SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549

                                FORM 10-K
(Mark One)
     [x]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

             For the Fiscal Year Ended December 31, 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 Number 0-27744

                                 PCD INC.
           (Exact Name of Registrant as Specified in its Charter)

      Massachusetts                                           04-2604950
(State or Other Jurisdiction of                           (I.R.S. Employer
Incorporation or Organization)                         Identification Number)

                            2 Technology Drive
                              Centennial Park
                     Peabody, Massachusetts  01960-7977
        (Address of Principal Executive Offices, Including Zip Code)

Registrant's telephone number, including area code: (978) 532-8800

Securities registered pursuant to Section 12(b) of the act: None
Securities registered pursuant to Section 12(g) of the act: Common Stock,
$0.01 par value

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
        -------      -------

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.     [ ]

As of March 2, 1998, the aggregate market value of the registrant's Common
Stock held by non-affiliates of the registrant was approximately $68,106,324,
based upon the closing sales price on the Nasdaq Stock Market for that date
As of March 2, 1998, the number of issued and outstanding shares of the
registrant's Common Stock, par value $.01 per share, was 6,050,682.

                       DOCUMENTS INCORPORATED BY REFERENCE

Certain of the information called for by Parts I through IV of this report on
Form 10-K is incorporated by reference from certain portions of the Proxy
Statement of the registrant to be filed pursuant to Regulation 14A and to be
sent to stockholders in connection with the Annual Meeting of Stockholders to
be held on June 5, 1998. Such Proxy Statement, except for the parts therein
that have been specifically incorporated herein by reference, shall not be
deemed "filed" as part of this report on Form 10-K.

<PAGE>
                                PART I

ITEM 1. BUSINESS

     As used herein, the terms "Company" and "PCD," unless
otherwise indicated or the context otherwise requires, refer to
PCD Inc., a Massachusetts corporation, and its subsidiaries,
including Wells Electronics, Inc. and its subsidiaries ("Wells").
However, all financial information for periods ended before
December 26, 1997, unless otherwise indicated or the context
otherwise requires, is for PCD Inc. and its subsidiaries,
excluding Wells.

THE COMPANY

   PCD Inc. (the "Company") designs, manufactures and markets
electronic connectors for use in integrated circuit ("IC")
package interconnect applications, industrial equipment and
avionics. Electronic connectors, which enable an electrical
current or signal to pass from one element to another within an
electronic system, range from minute individual connections
within an IC to rugged, multiple lead connectors that couple
various types of electrical/electronic equipment. Electronic
connectors are used in virtually all electronic systems,
including data communications, telecommunications, computers and
computer peripherals, industrial controls, automotive, avionics
and test and measurement instrumentation. The electronic
connector market is both large and broad. Bishop & Associates, a
leading electronic connector industry market research firm,
estimates the total 1997 worldwide market at $23.4 billion with
more than 2,000 manufacturers.

   The Company markets over 6,800 electronic connector products
in three product categories, each targeting a specific market.
These product categories are IC package interconnects, industrial
interconnects and avionics terminal blocks and sockets. IC
package interconnects are specially designed electro-mechanical
devices that connect ICs to printed circuit boards during the
various stages of the IC's production and application in
electronic systems. These stages are test, burn-in, development
and production. Industrial interconnects are used in industrial
equipment systems both internally, as input/output ("I/O")
connectors to link the rugged electrical environment of operating
equipment to the electronic environment of controllers and
sensors, and externally, to facilitate the interface between
discrete factory wiring and cabling for standard computer
interconnects. Avionics terminal blocks and sockets perform
similar functions as industrial connectors, but are designed and
built to operate in the harsher environment and meet the more
<PAGE>
critical performance requirements of avionics applications.
Representative customers of the Company include Altera
Corporation, The Boeing Company, Micron Technology, Inc.,
Rockwell International Corp. (through its subsidiary, the Allen-
Bradley Company) and Siemens AG.

   The Company believes it is benefiting from three trends
affecting the electronics industry: (i) the increasing complexity
of ICs and corresponding evolution of IC package designs, which
favor growth in PCD's IC package interconnect market; (ii) the
global nature of semiconductor manufacturers, which requires
suppliers with global design, manufacturing and marketing
capabilities; and (iii) the use of increasingly complex
electronic controllers and sensors in industrial and avionics
applications, which creates opportunities in PCD's industrial
equipment and avionics markets.

   The Company has maintained a consistent strategy over the past
five years to identify and expand into selected electronic
connector markets where it can establish a position of
leadership. There are five key elements of the Company's
strategy: selection of key markets - market selection has
contributed to the compound annual growth in sales of the Company
(excluding Wells) of approximately 23.8% since 1993, and, after
giving effect to the Wells acquisition, the Company's net sales
in 1997, on a pro forma basis, were $71.4 million; total customer
solution - the Wells acquisition and the creation of the Control
Systems Interconnect division are examples of broadening the
Company's product offerings within targeted markets; customer
responsiveness/short delivery cycle - the Company believes it is
among the most responsive to customer needs including product
design and production lead times in the markets it serves, and
its strategy is to maintain and exploit its leadership position;
best cost producer - the Company (excluding Wells) has
experienced an improvement in gross profit as a percentage of net
sales from 33.1% in 1993 to 49.3% in 1997; and penetration of
worldwide markets - international sales of the Company (excluding
Wells) increased from 7.7% of net sales in 1993 to 35.8% in 1997,
and, with the addition of operations of Wells in Europe and Asia,
the Company expects that international sales will account for a
significant portion of its revenues for the foreseeable future.

   The Company was incorporated in Massachusetts on November 9,
1976 under the name Precision Connector Designs, Inc. In February
1996, the Company changed its name to PCD Inc.




<PAGE>
MARKETS

   The electrical and electronic systems which utilize connectors
have become increasingly widespread and complex, in part, as a
result of the increased automation of business systems and
manufacturing equipment. Consequently, the electronic connector
industry has grown in size and electronic connectors have become
more sophisticated. Demand for smaller yet more powerful products
has resulted in continued improvements in electronic systems in
general and electronic connectors in particular. Product cycles
continue to shorten and, as time to market becomes increasingly
important, equipment manufacturers seek to reduce inventory and
contend with pressures to keep up with new product innovations.
The growing demand for electronic connector complexity, coupled
with reduced product development cycles and delivery lead times,
create a need for closer cooperation between connector suppliers
and equipment manufacturers, often leading to new connector
requirements and market opportunities.

   The electronic connector market is both large and broad.
Bishop & Associates estimates the total 1997 worldwide market at
$23.4 billion. This market is highly fragmented with over 2,000
manufacturers. While many of these companies produce connectors
which are relatively standard and often produced in large
quantities, a substantial portion of the industry is comprised of
companies which produce both proprietary and standard products in
relatively low volumes for specialized applications. Fleck
Research has identified over 1,100 separate electronic connector
product lines presently offered in the marketplace.

   PCD focuses its products and sales efforts in the selected key
markets listed below.

   IC PACKAGE INTERCONNECT MARKET:  In the fabrication and use of
ICs, there are four stages in which sockets may be used: test,
burn-in, development and production. It is the Company's
objective to provide a total solution for selected IC packages
encompassing all four stages. By providing a total solution, the
Company believes it will be able to forge closer customer
relationships and gain acceptance by new customers.

   The Company's market position varies by market. TEST - Through
the Wells acquisition, the Company gained entrance to the IC
package test market with a program, which is in its early stage
and is designed to penetrate the test market. BURN-IN - The
Company believes that the combination of the burn-in product
lines of PCD and Wells makes the Company one of the worldwide
leaders in the burn-in market. DEVELOPMENT - The Company has been
active in the development market for a number of years, primarily
<PAGE>
with a product line that it sells to Altera Corporation.
PRODUCTION - The Company has recently entered the production
market with the introduction of its Z-Lok(TM) BGA socket.

   TEST - Test sockets are used primarily in semiconductor
   foundries. After silicon wafers have been cut into individual
   chips and packaged, certain electrical tests are performed to
   detect packaging defects and to grade/sort the chips based on
   various performance characteristics. Test sockets are
   designed for specific packages and must withstand hundreds of
   thousands of rapid insertions and withdrawals while offering
   high reliability. Because of their intensive use, test
   sockets have a relatively short useful life.

   BURN-IN - Most leading-edge microprocessors, logic and
   memory ICs undergo an extensive reliability screening and
   stress testing procedure known as burn-in. The burn-in
   process screens for early failures by operating the IC at
   elevated voltages and temperatures, usually at 125 degree
   symbolC (257 degree symbolF), for periods typically ranging
   from 12 to 48 hours. During burn-in, the IC is secured in a
   socket, an electro-mechanical interconnect, which is a
   permanent fixture on the burn-in printed circuit board. The
   socket is designed to permit easy insertion and removal of
   the IC before and after burn-in. Further, these sockets must
   be able to withstand up to 10,000 insertions and withdrawals
   under extreme thermal cycle conditions.

   DEVELOPMENT - The main purpose of the development socket is
   to provide flexibility for the designer in performing
   diagnostics of electronic design layouts and programming of
   programmable logic devices ("PLDs") in the prototype and
   early production stages of these layouts.

   PRODUCTION - Production sockets provide an electro-mechanical
   interface between the printed circuit board and the IC
   package. Printed circuit boards form the backbone of all
   electronic systems. The use of sockets allows a detachable
   interconnection between the IC and printed circuit board and
   benefits both the systems manufacturer and end consumer.
   Sockets provide flexibility in production by allowing
   manufacturers to produce the printed circuit board with
   unpopulated sockets, then populate the board with ICs at a
   later date. Sockets also make upgrading easier and more
   flexible for the consumer by allowing for the replacement of
   a chip on a printed circuit board without disturbing or
   damaging other elements of the board.



<PAGE>
   The worldwide semiconductor market has grown in five of the
last six years and is projected by Integrated Circuit Engineering
Corporation, a leading research company in the semiconductor
field, to grow at a compound annual growth rate over the next
five years in excess of 15%.

   INDUSTRIAL INTERCONNECT MARKET:  The industrial interconnect
market is comprised of a broad range of control, measurement and
manufacturing equipment. Terminal blocks are most commonly used
in this equipment to provide an electrical link between discrete
functions, such as monitoring and measuring, and controlling
devices, such as programmable logic controllers ("PLCs"), stand-
alone PCs and single function controllers. The use of terminal
blocks has increased as electronic controllers and sensors in the
industrial environment have evolved to control more complex,
multi- function activities. In addition to increasing in number,
these controllers and their connectors are becoming smaller and
are being configured in increasing variations.

   Increased sophistication in industrial and process control
equipment has led to a demand for flexible, modular
interconnection and interface products. Control systems are used
to facilitate the interface of discrete factory wiring and cable
systems with standard computer interconnects. These interface
systems allow industrial customers to reduce installation time
and decrease cabinet space, thereby improving their overall
system costs.

   PCD is benefiting from the proliferation of factory automation
and the embedded electronics which control manufacturing
processes. This trend has spurred demand not only for increased
unit volume of terminal blocks but also for interface modules
with higher density and greater diversity of configurations.

   Within the industrial interconnect market, the Company focuses
its sales and marketing efforts on North America. Bishop &
Associates forecasts sales of industrial interconnect products in
North America to grow at a 6.2% compound annual growth rate, from
$891 million in 1997 to $1.2 billion in 2002.

   AVIONICS MARKET:  The avionics market requires a diverse range
of electronic connectors that are designed and manufactured
specifically for avionics applications. Over the last few years,
commercial aircraft applications have represented an increasingly
important part of this market. The Company participates in
selected areas of the avionics market with terminal blocks and
sockets that perform similar functions as its industrial
connectors but are designed to operate in the harsher environment
and meet the more critical performance requirements of avionics
applications.

<PAGE>
   The world fleet of commercial transport aircraft, which
includes all aircraft with 50 seats or more, is projected by The
Boeing Company to grow from 11,500 airplanes at the end of 1996
to almost 17,000 airplanes in 2006. Over the next ten years, The
Boeing Company estimates that more than 7,300 new commercial jets
will enter service worldwide. The majority of these airplanes
will meet industry demand for growth, while the remainder will
replace the 1,900 airplanes that are projected to be removed from
service. According to The Boeing Company, many of these airplanes
are expected to be removed from service due to the International
Civil Aviation Organization ("ICAO") requirement that in the
United States all airplanes must comply with the ICAO Stage 3
noise standard as of December 31, 1999. Of the 1,900 airplanes
projected to be removed from service between 1997 and 2006, three
out of four are expected to be removed during the next five
years.

STRATEGY

   Before the Wells acquisition, both PCD and Wells shared
similar strategies, and the Company has developed a unified
strategy for the future. The Company's goal is to identify and
expand into selected electronic connector markets where it can
establish a position of leadership. The Company intends to
increase its presence in the markets in which it participates
through internal investment in product development and potential
strategic acquisitions. The key elements of the Company's
strategy are:

   SELECTION OF KEY MARKETS:  The Company actively identifies
   and pursues areas of the electronic connector market which
   have the following characteristics: demand for electronic
   connectors with relatively high engineering content, high
   degree of customer interface, changing technology,
   significant growth opportunities and a market size
   appropriate to the Company's resources. The Company focuses
   on the IC package, industrial and avionics interconnect
   markets.  The recent acquisition of Wells emphasizes the
   Company's strategy of selection of key markets by expanding
   its share of the IC package interconnect market. Similarly,
   the Company recently formed its Control Systems Interconnect
   division in order to enter the interface module market which
   the Company believes is a rapidly growing segment of the
   interconnect market.

   TOTAL CUSTOMER SOLUTION:  The Company seeks to anticipate
   evolving market requirements and capitalize on its design
   capabilities to rapidly develop products that meet those
   needs. PCD has increased its product offerings and design
<PAGE>
   capabilities to provide a total product solution to its
   customers. These customers are increasingly seeking a
   solution to an expanding array of product requirements and
   services, resulting in the establishment of closer strategic
   relationships between PCD and its customers. The Company
   believes its total solution approach meets these customer
   needs by shortening the new product development cycle,
   helping them to meet their time-to-market requirements and
   providing product specific expertise.

   CUSTOMER RESPONSIVENESS/SHORT DELIVERY CYCLE:  The Company
   believes that responding quickly to customer needs is a
   critical competitive factor in the markets in which it
   participates. Increasing emphasis by customers on time to
   market with new designs, inventory reduction and shorter, and
   more frequent production runs has created the need for more
   responsive, innovative vendors. The Company believes it is
   among the most responsive to its customer needs including
   product design and production lead times for product
   development and delivery in the markets it serves, and the
   Company's strategy is to maintain and leverage this
   leadership position.

   BEST COST PRODUCER:  In the markets in which the Company
   competes, high quality is a prerequisite. The Company's goal
   is to be the low cost producer for comparable product designs
   in each of these markets. The Company strives for continuous
   cost reduction and monitors its progress closely throughout
   the year. As part of this program, engineering and
   manufacturing work closely together from the inception of all
   new product programs.

   PENETRATION OF WORLDWIDE MARKETS:  The Company has recently
   placed great emphasis on marketing its products on a
   worldwide basis and currently sells to its foreign customers
   both directly and through U.S. and foreign distributors.
   According to Bishop & Associates, non-U.S. sales accounted
   for over 60% of 1997 sales in the world connector market.
   International sales of the Company (excluding Wells) as a
   percentage of net sales increased from 7.7% in 1993 to 35.8%
   in 1997. As a result of the Wells acquisition, the Company
   now has an operating subsidiary in Japan ("Wells Japan"), and
   sales or technical support operations in England, Germany,
   South Korea, Malaysia and Singapore, which the Company
   believes will expand its ability to serve the global
   semiconductor market.




<PAGE>
PRODUCTS AND APPLICATIONS

   The Company markets over 6,800 electronic connector products
in three product categories, each targeting a specific market.
These product categories are: IC package interconnects,
industrial interconnects and avionics terminal blocks and
sockets. The products offered within each product category can be
characterized as either proprietary, application specific or
industry standard, as described below.

   PROPRIETARY connectors are unique Company designs that are
   introduced and sold to a broad market rather than a single
   customer.

   APPLICATION-SPECIFIC interconnects are products which are
   designed and developed for a specific application, typically
   for one customer. These products can be subsequently
   developed into proprietary product lines.

   INDUSTRY STANDARD connectors are normally produced in
   accordance with a relatively detailed industry or military
   design and performance specification and sold to the broad
   market to which that specification relates.

IC PACKAGE INTERCONNECTS

   ICs (which before being packaged are frequently referred to as
dies) are generally encased in a plastic or ceramic package to
protect the device and facilitate its connection with other
system components. The IC package industry offers a wide variety
of evolving package designs. New package designs are driven by
the need to accommodate the increasing complexity and higher lead
count ICs. Each unique IC package configuration requires a socket
that corresponds to the package's specific characteristics.

   ICs are constantly increasing in functionality while generally
decreasing in unit cost. This leads to an increase in IC product
application, thereby driving IC unit growth. This unit growth and
the proliferation of sizes and packages drives the demand for IC
sockets.

   Based on industry reports, unit demand for major package types
are expected to increase at a compound annual growth rate of 8.1%
from 1996 to 2001. The Company offers products within all package
families, however, the Company primarily focuses on the Small
Outline ("SO") Package Sockets, Quad Flat Pack ("QFP") Sockets,
Pin Grid Array ("PGA") Sockets and Ball Grid Array ("BGA")
Sockets. Based on industry reports, the projected compound annual
growth rates for SO, QFP, PGA and BGA package families are 8.5%,
16.7%, 8.3% and 59.3%, respectively, from 1996 to 2001.

<PAGE>
   SMALL OUTLINE PACKAGE SOCKETS:  The SO is a plastic,
   rectangular package with leads on two sides, running along
   either pair of opposite edges. With lead counts from 8 to 64
   leads, the SO houses simple logic, memory and linear dies.
   Most SO packages are 44 leads and below. Devices tend to
   transition to the QFP above this lead count. The small size,
   low price and surface mount design of the SO makes it a
   highly desirable package. The Company currently produces 170
   distinct sockets to accommodate a variety of SO packages.

   QUAD FLAT PACK SOCKETS:  The QFP is a plastic package with
   leads on four sides. It is used for high lead count surface
   mount applications and is characterized by lead counts
   typically ranging between 40 and 208 leads. The QFP is
   currently a predominant and rapidly growing technology for
   packaging of leading edge ICs used in microprocessor,
   communication and memory applications. The Company currently
   produces over 37 distinct sockets to accommodate a wide
   variety of QFP packages.

   PIN GRID ARRAY SOCKETS:  The PGA is a square or rectangular
   through-hole device that affects routing through all layers
   of the printed circuit board. The pins are generally placed
   on the package before insertion of the die. The
   differentiating feature of the PGA is that the contacts are
   placed in an array over the bottom of the packaged device,
   rather than protruding from the sides of the device in a
   perimeter pattern, as with the QFP. As a result, the PGA
   offers greater lead density and smaller overall profile. This
   makes the PGA ideal for devices with high lead counts, in
   excess of 208, the upper range in which the QFP becomes
   difficult to handle.

   BALL GRID ARRAY SOCKETS:  Similar to the PGA, the BGA uses an
   underlying substrate, rather than a lead frame, for die
   attachment. The die is then encapsulated and solderballs are
   attached to the underside of the substrate. The solderballs
   ultimately attach the package to the printed circuit board.
   The die is placed in the package prior to the attachment of
   the solderballs to ensure a flat surface for the die during
   processing. In some cases, the packaged BGA is referred to as
   the BGA Chip-Scale Package ("BGA/CSP") because the package
   is only slightly larger (i.e. less than 20% larger) than the
   die itself. Whereas the PGA contacts the printed circuit
   board at all layers using through-hole connection, the BGA
   contacts the printed circuit board only at the surface. This
   allows the BGA to achieve a lower profile, lighter weight and
   smaller area on the printed circuit board due to surface
   mounting.
<PAGE>
INDUSTRIAL INTERCONNECTS

   The Company's product areas in this market are industrial
terminal blocks and interface modules. Terminal blocks are most
commonly used in industrial equipment to provide an electrical
link between discrete functions, such as monitoring and
measuring, and a controlling device. Interface modules facilitate
the interface between discrete factory wiring and cabling for
standard computer interconnects. The Company's industrial
interconnects are targeted at the industrial and process control
markets and affiliated markets and applications such as
environmental control systems, food and beverage preparation,
motor controls, machine tools, robotics,
instrumentation and test equipment.

   TERMINAL BLOCKS:  Terminal blocks are used in applications
   where I/O power or signal wires are fed into a PLC or similar
   (and often simpler) control system, and a connector is
   required to interface between the electrical environment of
   relatively heavy wires and the electronic environment of
   controllers and sensors. The Company's terminal blocks
   connect to and capture the wires in screw-clamp terminations,
   and interface with printed circuit boards in a variety of
   manners. The Company concentrates on four major product lines
   within this market: pluggable terminal blocks, fixed mount
   terminal blocks, edgecard terminal blocks, and application
   -specific terminal blocks. Application-specific terminal
   blocks are developed for customers who are of strategic
   importance to the Company, represent significant potential
   volume and are recognized market leaders.

   INTERFACE MODULES:  Interface modules are interconnect
   devices that incorporate terminal blocks, high density
   connectors and often additional electronic components and are
   used to form the interconnection between a system I/O card
   and field equipment. Often these interconnections require
   several discrete wire and standard computer connector
   interconnects. The interface module simplifies the
   interconnection by incorporating both the discrete wire and
   standard computer interconnects into a rail mounted printed
   circuit board assembly consisting of terminal blocks,
   additional connectors and possibly other electronic devices.
   Interface modules are typically application-specific and may
   contain electronic components for signal conditioning,
   fusing and various other electronic requirements.




<PAGE>
AVIONICS TERMINAL BLOCKS AND SOCKETS

   Avionics terminal blocks perform similar functions as
industrial terminal blocks, linking discrete wires that are
individually terminated to a connector. However, avionics
terminal blocks are designed to withstand the harsher environment
and far more critical operating requirements to which they are
subject. The primary differences are that: contacts are gold
plated; wires are terminated by the crimped (metal deformation)
technique rather than screw clamps; and individual wires are
installed and removed from the connector through use of spring-
actuated locking devices. The avionics connectors are normally
completely environmentally sealed through use of a silicon
elastomer sealing grommet or are designed to operate in a sealed
compartment.

   The Company concentrates on three major product lines in the
avionics market:

   RELAY SOCKETS:  Relay sockets are used throughout aircraft as
   a means to facilitate installation, repair and maintenance of
   electro-mechanical relays which are utilized for a wide
   variety of control purposes ranging from main control
   circuits to landing gear.

   JUNCTION MODULES:  Junction modules are environmentally
   sealed, airborne terminal blocks.

   APPLICATION-SPECIFIC AVIONICS CONNECTORS:  Application
   -specific junction modules have been developed in conjunction
   with Boeing Commercial Aircraft for use on the 737-747-757
   -767 series of commercial aircraft; and with Douglas Aircraft
   Company for the MD11 and C17 aircraft. Application-specific
   relay sockets are marketed to Boeing subcontractors for the
   777 commercial aircraft program and to Douglas for the MD11
   and C17 aircraft.

PRODUCT DEVELOPMENT

   Currently, the Company markets over 6,800 products in a wide
variety of product lines. The Company seeks to broaden its
product lines and to expand its technical capabilities in order
to meet its customers' anticipated needs. Through the Wells
acquisition, the Company anticipates improved project design
capacity resulting from focusing new product development
resources and eliminating project duplication. The Company's
product development strategy is to introduce new products into
markets where the Company has already established a leadership
position and to develop next generation products for other
<PAGE>
markets in which the Company wishes to participate. The following
product lines were introduced in 1997: high density terminal
blocks, production BGA Z-Lok(TM) sockets, test sockets and
Flexiplug(TM), and a number of application-specific products for
major market leaders in the IC package interconnect, industrial
equipment and avionics markets, including Micron, AMD, Groupe
Schneider and Rockwell International Corp. (through its
subsidiary Allen-Bradley).

   The Company's current product development projects in the IC
package interconnect market target new package device designs
such as BGA, TSOP and CSP burn-in, test and BGA production
packages. The Company believes, based on industry trends, that
BGA will become the preferred package for high-lead count IC
packages (in excess of 300 leads). The Company also believes,
based on industry trends, that SOP and CSP will be the preferred
package for high-volume, high-density small outline IC devices.
In the industrial equipment market, the Company is scheduled to
introduce a series of multi-tier fixed terminal blocks in the
first half of 1998.  The initial interface modules were
introduced in January 1998, and a number of custom designs are
expected to follow during the year.  New application-specific
products are also being developed.  Among these products is a
product similar to the Company's Flexiplug(TM) product being
developed for Rockwell International Corp. (Allen-Bradley
Company), which is projected to go into production in the second
half of 1998.  For Groupe Schneider, the Company has developed a
number of standard and application-specific fixed terminal
blocks, which are projected to be introduced in the second
quarter of 1998.

SALES AND MARKETING

   The Company distributes its products through a combination of
its own dedicated direct sales forces, a worldwide network of
manufacturers representatives and authorized distributors. The
Company maintains separate sales forces for the IC package
interconnect markets and for the industrial equipment and
avionics markets. For the IC package interconnect markets, the
Company employs a global direct sales force with offices in
England, Germany, Japan, South Korea, Malaysia, Singapore and the
United States, augmented with sales representatives in smaller
markets. The Company has integrated the Wells sales force with
PCD's sales force for the IC package interconnect markets. For
the industrial equipment and avionics markets, the Company
generally uses its direct sales forces and manufacturer
representatives for large customers, new product introductions
and application-specific products and uses its authorized
distributors for smaller and medium-sized customers of standard

<PAGE>
and proprietary products. The Company's sales and marketing
program is focused on achieving and maintaining close working
relationships with its customers early in the design phase of the
customer's own product development.

CUSTOMERS

   In 1997, products of the Company (excluding Wells) were sold
to over 1,300 customers in a wide range of industries and
applications. The top five customers of the Company (excluding
Wells) in 1997 accounted for 42.7% of net sales. Altera
Corporation accounted for 14.5%, 17.4% and 16.6% of net sales of
the Company (excluding Wells) in 1997, 1996 and 1995,
respectively, and TNT Distributors, Inc. accounted for 12.7%, and
13.4% of net sales of the Company (excluding Wells) in 1997 and
1995, respectively. In 1997, principal end users of products of
Wells included Advanced Micro Devices, Inc., Micron Technology,
Inc. and Siemens AG. Sales to customers located outside the
United States, either directly or through U.S. and foreign
distributors, accounted for approximately 35.8%, 22.1% and 28.1%
of the net sales of the Company (excluding Wells) in the years
ended 1997, 1996 and 1995, respectively.

   Examples of end users of the Company's products, by category,
are presented below:

<TABLE>
<CAPTION>
PRODUCT CATEGORIES                         REPRESENTATIVE CUSTOMERS
------------------                     --------------------------------
<S>                                   <C>
IC Package Interconnects............   Advanced Micro Devices, Inc.
                                       Altera Corporation
                                       Micron Technology, Inc.
                                       Motorola
                                       Siemens AG

Industrial Interconnects............   Checkpoint Systems, Inc.
                                       Groupe Schneider (Modicon, Inc./
                                        Square D Co/Telemecanique)
                                       Honeywell, Inc.
                                       Pacific Scientific Company
                                       Parker Hannifin Corporation
                                       Rockwell International Corp.
                                        (Allen Bradley Company)

Avionics Terminal Blocks and Sockets    Bell Helicopter Textron Inc.
                                        The Boeing Company
                                        Bombardier Inc. (Canadair/
                                         DeHavilland/Learjet Inc.)
                                        British Aerospace Ltd.
                                        Empresa Brasileira de Aeronautica S/A
                                           (Embraer)

</TABLE>

<PAGE>
MANUFACTURING AND ENGINEERING

   The Company is vertically integrated from the initial concept
stage through final design and manufacturing with regard to the
key production processes which the Company believes are critical
to product performance and service. These processes include
precision stamping, plastic injection molding and automated
assembly. The Company believes that this vertical integration
allows the Company to respond to customers quickly, control
quality and reduce the time to market for new product
development.

   The Company seeks to reduce costs in its manufacturing
fabrication and assembly operations through formalized cost
savings programs. Complementary programs are dedicated to
maximizing the return on capital investments and reducing
overhead expense.

   The Company believes it is a leader in delivery responsiveness
in its target markets. The introduction of just-in-time ("JIT")
manufacturing, inventory control techniques and quick-change, in-
house production tooling have substantially reduced delivery lead
times. Production cells operate under a JIT pull system, with
customer orders assembled as received. PCD carries minimal
finished goods inventory. An additional advantage of JIT
manufacturing is the almost complete elimination of rework. Shop
floor orders are not handled in bulk and are relatively small,
and problems are resolved as they occur, rather than continuing
through an extended production run.

   Wells Japan subcontracts all of its product manufacturing and
final assembly operations to approximately six Japanese vendors.
In calendar year 1997, Wells derived $15.1 million (or
approximately 21.1% of the Company's pro forma 1997 revenues)
from Wells Japan.   The Company does not subcontract any other
final product assembly.  In addition, the Company subcontracts a
portion of its labor-intensive product subassembly to a U.S.-
based subcontractor with a manufacturing facility in Mexico.  The
Company is not contractually obligated to do business with any
subcontractor, could substitute other subcontractors without
significant additional cost or delay, and could perform assembly
itself if the need were to arise.

INTELLECTUAL PROPERTY

   The Company seeks to use a combination of patents and other
means to establish and protect its intellectual property rights
in various products. The Company intends to vigorously defend its
intellectual property rights against infringement or
<PAGE>
misappropriation. Due to the nature of its products, the Company
believes that intellectual property protection is less
significant than the Company's ability to further develop,
enhance and modify its current products. The Company believes
that its products do not infringe on the intellectual property
rights of others. However, many of the Company's competitors have
obtained or developed, and may be expected to obtain or develop
in the future, patents or other proprietary rights that cover or
affect products that perform functions similar to those performed
by products offered by the Company. There can be no assurance
that, in the future, the Company's products will not be held to
infringe patent claims of its competitors, or that the Company is
aware of all patents containing claims that may pose a risk of
infringement by its products.

COMPETITION

   The markets in which PCD operates are highly competitive, and
the Company faces competition from a number of different
manufacturers. The Company has experienced significant price
pressure with respect to certain products, including its TSOP
product. The principal competitive factors affecting the market
for the Company's products include design, responsiveness,
quality, price, reputation and reliability. The Company believes
that it competes favorably on these factors.

   Generally, the electronic connector industry is competitive
and fragmented, with over 2,000 manufacturers worldwide.
Competition in the IC package interconnect market, however, is
highly concentrated among a small number of significant
competitors. Competition among manufacturers of application-
specific connectors in the industrial terminal blocks market
depends greatly on the customer, market and specific nature of
the requirement. Competition is fragmented in the avionics
market, but there are fewer competitors due to the demanding
nature of the military and customer specifications which control
much of the markets and the cost and time required to tool and
qualify military standard parts. In each of the markets in which
the Company participates, the Company's significant competitors
are much larger and have substantially broader product lines and
greater financial resources than the Company. There can be no
assurance that the Company will compete successfully, and any
failure to compete successfully could have a material adverse
effect on the financial condition, results of operations and
business of the Company.





<PAGE>
BACKLOG

   The Company defines its backlog as orders that are scheduled
for delivery within the next 12 months. The Company estimates
that its backlog of unfilled orders was approximately
$11.9 million (including Wells) at December 31, 1997, all of
which the Company expects to fill in 1998, and $7.3 million
(excluding Wells) at December 31, 1996.  The level and timing of
orders placed by the Company's customers vary due to customer
attempts to manage inventory, changes in manufacturing strategy
and variations in demand for customer products due to, among
other things, introductions of new products, product life cycles,
competitive conditions or general economic conditions. The
Company generally does not obtain long-term purchase orders or
commitments but instead seeks to work closely with its customers
to anticipate the volume of future orders. Based on anticipated
future volumes, the Company makes other significant decisions
regarding the level of business it will accept, the timing of
production and the levels and utilization of personnel and other
resources. A variety of conditions, both specific to the
individual customer and generally affecting the customer's
industry, may cause customers to cancel, reduce or delay purchase
orders that were either previously made or anticipated.
Generally, customers may cancel, reduce or delay purchase orders
and commitments without penalty. For these reasons, backlog may
not be indicative of future demand or results of operations.


ENVIRONMENTAL

   The Company is subject to a wide range of environmental laws
and regulations relating to the use, storage, discharge and
disposal of hazardous chemicals used during its manufacturing
process. A failure by the Company to comply with present or
future laws and regulations could subject it to future
liabilities or the suspension of production. Such laws and
regulations could also restrict the Company's ability to expand
its facilities or could require the Company to acquire costly
equipment or incur other significant expenses.


EMPLOYEES

   As of December 31, 1997, the Company had 367 employees and 18
contract workers. The Company's 385 employees and contract
workers include 311 in manufacturing and engineering, 45 in sales
and marketing and 29 in administration. Of the Company's U.S.
employees, 53 are represented by the International Brotherhood of
Electrical Workers, Local 1392. The Company believes that its
relations with its employees and their union are good. The
current collective bargaining agreement expires on February 18,
2000.

<PAGE>
RECENT DEVELOPMENTS

   WELLS ACQUISITION

   On December 26, 1997, the Company completed the acquisition
(the "Wells acquisition") of Wells Electronics, Inc. ("Wells").
Wells designs, develops, manufactures and markets a broad line of
test and burn-in sockets and plastic carriers for the global
semiconductor industry. In combining the existing burn-in
business of PCD with that of Wells, the Company now supports
complete design, development, manufacturing and marketing of test
and burn-in sockets in two of the world's largest IC package
interconnect markets: the United States and Japan.  The Company
believes that benefits of the combination of PCD and Wells
include: (i) complementary product lines that together provide an
extensive product offering of burn-in sockets as well as test,
development and production sockets; (ii) complementary major
customers with little overlap; and (iii) improved project design
capacity resulting from focusing new product development
resources and eliminating project duplication.

   Over the last three years, Wells has employed a similar
strategy to that of the Company. From fiscal 1995 (52 weeks ended
June 3, 1995), to fiscal 1997 (53 weeks ended May 3, 1997), the
net sales of Wells increased from $18.6 million to $27.5 million.
With the inclusion of the net sales of Wells, consolidated pro
forma net sales and income from operations (before deducting the
non-recurring write-off relating to the Wells acquisition of
acquired in-process research and development) for the Company
totaled $71.4 million and $21.9 million, respectively, in 1997.

   PUBLIC OFFERING

   On February 12, 1998, the Company filed a Registration
Statement on Form S-1 (Registration No. 333-46137)(the
"Registration Statement") with the Securities and Exchange
Commission with respect to the possible sale of 2,000,000 shares
of its Common Stock. The Company amended the Registration
Statement on March 20, 1998.  There can be no assurance that the
offering of shares contemplated by the Registration Statement
will be completed.

   NEW CREDIT FACILITY, SUBORDINATED DEBENTURE AND WARRANT

   On December 26, 1997, the Company entered into a new credit
agreement with Fleet National Bank as agent for itself and other
lenders ("Credit Facility") consisting of an aggregate $70.0
million in term loans and a $20.0 million revolving credit loan.
On the same date, the Company also issued a $25.0 million
<PAGE>
Subordinated Debenture (the "Debenture") and a common stock
purchase warrant (the "Emerson Warrant") to Emerson Electric Co.
For further discussion of the Credit Facility, Debenture, and the
Emerson Warrant see Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and
Capital Resources appearing in Item 7 hereof and Notes 8 and 9 of
Notes to the Company's Consolidated Financial Statements
appearing in Item 8 hereof.

FORWARD LOOKING INFORMATION

   Statements in this report concerning the future revenues,
profitability, financial resources, product mix, market demand,
product development and other statements in this report
concerning the future results of operations, financial condition
and business of the PCD Inc. are "forward-looking" statements as
defined in the Securities Act of 1933 and Securities Exchange Act
of 1934. Investors are cautioned that the Company's actual
results in the future may differ materially from those projected
in the forward-looking statements due to risks and uncertainties
that exist in the Company's operations and business environment,
including:

   DEPENDENCE ON IC PACKAGE INTERCONNECT AND SEMICONDUCTOR
INDUSTRIES.  The Company's semiconductor or integrated circuit
("IC") package interconnect sockets are used by producers and
testers of ICs and original equipment manufacturers ("OEMs"). For
the year ended December 31, 1997, the Company (excluding
Wells) derived 42.3% of its net sales from these products. The
Company's future success will depend in substantial part on the
vitality of the semiconductor and the related IC package
interconnect industries. The Company's recent acquisition of
Wells Electronics, Inc. ("Wells"), a supplier of IC package
interconnects, significantly increases the Company's dependence
on the IC package interconnect industry. Historically, the IC
package interconnect industry has been driven by both the
technology requirements and unit demands of the semiconductor
industry. Depressed general economic conditions and cyclical
downturns in the semiconductor industry have had an adverse
economic effect on the IC package interconnect market. In
addition, the product cycle of existing IC package designs and
the timing of new IC package development and introduction can
affect the demand for IC package interconnect sockets. Reduced
demand for semiconductors and their related packages would have a
material adverse effect on the financial condition, results of
operations and business of the Company.




<PAGE>
   DEPENDENCE ON PRINCIPAL CUSTOMERS.  Altera Corporation
("Altera"), a provider of high performance, high density
programmable logic devices, has been the largest customer of the
Company (excluding Wells) since 1994. Altera accounted for 14.5%,
17.4% and 16.6% of the net sales of the Company (excluding Wells)
for the years ended December 31, 1997, 1996 and 1995,
respectively. Sales to TNT Distributors, Inc. ("TNT"), a
semiconductor equipment distributor, accounted for 12.7% and
13.4% of net sales for the years ended December 31, 1997 and
1995, respectively. Sales by Wells to Advanced Micro Devices,
Inc. ("AMD"), Dynavision, Inc. ("Dynavision") and Micron
Technology, Inc. ("Micron") accounted for 12.0%, 11.6% and 29.6%,
respectively, of net sales by Wells for the pro forma calendar
year ended December 31, 1997. The Company does not have written
agreements with any of its customers, including Altera, AMD,
Dynavision, Micron or TNT, and therefore, no customer has any
minimum purchase obligations. Accordingly, there can be no
assurance that any of the Company's customers will purchase the
Company's products beyond those covered by released purchase
orders. The loss of, or significant decrease in, business from
Altera, AMD, Dynavision, Micron or TNT, for any reason, would
have a material adverse effect on the financial condition,
results of operations and business of the Company.

   ACQUISITIONS AND INDEBTEDNESS.  The Company acquired all of
the capital stock of Wells, a manufacturer of IC package
interconnect products, on December 26, 1997. Wells currently
operates as a wholly-owned subsidiary of the Company. Subject to
compliance with the Company's credit facility ("Senior Credit
Facility") with Fleet National Bank and other lenders, the
Company may from time to time pursue the acquisition of other
companies, assets, products or technologies. The Company has
limited experience in integrating acquired companies or
technologies into its operations. Therefore, there can be no
assurance that the Company will operate Wells or other acquired
businesses profitably in the future. Acquisitions involve a
number of operating risks that could materially adversely affect
the Company's operating results, including the diversion of
management's attention to assimilate the operations, products and
personnel of the acquired companies, the amortization of acquired
intangible assets and the potential loss of key employees of the
acquired companies. There can be no assurance that the Company
will be able to manage acquisitions successfully or that the
Company will be able to integrate the operations, products or
personnel gained through any such acquisitions without a material
adverse effect on the financial condition, results of operations
and business of the Company. Accordingly, operating expenses
associated with acquired businesses may have a material adverse
effect on the financial condition, results of operations and
business of the Company.

<PAGE>
   The Company incurred substantial indebtedness in connection
with the Wells acquisition and, subject to compliance with the
terms of the Senior Credit Facility, may incur additional
indebtedness in connection with future acquisitions. The
incurrence of substantial amounts of debt could increase the risk
of the Company's operations. If the Company's cash flow and
existing working capital are not sufficient to fund its general
working capital requirements or to service its indebtedness, the
Company would have to raise additional funds through the sale of
its equity securities, the refinancing of all or part of its
indebtedness or the sale of assets or subsidiaries. There can be
no assurance that any of these sources of funds would be
available in amounts sufficient for the Company to meet its
obligations, if at all. The cost of debt financing may also
impair the ability of the Company to maintain adequate working
capital or to make future acquisitions. In addition, the issuance
of additional shares of Common Stock in connection with
acquisitions could be dilutive to existing investors.

   INTERNATIONAL SALES AND OPERATIONS.  Sales to customers
located outside the United States, either directly or through
U.S. and foreign distributors, accounted for approximately 35.8%,
22.1% and 28.1% of the net sales of the Company (excluding Wells)
in the years ended December 31, 1997, 1996 and 1995,
respectively, and the Company believes that, with the addition of
Wells, international sales will account for a significant portion
of its revenues for the foreseeable future. International
revenues are subject to a number of risks, including: longer
accounts receivable payment cycles; exchange rate fluctuations;
difficulty in enforcing agreements and intellectual property
rights and in collecting accounts receivable; tariffs and other
restrictions on foreign trade; withholding and other tax
consequences; economic and political instability; and the burdens
of complying with a wide variety of foreign laws. Sales made to
foreign customers or foreign distributors may be denominated in
either U.S. dollars or in the currencies of the countries where
sales are made. The Company has not to date sought to hedge the
risks associated with fluctuations in foreign exchange rates and
does not currently plan to do so. The Company's foreign sales and
operations are also affected by general economic conditions in
its international markets. A prolonged economic downturn in its
foreign markets could have a material adverse effect on the
Company's business. As a result of the Wells acquisition, the
Company now has an operating subsidiary in Japan, and sales or
technical support operations in England, Germany, South Korea,
Malaysia and Singapore. Recent and continuing volatility in the
Asian economies and financial and currencies markets may have a
material adverse effect on the Company's current and planned
sales and operations in that region, particularly with respect to
<PAGE>
the Company's IC package interconnect business. In addition, the
laws of certain countries do not protect the Company's products
and intellectual property rights to the same extent as do the
laws of the United States. There can be no assurance that the
factors described above will not have an adverse effect on the
Company's future international revenues and, consequently, on the
financial condition, results of operations and business of the
Company.

   RESTRICTIVE COVENANTS UNDER SENIOR CREDIT FACILITY.  The
agreement governing the Senior Credit Facility contains numerous
financial and operating covenants. There can be no assurance that
the Company will be able to maintain compliance with these
covenants, and failure to meet such covenants would result in an
event of default under the Senior Credit Facility. Among these
covenants are restrictions that the Company (i) must maintain
John L. Dwight, Jr. as chief executive officer of the Company or
obtain the consent of the lenders under the Senior Credit
Facility to any replacement of Mr. Dwight; (ii) may not, without
the prior consent of such lenders, acquire the assets of or
ownership interests in, or merge with, other companies; and (iii)
may not, without the prior consent of such lenders, pay cash
dividends.

   FLUCTUATIONS IN OPERATING RESULTS.  The variability of the
level and timing of orders from, and shipments to, major
customers may result in significant fluctuations in the Company's
quarterly results of operations. The Company generally does not
obtain long-term purchase orders or commitments but instead seeks
to work closely with its customers to anticipate the volume of
future orders. Generally, customers may cancel, reduce or delay
purchase orders and commitments without penalty. Cancellations,
reductions or delays in orders by a customer or groups of
customers could have a material adverse effect on the financial
condition, results of operations and business of the Company. In
addition to the variability resulting from the short-term nature
of its customers' commitments, other factors have contributed,
and may in the future contribute, to such fluctuations. These
factors may include, among other things, customers' and
competitors' announcement and introduction of new products or new
generations of products, evolutions in the life cycles of
customers' products, timing of expenditures in anticipation of
future orders, effectiveness in managing manufacturing processes,
changes in cost and availability of labor and components, shifts
in the Company's product mix and changes or anticipated changes
in economic conditions. In addition, it is not uncommon in the
electronic connector industry for results of operations to
display a seasonal pattern of declining revenues in the third
quarter of the calendar year. Although the Company's results of
<PAGE>
operations did not display this pattern in 1997 and 1995, it did
occur in 1996 and is likely to occur in the future. Because the
Company's operating expenses are based on anticipated revenue
levels and a high percentage of the Company's operating expenses
are relatively fixed, any unanticipated shortfall in revenue in a
quarter may have a material adverse impact on the Company's
results of operations for the quarter. Results of operations for
any period should not be considered indicative of the results to
be anticipated for any future period.

   TECHNOLOGICAL EVOLUTION.  The rapid technological evolution of
the electronics industry requires the Company to anticipate and
respond rapidly to changes in industry standards and customer
needs and to develop and introduce new and enhanced products on a
timely and cost-effective basis. In particular, the Company must
target its development of IC package interconnect sockets based
on which next generation IC package designs the Company expects
to be successful. The Company must manage transitions from
products using present technology to those that utilize next
generation technology in order to maintain or increase sales and
profitability, minimize disruptions in customer orders and avoid
excess inventory of products that are less responsive to customer
demand. Any failure of the Company to respond effectively to
changes in industry standards and customer needs, develop and
introduce new products and manage product transitions would have
a material adverse effect on the financial condition, results of
operations and business of the Company.

   MANAGEMENT OF GROWTH.  The Company has grown rapidly in recent
years, in particular through the Wells acquisition in
December 1997. A continuing period of rapid growth could place a
significant strain on the Company's management, operations and
other resources. The Company's ability to manage its growth will
require it to continue to invest in its operational, financial
and management information systems, and to attract, retain,
motivate and effectively manage its employees. The inability of
the Company's management to manage growth effectively would have
a material adverse effect on the financial condition, results of
operations and business of the Company.

   PROPRIETARY TECHNOLOGY AND PRODUCT PROTECTION.  The Company's
success depends in part on its ability to maintain the
proprietary and confidential aspects of its products as they are
released. The Company seeks to use a combination of patents and
other means to establish and protect its proprietary rights.
There can be no assurance, however, that the precautions taken by
the Company will be adequate to protect the Company's technology.
In addition, many of the Company's competitors have obtained or
developed, and may be expected to obtain or develop in the
<PAGE>
future, patents or other proprietary rights that cover or affect
products that perform functions similar to those performed by
products offered by the Company. There can be no assurance that,
in the future, the Company's products will not be held to
infringe patent claims of its competitors, or that the Company is
aware of all patents containing claims that may pose a risk of
infringement by its products. The inability of the Company for
any reason to protect existing technology or otherwise acquire
such technology could prevent distribution of the Company's
products, having a material adverse effect on the financial
condition, results of operations and business of the Company.

   PATENT LITIGATION.  On August 21, 1995, the Company's wholly-
owned subsidiary, CTi Technologies, Inc. ("CTi"), filed an action
in the United States District Court for the District of
Arizona against Wayne K. Pfaff, an individual residing in Texas
("Pfaff"), and Plastronics Socket Company, Inc., a corporation
affiliated with Pfaff, alleging and seeking a declaratory
judgment that two United States patents issued to Pfaff and
relating to certain burn-in sockets for "leadless" IC packages
(the "Pfaff Leadless Patent") and ball grid array ("BGA") IC
packages (the "Pfaff BGA Patent") (collectively, the "Pfaff
Patents") are invalid and are not infringed by CTi, the products
of which include burn-in sockets for certain "leaded" packages
(including Quad Flat Paks) (the "CTi Leaded Products") and BGA
packages (the "CTi BGA Products") (collectively, the "CTi
Products"). Pfaff has filed a counterclaim alleging that CTi
infringes the "Pfaff Leadless Patent" and has requested an award
of damages; the counterclaim does not allege infringement of the
Pfaff BGA Patent. Pfaff has also sought a permanent injunction
against further infringement by CTi of the Pfaff Leadless Patent.
That action has been stayed pending resolution of another action,
described below, involving the Pfaff Leadless Patent.

   In litigation between Wells and Pfaff concerning the Pfaff
Leadless Patent, the United States Court of Appeals for the
Federal Circuit has found all of the individual descriptions of
the invention (the "Claims" of the patent) of the Pfaff Leadless
Patent which were at issue in that case to be invalid. Certain
other Claims of the patent were not at issue in that case and
their validity was not decided by the court, because Pfaff did
not allege that products of Wells infringed such Claims.  The
United States Supreme Court has accepted an appeal by Pfaff in
that case. Unless overturned, the Court of Appeals decision as to
the invalidity of such Claims of the Pfaff Leadless Patent will
be binding in the CTi v. Pfaff action in the District of Arizona,
and the reasoning of that decision could support CTi's position
that the remaining Claims of that patent are invalid. There can
be no assurance, however, that the decision will not be
<PAGE>
overturned or that the Company will not be required to engage in
further costly litigation regarding the Pfaff Patents.

   In addition, there can be no assurance that the Company, CTi
or Wells will prevail in any pending or future litigation. A
final court determination that CTi or Wells has infringed the
Pfaff Leadless Patent could have a material adverse effect on the
Company. Such adverse effect could include, without limitation,
the requirement that CTi or Wells pay substantial damages for
past infringement and an injunction against the manufacture or
sale in the United States of such products as are
found to be infringing.  Approximately 18.5% of the revenues of
the Company (excluding Wells) for 1997 and approximately 7.0% of
the revenues of Wells for calendar year 1997 were derived from
the sale of products potentially at issue in the Pfaff cases.
There can be no assurance that the CTi and Wells litigation will
be resolved without material adverse effect on the financial
condition, results of operations and business of the Company.

   COMPETITION.  The electronic connector industry is highly
competitive and fragmented, with more than 2,000 manufacturers
worldwide. The Company believes that competition in its targeted
segments is primarily based on design, responsiveness, quality,
price, reputation and reliability. The Company has experienced
significant price pressure with respect to certain products,
including its thin, small outline package ("TSOP") product. The
Company's significant competitors are much larger and have
substantially broader product lines and greater financial
resources than the Company. There can be no assurance that the
Company will compete successfully, and any failure to compete
successfully would have a material adverse effect on the
financial condition, results of operations and business of the
Company.

   CONTROL BY EXISTING STOCKHOLDERS.  Upon the completion of this
offering, the current officers, directors and Emerson Electric
Co. ("Emerson"), the Company's largest stockholder, will
beneficially own approximately 41.5% of the outstanding shares of
the Common Stock of the Company based on the number of shares of
Common Stock outstanding as of January 31, 1998.  Accordingly,
such persons, if they act together, will have effective control
over the Company through their ability to control the election of
directors and all other matters that require action by the
Company's stockholders, irrespective of how other stockholders
may vote. Such persons could prevent or delay a change in control
of the Company which may be favored by a majority of the
remaining stockholders. Such ability to prevent or delay such a
change in control of the Company also may have an adverse effect
on the market price of the Company's
<PAGE>
Common Stock.

   DEPENDENCE ON KEY PERSONNEL.  The Company is largely dependent
upon the skills and efforts of John L. Dwight, Jr., its Chairman
of the Board, President and Chief Executive Officer, Richard J.
Mullin, its Vice President and President, Wells - CTI Division,
Michael S. Cantor, its Vice President and General Manager,
Industrial/Avionics Division, Jeffrey A. Farnsworth, its Vice
President and General Manager, Wells - CTI Phoenix, and other
officers and key employees. The Company does not have employment
agreements with any of its officers or key employees providing
for their employment for any specific term or noncompetition
agreements prohibiting them from competing with the Company after
termination of their employment. The loss of key personnel or the
inability to hire or retain qualified personnel could have a
material adverse effect on the financial condition, results of
operations and business of the Company.

   DEPENDENCE UPON INDEPENDENT DISTRIBUTORS.  Sales through
independent distributors accounted for 38.7%, 28.1% and 35.7% of
the net sales of the Company (excluding Wells) for the years
ended December 31, 1997, 1996 and 1995, respectively. The
Company's agreements with its independent distributors are
nonexclusive and may be terminated by either party upon 30 days
written notice, provided that if the Company terminates the
agreement with an independent distributor, the Company will be
obligated to purchase certain of such distributor's pre-
designated unsold inventory shipped by the Company within an
agreed-upon period prior to the effective date of such
termination. The Company's distributors are not within the
control of the Company, are not obligated to purchase products
from the Company, and may also sell other lines of products.
There can be no assurance that these distributors will continue
their current relationships with the Company or that they will
not give higher priority to the sale of other products, which
could include products of competitors. A reduction in sales
efforts or discontinuance of sales of the Company's products by
its distributors could lead to reduced sales and could materially
adversely affect the Company's financial condition, results of
operations and business. The Company grants to certain of its
distributors limited inventory return and stock rotation rights.
If the Company's distributors were to increase their general
levels of inventory of the Company's products, the Company could
face an increased risk of product returns from its distributors.
There can be no assurance that the Company's historical return
rate will remain at a low level in the future or that such
product returns will not have a material adverse effect on the
Company's financial condition, results of operations and
business.
<PAGE>
   YEAR 2000 COMPLIANCE COSTS.  Many currently installed computer
systems and software products are coded to accept only two digit
entries in the date code field. To distinguish 21st century dates
from 20th century dates, these date code fields
must be able to accept four digit entries. The Company utilizes a
significant number of computer software programs and operating
systems across its entire organization, including applications
used in manufacturing, product development, financial business
systems and various administrative functions. The Company
believes that, with the exception of the South Bend, Indiana
location of Wells-CTI ("Wells-CTI South Bend"), its computer
systems will be able to manage and manipulate all material data
involving the transition from 1999 to 2000 without functional or
data abnormality and without inaccurate results related to such
data. However, there can be no assurances that potential systems
interruptions or the cost necessary to update software would not
have a material adverse effect on the Company's financial
condition, results of operations or business. In addition, the
Company has limited information concerning the compliance status
of its suppliers and customers. In the event that any of the
Company's significant suppliers or customers do not successfully
and timely achieve Year 2000 compliance, the Company's financial
condition, results of operations and business could be materially
and adversely affected.

   The Company believes that, within the next nine months, it
will have to replace the current systems at Wells-CTI South Bend
with new systems that are Year 2000 compliant. Failure to replace
such systems could result in the generation of erroneous data or
system failure. Significant uncertainty exists concerning the
potential effects associated with Year 2000 compliance, and Year
2000 issues involving systems of Wells-CTI South Bend could have
a material adverse effect on the Company's financial condition,
results of operations or business. The cost of replacing computer
systems of Wells-CTI South Bend is currently estimated to be up
to $900,000.

   PRODUCT LIABILITY.  The Company's products provide electrical
connections between various electrical and electronic components.
Any failure by the Company's products could result in claims
against the Company. Except with respect to avionics products,
the Company does not maintain insurance to protect against
possible claims associated with the use of its products. A
successful claim brought against the Company could have a
material adverse effect on the financial condition, results of
operations and business of the Company. Even unsuccessful claims
could result in the Company's expenditure of funds in litigation
and management time and resources. There can be no assurance that
the Company will not be subject to product liability claims.
<PAGE>
   ENVIRONMENTAL COMPLIANCE.  The Company is subject to a wide
range of environmental laws and regulations relating to the use,
storage, discharge and disposal of hazardous chemicals used
during its manufacturing process. A failure by the Company at any
time to comply with environmental laws and regulations could
subject it to liabilities or the suspension of production. Such
laws and regulations could also restrict the Company's ability to
expand its facilities or could require the Company to acquire
costly equipment or incur other significant expenses.

   POSSIBLE VOLATILITY OF STOCK PRICE.  The stock market
historically has experienced volatility which has affected the
market price of securities of many companies and which has
sometimes been unrelated to the operating performance of such
companies. The trading price of the Common Stock could also be
subject to significant fluctuations in response to variations in
quarterly results of operations, announcements of new products by
the Company or its competitors, other developments or disputes
with respect to proprietary rights, general trends in the
industry, overall market conditions and other factors. In
addition, there can be no assurance that an active trading market
for the Common Stock will be sustained.

   POTENTIAL EFFECT OF ANTI-TAKEOVER PROVISIONS.  The Company's
Board of Directors has the authority without action by the
Company's stockholders to fix the rights and preferences of and
to issue shares of the Company's Preferred Stock, which may have
the effect of delaying, deterring or preventing a change in
control of the Company. At present the Company has no plans to
issue any shares of Preferred Stock. The Company's Board of
Directors also has the authority without action by the Company's
stockholders to impose various procedural and other requirements
that could make it more difficult for stockholders to effect
certain corporate actions. In addition, the classification of the
Company's Board of Directors and certain provisions of
Massachusetts law applicable or potentially applicable to the
Company, could have the effect of delaying, deterring or
preventing a change in control of the Company. These statutory
provisions include a requirement that directors of publicly-held
Massachusetts corporations may only be removed for "cause," as
well as a provision not currently applicable to the Company that
any stockholder who acquires beneficial ownership of 20% or more
of the outstanding voting stock of a corporation may not vote
such stock unless the stockholders of the corporation so
authorize.





<PAGE>
ITEM 2. FACILITIES

   PCD, headquartered in Peabody, Massachusetts, operates leased
production facilities in Peabody, Massachusetts (60,000 square
feet) and Phoenix, Arizona (24,000 square feet). In conjunction
with the Wells acquisition, production facilities were added in
South Bend, Indiana (50,000 square feet), Yokohama, Japan (6,600
square feet) and Harrisburg (Swatara), Pennsylvania (7,000 square
feet). The Peabody facility is responsible for assembly,
manufacturing automation development and quality assurance
functions relating to industrial terminal blocks and avionics
terminal blocks. The Phoenix facility is responsible for assembly
and quality assurance functions relating to burn-in, development
and production sockets, as well as related product design and
development. The South Bend and Yokohama facilities are
responsible for design, assembly, manufacturing automation
development and quality assurance for burn-in sockets. Stamping
and molding fabrication of components for both Peabody and
Phoenix are handled at the Peabody facility. The Harrisburg
(Swatara) facility handles stamping for production in South Bend.
The Company also maintains distribution and technical sales
support facilities in Northhampton, England; Regensburg, Germany;
Seoul, South Korea; Singapore and Penang, Malaysia. The Company
believes that its facilities are adequate for its operations for
the foreseeable future.


ITEM 3. LEGAL PROCEEDINGS

   On August 21, 1995, the Company's wholly-owned subsidiary, CTi
Technologies, Inc. ("CTi"), filed an action in the United States
District Court for the District of Arizona against Wayne K.
Pfaff, an individual residing in Texas ("Pfaff"), and Plastronics
Socket Company, Inc., a corporation affiliated with Pfaff,
alleging and seeking a declaratory judgment that two United
States patents issued to Pfaff and relating to certain burn-in
sockets for "leadless" IC packages (the "Pfaff Leadless Patent")
and ball grid array ("BGA") IC packages (the "Pfaff BGA Patent")
(collectively, the "Pfaff Patents") are invalid and are not
infringed by CTi, the products of which include burn-in sockets
for certain "leaded" packages (including Quad Flat Paks) (the
"CTi Leaded Products") and BGA packages (the "CTi BGA Products")
(collectively, the "CTi Products"). Pfaff has filed a
counterclaim alleging that CTi infringes the Pfaff Leadless
Patent and has requested an award of damages; the counterclaim
does not allege infringement of the Pfaff BGA Patent. Pfaff has
also sought a permanent injunction against further infringement
by CTi of the Pfaff Leadless Patent. That action has been stayed
pending resolution of another action, described below, involving
the Pfaff Leadless Patent.

<PAGE>
   In litigation between Wells and Pfaff concerning the Pfaff
Leadless Patent, the United States Court of Appeals for the
Federal Circuit has found all of the individual descriptions of
the invention (the "Claims" of the patent) of the Pfaff Leadless
Patent which were at issue in that case to be invalid. Certain
other Claims of the patent were not at issue in that case, and
their validity was not decided by the court, because Pfaff did
not allege that products of Wells infringed such Claims.  The
United States Supreme Court has accepted an appeal on that case.
Unless overturned, the Court of Appeals decision as to the
invalidity of such Claims of the Pfaff Leadless Patent will be
binding in the CTi v. Pfaff action in the District of Arizona,
and the reasoning of that decision could support CTi's position
that the remaining Claims of that patent are invalid.

   The Company believes, based on the advice of counsel (Brown &
Bain, P.A., as to CTi and Baker & Daniels as to Wells), that CTi
and Wells have meritorious defenses against any allegations of
infringement under the Pfaff Patents, and, if necessary, CTi and
Wells will vigorously litigate their positions. There can be no
assurance, however, that the Company, CTi or Wells will prevail
in any pending or future litigation, and a final court
determination that CTi or Wells has infringed the Pfaff Leadless
Patent could have a material adverse effect on the Company. Such
adverse effect could include, without limitation, the requirement
that CTi or Wells pay substantial damages for past infringement
and an injunction against the manufacture or sale in the United
States of such products as are found to be infringing.
Approximately 18.5% of the revenues of the Company (excluding
Wells) for 1997 and approximately 7.0% of the revenues of Wells
for calendar year 1997 were derived from the sale of products
potentially at issue in the Pfaff cases.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   No matters were submitted to a vote of security holders in the
fourth quarter of 1997.












<PAGE>
              EXECUTIVE OFFICERS OF THE REGISTRANT

   Set forth below are the executive officers of the Company and
their ages as of December 31, 1997 and positions held with the
Company, as follows:
<TABLE>
<CAPTION>
         Name              Age                      Position
---------------------      ---     ------------------------------------------
<S>                        <C>    <C>
John L. Dwight, Jr...       53     Chairman of the Board, Chief Executive
                                    Officer, President and Director
Richard J. Mullin....       46     Vice President and President,
                                    Wells-CTI Division
Michael S. Cantor....       61     Vice President and General Manager,
                                    Industrial/Avionics Division
Jeffrey A. Farnsworth       51     Vice President and General Manager
                                    Wells-CTI Phoenix
Mary L. Mandarino....       43     Vice President, Finance and Administration,
                                    Chief Financial Officer and Treasurer
Roddy J. Powers......       54     Vice President - Operations
</TABLE>

     Mr. Dwight has served as Chairman of the Board, Chief
  Executive Officer, President and a director of the Company
  since November 1980, when he purchased a controlling interest
  in PCD. Mr. Dwight was previously Vice President -
  International of Burndy Corporation, an electronic connector
  manufacturer. Mr. Dwight has 27 years of management and
  operating experience in the connector industry.

     Mr. Mullin has served as Vice President and President,
  Wells - CTI Division since December 1997. From June 1993 to
  December 1997, he was President and Chief Executive Officer of
  Wells. From May 1983 to June 1993, Mr. Mullin was Executive
  Vice President and Chief Financial Officer of Wells. Before
  joining Wells, Mr. Mullin was a CPA with Peat Marwick Mitchell
  & Co. for nine years.

     Mr. Cantor has served as Vice President and General
  Manager, Industrial/Avionics Division since February 1998.
  From July 1988 to February 1998, he was Vice President, Sales
  and Marketing. Mr. Cantor joined the Company in 1983 and has
  held various positions in management. From 1980 to 1983, Mr.
  Cantor was President - U.S. Operations for Balteau S.A. and
  from 1972 to 1980, Director of Regional Operations at Burndy
  Corporation.  Mr. Cantor has 37 years of experience in the
  connector industry.

     Mr. Farnsworth has served as Vice President and the General
  Manager, Wells - CTI Phoenix since December 1997. From October
  1993 to December 1997, he was Vice President and General
<PAGE>
  Manager - CTi. Mr. Farnsworth was a founder of Component
  Technologies, Inc. in 1983, and remained with the Company, in
  various positions in sales and marketing, following the
  acquisition of Component Technologies, Inc. by the Company in
  1988. Mr. Farnsworth has 22 years of experience in the
  connector industry.

     Ms. Mandarino has served as Vice President, Finance and
  Administration, Chief Financial Officer and Treasurer since
  1989. Ms. Mandarino joined the Company in 1986 and has held
  several positions of increasing responsibility in finance.
  Prior to joining PCD, Ms. Mandarino held various financial
  positions with American Brands, Inc. and Dresser Industries,
  Inc.

     Mr. Powers has served as Vice President, Operations since
  he joined the Company in 1983. Previously, he was the General
  Manager of the Incon Division of Transitron, which was
  acquired by PCD.

                             PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS

(a)   The Company's Common Stock is traded on the Nasdaq National
   Market of the Nasdaq Stock Market, Inc.  The following table
   sets forth the reported high and low sale prices for the
   Common Stock, under the symbol "PCDI," for the periods
   indicated:
<TABLE>
<CAPTION>
                                                       HIGH      LOW
                                                      ------    ------
    1997:
    -----
    <S>                                               <C>      <C>
     First Quarter..................................   17-3/4   13
     Second Quarter.................................   17-5/8   14
     Third Quarter..................................   25       16
     Fourth Quarter.................................   26-1/2   19-1/2
</TABLE>
<TABLE>
<CAPTION>
    1996:
    -----
    <S>                                               <C>      <C>
     First Quarter (from March 27)..................   12-1/2   11(F1)
     Second Quarter.................................   16       11-1/4
     Third Quarter..................................   13-3/4   10-1/8
     Fourth Quarter.................................   13-7/8   10
</TABLE>
(a)  Initial public offering price per share.
<PAGE>
      On March 18, 1998, the last reported sale price for the
   Common Stock on the Nasdaq National Market was $22.00 per
   share. As of January 31, 1998, there were approximately 800
   holders of record of Common Stock.

      The Company has never declared or paid any cash dividends
   on the Common Stock. The Company currently intends to retain
   future earnings, if any, to fund the development and growth of
   its business and does not anticipate paying any cash dividends
   on the Common Stock in the foreseeable future. The Board of
   Directors of the Company intends to review this policy from
   time to time, after taking into account various factors such
   as the Company's financial condition, results of operation,
   current and anticipated cash needs and plans for expansion.
   The Senior Credit Facility contains a covenant that prohibits
   the Company from paying cash dividends.

      On December 26, 1997, the Company issued to Emerson
   Electric Co. a subordinated debenture with a principal amount
   of $25 million (convertible under certain circumstances into
   Common Stock) and Common Stock purchase warrants for the
   purchase of up to 525,000 shares of Common Stock at an
   exercise price of $1.00 per share.  See "Management's
   Discussion and Analysis of Financial Condition and Results of
   Operations - Liquidity and Capital Resources" appearing in
   Item 7 hereof.  No underwriters were engaged in connection
   with the foregoing sales of securities.  Such sales were made
   in reliance upon the exemption from registration set forth in
   Section 4(2) of the Securities Act.

(b)  The Company's registration statement on Form S-1 (Commission
   file no. 333-1266) relating to the initial public offering of
   shares of the Company's common stock was declared effective by
   the Securities and Exchange Commission on March 26, 1996.  On
   July 3, 1997, the Company filed an amendment to its initial
   report on Form S-R covering the six-month period ended
   June 26, 1997.  On December 26, 1997, the Company applied all
   of the net proceeds from its initial public offering
   ($11,253,000) towards payment of the purchase price of Wells
   Electronics, Inc.  See Management's Discussion and Analysis of
   Financial Condition and Results of Operations - Wells
   Acquisition appearing in Item 7 hereof.  None of such payment
   was made directly or indirectly to directors or officers of
   the Company or their associates, or to persons owning 10
   percent or more of any class of equity securities of the
   Company, or to affiliates of the Company.



<PAGE>
ITEM 6. SELECTED FINANCIAL DATA

SELECTED CONSOLIDATED FINANCIAL DATA

   The following table contains certain selected consolidated
financial data for PCD and its subsidiaries (excluding Wells and
its subsidiaries, except as noted). The selected consolidated
financial data for each of the years ended December 31, 1997,
1996, 1995, 1994 and 1993 have been derived from the Company's
Consolidated Financial Statements, which have been audited by
Coopers & Lybrand L.L.P., independent public accountants. The pro
forma statement of operations data for the year ended
December 31, 1997 give effect to the Wells acquisition assuming
such transaction occurred on January 1, 1997 and have been
derived from the Unaudited Pro Forma Condensed Consolidated
Statement of Operations included elsewhere in this Prospectus.
The Pro Forma Consolidated Statement of Operations Data are not
necessarily indicative of the actual results that would have been
achieved had the Wells acquisition occurred at the beginning
1997, nor do they purport to indicate the results of operations
of the Company for any future period. The selected consolidated
financial data should be read in conjunction with the
Consolidated Financial Statements and the Notes thereto of the
Company and of Wells appearing elsewhere in this Report.
<TABLE>
<CAPTION>
                                              Year Ended December 31,
                                 1997(1)(2)   1997(3)     1996       1995       1994      1993
                                      (in thousands, except percentages and per share amounts)
<S>                              <C>        <C>        <C>        <C>        <C>       <C>
Consolidated Statement of
 Operations Data:
-------------------------
Net sales........................ $ 71,386   $ 29,796   $ 26,857   $ 25,616   $ 15,850  $12,691
Gross profit.....................   41,024     14,676     12,400     12,139      6,016    4,197
Write-off of acquired in-process
 research and development........        -    (44,438)         -          -          -        -
Income (loss) from operations....   21,877    (35,578)     6,955      6,472      2,157      867
Interest income (expense), net...  (12,013)       940        725        112         23        1
Net income (loss) ............... $  5,570   $(22,836)   $ 4,786   $  3,863   $  1,301  $   507
                                  ========   ========   ========   ========   ========  =======
Net income (loss) per share (3):
  Basic.......................... $   0.94   $  (3.83)  $   0.87   $   0.85   $   0.29  $  0.11
                                  ========   ========   ========   ========   ========  =======
  Diluted ....................... $   0.82   $  (3.83)  $   0.76   $   0.74   $   0.28  $  0.11
                                  ========   ========   ========   ========   ========  =======
Weighted average number of common
 and common equivalent shares
 outstanding (4):
  Basic..........................    5,955      5,955      5,478      4,570      4,561     4,561
                                  ========   ========   ========   ========   ========  ========
  Diluted........................    6,769      5,955      6,292      5,201      4,631     4,637
                                  ========   ========   ========   ========   ========  ========

Other Data
----------
EBITDA (5)(6) ...................  $30,059   $10,390      $8,344      $7,498   $3,142     $1,933
EBITDA margin (5) ...............    42.1%     34.9%       31.1%       29.3%    19.8%      15.2%
Depreciation.....................    4,140     1,530       1,389       1,026      985      1,066
Amortization of intangible assets    4,042         -           -           -        -          -
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                      December 31,
                                    ------------------------------------------------
                                    1997(3)    1996       1995        1994     1993
                                    -------   ------    -------      ------   ------
<S>                              <C>        <C>        <C>         <C>        <C>
Consolidated Balance Sheet Data:
--------------------------------
Working capital (deficit).......  $(12,632)  $23,054    $ 7,671     $ 5,089    $4,249
Total assets....................   126,592    32,456     15,929      10,783     8,945
Total debt......................   105,903         -          -           -        37
Stockholders' equity............     8,995    28,706     12,812       8,774     7,473
</TABLE>
----------
(1)  Gives effect to the Wells acquisition assuming such
     transaction had occurred on January 1, 1997 and the
     elimination of the related non-recurring acquired
     in-process research and development expense and the
     addition of the annual amortization of acquired intangible
     assets so that the pro forma and the pro forma includes
     only recurring costs. See "Unaudited Pro Forma Condensed
     Consolidated Statement of Operations" and "Management's
     Discussion and Analysis of Financial Condition and Results
     of Operations."

(2)  Before deducting the additional interest expense for the
     value of the exercisable portion of the Emerson Warrant,
     pro forma net income was approximately $6,849,000, pro
     forma net income per share - basic was $1.15 (based on a
     weighted average number of shares outstanding of 5,954,657)
     and pro form net income per share - diluted was $1.01
     (based on a weighted average number of common and common
     equivalent shares outstanding of 6,769,479).

(3)  Net loss for the year ended December 31, 1997 includes a
     non-recurring write-off relating to the Wells acquisition
     for acquired in-process research and development. Before
     deducting the write-off, net income per share - basic was
     $1.04 (based on a weighted average number of shares
     outstanding of 5,954,657), and net income per share -
     diluted was $0.94 (based on a weighted average number of
     common and common equivalent shares outstanding of
     6,634,125).

(4)  See Note 2 to the Company's Consolidated Financial
     Statements for an explanation of the basis used to
     Calculate net income (loss) per share.

(5)  Earnings before interest, taxes, depreciation and
     amortization ("EBITDA") includes income from operations
     before deducting the non-recurring write-off relating to
     the Wells acquisition for acquired in-process research and
     development adjusted to exclude depreciation and
<PAGE>
     amortization of intangible assets. EBITDA margin is EBITDA
     reflected as a percentage of net sales. The Company
     believes that EBITDA and EBITDA margin provide additional
     information to assist investors in determining its ability
     to meet future debt service requirements. However, EBITDA
     is not a defined term under generally accepted accounting
     principles ("GAAP"),  is not indicative of operating income
     or cash flow from operations as determined under GAAP and
     may not be comparable to similarly titled measures reported
     by other companies.

(6)  Net cash provided by operating activities was $8.1 million,
     $7.8 million, $5.5 million, $1.6 million and $1.5
     million for 1997, 1996, 1995, 1994 and 1993, respectively.
     Net cash used in investing activities was $132.9 million,
     $1.9 million, $2.5 million, $1.4 million and $1.4 million
     for 1997, 1996, 1995, 1994 and 1993, respectively.  Net
     cash (used in) provided by financing activities was $108.3
     million, $10.7 million, $0.004 million, $(0.09) million and
     $(0.4) million for 1997, 1996, 1995, 1994 and 1993,
     respectively.







                     WELLS ELECTRONICS, INC.

              SELECTED CONSOLIDATED FINANCIAL DATA

   The following table contains certain selected consolidated
financial data for Wells Electronics, Inc. The selected
consolidated financial data for each of the periods 34 weeks
ended December 26, 1997, 48 weeks ended April 27, 1996, and 52
weeks ended June 3, 1995, have been derived from the Wells
Consolidated Financial Statements, which have been audited by
KPMG Peat Marwick, independent public accountants. The selected
consolidated financial data should be read in conjunction with
the Consolidated Financial Statements and the Notes thereto of
Wells appearing elsewhere in this Prospectus.











<PAGE>
<TABLE>
<CAPTION>
                                                                               Unaudited
                              34 Weeks    53 Weeks  48 Weeks  52 Weeks  ----------------------
                                Ended       Ended     Ended     Ended   Year Ended  Year Ended
                             December 26,   May 3,  April 27,  June 3,     May 31,     May 31,
                                 1997       1997      1996       1995       1994        1993
                             -----------  --------  --------  --------  ----------  ----------
CONSOLIDATED STATEMENT
 OF OPERATIONS DATA:
----------------------
<S>                           <C>         <C>       <C>       <C>        <C>         <C>
Net sales....................  $29,268     $27,492   $17,998   $18,579    $12,287     $11,696
Gross profit.................   19,007      14,311     8,727     8,847      3,964       4,370
Income (loss) from operations   11,584       5,553     2,103     1,575       (642)       (944)
Non-operating income, net....      330         783       735        66        154         518
Net income (loss) ...........  $ 6,269     $ 4,367   $ 2,252   $   843    $  (386)    $  (432)
                               =======     =======   =======   =======    =======     =======
Net income (loss) per share(1):
  Basic......................  $801.15     $558.08   $287.80   $107.73    $(49.33)    $(55.21)
                               =======     =======   =======   =======    =======     =======
  Diluted....................  $801.15     $558.08   $287.80   $107.73    $(49.33)    $(55.21)
                               =======     =======   =======   =======    =======     =======
Weighted average number of common
 and common equivalent shares:
  Basic......................    7,825       7,825     7,825     7,825      7,825       7,825
                               =======     =======   =======   =======    =======     =======
  Diluted....................    7,825       7,825     7,825     7,825      7,825       7,825
                               =======     =======   =======   =======    =======     =======
</TABLE>
<TABLE>
<CAPTION>
                            December 26,    May 3,  April 27,  June 3,    May 31,     May 31,
                                1997         1997     1996      1995       1994        1993
                            ------------   -------  ---------  -------    -------     -------
CONSOLIDATED
 BALANCE SHEET DATA:
                             <C>          <C>       <C>       <C>        <C>         <C>
Working capital.............. $   757      $ 2,085   $ 2,679   $ 1,547    $ 2,043     $ 1,337
Total assets.................  27,542       30,785    13,913    11,494      9,023       7,230
Total debt...................      18          268     2,611     1,699      1,458         194
Stockholders' equity.........  13,841       18,641     6,333     4,354      3,273       3,612
</TABLE>
----------
(1) See Note 2 of Notes to Wells' Consolidated Financial Statements for an
explanation of the basis used to calculate net income (loss) per share.



        UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

   On December 26, 1997, pursuant to the Share Purchase Agreement
dated November 17, 1997, the Company acquired all of the
outstanding common stock of Wells Electronics, Inc. ("Wells") for
approximately $130 million in cash. The Company also incurred
approximately $1.2 million in acquisition related costs resulting
in a total purchase price of approximately $131.2 million. The
acquisition was financed by a combination of a new bank credit
facility of $90 million of which the Company borrowed
approximately $83 million upon consummation of the acquisition
and a $25 million subordinated debenture issued to Emerson.

   The acquisition is being accounted for as a purchase, and the
Company has allocated the purchase price based on the fair value
of assets acquired and liabilities assumed. A significant portion
<PAGE>
of the purchase price has been allocated as intangible assets
using proven valuation procedures and techniques, including
approximately $44 million of acquired in-process research and
development.

   The accompanying Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the 12 months ended December 31, 1997
assumes that the acquisition of Wells took place on January 1,
1997.

   The accompanying pro forma information is presented for
illustrative purposes only and is not necessarily indicative of
the financial position or results of operations which would
actually have been reported had the acquisition been in effect
during the periods presented, or which may be reported in the
future.

   The accompanying Unaudited Pro Forma Condensed Consolidated
Statement of Operations should be read in conjunction with the
historical financial statements and related notes thereto for PCD
and for Wells that appear elsewhere in this report.


<PAGE>
<TABLE>
<CAPTION>
      UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                         Year Ended December 31, 1997
                   (in thousands, except per share amounts)

                               PCD       Wells      Pro Forma      Pro Forma
                             Dec 31,    Dec 31,    Adjustments    Combined(1)
                             -------    -------    -----------    -----------
<S>                         <C>        <C>          <C>            <C>
Net sales..................  $ 29,796    $41,590                     $71,386
Cost of sales..............    15,120     15,242                      30,362
                             --------    -------      --------       -------
  Gross profit.............    14,676     26,348                      41,024
Operating expenses,
 excluding amortization....     5,816      9,289                      15,105
Write -off of acquired
 in process research and
 development...............    44,438          -      $(44,438)
Amortization of acquired
 intangible assets.........       484      3,558(2)      4,042
                             --------    -------      --------       -------
Income (loss)
 from operations...........   (35,578)    16,575        40,880        21,877
Interest and other income..     1,167                   (1,067)(4)       100
Interest expense...........      (227)        (8)      (11,878)      (12,113)
                             --------    -------      --------       -------
Income (loss) before
 provisions for
 income taxes..............   (34,638)    16,567        27,935         9,864
Provisions (benefit) for
 income taxes..............   (11,802)     7,157         8,939         4,294
                             --------    -------      --------       -------
Net income (loss) before
 non-recurring item and
 extraordinary loss........  $(22,836)   $ 9,410      $ 18,996       $ 5,570
                             ========    =======      ========       =======
Net income (loss) per share:
  Basic....................  $  (3.83)                               $  0.94
                             ========                                =======
  Diluted..................  $  (3.83)                               $  0.82
                             ========                                =======

Weighted average number of
 common and common
 equivalent shares
 outstanding:
  Basic....................     5,955                                  5,955
                             ========                                =======
  Diluted..................     5,955                                  6,769
                             ========                                =======
</TABLE>
----------
 (1)  Before deducting the additional interest expense for the value of the
exercisable portion of the Emerson Warrant, pro forma net income combined was
approximately $6,849,000, pro forma net income combined per share-basic was
$1.15 (based on a weighted average number of shares outstanding of 5,954,657)
and pro forma net income combined per share-diluted was $1.01 (based on a

weighted average number of common and common equivalent shares outstanding of
6,769,479).

<PAGE>
 (2)  Reflects the elimination of non-recurring acquired in-process research
and development relating to the Wells acquisition so that the pro forma
combined statement of operations includes only recurring costs.

 (3)  Includes amortization of intangible assets as a result of the Wells
acquisition consisting of 20 years for goodwill, trademarks and tradenames and
9 years for patented technologies to reflect a full year's charge.

 (4)  Represents a reduction of interest income as a result of utilizing cash
and cash equivalents for the Wells acquisition.

 (5)  Includes interest expense on debt issued to finance the Wells
acquisition, at an assumed weighted average rate of 8.96% for the Senior
Credit Facility and at 10% for the subordinated debenture and additional
interest expense of $2.1 million representing the interest expense of the
exercisable portion of the Emerson Warrant.  A 1/8 percent change in the
interest rate of the Senior Credit Facility results in a change of $103,750.

 (6)  Reflects the related tax effect of adjustments (2) through (5).  A
portion of the approximately $44 million of in-process research and
development charge is not deductible in Japanese tax jurisdictions.  The
remainder of the adjustments are included at a 39% rate.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

   The following discussion contains forward-looking statements
which involve risks and uncertainties. The Company's actual
results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors,
including, without limitation, those set forth under "Business -
Forward Looking Information" in Item 1 hereof and elsewhere in
this report.

   As used herein, the terms "Company" and "PCD," unless
otherwise indicated or the context otherwise requires, refer to
PCD Inc. and its subsidiaries, including Wells Electronics, Inc.
and its subsidiaries ("Wells"). However, all financial
information for periods ended before December 26, 1997, unless
otherwise indicated or the context otherwise requires, is for PCD
Inc. and its subsidiaries, excluding Wells.

OVERVIEW

   PCD designs, manufactures and markets electronic connectors
for use in integrated circuit ("IC") package interconnect
applications, industrial equipment and avionics. Electronic
connectors, which enable an electrical current or signal to pass
from one element to another within an electronic system, range
from minute individual connections within an IC to rugged,
multiple lead connectors that couple various types of
electrical/electronic equipment.

<PAGE>
   The Company was founded in 1976 and the current chairman, John
L. Dwight, Jr., acquired a controlling interest in 1980. Over the
years, the Company has made a number of strategic acquisitions
and investments to both bolster existing product lines and expand
into selected key markets. The most significant of these
acquisitions were: (i) the 1997 acquisition of the common stock
of Wells Electronics, Inc. ("Wells") from UL America, Inc., an
indirect wholly-owned subsidiary of Siebe plc; (ii) the 1988
acquisition of the assets of Component Technologies, Inc.; and
(iii) the 1983 acquisition of the Appleton Electronics product
line from Emerson Electric Co. In 1996, the Company completed an
initial public offering of its Common Stock.

   In 1995, net sales of the Company (excluding Wells) were
$25.6 million and grew to $29.8 million in 1997, and after giving
effect to the Wells acquisition the Company's net sales in 1997
were $71.4 million on a pro forma basis. The Company (excluding
Wells) realized approximately 46.7% of its net sales in 1997 from
products introduced in the last five years. The Company
distributes its products through a combination of its own
dedicated direct sales forces, a worldwide network of
manufacturers representatives and authorized distributors. Sales
to customers located outside the United States, either directly
or through U.S. and foreign distributors, accounted for
approximately 35.8%, 22.1% and 28.1% of the net sales of the
Company in the years ended December 31, 1997, 1996 and 1995,
respectively, and the Company believes that, with the addition of
Wells, international sales will account for a significant portion
of its revenues for the foreseeable future.

   The following table sets forth the relative percentages of the
total net sales of the Company attributable to each of the
Company's product categories for the periods indicated.
<TABLE>
<CAPTION>
                                    Year Ended December 31,
                              ----------------------------------
                              Pro Forma
                               1997(1)     1997    1996    1995
                              ---------   ------  ------  ------
Product Categories
------------------
<S>                             <C>      <C>     <C>     <C>
IC package interconnects.....    75.9%    42.3%   37.6%   52.7%
Industrial interconnects.....    10.2     24.5    22.5    16.5
Avionics terminal
 blocks and sockets..........    13.9     33.2    39.9    30.8
                                 ------   ------  ------  ------
     Total...................    100.0%   100.0%  100.0%  100.0%
                                 ======   ======  ======  ======
</TABLE

<PAGE>
(1)  Gives effect to the Wells acquisition assuming such
transaction had occurred on January 1, 1997.

----------

WELLS ACQUISITION

   On December 26, 1997, the Company purchased Wells (the "Wells
acquisition"). The acquisition significantly expanded the
Company's product offerings in the IC package interconnect
category and added principal facilities in South Bend, Indiana
and Yokohama, Japan, as well as technical support operations in
Regensburg, Germany and Penang, Malaysia, sales offices in San
Jose, California; Northhampton, England; Seoul, South Korea and
Singapore, and a stamping facility in Harrisburg (Swatara),
Pennsylvania. In combining the existing IC package interconnect
business of PCD with that of Wells, the Company now supports
complete design, development, manufacturing and marketing of test
and burn-in sockets in two of the world's largest IC package
interconnect markets: the United States and Japan. Wells was
acquired for access to its burn-in technology and customer base.
The purchase price for Wells was $130 million in cash and the
Company incurred approximately $1.2 million in acquisition
related costs resulting in a total purchase price of
approximately $131.2 million. The acquisition is being accounted
for as a purchase in accordance with APB Opinion No. 16. As a
result, a purchase price premium of $110 million was recorded on
the transaction. Patented technology of approximately $3.1
million was identified. The patented technologies reflect the
products built upon established technology, with an average
remaining life of 9 years.

   The acquisition was financed by a combination of a new bank
credit facility of $90 million, of which the Company borrowed
approximately $83 million at consummation of the acquisition, a
$25 million subordinated debenture issued to Emerson and the
Company's existing cash and short term investments.

   Approximately $44 million of the purchase price premium was
written off as acquired in-process research and development
("IPR&D") with no alternative future use as a non-recurring
write-off charged to operations at the acquisition date. The
acquired IPR&D relates to in-process burn-in socket designs and
manufacturing process for next generation high density IC
packaging. The completion costs for these IPR&D programs are
expected to be approximately $3.7 million. The Company intends to
further develop the IPR&D projects, and expects successful
completion of a number of them. However, the Company recognizes
that development of the IPR&D possesses certain risks such as
<PAGE>
failure of one or more of the critical technologies to function
according to specifications or customer rejection, which may
directly impact these projects reaching technological
feasibility. The Company expects the useful lives of the IPR&D
projects to be 5 to 8 years, if technological feasibility is
reached. If the IPR&D projects were not successfully developed,
it would negatively impact the future performance and the ability
of the Company's burn-in socket segment to compete.

   Wells product development is highly focused and customer
driven, and generally related to a specific product or next
generation platform. Often, successful projects are able to be
commercialized into major product lines, as demonstrated by
recent sales results. Wells is in the process of developing
significant next generation product programs with major
customers.

   Prior to the acquisition of Wells by the Company, Wells was a
wholly-owned subsidiary of Siebe, having been purchased in May
1996 as part of Siebe's strategic acquisition of Unitech plc. The
stated objective of Siebe's purchase of Unitech was to combine
the two companies' power supply and control operations. Wells, a
small non-strategic and non-core subsidiary of Unitech,
represented less than 5% of the total purchase consideration.
Subsequent to the acquisition by Siebe, Wells grew substantially
and expanded its customer base, product lines and product
development processes.


RESULTS OF OPERATIONS OF WELLS ELECTRONICS, INC. FOR FISCAL 1997
(53 WEEKS ENDED MAY 3, 1997) AND FISCAL 1996 (48 WEEKS ENDED
APRIL 27, 1996); AND THE PERIODS ENDED DECEMBER 26, 1997 (34
WEEKS ENDED DECEMBER 26, 1997) AND DECEMBER 31, 1996 (35 WEEKS
ENDED DECEMBER 31, 1996)

   NET SALES.  Net sales increased approximately 53% to $27.5
million for fiscal 1997, from $18.0 million for fiscal 1996. This
change in net sales reflected increased market penetration of
Wells' burn-in products on an overall business basis. Wells'
largest customer accounted for approximately 12% of the 53%
increase in net sales. In addition, net sales of Wells' TSOP
(thin small-outline package) product line increased significantly
as volume shipments began to a major new customer. For the 34
week period ended December 26, 1997, net sales increased
approximately 89%, to $29.3 million from $15.5 million for the 35
week period ended December 31, 1996. Shipments to Wells' three
largest customers during the 34 week period ended December 26,
1997 accounted for $15.6 million, or 53% of the net sales for
that period.
<PAGE>
   GROSS PROFIT.  Gross profit increased 64% to $14.3 million for
fiscal 1997, from $8.7 million for fiscal 1996. As a percentage
of net sales, gross margin increased to 52.1% for fiscal 1997
from 48.5% for fiscal 1996. This increase in gross margin was
attributable to a shift in product mix to Wells' TSOP and IPGA
product lines and increased manufacturing and labor efficiencies
resulting from the higher sales volume. For the 34 week period
ended December 26, 1997, gross profit increased approximately
171%, to $19.0 million from $7.0 million for the 35 week period
ended December 31, 1996. As a percentage of net sales, gross
margin increased to 64.9% for the 34 week period ended December
26, 1997 from 45.2% for the 35 week period ended December 31,
1996. The improvement in gross margin was primarily due to the
increase in sales volume resulting in a shift in product mix
defined above and improved overhead absorption via improved
manufacturing and labor efficiencies.

   OPERATING EXPENSES.  Operating expenses were $8.8 million, or
31.9% of net sales for fiscal 1997 compared to $6.6 million, or
36.8% of net sales for fiscal 1996. Accounting for this change
were higher salaries and related expenses, increased commissions
due to the higher sales volume and increased product engineering
costs. For the 34 week period ended December 26, 1997, operating
expenses were $7.4 million, or 25.4% of net sales, compared to
$5.2 million, or 33.9% of net sales for the 35 week period ended
December 31, 1996. Accounting for this change were higher
salaries and related expenses, higher product repair expenses,
increased commission expense due to the higher sales volume and
expansion costs into Europe and Texas.

   PROVISION FOR INCOME TAXES.  The effective tax rate was 31.1%
for fiscal 1997 compared to 20.6% for fiscal 1996. The difference
was due primarily to a rate benefit taken by Wells for fiscal
1996 with respect to a reduction in the valuation allowance, as
well as differing effective state tax rates. The effective tax
rate was 47.4% for the 34 week period ended December 26, 1997
compared to 28.3% for the 35 week period ended December 31, 1996.
This change reflects the utilization of net operating loss
carryforwards in 1996 that were not available in 1997.

   The gross profit margin for PCD (excluding Wells) for the year
ended December 31, 1997 was 49.3%. The gross profit margin for
Wells for the fiscal year ended May 5, 1997 was 52.1%. The gross
profit margin for Wells for the 12 months ended December 31, 1997
was 63.4%. The difference in gross profit margin between PCD's
and Wells' historical results are related to the different
markets that PCD serves versus Wells and the rapid escalation of
net sales volume that Wells experienced during the above
referenced periods. Operating expenses (excluding a write-off of

<PAGE>
acquired in-process research and development expense relating to
the Wells acquisition) for PCD (excluding Wells) for the year
ended December 31, 1997 was 19.5%. Operating expenses for Wells
for fiscal 1997 was 31.9%. Operating expenses for Wells for the
12 months ended December 31, 1997 was 23.5%. The difference in
operating expenses between PCD's and Wells' historical results
are related to the costs associated with the sales and technical
support facilities established by Wells to support the growing
international markets for IC package interconnect sockets. Wells
maintained an overall effective tax rate equal to 31.1% for the
period ended May 5, 1997 compared to a 34.1% overall effective
tax rate provided by PCD for the year ended December 31, 1997.
The difference was due primarily to a rate benefit taken by Wells
with respect to a reduction in the valuation allowance, as well
as differing effective state tax rates.


RESULTS OF OPERATIONS

   The following table sets forth certain Consolidated Statements
of Income data and other data as a percentage of net sales for
the periods indicated. The table and the discussion below should
be read in conjunction with the Consolidated Financial Statements
and Notes thereto for the Company (excluding Wells) and for Wells
that appear elsewhere in this Prospectus.


</TABLE>
<TABLE>
<CAPTION>
                                    Year Ended December 31,
                               ---------------------------------
                               Pro Forma
                                 1997(1) 1997(2)   1996    1995
                               --------- -------  ------  ------
<S>                             <C>      <C>     <C>     <C>
Net sales.....................   100.0%   100.0%  100.0%  100.0%
Gross profit..................    57.5     49.3    46.2    47.4
Write-off of acquired
 in-process research
 and development..............       -   (149.1)      -       -
Income (loss) from operations.    30.6   (119.4)   25.9    25.3
Interest income (expense), net   (16.8)     3.2     2.7     0.4
Net income (loss) ............     7.8    (76.6)   17.8    15.1
------------------
(1)   Gives effect to the Wells acquisition assuming such
      transaction had occurred on January 1, 1997 and the
      elimination of the related non-recurring acquired
      in-process research and development and the addition of
      the annual amortization of acquired intangible assets so
      that the pro forma and the pro forma as adjusted include
      only recurring costs. See "Unaudited Pro Forma Condensed
      Consolidated Statement of Operations.

<PAGE>
(2)   Net loss for the year ended December 31, 1997 includes a
      non-recurring write-off relating to the Wells acquisition
      for acquired in-process research and development.


YEARS ENDED DECEMBER 31, 1997 AND DECEMBER 31, 1996

   NET SALES.  Net sales increased 10.8% to $29.8 million for
1997, from $26.9 million for 1996. This change in net sales
reflected increased market penetration of the Company's IC
package interconnects and industrial interconnects. The greatest
portion of this growth was derived from higher sales volume of
the IC package sockets, particularly the ball grid array ("BGA")
burn-in sockets. Sales of this product family, which was <PAGE>
introduced in the fourth quarter of 1996, grew to approximately
$1.6 million in 1997 from $163,000 in 1996. The industrial
interconnect line was also favorably impacted by new product
introductions. Sales of the high-density terminal block line,
which was introduced in late 1995, grew to approximately $765,000
in 1997 from $223,000 in 1996. Sales to customers located outside
the United States, either directly or through U.S. and foreign
distributors, were 35.8% of net sales in 1997, compared with
22.1% of net sales in 1996.

   GROSS PROFIT.  Gross profit increased 18.4% to $14.7 million
for 1997, from $12.4 million for 1996. As a percentage of net
sales, gross margin increased to 49.3% for 1997 from 46.2% for
1996. The increase in gross margin was attributable to a shift in
product mix back to IC packaging interconnects from industrial
interconnects and avionics terminal blocks and sockets, higher
sales volume and cost improvements resulting from the Company's
continuous cost reduction program.

   OPERATING EXPENSES.  Operating expenses include selling,
general and administrative expenses and costs of product
development. Operating expenses, excluding a write-off of
acquired in-process research and development from the Wells
acquisition, were $5.8 million, or 19.5% of net sales, for 1997,
compared to $5.4 million, or 20.3% of net sales, for 1996. This
dollar increase in operating expenses reflects the costs
associated with the start-up of the Control Systems Interconnect
division in the third quarter of 1997 as well as the costs
associated with the advertising campaign to promote the
production BGA Z-Lok(TM) product family.

   WRITE-OFF OF ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT.
The non-recurring write-off of approximately $44.0 million of
acquired in-process research and development was recorded in
connection with the Wells acquisition. The amount of in-process
<PAGE>
research and development was determined by identifying product
development projects at Wells that were based on technologies
that were considered incomplete or in-process.  The remaining
goodwill and purchased intangibles will be amortized over 9 to 20
years, which will increase operating expenses by approximately
$4.0 million per year.  PCD selected a 20 year life for goodwill
and intangibles based on connector industry norms and the wide
array of technologies, services and capabilities required to
successfully compete in the burn-in market.  Wells is an
established manufacturer in this market with over 20 years
experience.

   INTEREST AND OTHER INCOME (EXPENSE), NET.  Interest and other
income increased to $1.2 million in 1997 from $734,000 in 1996.
This increase was attributable to the higher balances of cash and
cash equivalents during 1997. Interest expense increased to
approximately $227,000 in 1997, reflecting the debt incurred in
connection with the Wells acquisition.  The Company expects
interest expense to increase substantially in 1998.  See "-
Liquidity and Capital Resources."

   PROVISION FOR INCOME TAXES.  The effective tax rate for 1997
was approximately 34.1%, compared to 37.7% in 1996. The decrease
in the effective tax rate for 1997 resulted primarily from the
write-off of acquired in-process research and development
relating to the Wells acquisition. Before taking into
consideration the write-off of acquired in-process research and
development, the Company's effective tax rate was 36.6%.

YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1995

   NET SALES.  Net sales increased 4.8% to $26.9 million for 1996
from $25.6 million for 1995. This increase in net sales reflected
overall market growth and increased market penetration <PAGE>
of the Company's product lines. The greatest portion of this
growth was derived from higher volume in the industrial
interconnects and avionics terminal block and socket categories.
The IC package interconnect product category declined due to the
volatility within the IC package market. Sales to customers
located outside the United States, either directly or through
U.S. and foreign distributors, were 22.1% of net sales in 1996,
compared with 28.1% of net sales in 1995.

   GROSS PROFIT.  Gross profit increased 2.2% to $12.4 million
for 1996 from $12.1 million for 1995. As a percentage of net
sales, gross margin decreased from 47.4% in 1995 to 46.2% for
1996. This decrease in gross margin was attributable to a shift
in product mix from IC packaging interconnects to industrial
interconnects and avionics terminal blocks and sockets and a one-
<PAGE>
time expense for a design change to a nonstandard product in the
IC package interconnect category. This decline was partially
offset by increased manufacturing and labor efficiencies
resulting from higher sales volume and the best cost producer
program.

   OPERATING EXPENSES.  Operating expenses decreased by $222,000,
to $5.4 million, or 20.3% of net sales, for 1996, compared to
$5.7 million, or 22.1% of net sales, for 1995. This decrease in
operating expenses is the result of having recorded professional
fees in 1995 associated with pending patent litigation, partially
offset by increased expenses in 1996 resulting from the Company's
status as a publicly traded company.

   INTEREST AND OTHER INCOME (EXPENSE), NET.  Interest and other
income was $725,000 in 1996, compared to $112,000 for 1995. The
increase was attributable to the interest earned on the proceeds
from the Company's initial public stock offering.

   PROVISION FOR INCOME TAXES.  The effective tax rate for 1996
was approximately 37.7%, compared to 41.3% for 1995. This
decrease in the effective tax rate for 1996 was due to the
application of the appropriate effective tax rates for each of
the state tax jurisdictions in which the Company operates. In
addition, the Company established a wholly-owned subsidiary which
was engaged in holding PCD securities. This corporate structure
allowed for a favorable treatment of passive income in the
Commonwealth of Massachusetts.


LIQUIDITY AND CAPITAL RESOURCES

   Cash provided by operating activities in 1997 was
$8.1 million, compared to $7.8 million in 1996. These funds were
sufficient to meet increased working capital needs and capital
expenditures of approximately $2.5 million. The Company currently
anticipates that its capital expenditures for 1998 will be
approximately $7 million, which consists primarily of purchased
tooling and equipment required to support the Company's business.
The amount of these anticipated capital expenditures will
frequently change based on future changes in business plans and
conditions of the Company and changes in economic conditions.

   In December 1997, the Company obtained a Senior Credit
Facility for $90 million from Fleet National Bank and other
lenders (the "Senior Credit Facility") to finance in part the
Wells acquisition. The Senior Credit Facility is secured by all
of the assets of the Company. In conjunction with the Senior
Credit Facility, PCD and Wells each entered into a stock pledge
<PAGE>
agreement with Fleet and the other lenders pledging all or
substantially all of the stock of the subsidiaries of PCD and
Wells. Each of PCD, Wells and certain of their subsidiaries also
entered into a security agreement and certain other collateral or
conditional assignments of assets with Fleet and other lenders.
Interest on loans outstanding under the Senior Credit Facility
is, at the Company's election, payable at either (i) the higher
of the lender's base rate, or a rate equal to 1/2 of 1% per annum
above the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System
arranged by federal funds brokers plus between 25 and 200 basis
points based on the ratio of senior indebtedness to earnings
before interest, taxes, depreciation and amortization ("EBITDA"),
or (ii) a periodic fixed rate equal to Libor plus between 150 and
325 basis points based on the ratio of senior indebtedness to
EBITDA. In addition, the Company obtained $25 million in
subordinated debt financing from Emerson Electric Co. ("Emerson")
pursuant to a Subordinated Debenture (the "Debenture") issued to
Emerson. Interest on the Debenture is 10% per annum plus the
issuance of the Emerson Warrant which is exercisable for 525,000
shares of Common Stock of the Company, as follows: (i) the
Emerson Warrant is currently exercisable for 150,000 shares of
common stock; (ii) if the principal of and accrued interest and
costs and expenses under the Debenture have not been paid in full
at the close of business on December 31, 1998, the Emerson
Warrant shall be exercisable for an additional 225,000 shares of
Common Stock; and (iii) if the principal of and accrued interest
and costs and expenses under the Debenture have not been paid in
full at the close of business on December 31, 1999, the Emerson
Warrant shall be exercisable for an additional 150,000 shares of
Common Stock.  The combined effective interest rate for the
Debenture, the exercisable portion of the Emerson Warrant and the
prepayment penalty is 21.7%, assuming 10% per annum direct
interest expense, 8.4% per annum effective interest expense
associated with the value of the Emerson Warrant and 3.25%
effective interest expense due to prepayment penalties.
Prepayment of the principal amount under the Debenture is subject
to a penalty, due at the time of prepayment, as follows: (i) for
the period beginning on December 26, 1997 and ending June 30,
1998, an amount equal to 3.25% of the principal sum prepaid; (ii)
for the period beginning July 1, 1998 and ending September 30,
1998, an amount equal to 6.5% of the principal sum prepaid; and
(iii) for the period beginning October 1, 1998 and ending
December 31, 1998, an amount equal to 9.75% of the principal sum
prepaid.  The Debenture is convertible into Common Stock of the
Company, at Emerson's election, upon the occurrence of an Event
of Default.  The Events of Default under the Debenture are (i)
insolvency; (ii) default under the Senior Credit Facility; (iii)
a payment default on the Debenture which default is not cured
<PAGE>
within 10 business days;  (iv) a material breach by the Company
of any representations or warranties or failure to comply with
covenants or agreements contained in the agreements with Emerson
which breach is not cured within 30 days; and (v) an undischarged
or unstayed judgment against the Company for an amount in excess
of $1 million.  The Senior Credit Facility will terminate over a
period of six to seven years. The Company expects to use the net
proceeds from this offering to repay (i) 100% of the Debenture
held by Emerson and (ii) a portion of the outstanding balance on
the Senior Credit Facility.

   The Company believes its existing working capital and
borrowing capacity, coupled with the funds generated from the
Company's operations, will be sufficient to fund its anticipated
working capital, capital expenditure and debt payment
requirements through 1999. Because the Company's capital
requirements cannot be predicted with certainty, there can be no
assurance that any additional financing will be available on
terms satisfactory to the Company or not disadvantageous to the
Company's stockholders, including those purchasing Common Stock
in this offering.

INFLATION AND COSTS

   The cost of the Company's products is influenced by the cost
of a wide variety of raw materials, including precious metals
such as gold used in plating, copper and brass used for contacts,
and plastic material used in molding connector components. In the
past, increases in the cost of raw materials, labor and services
have been offset by price increases, productivity improvements
and cost saving programs. There can be no assurance, however,
that the Company will be able to similarly offset such cost
increases in the future.

YEAR 2000 COMPLIANCE COSTS

   Many currently installed computer systems and software
products are coded to accept only two digit entries in the date
code field. To distinguish 21st century dates from 20th century
dates, these date code fields must be able to accept four digit
entries. The Company utilizes a significant number of computer
software programs and operating systems across its entire
organization, including applications used in manufacturing,
product development, financial business systems and various
administrative functions. The Company believes that, with the
exception of the South Bend, Indiana location of Wells-CTI
("Wells-CTI South Bend"), its computer systems will be able to
manage and manipulate all material data involving the transition
from 1999 to 2000 without functional or data abnormality and
<PAGE>
without inaccurate results related to such data. However, there
can be no assurances that potential systems interruptions or the
cost necessary to update software would not have a material
adverse effect on the Company's financial condition, results of
operations or business. In addition, the Company has limited
information concerning the compliance status of its suppliers and
customers. In the event that any of the Company's significant
suppliers or customers do not successfully and timely achieve
Year 2000 compliance, the Company's financial condition, results
of operations and business could be adversely affected.

   The Company believes that, within the next nine months, it
will have to replace the current systems at Wells-CTI South Bend
with new systems that are Year 2000 compliant. Failure to replace
such systems could result in the generation of erroneous data or
system failure. Significant uncertainty exists concerning the
potential effects associated with Year 2000 compliance, and Year
2000 issues involving systems of Wells-CTI <PAGE>
South Bend could have a material adverse effect on the Company's
financial condition, results of operations or business. The cost
of replacing computer systems of Wells-CTI South Bend is
currently estimated to be up to $900,000.
























<PAGE>
ITEM 8. FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PCD INC.
  December 31, 1997 and 1996
  Report of Independent Accountants
  Consolidated Balance Sheets as of December 31, 1997 and 1996
  Consolidated Statements of Operations for the years ended December 31,
   1997, 1996 and 1995
  Consolidated Statements of Stockholders' Equity for the years ended
   December 31, 1997, 1996 and 1995.
  Consolidated Statements of Cash Flows for the years ended December 31,
   1997, 1996 and 1995
  Notes to Consolidated Financial Statements


WELLS ELECTRONICS, INC.
  MAY 3, 1997 and APRIL 27, 1996
  Independent Auditors' Report
  Consolidated Balance Sheets as of May 3, 1997 and April 27, 1996
  Consolidated Statements of Income for the 53 weeks ended May 3, 1997, the
   48 weeks ended April 27, 1996 and 52 weeks ended June 3, 1995
  Consolidated Statements of Shareholder's Equity for the 53 weeks ended May
   3, 1997, 48 weeks ended April 27, 1996 and 52 weeks ended June 3, 1995
  Consolidated Statements of Cash Flows for the 53 weeks ended May 3, 1997,
   48 weeks ended April 27, 1996 and 52 weeks ended June 3, 1995
  Notes to Consolidated Financial Statements


WELLS ELECTRONICS, INC.
  DECEMBER 26, 1997
  Independent Auditors' Report
  Consolidated Balance Sheets as of December 26, 1997 and
   December 31, 1996 (Unaudited)
  Consolidated Statements of Income for the 34 weeks ended December 26,
   1997 and 35 weeks ended December 31, 1996 (Unaudited)
  Consolidated Statements of Shareholder's Equity for the 34 weeks
   ended December 26, 1997
  Consolidated Statements of Cash Flows for the 34 weeks ended December
   26, 1997 and the 35 weeks ended December 31, 1996 (Unaudited)
  Notes to Consolidated Financial Statements













<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of PCD Inc.:

   We have audited the accompanying consolidated balance sheets
of PCD Inc. as of December 31, 1997 and 1996, and the related
consolidated statements of operations, stockholders' equity, and
cash flows for each of the three years in the period ended
December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.

   We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

   In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of PCD Inc. as of December 31, 1997 and 1996,
and the consolidated results of its operations and its cash flows
for each of the three years in the period ended December 31,
1997, in conformity with generally accepted accounting
principles.



/s/ Coopers & Lybrand L.L.P.

Coopers & Lybrand L.L.P.

Boston, Massachusetts
February 11, 1998, except information included under the caption
Litigation in Note 11, Commitments and Contingencies, as to which
the date is March 18, 1998.








<PAGE>
                              PCD Inc.
                     CONSOLIDATED BALANCE SHEETS
                 (In thousands, except share amounts)

</TABLE>
<TABLE>
<CAPTION>
                                                          December   31,
                                                          --------------
                                                           1997    1996
                                                          ------  ------
<S>                                                     <C>      <C>
ASSETS
Current assets:
  Cash and cash equivalents.......................       $  3,990 $20,529
  Accounts receivable - trade (less allowance
        for uncollectible accounts of $205 in
        1997 and $232 in 1996)....................          6,804   3,578
  Inventory.......................................          4,796   2,608
  Prepaid expenses and other current assets.......          1,135      89
                                                         -------- -------
    Total current assets..........................         16,725  26,804

Equipment and improvements, net...................         15,843   5,337
Deferred tax asset................................         15,335      82
Goodwill..........................................         61,718       -
Intangible assets.................................         13,539       -
Debt financing fees...............................          1,800       -
Other assets......................................          1,632     233
                                                         -------- -------
Total assets......................................       $126,592 $32,456
                                                         ======== =======


    LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Short-term debt and current portion
    Of long-term debt.............................       $ 17,700
  Accounts payable - trade........................          4,213 $   627
  Accrued liabilities.............................          7,444   3,123
                                                         -------- -------
    Total current liabilities.....................         29,357   3,750
Long-term debt, net of current portion............         65,300       -
Subordinated debenture - related party............         22,903       -
Minority interest.................................             37       -
                                                         -------- -------
  Total liabilities...............................        117,597   3,750
Commitments and contingencies (Note 8)............              -       -
Stockholders' equity:
Preferred stock - $0.10 par value;
  1,000,000 shares authorized; no shares issued
Common stock - $0.01 par value;
  25,000,000 shares authorized, 6,020,182
  shares issued in 1997 and 5,854,733 shares
  issued in 1996..................................             60      59
Additional paid-in capital........................         17,904  14,838
Retained earnings (accumulated deficit)...........         (8,930) 13,906
Deferred compensation.............................            (39)    (97)
                                                         -------- -------
Total stockholders' equity........................          8,995  28,706
                                                         -------- -------
Total liabilities and stockholders' equity........       $126,592 $32,456
                                                         ======== =======
</TABLE>
        The accompanying notes are an integral part of the
                 consolidated financial statements

<PAGE>
                              PCD Inc.
                 CONSOLIDATED STATEMENTS OF INCOME
             (In thousands, except per share amounts)


<TABLE>
<CAPTION>

                                                  Years ended December 31,
                                               -----------------------------
                                                 1997       1996      1995
                                               --------   --------  --------
<S>                                            <C>        <C>       <C>
Net sales.....................................  $29,796    $26,857   $25,616
Cost of sales.................................   15,120     14,457    13,477
                                               --------    -------   -------
Gross profit..................................   14,676     12,400    12,139
Operating expenses............................    5,816      5,445     5,667
Acquired in-process research and development..   44,438          -         -
                                               --------    -------   -------
Income (loss) from operations.................  (35,578)     6,955     6,472
Interest and other income.....................    1,167        734       125
Interest expense..............................     (227)        (9)      (13)
                                               --------    -------   -------
Income before income taxes....................  (34,638)     7,680     6,584
Provision for (benefit) income taxes..........  (11,802)     2,895     2,721
                                               --------    -------   -------
Net income (loss)............................. $(22,836)   $ 4,785   $ 3,863
                                               ========    =======   =======
Net income (loss) per share:
  Basic....................................... $  (3.83)   $  0.87   $  0.85
                                               ========    =======   =======
  Diluted..................................... $  (3.83)   $  0.76   $  0.74
                                               ========    =======   =======
Weighted average number of common and common
 equivalent shares outstanding:
  Basic.......................................    5,955      5,478     4,570
                                               ========    =======   =======
  Diluted.....................................    5,955      6,292     5,201
                                               ========    =======   =======
</TABLE>
         The accompanying notes are an integral part of the
                 consolidated financial statements.

<PAGE>
                                PCD Inc.
             CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                   (In thousands, except share amounts)
<TABLE>
<CAPTION>
                     Common Stock   Additional Retained               Treasury Stock
                   ----------------  Paid-in   Earnings   Deferred    --------------- Stockholders'
                   Shares Par Value  Capital   (Deficit) Compensation Shares  Amount     Equity
                   ------ --------- ---------- --------- ------------ ------  ------  -------------
<S>              <C>       <C>      <C>        <C>         <C>       <C>      <C>         <C>
Balance,
December 31, 1994 4,951,032 $50      $ 3,794    $ 5,258               390,000  $(328)     $ 8,774

Exercise of
 stock options...    36,000               41                                                   41

Issuance of
 stock options...                        239                $(239)

Tax benefit from
 non-qualified
 stock options
 exercised.......                         50                                                  50

Amortization of
 deferred
 compensation....                                              84                             84

Net income.......                                 3,863                                    3,863
                  --------- ---      -------     ------    ------     -------  -----     -------
Balance,
December 31, 1995 4,987,032  50        4,124      9,121      (155)    390,000   (328)     12,812

Public stock
 offering, net...  1,100,000  11      10,490                                              10,501

Exercise of
 stock options...    157,701   2         192                                                 194

Retired
 treasury shares.   (390,000) (4)       (324)                         (390,000)   328

Tax benefit from
 stock options
 exercised.......                        356                                                  356

Amortization of
 deferred
 compensation....                                              58                             58

Net income.......                                 4,785                                    4,785
                  ---------  ---    -------     -------     -----     -------    ---     -------
Balance,
December 31, 1996 5,854,733   59     14,838      13,906       (97)                        28,706

Exercise of
 stock options...   165,449    1        262                                                  263

Tax benefit
 from stock
 options
 exercised.......                       673                                                  673

Amortization of
 deferred
 compensation....                                              58                             58

Issuance of
 stock warrant...                     2,131                                                2,131

Net (loss).......                               (22,836)                                 (22,836)
                  ---------   ---   -------     -------     -----     -------    ---     -------
Balance,
December 31, 1997 6,020,182   $60   $17,904     $(8,930)    $ (39)                       $ 8,995
                  =========   ===   =======     =======     =====                        =======
</TABLE>
         The accompanying notes are an integral part of the
                 consolidated financial statements

<PAGE>
                              PCD Inc.
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (In thousands)
<TABLE>
<CAPTION>
                                                     Years ended December 31,
                                                     ------------------------
                                                      1997     1996     1995
                                                     ------   ------   ------
<S>                                                <C>       <C>     <C>
Cash flows from operating activities:
Net income......................................... $(22,836) $ 4,785 $3,863
Adjustments to reconcile net income to net cash
  provided by operating activities:
    Acquired in-process research and development...   44,438        -      -
    Depreciation...................................    1,530    1,389  1,026
    Amortization of warrant........................       34        -      -
    Loss (gain) on disposal of
     equipment and improvements....................       (4)     107    261
    Allowance for uncollectible accounts...........        -       40     76
    Amortization of deferred compensation..........       58       58     84
    Tax benefit from stock options exercised.......      673      356     50
    Provision for deferred taxes...................  (15,253)     (80)  (192)
    Changes in operating assets and liabilities:
      Increase in accounts receivable..............      888      (54)  (623)
      Decrease (increase) in inventory.............     (539)     259   (256)
      Decrease (increase) in prepaid
        expenses and other current assets..........      (68)     310    (48)
      Increase in other assets
        and debt financing fees....................   (1,830)     (25)   (45)
      Increase(decrease)in accounts payable........      479      (59)   205
      Increase in accrued liabilities..............      516      692  1,130
                                                    -------- -------- ------
           Total adjustments.......................   30,922    2,993  1,668
                                                    -------- -------- ------
  Net cash provided by operating activities........    8,086    7,778  5,531
                                                    -------- -------- ------
Cash flows from investing activities:
Equipment and improvements expenditures.............  (2,531) (1,902) (2,505)
Acquisition of Wells Electronics, Inc., net of
 cash acquired of $827..............................(130,357)      -       -
                                                     ------- -------  ------
  Net cash used in investing activities............ (132,888) (1,902) (2,505)
                                                     ------- -------  ------
Cash flows from financing activities:
Proceeds from issuance of short-term debt..........   13,000       -       -
Proceeds from issuance of long-term debt...........   70,000       -       -
Proceeds from issuance of subordinated
 debenture and warrant.............................   25,000       -       -
Exercise of common stock options...................      263     194      41
Proceeds from issuance of common stock, net........        -  10,501       -
Principal payments under long-term debt obligations        -       -     (37)
                                                     ------- -------  ------
Net cash (used in) provided by financing activities  108,263  10,695       4
                                                     ------- -------  ------
Net increase in cash...............................  (16,539) 16,571   3,030
Cash and cash equivalents at beginning of year.....   20,529   3,958     928
                                                     ------- -------  ------
Cash and cash equivalents at end of year...........  $ 3,990 $20,529  $3,958
                                                     ======= =======  ======
Supplemental disclosures of cash flow information:
   Cash paid during the year for:
     Interest...................................... $    20 $     9  $   13
                                                    ======= =======  ======
     Income taxes.................................. $ 3,049 $ 2,452  $2,553
                                                    ======= =======  ======
</TABLE>
         The accompanying notes are an integral part of the
                 consolidated financial statements

<PAGE>
                            PCD INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Nature of Business:

   PCD Inc. ("the Company") is engaged principally in designing,
manufacturing and marketing electronic connectors for use in and
integrated circuit ("IC") package interconnect applications,
industrial equipment and avionics. Electronic connectors are used
in virtually all electronic systems, including data
communications, telecommunications, computers and computer
peripherals, industrial controls, automotive, avionics and test
and measurement instrumentation. As further discussed in Note 3,
on December 26, 1997 the Company acquired all of the outstanding
stock of Wells Electronics, Inc. ("Wells"). Wells designs,
develops and markets a broad line of test and burn-in sockets and
related carriers for the global IC package interconnect industry.
The effect of the purchase is recorded in the financial
statements.

2.  Summary of Significant Accounting Policies:

   Basis of Consolidation

   The consolidated financial statements include the accounts of
the Company and its subsidiaries. All significant intercompany
balances and transactions have been eliminated.

   Revenue Recognition

   Revenue is recognized upon shipment to customers. The Company
grants to certain of its distributors limited return and stock
rotation rights. Historically, the Company's return rate has been
insignificant.

   Cash and Cash Equivalents

   The Company considers all highly liquid debt instruments
purchased with an original maturity of three months or fewer to
be cash equivalents. The Company invests excess cash in a money
market fund and indirect obligations of the United States
government. The Company had all its cash in interest bearing
accounts at December 31, 1997. Approximately $16.1 million was
invested in such cash equivalents at December 31, 1996. The
Company classifies its investments as available for sale; however
at December 31, 1996, cost approximates fair value.



<PAGE>
   Concentrations of Credit Risk and Estimates

   Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash
investments and trade receivables. The Company invests primarily
in high quality securities with short lives. Accordingly, these
investments are subject to minimal credit and market risk.
Collateral is not required for trade receivables, but ongoing
credit evaluations of customer's financial condition are
performed. As a result of the Wells acquisition, a greater
portion of the Company's accounts receivable will be concentrated
in the IC package interconnect and semiconductor industries. The
Company has not experienced significant losses related to
receivables from individual customers or groups of customers in
the IC package interconnect and semiconductor industries or by
geographic region. Additionally, the Company maintains reserves
for potential credit losses. Due to these factors, no additional
credit risk beyond amounts provided for collection losses is
believed by management to be inherent in the Company's accounts
receivables.

   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 financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. The
most significant estimates included in these financial statements
are allowances for uncollectible accounts, allowances for
inventory valuation, goodwill, intangible assets and deferred
taxes.

   Inventory

   Inventories are stated at the lower of cost, determined on a
first-in, first-out method, or market.

   Research and Development

   Research and development costs are charged to expense as
incurred.

   Net Income Per Common Share

   In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
Earnings Per Share ("FAS 128"). FAS 128 requires dual
presentation of basic and diluted earnings per share on the face

<PAGE>
of the income statement for all entities with complex capital
structures. Basic earnings per share is computed using the
weighted average number of shares of common stock outstanding.
Diluted earnings per share is computed using the weighted average
number of shares of common stock outstanding plus the effect of
the additional number of common shares that would have been
outstanding if the dilutive potential common shares had been
outstanding. Under FAS 128, the computation of the basic earnings
per share does not assume the conversion, exercise, or contingent
issuance of securities that have an anti-dilutive effect on
earnings per share. The Company has issued a subordinated
debenture, described in Note 9, that has a conversion feature to
common stock upon the occurrence of certain events of default.

   In accordance with SFAS No. 128, the following tables
reconcile net income (loss) and weighted average shares
outstanding to the amounts used to calculate basic and diluted
earnings (loss) per share for each of the years ended December
31, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
                                                Net Income          Per Share
                                                  (Loss)     Shares    Amount
                                              ----------- --------- -------
<S>                                          <C>           <C>       <C>
For the year ended December 31, 1997
 Basic and diluted loss...................... $(22,836,000) 5,954,657 $(3.83)
                                              ============  ========= ======
For the year ended December 31, 1996
 Basic earnings.............................. $  4,785,000  5,478,330 $ 0.87
 Assumed exercise of options (treasury method)           -    813,523      -
                                              ------------  --------- ------
  Diluted earnings........................... $  4,785,000  6,291,853 $ 0.76
                                              ============  ========= ======
For the year ended December 31, 1995
 Basic earnings.............................. $  3,863,000  4,570,032 $ 0.85
 Assumed exercise of options (treasury method)           -    631,092      -
                                              ------------  --------- ------
 Diluted earnings............................ $  3,863,000  5,201,124 $ 0.74
                                              ============  ========= ======
</TABLE>

   In 1997, Common Stock equivalents of 679,468 shares were not
included in the calculation of diluted EPS.

   Equipment and Improvements

   Equipment and improvements are recorded at cost. Maintenance
and repairs which neither materially add to the value of the
property nor appreciably prolong its life are charged to expense
as incurred. Upon retirement or other disposition, the cost and
related accumulated depreciation are eliminated from the accounts
and the resulting gain or loss is included in the results of
operation

<PAGE>
   Depreciation of equipment and improvements is computed using
the straight-line method over the estimated useful lives of the
assets as follows:
<TABLE>
<CAPTION>
                                         Estimated Useful
                                          Life in Years
                                         ----------------
       <S>                                       <C>
        Tools, dies and molds...........           5
        Machinery and equipment.........          10
        Office furniture and fixtures...           5
        Transportation equipment........           4
        Computer software...............           3
        Leasehold improvements..........  Shorter of lease
                                         term or useful life

</TABLE>

   Income Taxes

   The Company utilizes the asset and liability approach of
accounting for income taxes. Under the asset and liability
approach, deferred taxes are determined based on the difference
between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect in the years in
which the differences are expected to reverse. Deferred tax
expense (benefit) represents the change in the deferred tax asset
or deferred tax liability balance. Tax credits are treated as
reductions of income taxes in the year in which the credits
become available for tax purposes.

   Goodwill

   Goodwill is accounted for in accordance with Accounting
Principles Board ("APB") No. 17, Intangible Assets. Goodwill
represents costs in excess of net assets of the business acquired
and is amortized on a straight-line basis over the expected
periods to be benefited, which is currently 20 years.  The
Company's policy is to assess the goodwill based on an evaluation
of such factors as the occurrence of a significant adverse event
or change in the environment in which the business operates.  An
impairment loss would be recorded in the period such
determination is made based on the undiscounted cash flows of the
related businesses.  No impairment losses have been recognized in
any of the periods presented.



<PAGE>
   Intangible Assets

   Intangible assets are accounted for in accordance with SFAS
121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of. Intangible assets are stated
at cost and are amortized using the straight-line method. Loan
acquisition fees are amortized over the life of the applicable
indebtedness.  Trademarks and trade names are amortized over 20
years, consistent with industry norms.  Patented technologies are
amortized over 9 years.

3.  ACQUISITION OF WELLS ELECTRONICS, INC.:

   On December 26, 1997, pursuant to the Share Purchase Agreement
dated November 17, 1997, the Company acquired all of the
outstanding common stock of Wells Electronics, Inc. Wells is a
manufacturer of IC package interconnect products. The acquisition
was financed by a combination of a new bank credit facility of
$90 million of which the Company borrowed approximately
$83 million upon consummation of the acquisition and a
$25 million subordinated debenture. The acquisition is being
accounted for as a purchase in accordance with APB Opinion No.
16.

   In accordance with APB Opinion No. 16, the Company has
allocated the purchase price based on the fair value of assets
acquired and liabilities assumed. Acquired intangible assets
consist of trade names and trademarks and patented technologies
valued at approximately $10.4 million and $3.1 million,
respectively. A portion of the purchase price was allocated to
these intangible assets using a risk adjusted discounted cash
flow approach. These intangibles are being amortized over their
estimated useful lives of 9 and 20 years, respectively.
Additionally, a portion of the purchase price was allocated to
purchased research and development projects that were identified
as having no alternative future value and had not yet reached
technological feasibility. Purchased research and development
that had not reached technological feasibility and that had no
alternative future use was valued under a risk adjusted cash flow
model, under which future cash flows were discounted taking into
consideration risks relating to existing and future markets. This
analysis resulted in an allocation of approximately $44 million
to acquired in-process research and development expense. This
amount was charged to operations at the acquisition date. A final
allocation of the purchase price will be completed in 1998 based
on determination of the final purchase price.  The purchase price
is subject to adjustment by the amount, if any, by which the net
worth, with certain adjustments, of Wells as of the closing date,
as agreed to by the Company and the seller, is less than or more
<PAGE>
than the corresponding net worth as of September 30, 1997.  The
adjustment is expected to be favorable to the Company, but is not
expected to be material.  The final allocation is not expected to
differ materially from amounts previously reported.

   The aggregate purchase price of $131,184,000, includes
acquisition costs. Acquisition costs consist of approximately
$500,000 of financial advisory fees and $684,000 of professional
fees. The aggregate purchase price was allocated as follows:

<TABLE>
<CAPTION>
                                                            (In thousands)
                                                            --------------
    <S>                                                       <C>
     Current assets................................            $  7,568
     Equipment and improvements....................               9,501
     Acquired intangibles..........................              13,539
     Acquired in-process research and development..              44,438
     Goodwill......................................              61,718
     Other assets..................................               1,369
     Liabilities assumed...........................              (6,949)
                                                               --------
                                                               $131,184
                                                               ========

   Unaudited pro forma operating results for the Company,
assuming the acquisition of Wells occurred at the beginning of
the period presented
are as follows:


</TABLE>
<TABLE>
<CAPTION>
                                                        Years Ended
                                                     -----------------
                                                       1997     1996
                                                     -------- --------
                                                   (In thousands, except
                                                     per share amounts)
         <S>                                        <C>      <C>
          Net sales.............................     $71,386  $49,779
          Net income (loss).....................       5,570   (1,342)
          Net income (loss) per share:
            Basic...............................     $  0.94  $ (0.24)
            Diluted.............................     $  0.82  $ (0.24)


   Pro forma operating results for years ended 1997 and 1996
include costs of $4.0 million of amortization of goodwill and
acquired intangible assets and $10.0 million of interest expense.
Approximately $44.4 million of expense related to the acquired
in-process research and development and $2.1 million of
additional interest expense related to the Emerson Warrant (Note
9) are excluded from both 1997 and 1996.

<PAGE>
   These unaudited pro forma operating results are included for
information purposes only and may not be indicative of the
results of operations for PCD and Wells had they been a single
entity during 1996 and 1997.

4.  INVENTORY:

   Inventory consisted of the following at December 31:

</TABLE>
<TABLE>
<CAPTION>
                                           1997     1996
                                          ------   ------
                                           (in thousands)
       <S>                               <C>      <C>
        Raw materials and
         finished subassemblies........   $3,387   $1,908
        Work in process................      532      226
        Finished goods.................      877      474
                                          ------   ------
        Total..........................   $4,796   $2,608
                                          ======   ======
</TABLE>

5.  Equipment and Improvements:

   Equipment and improvements consisted of the following at
December 31:
<TABLE>
<CAPTION>
                                              1997      1996
                                             ------    ------
                                               (In thousands)
       <S>                                  <C>       <C>
        Tools, dies and molds.............   $11,244   $5,192
        Machinery and equipment...........     5,546    2,586
        Office furniture and fixtures.....     1,978      936
        Computer software.................        99       89
        Transportation equipment..........       205      168
        Leasehold improvements............       718      493
                                             -------   ------
                                              19,790    9,464
        Less accumulated depreciation.....     4,852    4,379
                                             -------   ------
                                              14,938    5,085
     Capital expenditures in progress......      905      252
                                             -------   ------
       Property and improvements, net......  $15,843   $5,337
                                             =======   ======
</TABLE>
<PAGE>
6.  INTANGIBLE ASSETS AND GOODWILL:

   Goodwill is accounted for in accordance with APB 17,
Intangible Assets. The Company assesses the realizability of
intangible assets in accordance with SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of when events or changes in circumstances indicate
that the carrying amount may not be recoverable.  Goodwill is
stated at cost and amortized on a straight line basis over the
estimated future periods to be benefited, which is currently 20
years.  The Company's policy is to assess the goodwill based on
an evaluation of such factors as the occurrence of a significant
adverse event or change in the environment in which the business
operates.  An impairment loss would be recorded in the period
such determination is made based on the undiscounted cash flows
of the related businesses.  No impairment losses have been
recognized in any of the periods presented.  Intangible assets
are amortized on a straight-line basis, based on their estimated
lives, as follows:
<TABLE>
<CAPTION>
                                              Balance          Estimated
                                         December 31, 1997       Life
                                         -----------------     ---------
                                           (In thousands)
         <S>                                <C>                  <C>
          Patented technology..........      $ 3,155               9 years
          Tradenames/trademarks........       10,384              20 years
          Goodwill.....................       61,718              20 years

</TABLE>

7.  ACCRUED LIABILITIES:

   Accrued liabilities consisted of the following at December 31:
<TABLE>
<CAPTION>
                                               1997     1996
                                              ------   ------
                                               (in thousands)
           <S>                               <C>      <C>
            Compensation and benefits.....    $2,210   $  760
            Professional fees.............       846    1,002
            Income taxes payable..........     2,604      730
            Other.........................     1,784      631
                                              ------   ------
            Total.........................    $7,444   $3,123
                                              ======   ======
</TABLE>


<PAGE>
8.  LINE OF CREDIT AND LONG-TERM DEBT:

   Prior to the acquisition of Wells discussed in Note 3, the
Company had unsecured lines of credit with a bank. The agreement
provided for up to $5,250,000 in a revolving credit line with
interest payable monthly at the bank's base lending rate until
June 30, 1998. As of December 31, 1996, no amounts were
outstanding under this line of credit.

   On December 26, 1997, in connection with the Wells acquisition
discussed in Note 3, the Company entered into a secured
$20,000,000 Revolving Credit Agreement ("Revolver") with several
banks replacing the previous $5,250,000 agreement described
above, a $30,000,000 Secured Term Loan Agreement A and a
$40,000,000 Secured Term Loan Agreement B (collectively referred
to as the "Senior Credit Facility"). The Revolver provides for
direct borrowings or letters of credit and expires December 31,
2003; Term Loan Agreement A expires December 31, 2003; and Term
Loan Agreement B expires December 31, 2004. The Senior Credit
Facility is collateralized by all of the assets of PCD and Wells.
In conjunction with the Senior Credit Facility, PCD and Wells
each entered into a stock pledge agreement with these banks
pledging all or substantially all of the stock of the
subsidiaries of PCD and Wells. Each of PCD, Wells and certain of
their subsidiaries also entered into a security agreement and
certain other collateral or conditional assignments of assets.
Borrowings under the Senior Credit Facility bear interest, at the
Company's option, at either: (i) the higher of the lender's base
rate, or a rate equal to 1/2 of 1% per annum above the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, plus between 25 and 200 basis points based on the ratio
of senior indebtedness to the Company's earnings before interest,
taxes, depreciation and amortization ("EBITDA"), or (ii) a
periodic fixed rate equal to LIBOR plus between 150 and 325 basis
points based on the ratio of senior indebtedness to EBITDA. The
Company is required to pay a quarterly commitment fee ranging
from 0.35% to 0.50% per annum, based on a certain financial ratio
of the Company, of the unused commitment under the Revolver.
There are no prepayment fees on the Senior Credit Facility. At
December 31, 1997, borrowings of $83,000,000 were outstanding
under the Senior Credit Facility at a weighted average interest
rate of 8.96%.

   The Agreement governing the Senior Credit Facility contains
numerous financial and operating covenants that are effective as
of the quarter ending March 28, 1998. Among these covenants are
restrictions that the Company (i) must maintain John L. Dwight,
Jr. as chief executive officer of the Company or obtain the

<PAGE>
consent of the lenders under the Senior Credit Facility to any
replacement of Mr. Dwight; (ii) may not, without the prior
consent of such lenders, acquire the assets of or ownership
interest in, or merge with, other companies; and (iii) may not,
without the prior consent of such lenders, pay cash dividends.
The Senior Credit Facility also requires the Company to maintain
certain financial covenants, including minimum fixed charge
coverage ratio, as defined, minimum quick ratio, as defined,
maximum ratio of total senior debt to EBITDA, maximum ratio of
total indebtedness for borrowed money to EBITDA, minimum interest
coverage ratio, maximum capital expenditures, as defined, during
the terms of the Senior Credit Facility. However, there can be no
assurance that the Company will be able to maintain compliance
with these covenants, and failure to meet such covenants would
result in an event of default under the Senior Credit Facility.
In addition, the Company estimates that the fair value of the
loans approximates the carrying value in the financial
statements.

Long-term debt consists of the following:
<TABLE>
<CAPTION>
                                              1997       1996
                                             -------     ----
                                              (In thousands)
    <S>                                     <C>            <C>
     Term Loan A.........................    $30,000        -
     Term Loan B.........................     40,000        -
                                             -------      ---
                                             $70,000        -
     Less - current portion..............      4,700        -
                                             -------      ---
                                             $65,300        -
                                             =======      ===
</TABLE>
Maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
     Year ended December 31                            Amount
     ----------------------                          ----------
                                                  (In thousands)
    <S>                                               <C>
     1998.....................................         $ 4,700
     1999.....................................           4,900
     2000.....................................           5,200
     2001.....................................           5,400
     2002.....................................           5,800
     2003 and thereafter......................          44,000
                                                       -------
                                                       $70,000
                                                       =======
</TABLE

<PAGE>
9.  SUBORDINATED DEBENTURE:

   On December 26, 1997, the Company entered into a Subordinated
Debenture ("Debenture") and Warrant Purchase Agreement ("Purchase
Agreement") with Emerson Electric Co. ("Emerson"), the Company's
largest stockholder. Pursuant to the Purchase Agreement, the
Company issued to Emerson a Debenture with a principal amount of
$25 million at an annual rate of interest of 10% and a Common
Stock Purchase Warrant (the "Emerson Warrant") for the purchase
of up to 525,000 shares of PCD Common Stock at a purchase price
of $1.00 per share. The combined effective interest rate for the
Debenture, the exercisable portion of the Emerson Warrant and the
prepayment penalty is 21.7%, assuming 10% per annum direct
interest expense, 8.4% per annum effective interest expense
associated with the Emerson Warrant and 3.25% of effective
interest expense due to prepayment penalties.  The Emerson
Warrant is initially exercisable for 150,000 shares of Common
Stock. If the principal and interest on the Debenture have not
been paid in full as of December 31, 1998, the Emerson Warrant
becomes exercisable for an additional 225,000 shares. If the
principal and accrued interest on the Debenture have not been
paid in full as of December 31, 1999, the Emerson Warrant becomes
exercisable for the remaining 150,000 additional shares.
Prepayment of the principal amount under the Debenture is subject
to a penalty, due at the time of prepayment, as follows: (i) for
the period beginning December 26, 1997 and ending June 30, 1998,
an amount equal to 3.25% of the principal sum prepaid; (ii) for
the period beginning July 1, 1998 and ending September 30, 1998,
an amount equal to 6.5% of the principal sum prepaid; and (iii)
for the period beginning October 1, 1998 and ending December 31,
1998, an amount equal to 9.75% of the principal sum prepaid. At
the option of the holder, the unpaid principal and accrued
interest under the Debenture is convertible into Common Stock
upon the occurrence of certain Events of Default thereunder, at a
conversion price equal to the lesser of $17.00 per share or 70%
of the average daily closing price of Common Stock for the 90
days preceding such default as reported by the Nasdaq Stock
Market.  The Events of Default under the Debenture are (i)
insolvency; (ii) default under the Senior Credit Facility; (iii)
a payment default on the Debenture which default is not cured
within 10 business days; (iv) a material breach by the Company of
any representations or warranties or failure to comply with
covenants or agreements contained in the agreements with Emerson
which breach is not cured within 30 days, and (v) an undischarged
or unstayed judgment against the Company for an amount in excess
of $1 million.  The total purchase price paid <PAGE>
by Emerson for the Debenture and Warrant was $25,000,000. The
proceeds from the sale of the Debenture and the Warrant were
applied in full to the purchase price paid by the Company in
connection with the Wells acquisition.

<PAGE>
   The Company allocated the proceeds of the $25,000,000 between
the Subordinated Debenture and the Warrant. The Company has
valued the Warrant according to the Black-Scholes model, and
determined the value to be approximately $2,131,000. The Company
has recorded a credit to additional paid-in capital of $2,131,000
and a reduction in the face amount of the Subordinated Debenture
for the same amount. This amount will be reflected as additional
interest expense over the period that the Subordinated Debenture
is expected to be outstanding. A change in the expected repayment
date will result in an additional charge to income. The
Subordinated Debenture is expected to be repaid in approximately
six months.

10.  INCOME TAXES:

   The provision (benefit) for income taxes for the years ended
December 31, 1997, 1996 and 1995 was as follows:

</TABLE>
<TABLE>
<CAPTION>
                                        1997    1996   1995
                                       ------  ------  ----
                                           (in thousands)
          <S>                         <C>     <C>     <C>
           Current
                     Federal.......  $  2,937  $2,504  $2,466
                     State.........       514     471     447
                                     --------  ------  ------
                     Total current.     3,451   2,975   2,913
                                     --------  ------  ------

           Deferred
                     Federal.......   (12,107)    (62)   (174)
                     State.........    (3,146)    (18)    (18)
                                     --------  ------  ------
                     Total deferred   (15,253)    (80)   (192)
                                     --------  ------  ------
                                     $(11,802) $2,895  $2,721
                                     ========  ======  ======
</TABLE>

   The components of the net deferred tax asset consisted of the
following at December 31, 1997 and 1996:







<PAGE>
<TABLE>
<CAPTION>
                                                  1997    1996
                                                  ----    ----
                                                 (In thousands)
   <S>                                           <C>     <C>
     Deferred tax assets (liabilities):
       Difference in accounting for inventory  $   148    $195
       Accounts receivable allowances........       81      90
       Vacation and other accruals...........      351     297
       In-process research and development...   15,362       -
       Difference in depreciation methods....     (607)   (500)
                                               -------    ----
         Net deferred tax asset..............  $15,335    $ 82
                                               =======    ====
</TABLE>
   The deferred tax consequences of temporary differences in
reporting items for financial statement and income tax purposes
are recognized, if appropriate. Realization of the future tax
benefits related to the deferred tax assets is dependent on many
factors, including the Company's ability to generate taxable
income. Future tax benefits are recognized to the extent that
realization of such benefits is more likely than not.

   The analysis of the variance of income taxes as reported from
income taxes compiled at the U.S. statutory federal income tax
rate for continuing operations is as follows:
<TABLE>
<CAPTION>
                                                    1997    1996    1995
                                                  --------  ----    ----
                                                      (In thousands)
   <S>                                           <C>       <C>      <C>
    Income taxes at U.S. statutory rate of 34%    $(11,777) $2,611   $2,239
    State income taxes........................      (1,737)    300      284
    Benefit of Foreign Sales Corporation......          88       -        -
    Non-deductible expenditures...............       1,624       -        -
    Other, net................................           -     (16)     198
                                                  --------  ------   ------
                                                  $(11,802) $2,895   $2,721
                                                  ========  ======   ======

</TABLE>

11.  COMMITMENTS AND CONTINGENCIES:

   Litigation:

   On August 21, 1995, the Company's wholly-owned subsidiary, CTi
Technologies, Inc. ("CTi"), filed an action in the United States
District Court for the District of Arizona against Wayne K.
Pfaff, an individual residing in Texas ("Pfaff"), and Plastronics
<PAGE>
Socket Company, Inc., a corporation affiliated with Pfaff,
alleging and seeking a declaratory judgment that two United
States patents issued to Pfaff and relating to certain burn-in
sockets for "leadless" IC packages (the "Pfaff Leadless Patent")
and ball grid array ("BGA") IC packages (the "Pfaff BGA Patent")
(collectively, the "Pfaff Patents") are invalid and are not
infringed by CTi, the products of which include burn-in sockets
for certain "leaded" packages (including Quad Flat Paks) (the
"CTi Leaded Products") and BGA packages (the "CTi BGA Products")
(collectively, the "CTi Products"). Pfaff has filed a
counterclaim alleging that CTi infringes the Pfaff Leadless
Patent and has requested an award of damages; the counterclaim
does not allege infringement of the Pfaff BGA Patent. Pfaff has
also sought a permanent injunction against further infringement
by CTi of the Pfaff Leadless Patent. That action has been stayed
pending resolution of another action, described below, involving
the Pfaff Leadless Patent.

   In litigation between Wells and Pfaff concerning the Pfaff
Leadless Patent, the United States Court of Appeals for the
Federal Circuit has found all of the individual descriptions of
the invention (the "Claims" of the patent) of  the Pfaff Leadless
Patent which were at issue in that case to be invalid. Certain
other Claims of the patent were not at issue in that case, and
their validity was not decided by the court, because Pfaff did
not allege that products of Wells infringed such Claims.  The
United States Supreme Court has accepted  an appeal on that case.
Unless overturned, the Court of Appeals decision as to the
invalidity of such Claims of the Pfaff Leadless Patent will be
binding in the CTi v. Pfaff action in the District of Arizona,
and the reasoning of that decision could support CTi's position
that the remaining Claims of that patent are invalid.

   The Company believes, based on the advice of counsel, that CTi
and Wells have meritorious defenses against any allegations of
infringement under the Pfaff Patents, and, if necessary, CTi and
Wells will vigorously litigate their positions. There can be no
assurance, however, that the Company, CTi or Wells will <PAGE>
prevail in any pending or future litigation, and a final court
determination that CTi or Wells has infringed the Pfaff Leadless
Patent could have a material adverse effect on the Company. Such
adverse effect could include, without limitation, the requirement
that CTi or Wells pay substantial damages for past infringement
and an injunction against the manufacture or sale in the United
States of such products as are found to be infringing.




<PAGE>
   Leases:

   The Company leases office and production facilities in
Peabody, Massachusetts, Wormleysburg, Pennsylvania, and Phoenix,
Arizona. These rentals are subject to escalation in real estate
taxes and operating expenses. Rental expense for the years ended
December 31, 1997, 1996 and 1995 was $480,000, $498,000, and
$500,000 respectively.

   In conjunction with the Wells acquisition, leased production
facilities in South Bend, Indiana, Yokohama, Japan and Swatara,
Pennsylvania and leased distribution and technical sales support
facilities in Northhampton, England; Regensburg, Germany; Seoul,
South Korea; Singapore and Penang, Malaysia were added.

   Minimum future rental commitments under leases with remaining
terms in excess of one year are approximately as follows:

<TABLE>
<CAPTION>
        Year Ended
        December 31,                             Amount
        -------------                            --------
                                              (In thousands)
            <S>                                   <C>
             1998............................      $1,136
             1999............................       1,012
             2000............................         914
             2001............................         914
             2002............................         913
             2003 and thereafter.............       1,972
</TABLE>

12.  STOCKHOLDERS EQUITY:

   Preferred Stock

   The Board of Directors is authorized, subject to any
limitations prescribed by law, from time to time to issue up to
an aggregate of 1,000,000 shares of Preferred Stock, $0.10 par
value per share, with such powers, designations, preferences and
relative, participating, optional or other special rights and
such qualifications, limitations or restrictions thereof, as
shall be determined by the Board of Directors in a resolution or
resolutions providing for the issuance of such Preferred Stock.




<PAGE>
   Common Stock

   In February 1996, the stockholders approved an increase in the
authorized common stock of the Company to 25,000,000 shares,
$0.01 par value per share, and the stockholders approved a
twelve-for-one stock split effected in the form of a stock
dividend. All references to the number of shares and per share
amounts have been restated to reflect the split.

   Treasury Stock

   On January 30, 1996, the Board of Directors approved a
resolution to restore any and all Common Stock of the Company
which had been repurchased by the Company to the status of
authorized but unissued shares.

   Stock Options:

   Directors Stock Plan

   The Company's 1996 Eligible Directors Stock Plan (the
"Directors Stock Plan") was approved by the Board of Directors on
January 30, 1996 and thereafter by the Company's stockholders.
Under the Directors Stock Plan, commencing with the 1997 annual
meeting of stockholders, each director who is not an officer or
employee of the Company or any subsidiary of the Company (an
"outside director") who has not previously been granted an option
to purchase shares of Common Stock will be granted, on the
thirtieth day after such meeting, an option to purchase 3,000
shares of Common Stock at an exercise price equal to the fair
market value on the date of grant. In addition, on the thirtieth
day after such meeting, each outside director will be granted an
option at each annual meeting of stockholders to purchase 1,500
shares of Common Stock at an exercise price equal to the fair
market value on the date of grant. A total of 36,000 shares of
Common Stock are available for awards under the Directors Stock
Plan. Each option shall vest 6 months after, and expire 10 years
from, the date of grant of such option. No options may be granted
under the Directors Stock Plan after January 29, 2006.

   1996 Stock Plan

   The Company's 1996 Stock Plan was approved by the Board of
Directors on January 30, 1996, and thereafter by the Company's
stockholders. The 1996 Stock Plan provides for the grant or award
of stock options, restricted stock and other performance awards
which may or may not be denominated in shares of Common Stock or
other securities (collectively, the "Awards"). Stock options
granted under the 1996 Stock Plan may be either incentive stock
<PAGE>
options or non-qualified options. The 1996 Stock Plan is
administered by the Compensation Committee. Subject to the
provisions of the 1996 Stock Plan, the Committee has the
authority to designate participants, determine the types of
Awards to be granted, the number of shares to be covered by each
Award, the time at which each Award is exercisable or may be
settled, the method of payment and any other terms and conditions
of the Awards. While the Committee determines the prices at which
options and other Awards may be exercised under the 1996 Stock
Plan, the exercise price of an option shall be at least 100% of
the fair market value (as determined under the terms of the 1996
Stock Plan) of a share of Common Stock on the date of grant. The
aggregate number of shares of Common Stock available for awards
under the Plan is 324,000. No option shall be exercisable with
respect to any shares later than 10 years after the date of grant
of such options or 5 years in the case of incentive options
granted to the owner of stock possessing more than 10% of the
value of all classes of stock of the Company. Vesting is
determined in the sole discretion of the Compensation Committee
of the Board of Directors. In connection with Committee's grants
to date, it has fixed vesting in four approximately equal annual
installments, the first of which vests on the date of grant. No
awards may be made under the 1996 Stock Plan after January 29,
2006.

   1992 Stock Option Plan

   The Company's 1992 Stock Option Plan as amended on January 30,
1996 provides for the grant or award of stock options, which may
be either incentive stock options or non-qualified stock options
to key employees and directors. The aggregate number of shares of
Common Stock reserved for issuance under the 1992 Stock Plan is
636,600 shares. No option shall be exercisable with respect to
any shares later than 10 years after the date of grant of such
options or 5 years in the case of incentive options granted to
the owner of stock possessing more than 10% of the value of all
classes of stock of the Company. Vesting is determined in the
sole discretion of the Compensation Committee of the Board of
Directors. In connection with Committee's grants to date, it has
fixed vesting in four approximately equal annual installments,
the first of which vests on the date of grant. The Compensation
Committee administers the 1992 Stock Option Plan.

The following table summarizes the transactions from these plans:






<PAGE>
<TABLE>
<CAPTION>
                                                                 Weighted
                                                                 exercise
                                                    Options    average price
                                                    -------    -------------
     <S>                                           <C>            <C>
      Options outstanding at December 31, 1994      846,000        $ 1.15
                          Options exercised...      (36,000)         1.15
                          Options granted.....      144,000          1.68
                                                    -------
      Options outstanding at December 31, 1995      954,000          1.23
                          Options exercised...     (157,701)         1.22
                          Options granted.....       15,000         12.00
                                                    -------
      Options outstanding at December 31, 1996      811,299          1.43
                          Options exercised...     (165,449)         1.59
                          Options cancelled...       (4,000)        12.00
                          Options granted.....       78,000         21.08
                                                    -------
      Options outstanding at December 31, 1997      719,850          3.46
                                                    =======
</TABLE>

   Summarized information about stock options outstanding at December 31, 1997
is as follows:
<TABLE>
<CAPTION>
                                                             Exercisable
                                    Weighted             -------------------
                                    average    Weighted             Weighted
                      Number of    remaining   average              average
         Range of      options    contractual  exercise  Number of  exercise
     exercise prices outstanding     life       price     options    price
     --------------- -----------  -----------  --------  ---------  --------
     <C>              <C>            <C>       <C>       <C>        <C>
      $ 1.15           518,100        4.75      $ 1.15    518,100    $ 1.15
        1.54-2.08      118,500        7.45        1.67     91,500      1.65
       12.00             6,500        8.58       12.00      2,500     12.00
       16.125-18.50     26,750        9.34       17.13     10,250     16.84
       23.25            50,000       10.00       23.25      8,335     23.25
</TABLE>

   For the years ended December 31, 1997, 1996 and 1995, options
to purchase 630,685 shares, 740,049 shares and 825,000 shares,
respectively, of Common Stock were exercisable with the remaining
options becoming exercisable at various dates through
December 26, 2002. The weighted average exercise price of
outstanding options for the years ended December 31, 1996 and
1995 were $1.25 and $1.18, respectively. The Company has recorded
deferred compensation of $239,000 for the difference between fair
value and exercise price for options granted in 1995 and such
deferred compensation is being amortized over the option vesting
period.




<PAGE>
   Generally, when shares acquired pursuant to the exercise of
incentive stock options are sold within one year of exercise or
within two years from the date of grant, the Company derives a
tax deduction measured by the amount that the fair market value
exceeds the option price at the date the options are exercised.
When nonqualified stock options are exercised, the Company
derives a tax deduction measured by the amount that the fair
market value exceeds the option price at the date the options are
exercised.

   Supplemental Disclosure for Stock Based Compensation:

   The Company has three stock-based compensation plans, which
are described above. In October 1995, the FASB issued SFAS 123,
Accounting for Stock-Based Compensation. SFAS 123 is effective
for periods beginning after December 15, 1995. SFAS 123 requires
that companies either recognize compensation expense for grants
of stock, stock options, and other equity instruments based on
fair value, or provide pro forma disclosure of net income and
earnings per share in the notes to the financial statements. The
Company adopted the disclosure provisions of SFAS 123 in 1996 and
has applied APB Opinion 25 and related Interpretations in
accounting for its plans. Accordingly, no compensation cost has
been recognized for its stock option plans. Had compensation cost
for the Company's stock-based compensation plans been determined
based on the fair value at the grant dates as calculated in
accordance with SFAS 123, the Company's net income (loss) and
earnings (loss) per share for the years ended December 31, 1997,
1996 and 1995 would have been reduced to the pro forma amounts
indicated below:
<TABLE>
<CAPTION>
                                         As reported      Pro forma
                                         -----------      ---------
  1997
  ----
  <S>                                    <C>             <C>
   Net income (loss).................     $(22,836)       $(23,119)
   Net income (loss) per share:
    Basic............................     $  (3.83)       $  (3.88)
    Diluted..........................     $  (3.83)       $  (3.88)

  1996
  ----
   Net income........................     $  4,785        $  4,665
   Net income per share:
    Basic............................     $   0.87        $   0.76
    Diluted..........................     $   0.85        $   0.74

  1995
  ----
   Net income........................     $  3,863        $  3,772
   Net income per share:
    Basic............................     $   0.85        $   0.74
    Diluted..........................     $   0.83        $   0.73
</TABLE

<PAGE>
   The fair value of each stock option is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted-average
assumptions:

</TABLE>
<TABLE>
<CAPTION>
                                            1997     1996     1995
                                           ------   ------   ------
    <S>                                   <C>      <C>      <C>
     Dividend yield....................    none     none     none
     Expected volatility...............    48.79%   45.00%    0.00%
     Risk free interest rate...........     7.27%    7.27%    7.13%
     Expected life (years) ............      5.0     10.0     10.0
</TABLE>
   Weighted average fair value of options granted at fair value
at date of grant:
                       1997..........       $12.73
                                            ======
                       1996..........       $ 7.83
                                            ======

   Weighted average fair value of options granted below fair
value at date of grant:
<PAGE>
                       1995..........       $ 2.53
                                            ======

   The effect of applying SFAS 123 in this pro forma disclosure
is not indicative of future amounts. The SFAS does not apply to
awards made prior to 1995. Additional awards in future years are
anticipated.


13.  PROFIT SHARING PLAN:

   Effective May 1, 1992, the Company adopted a Plan pursuant to
Section 401 of the Internal Revenue Code (the "Code"), whereby
employees may contribute a percentage of compensation, but not in
excess of the maximum allowed under the Code. Employees are
eligible for participation at the beginning of the calendar
quarter following their one year anniversary. The Company makes
matching contributions of fifty percent of employee contributions
up to 6% of employee compensation; however, the Company's total
contribution may not exceed 15% of the prior year's pre-tax
income unless authorized by the Board of Directors. The Company's
matching contributions were approximately $93,000, $80,000 and
$82,000 for the years ended December 31, 1997, 1996, and 1995,
respectively.

   Wells Electronics, Inc. Deferred Compensation and Savings Plan
(Salaried 401(k)) allows for salaried employees to contribute up
to a maximum allowable under the Code. Wells makes matching

<PAGE>
contributions of 25% of the employee contribution. Wells
Electronics, Inc. Union Employees' 401(k) Plan allows for all
union employees to contribute a minimum contribution ($0.19 per
hour through February 18, 1998). For those employees who
contribute at least the minimum, Wells matches $0.19 per hour
through February 18, 1998. As part of the liabilities assumed as
a result of the Wells acquisition, a liability was recorded for
approximately $46,000.


14.  SIGNIFICANT CUSTOMERS AND EXPORT SALES:

   One customer accounted for approximately 14.5%, 17.4% and
16.6% of the Company's net sales in 1997, 1996 and 1995,
respectively. A second customer accounted for approximately 12.7%
and 13.4% of the Company's net sales in 1997 and 1995,
respectively. The Company had export sales of approximately
$3,876,000, $2,975,000 and $3,022,000 in 1997, 1996 and 1995,
respectively. All export sales are in U.S. dollars.  No one
country or region accounted for greater than 10% of net sales.


15.  SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED):

<TABLE>
<CAPTION>
    (in thousands, except per share data)
    -------------------------------------------------------------------------
                                        For the Three Months Ended
    -------------------------------------------------------------------------
                                  Mar 29,    Jun 28,    Sep 27,    Dec 31,
    -------------------------------------------------------------------------
   <S>                           <C>        <C>        <C>        <C>
    1997
    ----
    Net sales..............       $6,217     $7,233     $8,077     $8,269
    Gross profit...........        2,953      3,507      3,927      4,289
    Net income.............        1,175      1,504      1,693    (27,208)
    Net income per share:
      Basic................       $ 0.20     $ 0.25     $ 0.28     $(4.52)
      Diluted..............       $ 0.18     $ 0.23     $ 0.26     $(4.52)

    -------------------------------------------------------------------------
                                         For the Three Months Ended
    -------------------------------------------------------------------------
                                  Mar 31,    Jun 29,    Sep 28,    Dec 31,
    -------------------------------------------------------------------------
   <S>                           <C>        <C>        <C>        <C>
    1996
    ----
    Net sales..............       $7,087     $7,223     $6,222     $6,325
    Gross profit...........        3,235      3,222      2,725      3,218
    Net income.............        1,130      1,348      1,068      1,239
    Net income per share:
      Basic................       $ 0.25     $ 0.24     $ 0.19     $ 0.21
      Diluted..............       $ 0.21     $ 0.21     $ 0.16     $ 0.19
</TABLE

<PAGE>
16.  SUBSEQUENT EVENT (UNAUDITED):

   The Company utilizes a significant number of computer software
programs and operating systems across its entire organization,
including applications used in manufacturing, product
development, financial business systems and various
administrative functions. The Company believes that, with the
exception of the South Bend, Indiana location, its computer
systems will be able to manage and manipulate all material data
involving the transition from 1999 to 2000 without functional or
data abnormality and without inaccurate results related to such
data. However, there can be no assurances that potential systems
interruptions or the cost necessary to update software would not
have a material adverse effect on the Company's financial
condition, results of operations or business. In addition, the
Company has limited information concerning the compliance status
of its suppliers and customers. In the event that any of the
Company's significant suppliers or customers do not successfully
and timely achieve Year 2000 compliance, the Company's financial
condition, results of operations and business could be adversely
affected.

   The Company believes that, within the next nine months, it
will have to replace the current systems at Wells-CTI South Bend
with new systems that are Year 2000 compliant. Failure to replace
such systems could result in the generation of erroneous data or
system failure. Significant uncertainty exists concerning the
potential effects associated with Year 2000 compliance, and Year
2000 issues involving systems of Wells-CTI South Bend could have
a material adverse effect on the Company's financial condition,
results of operations or business. The cost of replacing computer
systems of Wells-CTI South Bend is currently estimated to be up
to $900,000.

   The Company filed a registration statement in February 1998 on
Form S-1 for a public offering to raise proceeds to both retire
the subordinated debenture and pay down a portion of the Senior
Credit Facility.














<PAGE>
                 INDEPENDENT AUDITORS' REPORT

The Board of Directors
Wells Electronics, Inc.:

     We have audited the accompanying consolidated balance sheets of Wells
Electronics, Inc. and subsidiaries as of May 3, 1997 (Successor), and April
27, 1996 (Predecessor) and the related consolidated statements of income,
shareholders' equity, and cash flows for the 53 weeks ended May 3, 1997
(Successor period), the 48 weeks ended April 27, 1996 and the 52 weeks ended
June 3, 1995 (Predecessor periods).  These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.

     We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audit provides a reasonable basis
for our opinion.

     In our opinion, the aforementioned Successor consolidated financial
statements present fairly, in all material respects, the financial position of
Wells Electronics, Inc. and subsidiaries as of May 3, 1997, and the results of
their operations and their cash flows for the Successor period, in conformity
with generally accepted accounting principles. Further, in our opinion, the
aforementioned Predecessor consolidated financial statements present fairly,
in all material respects, the financial position of Wells Electronics, Inc.
and subsidiaries as of April 27, 1996, and the results of their operations and
their cash flows for the Predecessor periods, in conformity with generally
accepted accounting principles.

     As discussed in Note 1 to the consolidated financial statements,
effective May 2, 1996, Siebe plc acquired all of the outstanding stock of
Unitech plc in a business combination accounted for as a purchase. As a result
of the acquisition, the consolidated financial information for the periods
after the acquisition is presented on a different cost basis than that for the
periods before the acquisition and, therefore, is not comparable.


/s/ KPMG PEAT MARWICK LLP

Chicago, Illinois

January 15, 1998









<PAGE>

                    WELLS ELECTRONICS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      AS OF MAY 3, 1997 AND APRIL 27, 1996
                       (IN THOUSANDS, EXCEPT SHARE DATA)


</TABLE>
<TABLE>
<CAPTION>
                                                  Successor      Predecessor
                                                 -----------   --------------
                                                 MAY 3, 1997   APRIL 27, 1996
                                                 -----------   --------------
<S>                                                 <C>             <C>
ASSETS
Cash & cash equivalents..........................    $    95        $   441
Accounts receivable -- trade.....................      4,516          3,843
Allowance for uncollectible accounts.............       (100)          (100)
Inventory........................................      2,540          3,446
Prepaid expenses and other current assets........        416            475
Deferred tax assets..............................        571            547
                                                    --------        -------
          Total current assets...................      8,038          8,652
Property, plant and equipment, net...............      9,224          4,319
Intangible assets, net...........................     10,157            714
Due from affiliate...............................      3,231             --
Other assets.....................................        135            228
                                                     -------        -------
          Total assets...........................    $30,785        $13,913
                                                     =======        =======
LIABILITIES AND SHAREHOLDER'S EQUITY
Short-term debt..................................    $   268        $ 1,153
Accounts payable -- trade........................      3,016          2,801
Accrued expenses and other current liabilities...      2,669          2,008
Due to affiliate.................................         --             11
                                                     -------        -------
          Total current liabilities..............      5,953          5,973
Long-term debt...................................         --          1,458
Deferred tax liabilities.........................      6,185            149
Minority interest................................          6             --
                                                     -------        -------
          Total liabilities......................     12,144          7,580
                                                     -------        -------
SHAREHOLDER'S EQUITY
Common stock, $10 par value; 13,500 authorized
  shares; issued 7,825 shares......................       78             78
Additional paid-in capital.........................   14,510          6,547
Retained earnings..................................    4,367           (292)
Foreign currency translation adjustments...........     (314)            --
                                                     -------        -------
          Total shareholder's equity...............   18,641          6,333
                                                     -------        -------
Commitment and contingencies.......................       --             --
          Total liabilities and shareholder's equity $30,785        $13,913
                                                     =======        =======
</TABLE>
        See accompanying notes to the consolidated financial statements.




<PAGE>

                    WELLS ELECTRONICS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
         FOR 53 WEEKS ENDED MAY 3, 1997; 48 WEEKS ENDED APRIL 27, 1996
                         AND 52 WEEKS ENDED JUNE 3, 1995
                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                          Predecessor               Successor
                                 ------------------------------    -----------
                                 MAY 3, 1997    APRIL 27, 1996    MAY 3, 1997
                                 ------------    --------------    -----------
<S>                               <C>              <C>              <C>
Net sales......................     $27,492         $ 17,998         $18,579
Cost of sales..................      13,181            9,271           9,732
                                    -------          -------         -------
     Gross profit..............      14,311            8,727           8,847
Operating expenses.............       8,758            6,624           7,272
                                    -------          -------         -------
     Income from operations....       5,553            2,103           1,575
Non-operating income(expense):
Interest income................          11                6              10
Interest expense...............         (93)            (115)           (126)
Royalty income.................         630              844             404
Minority interest..............          (6)              --              --
Other expense..................         (23)             (40)            (42)
Foreign exchange gain/(loss)...         264               40            (180)
                                    -------          -------         -------
     Total non-operating income         783              735              66
                                    -------          -------         -------
Income before income taxes.....       6,336            2,838           1,641
Provision for income taxes.....       1,969              586             798
                                    -------          -------         -------
          Net Income...........     $ 4,367         $  2,252         $   843
                                    =======          =======         =======
Earnings per share.............     $558.08         $ 287.80         $107.73
                                    =======          =======         =======
Average number of shares.......       7,825            7,825           7,825
                                    =======          =======         =======
</TABLE>




        See accompanying notes to the consolidated financial statements.














<PAGE>
                    WELLS ELECTRONICS, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
         FOR 53 WEEKS ENDED MAY 3, 1997; 48 WEEKS ENDED APRIL 27, 1996
                         AND 52 WEEKS ENDED JUNE 3, 1995
                        (IN THOUSANDS, EXCEPT SHARE DATA)



<TABLE>
<CAPTION>
                                                          FOREIGN
                   COMMON STOCK    ADDITIONAL             CURRENCY
                -----------------   PAID-IN    RETAINED  TRANSLATION    TOTAL
                SHARES  PAR VALUE   CAPITAL    EARNINGS  ADJUSTMENTS   EQUITY
                ------  ---------  ----------  --------  -----------  -------
<S>             <C>        <C>      <C>        <C>          <C>       <C>
Balance,
 May 29, 1994..  7,825      $78      $  6,547   $ (3,387)    $  35     $3,273
Net income.....                                      843                  843
Net change
 foreign
 currency
 translation
 adjustment....                                                238        238
                 -----      ---       -------    -------     -----     -------
Balance,
 June 3, 1995..  7,825       78         6,547     (2,544)      273      4,354
Net income.....                                    2,252                2,252
Net change
 foreign
 currency
 translation
 adjustment....                                               (273)     (273)
                 -----      ---       -------    -------     -----    -------
Balance,
 April 27, 1996  7,825       78         6,547       (292)       --      6,333
Acquisition
 adjustments...                         7,963        292                8,255
Net income.....                                    4,367                4,367
Net change
 foreign
 currency
 translation
 adjustment....                                               (314)     (314)
                 -----      ---       -------    -------     -----    -------
Balance,
 May 3, 1997...  7,825      $78      $ 14,510   $  4,367     $(314)   $18,641
                 =====      ===       =======    =======     =====    =======
</TABLE>




        See accompanying notes to the consolidated financial statements.

<PAGE>
                    WELLS ELECTRONICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
         FOR 53 WEEKS ENDED MAY 3, 1997; 48 WEEKS ENDED APRIL 27, 1996
                         AND 52 WEEKS ENDED JUNE 3, 1995
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                      Successor           Predecessor
                                     ----------- ----------------------------
                                     MAY 3, 1997 APRIL 27, 1996  JUNE 3, 1995
                                     ----------- --------------  ------------
<S>                                     <C>          <C>            <C>
Cash flows from operating activities:
Net income.............................. $ 4,367      $ 2,252        $   843
                                         -------      -------        -------
Adjustments to reconcile net income
  to net cash provided by operating
  activities:
  Depreciation and amortization.........   2,205        1,426          1,870
  Gain on disposition of equipment......     (59)         (12)           (38)
  Provision for (benefit from)
    deferred taxes......................      50          (30)           (49)
  Changes in operating assets
    and liabilities:
      Increase in accounts receivable....   (673)        (732)        (1,550)
      Decrease (increase) in inventory...    906       (1,038)          (520)
      Decrease (increase) in prepaid
       expenses and other current assets.     60         (176)           193
      Decrease (increase) in other assets     93          (23)             9
      Decrease in due from affiliate..... (3,242)        (454)        (1,433)
      Increase in accounts payable.......    215          337          1,902
      Increase (decrease) in
        current liabilities..............    661          (91)           476
      Increase (decrease) in
        other liabilities................      3            4           (260)
                                         -------      -------        -------
          Total adjustments..............    219         (789)           600
                                         -------      -------        -------
Net cash provided by operating activities  4,586        1,463          1,443
Cash flows from investing activities:
  Capital expenditures................... (2,975)      (1,971)        (2,093)
  Proceeds from sale of fixed assets.....    386           18             67
                                         -------      -------        -------
Net cash used in investing activities...  (2,589)      (1,953)        (2,026)
Cash flow from financing activities:
  Net (payments of) proceeds from
    short-term debt.....................    (885)         739            414
  Principal payments of long-term debt..  (1,458)        (241)            --
  Proceeds from loan....................      --           --             56
                                         --------     -------        -------
Net cash (used in) provided by financing
  activities............................   (2,343)         498           470
Net (decrease) increase in cash and cash
  equivalents...........................     (346)           8          (113)
Cash and cash equivalents at beginning of
  the period.............................     441          433           546
                                         --------     --------       -------
Cash and cash equivalents
  at end of period.......................$    95      $    441       $   433
                                         ========     ========       =======
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
  Interest.............................. $     82     $    109       $   116
                                         ========     ========       =======
  Income taxes.......................... $  1,301     $  1,055       $   567
                                         ========     ========       =======
</TABLE>

        See accompanying notes to the consolidated financial statements

<PAGE>

               WELLS ELECTRONICS, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    MAY 3, 1997 AND APRIL 27, 1996
                            (IN THOUSANDS)

1.  NATURE OF BUSINESS

   As of May 3, 1997 and for the year then ended (fiscal 1997),
Wells Electronics, Inc. ("the Company"), an Indiana Corporation,
was a wholly owned subsidiary of UL America, Inc., whose ultimate
parent company, Siebe plc, is a publicly held corporation based
in the United Kingdom. On April 24, 1989, UL America, Inc.
acquired Wells Electronics, Inc., and for the eleven months ended
April 27, 1996 (fiscal 1996) and the year ending May 31, 1995
(fiscal 1995), the Company was a wholly owned subsidiary of UL
America, Inc.

   The Company has two subsidiaries: Wells Electronics Asia Pte
Ltd. in Singapore ("Wells Asia") which is a wholly owned
subsidiary and Wells Japan Ltd. ("Wells Japan") in Japan which is
approximately 98% owned by the Company. The remaining 2% is owned
by a Japanese corporation.

   The Company is principally engaged in designing, developing,
manufacturing and marketing a broad line of burn-in/test sockets
and plastic carriers for the global semiconductor industry. These
products are employed in the handling and quality assurance phase
of semiconductor manufacturing.

   The Company's ultimate parent, Unitech plc, was acquired by
Siebe plc, on May 2, 1996. Following the acquisition, a new basis
of accounting was applied. The fair market revaluation of the
Company's assets and liabilities resulted in an acquisition
adjustment of $8,255, net of the related deferred tax liability
of $5,962. As a result of the acquisition, property, plant and
equipment was written up to appraised fair market value of $8,535
(net historical cost was $4,319). Additionally, trademarks and
software were written up to appraised fair market value of
$10,001 (net historical cost was $0) and goodwill of $708 was
retained. There were no other significant accounting adjustments.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  BASIS OF PRESENTATION

   The consolidated financial statements include the accounts of
Wells Electronics, Inc. and its subsidiaries. Significant
intercompany balances and transactions have been eliminated.

<PAGE>
   The consolidated financial statements are prepared in
accordance with United States generally accepted accounting
principles. 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 financial statements
and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those
estimates. The most significant estimates included in these
financial statements are allowance for uncollectible accounts,
inventory reserves, and warranty reserves.

   There are 53, 48, and 52 weeks in fiscal 1997, 1996 and 1995,
respectively, due to the change in the fiscal year end subsequent
to the Siebe plc acquisition.

  REVENUE RECOGNITION

   Sales and related cost of sales are recognized upon shipment
of products to customers.

  CASH AND CASH EQUIVALENTS

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

  CONCENTRATION OF CREDIT RISK

   Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade
receivables. The Company provides credit to customers in the
normal course of business. Collateral is not required for trade
receivables, but ongoing credit evaluations of customers'
financial condition are performed. Additionally, the Company
maintains reserves for potential credit losses. As of April 27,
1996 and May 3, 1997 the Company had no significant receivable
write-offs. The Company operates in a single segment of the
semiconductor industry.

  RESEARCH AND DEVELOPMENT

   Research and development costs are charged to expense as
incurred.


<PAGE>
  INVENTORIES

   Inventories are stated at the lower of cost or market. The
inventories are valued at standard cost which approximates the
first-in, first-out (FIFO) cost method. Certain inventories are
valued at the moving average cost method.

   PROPERTY, PLANT AND EQUIPMENT

   For fiscal 1997, property, plant and equipment are stated at
fair value based upon independent appraisal.  For fiscal 1996 and
1995, property, plant and equipment are stated on the basis of
cost.  Equipment under capital leases is stated at the present
value of minimum lease payments at the inception of the lease.

   Material, labor and overhead costs associated with the
manufacture of molds are capitalized and classified as tooling.
Acquisition cost is used to cost molds which are purchased from
outside vendors.

   Depreciation is provided using the straight-line method over
the estimated useful lives of depreciable properties as follows:
buildings and improvements, 10 to 33 years; machinery and
equipment, 7 to 13 years; and tooling, 2 to 6 years.

   Equipment held under capital leases and lease improvements are
amortized using the straight-line method over the shorter of the
lease term or estimated useful life of the asset.

  INCOME TAXES

   The Company recognizes deferred tax assets and liabilities for
the expected future tax consequences of temporary differences
between the financial statement bases and the tax bases of the
Company's assets and liabilities using enacted statutory tax
rates applicable to future years.

  INTANGIBLE ASSETS

   The straight-line method is used to amortize intangible
assets. The goodwill and trademarks are amortized to expense over
20 years and computer software is amortized over 6 years.

  FOREIGN CURRENCY TRANSLATION

   The accounts of foreign subsidiaries are measured using local
currency as the functional currency. For those operations, assets
and liabilities are translated into US dollars at the end of
period exchange rates and income and expenses are translated at
<PAGE>
the average exchange rates. Net exchange gains or losses
resulting from such translation are excluded from net income and
accumulated in a separate component of shareholder's equity.

  IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

   The Company adopted the provisions of Statement of Financial
Accounting Standards (SFAS) Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed Of, during fiscal 1997. This statement requires that
long-lived assets, including associated goodwill, and certain
identifiable intangibles to be held and used be reviewed for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. It
also requires that long-lived assets and certain intangible
assets to be disposed be reported at the lower of carrying amount
or fair value less costs to sell. Adoption of this statement did
not have any impact on the Company's financial position, results
of operations, or liquidity.

  NET INCOME PER COMMON SHARE

   Net income per common share is computed using the weighted
average number of shares of common stock outstanding.

3.  FOREIGN OPERATIONS

   The Company's net income is affected by foreign currency
exchange (gains) losses resulting from translating foreign
currency denominated trade receivables and payables of Wells
Japan and Wells Asia and other realized and unrealized foreign
currency (gains) losses.


4.  INVENTORIES

   Inventories consist of the following:
<TABLE>
<CAPTION>
                                               1997       1996
                                              ------     ------
        <S>                                   <C>        <C>
        Raw material and supplies............  $  778     $1,463
        Work in process......................     223        349
        Finished goods.......................   1,539      1,634
                                               ------     ------
                                               $2,540     $3,446
                                               ======     ======
</TABLE>
<PAGE>
5.  PROPERTY, PLANT AND EQUIPMENT

   Property, plant and equipment consist of the following:
<TABLE>
<CAPTION>
                                             1997        1996
                                           --------     -------
        <S>                               <C>          <C>
        Land.............................  $     --     $   165
        Buildings and improvements.......       171       1,467
        Machinery and equipment..........     4,186       5,480
        Tooling..........................     5,499       9,374
        Construction in progress.........       576         480
                                            -------     -------
                                             10,432      16,966
        Less accumulated depreciation....    (1,208)    (12,647)
                                            -------     -------
                                           $  9,224     $ 4,319
                                            =======     =======
</TABLE>

6.  INTANGIBLE ASSETS

   Intangible assets consist of the following:

<TABLE>
<CAPTION>
                                                1997      1996
                                               -------    ----
        <S>                                   <C>      <C>
        Goodwill.............................  $   708    $ 708
        Computer software....................      349        6
        Trademarks...........................    9,674       --
                                               -------    -----
                                                10,731      714
        Less accumulated amortization........     (574)      --
                                               -------    -----
                                               $10,157    $ 714
                                               =======    =====
</TABLE>
7.  ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

   Accrued liabilities consist of the following:







<PAGE>
<TABLE>
<CAPTION>
                                               1997       1996
                                              ------     ------
        <S>                                  <C>        <C>
        Compensation and benefits...........  $1,038     $1,013
        Income taxes payable................     605         22
        Product warranty....................     300        100
        Other accrued liabilities...........     726        873
                                              ------     ------
                                              $2,669     $2,008
                                              ======     ======
</TABLE>

8.  DEBT

   Short-term debt consists of the following:

<TABLE>
<CAPTION>
                                                 1997      1996
                                                ------     ----
        <S>                                    <C>        <C>
        Line of credit........................  $214     $1,108
        Current maturities of long-term debt..    54         45
                                                ----     ------
          Total short-term debt...............  $268     $1,153
                                                ====     ======
</TABLE>

   Wells Japan has a Y125 million (approximately $985 at May 3,
1997) line of credit with a Japanese bank that was guaranteed by
its ultimate parent. The interest rate at May 1997 was 2.375% per
annum.


   Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                  1997      1996
                                                 ------     ---
       <S>                                      <C>        <C>
        Bank loan..............................  $ -     $1,400
        Capital lease obligation...............   54        103
                                                 ---     ------
                  Total long-term debt.........   54      1,503
        Less current maturities................   54         45
                                                 ---     ------
                                                 $ -     $1,458
                                                 ===     ======
</TABLE

<PAGE>
   The outstanding bank loan balance of $1,400 as of 1996
represents borrowings against the Company's revolving line of
credit. The line was repaid in January 1997 and the interest rate
at the time of repayment was 7% per annum.  Subsequent to the
repayment the line was cancelled.

9.  INCOME TAX EXPENSE

   Components of income tax expense (benefit) consist of:


</TABLE>
<TABLE>
<CAPTION>
                             CURRENT   DEFERRED     TOTAL
                             -------   --------     ------
       <S>                   <C>         <C>          <C>
        1997:
          Federal...........  $1,370      $ 43         $1,413
          State and local...     353        --            353
          Foreign...........     196         7            203
                              ------      ----         ------
                              $1,919      $ 50         $1,969
                              ======      ====         ======

        1996:
          Federal...........  $  358      $(30)        $  328
          State and local...     109        --            109
          Foreign...........     149        --            149
                              ------      ----         ------
                              $  616      $(30)        $  586
                              ======      ====         ======

        1995:
          Federal...........  $  535      $(49)        $  486
          State and local...     155        --            155
          Foreign...........     157        --            157
                              ------      ----         ------
                              $  847      $(49)        $  798
                              ======      ====         ======
</TABLE>

   Actual income tax expense differs from the amounts computed by
applying the enacted US federal corporate rate to income before
income taxes as a result of the following:







<PAGE>
<TABLE>
<CAPTION>
                                                      1997     1996     1995
                                                     ------    ----     ----
   <S>                                              <C>      <C>       <C>
    Federal income tax expense at statutory rate...  $2,190    $965     $558
    Increase (decrease) resulting from:
      Foreign tax rate differential................       2     (50)     (35)
      Reduction of valuation allowance.............    (499)   (299)      --
      Foreign subsidiary losses....................  ------    ----      144
      State income taxes, net......................     233      72      102
      Other, net...................................      43    (102)      29
                                                     ------   -----     ----
                                                     $1,969   $ 586     $798
                                                     ======   =====     ====
</TABLE>

   The tax effect of temporary differences that give rise to
deferred tax (assets) and liabilities follow:

<TABLE>
<CAPTION>
                                                              1997    1996
                                                             ------  ------
   <S>                                                       <C>      <C>
    Deferred tax assets:
      Inventories -- principally obsolescence...............  $  201  $  215
      Bad debts.............................................      36      38
      Other -- principally accruals.........................     334     294
      Net operating loss carryforward.......................      --     499
                                                              ------  ------
              Total deferred tax assets.....................     571   1,046
              Valuation allowance...........................      --    (499)
                                                              ------  ------
              Net deferred tax assets.......................     571     547
                                                              ------  ------
    Deferred tax liabilities:
      Property, plant & equipment...........................   1,828      10
      Capital lease.........................................     148     131
      Intangible assets.....................................   4,200      --
      Other.................................................       9       8
                                                              ------  ------
              Total deferred tax liabilities................   6,185     149
                                                              ------  ------
              Net deferred tax liability (asset)............  $5,614  $ (398)
                                                              ======  ======
</TABLE>

10.  LEASES

   The company leases certain of its manufacturing facilities,
sales offices and equipment. Some leases include provisions for
renewals and purchases at the Company's option.

   Rental expense for all operating leases approximated $562,
$241 and $233 in fiscal year 1997, 1996 and 1995, respectively.

<PAGE>
   Future minimum operating lease payments consist of the
following at May 3, 1997:

<TABLE>
<CAPTION>
                      FISCAL YEAR
            ----------------------------------------------
            <S>                                   <C>
            1998..................................  $  619
            1999..................................     615
            2000..................................     564
            2001..................................     511
            2002..................................     499
            Thereafter............................   1,738
                                                    ------
            Total minimum lease payments..........  $4,546
                                                    ======
</TABLE>

11.  PROFIT SHARING AND RETIREMENT PLANS

   The Company has adopted a Plan ("401(k) Plan") pursuant to
Section 401 of the Internal Revenue Code. Salaried employees may
contribute a percentage of their compensation to the 401(k) Plan,
but not in excess of the maximum allowed under the Code. Salaried
employees are eligible for participation at their one year
anniversary. The Company makes matching contributions of 25
percent of employee contributions but not in excess of the
maximum allowed under the Code.  In addition to any Employer
401(k) Contribution discussed above, the Company in any Plan
Year, to the extent it has Net Profits or retained earnings, may
make additional matching Employer 401(k) Contributions to the
extent it deems appropriate at its complete discretion.

   Effective February 19, 1997, the Company adopted a Retirement
Income Plan for the hourly employees whereby the Company will
make a contribution of $0.19 per hour for all hours worked into a
retirement income plan, with the employees contributing a
matching amount. The contribution will increase to $0.20 and
$0.22 per all hours worked effective February 19, 1998 and 1999,
respectively.  The employee matching contribution will increase
accordingly.

   The Company's combined matching contributions for the 401(k)
Plan and Retirement Income Plan were approximately $67, $63 and
$61 in 1997, 1996 and 1995, respectively.




<PAGE>
12.  RELATED PARTY TRANSACTIONS

   The Company was charged with corporate management fees of $25
in 1997, $193 in 1996, and $272 in 1995. Non-interest bearing
long-term receivable due from affiliates was $3,231 at May 3,
1997. This consists of $2,550 from Siebe Inc. and $681 from UL
America, Inc.

13.  COMMITMENTS AND CONTINGENCIES

   The Company has been party to ongoing litigation with Wayne K.
Pfaff and an affiliated corporation regarding alleged patent
infringements. Subsequent to the balance sheet date, the Federal
Circuit Court of Appeals found in favor of the Company.
Management believes that the likelihood of any future liability
in this regard is remote and as such, has established no
provision.

14.  SUBSEQUENT EVENT

   On November 17, 1997, UL America, Inc. agreed to sell all of
the Company's issued and outstanding shares of common stock to
PCD Inc. The purchase price of this transaction is $130 million.

15.  SEGMENT AND GEOGRAPHIC INFORMATION

   The Company operates in the integrated circuit connector
industry which is a single industrial segment. One customer
accounted for approximately 18%, 15% and 18% of the Company's
sales in 1997, 1996 and 1995, respectively. The Company had no
other single customer with sales greater than 10% of total sales.

   Sales between geographic areas are at cost plus approximately
50% mark-up.  The Company has significant operations in foreign
countries. Information regarding operations by geographic area
for fiscal 1997, 1996 and 1995 is as follows:
<TABLE>
<CAPTION>
                                                          FAR
                                                 USA      EAST
                                               -------   ------
       <S>                                    <C>       <C>
        Fiscal 1997:
        Net Sales............................  $17,528   $9,964
        Operating income.....................    3,749    1,804
        Identifiable assets..................   22,734    7,378

        Fiscal 1996:
        Net Sales............................  $10,049   $7,949
        Operating income.....................      735    1,368
        Identifiable assets..................    7,302    5,903

        Fiscal 1995:
        Net Sales............................  $12,900   $5,679
        Operating income.....................      572    1,003
        Identifiable assets..................    7,001    3,785
</TABLE

<PAGE>
16.  SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) FOR THE:


</TABLE>
<TABLE>
<CAPTION>
                                 THREE MONTHS ENDED
                         --------------------------------------
       Fiscal 1997:       MAY 3,   FEB 1,   OCT 26,    JUL 27,
                         ------   ------   -------   ----------
    <S>                 <C>      <C>      <C>         <C>
    Net Sales..........  $8,767   $7,471   $ 5,284     $5,970
    Gross profit.......   3,605    4,609     2,816      3,281
    Net income.........   2,189    1,178       412        588
</TABLE>

<TABLE>
<CAPTION>
                            THREE MONTHS ENDED       TWO MONTHS
                        ---------------------------     ENDED
       Fiscal 1996:     APR 27,   JAN 27,   OCT 28,    JUL 29,
                        -------   -------   -------    -------
   <S>                  <C>       <C>       <C>         <C>
    Net Sales..........  $ 4,261   $ 4,635   $ 5,918     $3,184
    Gross profit.......    2,036     2,049     3,026      1,616
    Net income.........      647       424       957        224
</TABLE

<PAGE>
                         Independent Auditors' Report


The Board of Directors
Wells Electronics, Inc.:

   We have audited the accompanying consolidated balance sheet of
Wells Electronics, Inc. and subsidiaries as of December 26, 1997
and the related consolidated statement of income, shareholder's
equity and cash flows for the 34 weeks ended December 26, 1997.
These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audit.

   We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

   In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Wells Electronics, Inc. and subsidiaries as of
December 26, 1997 and the results of their operations and their
cash flows for the 34 weeks then ended in conformity with
generally accepted accounting principles.


/s/ KPMG Peat Marwick LLP

Chicago, Illinois

February 4, 1998, except for note 11 which is as of March 9, 1998







<PAGE>
                   WELLS ELECTRONICS, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                         as of December 26, 1997 and
                        December 31, 1996 (unaudited)
                      (In thousands, except share data)


</TABLE>
<TABLE>
<CAPTION>
                                                                 Unaudited
                                                       Dec 26,    Dec 31,
                                                        1997        1996
                                                      ---------   --------
                       ASSETS
<S>                                                 <C>           <C>
Cash and cash equivalents......................       $   827      $   784
Accounts receivable - trade....................         4,251        3,380
Allowance for uncollectible accounts...........          (100)         (95)
Inventory......................................         1,879        2,585
Prepaid expenses and other current assets......           495          553
Deferred tax assets............................           758          425
                                                      -------      -------
     Total current assets......................         8,110        7,632
Property, plant and equipment, net.............         9,501        8,590
Intangible assets, net.........................         9,746       10,327
Other assets...................................           185          831
                                                      -------      -------
     Total assets..............................       $27,542      $27,380
                                                      =======      =======

         LIABILITIES AND SHAREHOLDER'S EQUITY

Current portion of capital lease debt..........       $    18      $ 1,376
Accounts payable - trade.......................         2,997        2,410
Accrued expenses and other current liabilities.         4,338        1,725
                                                      -------      -------
     Total current liabilities.................         7,353        5,511
Long-term debt.................................            --           21
Deferred tax liabilities.......................         6,311        5,962
Minority interest..............................            37           --
                                                      -------      -------
     Total liabilities.........................       $13,701      $11,494
                                                      -------      -------
                 SHAREHOLDER'S EQUITY

Common stock, $10 par value, 13,500 authorized
  Shares, issued 7,825 shares..................       $    78      $    78
Additional paid-in capital.....................        14,510       14,510
Retained earnings..............................          (371)       1,514
Foreign currency translation adjustments.......          (376)        (216)
                                                      -------      -------
     Total shareholder's equity................       $13,841      $15,886
                                                      -------      -------
Commitments and contingencies..................             -            -
                                                      -------      -------
     Total liabilities and stockholder's equity       $27,542      $27,380
                                                      =======      =======

      See accompanying notes to the consolidated financial statements
</TABLE

<PAGE>
                   WELLS ELECTRONICS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF INCOME
                   for the 34 weeks ended December 26, 1997
               and 35 weeks ended December 31, 1996 (Unaudited)
                       (In thousands, except share data)


</TABLE>
<TABLE>
<CAPTION>
                                                         Unaudited
                                         Dec 26, 97      Dec 31, 96
                                         ----------      ----------
    <S>                                  <C>             <C>
     Net sales......................      $ 29,268        $ 15,497
     Cost of sales..................        10,261           8,497
                                          --------        --------
       Gross profit.................        19,007           7,000
     Operating expenses.............         7,423           5,246
                                          --------        --------
       Income from operations.......        11,584           1,754
     Non-operating income (expense):
     Interest expense...............            (4)            (84)
     Royalty income.................           485             386
     Minority interest..............           (34)             --
     Other income...................            73              56
     Foreign exchange loss..........          (190)             --
                                           -------         -------
       Total non-operating income...           330             358
                                           -------         -------
     Income before income taxes.....        11,914           2,112
     Provision for income taxes.....         5,645             598
                                           -------         -------
       Net income...................       $ 6,269         $ 1,514
                                           =======         =======
     Earnings per share.............       $801.15         $193.48
                                           =======         =======
     Average number of shares.......         7,825           7,825
                                           =======         =======



</TABLE>

     See accompanying notes to the consolidated financial statements.
















<PAGE>
                         WELLS ELECTRONICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY
                             for 34 weeks ended December 26, 1997
                              (In thousands, except share data)

<TABLE>
<CAPTION>
                                                          Foreign
                 Common Stock   Additional               Currency
              -----------------   Paid-in    Retained   Translation
              Shares  Par Value   Capital     Deficit   Adjustments   Total
              ------  ---------  ----------  ---------  -----------   -----
<S>           <C>        <C>      <C>          <C>          <C>     <C>
Balance,
 May 3, 1997   7,825      $  78    $ 14,510     $ 4,367      $ (314) $18,641
Net income..                                      6,269                6,269
Dividend....                                    (11,007)             (11,007)
Net change
 foreign
 currency
 translation
 adjustment.                                                    (62)     (62)
                -----     -----    --------     -------      ------  -------
Balance,
 Dec 26, 97.    7,825     $  78    $ 14,510     $  (371)     $ (376) $13,841
                =====     =====    ========     =======      ======  =======

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




























<PAGE>
                   WELLS ELECTRONICS, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                    for 34 weeks ended December 26, 1997
              and 35 weeks ended December 31, 1996 (Unaudited)
                               (In thousands)

<TABLE>
<CAPTION>
                                                                 Unaudited
                                                        Dec 26,    Dec 31,
                                                         1997       1996
                                                       ---------   ------
<S>                                                    <C>        <C>
Cash flows from operating activities:
  Net income......................................      $ 6,269    $ 1,514
                                                        -------    -------
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation and amortization.................        1,448      1,517
    Loss on disposition of equipment..............           45         --
    Effect of changes in foreign currency.........           --       (216)
    Benefit from deferred taxes...................          (61)       (27)
    Changes in operating assets and liabilities:
      Decrease in net accounts receivable.........          265        458
      Decrease in inventory.......................          661        861
      Increase in prepaid and other current assets          (80)       (78)
      Increase in other assets....................          (50)      (215)
      (Decrease) increase in due from affiliates..        3,231        (11)
      Decrease in accounts payable ...............          (19)      (391)
      Increase (decrease) in current liabilities..        1,669       (283)
      Increase in other liabilities...............           31         --
                                                        -------    -------
        Total adjustments.........................        7,140      1,615
                                                        -------     ------
Net cash provided by operating activities.........       13,409      3,129
                                                        -------     ------
Cash flows from investing activities:
  Capital expenditures............................       (1,433)    (1,572)
  Proceeds from sale of fixed assets..............           13         --
                                                        -------     ------
Net cash used in investing activities.............       (1,420)    (1,572)
                                                        -------     ------
Cash flows from financing activities:
  Net payment of short-term debt..................         (250)    (1,214)
  Dividend........................................      (11,007)        --
                                                        -------    -------
Net cash used in financing activities.............      (11,257)    (1,214)
                                                        -------    -------
Net increase in cash and cash equivalents.........          732        343
Cash and cash equivalents at beginning of period..           95        441
                                                        -------    -------
Cash and cash equivalents at end of period........      $   827    $   784
                                                        =======    =======

Supplemental disclosures of cash flow information:
  Cash paid during the year for:
    Interest......................................     $     4     $   88
                                                       =======     ======
    Income taxes..................................     $ 4,617     $  419
                                                       =======     ======
</TABLE>

      See accompanying notes to the consolidated financial statemen

<PAGE>
          WELLS ELECTRONICS, INC. AND SUBSIDIARIES
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      December 26, 1997
                        (In thousands)

1.  Nature of Business

   Wells Electronics, Inc. ("the Company"), an Indiana
Corporation, was a wholly owned subsidiary of UL America, Inc.,
whose ultimate parent company, Siebe plc, is a publicly held
corporation based in the United Kingdom.

   The Company has two subsidiaries: Wells Electronics Asia Pte
Ltd. in Singapore ("Wells Asia") which is a wholly owned
subsidiary and Wells Japan Ltd. ("Wells Japan") in Japan which is
approximately 98% owned by the Company. The remaining 2% is owned
by a Japanese corporation.

   The Company is principally engaged in designing, developing,
manufacturing and marketing a broad line of burn-in/test sockets
and plastic carriers for the global semiconductor industry. These
products are employed in the handling and quality assurance phase
of semiconductor manufacturing.

   UL America, Inc.'s ultimate parent, Unitech plc, was acquired
by Siebe plc, on May 2, 1996. Following the acquisition, a new
basis of accounting was applied. The fair market revaluation of
the Company's assets and liabilities resulted in an acquisition
adjustment of $8,255, net of the related deferred tax liability
of $5,962. As a result of the acquisition, property, plant and
equipment was written up to appraised fair market value of $8,535
(net historical cost was $4,319). Additionally, trademarks and
software were written up to appraised fair market value of
$10,001 (net historical cost was $0) and goodwill of $708 was
retained. There were no other significant accounting adjustments.

   On December 26, 1997, UL America, Inc. sold all of the
Company's issued and outstanding shares of common stock to PCD
Inc. The purchase price of this transaction was $130 million.

2.  Summary of Significant Accounting Policies

   Basis of Presentation

   The consolidated financial statements include the accounts of
Wells Electronics, Inc. and its subsidiaries. Significant
intercompany balances and transactions have been eliminated. The
consolidated financial statements are prepared in accordance with
United States generally accepted accounting principles. The
<PAGE>
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 financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. The
most significant estimates included in these financial statements
are allowance for uncollectible accounts, inventory reserves, and
warranty reserves.

   Revenue Recognition

   Sales and related cost of sales are recognized upon shipment
of products to customers.

   Cash and Cash Equivalents

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

   Concentration of Credit Risk

   Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade
receivables. The Company provides credit to customers in the
normal course of business. Collateral is not required for trade
receivables, but ongoing credit evaluations of customers'
financial condition are performed. Additionally, the Company
maintains reserves for potential credit losses. As of December
26, 1997 the Company had no significant receivable write-offs.
The Company operates in a single segment of the semiconductor
industry.

   Research and Development

   Research and development costs are charged to expense as
incurred.

   Inventories

   Inventories are stated at the lower of cost or market. The
inventories are valued at standard cost which approximates the
first-in, first-out (FIFO) cost method. Certain inventories are
valued at the moving average cost method.



<PAGE>
   Property, Plant and Equipment

   Property, plant and equipment acquired on May 2, 1996 are
stated at fair value based upon independent appraisal. Subsequent
additions are recorded at cost. Equipment under capital leases is
stated at the present value of minimum lease payments at the
inception of the lease.

   Material, labor and overhead costs associated with the
manufacture of molds are capitalized and classified as tooling.
Acquisition cost is used to cost molds which are purchased from
outside vendors.

   Depreciation is provided using the straight-line method over
the estimated useful lives of depreciable properties as follows:
buildings and improvements, 10 to 33 years; machinery and
equipment, 7 to 13 years; and tooling, 2 to 6 years.

   Equipment held under capital leases and lease improvements are
amortized using the straight-line method over the shorter of the
lease term or estimated useful life of the asset.

     Income Taxes

   The Company recognizes deferred tax assets and liabilities for
the expected future tax consequences of temporary differences
between the financial statement bases and the tax bases of the
Company's assets and liabilities using enacted statutory tax
rates applicable to future years.

   Intangible Assets

   The straight-line method is used to amortize intangible
assets. The goodwill and trademarks are amortized to expense over
20 years and computer software is amortized over 6 years.

   Foreign Currency Translation

   The accounts of foreign subsidiaries are measured using local
currency as the functional currency. For those operations, assets
and liabilities are translated into US dollars at the end of
period exchange rates and income and expenses are translated at
the average exchange rates. Net exchange gain or losses resulting
from such translation are excluded from net income and
accumulated in a separate component of shareholder's equity.




<PAGE>
   Net Income Per Common Share

   Net income per common share is computed using the weighted
average number of shares of common stock outstanding.

3.  Foreign Operations

   The Company's net income is affected by foreign currency
exchange (gains) losses resulting from translating foreign
currency denominated trade receivables and payables of Wells
Japan and Wells Asia and other realized and unrealized foreign
currency (gains) losses.

4.  Inventories

   Inventories consist of the following:
<TABLE>
          <S>                                   <C>
           Raw material and supplies.......      $1,249
           Work in process.................         258
           Finished goods..................         372
                                                 ------
                                                 $1,879
                                                 ======

</TABLE>

5.  Property, Plant and Equipment

   Property, plant and equipment consist of the following:
<TABLE>
          <S>                                       <C>
           Buildings and improvements..........      $   245
           Machinery and equipment.............        4,759
           Tooling.............................        6,721
           Construction in progress............          249
                                                     -------
                                                      11,974
           Less accumulated depreciation.......       (2,473)
                                                     -------
                                                     $ 9,501
                                                     =======
</TABLE>

6.  Intangible Assets

   Intangible assets consist of the following:


<PAGE>
<TABLE>
         <S>                               <C>
          Goodwill......................    $   708
          Computer software.............        327
          Trademarks....................      9,674
                                            -------
                                             10,709
          Less accumulated amortization.       (963)
                                            -------
                                            $ 9,746
                                            =======
</TABLE>

7.  Accrued Expenses and Other Current Liabilities

   Accrued liabilities consist of the following:

<TABLE>
         <S>                                   <C>
          Compensation and benefits.........     $1,027
          Income taxes payable..............      2,666
          Product warranty..................        502
          Other accrued liabilities.........        143
                                                 ------
                                                 $4,338
                                                 ======
</TABLE>

8.  Income Tax Expense

   Components of income tax expense (benefit) consist of:
<TABLE>
<CAPTION>
                              CURRENT   DEFERRED     TOTAL
       <S>                   <C>        <C>        <C>
        Federal...........    $ 2,843    $   80     $ 2,923
        State and local...        701         -         701
        Foreign...........      2,230      (209)      2,021
                              -------    ------     -------
                              $ 5,774    $ (129)    $ 5,645
                              =======    ======     =======
</TABLE>


   Actual income tax expense differs from the amounts computed by
applying the enacted US federal corporate rate to income before
income taxes as a result of the following:


<PAGE>
<TABLE>

    <S>                                                <C>
     Federal income tax expense at statutory rate       $ 4,051
     Increase resulting from:
       Foreign tax rate differential.............           772
       State income taxes, net...................           463
       Other, net................................           359
                                                        -------
                                                        $ 5,645
                                                        =======
</TABLE>

     The tax effect of temporary differences that give rise to
deferred tax assets and liabilities follows:

<TABLE>
<CAPTION>
     Deferred tax assets:
      <S>                                              <C>
       Inventories - principally obsolesence            $  280
       Warranty accruals....................               300
       Compensation and benefit accruals....               142
       Bad debts............................                36
                                                        ------
         Net deferred tax assets............               758
                                                        ------
     Deferred tax liabilities:
       Property, plant and equipment........             2,075
       Intangible assets....................             4,084
       Other................................               152
                                                        ------
         Total deferred tax liabilities.....             6,311
                                                        ------
         Net deferred tax liability.........            $5,553
                                                        ======
</TABLE>

9.  Leases

   The Company leases certain of its manufacturing facilities,
sales offices and equipment. Some leases include provisions for
renewals and purchases at the Company's option.

   Rental expense for all operating leases approximated $453 for
the 34 weeks ended December 26, 1997

   Future minimum operating lease payments consist of the
following at December 26, 1997:
<PAGE>
<TABLE>
    <S>                                      <C>
     YEAR
     1998...............................      $   563
     1999...............................          435
     2000...............................          342
     2001...............................          335
     2002...............................          327
     Thereafter.........................        1,563
                                              -------
     Total minimum lease payments.......      $ 3,565
                                              =======
</TABLE>

10.  Profit Sharing and Retirement Plans

   The Company has adopted a Plan ("401(k) Plan") pursuant to
Section 401 of the Internal Revenue Code. Salaried employees may
contribute a percentage of their compensation to the 401(k) Plan,
but not in excess of the maximum allowed under the Code. Salaried
employees are eligible for participation at their one year
anniversary. The Company makes matching contributions of 25
percent of employee contributions but not in excess of the
maximum allowed under the Code. In addition to any Employer
401(k) Contribution discussed above, the Company in any Plan
Year, to the extent it has Net Profits or retained earnings, may
make additional matching Employer 401(k) Contributions to the
extent it deems appropriate at its complete discretion.

   The Company has also adopted a Retirement Income Plan for the
hourly employees whereby the Company will make a contribution of
$0.19 per hour for all hours worked into a retirement income
plan, with the employees contributing a matching amount. The
contribution will increase to $0.20 and $0.22 per all hours
worked effective February 19, 1998 and 1999, respectively. The
employee matching contribution will increase accordingly.

   The Company's combined matching contributions for the 401(k)
Plan and Retirement Income Plan were approximately $72, for the
34 weeks ended December 26, 1997.

11.  Commitments and Contingencies

   The Company has been party to ongoing litigation with Wayne K.
Pfaff and an affiliated corporation regarding alleged patent
infringement.



<PAGE>
   In litigation between Wells and Pfaff concerning the Pfaff
Leadless Patent, the United States Court of Appeals for the
Federal Circuit has found all of the individual descriptions of
the invention (the "Claims" of the patent) of the Pfaff Leadless
Patent which were at issue in that case to be invalid.  Certain
other Claims of the patent were not an issue in that case, and
their validity was not decided by the court, because Pfaff did
not allege that products of Wells infringed such Claims.  In
March, 1998, the United States Supreme Court accepted an appeal
on that case.  Unless overturned, the Court of Appeals decision
as to the invalidity of such Claims of the Pfaff Leadless Patent
will be binding.

   The Company believes, based on the advice of counsel, that the
Company has meritorious defenses against any allegations of
infringement under the Pfaff Patents, and, if necessary, the
Company will vigorously litigate their positions.  There can be
no assurance, however, that the Company will prevail in any
pending or future litigation, and a final court determination
that the Company has infringed the Pfaff Leadless Patent could
have a material adverse effect on the Company.  Such adverse
effect could include, without limitation, the requirement that
the Company pay substantial damages for past infringement and an
injunction against the manufacture or sale in the United States
of such products as are found to be infringing.


 12.  Segment and Geographic Information

   The Company operates in the integrated circuit connector
industry which is a single industrial segment. There were three
customers who accounted for approximately 30%, 12% and 11% of the
Company's sales during the 34 weeks ended December 26, 1997. The
Company had no other single customer with sales greater than 10%
of total sales.

   Sales between geographic areas are at cost plus approximately
50% mark-up.  The Company has significant operations in foreign
countries. Information regarding operations by geographic area
for the 34 weeks ended December 26, 1997 is as follows:
<TABLE>
<CAPTION>
                                     USA       FAR EAST
         <S>                      <C>          <C>
          Net sales............    $16,402      $12,866
          Operating income.....      6,701        4,883
          Identifiable assets..     19,573        7,319

</TABLE>

<PAGE>
13.  Summarized Quarterly Financial Data (unaudited) for the:
<TABLE>
<CAPTION>
                          Three Months Ended     Two Months
                         --------------------       Ended
                         August 2  November 1      July 29
                         --------  ----------    ----------
<S>                     <C>        <C>            <C>
Fiscal 1998
-----------
  Net Sales........      $13,059    $ 9,675        $ 6,500
  Gross Profit.....        8,207      6,414          4,027
  Net Income (loss)        3,308      2,629           (725)



































<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON AUDITING
AND FINANCIAL DISCLOSURE

     None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

   For information with respect to the Executive Officers of the
Company, see "Executive Officers of the Registrant" at the end of
Part I of this Report. For information with respect to the
Directors of the Company, see "Election of Directors" in the
Proxy Statement for the PCD Inc. 1998 Annual Shareholders'
Meeting, which portion of the Proxy Statement hereby is
incorporated by reference.

   Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's executive officers, directors,
and persons owning ten percent or more of a registered class of
the Company's equity securities to file reports of ownership and
changes in ownership of all equity and derivative securities of
the Company with the Securities and Exchange Commission ("SEC").
SEC regulations also require that a copy of all such Section
16(a) forms filed must be furnished to the Company by such
officers, directors and shareholders.

   Based solely on a review of the copies of such forms and
amendments thereto received by the Corporation, or written
representations from the Company's officers and directors that no
Forms 5 were required to be filed, the Company believes that
during 1997 all Section 16(a) filing requirements applicable to
its officers, directors and shareholders were met with the
exception of a report covering one transaction that was filed
late. Mr. Mullin's Section 16(a) filing on Form 3 was
inadvertently filed three days late. The late filing was made
promptly upon discovery of the oversight.

ITEM 11. EXECUTIVE COMPENSATION

   The information contained under the caption "EXECUTIVE
COMPENSATION" in the 1998 Proxy Statement is incorporated herein
by reference.

ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   The information contained under the caption "SECURITY
OWNERSHIP OF MANAGEMENT" and "PRINCIPAL STOCKHOLDERS" in the 1998
Proxy Statement is incorporated herein by reference.
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information contained under the caption "Certain
Relationships and Related Transactions" in the 1998 Proxy
Statement is incorporated herein by reference.

                             PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Documents Filed as a part of the Form 10-K Report


  1) Financial Statements

     PCD INC.
       December 31, 1997 and 1996
       Report of Independent Accountants
       Consolidated Balance Sheets as of December 31, 1997 and 1996
       Consolidated Statements of Operations for the years ended December 31,
        1997, 1996 and 1995
       Consolidated Statements of Stockholders' Equity for the years ended
        December 31, 1997, 1996 and 1995.
       Consolidated Statements of Cash Flows for the years ended December 31,
        1997, 1996 and 1995
       Notes to Consolidated Financial Statements

     WELLS ELECTRONICS, INC.
       MAY 3, 1997 and APRIL 27, 1996
       Independent Auditors' Report
       Consolidated Balance Sheets as of May 3, 1997 and April 27, 1996
       Consolidated Statements of Income for the 53 weeks ended May 3, 1997,
        the 48 weeks ended April 27, 1996 and 52 weeks ended June 3, 1995
       Consolidated Statements of Shareholder's Equity for the 53 weeks ended
        May 3, 1997, 48 weeks ended April 27, 1996 and 52 weeks ended June 3,
        1995
       Consolidated Statements of Cash Flows for the 53 weeks ended May 3,
        1997, 48 weeks ended April 27, 1996 and 52 weeks ended June 3, 1995
       Notes to Consolidated Financial Statements

     WELLS ELECTRONICS, INC.
       DECEMBER 26, 1997
       Independent Auditors' Report
       Consolidated Balance Sheets as of December 26, 1997 and
        December 31, 1996 (Unaudited)
       Consolidated Statements of Income for the 34 weeks ended December 26,
        1997 and 35 weeks ended December 31, 1996 (Unaudited)
       Consolidated Statements of Shareholder's Equity for the 34 weeks
        ended December 26, 1997
       Consolidated Statements of Cash Flows for the 34 weeks ended December
        26, 1997 and the 35 weeks ended December 31, 1996 (Unaudited)
       Notes to Consolidated Financial Statements




<PAGE>
  2) Financial Statement Schedules

     All financial statements and schedules have been omitted
     because the required information is included in the
     consolidated financial statements or the notes thereto, or
     is not applicable or required.

  3) Listing of Exhibits

</TABLE>
<TABLE>
<CAPTION>
      Exhibit
       Number                                 Description of Document
      -------      -----------------------------------------------------------------------------
      <S>         <C>
       2.1(F4)     Share Purchase Agreement  among UL America, Inc., Wells Electronics, Inc.
                    and PCD Inc. dated as of November 17, 1997.
       2.2(F4)     Undertaking to Furnish Copies of Omitted Schedules to Share Purchase
                    Agreement dated as of November 17, 1997.
       3.1(F1)     Restated Article of Organization of Registrant effective March 22, 1996.
       3.2(F1)     By-Laws of the Registrant, as amended, effective April 1, 1996.
       4.1(F1)     Articles 3, 4, 5 and 6 of the Restated Articles of Organization of Registrant
                    (included in Exhibit 3.1).
       4.2(F1)     Specimen Stock Certificate.
       10.1(F4)    Loan Agreement between PCD Inc. and Fleet National Bank dated as of December
                    26, 1997.
       10.2(F4)    Unlimited Guaranty from Wells Electronics, Inc. to Fleet National Bank dated
                    as of December 26, 1997.
       10.3(F4)    Security Agreement between PCD Inc. and Fleet National Bank dated as of
                    December 26, 1997.
       10.4(F4)    Security Agreement between Wells Electronics, Inc. and Fleet National Bank
                    dated as of December 26, 1997.
       10.5(F4)    Stock Pledge Agreement between PCD Inc. and Fleet National Bank dated as of
                    December 26, 1997.
       10.6(F4)    Stock Pledge Agreement between Wells Electronics, Inc. and Fleet National Bank
                    dated as of December 26, 1997.
       10.7(F4)    Conditional Patent Assignment from PCD Inc. to Fleet National Bank dated as of
                    December 26, 1997.
       10.8(F4)    Conditional Patent Assignment from Wells Electronics, Inc. to Fleet National
                    Bank dated as of December 26, 1997.
       10.9(F4)    Conditional Patent Assignment from Wells Japan Kabushiki Kaisha to Fleet
                    National Bank dated as of December 26, 1997.
       10.10(F4)   Conditional Trademark Collateral Assignment from PCD Inc. to Fleet National
                    Bank dated as of December 26, 1997.
       10.11(F4)   Conditional Trademark Collateral Assignment from Wells Electronics, Inc. to
                    Fleet National Bank dated as of December 26, 1997.
       10.12(F4)   Collateral Assignment of Contracts, Leases, Licenses and Permits from PCD Inc.
                    to Fleet National Bank dated as of December 26, 1997.
       10.13(F4)   Collateral Assignment of Contracts, Leases, Licenses and Permits from Wells
                    Electronics, Inc. to Fleet National Bank dated as of December 26, 1997.
       10.14(F4)   Undertaking to Furnish Copies of Omitted Exhibits and Schedules to Loan
                    Agreement and Related Documents dated as of December 26, 1997.
       10.15(F4)   Subordinated Debenture and Warrant Purchase Agreement between PCD Inc. and
                    Emerson Electric Co. dated as of December 26, 1997.
       10.16(F4)   Subordinated Debenture issued to Emerson Electric Co. dated December 26, 1997.
       10.17(F4)   Common Stock Purchase Warrant issued to Emerson Electric Co. dated December
                    26, 1997.
       10.18(F4)   Registration Rights Agreement between PCD Inc. and Emerson Electric Co. dated
                    as of December 26, 1997.
       10.19(F4)   Subordination Agreement  among PCD Inc., Emerson Electric Co. and Fleet
                    National Bank dated as of December 26, 1997.
       10.20(F4)   Undertaking to Furnish Copies of Omitted Exhibits to Subordinated Debenture
                    and Warrant Purchase Agreement dated as of December 26, 1997.
       10.21(F1)   Lease dated June 29, 1987, between Centennial Park Associates Realty Trust II
                    and the Company premises located at Two Technology Drive, Centennial Park,
                    Peabody, Massachusetts.
       10.22(F5)   Second Amendment to lease agreement dated July 15, 1993, between Centennial
                    Park Associates Partnership III and the Company.
       10.23(F2)   Third amendment to lease agreement dated as of June 25, 1996, between the
                    Company and Cent Associates Limited Partnership III.

<PAGE>
       10.24(F1)   Lease dated May 1995, between CMD Southwest Four and CTi Technologies, Inc.,
                    for premises to 2102 W. Quail Avenue, Phoenix, Arizona.
       10.25(F5)   Lease dated September 21, 1995, between Blackthorn Area Partners and Wells
                    Electronics, Inc. for premises located at 52940 Olive Road, South Bend,
                    Indiana.
       10.26(F5)   Amendment dated May 16, 1997 to Lease dated September 21, 1995, between
                    Blackthorn Area Partners and Wells Electronics, Inc. for premises located at
                    52940 Olive Road, South Bend, Indiana.
       10.27(F5)   Sublease dated October 10, 1992, between Daiwa House Kogya Co., Ltd and Wells
                    Japan, Ltd. for premises located at Paleana Building 2-2-15, Shin-Yokohoma,
                    Kohuku-Ku, Yokohoma, Japan (English translation).
       10.28(F5)   Lease dated September 25, 1997, between United Building and Leasing
                    Corporation and Wells Electronics, Inc. for premises located at 421 Amity
                    Road, Swatara, Pennsylvania.
       10.29(F1)   Registrant's 1992 Stock Option Plan and related forms of stock option
                    agreement.
       10.30(F1)   Registrant's 1996 Stock Option Plan.
       10.31(F1)   Registrant's 1996 Eligible Directors Stock Plan.
       10.32(F3)   Form of option agreements for the 1996 Stock Plan.
       10.33(F3)   Form of option agreements for the 1996 Eligible Directors Stock Plan.
       10.34(F1)   April 2, 1985 Stock Purchase Agreement and Amendment to Stock Purchase
                    Agreement dated March 31, 1983.
       10.35(F5)   Collective Bargaining Agreement between Wells Electronics, Inc. and Local
                    Union 1392, International Brotherhood of Electrical Workers, dated February
                    19,1997.
       10.36(F1)   Letter of Agreement dated September 18, 1995, between International
                    Assemblers, Inc. and CTi Technologies, Inc.
       10.37(F5)   Letter Agreement with Richard J. Mullin, effective December 26, 1997.
       10.38(F5)   Management Incentive Plan.
       11.1(F5)    Statement re computation of per share earnings.
       21.1(F5)    Subsidiaries of the Registrant.
       23.1        Consent of Coopers and Lybrand L.L.P., independent accountants.
       23.2        Consent of KPMG Peat Marwick LLP, independent accountants.
       27.1        Financial Data Schedule for the year ended December 31, 1997.
       27.2        Financial Data Schedule for the quarter ended September 27, 1997 (restated).
       27.3        Financial Data Schedule for the quarter ended June 28, 1997 (restated).
       27.4        Financial Data Schedule for the quarter ended March 29, 1997 (restated).
       27.5        Financial Data Schedule for the year ended December 31, 1996 (restated).
       27.6        Financial Data Schedule for the quarter ended September 28, 1996 (restated).
       27.7        Financial Data Schedule for the quarter ended June 29, 1996 (restated).
       27.8        Financial Data Schedule for the quarter ended March 30, 1996 (restated).
       99.1(F4)    Press Release of PCD Inc. dated December 29, 1997.
-----------
</TABLE>

(F1)  A copy has been previously filed with the Company's registration
      statement on Form S-1 (Registration no. 333-1266), as filed on February
      12, 1996, and amended on March 15 and March 21, 1996, and is
      incorporated in this document by reference.

(F2)  A copy has been previously filed with the Company's annual report on
      Form 10-K (Commission file no. 0-27744), as filed on March 28, 1997,
      and is incorporated in this document by reference.

(F3)  A copy has been previously filed with the Company's quarterly report on
      Form 10-Q, (Commission file no. 0-27744), as filed on September 27,
      1997, and is incorporated in this document by reference.

(F4)  A copy has been previously filed with the Company's current report on
      Form 8-K, (Commission file no. 0-27744), as filed on January 9, 1998,
      and as amended on March 11 and 24, 1998 and is incorporated in this
      document by reference.

(F5)  A copy has been previously filed with the Company's registration
      statement on form S-1 (Registration No. 333-46137), as filed on
      February 12, 1998, and amended on March 20, 1998, and is incorporated
      in this document by reference.

<PAGE>
   Management Contracts and Compensatory Plans
<TABLE>
<CAPTION>

   Exhibit
    Number     Description of Document
   -------     -----------------------
  <S>         <C>
   10.29(F1)   Registrant's 1992 Stock Option Plan and related forms of stock option
                agreement.
   10.30(F1)   Registrant's 1996 Stock Option Plan.
   10.31(F1)   Registrant's 1996 Eligible Directors Stock Plan.
   10.32(F2)   Form of option agreements for the 1996 Stock Plan.
   10.33(F2)   Form of option agreements for the 1996 Eligible Directors Stock Plan.
   10.37(F3)   Letter Agreement with Richard J. Mullin, effective December 26, 1997.
   10.38(F3)   Management Incentive Plan.
</TABLE>
----------
(F1)  A copy has been previously filed with the Company's registration
      statement on Form S-1 (Registration no. 333-1266), as filed on February
      12, 1996, and amended on March 15 and March 21, 1996, and is
      incorporated in this document by reference.

(F2)  A copy has been previously filed with the Company's quarterly report on
      Form 10-Q, (Commission file no. 0-27744), as filed on September 27,
      1997, and is incorporated in this document by reference.

(F3)  A copy has been previously filed with the Company's registration
      statement on form S-1 (Registration No. 333-46137), as filed on
      February 12, 1998, and amended on March 20, 1998, and is incorporated
      in this document by reference.

B.  Reports on Form 8-K

    The Company filed no reports on Form 8-K during the fourth quarter of
1997.



























<PAGE>
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereto duly authorized.

PCD INC.

Dated: March 31, 1998                  By: /s/ John L. Dwight, Jr.
                                           -----------------------------
                                           John L. Dwight, Jr.
                                           Chairman of the Board, President
                                           and
                                           Chief Executive Officer

Dated: March 31, 1998                  By: /s/ Mary L. Mandarino
                                           ----------------------------
                                           Mary L. Mandarino
                                           Vice President - Finance and
                                           Administration, Chief Financial
                                           Officer, and Treasurer (principal
                                           financial and accounting officer)

Dated: March 31, 1998                  By: /s/ Bruce E. Elmblad
                                           ----------------------------
                                           Bruce E. Elmblad
                                           Director

Dated: March 31, 1998                  By: /s/ Harold F. Faught
                                           ----------------------------
                                           Harold F. Faught
                                           Director

Dated: March 31, 1998                  By: /s/ C. Wayne Griffith
                                           ----------------------------
                                           C. Wayne Griffith
                                           Director

Dated: March 31, 1998                  By: /s/ Theodore C. York
                                           ----------------------------
                                           Theodore C. York
                                           Director















<PAGE>
                                EXHIBIT INDEX
<TABLE>
<CAPTION>
      Exhibit
       Number                                 Description of Document
      -------      -----------------------------------------------------------------------------
      <S>         <C>
       2.1(F4)     Share Purchase Agreement  among UL America, Inc., Wells Electronics, Inc.
                    and PCD Inc. dated as of November 17, 1997.
       2.2(F4)     Undertaking to Furnish Copies of Omitted Schedules to Share Purchase
                    Agreement dated as of November 17, 1997.
       3.1(F1)     Restated Article of Organization of Registrant effective March 22, 1996.
       3.2(F1)     By-Laws of the Registrant, as amended, effective April 1, 1996.
       4.1(F1)     Articles 3, 4, 5 and 6 of the Restated Articles of Organization of Registrant
                    (included in Exhibit 3.1).
       4.2(F1)     Specimen Stock Certificate.
       10.1(F4)    Loan Agreement between PCD Inc. and Fleet National Bank dated as of December
                    26, 1997.
       10.2(F4)    Unlimited Guaranty from Wells Electronics, Inc. to Fleet National Bank dated
                    as of December 26, 1997.
       10.3(F4)    Security Agreement between PCD Inc. and Fleet National Bank dated as of
                    December 26, 1997.
       10.4(F4)    Security Agreement between Wells Electronics, Inc. and Fleet National Bank
                    dated as of December 26, 1997.
       10.5(F4)    Stock Pledge Agreement between PCD Inc. and Fleet National Bank dated as of
                    December 26, 1997.
       10.6(F4)    Stock Pledge Agreement between Wells Electronics, Inc. and Fleet National Bank
                    dated as of December 26, 1997.
       10.7(F4)    Conditional Patent Assignment from PCD Inc. to Fleet National Bank dated as of
                    December 26, 1997.
       10.8(F4)    Conditional Patent Assignment from Wells Electronics, Inc. to Fleet National
                    Bank dated as of December 26, 1997.
       10.9(F4)    Conditional Patent Assignment from Wells Japan Kabushiki Kaisha to Fleet
                    National Bank dated as of December 26, 1997.
       10.10(F4)   Conditional Trademark Collateral Assignment from PCD Inc. to Fleet National
                    Bank dated as of December 26, 1997.
       10.11(F4)   Conditional Trademark Collateral Assignment from Wells Electronics, Inc. to
                    Fleet National Bank dated as of December 26, 1997.
       10.12(F4)   Collateral Assignment of Contracts, Leases, Licenses and Permits from PCD Inc.
                    to Fleet National Bank dated as of December 26, 1997.
       10.13(F4)   Collateral Assignment of Contracts, Leases, Licenses and Permits from Wells
                    Electronics, Inc. to Fleet National Bank dated as of December 26, 1997.
       10.14(F4)   Undertaking to Furnish Copies of Omitted Exhibits and Schedules to Loan
                    Agreement and Related Documents dated as of December 26, 1997.
       10.15(F4)   Subordinated Debenture and Warrant Purchase Agreement between PCD Inc. and
                    Emerson Electric Co. dated as of December 26, 1997.
       10.16(F4)   Subordinated Debenture issued to Emerson Electric Co. dated December 26, 1997.
       10.17(F4)   Common Stock Purchase Warrant issued to Emerson Electric Co. dated December
                    26, 1997.
       10.18(F4)   Registration Rights Agreement between PCD Inc. and Emerson Electric Co. dated
                    as of December 26, 1997.
       10.19(F4)   Subordination Agreement  among PCD Inc., Emerson Electric Co. and Fleet
                    National Bank dated as of December 26, 1997.
       10.20(F4)   Undertaking to Furnish Copies of Omitted Exhibits to Subordinated Debenture
                    and Warrant Purchase Agreement dated as of December 26, 1997.
       10.21(F1)   Lease dated June 29, 1987, between Centennial Park Associates Realty Trust II
                    and the Company premises located at Two Technology Drive, Centennial Park,
                    Peabody, Massachusetts.
       10.22(F5)   Second Amendment to lease agreement dated July 15, 1993, between Centennial
                    Park Associates Partnership III and the Company.
       10.23(F2)   Third amendment to lease agreement dated as of June 25, 1996, between the
                    Company and Cent Associates Limited Partnership III.
       10.24(F1)   Lease dated May 1995, between CMD Southwest Four and CTi Technologies, Inc.,
                    for premises to 2102 W. Quail Avenue, Phoenix, Arizona.
       10.25(F5)   Lease dated September 21, 1995, between Blackthorn Area Partners and Wells
                    Electronics, Inc. for premises located at 52940 Olive Road, South Bend,
                    Indiana.
       10.26(F5)   Amendment dated May 16, 1997 to Lease dated September 21, 1995, between
                    Blackthorn Area Partners and Wells Electronics, Inc. for premises located at
                    52940 Olive Road, South Bend, Indiana

<PAGE>
       10.27(F5)   Sublease dated October 10, 1992, between Daiwa House Kogya Co., Ltd and Wells
                    Japan, Ltd. for premises located at Paleana Building 2-2-15, Shin-Yokohoma,
                    Kohuku-Ku, Yokohoma, Japan (English translation).
       10.28(F5)   Lease dated September 25, 1997, between United Building and Leasing
                    Corporation and Wells Electronics, Inc. for premises located at 421 Amity
                    Road, Swatara, Pennsylvania.
       10.29(F1)   Registrant's 1992 Stock Option Plan and related forms of stock option
                    agreement.
       10.30(F1)   Registrant's 1996 Stock Option Plan.
       10.31(F1)   Registrant's 1996 Eligible Directors Stock Plan.
       10.32(F3)   Form of option agreements for the 1996 Stock Plan.
       10.33(F3)   Form of option agreements for the 1996 Eligible Directors Stock Plan.
       10.34(F1)   April 2, 1985 Stock Purchase Agreement and Amendment to Stock Purchase
                    Agreement dated March 31, 1983.
       10.35(F5)   Collective Bargaining Agreement between Wells Electronics, Inc. and Local
                    Union 1392, International Brotherhood of Electrical Workers, dated February
                    19,1997.
       10.36(F1)   Letter of Agreement dated September 18, 1995, between International
                    Assemblers, Inc. and CTi Technologies, Inc.
       10.37(F5)   Letter Agreement with Richard J. Mullin, effective December 26, 1997.
       10.38(F5)   Management Incentive Plan.
       11.1(F5)    Statement re computation of per share earnings.
       21.1(F5)    Subsidiaries of the Registrant.
       23.1        Consent of Coopers and Lybrand L.L.P., independent accountants.
       23.2        Consent of KPMG Peat Marwick LLP, independent accountants.
       27.1        Financial Data Schedule for the year ended December 31, 1997.
       27.2        Financial Data Schedule for the quarter ended September 27, 1997 (restated).
       27.3        Financial Data Schedule for the quarter ended June 28, 1997 (restated).
       27.4        Financial Data Schedule for the quarter ended March 29, 1997 (restated).
       27.5        Financial Data Schedule for the year ended December 31, 1996 (restated).
       27.6        Financial Data Schedule for the quarter ended September 28, 1996 (restated).
       27.7        Financial Data Schedule for the quarter ended June 29, 1996 (restated).
       27.8        Financial Data Schedule for the quarter ended March 30, 1996 (restated).
       99.1(F4)    Press Release of PCD Inc. dated December 29, 1997.
-----------
</TABLE>

(F1)  A copy has been previously filed with the Company's registration
      statement on Form S-1 (Registration no. 333-1266), as filed on February
      12, 1996, and amended on March 15 and March 21, 1996, and is
      incorporated in this document by reference.

(F2)  A copy has been previously filed with the Company's annual report on
      Form 10-K (Commission file no. 0-27744), as filed on March 28, 1997,
      and is incorporated in this document by reference.

(F3)  A copy has been previously filed with the Company's quarterly report on
      Form 10-Q, (Commission file no. 0-27744), as filed on September 27,
      1997, and is incorporated in this document by reference.

(F4)  A copy has been previously filed with the Company's current report on
      Form 8-K, (Commission file no. 0-27744), as filed on January 9, 1998,
      and as amended on March 11 and 24, 1998 and is incorporated in this
      document by reference.

(F5)  A copy has been previously filed with the Company's registration
      statement on form S-1 (Registration No. 333-46137), as filed on
      February 12, 1998, and amended on March 20, 1998, and is incorporated
     in this document by reference.








<EXHIBIT>
                                                                EXHIBIT 23.1


                CONSENT OF INDEPENDENT ACCOUNTANTS

     We consent to the incorporation by reference in the registration
statement of PCD Inc. on Form S-8 (File Nos. 333-07393, 333-07403 and
333-07405) of our report dated February 11, 1998, except information included
under the caption Litigation in Note 11, Commitments and Contingencies, as to
which the date is March 18, 1998, on our audits of the consolidated financial
statements of PCD Inc. as of December 31, 1997 and 1996 and for the
years ended December 31, 1997, 1996 and 1995 which report is included in this
Annual Report on Form 10-K.

                                 /s/ Coopers & Lybrand L.L.P


Coopers & Lybrand, L.L.P.
Boston, Massachusetts
March 30, 1998



<EXHIBIT>
                                                                  EXHIBIT 23.2
                      CONSENT OF KPMG PEAT MARWICK LLP


We consent to the incorporation by reference in the Registration Statements of
PCD Inc. on Form S-8 (File Nos. 333-07393, 333-07403 and 333-7405) of our
report dated January 15, 1998, relating to the consolidated balance sheets of.
Wells Electronics, Inc. and subsidiaries as of May 3, 1997 and April 27, 1996.
and the related consolidated statements of income, shareholder's equity, and.
cash flows for the 53 weeks ended May 3, 1997, the 48 weeks ended April 27, 1996
and the 52 weeks ended June 3, 1995, which  report appears in the December 31,
1997, annual report on Form 10-K PCD Inc.  We also consent to the inclusion of
our report dated February 4, 1998 relating to the consolidated balance sheet of
Wells Electronics Inc. and subsidiaries as of December 26, 1997 and the related
consolidated statements of income, shareholder's equity, and cash flows for the
34 weeks then ended, which report also appears in the December 31, 1997, annual
report on Form 10-K PCD Inc.


/s/ KPMG Peat Marwick LLP

Chicago, Illinois
March 10, 1998