SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D.C. 20549

                            ---------
                            FORM 10-K
                            ---------

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

   For the Fiscal Year Ended December 31, 1998

                            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. [X]

As of March 9, 1999, the aggregate market value of the 
registrant's Common Stock held by non-affiliates of the 
registrant was approximately $81,082,254, based upon the closing 
sales price on the Nasdaq Stock Market for that date As of March 
9, 1999, the number of issued and outstanding shares of the 
registrant's Common Stock, par value $.01 per share, was 
8,441,182.

               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 May 7, 1999. 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. and its subsidiaries.  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 Electronics.

GENERAL

   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 1998 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 and 
production. INDUSTRIAL INTERCONNECTS are used in industrial 
equipment systems both internally, as input/output ("I/O") 
connectors to link the rugged electrical environment of operating 
equipment to the electronic environment of controllers and 
sensors, and externally, to facilitate the interface between 
discrete factory wiring and cabling for standard computer 
interconnects. AVIONICS TERMINAL BLOCKS AND SOCKETS perform

<PAGE>
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 Bombardier Inc., 
Micron Technology, Inc., Rockwell International Corp. (through 
its subsidiary, the Allen-Bradley Company) and Advance Micro 
Devices, Inc.

   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'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. To 
enhance the above goal, the Company is undertaking a program to 
strengthen the balance sheet by reducing the level of bank debt 
outstanding. 

   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. 

Market Overview

   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
<PAGE>
with reduced product development cycles and delivery lead times, 
creates 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 1998 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 and production. It is the Company's objective to provide 
a total solution for selected IC packages encompassing these 
three stages. By providing a total solution, the Company believes 
it will be able to forge closer customer relationships and gain 
acceptance by new customers.

    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 symbol)C
    (257(degree symbol)F), 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
<PAGE>
    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.

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

   The worldwide semiconductor market has grown in five of the 
last eight years and is projected by IC Insights, Inc., 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.
<PAGE>
   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 Boeing Company estimates that total worldwide demand for 
new airplanes over the next decade will be 7,600 aircraft.  The 
Boeing world fleet is projected to grow from 12,300 airplanes at 
the end of 1998 to 17,700 airplanes in 2007. Over the next ten 
years, more than 7,600 new commercial jets - 7,425 passenger 
airplanes and 175 new freighters - are forecast to enter service 
worldwide.  The majority of these airplanes will meet industry 
demand for growth, while the remainder will replace the 2,200 
airplanes that are projected to be removed from service.  Many of 
these airplanes are expected to be removed form service due to 
the International Civil Aviation Organization ("ICAO") 
requirement in the United States that all airplanes comply with 
the ICAO Stage 3 noise standard as of December 31, 1999.  Of the 
2,200 airplanes projected to be removed between 1998 and 2007, 
three out of four are expected to be removed during the next five 
years.

STRATEGY

   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:

    BE THE KEY SUPPLIER IN SELECTED NICHE MARKETS: The electronic
    connector industry services a variety of different industries
    with connectors that are often unique to particular
    applications within a given industry. The Company actively
    identifies and pursues those markets which have the following
    characteristics: demand for electronic connectors with
    relatively high engineering content, high degree of customer
    interface, changing technology, significant growth
    opportunities and a market size appropriate to the Company's
<PAGE>
    resources.  Presently, the Company focuses on the IC package,
    industrial and avionics interconnect markets.  In each of
    these markets for the products that the Company offers, it
    holds a market position of either first or second or has a
    strategic plan to attain that position. There can be no
    assurance that the Company, however,  will attain or maintain
    these positions.

    GROW THROUGH INTERNAL PRODUCT DEVELOPMENT AND ACQUISITION:
    The Company is committed to grow the sales revenue at a rate
    that is higher than the connector industry projected growth
    rate.  To accomplish this, the Company invests heavily in new
    product development.  Over the last three years the Company
    has spent on average 5.3% of net sales on new product
    tooling.  For 1998, 59% of sales were generated from products
    that were introduced in the last five years.  It is the
    Company's strategy to continually expand the range of
    products that it offers in its existing markets.  The Company
    has been active in making acquisitions and intends to remain
    so in the future.  The Company views acquisitions as either
    providing the entree into a new connector market that the
    Company has selected or strategically expanding the product
    offering of an existing served market.

    STRENGTHEN THE BALANCE SHEET: The acquisition of Wells
    Electronics, Inc. in December of 1997 resulted in the Company
    taking on approximately $108 million of debt. The public
    stock offering of 2,300,000 shares of common stock in April
    and May of 1998 raised approximately $42 million, and the
    Company generated an additional $6.5 million of free cash
    flow in 1998.  The combination of the cash raised from the
    public offering and the free cash flow, along with existing
    cash balances, reduced the debt to $55.7 million as of
    December 31, 1998 and improved the total debt-to-equity ratio
    to 1.08 to 1.00.  Strengthening the balance sheet will
    provide the Company the flexibility it needs in the area of
    acquisitions and product development.

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 

<PAGE>
characterized as proprietary, application-specific or industry 
standard, as described below.

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

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

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

    IC PACKAGE INTERCONNECTS

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

       ICs are constantly increasing in functionality while
    generally decreasing in unit cost. This leads to an increase
    in IC product application, thereby driving IC unit growth.
    This unit growth and the proliferation of sizes and packages
    drive the demand for IC sockets. A further driver of unit
    growth is the establishment new foundries, as well as the
    reconfiguration of existing foundries.   According to IC
    Insights, Inc., unit demand for major package types is
    expected to increase at a compound annual growth rate of 7%
    from 1998 to 2003. 

    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.
    Devices tend to transition to the QFP above this lead count.
    The small size, low price and surface mount design of the SO
<PAGE>
    makes it a highly desirable package. The Company currently
    produces 170 distinct sockets to accommodate a variety of SO
    packages.

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

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

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



<PAGE>
INDUSTRIAL INTERCONNECTS

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

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

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

<PAGE>
AVIONICS TERMINAL BLOCKS AND SOCKETS 

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

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

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

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

    APPLICATION-SPECIFIC AVIONICS CONNECTORS:  Application
    specific junction modules have been developed in conjunction
    with Boeing Commercial Aircraft for use on the 737-747-757
    767 series of commercial aircraft and the C17 aircraft.
    Application-specific relay sockets are marketed to Boeing
    subcontractors for the 777 commercial aircraft program and
    the 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. 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.
<PAGE>
   The Company's current product development projects in the IC 
package interconnect market target new package device designs 
such as BGA, TSOP (thin, small outline package) and CSP (chip 
scale package) burn-in, test and BGA production packages. The 
Company believes, based on industry trends, that BGA will become 
the preferred package for high-lead count IC packages (in excess 
of 300 leads). The Company also believes, based on industry 
trends, that TSOP and CSP will be the preferred package for high-
volume, high-density small outline IC devices. 

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, and the United States, augmented with 
sales representatives in smaller 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 1998, products of the Company were sold to over 1,000 
customers in a wide range of industries and applications. The top 
five customers of the Company in 1998 accounted for 43.5% of net 
sales. Micron Technology, Inc. accounted for 15.8% of net sales 
of the Company in 1998 and Advanced Micro Devices, Inc. accounted 
for 12.7% of net sales of the Company in 1998.  Altera 
Corporation accounted for 14.5% and 17.4% of net sales of the 
Company in 1997 and 1996, respectively, and TNT Distributors, 
Inc. accounted for 12.7% of net sales of the Company in 1997.  
Sales to customers located outside the United States, either 
directly or through U.S. and foreign distributors, accounted for 
approximately 18.8%, 35.8% and 22.1% of the net sales of the 
Company in the years ended 1998, 1997 and 1996, respectively.

<PAGE>
   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.
                                            Cyrex/National Semiconductor, Inc.
                                            International Business Machines Corporation
                                            Micron Technology, Inc.
                                            Motorola, Inc.

Industrial Interconnects...............     Giddings & Lewis, Inc.
                                            Groupe Schneider (Modicon, Inc./Square D
                                             Co./Telemecanique)
                                            Parker Hannifin Corporation
                                            Rockwell International Corp. (Allen-Bradley
                                             Company)
                                            Vickers Inc.

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>

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

<PAGE>
manufacturing is the almost complete elimination of rework. Shop 
floor orders are relatively small and are not handled in bulk, 
and problems are resolved as they occur, rather than continuing 
through an extended production run.

   Wells-CTI KK, our Japanese subsidiary, subcontracts all of its 
product manufacturing and assembly operations to Japanese 
vendors. The Company subcontracts a portion of its labor-
intensive product assembly to a U.S.-based subcontractor with a 
manufacturing facility in Mexico. The Company is not 
contractually obligated to do business with any subcontractor, 
could substitute other subcontractors without significant 
additional cost or delay, and could perform assembly itself if 
the need were to arise.

INTELLECTUAL PROPERTY

   The Company seeks to use a combination of patents and other 
means to establish and protect its intellectual property rights 
in various products. The Company intends to vigorously defend its 
intellectual property rights against infringement or 
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. See "Risk Factors - Patent 
Litigation."

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 and 
QFP products. The principal competitive factors affecting the 
market for the Company's products include design, responsiveness, 

<PAGE>
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 1,200 manufacturers worldwide. 
Competition in the IC package interconnect market, however, is 
highly concentrated among a small number of significant 
competitors. Competition among manufacturers of application-
specific connectors in the industrial terminal blocks market 
depends greatly on the customer, market and specific nature of 
the requirement. Competition is fragmented in the avionics 
market, but there are fewer competitors due to the demanding 
nature of the military and customer specifications which control 
much of the markets and the cost and time required to tool and 
qualify military standard parts. In each of the markets in which 
the Company participates, the Company's significant competitors 
are much larger and have substantially broader product lines and 
greater financial resources than the Company. There can be no 
assurance that the Company will compete successfully, and any 
failure to compete successfully could have a material adverse 
effect on the financial condition, results of operations and 
business of the Company.

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 $8.4 
million at December 31, 1998 and $11.9 million at December 31, 
1997. 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. 
<PAGE>
For these reasons, backlog may not be indicative of future demand 
or results of operations.

ENVIRONMENTAL

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

EMPLOYEES

   As of December 31, 1998, the Company had 336 employees and 10 
contract workers. The Company's 346 employees and contract 
workers include 277 in manufacturing and engineering, 35 in sales 
and marketing and 34 in administration. Of the Company's U.S. 
employees, 62 are represented by the International Brotherhood of 
Electrical Workers, Local 1392. The Company believes that its 
relations with its employees and its union are good. The current 
collective bargaining agreement expires on February 18, 2000.

RECENT DEVELOPMENTS

SUBSIDIARY ACTIVITIES

   On July 31, 1998, the Company's wholly-owned subsidiary, CTi 
Technologies, Inc. was merged into Wells Electronics, Inc. and 
concurrently Wells Electronics, Inc. changed its name to Wells-
CTI, Inc. 

   In August 1998, the Company initiated the process of closing 
its Singapore subsidiary, Wells-Pte Ltd., and the Korean branch 
of its Japanese subsidiary, Wells-CTI KK.  The Company expects to 
complete the closure of these operations in the first half of 
1999.

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
<PAGE>
concerning the future results of operations, financial condition 
and business of 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, 1998, the Company derived 71.7% 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 acquisition of Wells Electronics, Inc. ("Wells") in 
December 1997, a supplier of IC package interconnects, 
significantly increased 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.  Micron Technology, Inc. 
("Micron"), a provider of DRAMs, SRAMs and other semiconductor 
components, was the largest customer of the Company in 1998. 
Micron accounted for 15.8% of the net sales of the Company for 
the year ended December 31, 1998. Advanced Micro Devices, Inc. 
("AMD"), a provider of integrated circuits for the global 
personal and networked computer, accounted for 12.7% of the net 
sales of the Company for the year ended December 31, 1998. Altera 
Corporation ("Altera"), a provider of high performance, high 
density programmable logic devices, had been the largest customer 
of the Company from 1994 to 1997. Altera accounted for 14.5% and 
17.4% of the net sales of the Company for the years ended 
December 31, 1997 and 1996, respectively. Sales to TNT
<PAGE>
Distributors, Inc. ("TNT"), a semiconductor equipment 
distributor, accounted for 12.7% of net sales for the years ended 
December 31, 1997, respectively. The Company does not have 
written agreements with any of its customers, including Altera, 
AMD,  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, 
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 may from time to 
time pursue the acquisition of 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 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
<PAGE>
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 21.9%, 
35.8% and 22.1% of the net sales of the Company in the years 
ended December 31, 1998, 1997 and 1996, respectively. 
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.  
The Company has an operating subsidiary in Japan, and sales or 
technical support operations in England, and Germany. 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
<PAGE>
covenants, and failure to meet such covenants would result in an 
event of default under the Senior Credit Facility. Among these 
covenants are restrictions that the Company (i) must maintain 
John L. Dwight, Jr. as chief executive officer of the Company or 
obtain the consent of the lenders under the Senior Credit 
Facility to any replacement of Mr. Dwight; (ii) may not, without 
the prior consent of such lenders, acquire the assets of or 
ownership interests in, or merge with, other companies; and (iii) 
may not, without the prior consent of such lenders, pay cash 
dividends. 

   FLUCTUATIONS IN OPERATING RESULTS.  The variability of the 
level and timing of orders from, and shipments to, major 
customers may result in significant fluctuations in the Company's 
quarterly results of operations. The Company generally does not 
obtain long-term purchase orders or commitments but instead seeks 
to work closely with its customers to anticipate the volume of 
future orders. Generally, customers may cancel, reduce or delay 
purchase orders and commitments without penalty. Cancellations, 
reductions or delays in orders by a customer or groups of 
customers could have a material adverse effect on the financial 
condition, results of operations and business of the Company. In 
addition to the variability resulting from the short-term nature 
of its customers' commitments, other factors have contributed, 
and may in the future contribute, to such fluctuations. These 
factors may include, among other things, customers' and 
competitors' announcement and introduction of new products or new 
generations of products, evolutions in the life cycles of 
customers' products, timing of expenditures in anticipation of 
future orders, effectiveness in managing manufacturing processes, 
changes in cost and availability of labor and components, shifts 
in the Company's product mix and changes or anticipated changes 
in economic conditions. In addition, it is not uncommon in the 
electronic connector industry for results of operations to 
display a seasonal pattern of declining revenues in the third 
quarter of the calendar year. Although the Company's results of 
operations did not display this pattern in 1998 and 1997, 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. 

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

   MANAGEMENT OF GROWTH.  THE Company has grown rapidly in recent 
years. Such 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 

<PAGE>
any reason to protect existing technology or otherwise acquire 
such technology could prevent distribution of the Company's 
products, having a material adverse effect on the financial 
condition, results of operations and business of the Company. 

   PATENT LITIGATION. On August 21, 1995, a predecessor ("CTi") 
of the Company's wholly-owned subsidiary, Wells-CTI, Inc. 
("Wells-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") 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") are invalid and are 
not infringed by CTi, the products of which include burn-in 
sockets for certain "leaded" packages (including Quad Flat Paks) 
and BGA packages. 

   In other litigation between Wells-CTI and Pfaff concernng the 
Pfaff Leadless Patent, the United States Supreme Court has 
affirmed the decision of the United States Court of Appeals for 
the Federal Circuit finding that all of the individual 
descriptions of the invention covered by the Pfaff Leadless 
Patent which were at issue in that case are invalid. Pfaff then 
agreed not to sue CTi or Wells-CTI for infringement of the Pfaff 
Leadless Patent, including infringement based upon claims not 
adjudicated in that litigation.  The litigation between Wells-CTI 
and Pfaff and CTi and Pfaff relating to the Pfaff Leadless Patent 
is thus concluded.  However, issues concerning the Pfaff BGA 
Patent will remain to be resolved in the District of Arizona 
litigation.

   The Company believes, based on the advice of counsel, that CTi 
has meritorious positions of noninfringement and invalidity with 
respect to the Pfaff BGA Patent issues raised in the District of 
Arizona litigation and, as necessary, will vigorously litigate 
its position.  There can be no assurance, however, that the 
Company, CTi or Wells-CTI will prevail in any pending or future 
litigation, and a final court determination that CTi or Wells-CTI 
has infringed the Pfaff BGA Patent could have a material adverse 
effect on the Company.  Such adverse effect could include, 
without limitation, the requirement that CTi or Wells-CTI pay 
substantial damages for past infringement and an injunction 
against the manufacture or sale in the United States of such 
products as are found to be infringing.

<PAGE>
   COMPETITION.  The electronic connector industry is highly 
competitive and fragmented, with more than 1,200 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")  and quad-flat 
pack ("QFP") products. 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. 

   CONCENTRATION OF OWNERSHIP.  The current officers, directors 
and Emerson Electric Co. ("Emerson"), the Company's largest 
stockholder, beneficially own approximately 39.3% of the 
outstanding shares of the Common Stock of the Company based on 
the number of shares of Common Stock outstanding as of December 
31, 1998.  Accordingly, such persons, if they act together, can 
exert substantial control over the Company through their  ability 
to influence the election of directors and all other matters that  
require action by the Company's stockholders. 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, 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. 

<PAGE>
   DEPENDENCE UPON INDEPENDENT DISTRIBUTORS.  Sales through 
independent distributors accounted for 21.9%, 38.7% and 28.1% of 
the net sales of the Company for the years ended December 31, 
1998, 1997 and 1996, respectively. The Company's agreements with 
its independent distributors are nonexclusive and may be 
terminated by either party upon 30 days written notice, provided 
that if the Company terminates the agreement with an independent 
distributor, the Company will be obligated to purchase certain of 
such distributor's pre-designated unsold inventory shipped by the 
Company within an agreed-upon period prior to the effective date 
of such termination. The Company's distributors are not within 
the control of the Company, are not obligated to purchase 
products from the Company, and may also sell other lines of 
products. There can be no assurance that these distributors will 
continue their current relationships with the Company or that 
they will not give higher priority to the sale of other products, 
which could include products of competitors. A reduction in sales 
efforts or discontinuance of sales of the Company's products by 
its distributors could lead to reduced sales and could materially 
adversely affect the Company's financial condition, results of 
operations and business. The Company grants to certain of its 
distributors limited inventory return and stock rotation rights. 
If the Company's distributors were to increase their general 
levels of inventory of the Company's products, the Company could 
face an increased risk of product returns from its distributors. 
There can be no assurance that the Company's historical return 
rate will remain at a low level in the future or that such 
product returns will not have a material adverse effect on the 
Company's financial condition, results of operations and 
business. 

   YEAR 2000 COMPLIANCE AND COSTS.  The "Year 2000 Issue" is the 
result of computer programs that were written using two digits 
rather than four to define the applicable year. If the Company's 
computer programs with date-sensitive functions are not Year 2000 
compliant, they may interpret a date using "00" in the year field 
as the Year 1900 rather than the Year 2000. This 
misinterpretation could result in a system failure or 
miscalculations causing disruptions of operations, including, 
among other things, an interruption of design or manufacturing 
functions or an inability to process transactions, send invoices 
or engage in similar normal business activities until the problem 
is corrected. 



<PAGE>
   The Company has identified its Year 2000 risk in three 
categories: internal information technology ("IT") systems; 
internal non-IT systems, including embedded technology such as 
microcontrollers; and external noncompliance by customers and 
suppliers.

    INTERNAL IT SYSTEMS. The Company utilizes a significant
    number of information technology systems across its entire
    organization, including applications used in manufacturing,
    product development, financial business systems and various
    administrative functions. During 1997 and 1998, the Company
    reviewed the Year 2000 issue that encompassed operating and
    administrative areas of the Company. The Company found that,
    with the exception of the South Bend, Indiana location of
    Wells-CTI ("Wells-CTI South Bend"), its information
    technology systems will be able to manage and manipulate all
    material data involving the transition from the year 1999 to
    the year 2000 without functional or data abnormality and
    without inaccurate results related to such data. During the
    past year, Wells-CTI South Bend has completed the
    modifications and testing of its information technology
    systems, and the Company believes that the Wells-CTI South
    Bend location is now Year 2000 compliant. The cost of the
    modifications and testing at Wells-CTI South Bend was
    approximately $90,000.   The Company does not have a
    contingency plan in place for Year 2000 failures of its
    internal IT systems. If the Company has not achieved or does
    not timely achieve Year 2000 compliance for its major IT
    systems, the Year 2000 Issue could have a material adverse
    effect on the financial condition, results of operations and
    business of the Company.

       Independent of the Year 2000 Issue and in order to improve
    access to business information through common, integrated
    computing systems across the Company, PCD began a worldwide
    information technology systems replacement project with
    systems that use programs from Oracle Corporation. The
    Company is in the implementation phase for this system and is
    expected to be complete by December 31, 1999.

    INTERNAL NON-IT SYSTEMS, INCLUDING EMBEDDED TECHNOLOGY. The
    Company is in the data-gathering phase with regard to non-IT
    systems including embedded technology such as
    microcontrollers.  PCD is currently gathering data to assess
    the impact of the Year 2000 on its non-IT systems such as
    design, manufacturing, testing and security, with Year 2000
<PAGE>
    compliance targeted for April 30, 1999. The Company does not
    at this time have sufficient data to estimate the cost of
    achieving Year 2000 compliance for its non-IT systems. If the
    Company is unable to achieve Year 2000 compliance for its
    major non-IT systems, the Year 2000 Issue could have a
    material adverse effect on the financial condition, results
    of operations and business of the Company. The Company does
    not currently have a contingency plan in place for Year 2000
    failures of its internal non-IT systems and embedded
    technology.

    EXTERNAL NONCOMPLIANCE BY CUSTOMERS AND SUPPLIERS. The
    Company is in the process of identifying and contacting its
    material suppliers, service providers and contractors to
    determine the extent of the Company's vulnerability to those
    third parties' failure to remedy their own Year 2000 issues.
    PCD expects to complete its assessment of that vulnerability
    by April 30, 1999. To the extent that responses to Year 2000
    readiness inquiries are unsatisfactory, the Company intends
    to change suppliers, service providers or contractors to
    those who have demonstrated Year 2000 readiness, but the
    Company cannot assure that it will be successful in finding
    such alternative suppliers, service providers and
    contractors. The Company does not currently have any formal
    information concerning the Year 2000 compliance status of its
    customers but has received indications that most of its
    customers are working on Year 2000 compliance. If any of the
    Company's significant customers and suppliers do not
    successfully and timely achieve Year 2000 compliance, and the
    Company is unable to replace them with new customers or
    alternative suppliers, the Company's financial condition,
    results of operations and business could be materially
    adversely affected.

       The Company's ability to achieve Year 2000 compliance, the
    level of incremental costs associated with compliance and the
    timing of compliance, could be adversely impacted by, among
    other things, the availability and cost of programming and
    testing resources, vendors' ability to modify proprietary
    software, and unanticipated problems identified in the
    ongoing compliance review.

   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 

<PAGE>
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.

   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

<PAGE>
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.  PROPERTIES

   PCD, headquartered in Peabody, Massachusetts, operates leased 
production facilities in Peabody, Massachusetts (60,000 square 
feet), Phoenix, Arizona (24,000 square feet), 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; and Regensburg, 
Germany. The Company believes that its facilities are adequate 
for its operations for the foreseeable future.


ITEM 3. LEGAL PROCEEDINGS

   On August 21, 1995, a predecessor ("CTi") of the Company's 
wholly-owned subsidiary, Wells-CTI, Inc. ("Wells-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") alleging and seeking a declaratory judgment that two 
United States patents issued to Pfaff and relating to certain 

<PAGE>
burn-in sockets for "leadless" IC packages (the "Pfaff Leadless 
Patent") and ball grid array ("BGA") IC packages (the "Pfaff BGA 
Patent") are invalid and are not infringed by CTi, the products 
of which include burn-in sockets for certain "leaded" packages 
(including Quad Flat Paks) and BGA packages. 

   In other litigation between Wells-CTI and Pfaff concerning the 
Pfaff Leadless Patent, the United States Supreme Court has 
affirmed the decision of the United States Court of Appeals for 
the Federal Circuit finding that all of the individual 
descriptions of the invention covered by the Pfaff Leadless 
Patent which were at issue in that case are invalid. Pfaff then 
agreed not to sue CTi or Wells-CTI for infringement of the Pfaff 
Leadless Patent, including infringement based upon claims not 
adjudicated in that litigation.  The litigation between Wells-CTI 
and Pfaff and CTi and Pfaff relating to the Pfaff Leadless Patent 
is thus concluded.  However, issues concerning the Pfaff BGA 
Patent will remain to be resolved in the District of Arizona 
litigation.

   The Company believes, based on the advice of counsel, that CTi 
has meritorious positions of noninfringement and invalidity with 
respect to the Pfaff BGA Patent issues raised in the District of 
Arizona litigation and, as necessary, will vigorously litigate 
its position.  There can be no assurance, however, that the 
Company, CTi or Wells-CTI will prevail in any pending or future 
litigation, and a final court determination that CTi or Wells-CTI 
has infringed the Pfaff BGA Patent could have a material adverse 
effect on the Company.  Such adverse effect could include, 
without limitation, the requirement that CTi or Wells-CTI 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.

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 1998.

<PAGE>
                               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:

                                                High        Low
1998
First Quarter..........................        $24 1/4    $19 3/4
Second Quarter.........................         23         16 3/4
Third Quarter..........................         18 3/4     10 1/2
Fourth Quarter.........................         14 3/4     11

1997
First Quarter..........................         17 3/4     13
Second Quarter.........................         17 5/8     14
Third Quarter..........................         25         16
Fourth Quarter.........................         26 1/2     19 1/2


   On March 9, 1999, the last reported sale price for the Common 
Stock on the Nasdaq National Market was $14.75 per share. As of 
January 31, 1999, there were approximately 1,200 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. 









<PAGE>
ITEM 6.  SELECTED FINANCIAL DATA

   The following table contains certain selected consolidated 
financial data for PCD and its subsidiaries. The selected 
consolidated financial data for each of the years ended 
December 31, 1998, 1997, 1996, 1995 and 1994 have been derived 
from the Company's Consolidated Financial Statements, which have 
been audited by PricewaterhouseCoopers LLP, independent public 
accountants. The selected consolidated financial data should be 
read in conjunction with the Consolidated Financial Statements 
and the Notes thereto of the Company and "Management's Discussion 
and Analysis of Financial Condition and Results of Operations."


<TABLE>
<CAPTION>


                                         Year Ended December 31,
                                 1998 (1)   1997 (2)    1996      1995   1994
                                 (in thousands, except per share amounts)
Consolidated Statement
 of Operations Data:
<S>                             <C>        <C>        <C>     <C>     <C>
Net sales....................... $64,391    $ 29,796   $26,857 $25,616 $15,850
Gross profit....................  37,060      14,676    12,400  12,139   6,016
Write-off of acquired in-process
  research and development......       -     (44,438)        -       -       -
Income (loss) from operations...  17,679     (35,578)    6,955   6,472   2,157
Interest income (expense), net..  (8,813)        940       725     112      23
Net income (loss) before
 extraordinary item.............   5,191     (22,836)    4,785   3,863   1,301
Extraordinary item, net of
 income tax benefit of $567.....    (888)          -         -       -       -
Net income (loss)............... $ 4,303    $(22,836)  $ 4,785 $ 3,863 $ 1,301
                                 =======    ========   ======= ======= =======
Net income (loss) per share
 before extraordinary item:
 Basic.......................... $  0.69    $  (3.83)  $  0.87 $  0.85 $  0.29
                                 =======    ========   ======= ======= =======
 Diluted........................ $  0.57    $  (3.83)  $  0.76 $  0.75 $  0.29
                                 =======    ========   ======= ======= =======

Net income (loss) per share:
 Basic.......................... $  0.64    $  (3.83)  $  0.87 $  0.85 $  0.29
                                 =======    ========   ======= ======= =======
 Diluted........................ $  0.53    $  (3.83)  $  0.76 $  0.75 $  0.29
                                 =======    ========   ======= ======= =======
</TABLE>





<PAGE>
<TABLE>
<CAPTION>
                                                    December 31,
                                      1998      1997     1996    1995    1994
                                            (in thousands)
Consolidated Balance Sheet Data:
<S>                                <C>       <C>       <C>     <C>     <C>
Working capital (deficit).......    $(11,839) $(12,632) $23,054 $ 7,671 $5,089
Total assets....................     119,104   126,592   32,456  15,929 10,783
Total debt......................      55,700   105,903        -       -      -
Stockholders' equity............      57,277     8,995   28,706  12,812  8,774
----------
</TABLE>

(1)    Net loss for the year ended December 31, 1998 includes a
    non-recurring charge relating to the Wells acquisition for
    the valuation of the Emerson Warrant and an extraordinary
    charge relating to the write off of the valuation of the
    Emerson Warrant and the prepayment penalty associated with
    the Debenture (for the meaning of capitalized terms, see
    "Management's Discussion and Analysis of Financial Condition
    and Results of Operations - Liquidity and Capital
    Resources"). Before deducting for the non-recurring and
    extraordinary charges, net income per share - basic was $0.89
    (based on a weighted average number of shares outstanding of
    7,486,915), and net income per share - diluted was $0.81
    (based on a weighted average number of common and common
    equivalent shares outstanding of  8,167,525).

(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. 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). 












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

   As used herein, the terms "Company" and "PCD," unless 
otherwise indicated or the context otherwise requires, refer to 
PCD Inc. and its subsidiaries. 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 Electronics, Inc.

   In 1998, net sales of the Company of $64.4 million grew from 
$29.8 million in 1997. This growth represents the additional 
sales from the Wells Electronics acquisition, as well as strong 
sales increase in avionics product lines. The Company realized 
approximately 58.6% of its net sales in 1998 from products 
introduced in the last five years. The Company distributes its 
products through a combination of its own dedicated direct sales 
force, 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 21.9%, 35.8% and 22.1% 
of the net sales of the Company in the years ended December 31, 
1998, 1997 and 1996, respectively.

   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.

Product Categories                       1998     1997     1996
------------------                      ------   ------   ------
IC package interconnects...........      71.7%    42.3%    37.6%
Industrial interconnects...........      11.4     24.5     22.5
Avionic terminal blocks and sockets      16.9     33.2     39.9
     Total.........................     100.0%   100.0%   100.0%



RESULTS OF OPERATIONS

   The following table sets forth certain items from the 
Company's Consolidated Statements of Operations as (1) a 
percentage of net sales and (2) the percentage period-to-period 
change in dollar amounts of such items for the periods indicated. 
The information for 1998 excludes the non-recurring and 
extraordinary charges related to the Wells acquisition and, in 
1997, excludes the effect of the non-recurring charge for <PAGE>
<PAGE>
purchased in-process research and development. The table and the 
discussion below should be read in conjunction with the 
Consolidated Financial Statements and Notes thereto.

<TABLE>
<CAPTION>
                          Year Ended December 31,   Period-to-Period Change
                          ----------------------- ---------------------------
                             1998   1997   1996   1998 vs. 1997 1997 vs. 1996
                            ------ ------ ------  ------------- -------------
<S>                        <C>    <C>    <C>        <C>           <C>
Revenue..................   100.0% 100.0% 100.0%     116.1%        10.8%
Gross profit.............    57.6   49.3   46.2      152.5         18.4
Income from operations...    27.5   29.7   25.9       99.5         27.4
 before non-recurring and
 extraordinary charges	
Interest/other income
 (expense), net..........   (10.1)   3.2    2.7     (789.9)        29.7
Net income...............    10.3   20.9   17.8        6.5         30.0
</TABLE>


YEARS ENDED DECEMBER 31, 1998 AND DECEMBER 31, 1997

   NET SALES.  Net sales increased 116.1% to $64.4 million for 
1998, from $29.8 million for 1997.  Net sales in the 
Industrial/Avionic product lines increased 5.9%, to $18.2 
million. The avionics portion of the industrial/avionic business 
segment showed the largest increase, with an overall 10% growth 
from 1997.  The IC package interconnect product lines grew more 
than 250% to $46.2 million from $12.6 million, which is the 
direct result of the acquisition of Wells Electronics. Wells-CTI, 
represents the merger of Wells Electronics and CTi Technologies, 
Inc. and encompasses the entire IC package interconnect business 
segment.  Sales to customers located outside the United States, 
either directly or through U.S. and foreign distributors, were 
21.9% of net sales for 1998, compared to 35.8% of net sales in 
1997.  

   GROSS PROFIT. Gross profit increased 152.5% to $37.1 million 
for 1998, from $14.7 million for 1997. As a percentage of net 
sales, gross margin increased to 57.6% for 1998 from 49.3% for 
1997. The increase in gross margin was attributable to the shift 
in product mix to the higher margin IC package interconnects, 
primarily due to the Wells acquisition. The results are also 
favorably impacted by the Company's continuous cost improvements 
program, which concentrates on cost reduction programs associated 
with the direct cost of the product. 

<PAGE>
   OPERATING EXPENSES. Operating expenses include selling, 
general and administrative expenses and costs of product 
development. Operating expenses increased 233.2% to $19.4 
million, or 30.1% of net sales, for 1998, from $5.8 million, or 
19.5% of net sales, excluding a write-off of acquired in-process 
research and development from the Wells acquisition, for 1997. 
The dollar increase in operating expenses reflects both the 
additional amortization of goodwill of $4.2 million and expenses 
of the newly acquired subsidiary. 

   INTEREST AND OTHER INCOME (EXPENSE), NET. Net interest expense 
was $10.3 million compared to net interest income in 1997 of 
$940,000. The net interest expense represents a combination of 
three elements: the valuation of the Emerson Warrant for 150,000 
shares of PCD Common Stock of $2.9 million; the prepayment 
penalty on the Debenture of $812,500; and the interest expense on 
the Senior Credit Facility of  $6.6 million.  See "Liquidity and 
Capital Resources." 

   PROVISION FOR INCOME TAXES. The effective income tax rates for 
1998 and 1997 were 41.9% and 34.1%, respectively. The increase in 
the effective income tax rate was due to the application of the 
effective tax rates for each of the state and foreign tax 
jurisdictions in which the Company operates.  Specifically, 
Wells-CTI KK, the Japanese subsidiary of Wells-CTI, had an 
effective tax rate of 50.6% for 1998. 

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 
introduced in the fourth quarter of 1996, grew to approximately 
$1.6 million in 1997 from $163,000 in 1996. The industrial 
interconnect line was also favorably impacted by new product 
introductions. Sales of the high-density terminal block line, 
which was introduced in late 1995, grew to approximately $765,000 
in 1997 from $223,000 in 1996. Sales to customers located outside 
the United States, either directly or through U.S. and foreign 
distributors, were 35.8% of net sales in 1997, compared with 
22.1% of net sales in 1996.

<PAGE>
   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 $44.4 million of 
acquired in-process research and development was recorded in 
connection with the Wells acquisition. 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.

   INTEREST AND OTHER INCOME (EXPENSE), NET.  Interest and other 
income increased to $1.2 million in 1997 from $734,000 in 1996. 
This increase was attributable to the higher balances of cash and 
cash equivalents during 1997. Interest expense increased to 
approximately $227,000 in 1997, reflecting the debt incurred in 
connection with the Wells acquisition.

   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 36.5%.



<PAGE>
INCOMPLETE TECHNOLOGY UPDATE

   The acquired in-process research and development ("IPR&D") 
which was expensed in 1997 in connection with the Wells 
acquisition related to in-process burn-in socket designs and 
manufacturing process for various next generation high density IC 
package types. More specifically, there were 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. Of the six SO projects, four remain active 
and two were abandoned in 1998. Of the six CSP projects, three 
remain active, two were postponed and one was abandoned in 1998. 
Of the three LGA projects, one remains active and two were 
abandoned in 1998. Of the two BGA projects, both were abandoned 
in 1998. Of the two test socket projects and the one 
miscellaneous package project, one remains active and two were 
abandoned in 1998. Regarding the active projects as a whole, an 
additional $1.0 million in capital costs were expended in 1998.  
For the active projects as a whole, net sales of $150,000 were 
generated in 1998.  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.

LIQUIDITY AND CAPITAL RESOURCES

   Cash provided by operating activities in 1998 was $12.0 
million, compared to $8.1 million in 1997. These funds were 
sufficient to meet increased working capital as well as capital 
expenditures of approximately $5.8 million. The Company currently 
anticipates that its capital expenditures for 1999 will be 
approximately $6.4 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-CTI (formerly Wells Electronics, 
Inc.) 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-CTI. Each of PCD, Wells-CTI
<PAGE>
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. In August 1998, the 
Company renegotiated the Senior Credit Facility. As a result, the 
interest rate premium of 50 basis points charged on approximately 
$40 million of the Senior Credit Facility was eliminated. 
According to its terms, the re-negotiated Senior Credit Facility 
will terminate on or before December 31, 2003. At December 31, 
1998 and 1997, borrowings of $55.7 million and $83.0 million were 
outstanding under the Senior Credit Facility at a weighted 
average interest rate of 7.60% and 8.96%, respectively.

   The agreement governing the Senior Credit Facility contains 
numerous financial and operating covenants. 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 lender, 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. 

   In December 1997, the Company entered into a Subordinated 
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 Subordinated Debenture ("Debenture") with a 
principal amount of $25 million at an annual rate of interest of 
10% and a Common Stock Purchase Warrant (the "Emerson Warrant") 
for the purchase of up to 525,000 shares of PCD Common Stock at a 
purchase price of $1.00 per share. In April of 1998, the Company 
paid the principal, interest and prepayment penalty of 3.25%, or 
$812,500, in full, resulting in an extraordinary charge to income 
of $888,000, net of taxes, in the second quarter of 1998.  
Accordingly, 375,000 shares of the Emerson Warrant terminated by 
the terms thereof, leaving the Emerson Warrant only exercisable 
for 150,000 shares of PCD Common Stock. The Emerson Warrant 
expires on December 31, 2000.

<PAGE>
   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.

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.

IMPACT OF YEAR 2000

   The "Year 2000 Issue" is the result of computer programs that 
were written using two digits rather than four to define the 
applicable year. If the Company's computer programs with date-
sensitive functions are not Year 2000 compliant, they may 
interpret a date using "00" in the year field as the Year 1900 
rather than the Year 2000. This misinterpretation could result in 
a system failure or miscalculations causing disruptions of 
operations, including, among other things, an interruption of 
design or manufacturing functions or an inability to process 
transactions, send invoices or engage in similar normal business 
activities until the problem is corrected. 

   The Company has identified its Year 2000 risk in three 
categories: internal information technology ("IT") systems; 
internal non-IT systems, including embedded technology such as 
microcontrollers; and external noncompliance by customers and 
suppliers.

   INTERNAL IT SYSTEMS. The Company utilizes a significant number 
of information technology systems across its entire organization, 
including applications used in manufacturing, product 
development, financial business systems and various
<PAGE>
administrative functions. During 1997 and 1998, the Company 
reviewed the Year 2000 issue that encompassed operating and 
administrative areas of the Company. The Company found that, with 
the exception of the South Bend, Indiana location of Wells-CTI 
("Wells-CTI South Bend"), its information technology systems will 
be able to manage and manipulate all material data involving the 
transition from the year 1999 to the year 2000 without functional 
or data abnormality and without inaccurate results related to 
such data. During the past year, Wells-CTI South Bend has 
completed the modifications and testing of its information 
technology systems, and the Company believes that the Wells-CTI 
South Bend location is now Year 2000 compliant. The cost of the 
modifications and testing at Wells-CTI South Bend was 
approximately $90,000.   The Company does not have a contingency 
plan in place for Year 2000 failures of its internal IT systems. 
If the Company has not achieved or does not timely achieve Year 
2000 compliance for its major IT systems, the Year 2000 Issue 
could have a material adverse effect on the financial condition, 
results of operations and business of the Company.

   Independent of the Year 2000 Issue and in order to improve 
access to business information through common, integrated 
computing systems across the Company, PCD began a worldwide 
information technology systems replacement project with systems 
that use programs from Oracle Corporation. The Company is in the 
implementation phase for this system and is expected to be 
complete by December 31, 1999.

   INTERNAL NON-IT SYSTEMS, INCLUDING EMBEDDED TECHNOLOGY. The 
Company is in the data-gathering phase with regard to non-IT 
systems including embedded technology such as microcontrollers.  
PCD is currently gathering data to assess the impact of the Year 
2000 on its non-IT systems such as design, manufacturing, testing 
and security, with Year 2000 compliance targeted for April 30, 
1999. The Company does not at this time have sufficient data to 
estimate the cost of achieving Year 2000 compliance for its non-
IT systems. The Company does not currently have a contingency 
plan in place for Year 2000 failures of its internal non-IT 
systems and embedded technology.  If the Company is unable to 
achieve Year 2000 compliance for its major non-IT systems, the 
Year 2000 Issue could have a material adverse effect on the 
financial condition, results of operations and business of the 
Company. 

   EXTERNAL NONCOMPLIANCE BY CUSTOMERS AND SUPPLIERS. The Company 
is in the process of identifying and contacting its material

<PAGE>
suppliers, service providers and contractors to determine the 
extent of the Company's vulnerability to those third parties' 
failure to remedy their own Year 2000 issues. PCD expects to 
complete its assessment of that vulnerability by April 30, 1999. 
To the extent that responses to Year 2000 readiness inquiries are 
unsatisfactory, the Company intends to change suppliers, service 
providers or contractors to those who have demonstrated Year 2000 
readiness, but the Company cannot assure that it will be 
successful in finding such alternative suppliers, service 
providers and contractors. The Company does not currently have 
any formal information concerning the Year 2000 compliance status 
of its customers but has received indications that most of its 
customers are working on Year 2000 compliance. If any of the 
Company's significant customers and suppliers do not successfully 
and timely achieve Year 2000 compliance, and the Company is 
unable to replace them with new customers or alternative 
suppliers, the Company's financial condition, results of 
operations and business could be materially adversely affected.

   The above discussion of the Company's efforts, and 
management's expectations, relating to Year 2000 compliance 
contains forward-looking statements within the meaning of the 
Securities Exchange Act of 1934. See "Forward Looking 
Information." The Company's ability to achieve Year 2000 
compliance, the level of incremental costs associated with 
compliance and the timing of compliance, could be adversely 
impacted by, among other things, the availability and cost of 
programming and testing resources, vendors' ability to modify 
proprietary software, and unanticipated problems identified in 
the ongoing compliance review.


ITEM 7A.  MARKET RISK AND SECURITY ANALYSIS

INTEREST RATE RISK

     PCD is exposed to fluctuations in interest rates in 
connection with its variable rate term loan.  In order to 
minimize the effect of changes in interest rates on earnings, PCD 
entered into an interest rate swap that fixed the interest rate 
on a notional amount of its variable rate term loan. See 
"Management's Discussion and Analysis of Operations - Liquidity 
and Capital Resources."  Under the swap agreement, PCD pays a 
fixed rate of 5.72% on a notional amount of $35,000,000 and 
receives LIBOR.  The potential increase in the fair value of its 
term loan when adjusting for the interest rate swap paying at a 
fixed rate would result from a hypothetical 10% decrease in 
interest rates was not material

<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA







                REPORT OF INDEPENDENT ACCOUNTANTS



To the Board of Directors and Shareholders of PCD Inc.

   In our opinion, the accompanying consolidated balance sheets 
and the related consolidated statements of operations,  cash 
flows and stockholders' equity present fairly, in all material 
respects, the financial position of PCD Inc. and its subsidiaries 
at December 31, 1998 and 1997, and the results of their 
operations and their cash flows for each of the three years in 
the period ended December 31, 1998, in conformity with generally 
accepted accounting principles.  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 of these 
statements in accordance with generally accepted auditing 
standards which 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, assessing the accounting 
principles used and significant estimates made by management, and 
evaluating the overall financial statement presentation.  We 
believe that our audits provide a reasonable basis for the 
opinion expressed above.



PricewaterhouseCoopers  LLP


/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
January 29, 199

<PAGE>
<TABLE>
<CAPTION>
                               PCD INC.
                      CONSOLIDATED BALANCE SHEETS
                   (In thousands, except share data)

                                                              December 31,
                                                             --------------
                                                             1998      1997
                                                             ----      ----
<S>                                                       <C>      <C>
ASSETS
Current assets:
 Cash and cash equivalents................................ $    852 $  3,990
 Accounts receivable - trade (less allowance for
  uncollectible accounts of $319 in 1998 and $205 in 1997)    5,851    6,804
 Inventory................................................    5,042    4,796
 Prepaid expenses and other current assets................      643    1,135
                                                           -------- --------
          Total current assets                               12,388   16,725
Equipment and improvements, net...........................   18,127   15,843
Deferred tax asset........................................   14,192   15,335
Goodwill..................................................   58,592   61,718
Intangible assets.........................................   12,456   13,539
Debt financing fees.......................................    1,531    1,800
Other assets..............................................    1,818    1,632
                                                           -------- --------
          Total assets.................................... $119,104 $126,592
                                                           ======== ========

                 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Short-term debt.......................................... $  9,700 $ 13,000
 Current portion of long-term debt........................    8,400    4,700
 Accounts payable - trade.................................    3,146    4,213
 Accrued liabilities......................................    2,981    7,444
                                                           -------- --------
          Total current liabilities.......................   24,227   29,357
Long-term debt, net of current portion....................   37,600   65,300
Subordinated debenture - related party....................        -   22,903
Minority interest.........................................        -       37
                                                           -------- --------
          Total liabilities...............................   61,827  117,597
Commitments and contingencies (Notes 9, 10 and 12)........        -        -
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, 8,439,682 and 6,020,182  shares issued
  and outstanding in 1998 and 1997, respectively..........       84       60
Additional paid-in capital................................   61,674   17,904
Accumulated deficit.......................................   (4,627)  (8,930)
Accumulated other comprehensive income - 
 cumulative translation adjustment........................      146        -
Deferred compensation.....................................        -      (39) 
                                                           -------- --------
          Total stockholders' equity......................   57,277    8,995
                                                           -------- --------
          Total liabilities and stockholders' equity...... $119,104 $126,592
                                                           ======== ========
</TABLE>
              The accompanying notes are an integral part of the
                      consolidated financial statements

<PAGE>
<TABLE>
<CAPTION>
                                PCD INC.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share amounts)

                                                    Years Ended December 31,
                                                    ------------------------
                                                     1998     1997     1996
                                                     ----     ----     ----
<S>                                              <C>      <C>       <C>
Net sales.......................................  $64,391  $ 29,796  $26,857
Cost of sales...................................   27,331    15,120   14,457
                                                  -------  --------  -------
  Gross profit..................................   37,060    14,676   12,400
Operating expenses..............................   15,172     5,816    5,445
Amortization....................................    4,209         -        -
Acquired in-process research and development....        -    44,438        -
                                                  -------  --------  -------
  Income (loss) from operations.................   17,679   (35,578)   6,955
Interest and other income.......................      421     1,167      734
Interest expense................................   (9,234)     (227)      (9)
                                                  -------  --------  -------
  Income (loss) before income taxes.............    8,866   (34,638)   7,680
Provision for (benefit) income taxes............    3,675   (11,802)   2,895
                                                  -------  --------  -------
Net income (loss) before extraordinary item.....    5,191   (22,836)   4,785
Extraordinary item, net of 
  income tax benefit of $567 (Note 4)...........     (888)        -        -
                                                  -------  --------  -------
  Net income (loss).............................    4,303   (22,836)   4,785
                                                  =======  ========  =======

Basic earnings (loss) per share:
  Income (loss) before extraordinary item.......  $  0.69  $  (3.83) $  0.87
  Extraordinary item............................    (0.12)        -        -
                                                  -------  --------  -------
     Net income (loss)..........................  $  0.57  $  (3.83) $  0.87
                                                  =======  ========  =======

Diluted earnings (loss) per share:
  Income (loss) before extraordinary item.......  $  0.64  $  (3.83) $  0.76
     Extraordinary item.........................    (0.11)        -        -
                                                  -------  --------  -------
     Net income (loss)..........................  $  0.53  $  (3.83) $  0.76
                                                  =======  ========  =======

Weighted average number of common and common
 equivalent shares outstanding:
     Basic......................................    7,487     5,955    5,478
                                                  =======  ========  =======
     Diluted                                        8,168     5,955    6,292
                                                  =======  ========  =======
</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>
                                                                    Accumulated
                               Common Stock   Additional Retained      Other                  Treasury Stock     Total
                               ----------------  Paid-in   Earnings  Comprehensive    Deferred  -------------- Stockholders'
                             Shares Par Value  Capital   (Deficit)     Income    Compensation Shares  Amount    Equity
                             ------ --------- ---------- --------- ------------- ------------ ------  ------ ------------
<S>                        <C>        <C>    <C>        <C>            <C>        <C>       <C>     <C>       <C>
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
Public stock offering, net   2,300,000     23   42,439                                                          42,462
Exercise of stock options      119,500      1      149                                                             150
Other comprehensive income                                              $ 146                                      146
Tax benefit from stock
 options exercised                                 357                                                             357
Valuation of stock warrant                         820                                                             820
Purchase of stock warrant                            5                                                               5
Amortization of deferred
 compensation                                                                           39                          39
Net income                                                  4,303                                                4,303
                             ---------  -----  -------   --------       -----     --------  --------  ------   -------
Balance, December 31, 1998   8,439,682  $  84  $61,674   $ (4,627)      $ 146                                  $57,277
                             =========  =====  =======   ========       =====                                  =======


The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


<PAGE>
                                 PCD INC.
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In thousands)
<TABLE>
<CAPTION>
                                                    Years Ended December 31,
                                                    1998     1997      1996
<S>                                              <C>      <C>        <C>
Cash flows from operating activities:
 Net income (loss)............................... $ 4,303  $(22,836)  $4,785
 Adjustments to reconcile net income (loss)
  to net cash provided by operating activities:
   Acquired in-process research and development..       -    44,438        -
   Depreciation..................................   3,472     1,530    1,389
   Amortization of warrant.......................   2,917        34        -
   Amortization of goodwill and intangible assets   4,209         -        -
   Loss (gain) on disposal of equipment and
    improvements.................................       9        (4)     107
   Allowance for uncollectible accounts..........       -         -       40
   Amortization of deferred compensation.........      39        58       58
   Tax benefit from stock options exercised......     357       673      356
   Provision for deferred taxes..................   1,143   (15,253)     (80)
   Changes in operating assets and liabilities,
    net of acquisition of Wells Electronics, Inc.:
     Accounts receivable                            1,262       888      (54)
     Inventory...................................     (93)     (539)     259
     Prepaid expenses and other current assets...     949       (68)     310
     Other assets................................    (100)   (1,830)     (25)
     Accounts payable............................  (1,448)      479      (59)
     Accrued liabilities.........................  (4,972)      516      692
                                                  -------  --------  -------
      Total adjustments..........................   7,744    30,922    2,993
                                                  -------  --------  -------
      Net cash provided by operating activities..  12,047     8,086    7,778
Cash flows from investing activities:
 Equipment and improvements expenditures           (5,827)   (2,531)  (1,902)
 Acquisition of Wells Electronics, Inc.,
  net of cash acquired of $827...................       -  (130,357)       -
                                                  -------  --------  -------
      Net cash used in investing activities        (5,827) (132,888)  (1,902)
Cash flows from financing activities:
 Proceeds from issuance of short-term debt              -    13,000        -
 Payments for short-term debt....................  (3,300)        -        -
 Proceeds from issuance of long-term debt........       -    70,000        -
 Payments for long-term debt..................... (24,000)        -        -
 Proceeds from issuance of subordinated debenture
  and Warrant....................................       -    25,000        -
 Payments for subordinated debenture              (25,000)        -        -
 Amortization of debt financing fees.............     269         -        -
 Proceeds from exercise of common stock options..     150       263      194
 Proceeds from issuance of warrant...............       5         -        -
 Proceeds from issuance of common stock, net.....  42,462         -   10,501
                                                  -------  --------  -------
      Net cash (used in)
       provided by financing activities..........  (9,414)  108,263   10,695
                                                  -------  --------  -------
Net (decrease) increase in cash                    (3,194)  (16,539)  16,571
Effect of exchange rate on cash..................      56         -        -
Cash and cash equivalents at beginning of year...   3,990    20,529    3,958
                                                  -------  --------  -------
Cash and cash equivalents at end of year......... $   852  $  3,990  $20,529
                                                  =======  ========  =======
Supplemental disclosures of cash flow information:
 Cash paid during the year for:
  Interest....................................... $ 7,580  $     20  $     9
                                                  =======  ========  =======
  Income taxes................................... $ 4,793  $  3,049  $ 2,452
                                                  =======  ========  =======

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

<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 
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.


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, 1998 and December 31, 1997. 

   CONCENTRATIONS OF CREDIT RISK

   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
<PAGE>
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. A greater portion of the Company's accounts 
receivables are 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.

   MANAGEMENT ESTIMATES

   The preparation of financial statements in conformity with 
generally accepted accounting principles requires management to 
make estimates and assumptions that affect the reported amounts 
of assets and liabilities and disclosure of contingent assets and 
liabilities at the date of the 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.

   INTEREST RATE SWAP

   The Company uses derivative financial instruments for purposes 
other than trading and does so to reduce its exposure to 
fluctuations in interest rates.  Gains and losses on hedges of 
existing assets and liabilities are included in the carrying 
amounts of those assets or liabilities and are ultimately 
recognized in income.  The amounts receivable and payable are 
recorded as a current liability with realized gains or losses 
recognized as adjustments to interest expense.

   Under the interest rate swap contract, the Company agrees to 
pay an amount equal to a specified floating rate of interest 
times a notional principal amount, and to receive in return an 
amount equal to a specified fixed rate of interest times the same 
notional principal amount.  The notional amounts of the contract 
are not exchanged.  No other cash payments are made unless the 
contract is terminated prior to maturity, in which case the 
amount paid or received in settlement is established by agreement 
at the time of termination, and usually represents the net 
present value, at current rates of interest, of the remaining 
obligations to exchange payments under the terms of the contract. 
The interest rate swap contract is entered into with a major 
financial institution in order to minimize credit risk.  This 
contract has a term from February 1998 through March 2001.  At 
December 31, 1998, the Company was a variable rate payer of 
5.04797% and received a fixed rate of 5.72% on notional amount of 
$35,000,000. The fair value at December 31, 1998, was an 
unfavorable $523,000.

   INVENTORY

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

   RESEARCH AND DEVELOPMENT

   Research and development costs are charged to expense as 
incurred. 

   NET INCOME PER COMMON SHARE

   In accordance with FAS 128,  the following table reconciles 
net income 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, 1998, 1997 and 1996.


</TABLE>
<TABLE>
<CAPTION>
                                              Net Income           Per Share
                                                (Loss)     Shares     Amount
                                              ----------- -------- ----------
<S>                                         <C>           <C>       <C>
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, 1997
Basic and diluted loss...................... $(22,836,000) 5,954,657 $ (3.83)
                                             ============  ========= =======
For the year ended December 31, 1998
Basic earnings before extraordinary item.... $  5,191,000  7,486,915 $  0.69
Assumed exercise of options (treasury method)           -    680,610       -
                                             ------------  --------- -------
Diluted earnings before extraordinary item.. $  5,191,000  8,167,525 $  0.64
                                             ============  ========= =======
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                              Net Income            Per Share
                                                (Loss)      Shares    Amount
                                              -----------  -------- ---------
<S>                                         <C>           <C>       <C>
Extraordinary item                           $   (888,000) 7,486,915 $ (0.12)
Assumed exercise of options (treasury method)           -    680,610       -
                                             ------------  --------- -------
Diluted extraordinary item.................. $   (888,000) 8,167,525 $ (0.11)
                                             ============  ========= =======

Basic earnings.............................. $  4,303,000  7,486,915 $  0.57
Assumed exercise of options (treasury method)           -    680,610       -
                                             ------------  --------- -------
Diluted earnings                             $  4,303,000  8,167,525 $  0.53
                                             ============  ========= =======
</TABLE>

   In 1998 and 1997, anti-dilutive Common Stock equivalents of 
79,366 and 679,468 shares, respectively were not included in the 
calculation of diluted EPS.

   EQUIPMENT AND IMPROVEMENTS

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

   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.

   FOREIGN CURRENCY TRANSLATION ADJUSTMENT 

   The functional currency of the Company's foreign operation is 
the foreign subsidiary's local currency.  Assets and liabilities 
of the foreign subsidiary are translated using the current 
exchange rate in effect at the balance sheet date.  Revenue and 
expense items are translated at average exchange rates for the 
period.  The resulting translation adjustments are recorded as a 
component of stockholders' equity.  Gains or losses resulting 
from foreign currency transactions are included in other income.

   REPORTABLE BUSINESS SEGMENTS

   Effective for the year ended December 31, 1998, the Company 
adopted SFAS 131, which requires a new basis of determining 
reportable business segments, i.e. the management approach.  This 
approach (as contrasted with the prior requirement which utilized 
a specified classification system for determining segments) 
designates the Company's internal organization as used by 
management for making operating decisions and assessing
<PAGE>
performance as the source for business segments.  On this basis, 
the Company has two principal businesses and, therefore, two 
reportable segments: IC Package interconnect segment and the 
industrial equipment and avionics segment.  Segment results, as 
well as selected geographic data, are presented on this new 
basis, as well as retroactively.

   NEW ACCOUNTING STANDARDS

   In 1998, the Financial Accounting Standards Board released 
Statement of Financial Accounting Standards No. 133, Accounting 
for Derivative Instruments and Hedging Activities ("FAS 133"), 
which becomes effective for all fiscal quarters beginning after 
June 15, 1999.  FAS 133 standardizes the accounting for 
derivative instruments, including certain derivative instruments 
embedded in other contracts, by requiring that an entity 
recognize those items as assets or liabilities in the statement 
of financial position and measure them at fair value.  The 
Company is currently evaluating the impact that FAS 133 will have 
on its future reporting requirements.


3.  ACQUISITION OF WELLS ELECTRONICS, INC.:

   On December 26, 1997, the Company acquired all of the 
outstanding 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.

   The Company allocated the purchase price of the acquisition 
based on the fair value of the assets acquired and liabilities 
assumed.  Acquired intangible assets consist of patented 
technology and trade names and trademarks valued at approximately 
$3.2 million and $10.4 million, respectively.  A portion of the 
purchase price was allocated to these intangible assets.  These 
intangible assets are being amortized over their estimated useful 
lives of 6 and 20 years, respectively.  Additionally 
approximately $44.4 million 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

<PAGE>
reached technological feasibility.  This amount was charged to 
operations at the acquisition date.

   The final purchase price of approximately $130,907,000, which 
was subject to adjustment by the amount 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, was 
determined during 1998. The aggregate purchase price of 
$130,907,000 included acquisition costs. Acquisition costs 
consist of approximately $500,000 of financial advisory fees and 
$936,730 of professional fees. The aggregate purchase price was 
allocated as follows:

     Current assets............................    $  7,445
     Equipment and improvements................       9,501
     Acquired intangibles......................      13,539
     Acquired in-process research & development      44,438
     Goodwill..................................      61,718
     Other assets..............................       1,624
     Liabilities assumed.......................      (7,358)
                                                   --------
                                                   $130,907
                                                   ========

4.  EXTRAORDINARY ITEM:

     In the second quarter of 1998, the Subordinated Debenture 
issued to Emerson Electric was paid in full.  The Company 
incurred additional interest expense of $642,500, which 
represents the amortized portion of the Emerson Warrant 
applicable to the second quarter of 1998, and prepayment 
penalties of $812,500, which represents the prepayment penalty 
associated with the Subordinated Debenture.

5.  INVENTORY:

    Inventory consisted of the following at December 31: 

                                                 1998      1997
                                                 (In thousands)
   Raw materials and finished subassemblies..   $3,536   $3,387
   Work in process...........................      492      532
   Finished goods............................    1,014      877
                                                ------   ------
   Total.....................................   $5,042   $4,796
                                                ======   ======
<PAGE>
6.  EQUIPMENT AND IMPROVEMENTS:

Equipment and improvements consisted of the following at 
December 31:

<TABLE>
<CAPTION>
                                      Estimated Useful         1998     1997
                                       Life in Years           (In thousands)
<S>                                                         <C>      <C>
Tools, dies and molds............          5                 $13,497  $11,244
Machinery and equipment..........          10                  5,732    5,546
Office furniture and fixtures....          5                   1,968    1,978
Computer software................          3                     383       99
Transportation equipment.........          4                     237      205
Leasehold improvements...........  Shorter of lease term         713      718
                                      or useful live         -------  -------
                                                              22,530   19,790
Less accumulated depreciation....                              7,442    4,852
                                                             -------  -------
                                                              15,088   14,938
Capital expenditures in progress.                              3,039      905
                                                             -------  -------
Equipment and improvements, net..                            $18,127  $15,843
                                                             =======  =======
</TABLE>


7.  INTANGIBLE ASSETS AND GOODWILL:

   Intangible assets and goodwill consisted of the following at 
December 31:

                                                1998     1997
                                               (In thousands)
                                              ----------------
Patented technology......................     $ 3,155  $ 3,155
Trade names/trademarks...................      10,384   10,384
                                              -------  -------
  Subtotal...............................      13,539   13,539
  Less accumulated amortization..........       1,083        -
                                              -------  -------
    Net intangibles......................     $12,456  $13,539
                                              =======  =======
Goodwill.................................     $61,718  $61,718
  Less accumulated amortization..........       3,126        -
                                              -------  -------
    Net goodwill.........................     $58,592  $61,718
                                              =======  =======



<PAGE>
8.  ACCRUED LIABILITIES:

   Accrued liabilities consisted of the following at December 31: 


                                            1998     1997
                                           (In thousands)
                                          ----------------
Compensation and benefits..............   $1,420    $2,210
Professional fees......................      414       846
Income taxes payable...................        -     2,604
Other..................................    1,147     1,784
                                          ------    ------
Total..................................   $2,981    $7,444
                                          ======    ======



9.  LINE OF CREDIT AND LONG-TERM DEBT:

   On December 26, 1997, the Company entered into a secured 
$20,000,000 Revolving Credit Agreement ("Revolver"), $30,000,000 
Secured Term Loan Agreement A and $40,000,000 Secured Term Loan 
Agreement B (collectively referred to as the "Senior Credit 
Facility") with several banks.  The Senior Credit Facility is 
collateralized by all of the assets of PCD and its subsidiaries. 
In conjunction with the Senior Credit Facility, PCD and Wells-CTI 
(formerly Wells Electronics, Inc.) each entered into a stock 
pledge agreement pledging all or substantially all of the stock 
of the subsidiaries of PCD and Wells-CTI. Each of PCD, Wells-CTI 
and certain of their subsidiaries also entered into a security 
agreement and certain other collateral or conditional assignments 
of assets.

   In August 1998, the Company renegotiated the Senior Credit 
Facility.  As a result, Term Loan A and Term Loan B were combined 
into a single term loan.  Accordingly, the interest rate premium 
of 50 basis points charged on Term Loan B was eliminated.  
According to its terms, the re-negotiated Senior Credit Facility 
will terminate on or before December 31, 2003.  At December 31, 
1998 and 1997, borrowings of $55,700,000 and $83,000,000 were 
outstanding under the Senior Credit Facility at a weighted 
average interest rate of 7.60% and 8.96%, respectively.  The 
unused portion of the Revolver at December 31, 1998 and 1997 was 
$10,300,000 and $7,000,000, respectively.


<PAGE>
   The agreement governing the Senior Credit Facility contains 
numerous financial and operating covenants.  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 lender, 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 that 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.

   Long-term debt consists of the following: 

                                        1998      1997
                                        (In thousands)

     Total long-term debt..........   $46,000   $70,000
     Less - current portion........     8,400     4,700
                                      -------   -------
                                      $37,600   $65,300
                                      =======   =======



   Maturities of long-term debt are as follows: 


Year Ended December 31,
-----------------------
                                                Amount
                                            (In thousands)
                                            --------------
1999.....................................       $ 8,400
2000.....................................         8,800
2001.....................................         9,200
2002.....................................         9,600
2003.....................................        10,000
                                                -------
                                                $46,000
                                                =======


<PAGE>
10.  SUBORDINATED DEBENTURE: 

   On December 26, 1997, the Company entered into a Subordinated 
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 Subordinated Debenture ("Debenture") with a 
principal amount of $25 million at an annual rate of interest of 
10% and a Common Stock Purchase Warrant (the "Emerson Warrant") 
for the purchase of up to 525,000 shares of PCD Common Stock at a 
purchase price of $1.00 per share.  In April 1998, the Company 
paid the principal, interest and prepayment penalty of 3.25%, or 
$812,500, in full.  Accordingly, 375,000 shares of the Emerson 
Warrant terminated by the terms thereof, leaving the Emerson 
Warrant only exercisable for 150,000 shares of PCD Common Stock.  
The Emerson Warrant expires on December 31, 2000.


11.  INCOME TAXES:

   The provision (benefit) for income taxes for the years ended 
December 31, 1998, 1997 and 1996 was as follows:


                                       1998     1997     1996
                                             (In thousands)
                                     -------------------------
Current
  Federal                            $  (220) $  2,937  $2,504
  State............................      625       514     471
  Foreign..........................    1,560         -       -
                                     -------  --------  ------
     Total current.................  $ 1,965  $  3,451  $2,975
                                     -------  --------  ------
Deferred
  Federal..........................  $ 1,345  $(12,107) $  (62)
  State............................      (32)   (3,146)    (18)
  Foreign..........................     (170)        -       -
                                     -------  --------  ------
     Total deferred................    1,143   (15,253)    (80)
                                     -------  --------  ------
                                     $ 3,108  $(11,802) $2,895
                                     =======  ========  ======

   The components of the net deferred tax asset consisted of the 
following at December 31, 1998 and 1997:

<PAGE>
                                              1998        1997
                                               (In thousands)
                                            -------------------
Deferred tax assets (liabilities):
 Difference in accounting for inventory     $   154     $   148
 Accounts receivable allowances........          87          81
 Vacation and other accruals...........         373         351
 Net operating loss carryforwards......         429           -
 Foreign Tax Credit carryforward.......         156           -
 Amortization..........................        (565)          -
 In-process research and development...      14,336      15,362
 Difference in depreciation methods            (778)       (607)
                                            -------     -------
     Net deferred tax asset............     $14,192     $15,335
                                            =======     =======

   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.

   At December 31, 1998, for state tax purposes, the Company has 
a net operating loss of approximately $5,945,000 which expires 
after 2001.  In addition, the Company has a foreign tax credit 
carryforward of approximately $156,000 which expires after 2003. 
The Company does not provide for U.S. deferred income taxes on 
the undistributed earnings of its foreign subsidiaries as the 
earnings are considered to be permanently reinvested.

   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>
                                                   1998     1997      1996
                                                        (In thousands)
<S>                                              <C>     <C>        <C>
Income taxes at U.S. statutory rate of 34%        $2,520  $(11,777)  $2,611
State income taxes........................           391    (1,737)     300
Benefit of foreign sales corporation......          (127)       88        -
Benefit of foreign tax credits............          (156)        -        -
Foreign tax rate differential.............           501         -        -
Non-deductible expenditures...............             -     1,624        -
Other, net................................           (21)        -      (16)
                                                  ------  --------   ------
                                                  $3,108  $(11,802)  $2,895
                                                  ======  ========   ======
</TABLE>
<PAGE>
12.  COMMITMENTS AND CONTINGENCIES:

   LITIGATION:

   On August 21, 1995, a predecessor ("CTi") of the Company's 
wholly-owned subsidiary, Wells-CTI, Inc. ("Wells-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") 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") are invalid and are not infringed by CTi, the products 
of which include burn-in sockets for certain "leaded" packages 
(including Quad Flat Paks) and BGA packages. 

   In other litigation between Wells-CTI and Pfaff concerning the 
Pfaff Leadless Patent, the United States Supreme Court has 
affirmed the decision of the United States Court of Appeals for 
the Federal Circuit finding that all of the individual 
descriptions of the invention covered by the Pfaff Leadless 
Patent which were at issue in that case are invalid. Pfaff then 
agreed not to sue CTi or Wells-CTI for infringement of the Pfaff 
Leadless Patent, including infringement based upon claims not 
adjudicated in that litigation.  The litigation between Wells-CTI 
and Pfaff and CTi and Pfaff relating to the Pfaff Leadless Patent 
is thus concluded.  However, issues concerning the Pfaff BGA 
Patent will remain to be resolved in the District of Arizona 
litigation.

   The Company believes, based on the advice of counsel, that CTi 
has meritorious positions of non infringement and invalidity with 
respect to the Pfaff BGA Patent issues raised in the District of 
Arizona litigation and, as necessary, will vigorously litigate 
its position.  There can be no assurance, however, that the 
Company, CTi or Wells-CTI will prevail in any pending or future 
litigation, and a final court determination that CTi or Wells-CTI 
has infringed the Pfaff BGA Patent could have a material adverse 
effect on the Company.  Such adverse effect could include, 
without limitation, the requirement that CTi or Wells-CTI pay 
substantial damages for past infringement and an injunction 
against the manufacture or sale in the United States of such 
products as are found to be infringing.



<PAGE>
LEASES:

   The Company leases office and production facilities in 
Peabody, Massachusetts, South Bend, Indiana, Yokohama, Japan, 
Swatara, Pennsylvania and Phoenix, Arizona and leases 
distribution and a technical sales support facility in 
Northhampton, England. These rentals are subject to escalation in 
real estate taxes and operating expenses. Rental expense for the 
years ended December 31, 1998, 1997 and 1996 was $1,270,000, 
$480,000, and $498,000 respectively.

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



Year Ended December 31,                         Amount
-----------------------                     (In thousands)
                                            --------------
1999......................................      $1,137
2000......................................       1,005
2001......................................         962
2002......................................         909
2003......................................         697
2004 and thereafter.......................       1,274



13.  STOCKHOLDERS EQUITY:

 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. As of December 31, 1998, 
22,500 shares of the Company's common stock were available for 
future grants and 6,000 of the 13,500 options which are 
outstanding under the 1996 Directors Stock Plan were exercisable.  
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
<PAGE>
Plan, the exercise price of an option shall be at least 100% of 
the fair market value (as determined under the terms of the 1996 
Stock Plan) of a share of Common Stock on the date of grant. The 
aggregate number of shares of Common Stock available for awards 
under the Plan is 324,000. No option shall be exercisable with 
respect to any shares later than 10 years after the date of grant 
of such options or 5 years in the case of incentive options 
granted to the owner of stock possessing more than 10% of the 
value of all classes of stock of the Company. Vesting is 
determined in the sole discretion of the Compensation Committee 
of the Board of Directors and the typical vesting plan is in four 
approximately equal annual installments, the first of which vests 
on the date of grant. As of December 31, 1998, 214,000 shares of 
the Company's common stock were available for future grants and 
36,918 of the 103,500 options which are outstanding under the 
1996 Stock Plan were exercisable.  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 provided 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 Compensation Committee 
administers the 1992 Stock Option Plan.  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 and the typical vesting plan 
is in four approximately equal annual installments, the first of 
which vests on the date of grant. As of December 31, 1998, no 
shares of the Company's common stock were available for future 
grants and all 517,850 options outstanding are exercisable.

The following table summarizes the transactions from these plans:










<PAGE>
                                                     Weighted
                                                      average
                                          Options exercise price
                                          ------- --------------
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 canceled......................   (4,000)     12.00
  Options granted                          78,000      21.08
                                          -------
Options outstanding at December 31, 1997  719,850       3.46
  Options exercised..................... (119,500)      1.26
  Options canceled......................   (2,000)     21.50
  Options granted.......................   36,500      19.45
                                          -------
Options outstanding at December 31, 1998  634,850       4.74
                                          =======

   Summarized information about stock options outstanding at 
December 31, 1998 is as follows:

<TABLE>
<CAPTION>
                                                              Exercisable
                                     Weighted             ------------------
                                     Average    Weighted            Weighted
                         Number of   Remaining   Average             Average
  Range of                options   Contractual Exercise  Number of  exercise
Exercise prices         outstanding     Life      Price    options    price
---------------         ----------- ----------- --------  --------- ---------
<S>                      <C>            <C>     <C>       <C>        <C>
$1.15................     408,350        3.80    $ 1.15    408,350    $ 1.15
 1.54-2.08...........     109,500        6.38      1.66    109,500      1.66
 12.00...............       5,750        7.50     12.00      3,750     12.00
 16.125-18.50........      45,250        8.87     17.26     18,500     17.11
 21.50...............      16,000        9.08     21.50      4,000     21.50
 23.25...............      50,000        9.00     23.25     16,668     23.25
</TABLE>

   For the years ended December 31, 1998, 1997 and 1996, options 
to purchase 560,768 shares, 630,685 shares and 740,049 shares, 
respectively, of Common Stock were exercisable with the remaining 
options becoming exercisable at various dates through 
December 26, 2002. The Company has recorded deferred compensation 
of $239,000 for the difference between fair value and exercise 
price for options granted in 1995 and such deferred compensation 
is being amortized over the option vesting period.

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

   SUPPLEMENTAL DISCLOSURE FOR STOCK BASED COMPENSATION:

   The Company has three stock-based compensation plans, which 
are described above. In October 1995, the FASB issued SFAS 123, 
Accounting for Stock-Based Compensation. SFAS 123 is effective 
for periods beginning after December 15, 1995. SFAS 123 requires 
that companies either recognize compensation expense for grants 
of stock, stock options, and other equity instruments based on 
fair value, or provide pro forma disclosure of net income and 
earnings per share in the notes to the financial statements. The 
Company adopted the disclosure provisions of SFAS 123 in 1996 and 
has applied APB Opinion 25 and related Interpretations in 
accounting for its plans. Accordingly, no compensation cost has 
been recognized for its stock option plans. Had compensation cost 
for the Company's stock-based compensation plans been determined 
based on the fair value at the grant dates as calculated in 
accordance with SFAS 123, the Company's net income (loss) and 
earnings (loss) per share for the years ended December 31, 1998, 
1997 and 1996 would have been reduced to the pro forma amounts 
indicated below:

<TABLE>
<CAPTION>
                          1998                        1997                         1996
                ------------------------   ---------------------------   ------------------------
                              Net income   Net income    Net income                  Net income
                Net income    per share      (loss)   (loss) per share   Net income  per share
                ---------- -------------   ---------- ----------------   ---------- -------------
                           Basic Diluted               Basic  Diluted               Basic Diluted
                           ----- -------              ------  -------               ----- -------
<S>             <C>       <C>    <C>      <C>        <C>     <C>          <C>      <C>    <C>
As reported...   $ 4,303   $0.57  $0.53    $(22,836)  $(3.83) $(3.83)      $4,785   $0.87  $0.76
Pro forma.....   $ 3,898   $0.52  $0.48    $(23,119)  $(3.88) $(3.88)      $4,665   $0.85  $0.74
</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:
<PAGE>
                                       1998      1997        1996
                                      -----     ------      -----
   Dividend yield...............      None       None       None
   Expected volatility..........      61.7%     48.79%      45.0%
   Risk free interest rate......      5.40%      7.27%      7.27%
   Expected life (years)........      5.0        5.0        5.0


   Weighted average fair value of options granted at fair value 
at date of grant:


                   1996..........     $ 7.83
                                      ======
                   1997..........     $12.73
                                      ======
                   1998..........     $12.57
                                      ======

   The effect of applying SFAS 123 in this pro forma disclosure 
is not indicative of future amounts. Additional awards in future 
years are anticipated.


14.  PROFIT SHARING PLAN:

   The Company has Employee Savings and Profit Sharing Plans (the 
"Plans") under section 401(k) of the Internal Revenue Code of 
1986, as amended.  All employees of the Company, after reaching 
the applicable service level, are eligible to participate in the 
Plans.  A participating employee may elect to defer on a pre-tax 
basis up to 15% of his or her salary.  This amount, plus a 
matching amount provided by the Company, is contributed to the 
Plan.  Company contributions to the Plans for the years ended 
December 31, 1998, 1997 and 1996 amounted to $190,000, $93,000 
and $80,000, respectively.


15.  EMPLOYEE STOCK PURCHASE PLAN:

   During 1998, the stockholders of the Company approved the 1998 
Employee Stock Purchase Plan (the "1998 Employee Stock Purchase 
Plan") covering 80,000 shares of the Company's Common Stock.  All 
employees who had completed twelve months of employment, except 
for those employees who possessed at least 5% of the voting power 
of the Company's Common Stock were entitled, through payroll 
deductions of amounts up to 10% of his or her salary, to purchase

<PAGE>
shares of the Company's Common Stock at the lessor of 85% of the 
market price at the offering date or the offering termination 
date.  No shares were issued in 1998.


16.  SIGNIFICANT CUSTOMERS AND EXPORT SALES:

   One customer accounted for approximately 15.8% of the 
Company's net sales in 1998, a second customer accounted for 
approximately 12.7% of the Company's net sales in 1998 and a 
third customer counted for approximately 14.5% and 17.4% of net 
sales of the Company in 1997 and 1996, respectively. A fourth 
customer accounted for 12.7% of the net sales of the Company in 
1997.  The Company had export sales of approximately $13,705,000, 
$3,876,000 and $2,975,000 in 1998, 1997 and 1996, 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.


17.  SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED):

<TABLE>
<CAPTION>
                                       For the Three Months Ended
                                -----------------------------------------
                                Mar 28,     Jul 4,     Oct 3,     Dec 31,
                               --------    -------    -------    --------
<S>                           <C>         <C>        <C>        <C>
1998
  Net sales..................  $16,726     $18,553    $15,786    $13,326
  Gross profit...............    9,485      10,847      9,161      7,567
  Net income (loss) before
   extraordinary item........      (27)      2,317      1,753      1,148
  Extraordinary item,
   net of taxes..............        -        (888)         -          -
  Net income (loss)..........      (27)      1,429      1,753      1,148
  Basic earnings (loss) per share:
    Income (loss) before
     extraordinary item......  $     -     $ 0.29     $  0.21    $  0.14
    Extraordinary item.......  $     -     $(0.11)    $     -    $     -
    Net income (loss)........  $     -     $ 0.18     $  0.21    $  0.14
  Diluted earnings (loss) per share:
     Income (loss) before
      extraordinary item.....  $     -     $ 0.27     $  0.19    $  0.13
     Extraordinary item......  $     -     $(0.10)    $     -    $     -
     Net income (loss).......  $     -     $ 0.17     $  0.19    $  0.13
</TABLE>






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


18.  SEGMENT INFORMATION:

   The Company designs, manufactures and markets electronic 
connectors for use in IC package interconnect applications, 
industrial equipment and avionics.  The Company has two principal 
businesses: IC package interconnect segment and industrial and 
avionics segment.  Each of these is a business segment with its 
respective financial performance detailed in this report.  Net 
income of the two principal businesses excludes the effects of 
special charges and gains.  The results for IC package 
interconnects include the effects of royalty revenues from IC 
package-related cross-license agreements.  Business assets are 
the owned or allocated assets used by each business.  Included in 
corporate activities are general corporate expenses, net of 
elimination of inter-segment transactions, which are generally 
intended to approximate market prices.  Assets of corporate 
activities include cash and short-term investments and corporate 
equipment and improvements, net.
<TABLE>
<CAPTION>
                                                1998       1997       1996
                                                      (in thousands)
<S>                                         <C>        <C>        <C>
Sales:
Industrial/Avionics......................    $ 18,214   $ 17,199   $ 16,761
IC Package interconnect..................      46,177     12,597     10,096
                                             --------   --------   --------
  Totals.................................    $ 64,391   $ 29,796   $ 26,857
                                             ========   ========   ========

Net income(loss):
Industrial/Avionics......................    $  2,426   $  2,724   $  2,180
IC Package interconnect..................       2,866      3,083      2,309
Corporate activities.....................        (101)       414        296
Special charges - IC Package interconnect        (888)   (29,057)         -
                                             --------   --------   --------
  Totals.................................    $  4,303   $(22,836)   $ 4,785
                                             ========   ========   ========
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                1998       1997       1996
                                                      (in thousands)
<S>                                         <C>        <C>        <C>
Special charges:
Acquired research & development..........    $      -   $ 29,057   $      -
Extraordinary item.......................         888          -          -
                                             --------   --------   --------
  Totals.................................    $    888   $ 29,057   $      -
                                             ========   ========   ========

Assets:
Industrial/Avionics......................    $  8,960   $  9,909   $ 12,304
IC Package interconnect..................     108.521    116,683      8,602
Corporate activities.....................       1,623          -     11,550
                                             --------   --------   --------
  Totals.................................    $119,104   $126,592   $ 32,456
                                             ========   ========   ========

Equipment and improvements:
Industrial/Avionics......................    $  7,042   $  6,367   $  5,982
IC Package interconnect..................      17,522     14,328      3,734
Corporate activities.....................       1,005          -          -
                                             --------   --------   --------
  Totals.................................    $ 25,569   $ 20,695   $  9,716
                                             ========   ========   ========

Additions:
Industrial/Avionics......................    $  1,341   $  1,179   $  1,376
IC Package interconnect..................       3,550     10,853        526
Corporate activities.....................         885          -          -
                                             --------   --------   --------
  Totals.................................    $  5,776   $ 12,032   $  1,902
                                             ========   ========   ========

Depreciation:
Industrial/Avionics......................    $    843   $    810   $    790
IC Package interconnect..................       2,588        720        599
Corporate activities.....................          41          -          -
                                             --------   --------   --------
  Totals.................................    $  3,472   $  1,530   $  1,389
                                             ========   ========   ========

Intangible assets:
Industrial/Avionics......................    $      -   $      -   $      -
IC Package interconnect..................      75,257     75,257          -
Corporate activities.....................           -          -          -
                                             --------   --------   --------
  Totals.................................    $ 75,257   $ 75,257   $      -
                                             ========   ========   ========

Amortization:
Industrial/Avionics......................    $      -   $      -   $      -
IC Package interconnect..................       4,209          -          -
Corporate activities.....................           -          -          -
                                             --------   --------   --------
  Totals.................................    $  4,209   $      -   $      -
                                             ========   ========   ========
</TABLE>
<PAGE>
   The following geographic area data include trade revenues 
based on product shipment destination and royalty payor per 
location, and property, plant and equipment based on physical 
location:

<TABLE>
<CAPTION>
                                                1998       1997       1996
                                                      (in thousands)
<S>                                         <C>        <C>        <C>
Geographic area net trade revenue :
United States............................    $ 50,682   $ 25,879   $ 23,849
Japan....................................       1,131          -          -
Singapore................................       3,573          -          -
Rest of world............................       9,005      3,917      3,008
                                             --------   --------   --------
  Totals..................................   $ 64,391   $ 29,796   $ 26,857
                                             ========   ========   ========

Geographic area equipment and improvements:
United States............................    $ 22,594   $ 18,414   $  9,716
Japan....................................       2,975      2,261          -
Singapore................................           -         20          -
                                             --------   --------   --------
  Totals.................................    $ 25,569   $ 20,695   $  9,716
                                             ========   ========   ========
</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 May 3, 1997 
(Successor) 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.  
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.

KPMG LLP

Chicago, Illinois
January 15, 199

<PAGE>

           WELLS ELECTRONICS, INC. AND SUBSIDIARIES

                   CONSOLIDATED BALANCE SHEETS
                         as of May 3, 1997
                (In thousands, except share data)
<TABLE>
<CAPTION>

                                                               Successor
                                                              May 3, 1997
                                                              -----------
<S>                                                            <C>
ASSETS
Cash & cash equivalents.............................            $    95
Accounts receivable - trade.........................              4,516
Allowance for uncollectible accounts................               (100)
Inventory...........................................              2,540
Prepaid expenses and other current assets...........                416
Deferred tax assets.................................                571
                                                                -------
          Total current assets......................              8,038
Property, plant and equipment, net..................              9,224
Intangible assets, net..............................             10,157
Due from affiliate..................................              3,231
Other assets........................................                135
                                                                -------
          Total assets..............................            $30,785
                                                                =======

LIABILITIES AND SHAREHOLDER'S EQUITY
Short-term debt.....................................            $   268
Accounts payable - trade............................              3,016
Accrued expenses and other current liabilities......              2,669
Due to affiliate....................................                  -
          Total current liabilities.................              5,953
Long-term debt......................................                  -
Deferred tax liabilities............................              6,185
Minority interest...................................                  6
                                                                -------
          Total liabilities.........................             12,144

SHAREHOLDER'S EQUITY
Common stock, $10 par value; 13,500
 authorized shares; issued 7,825 shares.............                 78
Additional paid-in capital..........................             14,510
Retained earnings...................................              4,367
Foreign currency translation adjustments............               (314)
                                                                -------
          Total shareholder's equity................             18,641
                                                                -------
Commitment and contingencies........................                  -
          Total liabilities and shareholder's equity            $30,785
                                                                =======

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


              WELLS ELECTRONICS, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF INCOME
for 53 weeks ended May 3, 1997 and 48 weeks ended April 27, 1996
                 (In thousands, except share data)

<TABLE>
<CAPTION>
                                          Successor          Predecessor
                                         May 3, 1997        April27, 1996
<S>                                        <C>               <C>
Net sales...........................        $27,492           $17,998
Cost of sales.......................         13,181             9,271
                                            -------           -------
     Gross profit...................         14,311             8,727
Operating expenses..................          8,758             6,624
                                            -------           -------
     Income from operations.........          5,553             2,103
Non-operating income(expense):
Interest income.....................             11                 6
Interest expense....................            (93)             (115)
Royalty income......................            630               844
Minority interest...................             (6)                -
Other expense.......................            (23)              (40)
Foreign exchange gain/(loss)........            264                40
                                            -------           -------
          Total non-operating income            783               735
                                            -------           -------
  Income before income taxes........          6,336             2,838
Provision for income taxes..........          1,969               586
                                            -------           -------
          Net Income................        $ 4,367           $ 2,252
                                            =======           =======

Earnings per share..................        $558.08           $287.80
                                            =======           =======
Average number of shares............          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 and 48 weeks ended April 27, 1996
                   (In thousands, except share data)
<TABLE>
<CAPTION>
                                                             Foreign
                                       Additional            Currency
                         Common Stock    Paid-in Retained  Translation  Total
                       Shares Par Value Capital  Earnings  Adjustments  Equity
                       ------ --------- -------- --------  ----------- -------
<S>                    <C>      <C>    <C>       <C>        <C>      <C>
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 and 48 weeks ended April 27, 1996
                           (In thousands)
<TABLE>
<CAPTION>
                                                   Successor     Predecessor
                                                  May 3, 1997   April 27, 1996
                                                  -----------   --------------
<S>                                                <C>            <C>
Cash flows from operating activities:
Net income.......................................   $ 4,367        $ 2,252
Adjustments to reconcile net income to net cash
  Provided by operating activities:
  Depreciation and amortization..................     2,205          1,426
  Gain on disposition of equipment...............       (59)           (12)
  Provision for (benefit from) deferred taxes....        50            (30)
  Changes in operating assets and liabilities:
     Increase in net accounts receivable.........      (673)          (732)
     Decrease (increase) in inventory............       906         (1,038)
     Decrease (increase) in prepaid expenses and
       other current assets......................        60           (176)
     Decrease (increase) in other assets.........        93            (23)
     Decrease in due from affiliate..............    (3,242)          (454)
     Increase in accounts payable................       215            337
     Increase (decrease) in current liabilities..       661            (91)
     Increase (decrease) in other liabilities....         3              4
                                                    -------        -------
          Total adjustments......................       219           (789) 
                                                    -------        -------
Net cash provided by operating activities........     4,586          1,463

Cash flows from investing activities:
  Capital expenditures...........................    (2,975)         (1,971)
  Proceeds from sale of fixed assets.............       386              18
                                                    -------         -------
Net cash used in investing activities............    (2,589)         (1,953)

Cash flow from financing activities:
  Net (payments of) proceeds from short-term debt      (885)            739
  Principal payments of long-term debt...........    (1,458)           (241) 
                                                    -------         -------
Net cash (used in) 
 provided by financing activities................    (2,343)            498
                                                    -------         -------
Net (decrease) increase 
 in cash and cash equivalents                          (346)              8
Cash and cash equivalents
 at beginning of the period......................       441             433
                                                    -------         -------
Cash and cash equivalents at end of period.......   $    95         $   441
                                                    =======         =======

Supplemental disclosures of cash flow information:
Cash paid during the period for:
  Interest.......................................   $    82         $   109
                                                    =======         =======
  Income taxes...................................   $ 1,301         $ 1,055
                                                    =======         =======
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE>
                WELLS ELECTRONICS, INC. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              May 3, 1997
                             (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) 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



<PAGE>
   BASIS OF PRESENTATION

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

   The consolidated financial statements are prepared in 
accordance with United States generally accepted accounting 
principles. The 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 and 48 weeks in fiscal 1997 and 1996, 
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 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, 
property, plant and equipment are stated on the basis of cost. 
Equipment under capital leases is stated at the present value of 
minimum lease payments at the inception of the lease.

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

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

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

   INCOME TAXES

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

   INTANGIBLE ASSETS



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

   FOREIGN CURRENCY TRANSLATION

   The accounts of foreign subsidiaries are measured using local 
currency as the functional currency. For those operations, assets 
and liabilities are translated into US dollars at the end of 
period exchange rates and income and expenses are translated at 
the average exchange rates. Net exchange 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

   As of May 3, 1997, the total inventories of $2,540 consist of 
the following: raw materials and supplies $778, work in process 
$223 and finished goods $1,539 

5.  PROPERTY, PLANT AND EQUIPMENT

   As of May 3, 1997, total property, plant and equipment of 
$9,224 consists of: buildings and improvements $171, machinery & 
equipment $4,186, tooling $5,499, construction in progress $576 
and accumulated depreciation of $1,208.


6.  INTANGIBLE ASSETS

   As of May 3, 1997, intangible assets consist goodwill of $708, 
computer software $349, and trademarks of $9,674 offset by 
accumulated amortization of $574 for a net total of $10,157.


7.  ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

   As of May 3, 1997, total accrued liabilities of $2,669 consist 
of: compensation and benefits $1,038, income taxes payable $605, 
product warranty $300, and other accrued liabilities of $726.


8.  DEBT

   As of May 3, 1997, short-term debt consists of line of credit 
of $214 and current maturities of long-term debt $54 (which 
constituted the total long-term debt outstanding.

   Wells Japan has a 125 million yen (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 3, 1997 was 
2.375% per annum.


9.  INCOME TAX EXPENSE

Components of income tax expense (benefit) consist of: 




<PAGE>
                                   Current     Deferred     Total
                                   -------     --------     -----
1997:
  Federal....................      $ 1,370      $   43     $1,413
  State and local............          353           -        353
  Foreign....................          196           7        203
                                   -------      ------     ------
                                   $ 1,919      $   50     $1,969
                                   =======      ======     ======

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

   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:

                                                  1997     1996
                                                 ------   ------
Federal income tax expense at statutory rate     $2,190   $  965
Increase (decrease) resulting from:
  Foreign tax rate differential.............          2      (50)
  Reduction of valuation allowance..........       (499)    (299)
  Foreign subsidiary losses.................          -        -
  State income taxes, net...................        233       72
  Other, net................................         43     (102)
                                                 ------   ------
                                                 $1,969   $  586
                                                 ======   ======

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

                                                     1997
                                                   --------
Deferred tax assets:
  Inventories - principally obsolescence....        $   201
  Bad debts.................................             36
  Other - principally accruals..............            334
  Net operating loss carryforward...........              -
          Total deferred tax assets.........            571
          Valuation allowance...............              -
          Net deferred tax assets...........            571

<PAGE>
Deferred tax liabilities:
  Property, plant & equipment...............          1,828
  Capital lease.............................            148
  Intangible assets.........................          4,200
  Other.....................................              9
          Total deferred tax liabilities....          6,185
                                                    -------
          Net deferred tax liability (asset)        $ 5,614
                                                    =======

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 and 
$241 in fiscal year 1997 and 1996, respectively.

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

     FISCAL YEAR
     -----------
     1998..............................    $  619
     1999..............................       615
     2000..............................       564
     2001..............................       511
     2002..............................       499
     Thereafter........................     1,738
                                           ------
Total minimum lease payments...........    $4,546
                                           ======

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.
<PAGE>

   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 and $63 in 
1997 and 1996, respectively.


12.  RELATED PARTY TRANSACTIONS

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


13.  COMMITMENTS AND CONTINGENCIES

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


14.  SUBSEQUENT EVENT

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


15.  SEGMENT AND GEOGRAPHIC INFORMATION

   The Company operates in the integrated circuit connector 
industry which is a single industrial segment. One customer 
accounted for approximately 18% and 15% of the Company's sales in 

<PAGE>
1997 and 1996, 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 and 1996 is as follows:


                                          USA        FAR EAST
                                        -------      --------
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


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>




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

     None.









<PAGE>
                                PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS


                EXECUTIVE OFFICERS OF THE REGISTRANT

   Set forth below are the executive officers of the Company and 
their ages as of December 31, 1998 and positions held with the 
Company, as follows:

Name                  Age                   Position
--------------------- --- ---------------------------------------
John L. Dwight, Jr.   54  Chairman of the Board, Chief Executive 
                          Officer, President and Director

Richard J. Mullin     47  Vice President and President, Wells-CTI
                                Division

Michael S. Cantor     62  Vice President and General Manger, PCD 
                          Industrial/Avionics Division

Jeffrey A. Farnsworth 52  Vice President and General Manager, 
                          Wells-CTI Phoenix

Mary L. Mandarino     44  Vice President, Finance and
                          Administration, Chief Financial
                          Officer, and Treasurer

Roddy J. Powers       55  Vice President, Operations

   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 28 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.

<PAGE>
   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 38 
years of experience in the connector industry.

   Mr. Farnsworth has served as Vice President and the General 
Manager, Wells - CTI Phoenix since December 1997. From October 
1993 to December 1997, he was Vice President and General 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 23 
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.

   For information with respect to the Directors of the Company, 
see "Election of Directors" in the Proxy Statement for the PCD 
Inc. 1999 Annual Meeting of Stockholders, which portion of the 
Proxy Statement is incorporated herein 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.


<PAGE>
   Based solely on a review of the copies of such forms and 
amendments thereto received by the Company, or written 
representations from the Company's officers and directors that no 
Forms 5 were required to be filed, the Company believes that 
during 1998 all Section 16(a) filing requirements applicable to 
its officers, directors and shareholders were met.


ITEM 11. EXECUTIVE COMPENSATION

   The information contained under the caption Executive 
Compensation in the 1999 Proxy Statement is incorporated herein 
by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND 
MANAGEMENT

   The information contained under the caption Security Ownership 
Of Management and Principal Stockholders in the 1999 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 1999 Proxy 
Statement is incorporated herein by reference.


<PAGE>
                                 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, 1998 and 1997
     Report of Independent Accountants
     Consolidated Balance Sheets as of December 31, 1998 and 1997
     Consolidated Statements of Operations for the years ended
      December 31, 1998, 1997 and 1996
     Consolidated Statements of Stockholders' Equity for the
      years ended December 31, 1998, 1997 and 1996.
     Consolidated Statements of Cash Flows for the years ended
      December 31, 1998, 1997 and 1996
     Notes to Consolidated Financial Statements 

     WELLS ELECTRONICS, INC.
     MAY 3, 1997
     Independent Auditors' Report
     Consolidated Balance Sheet as of  May 3, 1997
     Consolidated Statements of Income for the 53 weeks ended May
      3, 1997 and 48 weeks ended April 27, 1996
     Consolidated Statements of Shareholder's Equity for the 53
      weeks ended May 3, 1997 and 48 weeks ended April 27, 1996
     Consolidated Statements of Cash Flows for the 53 weeks ended
      May 3, 1997 and 48 weeks ended April 27, 1996
     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.

<TABLE>
<CAPTION>
    3) Listing of Exhibits
 <S>      <C>
   2.1(1)  Share Purchase Agreement among UL America, Inc., Wells Electronics, Inc. and PCD Inc.
           dated as of November 17, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
 <S>      <C>
   2.2(1)  Undertaking to Furnish Copies of Omitted Schedules to Share Purchase Agreement dated
           as of November 17, 1997

   3.1(2)  Restated Articles of Organization of Registrant effective March 22, 1996.

   3.2(2)  By-Laws of Registrant, as amended, effective April 1, 1996.

   4.1(2)  Articles 3, 4, 5 and 6 of the Restated Articles of Organization of Registrant
           (included in Exhibit 3.1).

   4.2(2)  Specimen Stock Certificate.

  10.1(1)  Loan Agreement between PCD Inc. and Fleet National Bank dated as of December 26, 1997.

  10.2(1)  Unlimited Guaranty from Wells Electronics, Inc. to Fleet National Bank dated as of
           December 26, 1997.

  10.3(1)  Security Agreement between PCD Inc. and Fleet National Bank dated as of December 26,
           1997.

  10.4     Amended and Restated Security Agreement between Wells-CTI, Inc. and Fleet National
           Bank dated as of July 31, 1998.

  10.5(1)  Stock Pledge Agreement between PCD Inc. and Fleet National Bank dated as of
           December 26, 1997.

  10.6(1)  Stock Pledge Agreement between Wells Electronics, Inc. and Fleet National Bank dated
           as of December 26, 1997.

  10.7(1)  Conditional Patent Assignment from PCD Inc. to Fleet National Bank dated as of
           December 26, 1997.

  10.8(1)  Conditional Patent Assignment from Wells Electronics, Inc. to Fleet National Bank
           dated as of December 26, 1997.

  10.9(1)  Conditional Patent Assignment from Wells Japan Kabushiki Kaisha to Fleet National Bank
           dated as of December 26, 1997.

  10.10(1) Conditional Trademark Collateral Assignment from PCD Inc. to Fleet National Bank dated
           as of December 26, 1997.

  10.11(1) Conditional Trademark Collateral Assignment from Wells Electronics, Inc. to Fleet
           National Bank dated as of December 26, 1997.

  10.12(1) Collateral Assignment of Contracts, Leases, Licenses and Permits from PCD Inc. to
           Fleet National Bank dated as of December 26, 1997.

  10.13(1) Collateral Assignment of Contracts, Leases, Licenses and Permits from Wells
           Electronics, Inc. to Fleet National Bank dated as of December 26, 1997.

  10.14(1) Undertaking to Furnish Copies of Omitted Exhibits and Schedules to Loan Agreement and
           Related Documents dated as of December 26, 1997.

  10.15(1) Subordinated Debenture and Warrant Purchase Agreement between PCD Inc. and Emerson
           Electric Co. dated as of December 26, 1997.

  10.16(1) Subordinated Debenture issued to Emerson Electric Co. dated December 26, 1997.

  10.17(1) Common Stock Purchase Warrant issued to Emerson Electric Co. dated December 26, 1997.

  10.18(1) Registration Rights Agreement between PCD Inc. and Emerson Electric Co. dated as of
           December 26, 1997.

  10.19(1) Subordination Agreement among PCD Inc., Emerson Electric Co. and Fleet National Bank
           dated as of December 26, 1997.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
<S>       <C>
  10.20(1) Undertaking to Furnish Copies of Omitted Exhibits to Subordinated Debenture and
           Warrant Purchase Agreement dated as of December 26, 1997.

  10.21(2) Lease dated June 29, 1987, between Centennial Park Associates Realty Trust II and the
           Company, for premises located at Two Technology Drive, Centennial Park, Peabody,
           Massachusetts.

  10.22(3) Second Amendment to lease agreement dated July 15, 1993, between Centennial Park
           Associates Limited Partnership III and the Company.

  10.23(4) Third Amendment to lease agreement dated as of June 25, 1996, between the Company and
           Centennial Park Associates Limited Partnership III.

  10.24(2) Lease dated May 1995, between CMD Southwest Four and CTi Technologies, Inc., for
           premises located at 2102 W. Quail Avenue, Phoenix, Arizona.

  10.25(3) 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(3) 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(3) Sublease dated October 10, 1992, between Daiwa House Kogyo Co., Ltd. and Wells Japan,
           Ltd. For premises located at Paleana Building 2-2-15, Shin-Yokahama, Kohuku-Ku,
           Yokohama, Japan (English translation).

  10.28(3) Lease dated September 25, 1997, between United Building and Leasing Corporation and
           Well Electronics, Inc. for premises located at 421 Amity Road, Swatara, Pennsylvania.

  10.29(2) Registrant's 1992 Stock Option Plan and related forms of stock option agreement.

  10.30(2) Registrant's 1996 Stock Plan and superceded forms of stock option agreement.

  10.31(2) Registrant's 1996 Eligible Directors Stock Plan and superceded form of stock option
           agreement.

  10.32(5) Form of option agreements for the 1996 Stock Plan.

  10.33(5) Form of option agreement for the 1996 Eligible Directors Stock Plan.

  10.34(2) April 2, 1985 Stock Purchase Agreement and Amendment to Stock Purchase Agreement dated
           March 31, 1983.

  10.35(3) Collective Bargaining Agreement between Wells Electronics, Inc. and Local Union 1392,
           International Brotherhood of Electrical Workers, dated February 19, 1997.

  10.36(2) Letter of Agreement dated September 18, 1995, between International Assemblers, Inc.
           and Cti Technologies, Inc.

  10.37(3) Letter Agreement with Richard J. Mullin, effective December 26, 1997.

  10.38(3) Management Incentive Plan.

  10.39(6) Registrant's Employee Stock Purchase Plan.

  10.40(6) Form of option agreement for the 1998 Employee Stock Purchase Plan.

  10.41    First Amendment to Loan Agreement between Fleet National Bank and other lenders dated
           July 31, 1998.

  10.42    Second Amendment to Loan Agreement between Fleet National Bank and other lenders dated
           August 31, 1998.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
 <S>      <C>
  21.1     Subsidiaries of the Registrant.
  23.1     Consent of PricewaterhouseCoopers, LLP.

  23.2     Consent of KPMG LLP.

  27.1     Financial Data Schedule.
----------
</TABLE>
(1)    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.

(2)    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.

(3)    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 as amended on March
    20, 1998 and April 13, 1998 and is incorporated in this
    document by reference.

(4)    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.

(5)    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.

(6)    A copy has been previously filed with the Company's
    registration statement on Form S-8 (Registration no. 333-
    57805), as filed on June 26, 1998, and is incorporated in
    this document by reference.











<PAGE>
<TABLE>
<CAPTION>
Management Contracts and Compensatory Plans
 <S>       <C>
  10.29(1)  Registrant's 1992 Stock Option Plan and related forms of stock option agreement.

  10.30(1)  Registrant's 1996 Stock Plan and superceded forms of stock option agreement.

  10.31(1)  Registrant's 1996 Eligible Directors Stock Plan and superceded form of stock option
            agreement.

  10.32(2)  Form of option agreements for the 1996 Stock Plan.

  10.33(2)  Form of option agreement for the 1996 Eligible Directors Stock Plan.

  10.37(3)  Letter Agreement with Richard J. Mullin, effective December 26, 1997.

  10.38(3)  Management Incentive Plan.

  10.39(4)  Registrant's Employee Stock Purchase Plan.

  10.40(4)  Form of option agreement for the 1998 Employee Stock Purchase Plan.
----------
</TABLE>

(1)    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.

(2)    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.

(3)    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 as amended on March
    20, 1998 and April 13, 1998 and is incorporated in this
    document by reference.

(4)    A copy has been previously filed with the Company's
    registration statement on Form S-8 (Registration no. 333-
    57805), as filed on June 26, 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 1998.

<PAGE>
                               SIGNATURES

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

                              PCD INC.

Dated: March 26, 1999      By: /s/ John L. Dwight, Jr.
                              ----------------------------------
                              John L. Dwight, Jr.
                              Chairman of the Board, President and
                              Chief Executive Officer

Dated: March 26, 1999      By: /s/ Mary L. Mandarino
                              ----------------------------------
                              Mary L. Mandarino
                              Vice President - Finance and
                              Administration, Chief Financial
                              Officer, and Treasurer (principal
                              financial and accounting officer)

Dated: March 26, 1999      By: /s/ Harold F. Faught
                              ----------------------------------
                              Harold F. Faught
                              Director

Dated: March 26, 1999      By: /s/ C. Wayne Griffith
                              ----------------------------------
                              C. Wayne Griffith
                              Director

Dated: March 26, 1999      By: /s/ John E. Stuart
                              ----------------------------------
                              John E. Stuart
                              Director

Dated: March 26, 1999      By: /s/ Theodore C. York
                              ----------------------------------
                              Theodore C. York
                              Director





<EXHIBIT>                                                      
EXHIBIT 10.4
             AMENDED AND RESTATED SECURITY AGREEMENT


     THIS AGREEMENT made as of July 31, 1998, by and between 
WELLS-CTI, INC., an Indiana corporation (formerly known as Wells 
Electronics, Inc. and successor by merger to CTi Technologies, 
Inc., a Massachusetts corporation "CTi Technologies"), with a 
principal place of business at 52940 Olive Road, South Bend, 
Indiana ("Debtor") and FLEET NATIONAL BANK, a national banking 
association organized under the laws of the United States having 
an office at One Federal Street, Boston, Massachusetts 02110, as 
Agent for itself and each of the other Lenders who are now or 
hereafter become parties to the hereinafter defined Loan 
Agreement ("Secured Party"). Capitalized terms used but not 
expressly defined herein shall have the meanings assigned thereto 
in said Loan Agreement.

SECTION 1.  RECITALS. 

(a)  Secured Party and Debtor entered into that certain security 
agreement dated December 26, 1997 (the "Security Agreement") in 
connection with that certain Loan Agreement dated December 26, 
1997 by and among PCD Inc., a Massachusetts corporation 
("Borrower"), Secured Party and the therein defined Lenders (the 
"Original Loan Agreement"); and

(b)  Borrower has requested and Lenders have approved the merger 
of CTi Technologies into Wells Electronics, Inc., an Indiana 
corporation and the contemporaneous name change of Wells 
Electronics, Inc., to Wells-CTI, Inc., (such merger and name 
change being herein collectively referred to as the "Merger"); 
and

(c)  In connection with the Merger, (a) Debtor has executed and 
delivered, or agreed to execute and deliver (i) this Amended and 
Restated Security Agreement, (ii) a Reaffirmation of Guaranty and 
Stock Pledge Agreement and (iii)  amendments to various other 
security documents given by it to secure the Guaranty, including, 
without limitation, associated UCC-1 Financing Statements; and 
(b) Borrower, Agent and Lenders have entered into a First 
Amendment of Loan Agreement (the "First Amendment of Loan 
Agreement"); and

(d)  Agent and Debtor have agreed to enter into this Amended and 
Restated Security Agreement  and acknowledge that this Amended 
<PAGE>
and Restated Security Agreement amends, restates and supercedes 
the Security Agreement in its entirety; and

(e)  The Original Loan Agreement, as amended by the First 
Amendment of Loan Agreement shall hereinafter be referred to as 
the "Loan Agreement".


SECTION 2.  THE SECURITY INTERESTS.

(a)  In order to secure (i) payment and performance of all of the 
obligations of Principal Debtor under the Loan Agreement and 
under the Notes, (ii) the performance of all of the obligations 
of Debtor to Secured Party contained herein, and (iii) the 
payment of all other future advances and other obligations of 
Principal Debtor or Debtor to Secured Party and/or the Lenders, 
including, without limitation, any future loans and advances made 
to Principal Debtor or Debtor by Secured Party and/or the Lenders 
prior to, during or following any (a) application by Principal 
Debtor or Debtor for or consent by Principal Debtor or Debtor to 
the appointment of a receiver, trustee or liquidator of Principal 
Debtor's or Debtor's property, (b) admission by Principal Debtor 
or Debtor in writing of its inability to pay or failure generally 
to pay its respective debts as they mature, (c) general 
assignment by Principal Debtor or Debtor for the benefit of 
creditors, (d) adjudication of  Principal Debtor or Debtor as 
bankrupt or (e) filing by Principal Debtor or Debtor of a 
voluntary petition in bankruptcy or a petition or an answer 
seeking reorganization or an arrangement with creditors or to 
take advantage of any bankruptcy, reorganization, arrangement, 
insolvency, readjustment of debts, dissolution or liquidation 
statute, or an answer admitting the material allegations of a 
petition filed against it in a proceeding under any such law (any 
of the foregoing shall hereinafter be referred to as a 
"Bankruptcy Event"), any interest accruing under the Notes and/or 
the Loan Agreement after the commencement of a Bankruptcy Event 
to the extent permitted by applicable law, and any and all other 
indebtedness, liabilities and obligations of Principal Debtor or 
Debtor to Secured Party and/or the Lenders of every kind and 
description, direct, indirect or contingent, now or hereafter 
existing, due or to become due (all of the foregoing being 
hereinafter called the "Obligations"), Debtor hereby grants to 
Secured Party for its benefit a continuing security interest in 

<PAGE>
the following described fixtures and personal property 
(hereinafter collectively called the "Collateral"):

     All fixtures and all tangible and intangible personal 
property of Debtor, whether now owned or hereafter acquired by 
Debtor, or in which Debtor may now have or hereafter acquire an 
interest, including, without limitation, (a) all equipment 
(including all machinery, tools and furniture), inventory and 
goods (each as defined in the Uniform Commercial Code, if so 
defined therein); (b) all accounts, accounts receivable, other 
receivables, contract rights, chattel paper, and general 
intangibles (including, without limitation, trademarks, trademark 
registrations, trademark registration applications, servicemarks, 
servicemark registrations, servicemark registration applications, 
goodwill, tradenames, trade secrets, patents, patent 
applications, leases, licenses, permits, copyrights, copyright 
registrations, copyright registration applications, moral rights, 
any other proprietary rights, exclusionary rights or <PAGE>
intellectual property and any renewals and extensions associated 
with any of the foregoing, as each of the foregoing may be 
secured under the laws now or hereafter in force and effect in 
the United States of America or any other jurisdiction) of Debtor 
(each as defined in the Uniform Commercial Code, if so defined 
therein); (c) all instruments, documents of title, policies and 
certificates of insurance, securities, bank deposits, deposit 
accounts, checking accounts and cash of Debtor; (d) all 
accessions, additions or improvements to, all replacements, 
substitutions and parts for, and all proceeds and products of, 
all of the foregoing and (e) all books, records and documents 
relating to any of the foregoing.

     (b)  All Collateral consisting of accounts receivable, 
contract rights, instruments, chattel paper and general 
intangibles (each as defined in the Uniform Commercial Code) of 
Debtor arising from the sale, delivery or provision of goods 
and/or services, including, without limitation, all documents, 
notes, drafts and acceptances, now owned by Debtor as well as any 
and all thereof that may be hereafter acquired by Debtor and in 
and to all returned or repossessed goods arising from or relating 
to any contract rights, accounts or other proceeds of any sale or 
other disposition of inventory, are sometimes hereinafter 
collectively called the "Customer Receivables".

     (c)  The security interests granted pursuant to this SECTION 
2 (the "Security Interests") are granted as security only and 
shall not subject Secured Party to, or transfer or in any way 
<PAGE>
affect or modify, any obligation or liability of Debtor under any 
of the Collateral or any transaction which gave rise thereto.

     SECTION 3.  DELIVERY OF PLEDGED SECURITIES, CHATTEL PAPER 
AND DATABASE.  All securities including, without limitation, 
shares of stock and negotiable promissory notes, of Debtor, 
whether now owned or hereafter acquired by Debtor, shall be 
delivered to Secured Party by Debtor simultaneously with the 
delivery hereof or, with respect to after acquired securities, 
promptly after the same have been acquired by Debtor (which 
securities are hereinafter called the "Pledged Securities") shall 
be in suitable form for transfer by delivery, or shall be 
accompanied by duly executed undated instruments of transfer or 
assignments in blank, all in form and substance satisfactory to 
Secured Party.  EXHIBIT A attached hereto and made a part hereof 
sets forth a complete description of all securities owned by 
Debtor on the date hereof.  Secured Party may at any time or from 
time to time, at its sole discretion, require Debtor to cause any 
chattel paper included in the Customer Receivables to be 
delivered to Secured Party or any successor agent or 
representative designated by it for the purpose of causing a 
legend referring to the Security Interests to be placed on such 
chattel paper and upon any ledgers or other records concerning 
the Customer Receivables.

     SECTION 4.  FILING; FURTHER ASSURANCES.  Debtor will, at its 
expense, execute, deliver, file and record (in such manner and 
form as Secured Party may reasonably require), or permit Secured 
Party to file and record, any financing statements, any carbon, 
photographic or other reproduction of a financing statement or 
this Security Agreement (which shall be sufficient as a financing 
statement hereunder), any specific assignments or other paper 
that may be reasonably necessary or desirable, or that Secured 
Party may reasonably request, in order to create, preserve, 
perfect or validate any Security Interest or to enable Secured 
Party to exercise and enforce its rights hereunder with respect 
to any of the Collateral.  Debtor hereby irrevocably appoints 
Secured Party as Debtor's attorney-in-fact to execute in the name 
and behalf of Debtor such additional financing statements as 
Secured Party may reasonably request.

     SECTION 5.  REPRESENTATIONS AND WARRANTIES OF DEBTOR.  
Debtor hereby represents and warrants to Secured Party that (a) 
Debtor is, or to the extent that certain of the Collateral is to 
be acquired after the date hereof, will be, the owner of the

<PAGE>
Collateral free from any adverse Lien except as permitted under 
the Loan Agreement; (b) except for such financing statements 
identified on EXHIBIT C hereto and such financing statements 
relating to Liens against Debtor specifically described in and 
permitted by the Loan Agreement, no financing statement covering 
the Collateral is on file in any public office, other than the 
financing statements filed pursuant to this Security Agreement; 
(c) all additional information, representations and warranties 
contained in EXHIBIT B attached hereto and made a part hereof are 
true, accurate and complete in all material respects on the date 
hereof; and (d) there are no restrictions upon the voting rights 
or the transfer of all or any of the Pledged Securities (other 
than as may appear on the face of any certificate evidencing any 
of the Pledged Securities or as may be imposed by any state or 
local agency or government) and Debtor has the right to vote, 
pledge, grant the Security Interest in and otherwise transfer the 
Pledged Securities free of any encumbrances (other than 
applicable restrictions imposed by any state or local agency or 
government or Federal or state securities laws or regulations).

     SECTION 6.  COVENANTS OF DEBTOR.  Debtor hereby covenants 
and agrees with Secured Party that Debtor (a) will defend the 
Collateral against all claims and demands of all persons at any 
time claiming any interest therein other than that of Secured 
Party; (b) will provide Secured Party with prompt written notice 
of (i) any change in the office where Debtor maintains its books 
and records pertaining to the Customer Receivables, and (ii) the 
movement or location of Collateral to or at any address other 
than as set forth in EXHIBIT B attached hereto; (c) will promptly 
pay any and all taxes, assessments and governmental charges upon 
the Collateral prior to the date penalties attach thereto except 
to the extent permitted under the Loan Agreement; (d) will 
immediately notify Secured Party of any event causing a 
substantial loss or diminution in the value of all or any 
material part of the Collateral and the amount or an estimate of 
the amount of such loss or diminution; (e) will have and maintain 
insurance at all times in accordance with the provisions of the 
Loan Agreement; (f) except in the ordinary course of business or 
as otherwise permitted under the Loan Agreement, will not sell or 
offer to sell or otherwise assign, transfer or dispose of the 
Collateral or any interest therein, without the prior written 
consent of Secured Party; (g) will keep the Collateral free from 
any adverse Lien (other than Liens permitted under the Loan 
Agreement) and in good order and repair, reasonable wear and tear 
excepted, and will not waste or destroy the Collateral or any 

<PAGE>
part thereof; and (h) will not use the Collateral in violation of 
the Loan Agreement or this Agreement.

     SECTION 7.  RECORDS RELATING TO COLLATERAL.  Debtor will 
keep its records concerning the Collateral, including the 
Customer Receivables and all chattel paper included in the 
Customer Receivables, at the location(s) set forth in EXHIBIT B 
attached hereto or at such other place or places of business of 
which Secured Party shall have been notified in writing no less 
than ten (10) days in advance.  Debtor will hold and preserve 
such records and chattel paper and will, to the extent provided 
in the Loan Agreement, (a) permit representatives of Secured 
Party at any time during normal business hours to examine and 
inspect the Collateral and to make abstracts from such records 
and chattel paper, and (b) furnish to Secured Party such 
information and reports regarding the Collateral as Secured Party 
may from time to time reasonably request. 

     SECTION 8.  RECORD OWNERSHIP OF PLEDGED SECURITIES.  Debtor 
will promptly give to Secured Party copies of any notices or 
other communications received by Debtor with respect to Pledged 
Securities registered in the name of Debtor.  Upon the occurrence 
of an Event of Default, Secured Party may cause any or all of the 
Pledged Securities to be transferred of record into the name of 
Secured Party (or a designee of Secured Party).  

     SECTION 9.  RIGHT TO RECEIVE DISTRIBUTIONS ON PLEDGED 
SECURITIES.  Unless an Event of Default shall have occurred and 
be continuing, Debtor shall be entitled, from time to time, to 
collect and receive for its own use all dividends, interest and 
other payments and distributions made upon or with respect to the 
Pledged Securities, except:

          (i)   dividends of stock;

          (ii)  dividends payable in securities or other property 
(except cash dividends);

          (iii) other securities issued with respect to or in 
lieu of the Pledged Securities (whether upon conversion of the 
convertible securities included therein or through stock split, 
spin-off, split-off, reclassification, merger, consolidation, 
sale of assets, combination of shares or otherwise).



<PAGE>
All of the foregoing, together with all new, substituted or 
additional shares of capital stock, warrants, options or other 
rights, or other securities issued in addition to or in respect 
of all or any of the Pledged Securities shall be delivered to 
Secured Party hereunder as required by SECTION 3 hereof, to be 
held as Collateral pursuant to the terms hereof in the same 
manner as the Pledged Securities delivered to Secured Party on 
the date hereof.

     SECTION 10.  RIGHT TO VOTE PLEDGED SECURITIES.  Unless an 
Event of Default shall have occurred and be continuing, Debtor 
shall have the right, from time to time, to vote and to give 
consents, ratifications and waivers with respect to the Pledged 
Securities and to exercise conversion rights with respect to the 
convertible securities included therein, and Secured Party shall, 
upon receiving a written request from Debtor accompanied by a 
certificate signed by Debtor's principal financial officer 
stating that no Event of Default has occurred, deliver to Debtor 
or as specified in such request such proxies, powers of attorney, 
consents, ratifications and waivers in respect of any Pledged 
Securities which are registered in Secured Party's name, and make 
such arrangements with respect to the conversion of convertible 
securities as shall be specified in Debtor's request, such 
arrangements to be in form and substance reasonably satisfactory 
to Secured Party.

     If an Event of Default shall have occurred and be 
continuing, and provided Secured Party elects to exercise the 
rights hereinafter set forth by notice to Debtor of such 
election, Secured Party shall have the right, to the extent 
permitted by law, and Debtor shall take all such action as may be 
necessary or reasonably appropriate to give effect to such right, 
to vote and to give consents, ratifications and waivers and take 
any other action with respect to all the Pledged Securities with 
the same force and effect as if Secured Party were the absolute 
and sole owner thereof.

     SECTION 11.  GENERAL AUTHORITY.  Debtor hereby irrevocably 
appoints Secured Party Debtor's lawful attorney (which 
appointment shall be deemed a power coupled with an interest) 
with full power of substitution, in the name of Debtor, for the 
sole use and benefit of Secured Party, its successors and 
assigns, but at Debtor's expense, to exercise, all or any of the 
following powers with respect to all or any of the Collateral 
during the existence and continuance of any Event of Default:

<PAGE>
     (i)   to demand, sue for, collect, receive and give 
acquittance for any and all monies due or to become due;

     (ii)  to receive, take, endorse, assign and deliver all 
checks, notes, drafts, securities, documents and other negotiable 
and non-negotiable instruments and chattel paper taken or 
received by Secured Party; 

     (iii)  to settle, compromise, compound, prosecute or defend 
any action or proceeding with respect thereto;

     (iv)  to sell, transfer, assign or otherwise deal in or with 
the same or the proceeds or avails thereof or the related goods 
securing the Customer Receivables, as fully and effectually as if 
Secured Party were the absolute owner thereof;

     (v)  to extend the time of payment of any or all thereof and 
to make any allowance and other adjustments with reference 
thereto;

     (vi)  to discharge any taxes or Liens at any time placed 
thereon; and

     (vii)  to execute any document or form, in the name of 
Debtor, which may be necessary or desirable in connection with 
any sale of Pledged Securities by Secured Party, including 
without limitation Form 144 promulgated by the Securities and 
Exchange Commission;

provided, that Secured Party shall give Debtor not less than ten 
(10) days' prior written notice of the time and place of any sale 
or other intended disposition of any of the Collateral.

     SECTION 12.  EVENTS OF DEFAULT.  Debtor shall be in default 
under this Security Agreement upon the occurrence of any Event of 
Default under the Loan Agreement.

     SECTION 13.  REMEDIES UPON EVENT OF DEFAULT.  If any Event 
of Default shall have occurred and be continuing, Secured Party 
may exercise all the rights and remedies of a secured party under 
the Uniform Commercial Code.  Secured Party may require Debtor to 
assemble all or any part of the Collateral and make it available 
to Secured Party at a place to be designated by Secured Party 
which is reasonably convenient.  Secured Party shall give Debtor 
ten (10) days' written notice of its intention to make any public

<PAGE>
or private sale or sale at a broker's board or on a securities 
exchange of the Collateral.  At any such sale the Collateral may 
be sold in one lot as an entirety or in separate parcels, as 
Secured Party may determine.  Secured Party shall not be 
obligated to make any such sale pursuant to any such notice.  To 
the extent permitted by law, Secured Party may, without notice or 
publication, adjourn any public or private sale or cause the same 
to be adjourned from time to time by announcement at the time and 
place fixed for the sale, and such sale may be made at any time 
or place to which the same may be adjourned.  Secured Party, 
instead of exercising the power of sale herein conferred upon it, 
may proceed by a suit or suits at law or in equity to foreclose 
the Security Interests and sell the Collateral, or any portion 
thereof, under a judgment or decree of a court or courts of 
competent jurisdiction.

     SECTION 14.  APPLICATION OF COLLATERAL AND PROCEEDS.  The 
proceeds of any sale of, or other realization upon, all or any 
part of the Collateral shall be applied in the following order of 
priorities:  (a) first, to pay the expenses of such sale or other 
realization, including reasonable attorneys' fees, and all 
expenses, liabilities and advances incurred or made by Secured 
Party in connection therewith, and any other unreimbursed 
expenses for which Secured Party may be reimbursed pursuant to 
SECTION 15; (b) second, to the payment of the Obligations in such 
order of priority as Secured Party, in its sole discretion, shall 
determine; and (c) finally, to pay to Debtor, or its successors 
or assigns, or as a court of competent jurisdiction may direct, 
any surplus then remaining from such proceeds.

     SECTION 15.  EXPENSES; SECURED PARTY'S LIEN.  Debtor will 
forthwith upon demand pay to Secured Party: (a) the amount of any 
taxes which Secured Party may have been required to pay by reason 
of the Security Interests (including any applicable transfer and 
personal property taxes but excluding taxes in respect of Secured 
Party's income and profits) or to free any of the Collateral from 
any Lien thereon and (b) the amount of any and all reasonable 
costs and expenses, including the reasonable fees and 
disbursements of its counsel and of any agents not regularly in 
its employ, which Secured Party may incur in connection with (i) 
the collection or other disposition of any of the Collateral, 
(ii) the exercise by Secured Party of any of the powers conferred 
upon it hereunder, (iii) any default on Debtor's part hereunder 
or (iv) any Bankruptcy Event.


<PAGE>
     SECTION 16.  TERMINATION OF SECURITY INTERESTS; RELEASE OF 
COLLATERAL.  Upon the repayment and performance in full of all 
the Obligations and the expiration or termination of any 
obligations of Secured Party to advance funds to Debtor, or upon 
the sale of any Collateral which is permitted under the Loan 
Agreement or as otherwise consented to in writing by Secured 
Party, the Security Interests on such sold Collateral shall 
terminate and all rights to the Collateral shall revert to Debtor 
or such other party as may be entitled thereto.  Upon any such 
termination of the Security Interests or release of Collateral, 
Secured Party will execute and deliver to Debtor such documents 
as Debtor shall reasonably request to evidence the termination of 
the Security Interests or the release of such Collateral, as the 
case may be.  Notwithstanding the foregoing, this Security 
Agreement shall be reinstated if at any time any payment made or 
value received with respect to an Obligation is rescinded, 
invalidated, declared to be fraudulent or preferential, or set 
aside or is required to be repaid to a trustee, receiver or any 
other party under any case or proceeding, voluntary or 
involuntary, for the distribution, division or application of all 
or part of the assets of Debtor or the proceeds thereof, whether 
such case or proceeding be for the liquidation, dissolution or 
winding up of Debtor or their respective businesses, a 
receivership, insolvency or bankruptcy case or proceeding, an 
assignment for the benefit of creditors or a proceeding by or 
against Debtor for relief under the federal Bankruptcy Code or 
any other bankruptcy, reorganization or insolvency law or any 
other law relating to the relief of debtors, readjustment of 
indebtedness, reorganization, arrangement, composition or 
extension or marshalling of assets or otherwise, all as though 
such payment had not been made or value received.

     SECTION 17.  NOTICES.  All notices, requests, demands and 
other communications provided for hereunder shall be in writing 
and mailed or telefaxed or delivered to the applicable party in 
the manner set forth in SECTION 9.6 of the Loan Agreement.

     SECTION 18.  MISCELLANEOUS.  (a) No failure on the part of 
Secured Party to exercise, and no delay in exercising, and no 
course of dealing with respect to, any right, power or remedy 
under this Security Agreement shall operate as a waiver thereof; 
nor shall any single or partial exercise by Secured Party of any 
right, power or remedy under this Security Agreement preclude any 
other right, power or remedy.  The remedies in this Security 
Agreement are cumulative and are not exclusive of any other 

<PAGE>
remedies provided by law.  Neither this Security Agreement nor 
any provision hereof may be changed, waived, discharged or 
terminated orally but only by a statement in writing signed by 
the party against which enforcement of the change, waiver, 
discharge or termination is sought.

     (b)  This Security Agreement shall be construed in 
accordance with and governed by the laws of The Commonwealth of 
Massachusetts, except as otherwise required by mandatory 
provisions of law.

     (c) This Security Agreement may be executed in several 
counterparts, each of which shall be an original and all of which 
shall constitute but one and the same Security Agreement.

     SECTION 19.  CONSENT TO JURISDICTION AND SERVICE OF PROCESS.  

     (a)  Except to the extent prohibited by applicable law, 
Debtor irrevocably:

          (i)  agrees that any suit, action, or other legal 
proceeding arising out of this Security Agreement or any of the 
Loans may be brought in the courts of record of The Commonwealth 
of Massachusetts or any other state(s) in which any of the 
Collateral is located or the courts of the United States located 
in The Commonwealth of Massachusetts or any other state(s) in 
which any of the Collateral is located;

          (ii)  consents to the jurisdiction of each such court 
in any such suit, action or proceeding; and

          (iii)  waives any objection which it may have to the 
laying of venue of such suit, action or proceeding in any of such 
courts.

     For such time as any of the Obligations of Debtor to Secured 
Party shall be unpaid in whole or in part and/or the Commitment 
is in effect, Debtor irrevocably designates the registered agent 
or agent for service of process of the Debtor as reflected on the 
records of the Secretary of State of The Commonwealth of 
Massachusetts as its registered agent, and, in the absence 
thereof, the Secretary of State of The Commonwealth of 
Massachusetts, as its agent to accept and acknowledge on its 
behalf service of any and all process in any such suit, action or 
proceeding brought in any such court and agrees and consents that

<PAGE>
any such service of process upon such agent and written notice of 
such service to Debtor by registered or certified mail shall be 
taken and held to be valid personal service upon Debtor 
regardless of where Debtor shall then be doing business and that 
any such service of process shall be of the same force and 
validity as if service were made upon it according to the laws 
governing the validity and requirements of such service in each 
such state and waives any claim of lack of personal service or 
other error by reason of any such service.  Any notice, process, 
pleadings or other papers served upon the aforesaid designated 
agent shall, within three (3) Business Days after such service, 
be sent by the method provided therefor under SECTION 9.6 of the 
Loan Agreement to the Debtor at its address set forth in the Loan 
Agreement. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO 
TRIAL BY JURY IN THE EVENT OF ANY DISPUTE BETWEEN THE DEBTOR AND 
SECURED PARTY WITH RESPECT TO THE FINANCING DOCUMENTS AND/OR ANY 
OF THE TRANSACTIONS CONTEMPLATED THEREBY.

     SECTION 20.  SEPARABILITY.  If any provision hereof is 
invalid or unenforceable in any jurisdiction, the other 
provisions hereof shall remain in full force and effect in such 
jurisdiction and shall be liberally construed in favor of Secured 
Party.

     IN WITNESS WHEREOF, this Security Agreement has been 
executed by the parties hereto all as of the day and year first 
above written.


                         WELLS-CTI, INC.


                         By:   /S/  Mary Mandarino
                             -----------------------------
                              Mary Mandarino
                              Treasurer


                         FLEET NATIONAL BANK, as Agent for
                         itself and the other Lenders


                         By:  /s/ Scott D. Wheelock
                             -----------------------------
                              Scott D. Wheelock
                              Vice President



<EXHIBIT>                                         <EXHIBIT 10.41>
                     FIRST AMENDMENT OF LOAN AGREEMENT 

     This FIRST AMENDMENT OF LOAN AGREEMENT (this "Agreement") is
made as of the 31st day of July, 1998 by and among (a) PCD INC., 
a Massachusetts corporation with a principal place of business at 
2 Technology Drive, Peabody, Massachusetts 01960 (the 
"Borrower"), (b) FLEET NATIONAL BANK, a national banking 
association organized under the laws of the United States and 
having an office at One Federal Street, Boston, Massachusetts 
02110 as a Lender and in its capacity as Agent ("Agent") for 
itself, and for each of the other Lenders who now or hereafter 
become parties to the hereinafter defined Loan Agreement and (c) 
the other Lenders.

                       W I T N E S S E T H:

     WHEREAS, Borrower, Agent and Lenders are parties to that 
certain Loan Agreement, dated as of December 26, 1997, (as the 
same may be further amended from time to time, the "Loan 
Agreement") pursuant to the terms of which Lenders made (a) a 
$30,000,000 Secured Term Loan A, (b) a $40,000,000 Secured Term 
Loan B and (c) a $20,000,000 Secured Revolving Credit Loan to 
Borrower; and
     WHEREAS, capitalized terms used herein and not otherwise 
defined herein shall have the meanings set forth in the Loan 
Agreement; and
     WHEREAS, Borrower has requested and Lenders have approved 
the merger of CTi Technologies, Inc., a Massachusetts corporation 
into Wells Electronics, Inc., an Indiana corporation ("Wells") 
and the contemporaneous name change of Wells, as survivor of such 
merger, to Wells-CTI, Inc. ("Wells-CTI"), (such merger and name 
change being herein collectively referred to as the "Merger"); 
and
     WHEREAS, in connection with the Merger, (a) Wells-CTI has 
executed and delivered, or agreed to execute and deliver an 
Assumption Agreement and Amendment to various security documents 
given by it securing the loans, including, without limitation, 
associated UCC-1 Financing Statements; and (b) Borrower, Agent 
and Lender have agreed to modify the Loan Agreement in certain 
hereinafter set forth respects.
<PAGE>
     NOW THEREFORE, in consideration of the mutual covenants 
herein contained and for good and valuable consideration, the 
receipt and sufficiency of which are hereby acknowledged, 
Borrower, Agent and Lender hereby agree as follows:

     I.   AMENDMENTS TO LOAN AGREEMENT:  The Loan Agreement be
          and hereby is amended in the following respects:

          1.  The definitions of "WELLS" and "WELLS JAPAN"
              appearing on page 16 of the Loan Agreement are
              hereby deleted in their entirety and the following
              are substituted therefor:

              "WELLS" means Wells-CTI, Inc., an Indiana
              corporation.

              "WELLS JAPAN" means Wells CTI Kabushiki
              Kaisha, a Japanese limited stock company,
              having its principal place of business at
              Paleana Building 2-2-15, Shin-Yokahama,
              Kohuku-Ku, Yokahama, Japan.

              In this regard, all references to "WELLS" or "WELLS
              JAPAN" in any of the other Financing Documents
              shall Be deemed to refer to WELLS-CTI AND WELLS CTI
              KABUSHIKI KAISHA respectively.

          2.  "EXHIBIT 1.1" and "EXHIBIT 4.1.1" attached to the
              Loan Agreement are hereby deleted and their
              entirety, and "SUBSTITUTE EXHIBIT 1.1" and
              "SUBSTITUTE EXHIBIT 4.1.1" attached to this First
              Amendment of Loan Agreement are hereby substituted
              therefor, respectively.


    II.   OTHER AGREEMENTS:

          1.  All references to the Loan Agreement in any of the
              other Financing Documents, are hereby amended to
              refer to the Loan Agreement, as amended by this
              Agreement.

          2.  All of the terms and provisions of this Agreement
              are hereby incorporated in the Loan Agreement and
              the Loan Agreement is amended accordingly. In the
              event that any term or condition contained in this
              Agreement conflicts with, or is inconsistent with,
              any provision of the Loan Agreement, as amended
              hereby, the terms and conditions of this Agreement
              shall supersede and control.  In all other
              respects, the provisions of the Loan Agreement,
              shall remain in full force and effect, including,
              without limitation, any and all additional terms
              and conditions therein which are not in conflict
              with the provisions of this Agreement.

          3.  The Borrower hereby restates and repeats all of the
              representations, warranties and covenants of the
              Borrower set forth in the Loan Agreement and each
              of the other Financing Documents to the same extent
              as if fully set forth herein and the Borrower
              hereby certifies that all such representations and
              warranties are true and accurate as of date hereof.

                                 2
<PAGE>
          4.  The Borrower hereby further represents, warrants
              and confirms that (a) all of the Financing
              Documents and the terms thereof are hereby ratified
              and confirmed, (b) the Loan Agreement, as amended
              hereby, and each of the other Financing Documents,
              as amended hereby, are all in full force and effect
              and evidence the valid and binding obligation of
              Borrower enforceable in accordance with their
              respective terms and (c) there does not exist (i)
              any offset or defense against the payment or
              performance of any of the indebtedness or
              obligations of the Borrower evidenced or secured by
              the Financing Documents or (ii) any claim or cause
              of action by Borrower against Agent or any Lender.

      IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written, under seal.

WITNESS:                           BORROWER:

                                   PCD INC.

______________________________     By: /s/ Mary L. Mandarino. 
                                      ---------------------------
                                      Mary L. Mandarino
                                      Treasurer



WITNESS:                           AGENT:

                                   FLEET NATIONAL BANK, as Agent
                                   for the Lenders


______________________________     By: /s/ Scott D. Wheelock 
                                      ---------------------------
                                      Scott D. Wheelock
                                      Vice President

                                  3
<PAGE>
                                   LENDERS:

                                   FLEET NATIONAL BANK, as Lender

_________________________          By: /s/ Scott D. Wheelock 
                                      ---------------------------
                                      Scott D. Wheelock
                                      Vice President 


                                   STATE STREET BANK AND TRUST 
                                   COMPANY

_________________________          By: /s/ Bruce Daniels
                                      ---------------------------
                                      Bruce Daniels
                                      Vice President


                                   IMPERIAL BANK

_________________________          By: /s/ William Sweeney
                                      ---------------------------
                                      William Sweeney
                                      Assistant Vice President


                                   EASTERN BANK

_________________________          By: /s/ John P. Farmer
                                      ---------------------------
                                      John P. Farmer
                                      Vice President


                                   IBJ SCHRODER BANK & TRUST 
                                   COMPANY 

_________________________          By: /s/ Michael Graham
                                      ---------------------------
                                      Michael Graham
                                      Director

                                  4
<PAGE> 
                                   CORESSTATES BANK, N.A.

_________________________          By: /s/ Lyle P. Cunnigham
                                      ---------------------------
                                      Lyle P. Cunningham
                                      Vice President 


                                   FIRST SOURCE FINANCIAL LLP

_________________________          By: /s/ John L. Walding
                                      ---------------------------
                                      John L. Walding
                                      Vice President




<EXHIBIT>                                         <EXHIBIT 10.42>
                    SECOND AMENDMENT OF LOAN AGREEMENT

     This SECOND AMENDMENT OF LOAN AGREEMENT (this "Amendment") 
is made as of the 31st day of August, 1998 by and among (a) PCD 
INC., a Massachusetts corporation with a principal place of 
business at 2 Technology Drive, Peabody, Massachusetts 01960 (the 
"Borrower"), (b) FLEET NATIONAL BANK, a national banking 
association organized under the laws of the United States and 
having an office at One Federal Street, Boston, Massachusetts 
02110 as a Lender and in its capacity as Agent ("Agent") for 
itself, and for each of the other Lenders who now or hereafter 
become parties to the hereinafter defined Loan Agreement and (c) 
the other Lenders. 
                      W I T N E S S E T H:

     WHEREAS, Borrower, Agent and Lenders are parties to that 
certain Loan Agreement, dated as of December 26, 1997, as amended 
by that certain First Amendment of Loan Agreement dated as of 
July 31, 1998 (as the same may be further amended from time to 
time, the "Loan Agreement") pursuant to the terms of which 
Lenders made (a) a $30,000,000 Secured Term Loan A, (b) a 
$40,000,000 Secured Term Loan B and (c) a $20,000,000 Secured 
Revolving Credit Loan to Borrower; and
     WHEREAS, capitalized terms used herein and not otherwise 
defined herein shall have the meanings set forth in the Loan 
Agreement; and
     WHEREAS, in addition, Borrower has requested and Agent and 
Lenders have agreed to amend the Loans in certain respects, 
including, without limiting the generality of the foregoing by 
(a) consolidating Term Loan A and Term Loan B into one Term Loan, 
(b) adjusting the payment schedules of the Term Loans so as to 
have one Term Loan payment schedule and (c) amending certain 
financial covenants set forth in the Loan Agreement (collectively 
the "Amendment"); and
     WHEREAS, in connection with the Amendment, (a) Borrower has 
this day executed and delivered to each Lender its Amended, 
Restated and Consolidated Term Note in the principal amounts set 
forth on EXHIBIT A attached hereto and incorporated herein by 
reference (collectively, the "Amended and Restated Notes") and 
(b) Borrower, Agent and Lenders have agreed to modify the Loan 
Agreement in certain hereinafter set forth respects.
<PAGE>
     NOW THEREFORE, in consideration of the mutual covenants 
herein contained and for good and valuable consideration, the 
receipt and sufficiency of which are hereby acknowledged, 
Borrower, Agent and Lender hereby agree as follows:

   I.  AMENDMENTS TO LOAN AGREEMENT:  The Loan Agreement be and
       hereby is amended in the following respects:

       1.  The definition of "APPLICABLE MARGIN" appearing on
       pages 2-4 of the Loan Agreement is hereby deleted in its
       entirety and the following is substituted therefor:

       "APPLICABLE MARGIN" means, with respect to the
       Revolving Credit Loan and the Term Loan, for each
       Libor Loan, two and one-half percent (2.50%) per
       annum and for each Prime Rate Loan, one and one
       quarter percent (1.25%) per annum, provided,
       however, that if, at any time on or after the
       receipt by the Agent of the quarterly financial
       statements for the Borrower's June 30, 1998
       fiscal quarter and each subsequent Borrower
       fiscal quarter provided to the Agent by the
       Borrower pursuant to SECTION 5.3.3 hereof, the
       ratio of (a) total Senior Debt on a consolidated
       basis as of the last day of the most recently
       ended fiscal quarter of the Borrower to (b)
       EBITDA, is within the ratios set forth below and
       if and so long as no Event of Default or Default
       exists, the Applicable Margin shall, subject to
       the last sentence of this definition, equal the
       rate set forth below opposite the applicable
       ratio:

                              APPLICABLE MARGIN APPLICABLE MARGIN
            RATIO                 LIBOR LOAN    PRIME RATE LOAN
   Less than 2.75:1 and greater      2.25%           1.00%
     than or equal to 2.50:1

   Less than  2.50:1 and greater     2.00%           0.75%
     than or equal to 2.00:1

   Less than 2.00:1 and greater      1.75%           0.50%
     than or equal to 1.50:1

   Less than 1.50:1 and greater      1.50%           0.25%
     than or equal to 1.00:1

   Less than 1.00:1                  1.25%           0.00%

   Any change in the Applicable Margin required
pursuant to the foregoing shall become effective on
the fifth Business Day after the Agent receives the

                                 2
<PAGE>
       Borrower's financial statement for the Borrower's
       fiscal quarter in question; provided, however, that
       each of the above referenced interest rates shall
       remain in effect only so long as Borrower qualifies
       therefor and provided further, however, that interest
       rate reductions shall become final only on the basis
       of Borrower's annual audited financial statements and
       in the event that such annual audited financial
       statements establish that the Borrower was not
       entitled to a rate reduction which was previously
       granted, the Borrower shall, upon written demand by
       the Agent, repay to the Agent for the account of each
       Lender an amount equal to the excess of interest at
       the rate which should have been charged based on such
       annual audited financial statements and the rate
       actually charged on the basis of Borrower's quarterly
       financial statement(s) (provided that in  the event
       of a dispute as to the appropriate fiscal quarter as
       to which any adjustment should be allocated, the
       decision of the independent accountants of the
       Borrower shall be made in accordance with GAAP and
       shall be binding upon the Agent, the Lenders and the
       Borrower absent manifest error); and provided
       further, however, that in the event that Borrower
       fails to provide any financial statement on a timely
       basis in accordance with SECTION 5.3.3, any interest
       rate increase payable as a result thereof shall be
       retroactively effective to the date on which the
       financial statement in question should have been
       received by the Agent in accordance with SECTION
       5.3.3, and the Borrower shall pay any amount due as a
       result thereof upon written demand from the Agent.
       The Agent shall send the Borrower written
       acknowledgment of each change in the Applicable
       Margin in accordance with the Agent's customary
       procedures as in effect from time to time, but the
       failure to send such acknowledgment shall have no
       effect on the effectiveness or applicability of the
       foregoing provisions of this definition or Borrower's
       obligations with respect to payment and calculation
       of interest on Libor Loans.

       2.  The definition of "Fee Letter" appearing on page 8 of
       the Loan Agreement is hereby deleted in its entirety and
       the following is substituted therefor:

       "FEE LETTER" means each of that certain fee letter
       dated October 31, 1997, that certain fee letter dated
       as of the date of the Second Amendment of Loan
       Agreement and any subsequent fee letter between
       Borrower and the Agent regarding certain fees payable
       by the Borrower.

       3.  Subsection (C) of the definition of "Interest Period"
       appearing on page 10 of the Loan Agreement is hereby
       deleted in its entirety and the following is substituted
       therefor:

       (D) for the Term Loan, no Interest Period shall end
       after the Term Loan Repayment Date and for the
       Revolving Credit Loan, no Interest Period shall end
       after the Revolving Credit Repayment Date; and

                                 3
<PAGE>
       4.  The definitions of "Term Loans", "Term Loan A", "Term
       Loan B", "Term Note A", "Term Note B", "Term Loan A
       Repayment Date" and "Term Loan B Repayment Date", all
       appearing on page 16 of the Loan Agreement are each
       deleted in their entirety and following are substituted
       therefor:

          "TERM LOAN" means the term loan in the aggregate
        principal amount of $50,000,000 to be maintained by
        the Lenders pursuant to SECTION 2.1.1 hereof.

          "TERM NOTE" means an amended, restated and
        consolidated term note of the Borrower payable to
        the order of a Lender in the form of EXHIBIT 1.6
        hereto evidencing the Indebtedness of the Borrower
        to such Lender with respect to the Term Loan.

          "TERM LOAN REPAYMENT DATE" means the earlier to
        occur of (i) December 31, 2003 and (ii) such earlier
        date on which the Term Loan becomes due and payable
        pursuant to the terms hereof.

          In connection with the substitution of such
       definitions, all references in the Loan Agreement or any
       of the other Financing Documents to (a) the "Term Loans",
       "Term Loan A" and "Term Loan B" shall be deemed to refer
       to the "Term Loan", (b) "Term Note A" or "Term Note B"
       shall be deemed to refer to the "Term Note" and (c) the
       "Term Loan A Repayment Date" or the "Term Loan B Repayment
       Date" shall be deemed to refer to the "Term Loan Repayment
       Date".

       5.  SECTIONS 2.1.1. AND 2.1.2. appearing on pages 19 - 20
       of the Loan Agreement are hereby deleted in their entirety
       and the following is substituted therefor:

       SECTION 2.1.1.  TERM LOAN.  Borrower shall pay on the
       last day of each calendar quarter ending on or in
       between the dates set forth below the amount of the
       Term Loan set forth immediately opposite such dates
       below:

                  Repayment                Quarterly
                     Dates                Payment Amount
                -------------             --------------
          September 30, 1998 through
            December 31, 1998            $2,000,000

          January 1, 1999 through
            December 31, 1999            $2,100,000

          January 1, 2000 through
            December 31, 2000            $2,200,000

          January 1, 2001 through

                                  4
<PAGE>
            December 31, 2001            $2,300,000

          January 1, 2002 through
            December 31, 2002            $2,400,000

          January 1, 2003 through
            September 30, 2003           $2,500,000

          Term Loan Repayment Date       Then Remaining
                                         Outstanding Balance
                                         of the Term Loan 

       SECTION 2.1.2.     INTENTIONALLY OMITTED.

       6.  SECTION 2.2.2 appearing on pages 21 and 22 of the Loan
       Agreement are hereby deleted in its entirety and the
       following is substituted therefor:

       SECTION 2.2.2.   FEES  On the last Business Day of
       each March, June, September and December commencing
       September 30, 1998 and continuing through  the
       Revolving Credit Repayment Date, the Borrower shall
       pay to the Agent for the pro rata account of each
       Lender, a fee in an amount equal to .50% per annum of
       the amount, if any, by which the average actual daily
       amount of the Revolving Credit Loan Commitment for
       the quarterly period just ended (or in the case of
       the first such payment, the period from the Closing
       Date to the date such payment is due) exceeds the sum
       of (x) the average of the actual daily (on the basis
       of a year of 360 days, for the actual number of days
       elapsed) outstanding principal balances of the
       Revolving Credit Loans PLUS (y) the average of the
       actual daily aggregate amount of the outstanding
       stated amount of any Letter of Credit or Letter of
       Credit Agreement, and any unreimbursed amounts
       thereunder; provided, however, that if at any time
       after the receipt by the Agent of the quarterly
       financial statements for the Borrower's June 30, 1998
       fiscal quarter and each subsequent Borrower fiscal
       quarter provided to the Agent by the Borrower
       pursuant to SECTION 5.3.3 hereof, the ratio of (a)
       total Senior Debt on a consolidated basis as of the
       last day of the most recently ended fiscal quarter of
       the Borrower to (b) EBITDA, (i) is less than 2.5:1.0
       and greater than or equal to 2.0:1.0 and if and so
       long as no Event of Default or Default exists and is
       continuing, the Borrower shall pay to the Agent for
       the pro rata account of each Lender a fee in an
       amount equal to .45% per annum of the amount, if any,
       by which the average actual daily amount of the
       Revolving Credit Loan Commitment for the quarterly
       period just ended (or in the case of the first such

                                 5
<PAGE>
       payment, the period from the Closing Date to the date
       such payment is due) exceeds the sum of (x) the
       average of the actual daily (on the basis of a year
       of 360 days, for the actual number of days elapsed)
       outstanding principal balance of the Revolving Credit
       Loans PLUS (y) the average of the actual daily
       aggregate amount of the outstanding stated amount of
       any Letter of Credit or Letter of Credit Agreement,
       and any unreimbursed amounts thereunder; (ii) is less
       than 2.0:1.0 and greater than or equal to 1.5:1.0 and
       if and so long as no Event of Default or Default
       exists and is continuing, the Borrower shall pay to
       the Agent for the pro rata account of each Lender a
       fee in an amount equal to .40% per annum of the
       amount, if any, by which the average actual daily
       amount of the Revolving Credit Loan Commitment for
       the quarterly period just ended (or in the case of
       the first such payment, the period from the Closing
       Date to the date such payment is due) exceeds the sum
       of (x) the average of the actual daily (on the basis
       of a year of 360 days, for the actual number of days
       elapsed) outstanding principal balance of the
       Revolving Credit Loans PLUS (y) the average of the
       actual daily aggregate amount of the outstanding
       stated amount of any Letter of Credit or Letter of
       Credit Agreement, and any unreimbursed amounts
       thereunder or (iii) is less than 1.5:1.0 and greater
       than or equal to 1.0:1.0 and if and so long as no
       Event of Default or Default exists and is continuing,
       the Borrower shall pay to the Agent for the pro rata
       account of each Lender a fee in an amount equal to
       .35% per annum of the amount, if any, by which the
       average actual daily amount of the Revolving Credit
       Loan Commitment for the quarterly period just ended
       (or in the case of the first such payment, the period
       from the Closing Date to the date such payment is
       due) exceeds the sum of (x) the average of the actual
       daily (on the basis of a year of 360 days, for the
       actual number of days elapsed) outstanding principal
       balance of the Revolving Credit Loans PLUS (y) the
       aggregate amount of the outstanding stated amount of
       any Letter of Credit or Letter of Credit Agreement,
       and any unreimbursed amounts thereunder or (iv) is
       less than 1.0:1.0 and if and so long as no Event of
       default or Default exists and is continuing, the
       Borrower shall pay to the Agent for the pro rata
       account of each Lender a fee in an amount equal to
       .30% per annum of the amount, if any, by which the
       average actual daily amount of the Revolving Credit
       Loan Commitment for the quarterly period just ended
       (or in the case of the first such payment, the period
       from the Closing Date to the date such payment is
       due) exceeds the sum of (x) the average of the actual
       daily (on the basis of a year of 360 days, for the
       actual number of days elapsed) outstanding principal
       balance of the Revolving Credit Loans PLUS (y) the
       aggregate amount of the outstanding stated amount of
       any Letter of Credit or Letter of Credit Agreement,
       and any unreimbursed amounts thereunder (the "Unused
       Fees"). In addition, the Borrower shall pay to the
       Agent  for its own account certain fees as specified
       in the Fee Letter.

                                  6
<PAGE>
       7.  SECTIONS 2.6.1.1 AND 2.6.1.2 appearing on pages 27 and
       28 of the Loan Agreement are hereby deleted in their
       entirety and the following is substituted therefor:

       SECTION 2.6.1.1.  In addition to each other principal
       payment required hereunder, the outstanding principal
       balance of the Term Loan shall be repaid on the Term
       Loan Repayment Date and the outstanding principal
       balances of the Revolving Credit Loans shall be
       repaid on the Revolving Credit Repayment Date.

       SECTION 2.6.1.2.  On or before the 90th day after the
       end of each fiscal year of the Borrower commencing
       with the fiscal year ending December 31, 1998, the
       Borrower shall prepay to the Agent for the accounts
       of the Lenders in accordance with their Pro Rata
       Shares an amount of the outstanding principal
       balances of the Term Loans equal to 50% of the
       amount, if any, of Excess Cash Flow for such fiscal
       year; provided, however, that if, based upon the
       financial statements for the Borrower's immediately
       preceding fiscal year end delivered to the Agent
       pursuant to SECTION 5.3.2, the ratio of (a) total
       Senior Debt on a consolidated basis as of the last
       day of the most recently ended fiscal quarter of the
       Borrower to (b) EBITDA, is less than 2.00:1, the
       Borrower shall not be required to make such
       prepayment on account of such fiscal year.  Such
       prepayments shall be in addition to any and all other
       mandatory and voluntary prepayments required or
       permitted hereunder and shall be applied to the
       principal installments of the Term Loans in
       accordance with SECTION 2.6.1.6.

       8.  The first sentence of SECTION 2.6.1.6. appearing on
       page 29 of the Loan Agreement is hereby deleted in its
       entirety and the following is substituted therefor:

       SECTION 2.6.1.6.  Any amount repaid by the Borrower
       and/or any Subsidiary under this SECTION 2.6.1 shall
       be applied on a pro-rata basis to the respective
       amounts of the remaining payments to reduce the
       remaining quarterly payments of the Term Loan.

       9.  SECTION 5.1.12. appearing on pages 50-51 of the
       Loan Agreement is hereby deleted in its entirety. 

       10. SECTION 5.1.12A appearing on pages 51-52 of the Loan
       Agreement is hereby deleted in its entirety and the
       following is substituted therefor:

           SECTION 5.1.12A. MAXIMUM RATIO OF TOTAL
         INDEBTEDNESS FOR BORROWED MONEY TO EBITDA.
         Maintain at the end of each fiscal quarter of
         Borrower a ratio of (i) total Indebtedness for
         Borrowed Money on a consolidated basis as of the
         last day of such fiscal quarter to (ii) EBITDA, of
         not greater than 3.00:1.00.

                                     7
<PAGE>
       11. PCD Control Systems, Inc. has changed its name to PCD
       Control Systems Interconnect, Inc.  All references to PCD
       Control Systems, Inc. in the Financing Documents are
       amended to read PCD Control Systems Interconnect, Inc.

       12. At the request of the Borrower, the Agent and the
       Lenders hereby consent to the following transactions and
       waive any Default or Event of Default which may be
       occasioned thereby under Sections 2.6.1.5, 5.2.3, 5.2.8,
       5.2.12 and 5.2.20:

       (a)  the liquidation of Wells-CTI Pte Ltd.;

       (b)  termination of the operations of the Korean branch
       office of Wells CTI KK;

       (c)  organization of a new Japanese Subsidiary of Wells-
       CTI, Inc. to be wholly-owned by Wells-CTI, Inc., the
       borrowing of Revolving Credit Loan proceeds and/or
       additional borrowings from the Lenders or any of them for
       the purpose of capitalizing such newly organized Japanese
       Subsidiary and the sale of the issued and outstanding
       capital stock of Wells Japan by Wells-CTI, Inc. to said
       newly organized Japanese Subsidiary; provided, however,
       any such additional borrowings (other than those under the
       Revolving Credit Loan) shall be repaid with seven (7) days
       of the date thereof).

         The foregoing waivers and consents are strictly limited
       to the transactions expressly described above and shall
       not be deemed to extend to any other transaction or to
       imply any consent or waiver by the Agent or the Lenders to
       any other similar transaction.

       13.  EXHIBIT 1.9 attached to the Loan Agreement is hereby
       deleted in its entirety and SUBSTITUTE EXHIBIT 1.9
       attached hereto is substituted therefor.


  II.  OTHER AGREEMENTS:

       1.  All references to the Loan Agreement in any of the
       other Financing Documents, are hereby amended to refer to
       the Loan Agreement, as amended by this Amendment.

       2.  All of the terms and provisions of this Amendment are
       hereby incorporated in the Loan Agreement and the Loan
       Agreement is amended accordingly. In the event that any
       term or condition contained in this Amendment conflicts
       with, or is inconsistent with, any provision of the Loan
       Agreement, as amended hereby, the terms and conditions of
       this Amendment shall supersede and control.  In all other

                                8
<PAGE>
       respects, the provisions of the Loan Agreement, shall
       remain in full force and effect, including, without
       limitation, any and all additional terms and conditions
       therein which are not in conflict with the provisions of
       this Amendment.

       3.  The Borrower hereby restates and repeats all of the
       representations, warranties and covenants of the Borrower
       set forth in the Loan Agreement and each of the other
       Financing Documents to the same extent as if fully set
       forth herein and the Borrower hereby certifies that all
       such representations and warranties are true and accurate
       as of date hereof.

       4.  The Borrower hereby further represents, warrants and
       confirms that (a) all of the Financing Documents and the
       terms thereof are hereby ratified and confirmed, (b) the
       Loan Agreement, as amended hereby, and each of the other
       Financing Documents, as amended hereby, are all in full
       force and effect and evidence the valid and binding
       obligation of Borrower enforceable in accordance with
       their respective terms and (c) there does not exist (i)
       any Default or Event of Default, (ii) any offset or
       defense against the payment or performance of any of the
       Indebtedness or Obligations of the Borrower evidenced or
       secured by the Financing Documents or (iii) any claim or
       cause of action by Borrower against Agent or any Lender.

     IN WITNESS WHEREOF, the parties hereto have executed this 
Amendment as of the day and year first above written, under seal.

WITNESS:                           AGENT:

                                   FLEET NATIONAL BANK, as Agent
                                   for the Lenders


_________________________          By: /s/ Scott D. Wheelock
                                       -----------------------------
                                       Scott D. Wheelock
                                       Vice President

                                   LENDERS:


                                   FLEET NATIONAL BANK, as Lender

_________________________          By: /s/ Scott D. Wheelock
                                       -----------------------------
                                       Scott D. Wheelock 

                                    9
<PAGE>
                                       Vice President






                                  10
<PAGE>
                                STATE STREET BANK AND TRUST 
                                COMPANY

______________________          By: /s/ Bruce Daniels
                                   ---------------------------
                                   Bruce Daniels
                                   Vice President

                                IMPERIAL BANK 


_______________________         By: /s/ William Sweeney
                                   ---------------------------
                                   William Sweeney
                                   Assistant Vice President


                                EASTERN BANK

_______________________         By: /s/ John P. Farmer
                                   ---------------------------
                                   John P. Farmer
                                   Vice President


                                IBJ SCHRODER BANK & TRUST COMPANY 

_______________________         By: /s/ Michael Graham
                                   ---------------------------
                                   Michael Graham
                                   Director


                                FIRST UNION NATIONAL BANK
                               (Successor by merger with
                                Coresstates Bank, N.A.) 

_______________________         By: /s/ Lyle P. Cunningham
                                   ---------------------------
                                   Lyle P. Cunningham
                                   Vice President

                                  11
<PAGE>

                                FIRST SOURCE FINANCIAL LLP

_______________________         By: /s/ John L. Walding
                                   ---------------------------
                                   John L. Walding
                                   Vice President



                                PCD, INC. 

_______________________         By: /s/ Mary L. Mandarino
                                   ---------------------------
                                   Mary L. Mandarino
                                   Treasurer



























                                     12
<PAGE>

                     SUBSTITUTE EXHIBIT 1.9


NAME OF LENDER, ADDRESS FOR NOTICES
AND WIRE TRANSFER INSTRUCTIONS:         PRO RATA SHARE

Fleet National Bank                     Revolving 
One Federal Street                      Credit Loan:  25.1259%
Mail Stop:  MAOFD07A                    Term Loan:    25.1259%
Boston, Massachusetts 02110
Attn: Thomas W. Davies,
      Senior Vice President

      WIRE TRANSFER INSTRUCTIONS:

Fleet National Bank
One Federal Street
Boston, Massachusetts 021110
Attn:      Susan Koulouris
Telecopy: (617) 346-1633]0151
ABA #: 011000138 
Account: Commercial Loan Services
         Attn: Agent Bank MA 
Account #:  1510351 G/L 
Re:  PCD Inc.


NAME OF LENDER, ADDRESS FOR NOTICES
AND WIRE TRANSFER INSTRUCTIONS:         PRO RATA SHARE

Street Bank and Trust Company           Revolving 
225 Franklin Street                     Credit Loan:  16.6619%
Boston, Massachusetts                   Term Loan:    16.6619%
Attn: Bruce Daniels,
      Vice President

     WIRE TRANSFER INSTRUCTIONS

State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts
Attn:  Cindi Kenny
Telecopy:  (617) 664-3465
ABA#: 011000028
Re:  PCD Inc.

                                    13
<PAGE>
NAME OF LENDER, ADDRESS FOR NOTICES
AND WIRE TRANSFER INSTRUCTIONS:         PRO RATA SHARE

Imperial Bank                           Revolving 
225 Franklin Street, 28th Floor         Credit Loan:  8.73%
Boston, Massachusetts 02109             Term Loan:    8.73%
Attn: William Sweeney, 
      Assistant Vice President

     WIRE TRANSFER INSTRUCTIONS:

Imperial Bank
2015 Manhattan Beach Boulevard
Redondo Beach, CA 90278
Attn:  Debbie Smith
Telecopy:  (617) 521-9410
ABA#: 122-201-444
Re:  PCD Inc.

NAME OF LENDER, ADDRESS FOR NOTICES
AND WIRE TRANSFER INSTRUCTIONS:         PRO RATA SHARE

Eastern Bank                            Revolving 
53 State Street, 13th Floor             Credit Loan:  10.71%
Boston, Massachusetts 02109             Term Loan:    10.71%
Attn: John P. Farmer,
      Vice President

     WIRE TRANSFER INSTRUCTIONS:

Eastern Bank
53 State Street, 13th Floor
Boston, Massachusetts 02109
Attn:  John P. Farmer, Vice President
Telecopy:  (617) 263-2521
ABA#:  011301798
Re:    PCD Inc. 

                                    14
<PAGE>
NAME OF LENDER, ADDRESS FOR NOTICES
AND WIRE TRANSFER INSTRUCTIONS:         PRO RATA SHARE

IBJ Schroder Bank & Trust               Revolving 
Company                                 Credit Loan:  16.6619%
One State Street                        Term Loan:    16.6619%
New York, New York 10004
Attn: Michael Graham, Director

     WIRE TRANSFER INSTRUCTIONS:

IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attn: Bill Reyes - Loan Department
ABA#:  026007825
Re:    PCD Inc.


NAME OF LENDER, ADDRESS FOR NOTICES
AND WIRE TRANSFER INSTRUCTIONS:         PRO RATA SHARE

CoreStates Bank, N.A.                   Revolving 
28 State Street                         Credit Loan:  11.00%
Suite 1100                              Term Loan:    11.00%
Boston, Massachusetts  02109
Attn: Lyle P. Cunningham,
      Vice President

     WIRE TRANSFER INSTRUCTIONS:

CoreStates Bank, N.A.
28 State Street
Suite 1100
Boston, Massachusetts  02109
ABA#:  031000011
Account:  Commercial Loan Wire Account
Attn: Dee Scott
Account #: 00013-20452
Re:        PCD Inc.

                                    15
<PAGE>
NAME OF LENDER, ADDRESS FOR NOTICES
AND WIRE TRANSFER INSTRUCTIONS:         PRO RATA SHARE

First Source Financial LLP              Revolving
c/o First Source Financial, Inc.        Credit Loan:  11.1103
2850 West Golf Road                     Term Loan:    11.1103
5th Floor
Rolling Meadows, Illinois  60008
Attention:  Ms. Kimberly Kerr

     WIRE TRANSFER INSTRUCTIONS:

First Source Financial LLP 
c/o The Bank of New York
Corporate Trust Administration
101 Barclay Street
New York, New York  10286
Attention:  Ms. Cheryl L. Laser




















                                     16














                                5


<EXHIBIT>                                            EXHIBIT 21.1

SUBSIDIARIES OF PCD INC.

 PCD Control Systems Interconnect, Inc., a Massachusetts 
  corporation
 PCD USVI, Inc., a United States Virgin Islands corporation
 WELLS-CTI, Inc., an Indiana corporation
 SUBSIDIARIES OF WELLS-CTI, INC.
  Wells-CTI Kabushiki Kaisha, a Japanese corporation
  Wells International Corporation, Inc., an Indiana corporation
 SUBSIDIARIES OF WELLS INTERNATIONAL CORPORATION, INC.
  Wells Electronics Asia Pte. Ltd., a Singapore limited liability
   company
















<EXHIBIT>                                            EXHIBIT 23.1

                 CONSENT OF PRICEWATERHOUSECOOPERS 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, 333-07405 and 333-57805) of our report dated January 29, 
1999, relating to the consolidated balance sheets of PCD Inc. and 
subsidiaries as of December 31, 1998 and 1997, and the related 
consolidated statements of operations, shareholder's equity, and 
cash flows for the three years in the period ended December 31, 
1998, which reports are included in this Annual Report on Form 
10-K.


/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
March 25, 1999

<EXHIBIT>                                           EXHIBIT 23.2


                   CONSENT OF KPMG 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, 333-07405 and 333-57805) of our report dated January 15, 
1998, relating to the consolidated balance sheets of Wells 
Electronics, Inc. and subsidiaries as of May 3, 1997 and the 
related consolidated statements of income, shareholder's equity, 
and cash flows for the 53 weeks ended May 3, 1997 and the 48 
weeks ended April 27, 1996 which report is included in this 
Report on Form 10-K.


/s/ KPMG LLP

Chicago, Illinois
March 26, 1999