1



                                      U.S. SECURITIES AND EXCHANGE COMMISSION
                                               Washington, D.C.  20549

                                                      FORM 10-Q





[X]      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
exchange  Act of  1934  for the quarterly period ended March 31, 1997


[ ]      Transition Report under Section 13 or 15(d) of the Securities Exchange
         Act   of   1934   for   thr transition period from          to       .



                                             Commission file No. 0-18476



                                        AMRION, INC.
                    (Exact name of Registrant as specified in its charter)


                     Colorado                            84-1050628
            State or other jurisdiction            (IRS Employer ID No.)
          of incorporation or organization)



       6565 Odell Place, Boulder, CO                   80301
    (Address of principal executive offices)          (Zip Code)


                                                     303-530-2525
                                                 (Telephone Number)





Indicate by check mark whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange Act
of 1934 during the  preceding  12 months (or for such shorter  period that the
Registrant was required to file such reports),  and (2) has been subject to
such filing  requirements  for the past 90 days.

                               Yes   X    No

Common stock, par value $.0011 per share: 5,251,514 shares outstanding as of
March 31, 1997.
<PAGE>


                             PART 1. FINANCIAL
                  ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

<PAGE>









                                             AMRION, INC. AND SUBSIDIARY

                                             CONSOLIDATED BALANCE SHEETS

                                     AS OF MARCH 31, 1997 AND DECEMBER 31, 1996



<TABLE>

                                                    March 31,      December 31,
                                                      1997            1996
                                                   (Unaudited)      (Audited)

                             Assets

<S>                                                 <C>                  <C>
Current:

  Cash and cash equivalents                         $   419,474          $ 2,277,469
  Accounts receivable, less allowance
    of $26,000 and $28,000
    for possible losses                               2,158,140            1,991,772
  Inventories                                        11,164,347            7,727,315
  Mail supplies                                       1,176,784              893,268
  Deferred promotional mailing costs, net             1,365,028            1,375,625
  Other                                                 932,842              811,997

Total current assets                                 17,216,615           15,077,446


Property and equipment, net                           6,981,397            5,272,940


Other assets:

 Marketable securities available for sale             6,346,183            6,895,214
 Mailing lists, net                                   2,849,280            2,876,748
 Intangible assets, net                                  85,763               92,917

Total other assets                                    9,281,226            9,864,879

Total assets                                        $33,479,238          $30,215,265

</TABLE>

         See accompanying notes to the consolidated financial statements

<PAGE>







                                             AMRION, INC. AND SUBSIDIARY

                                             CONSOLIDATED BALANCE SHEETS

                                     AS OF MARCH 31, 1997 AND DECEMBER 31, 1996

<TABLE>

                                                      March 31,     December 31,
                                                        1997            1996
                                                    (Unaudited)       (Audited)


         Liabilities and Stockholders' Equity

<S>                                                 <C>            <C>
Current:

 Accounts payable                                   $ 5,382,296    $ 3,093,739
 Accrued liabilities                                  1,707,584      1,223,758
 Income taxes payable                                   810,000           -

Total current liabilities                             7,899,880      4,317,497

Deferred income taxes                                   280,000        280,000

Total liabilities                                     8,179,880      4,597,497


Minority interest                                        33,889         41,973


Stockholders' equity:

 Common stock, $.0011 par value - shares
  authorized, 10,000,000; issued 5,251,514
  and 5,326,814                                           5,777          5,860
 Additional paid-in capital                          11,209,029     13,176,747
 Retained earnings                                   14,244,474     12,610,602
 Marketable securities valuation
  allowance                                            (193,811)      (217,414)

Total stockholders' equity                           25,265,469     25,575,795

                                                    $33,479,238    $30,215,265



        See accompanying notes to the consolidated financial statements


</TABLE>

<PAGE>
                          AMRION, INC. AND SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF INCOME

            FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1997 AND 1996


<TABLE>
<CAPTION>
                                                      Three months
                                                         ended
                                                       March 31,

                                               1997               1996
                                           (Unaudited)        (Unaudited)
<S>                                       <C>                 <C>
Net sales                                 $18,356,744         $13,381,956


Costs of sales:
 Cost of products                           7,682,688           5,939,529
 Cost of mailings                           3,441,433           2,883,308

 Cost of sales                             11,124,121           8,822,837

 Gross profit                               7,232,623           4,559,119


Operating expenses - selling, general
 and administration                         4,870,416           3,384,418

Income from operations                      2,362,207           1,174,701

Other income, net                              91,665             159,138


Income before taxes on income               2,453,872           1,333,839

Taxes on income                               820,000             410,749

Net income                                $ 1,633,872         $   923,090

Net income per common and common
 equivalent share                         $       .30         $       .18

Weighted average number of common shares
 and common shares equivalents outstanding  5,392,115           5,204,489



          See accompanying notes to the consolidated financial statements
</TABLE>
<PAGE>


                               AMRION, INC. AND SUBSIDIARY

                          CONSOLIDATED STATEMENTS OF CASH FLOWS

                     FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
                                                                  Three months
                                                                     ended
                                                                   March 31,
                                                        1997                  1996
                                                     (Unaudited)          (Unaudited)
<S>                                                  <C>                  <C>
Cash flow from operating activities:
 Net income                                          $1,633,872           $  923,090
 Adjustments to reconcile net income to net
  cash provided by operating activities:
    Depreciation and amortization                       466,713              299,793
    Provision for losses on accounts receivable          (2,000)
    Minority interest share in loss of subsidiary        (8,084)

    Changes in operating assets and liabilities:
     Accounts receivable                               (164,368)             (71,464)
     Inventories                                     (3,437,032)          (2,922,440)
     Mailing supplies                                  (283,516)             167,342
     Deferred promotional mailing costs                  10,597              456,814
     Other assets                                      (120,845)             (31,139)
     Accounts payable                                 2,288,557            1,364,175
     Accrued liabilities                                483,825               17,390
     Income taxes payable                               810,000              237,857

Cash provided by operating activities                 1,677,719              441,418

Cash flows from investing activities:
  Proceeds of marketable securities
   available for sale                                   572,634              191,313
  Purchase of property and equipment                 (1,946,312)            (217,589)
  Purchase of mailing lists and intangible assets      (194,235)            (341,976)

Cash used in investing activities                    (1,567,913)            (368,252)

Cash flows from financing activities:
  Proceeds from issuance of common stock - net          229,595               53,025
  Purchase of company stock                          (2,187,396)                 -

  Cash used by financing activities                  (1,967,801)              53,025

Net increase in cash and cash
 equivalents                                         (1,857,995)             126,191

Cash and cash equivalents,at beginning of period      2,277,469              831,544

Cash and cash equivalents,at end of period         $    419,474           $  957,735


      See accompanying notes to the consolidated financial statements
</TABLE>
<PAGE>



                               AMRION, INC. AND SUBSIDIARY

                              Summary of Accounting Policies


Organization and Business

The consolidated  financial  statements include the accounts of Amrion,  Inc.
(Amrion) and those of its 94% owned subsidiary,  Natrix  International,  LLC 
(Natrix),  a Colorado Limited  Liability  Corporation  (collectively the
Company).  Amrion markets nutritional  supplements  principally throughout
 the United States, with the balance to customers  in the Far East,  Europe and
Mexico,  using a  combination  of direct  mail,  telemarketing  and print
advertising. Natrix is engaged in the marketing and distribution of proprietary
herbal based health  maintenance products to food and drug chains and discount
mass  merchandisers.  The  Companys  primary  products are Coenzyme Q10,
Bilberry and Gingko  Biloba which  comprised  39% of the  Companys net sales
for the quarter ended March 31,1997.

Principles of Consolidation

All significant intercompany accounts and transactions have been eliminated in
consolidation.

Concentrations of Credit Risk

The  Companys  financial instruments exposed to concentrations of credit risk
consist primarily of accounts receivable, cash equivalents and marketable
securities.

Concentrations  of credit risk with  respect to such  accounts  receivable are
limited due to the large  number of customers, generally short payment terms,
and customer dispersion across geographic areas.

The Companys cash  equivalents are high quality money market  accounts  placed
with major financial  institutions. Marketable  securities consist primarily of
preferred  stock  and AAA rated  tax-exempt  municipal  bonds.  The investment
policy limits the Companys exposure to concentrations of credit risk.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined using
the standard cost method,  which approximates the weighted average cost method.

Property and Equipment

Property and equipment are stated at cost. Depreciation  is computed using the
straight-line  method based on the estimated  useful lives of related  assets,
generally 3 to 31.5 years. Maintenance and repair costs are expensedas incurred.




<PAGE>



Marketable Securities

The Company accounts for marketable  securities in accordance with Statement of
Financial  Accounting Standards No.115 (SFAS),  Accounting for Certain 
Investments in Debt and Equity  Securities. All marketable equity and debt
securities  have been  categorized  as available for sale as the Company does
not have the positive  intent to hold to  maturity  or does not intend to trade
actively.  These  securities  are  stated at fair value with  unrealized
gains and losses included as a component of stockholders equity until realized.

Advertising

The Company  expenses the production  costs of advertising the first time the
advertising  takes place,  except for direct-response advertising, which is
capitalized and amortized over its expected period of future benefits.

Direct response advertising  consists primarily of direct mail advertising, 
including deferred promotional mailing costs, of the Companys  products. 
The capitalized  costs of mailed  promotional  materials are amortized over the
expected promotional benefit period of three months.

Income Taxes

The  Company  accounts  for income  taxes in  accordance  with SFAS N. 109, 
Accounting  for Income  Taxes  which requires the use of the  liability
method.  Accordingly,  deferred  tax  liabilities  and assets are  determined
based on the  temporary  differences  between the  financial  statements  and
tax bases of assets and  liabilities, using enacted tax rates in effect for the
year in which the differences are expected to reverse.

Intangible Assets

Purchased mailing lists,  trademarks and copyrights are amortized by the
straight-line  method over their estimated useful lives which range from five to
ten years.  On an ongoing basis the Company  reviews the  recoverability  and
amortization  periods of  intangible  assets  taking into  consideration  any 
events or  circumstances  which could impair the assets carrying value and 
records adjustments when necessary.

Income Per Common and Common Share Equivalent

Income  per  common  and  common  share  equivalent  is based on the  weighted
average  number  of  common  shares outstanding  during  each of the  periods
presented.  Options  to  purchase  stock are  included  as common  share
equivalents when dilutive.

<PAGE>

Cash Equivalents

The Company  considers cash and all highly liquid  investments  purchased with 
an original maturity of three months or less to be cash equivalents.

Use of Estimates

The  preparation of financial  statements in conformity  with generally 
accepted  accounting  principles  requires management  to make  estimates  and 
assumptions that affect the reported  amounts of assets and  liabilities  and
disclosure of contingent assets and liabilities at the date of the consolidated
financial  statements  and the reported  amounts of revenues  and expenses
during the reporting  period.  Actual results  could differ from thr estimates.

Revenue Recognition

Revenue is recognized upon shipments of goods to the customer.

Stock Option Plans

The Company applies APB Opinion 25, Accounting for Stock Issued to Employees,
and related  Interpretations in accounting for all stock option plans.
Under APB Opinion 25, no  compensation  cost has been  recognized for stock
options  issued to employees as the exercise  price of the companys  stock 
options  granted  equals or exceeds the market price of the underlying common
stock on the date of the grant.

SFAS No. 123,Accounting for Stock-Based  Compensation, requires the Company to
provide pro forma  information regarding  net  income  as if  compensation cost 
for the  Companys  stock  option  plans had been  determined  in accordance
with the fair value based method prescribed in SFAS No. 123.

Reclassifications

Certain  items  included in prior years  financial  statements  have been
reclassified  to conform to current year presentation.

New Accounting Pronouncements

On March 3, 1997,  the  Financial  Accounting  Standards  Board (FASB)  issued
Statement  of Financial  Accounting Standards  No. 128  Earnings  Per Share 
(SFAS No.  128).  This  pronouncement  provides  a  different  method of 
calculating  earnings per share than is currently used in accordance  with
Accounting  Board Opinion (APB) No. 15, Earnings Per Share. SFAS 128 provides
for the  calculation  of Basic and Diluted  earnings per share.  Basic
earnings per share  includes no dilution and is computed by dividing  income 
available to common  shareholders  by the weighted  average number of common
shares  outstanding for the period.  Diluted earnings per share reflects the
potential  dilution of securities that could share in the earnings of an entity,
similar to fully diluted earnings per share.  The Company will adopt SFAS
No. 128 in 1997 and its  implementation  is not expected to have a material
effect on the consolidated financial statements.

<PAGE>




PART I   FINANCIAL

Item 2.  Management's  Discussion  and Analysis of Financial  Condition and
         Results of Operationsfor the Period from January 1, 1997,
         to March 31, 1997.

The following  review  concerns the  three-month  period ended March 31, 1997,
and March 31, 1996,  which should be read in conjunction  with the financial
statements and notes thereto presented in the 10-Q. Statements regarding future
economic  performance contained  within  Managements  Discussion  and  Analysis
of  Financial condition and Results of  Operations, constitute  forward-looking
statements.  Certain  factors  regarding  the companys business, operations and
competitive  environment which may cause actual results to vary materially from
these forward-looking statements accompany such statements.


Results of Operations

For the three-month periods ended March 31, 1997, and March 31, 1996.

Net sales for the three months ended March 31, 1997,  were  $18,357,000,  an
increase of  $4,975,000,  or 37%, over the same period in 1996.  The Company 
believes the continued  growth in net sales for the three months ended March
31, 1997, was a direct result of the Companys  ability to expand sales through
larger and more frequent  customer acquisition  mailings,  advertisements  in
magazines  and  newspapers,  and through the  nationwide  trend  towards 
preventive  health care as a viable  alternative to  traditional  medical 
treatment.  A portion of the increase in net sales is attributable to
improvements in customer  segmentation  mailing programs within the existing
customer base.  Such  mailings  have  generated  positive  sales  response 
rates on smaller and more  targeted  mailings to existing customers.

The Company intends to continue to implement new customer  acquisition programs
through  mailings,  telemarketing, print  advertisements,  direct response 
television,  field sales  representatives and expanded retail distribution
programs.  The  Company  plans to add 75 new  products  and  approximately
115,000  new  customers  through  these scheduled  marketing  programs in 1997.
However,  difficulties or delays in the development,  production,  testing 
and  marketing of  products,  including a failure to ship new products  when 
anticipated,  failure of customers to accept these products,  and a failure of
manufacturing  economies to develop when planned may reduce the number of new
products introduced.

Cost of products  increased to $7,683,000  for the first three months of 1997,
compared to $5,940,000 for the same period in 1996.  As a percentage of net
sales,  cost of products  decreased by 2% over the same period in the prior
year due to continued  reductions in product costs from in-house  manufacturing
and lower product  prices  through volume discounts and expanded direct
sourcing of raw materials.


<PAGE>







Cost of mailings  increased to $3,441,000  for the first three months of 1997,
compared to $2,883,000 for the same period in 1996.  As a percentage of net
sales,  cost of mailings  decreased by 3% over the same period in the prior
year  due to the  decreased  use of  customer  acquisition  mailings.  These  
mailings  are more  expensive  due to increased  costs  associated  with
acquiring each new customer.  Such mailings typically have lower response rates
than mailings to existing customers.  The increased use of alternative customer
acquisition  strategies during the three months ended March 31, 1997,  compared
to the same period in 1996,  proved to be  successful,  leading to the overall
3% decrease as a percentage  of net sales.  However, until alternative customer
acquisition  strategies continue  to prove  successful,  cost of  mailings as a
percentage  of  sales  may be  higher  due to the lack of experience  regarding
these  strategies  and the  continued  reliance of the  Companys  direct  mail
efforts for customer acquisition.

During the three months ended March 31, 1997,  selling,  general and
administrative  expenses ("SG&A") increased by $1,486,000  or 44% to $4,870,000
in 1997 from the same period in 1996.  This  significant  increase in SG&A was
due to market  development  costs of  $378,000  by  Natrix  International,  the
Companys  majority-owned  subsidiary. Further  increases were due primarily to
the Companys  sales growth,  which  necessitated  additional  staffing of
approximately  $857,000 and substantial  increases in product  marketing and 
development  expenses of approximately $251,000 in 1997.  SG&A as a  percentage
of net sales  increased by 2% over the same period in 1996 to 27% for the
three months ended March 31, 1997.

In the three months ended March 31, 1997,  net income  increased by $711,000
(77%) to  $1,634,000  compared to net income of $923,000 for the three months
ended March 31,  1996.  Overall,  the growth in net income for the quarter
ended March 31, 1997,  was due to increased  sales,  cost control  efforts and
lower  product  costs from  in-house manufacturing and lower raw material prices
during a period of significant  expenditures on market  development in
the Company's newer retail product lines.

Liquidity and Capital Resources

The Company  generated  $1,678,000  and $441,000 in cash from  operating
activities  during the three months ended March 31, 1997 and 1996, respectively.
The increase in cash from  operating  activities of $1,236,000  during the
three  months  ended March 31,  1997,  as  compared  to the same period in 1996
was due to the  increase in product inventories  by $3,437,000 in 1997 compared
to increases of $2,922,000  during 1996.  This cash outflow was offset by net 
income of  $1,634,000,  an  increase  of  $711,000  from net income of $923,000
in 1996 and an increase of $2,289,000 in accounts payable from December 31,1996.
The increase in inventory  and  corresponding  increase in accounts payable was
necessary to support continued sales growth and expanding product lines.

<PAGE>










Cash flows used by investing  activities  totaled  $1,568,000  during the three
months ended March 31, 1997, versus $368,000  for the same  period  in 1996.
The  continued  use of cash in  investing  activities  resulted  from the
purchase of machinery and equipment for the Companys  manufacturing  facility
and computer  equipment and software for a total  cost of  $1,946,000.  The 
ompany  used  $194,000  to  purchase  mailing  lists and other  intangible 
assets.  Finally,  the Company  generated  $573,000 from sales of marketable
securities.  The Company believes the cash  invested in marketable  securities
combined with its current  working  capital  position will be adequate to meet
future  operating  needs.   However,  as  significant  expenses  are  incurred
for  marketing   distribution development, facility expansion and product
development, the Company may be required to seek additional funding.

Cash flows  generated by financing  activities  totaled  $230,000 as a result of
the exercise of stock options that were  granted to  directors  and  employees
during  1995,  1994,  1993 and 1992. Additionally,  the Company  used $2,187,000
to repurchase  111,800  shares of its stock  according to a stock  buy-bac
program  authorized by the Board of Directors.

The Company  accounts for marketable  securities in accordance  with Statements
of Financial  Accounting  Standards No. 115.  Accordingly,  these  securities 
are stated at fair value with  unrealized  gains and losses included as a
component  of  stockholders  equity  until  realized.  At March  31,  1997,
the  Company  recorded  a  marketable securities  valuation  allowance  for an
unrealized  loss of $194,000 as a component of  stockholders  equity.  At
March 31, 1997,  the Company  recorded a valuation  allowance  equal to the 
deferred tax effects of the  marketable securities net  unrealized  loss as 
management of the Company has not been able to determine that it is more likely
than not that the unrealized capital loss with be realized.

The Company  has a $650,000  revolving  line of credit  agreement  with a bank
which bears  interest at 1% over the bank's prime  lending rate and expires in 
June,  1997.  No amounts were  outstanding  at December 31, 1996 or March
31, 1997.

PART II OTHER INFORMATION

No other  information  is required  to be  included  in  response to Items 1-6
under Part II of this form 10-Q.  No report on Form 8-K was filed during the
quarter ending March 31, 1997.

<PAGE>



                               SIGNATURES


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


                              AMRION, INC.

Date: May 12, 1997
                    by: /s/ Jeffrey S. Williams
                       Jeffrey S. Williams, Chief Financial Officer