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 SEPTEMBER 30, 1996

                                       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 identification no.)
incorporation or organization) 

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  reports),  and  (2) has  been  subject  to such  filing
requirements  for  the  past  90  days  Yes  /X/  No / /.  2,810,569  shares  of
Registrant's  Class A Common  Stock,  without par value,  and 100,000  shares of
Registrant's  Class B Common Stock,  without par value,  are  outstanding  as of
November 19, 1996.
<PAGE>
                                      INDEX

Part I.  FINANCIAL INFORMATION                                          PAGE NO.

            Consolidated Balance Sheets as of
            September 30, 1996 and June 30, 1996                           2 - 3

            Consolidated Statements of Operations for the
            Three Months Ended September 30, 1996 and 1995                     4

            Consolidated Statements of Cash Flows for the
            Three Months Ended September 30, 1996 and 1995                     5

            Notes to Financial Statements                                      6

            Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                      7 - 8

Part II.     OTHER INFORMATION                                                 9

Signatures                                                                    10


                                       1
<PAGE>
                      NUTRITION MANAGEMENT SERVICES COMPANY

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                                           September 30,           June 30,
                                                                              1996                  1996
                                                                           -----------           -----------
                                                                           (unaudited)
<S>                                                                        <C>                   <C>        
Current assets:
       Cash and cash equivalents                                           $ 1,989,234           $ 3,026,607
       Accounts receivable, less allowance for doubtful
            accounts of $396,428 and $362,065, respectively                  5,667,106             5,863,105
       Unbilled revenue                                                        721,204               273,132
       Notes and leases receivable                                             792,220               823,602
       Advances to employees                                                   262,918               257,415
       Deferred income taxes                                                   387,265               387,183
       Inventory and other                                                     549,956               407,221
                                                                           -----------           -----------
Total current assets                                                        10,369,903            11,038,265

Property and equipment, net of accumulated
       depreciation of $741,191 and $663,250, respectively                   4,897,837             4,450,309

Other assets:

       Restricted Cash                                                          69,885               146,827
       Long-term accounts receivable, less allowance for doubt-
          ful accounts of $57,509 and $57,509,respectively                      50,815                50,815
       Deferred income taxes                                                   111,918               112,000
       Investment in contracts, net of accumulated amort-
            tization of $1,022,588 and $937,263,respectively                   683,901               769,226
       Lease receivable                                                        276,417               289,882
       Advances to employees                                                     5,000                 5,000
       Deferred costs and other                                                 87,524               100,028
                                                                           -----------           -----------

Total assets                                                               $16,553,200           $16,962,352

                                                                           ===========           ===========
</TABLE>
                                       2
<PAGE>
                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                           September 30,           June 30,
                                                                              1996                  1996
                                                                           -----------           -----------
                                                                           (unaudited)
<S>                                                                        <C>                   <C>        

Current liabilities:
       Accounts payable                                                    $ 4,646,075             $ 5,042,025
       Accrued expenses                                                        368,316                 397,054
       Accrued payroll and related expenses                                    468,318                 471,806
       Current portion of long-term debt                                       896,666                 896,667
       Accrued income taxes                                                     72,980                  45,063
       Other                                                                   430,080                 349,013
                                                                           -----------             -----------
Total current liabilities                                                    6,882,435               7,201,628

Long-term debt, net of current portion                                       3,043,641               3,267,808
Other                                                                          246,504                 262,824

Stockholders' equity:

       Undesignated preferred stock - no par,
            2,000,000 shares authorized, none outstanding                         --                      --

       Common stock:

            Class A - no par, 10,000,000 shares authorized;
                  3,012,500 issued, 2,810,569 outstanding                    3,826,926               3,826,926
            Class B - no par, 100,000 shares authorized,
                  issued and outstanding                                            48                      48
       Retained earnings                                                     2,963,427               2,838,934
                                                                           -----------             -----------
                                                                             6,790,401               6,665,908

       Less: treasury stock (class A common: 224,431
            shares) - at cost                                                 (409,781)               (435,816)
                                                                           -----------             -----------
Total stockholders' equity                                                   6,380,620               6,230,092
                                                                           -----------             -----------

Total liabilities and stockholders' equity                                 $16,553,200             $16,962,352

                                                                           ===========             ===========
</TABLE>
                                        3
<PAGE>
                      NUTRITION MANAGEMENT SERVICES COMPANY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                        Three months ended
                                                         September 30,
                                                       1996             1995
                                                   -----------      -----------


Revenues                                           $ 8,552,087       $ 9,246,352

Operating costs and expenses:
    Cost of services provided                        7,063,757        7,536,547
    General and administrative expenses              1,262,178        1,654,181

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

Income from operations                                 226,152           55,624

Other income:

    Other income (expense)                              76,536           73,810
    Other                                              (76,276)         (53,514)
                                                   -----------      -----------

Income before income taxes                             226,412           75,920
Provision for income taxes                             101,919           35,348
                                                   -----------      -----------

Net income                                         $   124,493      $    40,572
                                                   ===========      ===========

Earnings per common share                          $      0.04      $      0.01
                                                   ===========      ===========

Weighted average shares outstanding                  2,947,433        2,975,000
                                                   ===========      ===========


                                       4
<PAGE>
                      NUTRITION MANAGEMENT SERVICES COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                    Three months ended
                                                                       September 30,

                                                               1996                       1995
                                                           -----------               ------------

OPERATING ACTIVITIES:

<S>                                                        <C>                       <C>        
Net income                                                 $   124,493               $    40,572
Adjustments to reconcile net income to net
       cash (used in) operating activities:

       Depreciation and amortization                           155,646                   164,042
       Deferred income taxes                                      --                     (10,000)
       Provision for doubtful accounts                          45,024                    30,000
       Gain on sale of assets                                   (6,591)                   (6,593)
       Amortization of lease receivable                         39,488                    39,488
Changes in assets and liabilities:

       Accounts receivable                                     150,215                  (817,579)
       Inventory                                               (21,533)                  (50,599)
       Prepaid expenses                                        (79,909)                  (61,076)
       Accrued income receivable                              (448,072)                  (82,745)
       Deferred costs                                           12,504                    51,731
       Notes receivable                                         31,382                    93,185
       Accounts payable                                       (395,950)                  819,549
       Accrued expenses                                        (28,738)                 (134,925)
       Customer deposits                                          --                      13,281
       Accrued payroll                                          (3,488)                  (11,653)
       Accrued/prepaid income taxes                             27,917                  (218,522)
       Unearned interest income                                   --                     (12,101)
       Other                                                    (1,064)                  (25,917)
                                                           -----------               -----------
       Total adjustments                                      (523,169)                 (220,434)
                                                           -----------               -----------
                                                           -----------               -----------
Net cash (used in) operating activities                       (398,676)                 (179,862)
                                                           -----------               -----------

INVESTING ACTIVITIES:

Proceeds from sale of marketable securities                       --                     669,781
Advances to employees and officers                              (5,503)                  (47,727)
Repayments - mortgage to related party                            --                       2,052
Payment of lease receivable                                     13,465                      --
Transfer of restricted cash to cash                             76,942                      --
Acquisition of fixed assets                                   (525,469)                 (506,806)
                                                           -----------               -----------
                                                           -----------               -----------
Net cash (used in)/provided by investing activities           (440,565)                  117,300
                                                           -----------               -----------

FINANCING ACTIVITIES:

Repayments of long term debt                                  (224,167)                 (224,166)
(Purchase)/sale of treasury stock                               26,035                      --
Other                                                             --                     163,200
                                                                                     -----------
                                                           -----------               -----------
Net cash (used in) financing activities                       (198,132)                  (60,966)
                                                           -----------               -----------

       Net (decrease) in cash                               (1,037,373)                 (123,528)

Cash and cash equivalents at begin-
       ning of period                                        3,026,607                 1,444,558
                                                           -----------               -----------
Cash and cash equivalents at end
       of period                                           $ 1,989,234               $1,321,030

                                                           ===========               ===========

Supplemental cash flow information:

       Interest paid                                       $    68,379               $   106,336
       Income taxes paid                                   $    68,330               $   263,870
</TABLE>

                                       5
<PAGE>
                      NUTRITION MANAGEMENT SERVICES COMPANY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996

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  which, in the opinion of management are necessary for fair
     presentation of the financial statements,  have been included.  The results
     of  operations  for the  interim  periods  presented  are  not  necessarily
     indicative  of the results which may be expected for the entire fiscal year
     ending June 30, 1997. The financial information presented should be read in
     conjunction with the Company's financial  statements which were filed under
     Form 10-K.

     2.  EARNINGS PER COMMON SHARE

     Earnings per common share amounts are based on the weighted  average number
     of shares of common stock outstanding  during the years ended June 30,1996,
     1995 and 1994. Shares issued in connection with the employee stock purchase
     plan were included as common stock equivalents.  Stock options and warrants
     did not impact earnings per share each quarter as they were anti-dilutive.

3.   REDEEMABLE WARRANTS

     In  connection  with the public  offering  on January 29,  1992,  there are
     warrants  outstanding to purchase 1,150,000 shares of the Company's Class A
     Common Stock.  Effective  February 28, 1992, each registered warrant holder
     is entitled to purchase  from the Company one share of Class A Common Stock
     of the Company at the exercise  price of $6.00 (120% of the initial  public
     offering price of a Unit) per share.  These warrants  expire on January 29,
     1997.

4.   LITIGATION

     A civil action is pending against the Company for  approximately  $105,000.
     The action relates to the alleged purchase price of equipment  purchased by
     the Company via assignment  from Service America  Corporation.  The Company
     has responded by answering the complaint and asserting a number of defenses
     and  counterclaims.   The  parties  are  in  the  discovery  phase  of  the
     litigation. The Company has contested the case vigorously and will continue
     to do so.

     In the normal  course of its  business,  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  affect on the  Company's
     financial position, results of operations or cash flows.

                                        6
<PAGE>
           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.

RESULTS OF OPERATIONS

         Revenues for the quarter ended September 30, 1996 decreased by $694,265
or 7.5% to $8,552,087,  compared to revenues of $9,246,352 in the  corresponding
quarter last year. This decrease is the result of three accounts being sold to a
non-contracted  nursing home chain and the  termination of an account at the end
of the first quarter last year.

         General and administrative  expenses for the current quarter were 14.8%
of  revenue,  compared  to 17.9% of revenue for the same  quarter  last year,  a
decrease of $392,003 or 3.1% of revenue.

         Interest  income/(expense)  for the three  month  period  totaled  $260
compared to $20,296 for the same period last year.

         Net income  after taxes for the quarter  ended  September  30, 1996 was
$124,493 compared to $40,572 for the corresponding  quarter last year.  Earnings
per share for the  current  quarter  were $0.04  compared  to $0.01 for the same
quarter last year, an increase of 400%.

LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 1996, the Company had working capital of $3,487,468.

         Operating Activities.  Cash consumed by operations for the three months
ended  September 30, 1996 was $398,676  compared to $179,862 in cash consumed by
operations  for the three  months  ended  September  30,  1995.  An  increase in
accounts  receivable/accrued  income  receivable  of $297,857  and a decrease in
accounts  payable  of  $395,950  were  responsible  for  the  current  quarter's
activity.

         Investing  Activities.  Investing activities during the current quarter
consumed $440,565 in cash compared to $117,300 provided by similar activities in
the same quarter last year.  Investing  activities  for the three month  periods
ended  September  30, 1996  included  $517,468  in  purchases  on  property  and
equipment at the Collegeville Inn & Conference Center. The prior year's activity
provided  cash of $117,300  due to the  proceeds  of  $669,781  from the sale of
marketable securities, partially off-set by capital expenditures of $431,507 for
the Collegeville Inn & Conference Center.

                                        7
<PAGE>
         Financing Activities. During the three months ended September 30, 1996,
financing  activities  consumed  $198,132  in cash  compared  to $60,966 in cash
consumed  by similar  activities  in the same  period  last year.  Repayment  of
$224,167 in long term debt  accounted  for the majority of the cash  consumed in
this activity.

         Capital  Resources.  The Company has certain credit facilities with its
bank including a line of credit and three term loans.  As of September 30, 1996,
the Company had $370,447 available on its line of credit. The Company is current
with all its obligations to its Bank and has met all financial  covenants in its
loan documents.

         A substantial  portion of the Company's revenues are dependent upon the
payment of its fees by  customer  healthcare  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.

         The Company has no material commitments for capital expenditures (aside
from the Collegeville  Inn & Conference  Center) and believes that its cash from
operations,  existing  balances,  and available credit line are adequate for the
foreseeable  future  to  satisfy  the  needs of its  operations  and to fund its
continued growth.  However,  if the need arose, the Company would seek to obtain
capital from such sources as continuing debt financing or equity financing.

                                        8
<PAGE>
                           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                                               None

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            (a)   Exhibits                                                  None

            (b)   Reports on Form 8-K                                       None

                                        9
<PAGE>
                                   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/ Francis J. Ford
                                  ------------------------------
                                  Francis J. Ford
                                  Controller

Date:    November 19, 1996

                                       10