`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549


                                    FORM 10-Q

(Mark one)
[X ]  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR  15(D)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934
      For the quarterly period ended December 31, 2004
                                     -----------------

                                       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 0-19824
                                                -------

                      Nutrition Management Services Company
                      -------------------------------------
             (Exact name of registrant as specified in its charter)

           Pennsylvania                                          23-2095332
-----------------------------------                          -------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

   Box 725, Kimberton Road, Kimberton, PA                           19442
--------------------------------------------------------------------------------
  (Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code   (610) 935-2050
                                                   ----------------

                                      N/A
                          -----------------------------
                   Former name, former address and former fiscal year, if change
since last report.

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  report),  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days Yes /X/ No / /.

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes / /  No /X/.

2,747,000  Shares of Registrant's  Class A Common Stock,  with no par value, and
100,000  shares of  Registrant's  Class B Common Stock,  with no par value,  are
outstanding as of January 3, 2005.






                                TABLE OF CONTENTS


Part I.   Financial Information                                         Page No.
          ---------------------                                         --------

          Consolidated Balance Sheets as of
          December 31, 2004 (unaudited) and June 30, 2004                  2

          Consolidated Statements of Operations for the Three
          and Six Months Ended December 31, 2004 (unaudited) and
          2003 (unaudited)                                                 3

          Consolidated Statements of Cash Flows for the Six
          Months Ended December 31, 2004 (unaudited) and
          2003 (unaudited)                                                 4

          Notes to Consolidated Financial Statements                     5 - 8

          Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                      9 - 14

          Item 9A - Controls and Procedures                               14

Part II.  Other Information                                               15

          Signatures                                                      16





                      NUTRITION MANAGEMENT SERVICES COMPANY
                           CONSOLIDATED BALANCE SHEETS

                                                                                 DECEMBER 31, 2004  JUNE 30, 2004
                                                                                    (UNAUDITED)
                                                                                 -----------------  -------------

Current assets:
   Cash and cash equivalents                                                     $    782,675      $    946,523
   Marketable securities                                                              216,303           202,969
   Accounts receivable, net of allowance for doubtful
      accounts of $2,982,280 and $2,877,336, respectively                           2,778,316         2,259,582
   Deferred income taxes                                                              405,320           405,320
   Inventory                                                                          155,745           159,181
   Prepaid and other current assets                                                   653,886           525,556
                                                                                 ------------      ------------
Total current assets                                                                4,992,245         4,499,131

Property and equipment, net                                                         7,294,219         7,563,568

Other assets:
   Restricted cash                                                                    250,000           250,000
   Note receivable                                                                    111,374           120,608
   Advances to employees                                                              435,283           435,283
   Deferred income taxes                                                            1,218,521         1,218,521
   Bond issue costs, net of accumulated amortization of $117,745
      and $110,461, respectively                                                      173,579           180,863
   Other assets                                                                        11,321            11,321
                                                                                 ------------      ------------
Total other assets                                                                  2,200,078         2,216,596
                                                                                 ------------      ------------
Total assets                                                                     $ 14,486,542      $ 14,279,295
                                                                                 ============      ============

Current liabilities:
     Current portion of long-term debt                                           $    145,000      $    145,000
     Current portion of note payable                                                        0           154,453
     Accounts payable                                                               4,035,583         3,303,947
     Accrued payroll and related expenses                                             152,935           222,176
     Accrued expenses and other                                                       170,937           447,114
                                                                                 ------------      ------------
Total current liabilities                                                           4,504,455         4,272,690

Long-Term liabilities:
    Long-term debt, net of current portion                                          5,609,922         5,376,922

Commitments and contingencies

Stockholders' equity:
    Undesignated preferred stock - no par, 2,000,000 shares authorized, none
       issued or outstanding
    Common stock:
    Class A - no par, 10,000,000 shares authorized; 3,000,000 issued,
       2,747,000 outstanding                                                        3,801,926         3,801,926
    Class B - no par, 100,000 shares authorized, issued and outstanding                    48                48
    Retained earnings                                                               1,069,754         1,327,272
    Less:  treasury stock (Class A common: 253,000 and 253,000
     shares, respectively) - at cost                                                 (499,563)         (499,563)
                                                                                 ------------      ------------
Total stockholders' equity                                                          4,372,165         4,629,683
                                                                                 ------------      ------------
                                                                                 $ 14,486,542      $ 14,279,295
                                                                                 ============      ============

            See Notes to Unaudited Consolidated Financial Statements

                                        2



                      NUTRITION MANAGEMENT SERVICES COMPANY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                                   THREE MONTHS ENDED               SIX MONTHS ENDED
                                                      DECEMBER 31,                    DECEMBER 31,
                                                  2004           2003             2004            2003
                                                  ----           ----             ----            ----

Food Service Revenue                            $6,610,033    $7,175,557      $13,379,580      $13,882,411
Cost of Operations
     Payroll and related expenses                2,525,661     2,851,728        5,228,008        5,362,130
     Other costs of operations                   2,740,113     2,984,272        5,504,001        5,867,390
                                                ----------    ----------      -----------      -----------
Total cost of operations                         5,265,774     5,836,000       10,732,009       11,229,520
                                                 ---------    ----------      -----------      -----------
Gross Profit                                     1,344,259     1,339,557        2,647,571        2,652,891

Expenses
     General and administrative expenses          1,159,971    1,190,626        2,385,265        2,367,466
     Depreciation and amortization                  151,308      155,547          302,984          309,945
     Provision for doubtful accounts                 30,000       60,000          105,000          120,000
                                                 ----------   ----------      -----------        ----------
           Total expenses                         1,341,279    1,406,173        2,793,249        2,797,411
                                                 ----------   ----------      -----------        ----------
Income/(loss) from operations                         2,980      (66,616)        (145,678)        (144,520)

Other income/(expense)
     Other                                           13,983       (4,509)          11,600           (9,018)
     Interest income                                  1,220        1,917            2,255            3,557
     Interest expense                               (67,035)     (47,441)        (125,695)         (92,624)
                                                 ----------    ---------      -----------       ----------
            Total other income/(expense)            (51,832)     (50,033)        (111,840)         (98,085)
                                                 ----------    ---------      -----------       ----------

Loss before income taxes                            (48,852)    (116,649)        (257,518)        (242,605)

Provision for income taxes                             --           --               --                --
                                                 ----------    ----------     ------------       ---------

Net loss                                           ($48,852)   ($116,649)       ($257,518)       ($242,605)
                                                 ===========   =========      ============       =========

Net loss per share - basic and diluted                ($.02)      ($0.04)           ($.09)          ($0.08)
                                                  ==========   =========      ===========        =========

Weighted average number of shares                 2,847,000    2,847,000        2,847,000        2,847,000
                                                  ==========   =========      ===========        =========


            See Notes to Unaudited Consolidated Financial Statements

                                        3




                      NUTRITION MANAGEMENT SERVICES COMPANY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)

                                                         SIX MONTHS ENDED DECEMBER 31,
                                                          2004                  2003
                                                          ----                  ----

Operating activities:
Net loss                                              ($ 257,518)            ($ 242,605)
Adjustments to reconcile net loss to
  net cash used in operating activities:
     Depreciation and amortization                       302,984               309,945
     Provision for bad debts                             105,000               120,000
     Amortization of bond costs                            7,284                 7,282
 Changes in assets and liabilities:
     Marketable securities                               (13,334)                 --
     Accounts receivable                                (614,500)             (743,640)
     Inventory                                             3,436               (12,118)
     Prepaid and other current assets                   (128,330)              (34,644)
     Accounts payable                                    731,636               (72,657)
     Accrued payroll and related expenses                (69,241)               (5,607)
     Accrued expenses and other                         (276,177)               (7,673)
                                                      -----------            ----------
Net cash used in operating activities                   (208,760)             (681,717)

Investing activities:
    Purchase of property and equipment                   (33,635)              (50,774)
                                                      -----------            ----------
Net cash used in investing activities                    (33,635)              (50,774)

Financing activities:
     Repayment of note payable                          (154,453)             (154,453)
     Repayment of term loan                                 --                 (35,403)
     Repayments of long-term borrowing                  (203,000)           (1,680,000)
     Proceeds from long-term borrowing                   436,000             2,005,000
                                                      -----------           -----------
Net cash provided by financing activities                 78,547               135,144
                                                      -----------           -----------
Net decrease in cash                                    (163,848)             (597,347)

Cash and cash equivalents - beginning of period          946,523             1,360,512
                                                      ----------            ----------

Cash and cash equivalents - end of period             $  782,675            $  763,165
                                                      ==========            ===========

            See Notes to Unaudited Consolidated Financial Statements

                                        4





                      NUTRITION MANAGEMENT SERVICES COMPANY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

1.       BASIS OF PRESENTATION

          The  accompanying  unaudited  consolidated  financial  statements were
          prepared in accordance with generally accepted  accounting  principles
          for interim  financial  information for quarterly reports on Form 10-Q
          and,  therefore,  do not include all of the  information and footnotes
          required by  generally  accepted  accounting  principles  for complete
          financial statements. However, all adjustments that, in the opinion of
          management,  are  necessary  for fair  presentation  of the  financial
          statements  have been  included and such  adjustments  are of a normal
          recurring  nature.  The results of operations  for the interim  period
          presented  is not  necessarily  indicative  of the results that may be
          expected  for the  entire  fiscal  year  ending  June  30,  2005.  The
          financial information presented should be read in conjunction with the
          Company's 2004 financial statements that were filed under Form 10-K.

2.     NEW ACCOUNTING PRONOUNCEMENTS

         In January 2003 the FASB issued Financial  Interpretation  No. 46 ("FIN
         46"),  "Consolidation  of Variable  Interest  Entities" and in December
         2003 the FASB issued  Financial  Interpretation  No. 46 (revised) ("FIN
         46(R)"),"Consolidation of Variable Interest Entities (revised)".  These
         interpretations of Accounting  Research Bulletin No. 51,  "Consolidated
         Financial Statements," address consolidation by business enterprises of
         certain  variable  interest  entities  where  there  is  a  controlling
         financial  interest in a variable interest entity or where the variable
         interest  does  not  have  sufficient  equity  at risk to  finance  its
         activities without additional subordinated financial support from other
         parities.  The Company will apply the consolidation  requirement of FIN
         46 and FIN  46(R) in  future  periods  if the  Company  should  own any
         interests in any variable interest entity.

3.      EARNINGS PER COMMON SHARE

          Earnings  per common share  amounts are based on the  weighted-average
          number of shares of common stock outstanding  during the three and six
          month  periods ended  December 31, 2004 and 2003.  The Company did not
          have any stock options and warrants  that impacted  earnings per share
          in each period.


                                       5





4.        LITIGATION

          On February 7, 2001,  the Company  filed a suit against a major client
          in the Court of Common  Pleas in Chester  County,  Pennsylvania.  This
          suit has subsequently been removed to the United States District Court
          for the Eastern District of Pennsylvania.  In the lawsuit, the Company
          has made various  claims,  including,  among others,  a claim that the
          client failed to pay approximately $2.1 million in invoiced amounts, a
          claim that the client failed to pay  approximately $1 million in other
          amounts  owing,  a claim  for  reimbursement  for start up costs in an
          amount in  excess of  $400,000,  a claim for over $2  million  in lost
          profits  (or,  alternatively,  a  claim  for  reimbursement  for  over
          $300,000 in credits  issued in exchange  for the promise to extend the
          arrangement),  a claim in the  nature of treble  damages  and  counsel
          fees, and other claims.  The client has filed a counterclaim which the
          Company is  contesting as part of the overall  proceedings.  The trial
          commenced on February 8, 2005.

          The Company is involved in litigation  with two separate  construction
          contractors  related to the renovations of Collegeville Inn Conference
          and Training  Center.  The Company denies its liability for each claim
          and has  asserted  offsets  against the amounts  claimed.  One case is
          listed for trial in early 2005, while the other case is in discovery.

          Although it is not possible to predict with  certainty  the outcome of
          these  unresolved  legal  actions  or the  range of  possible  loss or
          recovery, the Company believes these unresolved legal actions will not
          have a material adverse effect on its financial position or results of
          operations.

          In addition to the litigation  described above, the Company is exposed
          to asserted and unasserted  claims. In the opinion of management,  the
          resolution of these matters will not have a material adverse effect on
          the Company's financial position, results of operations or cash flows.

5.        BUSINESS SEGMENTS

          The  Company  follows  the  disclosure  provisions  of SFAS  No.  131,
          DISCLOSURES  ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED  INFORMATION.
          This management  approach  focuses on internal  financial  information
          that is used by management to assess performance and to make operating
          decisions.  SFAS No. 131 also  requires  disclosures  about  products,
          services, geographic areas, and major customers.

         The Company's  reportable  segments are (1) food service management and
         (2)  training  and  conference  center.  The  Company  reports  segment
         performance on an after-tax basis.  Deferred taxes are not allocated to
         segments.  The management accounting policies and processes utilized in
         compiling  segment  financial  information  are highly  subjective and,
         unlike financial  accounting,  are not based on authoritative  guidance
         similar  to  accounting  principles  generally  accepted  in the United
         States  of  America.  As a result,  reported  segment  results  are not
         necessarily  comparable  with  similar  information  reported  by other
         similar companies.

                                       6





For the quarter ended December 31, 2004:

                                        Food Service       Training and
                                         Management        Conference Center     Total
                                         ----------        -----------------     -----
Food service revenue                     $  6,372,603      $    237,430      $  6,610,033
Depreciation and amortization                  26,910           124,398           151,308
Income (loss) from operations                 252,042          (249,062)            2,980
Interest income                                 1,220                 0             1,220
Interest expense                              (40,930)          (26,105)          (67,035)
Income (loss) before taxes (benefit)          227,182          (276,034)          (48,852)
Net income (loss)                             227,182          (276,034)          (48,852)
Total assets                             $  6,784,204      $  7,702,338      $ 14,486,542


For the quarter ended December 31, 2003:

                                        Food Service       Training and
                                         Management        Conference Center     Total
                                         ----------        -----------------     -----
Food service revenue                     $  6,875,555      $    300,002      $  7,175,557
Depreciation and amortization                  31,164           124,383           155,547
Income (loss) from operations                 276,526          (343,142)          (66,616)
Interest income                                 1,917                 0             1,917
Interest expense                              (29,513)          (17,928)          (47,441)
Income (loss) before taxes (benefit)          248,921          (365,570)         (116,649)
Net income (loss)                             248,921          (365,570)         (116,649)
Total assets                             $  6,850,100      $  8,160,648      $ 15,010,784


For the six months ended December 31, 2004

                                        Food Service       Training and
                                         Management        Conference Center     Total
                                         ----------        -----------------     -----
Food service revenue                     $ 12,902,161      $    477,419      $ 13,379,580
Depreciation and amortization                  54,186           248,798           302,984
Income (loss) from operations                 453,574          (599,252)         (145,678)
Interest income                                 2,255                 0             2,255
Interest expense                              (76,144)          (49,551)         (125,695)
Income (loss) before taxes                    393,019          (650,537)         (257,518)
Net income (loss)                             393,019          (650,537)         (257,518)
Total assets                             $  6,784,204      $  7,702,338      $ 14,486,542

For the six months ended December 31, 2003

                                        Food Service       Training and
                                         Management        Conference Center     Total
                                         ----------        -----------------     -----
Food service revenue                     $ 13,403,435      $    478,976      $ 13,882,411
Depreciation and amortization                  61,443           248,502           309,945
Income (loss) from operations                 565,045          (709,565)         (144,520)
Interest income                                 3,557                 0             3,557
Interest expense                              (57,758)          (34,866)          (92,624)
Income (loss) before taxes                    510,836          (753,441)         (242,605)
Net income (loss)                             510,836          (753,441)         (242,605)
Total assets                             $  6,850,101      $  8,160,647      $ 15,010,748

                                       7





6.   REVOLVING CREDIT FACILITY

     In February 2001,  the Company  executed a loan agreement with a bank for a
     revolving   credit  and  two  irrevocable   letters  of  credit  issued  in
     conjunction  with  the  issuance  of  Industrial  Revenue  Bonds,  totaling
     $4,000,000  and  $3,065,000,  respectively.  In  October  2003 the  Company
     entered into an amended credit agreement  whereby the $4,000,000  Revolving
     Credit Loan Facility was reduced to $3,500,000 and $500,000 was placed in a
     cash collateral  account and pledged as additional  collateral  against the
     revolving credit line. At December 31, 2004, the Company had  approximately
     $275,078 available under the revolving credit. Advances under the revolving
     credit are used for working capital purposes.

     These credit  agreements  contain  covenants that include the submission of
     specified  financial  information and the maintenance of insurance coverage
     for the pledged  assets during the term of the loans.  The  covenants  also
     include  the  maintenance  of a certain  consolidated  fixed  debt  service
     coverage  ratio,  ratio of total  consolidated  liabilities to consolidated
     tangible net worth, and minimum working  capital.  At December 31, 2004 the
     Company was in compliance with these covenants.

     As of December 31, 2004 and June 30, 2004 the Company maintained restricted
     cash balances of $250,000,  which was not available for operating purposes.
     On December 15, 2004 the Company entered into an amended  agreement whereby
     the non-compliance  was waived and new financial  covenants were negotiated
     through  June 30,  2005,  which  reflect the  Company's  current  operating
     projections.  As  part  of  the  amended  agreement,  the  Company's  Chief
     Executive  Officer was required to execute a limited personal  guarantee in
     the amount of $3,000,000.

7.   COLLEGEVILLE INN

     On September 8, 2004 the Company  entered into an agreement of sale for the
     land adjacent to its  Collegeville  Inn Conference & Training  Center.  The
     agreement provides for an initial deposit of $10,000 within ten days of the
     effective date of the agreement,  with  additional  deposits of $50,000 and
     $25,000  payable to the  Company  upon the  occurrence  of certain  events,
     including,   but  not  limited  to,  zoning  approvals.  The  deposits  are
     non-refundable upon the end of a 120-day inspection period, which commenced
     on the date the buyer received a fully  executed  original of the agreement
     of sale.  Pursuant to the terms of the  agreement of sale,  the Company may
     realize gross proceeds of not less than  $1,710,000.  However,  the Company
     may realize gross proceeds in excess of $1,710,000, if the buyer is able to
     maximize the yield of the  property.  The  agreement of sale  provides that
     settlement  occur within  twenty-four  months of the date of the agreement,
     however, upon payment of additional deposits, settlement may be extended an
     additional  twelve  months.  Upon closing of the  transaction,  the Company
     plans on using the proceeds to retire a proportional  amount of outstanding
     debt associated with the parcel of land. There can be no assurance that the
     sale of this land will be  completed  in  accordance  with the terms of the
     agreement of sale.

                                       8





           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

            The following  discussion and analysis should be read in conjunction
with the financial statements and notes thereto.

FORWARD LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the  Securities Act of 1933, as amended and Section 21E of the Securities
Exchange  Act of 1934,  as amended,  that are intended to be covered by the safe
harbors  created  thereby.  Investors  are  cautioned  that all  forward-looking
statements  involve risks and uncertainty,  including  without  limitation,  the
adequacy of the Company's cash from operations,  existing balances and available
credit line.  Although the Company believes that the assumptions  underlying the
forward-looking   statements  contained  herein  are  reasonable,   any  of  the
assumptions could be inaccurate,  and therefore,  there can be no assurance that
the  forward-looking  statements  included  in this Form  10-Q will  prove to be
accurate.  Factors  that could cause  actual  results to differ from the results
discussed in the  forward-looking  statements  include,  but are not limited to,
results of operations of Collegeville Inn Conference & Training Center, the sale
of land adjacent to the Collegeville Inn discussed in Note 7 - Collegeville Inn,
and the outcome of the Company's litigation discussed in Note 4 - Litigation. In
light of significant  uncertainties  inherent in the forward-looking  statements
included herein,  the inclusion of such information  should not be regarded as a
representation  by the Company or any other person that the objectives and plans
of the Company will be achieved.

RESULTS OF OPERATIONS

Revenues for the quarter ended December 31, 2004 were $6,610,033,  a decrease of
$565,524 or 7.8% compared to revenues of $7,175,557 in the corresponding quarter
last year.  Revenues  for the six month  period  ended  December  31,  2004 were
$13,379,580, compared to $13,882,411 for the six month period ended December 31,
2003, a decrease of $502,831 or 3.6%. The decreases are primarily due to the net
impact of revenues from new contracts versus revenues from lost contracts.

Cost  of  operations  for  the  current  quarter  was  $5,265,744,  compared  to
$5,836,000  for similar  expenses  in the same  period last year,  a decrease of
$570,256 or 9.8%. Cost of operations for the six month period ended December 31,
2004 were  $10,732,009  compared to  $11,229,520  for the six month period ended
December 31, 2003, a decrease of $497,511 or 4.4%.  The  decreases are primarily
due to lower revenues during the period partially offset by inflationary  price,
wage and expense increases.

Gross profit for the current quarter was $1,344,259,  or 20.3% of gross revenue,
compared  to  $1,339,557,  or 18.7% of gross  revenue,  for the same period last
year, an increase of $4,702 or .3%. The increase is due to a decrease in cost of
operations that exceeds the decrease in revenues. Gross profit for the six month
period  ended  December  31,  2004 was  $2,647,571,  or 19.8% of gross  revenue,
compared to  $2,652,891,  or 19.1%,  for the six month period ended December 31,
2003, a decrease of $5,320 or 0.2%.

                                       9





General and administrative  expenses for the quarter were $1,159,971 or 17.6% of
revenue,  compared to  $1,190,626  or 16.6% of revenue for the same quarter last
year,  a decrease of $30,655 or 2.6%.  The  decrease  was due to a reduction  of
fixed  costs   within   general  and   administrative   expenses.   General  and
administrative  expenses for the six month  period ended  December 31, 2004 were
$2,385,265  compared to $2,367,466  for the six month period ended  December 31,
2003, an increase of $17,799, or .8%.

Provision for doubtful  accounts for the quarter was $30,000 compared to $60,000
for the  corresponding  quarter last year.  The decrease was due to the specific
allocation of the existing reserve to past due accounts.  Provision for doubtful
accounts for the six month period ended December 31, 2004 was $105,000  compared
to $120,000 for the six month period ended December 31, 2003.

Interest expense for the three-month  period totaled $67,035 compared to $47,441
for the same period last year, an increase of $19,594 or 41.3%. Interest expense
for the  six-month  period  ended  December  31, 2004 was  $125,695  compared to
$92,624 for the six-month period ended December 31, 2003, an increase of $33,071
or  35.7%.  The  increases  in  interest  expense  are a  result  of  additional
borrowings as well as an increase in interest rates.

For the  reasons  stated  above,  net loss  after  taxes for the  quarter  ended
December 31, 2004 was $48,852 compared to $116,649 for the corresponding quarter
last year, and the net loss for the six-month period ended December 31, 2004 was
$257,518 compared to $242,605 for the six-month period ended December 31, 2003.

Net loss per share for the current  quarter  was $0.02  compared to net loss per
share of $0.04  for the same  quarter  last  year.  Net loss per  share  for the
six-month  period  ended  December  31,  2004 was $.09  compared to $.08 for the
six-month period ended December 31, 2003.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2004 the Company had working capital of $487,790.

OPERATING ACTIVITIES.  Cash used in operations for the six months ended December
31, 2004 was $208,760 compared to $681,717 used by operations for the six months
ended December 31, 2003. The current period's activity is primarily attributable
to operating  losses  sustained in the current  period as well as an increase in
accounts payable.

INVESTING  ACTIVITIES.  Investing activities used $33,635 in cash in the current
six month period  compared to $50,774 in cash used in the same period last year.
This was due to purchases of property and equipment.

FINANCING ACTIVITIES. Current year to date financing activities provided $78,547
in cash compared to $135,144 provided in the same period last year.

                                       10





CAPITAL  RESOURCES.  The  Company has certain  credit  facilities  with its bank
including a revolving  credit  facility of $3,500,000.  At December 31, 2004 and
June 30, 2004,  the Company had $275,078  and $653,078, respectively,  available
under its revolving  credit.  The Company has pledged a $250,000  certificate of
deposit as  additional  collateral  against  the  revolving  line of credit.  In
November  2004,  the Company  entered into an agreement  whereby its credit loan
facility was extended to December 31, 2005.  The maturity  date of the revolving
line of credit has been extended to March 31, 2006.  The loan facility  contains
certain  covenants  that  include   maintenance  of  certain  financial  ratios,
maintenance  of minimum  levels of working  capital as well as  affirmative  and
negative  covenants.  On December  15, 2004 the Company  entered into an amended
agreement whereby new financial covenants were negotiated through June 30, 2005,
which  reflect  the  Company's  current  operating  projections.  As part of the
amended agreement, the Company's Chief Executive Officer was required to execute
a limited personal guarantee in the amount of $3,000,000. The Company is current
with all its  obligations to its bank and on its bonds and has met all financial
covenants in its loan documents.

The Company issued two series of Industrial Revenue Bonds totaling $3,560,548 in
December  1996.  The  outstanding  balance  on  the  bonds  was  $2,530,000  and
$2,675,000 as of December 31, 2004 and June 30, 2004, respectively.

                                                           PAYMENT DUE BY PERIOD
                                                           ---------------------
                                                    LESS
                                                   THAN 1        1 - 3            4 - 5        AFTER 5
CONTRACTUAL OBLIGATIONS             TOTAL           YEAR         YEARS            YEARS         YEARS
-----------------------             -----           ----         -----            -----         -----

Long-Term Debt*                   $5,754,922     $  145,000     $3,539,922     $  350,000     $1,720,000
Operating Leases                      78,921         41,702         37,219           --             --
Total Contractual Cash
 Obligations                      $5,833,843     $  186,702     $3,577,141     $  350,000     $1,720,000

* Long-Term  Debt includes the $3,224,922  outstanding  balance on the revolving
credit facility.

                                                        AMOUNT OF COMMITMENT EXPIRATION
                                                                  PER PERIOD
                                                        -------------------------------
    OTHER                                    LESS
 COMMERCIAL           TOTAL AMOUNTS         THAN 1             1 - 3             4 - 5             OVER 5
 COMMITMENTS            COMMITTED            YEAR              YEARS             YEARS             YEARS
 -----------            ---------            ----              -----             -----             -----


Lines of Credit         $3,500,000        $    --            $3,500,000        $   --           $   --

Standby Letter of
Credit                   3,065,000             --             3,065,000            --               --

Total Commercial
Commitments             $6,565,000        $    --           $ 6,565,000        $   --           $   --


                                       11





Based upon its present  plans,  management  believes that  operating  cash flow,
available  cash  and  available  credit  resources  will  be  adequate  to  make
repayments of indebtedness  described  herein,  to meet the working capital cash
needs of the Company and to meet anticipated  capital  expenditure  needs during
the twelve months ending June 30, 2005. In addition, the Company anticipates the
sale of certain land adjacent to its  Collegeville  facility that it believes if
the sale is consummated it will net cash proceeds of not less than $1,710,000.

In an effort to extend its current bank debt, the Company may seek to access the
public equity market whenever conditions are favorable, even if the Company does
not have an immediate need for  additional  capital at that time. Any additional
funding may result in  significant  dilution  and could  involve the issuance of
securities with rights, which are senior to those of existing stockholders.  The
Company may also need additional funding earlier than anticipated,  and our cash
requirements,  in  general,  may vary  materially  from those now  planned,  for
reasons  including,  but not limited to,  competitive  advances  and higher than
anticipated revenues from operations.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations
are based upon the Company's consolidated financial statements,  which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America. The preparation of these financial statements requires
the Company to make estimates and judgments  that affect the reported  amount of
assets and  liabilities,  revenues  and  expenses,  and  related  disclosure  of
contingent  assets  and  liabilities  at the  date  of the  Company's  financial
statements.  Actual  results may differ  from these  estimates  under  different
assumptions or conditions.

Critical  accounting  policies  are  defined  as those  that are  reflective  of
significant  judgments and  uncertainties,  and potentially result in materially
different  results  under  different  assumptions  and  conditions.  The Company
believes that its critical accounting policies include those described below.

REVENUE RECOGNITION

Revenue  is  generated  primarily  from  fees for food  service  management  and
facilities  management at  continuing  care and health care  facilities  and the
Collegeville Inn restaurant.  Revenue is recognized when services are performed.
Ongoing  assessments of the  creditworthiness  of customers  provide the Company
reasonable assurance of collectibility upon performance of services.

ACCOUNTS RECEIVABLE

The Company  performs  ongoing  credit  evaluations of its customers and adjusts
credit   limits   based  on  payment   history   and  the   customer's   current
creditworthiness, as determined by a review of their current credit information.
The Company  continuously  monitors  collections and payments from its customers
and  maintains a provision  for  estimated  credit  losses  based on  historical
experience  and  any  specific   customer   collection  issues  that  have  been
identified. While such credit losses have historically been within the Company's
expectations and the provisions  established,  the Company cannot guarantee that
it will  continue  to  experience  the same credit loss rates that it has in the
past.  During the fiscal year ended June 30,  2004,  due to the passage of time,
the Company made a decision to increase the provision for doubtful accounts with
respect to certain delinquent customers.

                                       12





IMPAIRMENT OR DISPOSAL OF LONG LIVED ASSETS

The carrying  value of property,  plant,  and equipment is evaluated  based upon
current and  anticipated  undiscounted  operating cash flows before debt service
charges.  An impairment is  recognized  when it is probable that such  estimated
future  cash  flows  will  be  less  than  the  carrying  value  of the  assets.
Measurement  of the amount of  impairment,  if any, is based upon the difference
between the net carrying value and the fair value, which is estimated based upon
anticipated undiscounted operating cash flows before debt service charges. Based
upon a review  of its  long-lived  assets,  the  Company  did not  recognize  an
impairment  loss for the quarters ended September 30, 2004 and December 31, 2004
or the fiscal year ended June 30, 2004; however,  there can be no assurance that
the Company will not recognize an impairment  loss on its  long-lived  assets in
future periods.

INCOME TAX ACCOUNTING

The  Company  determines  its  provision  for income  taxes  using the asset and
liability  method.  Under this method,  deferred tax assets and  liabilities are
recognized  for the future tax  effects of  temporary  differences  of  existing
assets and  liabilities and their  respective tax bases.  Future tax benefits of
tax loss and credit  carryforwards  are also  recognized as deferred tax assets.
When necessary,  deferred tax assets are reduced by a valuation allowance to the
extent  the  Company  concludes  there  is  uncertainty  as  to  their  ultimate
realization.  Deferred tax assets and liabilities are measured using enacted tax
rates in effect for the year in which those  temporary  differences are expected
to be  recovered  or settled.  The effect on  deferred  taxes of a change in tax
rates is recognized as income in the period that the change is enacted.

As of December 31, 2004 and June 30, 2004, the Company maintained a deferred tax
asset of $1,623,841.  The Company has not provided a valuation allowance against
its deferred tax assets after  consideration of a future gain on the disposal of
certain  land  adjacent to its  Collegeville  facility  and  anticipated  future
profitable  operating results.  However, the amount realizable may be reduced if
future  taxable  income is reduced  or is  insufficient  to  utilize  the entire
deferred tax asset.

CAPITAL EXPENDITURES

The Company has no other  material  commitments  for  capital  expenditures  and
believes that its existing cash and cash  equivalents,  cash from operations and
available  revolving  credit  will be  sufficient  to  satisfy  the needs of its
operations and its capital  commitments for the next twelve months.  However, if
the need arose,  the Company  would seek to obtain  capital from such sources as
continuing debt financing or equity financing.

EFFECTS OF INFLATION

Substantially  all of the  Company's  agreements  with its  customers  allow the
Company to pass  through to its  customers  its  increases in the cost of labor,
food  and  supplies.  The  Company  believes  that it  will  be able to  recover
increased  costs  attributable  to inflation by  continuing to pass through cost
increases to its customers.

                                       13





MEDICARE AND MEDICAID REIMBURSEMENTS

A substantial  portion of the Company's revenue is dependent upon the payment of
its fees by customer health care facilities,  which, in turn, are dependent upon
third-party payers such as state governments,  Medicare and Medicaid.  Delays in
payment by third party payers,  particularly  state and local  governments,  may
lead to delays in collection of accounts receivable.

ITEM 9A.

CONTROLS AND PROCEDURES

Based on their  evaluation,  as of the end of the period covered by this report,
the  Company's  Chief  Executive  Officer and Principal  Financial  Manager have
concluded the Company's  disclosure controls and procedures (as defined in Rules
13a-14 and 15d-14  under the  Securities  Exchange  Act of 1934) are  effective.
There have been no significant  changes in internal controls or in other factors
that could  significantly  affect these controls subsequent to the date of their
evaluation,   including  any  corrective  actions  with  regard  to  significant
deficiencies and material weaknesses.

                                       14





                           PART II - OTHER INFORMATION

    Item 1.      Legal Proceedings                                          None

    Item 2.      Changes in Securities                                      None

    Item 3.      Defaults Upon Senior Securities                            None

    Item 4.      Submission of Matters to a Vote of Security Holders        None

    Item 5.      Other Information

                 As of January 6, 2005,  the Company's  Class A Common Stock was
                 no longer eligible for continued  quotation on the OTC Bulletin
                 Board  ("OTCBB") due to the Company's  failure to file its Form
                 10-Q for the quarter ended  September  30, 2004.  The Company's
                 Class A Common Stock is currently traded on the pink sheets but
                 the Company believes that at such time as a broker/dealer files
                 a Form 211, the Company's Class A Common Stock will be eligible
                 for Quotation on the OTCBB. The fact that the Company's Class A
                 Common Stock is not  currently  eligible  for  quotation on the
                 OTCBB may negatively impact the liquidity of the Class A Common
                 Stock.  The Company  believes  it has  adopted the  appropriate
                 measures  to ensure that its future  filings  will be made on a
                 timely basis.

    Item 6.      Exhibits and Reports on Form 8-K

        (a)  Exhibits
               31.1   Certification of Chief Executive  Officer pursuant to Rule
                      13a-14(a)  under the  Securities and Exchange Act of 1934,
                      as adopted  pursuant to Section 302 of the  Sarbanes-Oxley
                      Act of 2002.

               31.2   Certification of Principal  Financial  Officer pursuant to
                      Rule  13a-14(a)  under the  Securities and Exchange Act of
                      1934,   as  adopted   pursuant   to  Section  302  of  the
                      Sarbanes-Oxley Act of 2002.

               32.1   Certification  of Chief Executive  Officer  pursuant to 18
                      U.S. C. Section 1350,  as adopted  pursuant to Section 906
                      of the Sarbanes-Oxley Act of 2002.

               32.2   Certification of Principal  Financial  Officer pursuant to
                      18 U.S. C. Section  1350,  as adopted  pursuant to Section
                      906 of the Sarbanes-Oxley Act of 2002.

        (b)  Reports on Form 8-K

             The  Company  filed  a  Form  8-K on October 22, 2004.

                                       15




                                   SIGNATURES

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



                                    Nutrition Management Services Company


                                    /s/ Joseph V. Roberts
                                    -------------------------------------
                                    Joseph V. Roberts
                                    Chairman and Chief Executive Officer



                                    /s/ Linda J. Haines
                                    ------------------------
                                    Linda J. Haines
                                    (Principal Financial Manager)


Date:  February 17, 2005


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