SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549
                         
                            AMENDMENT NO. 1 to

                                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 
<PAGE>
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 
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 introduction of just-in-
time ("JIT") manufacturing, inventory control techniques, and 
quick-change, in-house production tooling have substantially 
reduced the Company's delivery lead times; 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.


<PAGE>
   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. 

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.


<PAGE>
   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
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
<PAGE>
   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.

   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 & 
<PAGE>
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.

   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
<PAGE>
   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
   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's introduction of
   just-in time ("JIT") manufacturing, inventory control
   techniques and quick-change, in-house production tooling
   have substantially reduced the Company's delivery lead times
   enabling the Company to respond more quickly to its customers'
   needs.

   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
<PAGE>
   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.


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.



<PAGE>
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.

   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.
<PAGE>
   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.

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.


<PAGE>
   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.

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.
<PAGE>
   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
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
<PAGE> 
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
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 
<PAGE>
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.  In 
1997, the Company derived $2.3 million (or approximately 3.2% of 
its pro forma 1997 revenues) from products which subassembly was 
performed by such subcontractor.  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.

<PAGE>
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 
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
<PAGE>
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.


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.
<PAGE>
EMPLOYEES

   As of December 31, 1997, the Company had 362 employees and 18 
contract workers. The Company's 380 employees and contract 
workers include 306 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.


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 $21.7 million, respectively, in 1997.



<PAGE>
   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 sale of 2,000,000 shares  of its
Common Stock. The Company amended the Registration 
Statement on March 20, 1998 and April 13, 1998.  The Registration 
Statement was declared effective by the Securities and Exchange 
Commission on April 16, 1998.

   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 
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
<PAGE>
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. 

   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 
<PAGE>
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. 

   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%, 
<PAGE>
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 
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 
<PAGE>
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 
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 
<PAGE>
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
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. 


<PAGE>
   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. The basis 
for the decision of the Court of Appeals was a finding that the 
invention covered by the Pfaff Leadless Patent had been "on sale" 
for more than one year before the filing of the patent 
application.  An invention that has been "on sale" for more than 
one year before the filing of a patent application may not be 
patented.  Certain other Claims of the patent were not at issue in 
the Pfaff v. Wells case and their validity was not decided by the 
Court of Appeals, because Pfaff did not allege that products of 
Wells infringed such Claims.  These other Claims include design 
elements not incorporated into products of Wells or CTi, including 
the  use of contact pins formed with a pair of parallel blades 
extending from a common base.  The United States Supreme Court has 
accepted an appeal on the Pfaff v. Wells case, limited to the 
question of whether the Pfaff Leadless Patent should have been 
held invalid on the basis of the "on sale" bar if Pfaff's 
invention was not "fully completed" more than one year before he 
filed his patent application.  The Supreme Court could affirm or 
reverse the decision of the Court of Appeals.  If the Supreme 
Court affirms the decision of the Court of Appeals, the

<PAGE>
determination of invalidity of the Claims at issue in the Pfaff v. 
Wells case will become final.  This determination will be binding 
with respect to such Claims in the CTi v. Pfaff action in the 
District of Arizona.  The reasoning of the Pfaff v. Wells 
decision, moreover, could support CTi's position that the 
remaining Claims of that patent are invalid. This conclusion is 
based on the Company's belief that the invention covered by such 
remaining Claims was also "on sale" for more than a year before 
the date of the application of the Pfaff Leadless Patent.  If the 
Supreme Court reverses the decision of the Court of Appeals, the 
lower courts will then determine the validity of the Claims of the 
Pfaff Leadless Patent at issue on other grounds and will determine 
whether the products of Wells infringe on these Claims of the 
Pfaff Leadless Patent.  There can be no assurance that the Court 
of Appeals decision will not be 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.

<PAGE>
   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 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. 
<PAGE>
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. 

   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 
<PAGE>
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.

   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.


<PAGE>
   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. 


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; 
<PAGE>
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.

   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. The basis 
for the decision of the Court of Appeals was a finding that the 
invention covered by the Pfaff Leadless Patent had been "on sale" 
for more than one year before the filing of the patent 
application.  An invention that has been "on sale" for more than 
one year before the filing of a patent application may not be 
patented.  Certain other Claims of the patent were not at issue in 
the Pfaff v. Wells case, and their validity was not decided by the 
Court of Appeals, because Pfaff did not allege that products of 
Wells infringed such Claims.  These other Claims include design 
elements not incorporated into products of Wells or CTi, including 
the use of contact pins formed with a pair of parallel blades 
extending from a common base.  The United States Supreme Court has 
<PAGE>
accepted an appeal on the Pfaff v. Wells case, limited to the 
question of whether the Pfaff Leadless Patent should have been 
held invalid on the basis of the "on sale" bar if Pfaff's 
invention was not "fully completed" more than one year before he 
filed his patent application.  The Supreme Court could affirm or 
reverse the decision of the Court of Appeals.  If the Supreme 
Court affirms the decision of the Court of Appeals, the 
determination of invalidity of the Claims at issue in the Pfaff v. 
Wells case will become final.  This determination will be binding 
with respect to such Claims in the CTi v. Pfaff action in the 
District of Arizona. The reasoning of the Pfaff v. Wells decision, 
moreover, could support CTi's position that the remaining Claims 
of that patent are invalid. This conclusion is based on the 
Company's belief that the invention covered by such remaining 
Claims was also "on sale" for more than a year before the date of 
the application of the Pfaff Leadless Patent.  If the Supreme 
Court reverses the decision of the Court of Appeals, the lower 
courts will then determine the validity of the Claims of the Pfaff 
Leadless Patent at issue on other grounds and will determine 
whether the products of Wells infringe on these Claims of the 
Pfaff Leadless Patent.  

   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 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.

<PAGE>
     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
  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>




<PAGE>
<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>
(F1)  Initial public offering price per share. 

      On April 9, 1998, the last reported sale price for the  
   Common Stock on the Nasdaq National Market was $20.00 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

<PAGE>
   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.


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 unaudited pro forma 
Selected Consolidated Financial Data reflect a revised discount 
attributed to the Emerson Warrant in the amount of $820,000 which 
has the effect of increasing equity and reducing debt.  There is 
no impact on reported historical net income or total assets.  Such 
changes have not been reflected in the historical financial 
statements because of immateriality and will be reflected 
prospectively in the first quarter of 1998.  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 Form 10-K and 
"Management's Discussion and Analysis of Financial Condition and 
Results of Operations."

<PAGE>
<TABLE>
<CAPTION>
                                              Year Ended December 31,
                                 ------------------------------------------------------------- 
                                 Pro Forma
                                 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....   21,710    (35,578)     6,955      6,472      2,157      867
Interest income (expense), net...  (12,833)       940        725        112         23        1
Net income (loss) ............... $  4,962   $(22,836)   $ 4,786   $  3,863   $  1,301  $   507
                                  ========   ========   ========   ========   ========  =======
Net income (loss) per share (3):
  Basic.......................... $   0.83   $  (3.83)  $   0.87   $   0.85   $   0.29  $  0.11
                                  ========   ========   ========   ========   ========  =======
  Diluted ....................... $   0.73   $  (3.83)  $   0.76   $   0.75   $   0.29  $  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      5,184      4,561     4,567
                                  ========   ========   ========   ========   ========  ========

Other Data (5)(6)
-----------------
Depreciation.....................    4,140     1,530       1,389       1,026      985      1,066
Amortization of intangible assets    4,209         -           -           -        -          -
</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."
<PAGE>
(2)  Before deducting the additional interest expense for the
     value of the exercisable portion of the Emerson Warrant,
     pro forma net income was approximately $6,762,000, pro
     forma net income per share - basic was $1.14 (based on a
     weighted average number of shares outstanding of 5,954,657)
     and pro form net income per share - diluted was $1.00
     (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") was $10.4 million, $8.3 million,
     $7.5 million, $3.1 million, and $1.9 million for 1997,
     1996, 1995, 1994 and 1993, respectively.  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 amortization of intangible assets. EBITDA
     margin, which was 34.9%, 31.1%, 29.3%, 19.8%, and 15.2% for
     1997, 1996, 1995, 1994, and 1993, respectively, 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. 




<PAGE>
(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 Form 10-K.
<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 28,     May 29,
                                 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>
<PAGE>
<TABLE>
<CAPTION>
                            December 26,    May 3,  April 27,  June 3,    May 28,     May 29,
                                1997         1997     1996      1995       1994        1993
                            ------------   -------  ---------  -------    -------     ------- 
CONSOLIDATED
 BALANCE SHEET DATA:
                             <C>          <C>       <C>       <C>        <C>         <C>
Working capital (deficit).... $   757      $ 2,085   $ 2,679   $ 1,547    $ 1,860     $  (279)
Total assets.................  27,542       30,785    13,913    11,494      8,629       8,743
Total debt...................      18          268     2,611     1,699      1,458       1,301
Stockholders' equity.........  13,841       18,641     6,333     4,354      2,884       3,273
</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
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.


<PAGE>
   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 Form 10-K.  The unaudited pro forma Condensed Consolidated 
Statement of Operations reflects a revised discount attributed to the Emerson 
Warrant in the amount of $820,000 which has the effect of increasing equity and 
reducing debt.  There is no impact on reported historical net income or total 
assets.  Such changes have not been reflected in the historical financial 
statements because of immateriality and will be reflected prospectively in the 
first quarter of 1998.
<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)(2)
Amortization of acquired
 intangible assets.........         -        484         3,725(3)      4,209
                             --------    -------      --------       ------- 
Income (loss)
 from operations...........   (35,578)    16,575        40,713        21,710
Interest and other income..     1,167                   (1,067)(4)       100
Interest expense...........      (227)        (8)      (12,698)      (12,933)
                             --------    -------      --------       -------
Income (loss) before
 provisions for
 income taxes..............   (34,638)    16,567        26,948         8,877
Provisions (benefit) for
 income taxes..............   (11,802)     7,157         8,560         3,915
                             --------    -------      --------       -------
Net income (loss) before
 non-recurring item and
 extraordinary loss........  $(22,836)   $ 9,410      $ 18,388       $ 4,962
                             ========    =======      ========       ======= 
Net income (loss) per share:
  Basic....................  $  (3.83)                               $  0.83
                             ========                                =======
  Diluted..................  $  (3.83)                               $  0.73
                             ========                                =======

Weighted average number of
 common and common
 equivalent shares
 outstanding:
  Basic....................     5,955                                  5,955
                             ========                                =======
  Diluted..................     5,955                                  6,769
                             ========                                =======
</TABLE>
----------

<PAGE>
 (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 $6,762,000, pro forma net income combined per share-basic was 
$1.14 (based on a weighted average number of shares outstanding of 5,954,657) 
and pro forma net income combined per share-diluted was $1.00 (based on a 
weighted average number of common and common equivalent shares outstanding of 
6,769,479). 

 (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 trade names and 
6 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 $3.0 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.


<PAGE>
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.

   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.


<PAGE>
<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

(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 

<PAGE>
for as a purchase in accordance with APB Opinion No. 16. The 
purchase price was allocated to acquired net tangible assets 
($11.5 million), patented technologies ($3.1 million), trade 
names/trademarks ($10.4 million), in-process research and 
development ($44.4 million) and goodwill ($61.7 million).

   The goodwill and trade names have estimated useful lives of 20 
years based on Wells' long-term established position in the 
industry.  Wells is an established product developer and 
manufacturer with over 40 years of manufacturing experience and 
20-year presence in the IC package market.  The ability of Wells 
to compete in the IC package industry is in part derived from its 
reputation, worldwide locations, and the associated trade name it 
has developed over the past several decades.  Wells, through its 
close working relationships with its customers, has demonstrated 
an ability to respond to the evolving product packaging demands 
and corresponding technological requirements.  In the IC package 
industry, new product development is often linked with customers' 
packaging requirements.  Close interaction between Wells and the 
customers' engineering staff allows Wells to effectively respond 
to needs for product designs.

   The Company has utilized the income approach for valuation, 
which values an asset on future cash flows that accrue to the 
owner of the asset.  Specifically, the Company used the "relief 
from royalty" approach to the valuation of acquired patented 
technologies, trademarks and trade names.  For patented 
technologies, there are generally no additional investments 
required to achieve economic benefits for these assets which 
represent specific, discrete intangibles that are in demand in the 
marketplace as reflected by the royalties that they can command.  
Thus, it is common practice in the valuation of patented 
technologies to use the relief from royalty approach, an 
adaptation of the income approach, based on a future stream of 
hypothetical after-tax royalty payments based on market derived 
royalty rates.  For the valuation of the patented technologies 
acquired from Wells, the Company used royalty rates ranging from 1 
to 4 percent with the relief from royalty methodology.  This range 
reflects market-based royalty rates as estimated by the Company.  
The cash flows reflect after-tax royalty expense that does not 
need to be incurred due to the Company's ownership of the patented 
technologies.

   For the valuation of in-process research and development 
("IPR&D"), the Company has applied an income approach.  IPR&D 
programs typically apply a broad array of a firm's proprietary
<PAGE>
know-how, development skills and trade secrets as well as patented 
technologies.  For proprietary unpatented technologies, there may 
be no observable market-based royalty rates that could be 
considered so that a relief from royalty approach can be utilized
for valuation.  Thus, the methodology that is typically used for 
valuing IPR&D is the income or discounted cash flow approach.  In 
effect, an IPR&D program is considered to be a stand-alone 
"business" that, assuming technological feasibility is reached, 
will generate future revenues and profits.  The income approach 
considers that in order to achieve these revenues and profits, 
interim development and testing costs must be borne and capital 
investments made.  The income approach reflects both of these 
requirements in valuing an IPR&D program by computing the specific 
net cash inflows and outflows directly attributable to such 
program.  These considerations necessitate the income approach 
that the Company has used in its valuation of IPR&D.  The income 
approach also incorporates higher discount rates (applied to 
future cash flows) than those used in the valuation of the 
patented technologies.  These higher discount rates reflect the 
relative riskiness of each particular IPR&D program.  The IPR&D 
programs represent potential new technologies that are expected to 
achieve higher margins and facilitate broader product offerings.

   The patented technologies reflect the products built upon 
established technology, with an average remaining economic life of 
six years.  The Company believes that a shorter economic life for 
the acquired technology assets versus the lives of the goodwill 
and trade names is appropriate given the changing technological 
needs of its customers.  Continued application of these patented 
technologies is expected to result in next generation products and 
platforms.
  
   Approximately $44.4 million of the purchase price premium was 
written off as acquired 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 the next generation high 
density IC packaging, involving a number of projects in various 
package types.  More specifically, there are six projects for 
dual-sided surface mount ("SO") packages, six for chip scale 
packages ("CSP"), three for lan grid array ("LGA"), two for ball 
grid array ("BGA"), two for test sockets and one for a 
miscellaneous package. The aggregate 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 
either successful completion or abandonment of the projects within 
<PAGE>
24 months of the acquisition.  Among these projects, the Company 
believes that the greatest risk of failure to achieve successful 
completion relates to the LGA package, followed by the SO and CSP
packages.  The Company recognizes that the development of the
IPR&D involves certain risks such as failure of one or more of the 
critical technologies to function according to specifications or 
customer rejection, which may prevent these projects from reaching 
technological feasibility. The Company expects the economic lives 
of the IPR&D projects to range from five to eight years, if 
technological feasibility is reached. The SO packages are expected 
to have the shortest economic lives, approximately five years, 
while the CSP packages are expected to have the longest economic 
lives, approximately eight years.  Failure to successfully develop 
the IPR&D projects would negatively impact the Company's future 
performance and its ability to compete in the burn-in socket 
market.

   Wells has not had significant historical research and 
development expense due to highly focused and customer driven 
product development that generally related to a specific product 
or next generation platforms. 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.

   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.




<PAGE>
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.

   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 
<PAGE>
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 3, 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
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 3, 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 
<PAGE>
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 Form 10-K.

</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.    30.4   (119.4)   25.9    25.3
Interest income (expense), net   (18.0)     3.2     2.7     0.4
Net income (loss) ............     7.0    (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.

(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 
<PAGE>
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
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 6 to 20 
years, which will increase operating expenses by approximately 
$4.2 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. 
<PAGE>
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-
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 
<PAGE>
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
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 
<PAGE>
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 55.2% as the Debenture is expected to be 
repaid approximately four months after the date of issuance.  The 
individual components of this effective interest rate are (i) 10% 
per annum direct interest expense; (ii) 35.4% effective interest 
expense associated with the value of the Emerson Warrant; and
(iii) 9.8% of 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 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 
<PAGE>
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 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 April 13, 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 statement

<PAGE>
                              PCD Inc.
              CONSOLIDATED STATEMENTS OF OPERATIONS
             (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   $  0.75
                                               ========    =======   =======
Weighted average number of common and common
 equivalent shares outstanding:
  Basic.......................................    5,955      5,478     4,570
                                               ========    =======   =======
  Diluted.....................................    5,955      6,292     5,184
                                               ========    =======   =======
</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 statement

<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 statement

<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. 




<PAGE>
   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
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)           -    613,667      -
                                              ------------  --------- ------ 
 Diluted earnings............................ $  3,863,000  5,183,699 $ 0.75
                                              ============  ========= ======
</TABLE>

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

<PAGE>
   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

   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.




<PAGE>
   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.

   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 their
estimated remaining economic lives of 20 years, consistent with 
industry norms.  Patented technologies are amortized over their 
estimated remaining economic lives of 6 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 
<PAGE>
flow approach. These intangibles are being amortized over their 
estimated remaining economic lives of 6 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 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:

<PAGE>

</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 is excluded from both 1997 and 
1996.

   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>



<PAGE>
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>
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 
remaining economic lives, as follows:

<PAGE>
<TABLE>
<CAPTION>
                                                               Estimated
                                                               Remaining
                                              Balance           Economic
                                         December 31, 1997       Life
                                         -----------------     --------- 
                                           (In thousands)
         <S>                                <C>                  <C>
          Patented technology..........      $ 3,155               6 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> 
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, 
<PAGE>
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
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 
<PAGE>
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>

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 
<PAGE>
$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 45.4% as the Debenture is expected to be 
repaid approximately four months after the date of issuance.  The 
individual components of this effective interest rate are (i) 10% 
per annum direct interest expense, (ii) 25.6% effective interest 
expense associated with the value of the Emerson Warrant; and  
(iii) 9.8% 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 150,000 shares of the 525,000 share 
Emerson Warrant. The Company has valued 150,000 shares of the 
525,000 share Emerson 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 based 
on the value of the remaining warrants. The Subordinated Debenture 
is expected to be repaid in approximately four months.

10.  INCOME TAXES:

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







<PAGE>
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
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. The basis 
for the decision of the Court of Appeals was a finding that the 
invention covered by the Pfaff Leadless Patent had been "on sale" 
for more than one year before the filing of a patent application.  
An invention that has been "on sale" for more than one year before 
the filing of the patent application may not be patented.  Certain 
other Claims of the patent were not at issue in the Pfaff v. Wells 
case, and their validity was not decided by the Court of Appeals, 
because Pfaff did not allege that products of Wells infringed such 
Claims.  These other Claims include design elements not 
incorporated into products of Wells or CTi, including the use of 
contact pins formed with a pair of parallel blades extending from 
a common base.   The United States Supreme Court has accepted  an 
appeal on the Pfaff v. Wells case, limited to the question of 
whether the Pfaff Leadless Patent should have been held invalid on 

<PAGE>
the basis of the "on sale" bar if Pfaff's invention was not "fully 
completed" more than one year before he filed his patent 
application.  The Supreme Court could affirm or reverse the 
decision of the Court of Appeals.  If the Supreme Court affirms 
the decision of the Court of Appeals, the determination of 
invalidity of the Claims at issue in the Pfaff v. Wells case will 
become final.  This determination will be binding with respect to 
such Claims in the CTi v. Pfaff action in the District of Arizona. 
The reasoning of the Pfaff v. Wells decision, moreover, could 
support CTi's position that the remaining Claims of that patent 
are invalid.  This conclusion is based on the Company's belief 
that the invention covered by such remaining Claims was also "on 
sale" for more than one year before the date of the application 
for the Pfaff Leadless Patent.  If the Supreme Court reverses the 
decision of the Court of Appeals, the lower courts will then 
determine the validity of the Claims of the Pfaff Leadless Patent 
at issue on other grounds and will determine whether the products 
of Wells infringe on these Claims of the Pfaff Leadless Patent.

   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 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.

   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.
<PAGE>
   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.

   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.
<PAGE>
   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
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

<PAGE> 
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:

<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

<PAGE>
   Summarized information about stock options outstanding at 
December 31, 1997 is as follows:

</TABLE>
<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.

   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 

<PAGE>
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        $   0.85
    Diluted..........................     $   0.76        $   0.74

  1995
  ----
   Net income........................     $  3,863        $  3,772
   Net income per share:
    Basic............................     $   0.85        $   0.83
    Diluted..........................     $   0.75        $   0.73
</TABLE>


   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>
<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

<PAGE>
   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:

                       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
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.
<PAGE>
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 (other than the United States) accounted for 
greater than 10% of net sales.


15.  SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED):


</TABLE>
<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>
<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     JUNE 3, 1995
                                 ------------    --------------    ------------
<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 statement

<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
 
<PAGE>
   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 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.
 
<PAGE>
  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.

   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.




<PAGE> 
  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.
<PAGE>
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>

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:




<PAGE> 
<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:

<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>
<PAGE> 
   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>

   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>
<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
                              ======      ====         ======


<PAGE>
        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:

<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:
 









<PAGE>
<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.
 
   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

<PAGE>
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.
 

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


<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>
<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 statement

<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 
<PAGE>
intercompany balances and transactions have been eliminated. 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 
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



<PAGE>
   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

   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 

<PAGE>
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.

   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

<PAGE>
6.  Intangible Assets

   Intangible assets consist of the following: 

</TABLE>
<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>

<PAGE>
   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:

<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.
<PAGE>
   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:
<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.

<PAGE>
11.  Commitments and Contingencies

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

   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:
<PAGE>
<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>
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.



<PAGE>
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.

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



<PAGE>
     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


  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
<PAGE>
                    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.
       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.

<PAGE>
(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 April 20, 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 April 13, 1998, and
      is incorporated in this document by reference.

   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 April 13, 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: April 20, 1998                  By: /s/ John L. Dwight, Jr. 
                                           ----------------------------- 
                                           John L. Dwight, Jr.
                                           Chairman of the Board, President
                                           and
                                           Chief Executive Officer

Dated: April 20, 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: April 20, 1998                  By: /s/ Bruce E. Elmblad
                                           ---------------------------- 
                                           Bruce E. Elmblad
                                           Director

Dated: April 20, 1998                  By: /s/ Harold F. Faught
                                           ---------------------------- 
                                           Harold F. Faught
                                           Director

Dated: April 20, 1998                  By: 
                                           ---------------------------- 
                                           C. Wayne Griffith
                                           Director

Dated: April 20, 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 April 20, 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 April 13, 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 April 13, 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 
amendment number one to the Annual Report on Form 10-K/A.

                                 /s/ Coopers & Lybrand L.L.P


Coopers & Lybrand, L.L.P.
Boston, Massachusetts
April 17, 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 February 4, 1998, except for note 11, which is as of March 9, 
1998, relating to the consolidated balance sheets of Wells Electronics, Inc. 
and subsidiaries as of December 26, 1997 the related consolidated statements 
of income, shareholder's equity, and cash flows for the 34 weeks ended 
December 26, 1997, and to 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 reports are included in this amendment number one to the Annual Report on 
Form 10-K/A.


/s/ KPMG Peat Marwick LLP

Chicago, Illinois
April 17, 1998