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, 1997

                                       or
/ /      TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(D) OF THE  SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from ______________ to _______________

                         Commission File Number 0-19824

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

2,763,799  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 November 14, 1997.


<PAGE>

                                TABLE OF CONTENTS


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

            Consolidated Balance Sheets of
            September 30, 1997 (unaudited) and June 30, 1997              2 - 3

            Consolidated Statements of Operations for the
            Three Months Ended September 30, 1997 (unaudited) and
            1996 (unaudited)                                                  4

            Consolidated Statements of Cash Flows for the
            Three Months Ended September 30, 1997 (unaudited)
            and 1996 (unaudited)                                              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,
                                                                            1997                1997
                                                                         -------------         --------
                                                                         (unaudited)

Current assets:
<S>                                                                  <C>                  <C>
   Cash and cash equivalents                                         $       751,153      $   2,267,813
   Accounts receivable, net of allowance for doubtful
      accounts of $591,428 and $531,428, respectively.                     5,599,965          5,900,572
   Unbilled  revenue                                                         207,445            244,107
   Notes and leases receivable                                               208,598            202,124
   Advances to employees                                                     281,929            281,026
   Deferred income taxes                                                     643,600            599,000
   Inventory and Other                                                       387,225            409,068
                                                                      --------------      -------------
Total current assets                                                       8,079,915          9,903,710
                                                                      --------------      -------------

Property and equipment, net of accumulated depreciation of
    $1,059,613 and $969,175, respectively.                                10,259,641          8,143,131

Other assets:
   Restricted cash                                                         1,086,526          1,096,076
   Long-term accounts receivable, net of allowance for doubtful
     accounts of $57,509.                                                     50,815             50,815
   Investment in contracts, net of accumulated amortization of
    $1,363,885 and $1,278,561, respectively.                                 342,604            427,928
   Deferred income taxes                                                     252,900            233,000
   Lease receivable                                                          118,464            157,952
   Deferred costs and other assets                                           441,635            368,945
                                                                      --------------      -------------

Total assets                                                          $   20,632,500      $  20,381,557
                                                                      ==============      =============
</TABLE>


            See Notes to Unaudited Consolidated Financial Statements

                                      - 2 -
<PAGE>
                     NUTRITION MANAGEMENT SERVICES COMPANY
                           CONSOLIDATED BALANCE SHEETS
                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                                                    September 30,            June 30,
                                                                                       1997                   1997
                                                                                    -------------            --------
                                                                                    (unaudited)
Current liabilities:
<S>                                                                                  <C>                 <C>
     Accounts payable                                                                $5,022,573          $ 4,322,662
     Accrued expenses                                                                   509,244              757,286
     Accrued payroll and related expenses                                               502,449              460,898
     Accrued professional fees                                                          397,198              392,012
     Current portion of long-term debt                                                  551,588              744,504
     Accrued income taxes                                                               104,764              232,521
     Other                                                                              306,151              193,453
                                                                                     ----------          -----------
Total current liabilities                                                             7,393,967            7,103,336
                                                                                     ----------           ----------

Long-term debt, net of current portion
Other                                                                                 6,052,061            6,083,851
Total long-term liabilities                                                             177,567              222,217
                                                                                    -----------          -----------
                                                                                      6,229,628            6,306,068
                                                                                    -----------           ----------
Commitments and Contingencies                                                           -----                -----

Stockholders' equity:
     Undesignated preferred stock - no par, 2,000,000 shared authorized, none
     issued or outstanding.                                                               -----                -----

     Common stock:
     Class A - no par, 10,000,000 shares authorized; 3,000,000 and
       3,000,000 issued, 2,763,799 and 2,797,665 outstanding, respectively.           3,801,926            3,801,926
     Class B - no par, 100,000 shares authorized, issued and outstanding.                    48                   48
     Retained earnings                                                                3,676,483            3,591,210
                                                                                  -------------        -------------
                                                                                      7,478,457            7,393,184
     Less:  treasury stock (Class A common: 236,201 and 202,335
       shares, respectively) - at cost                                                 (469,552)            (421,031)
                                                                                  -------------         ------------
Total stockholders' equity                                                            7,008,905            6,972,153
                                                                                  -------------         ------------

Total liabilities and stockholders' equity                                          $20,632,500          $20,381,557
                                                                                  =============         ============
</TABLE>

            See Notes to Unaudited Consolidated Financial Statements

                                      - 3 -
<PAGE>

                      NUTRITION MANAGEMENT SERVICES COMPANY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                            Three Months Ended
                                                               September 30,
                                                          1997              1996
                                                          ----              ----

<S>                                                    <C>               <C>
Revenues                                               $9,128,381        $8,552,087

Operating costs and expenses
     Cost of services provided                          7,375,458         7,063,757
     General and administrative expenses                1,559,749         1,262,178
                                                       ----------       -----------

Income from operations                                    193,174           226,152

Other income
     Other income                                          56,068            76,536
     Interest expense                                     (68,898)          (76,276)
                                                         --------         ---------

Income before income taxes                                180,344           226,412
Provision for income taxes                                 95,072           101,919
                                                          -------         ---------

Net income                                             $   85,272        $  124,493
                                                       ==========        ==========

Earnings per common share                              $     0.03        $     0.04
                                                       ==========        ==========

Weighted average share outstanding                      2,866,619         2,947,433
                                                       ==========        ==========
</TABLE>



                                      - 4 -


<PAGE>

                      NUTRITION MANAGEMENT SERVICES COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                     Three Months Ended
                                                                                                        September 30,
                                                                                                 1997                  1996
                                                                                                ------                 -------


Operating activities:
<S>                                                                                           <C>                  <C>
Net Income                                                                                    $ 85,272             $   124,493
Adjustment to reconcile net income to net cash used in operating activities:
     Depreciation and amortization                                                             175,762                 155,646
     Provision for doubtful accounts                                                            60,000                  45,024
     Amortization of deferred gain                                                              (6,591)                 (6,591)
     Amortization of lease receivable                                                           (6,474)                 39,488
Changes in assets and liabilities:
     Accounts receivable                                                                       240,607                 150,215
     Notes receivable                                                                           -----                   31,382
     Prepaid expenses                                                                           -----                  (79,909)
     Deferred Taxes                                                                             64,500                  -----
     Unbilled revenue                                                                           36,662                (448,072)
     Accounts payable                                                                          699,911                (395,950)
     Accrued legal and expenses                                                               (242,856)                (28,738)
     Accrued payroll                                                                            41,551                  (3,488)
     Accrued income taxes                                                                    (256,757)                  27,917
     Other                                                                                     23,793                  (22,597)
                                                                                           ----------             ------------
Net cash (used in) operating activities                                                       915,380                 (411,180)
                                                                                           ----------             ------------

Investing activities:
Advances to employees and officers                                                               (903)                  (5,503)
Payment of lease receivable                                                                    39,488                   13,465
Transfer restricted cash to cash                                                                9,550                   76,942
Acquisition of fixed assets                                                                (2,206,948)                (525,469)
Deferred cost                                                                                   -----                   12,504
                                                                                           ----------             ------------
Net cash (used in) provided by investing activities                                        (2,158,813)                (428,061)
                                                                                            ---------             ------------

Financing activities:
Repayments of long term debt                                                                 (224,706)                (224,167)
Sale of treasury stock                                                                           ----                   26,035
Purchase of treasury stock                                                                    (48,521)                  -----
                                                                                           ----------             ------------
Net cash (used in) financing activities                                                      (273,227)                (198,132)
                                                                                           ----------             ------------

     Net (decrease) in cash                                                                (1,516,660)              (1,037,373)

Cash and cash equivalents at beginning of period                                            2,267,813                3,026,607
                                                                                           ----------              -----------

Cash and cash equivalents at end of period                                                   $751,153               $1,989,234
                                                                                           ==========              ===========

Supplemental cash flow information:
     Interest paid                                                                           $116,628                  $68,379
     Income taxes paid                                                                       $292,184                  $68,330
</TABLE>


                                      - 5 -
<PAGE>

                      NUTRITION MANAGEMENT SERVICES COMPANY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1997


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, 1998.
         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 three  month
         period ending  September 30, 1997 and 1996.  Stock options and warrants
         did  not  impact   earnings   per  share  each  quarter  as  they  were
         anti-dilutive.

3.       Litigation

         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 effect 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 note thereto.


Results of Operations

         Revenues for the quarter ended September 30, 1997 were  $9,128,381,  an
increase  of  $576,294  or 6.7%,  compared  to  revenues  of  $8,552,087  in the
corresponding  quarter last year.  This  increase is the result of new contracts
and  revenues  from  the  Company's   Collegeville   Inn  &  Conference   Center
(Collegeville), which opened on September 14, 1997.

         General  and  administrative  expenses  for the  quarter  were 17.1% of
revenue,  compared  to 14.8% of  revenue  for the same  quarter  last  year,  an
increase  of  $297,571  or 23.6%.  The  increase  is the result of a increase in
overhead  associated with the new buisiness start-up.  Collegeville  contributed
2.8% of total general and administrative expense for the current quarter.

         Interest expense for the three month period totaled $68,898 compared to
$76,276  for the same  period last year.  The  increase  in interest  expense is
attributable  to  the  increased  debt,   including   $3,560,548  of  Industrial
Development  bonds issued in December 1996, used to finance  construction of the
Collegeville Inn.

         Net income  after taxes for the quarter  ended  September  30, 1997 was
$85,272 compared to $124,493 for the corresponding  quarter last year.  Earnings
per share for the  current  quarter  were $0.03  compared  to $0.04 for the same
quarter last year.  The decrease in current  quarter net income and earnings per
share are the result of the increased costs  associated with the start up of the
Collegeville  Inn.  Excluding  Collegeville Inn, net income would have increased
approximately  $36,000 for a earnings per share of $0.05.  Over the same quarter
last year, this is an increase of $0.01 per share.



                                      - 7 -

<PAGE>
Liquidity and Capital Resources

         At September 30, 1997 the Company had working capital of $719,765.

         Operating Activities.  Cash provided by operations for the three months
ended  September  30,  1997  was  $915,380  compared  to  $411,180  consumed  by
operations  for the three  months  ended  September  30,  1996.  An  increase in
accounts receivable and accounts payable of $240,607 and $699,911, respectively,
and a decrease in accrued  expenses of $242,856 were responsible for the current
quarter's activity.

         Investing Activities.  Investing activities consumed $2,158,813 in cash
in the current quarter  compared to $428,061 in cash consumed in the same period
last year. Current year investing activities included $2,189,427 in purchases of
property and equipment at the Collegeville Inn & Conference Center.

         Financing  Activities.  Current quarter financing  activities  consumed
$273,227 in cash  compared to $198,132  consumed in the same  quarter last year.
Repayment of long term debt consumed approximately $224,000 in cash. The Company
also purchased 33,866 shares of its Class A Common Stock at a cost of $48,521 in
the current quarter.

         Capital  Resources.  The Company has certain credit facilities with its
bank  including  a line of credit and three term loans.  The Company  issued two
series of Industrial  Development Bonds totaling $3,560,548 in December 1996. As
of September 30, 1997, the Company has approximately $1,500,000 available on its
line of credit.  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.

         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,
including the  Collegeville Inn & Conference  Center,  and believes that is cash
from operations, existing balances, and available credit facilities are adequate
for the  foreseeable  future to satisfy the needs of its  operations and to fund
continued growth.

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,  which 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  limitatation,  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   statments   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. 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.

                                      -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/ Ralph M. Van
                                       ------------------------------
                                       Ralph M. Van
                                       Controller



Date:  November 19, 1997




                                     - 10 -