5.

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<PAGE>

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits.

             Exhibit 10.1 - Second Amended and Restated Credit Agreement 
                            dated as of July 31, 1997 by and among Nu-kote 
                            International, Inc. as borrower, Nu-kote Holding, 
                            Inc. as Guarantor, the lenders listed on the 
                            signature page thereto as Lenders, and NationsBank 
                            of Texas, N.A. as Administrative Agent and 
                            Collateral Agent.

             Exhibit 10.2 - L6,275,000 - Third Amended and Restated Revolving 
                            Credit Agreement dated July 31, 1997 between 
                            Pelikan Scotland Limited as borrower, Barclays Bank
                            PLC as Agent, NationsBank of Texas, N.A. as 
                            Collateral Agent and NationsBank of Texas, N.A. as 
                            Documentation Agent and Others.

             Exhibit 10.3 - CHF 50,000,000 - Third Amended and Restated 
                            Revolving Credit Agreement dated July 31, 1997 
                            between Pelikan Produktions AG and Pelikan Hardcopy
                            (International) AG as borrower, Barclays Bank PLC 
                            as Agent, NationsBank of Texas, N.A. as Collateral 
                            Agent and NationsBank of Texas, N.A. as 
                            Documentation Agent and Others.

             Exhibit 10.4 - Warrant Agreement between Nu-kote Holding, Inc. 
                            and the Warrantholders on the signature page 
                            thereof, dated as of July 31, 1997.

             Exhibit 10.5 - Registration Rights Agreement dated as of July 31,
                            1997 by and among Nu-kote Holding, Inc. and the 
                            Warrantholders listed on the signature page 
                            thereto.

             Exhibit 11.1 - Statement regarding computation of per share 
                            earnings.

             Exhibit 27   - Financial Data Schedule


         (b) Reports on Form 8-K.

             The registrant filed no reports on Form 8-K during the quarterly 
             period ended June 27, 1997.

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<PAGE>
                                       
                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

Date      August 8, 1997                     /s/   Patrick E. Howard
      ---------------------                  ----------------------------------
                                             Patrick E. Howard
                                             Chief Executive Officer and
                                             Chief Operating Officer


Date     August 8, 1997                      /s/   Anthony G. Schmeck
      ---------------------                  ----------------------------------
                                             Anthony G. Schmeck
                                             Senior Vice President, Finance
                                             Corporate Controller and Secretary

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