UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

     [X]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
EXCHANGE ACT OF 1934

     For the quarterly period ended November 30, 1997

     [ ]  TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
EXCHANGE ACT OF 1934

     For the transition period from _________________ to ______________

Commission File No.:  0-25592

                             PERIPHONICS CORPORATION
             (exact name of registrant as specified in its charter)

          Delaware                                       11-2699509
  (State or other jurisdiction of                   (I.R.S. Employer
   incorporation or organization)                   Identification No.)

             4000 Veterans Memorial Highway, Bohemia, New York 11716
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (516) 468-9000

     Check 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(s),  and (2) has been subject to such filing  requirements
for the past 90 days. Yes [X] No [ ]

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date: January 12, 1998

                  Class of                           Number
                Common Equity                      of Shares

                Common Stock,                      13,768,684
                par value $.01



<PAGE>



                             PERIPHONICS CORPORATION
                                AND SUBSIDIARIES


                                      INDEX

                                                               Page No.

     Part I. Financial Information

     Item 1. Financial Statements

     Consolidated Balance Sheets - November 30, 1997
     and May 31, 1997                                             3

     Consolidated Statements of Earnings - Six Months
     Ended November 30, 1997 and November 30, 1996                4

     Consolidated Statements of Earnings - Three Months
     Ended November 30, 1997 and November 30, 1996                5

     Consolidated Statements of Cash Flows - Six Months
     Ended November 30, 1997 and November 30, 1996                6

     Notes to Unaudited Consolidated Financial Statements         7-8

     Item 2. Management's Discussion and Analysis
     of Financial Condition and Results of Operations            9-14

     Part II. Other Information                                 15-16

     Signatures                                                   17




<PAGE>



                    PERIPHONICS CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                            November 30, 1997           May 31, 1997
                                                               (Unaudited)                (Audited)
                                                           ------------------         --------------
<S>                                                             <C>                        <C>    

ASSETS
Current Assets:
Cash and cash equivalents...............................         $13,227                    $25,092
Short-term investments..................................          10,690
Accounts  receivable, less allowance
 for doubtful  accounts of $878 and 
 $1,000,  respectively  ................................          31,669                     35,735
Inventories.............................................          14,676                     12,858
Deferred  income   taxes................................           1,338                      1,357
Prepaid expenses and other current assets...............           1,344                      1,211 
                                                                  ------                    -------
  Total Current Assets..................................          72,944                     76,253

Property, Plant and Equipment, net......................          18,028                     16,952
Other  Assets...........................................             423                        378
                                                                 -------                    -------
                                                                 $91,395                    $93,583
                                                                 =======                    =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable........................................         $ 6,625                    $ 5,928
Accrued expenses and other current liabilities..........          10,298                     15,125
                                                                 -------                     ------
  Total Current Liabilities.............................          16,923                     21,053
Deferred Income Taxes...................................             470                        322
                                                                 -------                    -------
                                                                  17,393                     21,375
                                                                 -------                    -------
Stockholders' Equity:
Preferred stock, par value $.01 per share,                           ---                        ---
  1,000 shares authorized, none issued          
Common stock, par value $.01 per share,                              137                        137
  30,000  shares  authorized ; 13,769 
  shares  outstanding  as of November 30,
  1997; 13,694 shares outstanding as of
  May 31, 1997
Additional Paid-in Capital..............................          43,346                     42,559
Retained Earnings.......................................          30,519                     29,512
                                                                 -------                    -------
Total Stockholder's Equity                                        74,002                     72,208
                                                                 -------                    -------
                                                                 $91,395                    $93,583
                                                                 =======                    =======
</TABLE>








<PAGE>



                    PERIPHONICS CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                      (In thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                              Six Months Ended
                                                                                November 30,
                                                                          1997              1996
                                                                          ----              ----
<S>                                                                    <C>                 <C>    


System sales...................................................         $37,169           $40,449
Service revenues...............................................          13,982            11,493
                                                                         ------            ------
  Total revenues...............................................          51,151            51,942
                                                                         ------            ------
Cost of system sales...........................................          18,609            18,929
Cost of service revenues.......................................           8,352             6,951
                                                                         ------            ------
  Cost of revenues.............................................          26,961            25,880
                                                                         ------            ------
Gross profit...................................................          24,190            26,062
                                                                         ------            ------
Operating expenses:
  Selling, general and administrative..........................          16,466            13,279
  Research and development.....................................           6,761             5,035
                                                                         ------            ------
                                                                         23,227            18,314
                                                                         ------            ------
Earnings from operations.......................................             963             7,748
                                                                         ------             -----
Other income (expense):
  Interest and other income....................................             710               701
  Foreign exchange (loss) gain ................................             (62)              328
                                                                         -------            -----
                                                                            648             1,029
                                                                         -------            -----
Earnings before provision for income taxes.....................           1,611             8,777
Provision for income taxes.....................................             604             3,423
                                                                         ------             -----
Net earnings ..................................................          $1,007            $5,354
                                                                         ======            ======
Net earnings per common and common equivalent share............           $0.07            $ 0.38
                                                                         ======            ======
Weighted average number of common and common 
  equivalent shares............................................          13,860            13,951
                                                                         ======            ======


</TABLE>








<PAGE>



                    PERIPHONICS CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                      (In thousands, except per share data)
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                                        Three Months Ended
                                                                                           November 30,
                                                                                     1997                1996
                                                                                    -----               -----
<S>                                                                                <C>                  <C>   


System sales........................................................               $21,753              $22,694
Service revenues....................................................                 6,838                5,989
                                                                                   -------              -------
  Total revenues....................................................                28,591               28,683
                                                                                   -------               ------
Cost of system sales................................................                10,752               10,907
Cost of service revenues............................................                 4,343                3,647
                                                                                   -------              -------
  Cost of revenues..................................................                15,095               14,554
                                                                                   -------              -------
Gross profit........................................................                13,496               14,129
                                                                                   -------              -------
Operating expenses:
  Selling, general and administrative...............................                 9,017                7,114
  Research and development..........................................                 3,548                2,615
                                                                                   -------              -------
                                                                                    12,565                9,729
                                                                                   -------              -------
Earnings from operations............................................                   931                4,400
                                                                                   -------              -------
Other income (expense):
  Interest and other income.........................................                   331                  372
  Foreign exchange gain ............................................                   218                  210
                                                                                   -------              -------
                                                                                       549                  582
                                                                                   -------              -------
Earnings before provision for income taxes..........................                 1,480                4,982
Provision for income taxes..........................................                   555                1,943
                                                                                   -------              -------
Net earnings........................................................              $    925             $  3,039
                                                                                   =======              =======
Net earnings per common and common equivalent share.................              $   0.07             $   0.22
                                                                                   =======              =======
Weighted average number of common and common equivalent shares......                13,864               13,956
                                                                                   =======              =======
</TABLE>








<PAGE>



                    PERIPHONICS CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                    Six Months Ended
                                                                                                      November 30,
                                                                                                  1997              1996
                                                                                                  ----              ----
<S>                                                                                             <C>                  <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net earnings.....................................................................             $ 1,007           $ 5,354
  Adjustments to reconcile net earnings to net cash and cash
    equivalents used in operating activities:
  Depreciation and amortization....................................................               2,559             1,679
  Deferred income taxes............................................................                 167              (159)
  Changes in operating assets and liabilities:
      Decrease (increase) in accounts receivable ..................................               4,066            (8,907)
      Increase in inventories......................................................              (1,818)           (1,053)
      Increase in prepaid expenses and other current assets........................                (133)               (3)
      (Increase) decrease in other assets..........................................                 (45)                5
      (Decrease) increase in accounts payable and accrued expenses and
         other current liabilities.................................................              (4,130)            1,452
                                                                                                 -------            ------
  Net cash and cash equivalents provided by (used in) operating activities.........               1,673            (1,632)
                                                                                                 -------            ------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property, plant and equipment........................................             (3,635)           (4,028)
  Proceeds from sales of short-term investments.....................................                ---             9,573
  Purchases of short-term investments...............................................            (10,690)           (6,283)
                                                                                                 -------           -------
  Net cash and cash equivalents used in investing activities........................            (14,325)             (738)
                                                                                                --------           -------

CASH FLOW FROM FINANCING ACTIVITIES:
  Proceeds from stock options exercised.............................................                787               185
                                                                                                 ------            ------
  Net cash and cash equivalents provided by financing activities....................                787               185
                                                                                                 ------            ------

NET (DECREASE) IN CASH AND CASH EQUIVALENTS.........................................            (11,865)           (2,185)

CASH AND CASH EQUIVALENTS, beginning of period......................................             25,092            18,664
                                                                                                 ------            ------
CASH AND CASH EQUIVALENTS, end of period............................................            $13,227           $16,479
                                                                                                =======            ======

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the period for:
  Interest ........................................................................                ---              ---
  Income Taxes.....................................................................             $ 3,081           $ 2,534

</TABLE>






<PAGE>



                    PERIPHONICS CORPORATION AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.        BASIS OF PRESENTATION

     In the  opinion of  management,  the  accompanying  unaudited  consolidated
financial  statements  contain  all  adjustments   (consisting  only  of  normal
recurring  adjustments)  necessary to present fairly the financial position, the
results of  operations,  and the cash  flows at  November  30,  1997 and for all
periods presented.

     Certain  information and footnote  disclosures  normally included in annual
financial  statements  prepared in accordance with generally accepted accounting
principles  have been  omitted.  These  financial  statements  should be read in
conjunction with the Consolidated Financial Statements and Notes included in the
Company's May 31, 1997 Annual  Report on Form 10-K as filed with the  Securities
and Exchange Commission.

     The results of operations  for the three and six months ended  November 30,
1997 and November 30, 1996 are not  necessarily  indicative of the results to be
expected for the full year.  Amounts are presented in thousands except per share
amounts.

2.       STOCK SPLIT AND CHANGES IN AUTHORIZED CAPITAL

     On September 20, 1996, the Board of Directors  approved a two-for-one split
of its  common  stock  effected  as a stock  dividend  on  October  31,  1996 to
shareholders  of record at the close of  business  on October  15,  1996.  After
giving  effect  to the  stock  split,  the  shares  outstanding  increased  from
approximately 6,813 to approximately 13,625.

     All  historical  share and per share  data  appearing  in the  consolidated
financial statements and notes thereto have been retroactively  adjusted for the
stock split.

     Also, on September 20, 1996, the Board of Directors determined it advisable
to amend the Company's  Certificate of  Incorporation  to increase the number of
authorized  shares of Common  Stock from  15,000  shares to 30,000  shares.  The
proposed amendment to the Amended and Restated  Certificate of Incorporation was
submitted  for  shareholder  approval.  Shareholder  approval  was  announced on
November 8, 1996 at the 1996 Annual Meeting of Stockholders.


3.       INVENTORIES

         Inventories consist of the following:

                                    November 30, 1997              May 31, 1997
                                    -----------------              ------------

         Raw materials                 $   8,847                  $    7,624
         Work-in-process                   5,829                       5,234
                                        ---------                    ---------
                                       $  14,676                  $   12,858
                                         ========                    ========







<PAGE>



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

     Results of Operations

     Six Months Ended  November 30, 1997  compared to Six Months Ended  November
30, 1996

     Total  Revenues.  Total revenues  decreased by 1.5% to $51.2 million in the
first six months of fiscal 1998 from $51.9 million in the  comparable  period of
the prior fiscal year.  System sales  decreased by 8.1% to $37.2  million in the
first six months of fiscal 1998 from $40.4 million in the  comparable  period of
the prior fiscal year.  The decrease in system sales was due to a 20.2% decrease
in domestic sales and offset by a 20.6%  increase in  international  sales.  The
decrease in system sales was  primarily  due to a decrease in unit sales volume.
Service revenues  increased by 21.7% to $14.0 million in the first six months of
fiscal  1998 from $11.5  million in the  comparable  period of the prior  fiscal
year, primarily due to the addition of more units to the service base.

     Gross Profit. The Company's gross profit decreased by $1.9 million to $24.2
million  in the first  six  months of fiscal  1998  from  $26.1  million  in the
comparable  period of the prior  fiscal year.  Gross  profit as a percentage  of
total  revenues  decreased  to 47.3% in the first six months of fiscal 1998 from
50.2% in the comparable  period of the prior year.  Gross profit on system sales
decreased  by $2.9  million  to $18.6  million in the first six months of fiscal
1998 from $21.5 million in the  comparable  period of the prior fiscal year. The
gross  margin  on system  sales  decreased  to 49.9% in the first six  months of
fiscal 1998 from 53.2% in the  comparable  period of the prior fiscal year.  The
Company attributes this decrease primarily to the product mix during the current
six month period,  with a higher  percentage of revenue being derived from lower
margin  programming  than  from  hardware.  Gross  profit  on  service  revenues
increased by $1.1 million,  or 24.0%, to $5.6 million in the first six months of
fiscal 1998 from $4.5 million in the comparable period of the prior fiscal year.
Gross margin on service  revenues  increased to 40.3% in the first six months of
fiscal 1998 from 39.5% in the comparable  period of the prior fiscal year.  This
increase was primarily attributable to the addition of more units to the service
base partially offset by higher cost to support organizational growth.

     Selling,  General  and  Administrative   Expenses.   Selling,  General  and
Administrative  ("SG&A")  expenses  were $16.5 million and $13.3 million for the
first six months of fiscal  1998 and 1997,  respectively,  or 32.2% and 25.6% of
total revenues, respectively. The increase in the dollar amount of SG&A expenses
was  primarily  related to the continued  expansion of the  Company's  sales and
marketing efforts in domestic and international markets and to increases in SG&A
expenses necessary to support the planned increased level of sales.

     Research  and  Development  Expenses.   Research  and  Development  ("R&D")
expenses  were $6.8  million and $5.0 million for the first six months of fiscal
1998 and 1997, respectively, or 13.2% and 9.7% of total revenues,  respectively.
The  increase  in the  dollar  amount of R&D  expenses  reflects  the  continued
expansion  of the  Company's  R&D staff which  increased to 156 from 114 between
November 30, 1997 and 1996, respectively. R&D expenses are charged to operations
as  incurred,  and no  software  development  costs have been  capitalized.  The
Company  expects the dollar amount of R&D  expenditures to continue to increase,
although such  expenses as a percentage of total  revenues will vary from period
to period.

<PAGE>

     Other Income (Expense).  Other income was $0.6 million and $1.0 million for
the six months  ended  November  30, 1997 and 1996,  respectively.  Interest and
other income was $0.7 million for both six month periods ended November 30, 1997
and 1996, respectively.  The Company had a foreign exchange loss of $0.1 million
in the six months ended November 30, 1997 compared to a foreign exchange gain of
$0.3  million for the six months  ended  November  30,  1996.  To the extent the
Company is unable to match revenue received in foreign  currencies with expenses
paid in the same  currency,  it is  exposed  to  fluctuations  in  international
currency transactions.

     Income  Taxes.   Variations  in  the  customary  relationship  between  the
provision for income taxes and the statutory  income tax rate  primarily  result
from the utilization of research and  development  tax credits,  state and local
income taxes, and exempt income of the Company's foreign sales corporation.  The
Company's  effective  income  tax rates  were 37.5% and 39.0% for the six months
ended November 30, 1997 and 1996, respectively.

     Foreign   Operations.   The  Company's  European   subsidiary  operated  at
approximately  a $1.3 million loss during the six months ended November 30, 1997
as compared to a loss of $0.6 million  during the six months ended  November 30,
1996.  The increase in such losses was  attributed  to an increase in the dollar
amount of SG&A  expenses to support  the  expansion  of the sales and  marketing
effort.  Transfers from the Company's North American  operations to its European
subsidiary  are accounted  for at cost,  plus a reasonable  profit.  The cost of
revenues for the  Company's  European  subsidiary  includes  approximately  $0.2
million and $0.2 million of  intercompany  gross profit  earned by the Company's
North  American  operations on system sales by the European  subsidiary to third
parties during the six months ended November 30, 1997 and 1996, respectively.


     Three  Months  Ended  November  30,  1997  compared to Three  Months  Ended
November 30, 1996

     Total Revenues. Total revenues were $28.6 million in the three months ended
November 30, 1997,  approximately the same as the $28.7 million reported in last
year's second  quarter.  System sales  decreased by 4.1% to $21.8 million in the
three months ended November 30, 1997 from $22.7 million in the comparable period
of the prior  fiscal  year.  The  decrease  in  system  sales was due to a 17.9%
decrease  in  domestic  sales and offset by a 24.4%  increase  in  international
sales.  The  decrease in system  sales was  primarily  due to a decrease in unit
sales volume.  Service revenues  increased by 14.2% to $6.8 million in the three
months ended November 30, 1997 from $6.0 million in the comparable period of the
prior  fiscal year,  primarily  due to the addition of more units to the service
base.

     Gross Profit. The Company's gross profit decreased by $0.6 million to $13.5
million in the three  months ended  November 30, 1997 from $14.1  million in the
comparable  period of the prior  fiscal year.  Gross  profit as a percentage  of
total  revenues  decreased to 47.2% in the three months ended  November 30, 1997
from 49.3% in the  comparable  period of the prior year.  Gross profit on system
sales  decreased  by $0.8  million to $11.0  million in the three  months  ended
November  30,  1997 from  $11.8  million in the  comparable  period of the prior
fiscal year.  The gross  margin on system sales  decreased to 50.6% in the three
months ended November 30, 1997 from 51.9% in the comparable  period of the prior
fiscal year. The Company  attributes this decrease  primarily to the product mix
during the current three month period, with a higher percentage of revenue being
derived  from lower  margin  programming  than from  hardware.  Gross  profit on
service  revenues  increased by $0.2  million,  or 6.5%,  to $2.5 million in the
three months ended November 30, 1997 from $2.3 million in the comparable  period
of the prior fiscal year. Gross margin on service revenues decreased to 36.5% in
the three months ended November 30, 1997 from 39.1% in the comparable  period of
the prior fiscal year. This decrease was  attributable to higher cost to support
organizational  growth and lower  installation  revenues  partially offset by an
increase in the service base.

<PAGE>

     Selling,  General  and  Administrative   Expenses.   Selling,  General  and
Administrative  ("SG&A")  expenses  were $9.0  million and $7.1  million for the
three months ended November 30, 1997 and 1996, respectively,  or 31.5% and 24.8%
of total  revenues,  respectively.  The  increase  in the dollar  amount of SG&A
expenses was primarily related to the continued expansion of the Company's sales
and marketing efforts in domestic and international  markets and to increases in
SG&A expenses necessary to support the planned increased level of sales.

     Research  and  Development  Expenses.   Research  and  Development  ("R&D")
expenses were $3.5 million and $2.6 million for the three months ended  November
30,  1997  and  1996,  respectively,  or  12.4%  and  9.1%  of  total  revenues,
respectively.  The increase in the dollar  amount of R&D  expenses  reflects the
continued  expansion of the Company's R&D staff which  increased to 156 from 114
between  November 30, 1997 and 1996,  respectively.  R&D expenses are charged to
operations as incurred, and no software development costs have been capitalized.
The  Company  expects  the dollar  amount of R&D  expenditures  to  continue  to
increase,  although such  expenses as a percentage  of total  revenues will vary
from period to period.

     Other Income (Expense).  Other income was $0.5 million and $0.6 million for
the three months ended  November 30, 1997 and 1996,  respectively.  Interest and
other income  decreased  to $0.3 million in the three months ended  November 30,
1997 from $0.4 million in the three months ended November 30, 1996 . The Company
had a foreign  exchange gain of $0.2 million in the three months ended  November
30,  1997 and 1996,  respectively.  To the extent the Company is unable to match
revenue received in foreign  currencies with expenses paid in the same currency,
it is exposed to fluctuations in international currency transactions.

     Income  Taxes.   Variations  in  the  customary  relationship  between  the
provision for income taxes and the statutory  income tax rate  primarily  result
from the utilization of research and  development  tax credits,  state and local
income taxes, and exempt income of the Company's foreign sales corporation.  The
Company's  effective  income tax rates were 37.5% and 39.0% for the three months
ended November 30, 1997 and 1996, respectively.

     Liquidity and Capital Resources

     The Company's  principal cash  requirement to date has been to fund working
capital and  capital  expenditures  in order to support the growth of  revenues.
Historically,  the Company has primarily financed this requirement  through cash
flow from operations, bank borrowings and two public offerings for the Company's
common stock in 1995,  which  resulted in an  aggregate of $41.1  million of net
proceeds to the Company.  Cash flow from  operations was $1.7 million and $(1.6)
million for the six months ended  November 30, 1997 and 1996,  respectively.  At
November 30, 1997, the Company had working  capital of $56.0 million,  including
$23.9  million of cash and cash  equivalents  and  short-term  investments.  The
Company  expects its working capital needs to increase along with planned future
revenue growth.

     At November 30, 1997, current assets and current  liabilities  decreased by
$3.3 million and $4.1 million,  respectively,  compared to May 31, 1997. Current
assets  decreased  primarily  as a result of a decrease in accounts  receivable.
Current  liabilities  decreased  primarily  due to  reduced  levels  of  accrued
expenses.

<PAGE>

     The average days sales outstanding (calculated by dividing the net accounts
receivable  at the balance  sheet date for each period by the average  sales per
day during the quarter  immediately  preceding  the balance sheet date) for this
period were  approximately 101 days. The average days sales outstanding were 111
days, 83 days and 98 days at May 31, 1997, 1996 and 1995, respectively.

     The Company's  inventory increased to $14.7 million as of November 30, 1997
from $12.9  million  as of May 31,  1997 due to lower  than  anticipated  system
sales.

     The Company has a $15.0 million  unsecured line of credit with a bank which
expires on November  30,  1998.  As of  November  30,  1997,  the Company had no
borrowings under this line of credit.  Any borrowing on this line of credit will
bear interest at the prime rate.

     The  Company  made  capital  expenditures  totaling  $3.6  million and $4.0
million  during the six months  ended  November  30, 1997 and November 30, 1996,
respectively.

     The  Company  believes  that its  existing  sources of working  capital and
borrowings  available  under its revolving  line of credit will be sufficient to
fund its operations and capital expenditures for at least 12 months.

     Foreign Currency Transaction

     The Company does not currently  engage in  international  currency  hedging
transactions to mitigate its foreign currency exposure.  Included in the foreign
exchange gain (loss) are unrealized  foreign exchange gains and losses resulting
from the currency  remeasurement  of the  financial  statements of the Company's
foreign  subsidiaries into U.S. dollars.  To the extent the Company is unable to
match  revenue  received in foreign  currencies  with  expenses paid in the same
currency,   it  is  exposed  to  possible  losses  on   international   currency
transactions.

     Inflation

     In the opinion of  management,  inflation has not had a material  effect on
the operations of the Company.

     Recent Financial Accounting Standards Board Statements

     Recent  pronouncements if the Financial Accounting Standards Board ("FASB")
which  are not  required  to be  adopted  at this  date  include,  Statement  of
Financial  Accounting  Standards  No.  131,  "Disclosures  about  Segments of an
Enterprise  and  Related  Information  ("SFAS  131"),   Statement  of  Financial
Accounting  Standards No. 130,  "Reporting  Comprehensive  Income" ("SFAS 130"),
Statement of Financial  Accounting  Standards No 129, "Disclosure of Information
about Capital  Structure"  ("SFAS 129") , and Statement of Financial  Accounting
Standards No. 128,  "Earnings per Share" ("SFAS 128"). SFAS 131 and SFAS 130 are
effective for fiscal years  beginning  after  December 15, 1997 and SFAS 129 and
128 are  effective  for fiscal years ending  December 31, 1997.  The adoption of
these  pronouncements is not expected to have a material impact on the Company's
consolidated financial statements.

     Certain Factors That May Affect Future Results

     From time to time, information provided by the Company,  statements made by
its employees or  information  included in its filings with the  Securities  and
Exchange Commission  (including this Form 10-Q) may contain statements which are
so-called   "forward-looking   statements"  and  not  historical  facts.   These
forward-looking  statements  are made pursuant to the safe harbor  provisions of
the Private  Securities  Litigation  Reform Act of 1995.  The  Company's  actual
future results may differ significantly from those stated in any forward-looking
statements.   Forward-looking   statements   involve   a  number  of  risks  and
uncertainties,  including,  but not limited to, product demand,  pricing, market
acceptance,  litigation,  risks in product and technology  development and other
risk factors detailed from time to time in the Company's Securities and Exchange
Commission  reports  including  this  Form  10-Q for the  fiscal  quarter  ended
November 30, 1997 and its Form 10-K for the fiscal year ended May 31, 1997.

<PAGE>

     The Company  undertakes  no  obligation  to  publicly  update or revise any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise.

     With particular  regard to the possible  variability of quarterly  results,
fluctuations may occur as a result of factors  including the length of the sales
cycle, the timing of orders from shipments to customers,  delays in developments
and  customer   acceptance  of  custom   software   applications,   new  product
introductions  or  announcements  by the products and the hiring and training of
additional staff as well as general economic conditions.

     Historically,  the size and timing of the Company's sales transactions have
varied substantially from quarter,  with a substantial  percentage of orders and
deliveries  occurring in the final weeks of a quarter,  and the Company  expects
such variations to continue in future periods.  Because a significant portion of
the Company's  overhead is fixed in the  short-term,  the  Company's  results of
operations  may be  materially  adversely  affected if  revenues  fall below the
Company's  expectations.  Generally,  the Compan s  inventory  of  computer  and
telephony  hardware is determined by the Company's  forecast of sales during the
future periods. If management's forecasts of product sales and product mix prove
to be inaccurate,  the Company may not have the necessary inventory available to
deliver  systems in a timely manner which may have a material  adverse effect on
the Company's results of operations during such period.





<PAGE>



                           PART II - OTHER INFORMATION

     Item 1. Legal Proceedings

     In April, 1997, Lucent  Technologies,  Inc. ("Lucent") notified the Company
that certain of the Company's  products  were, in Lucent's  opinion,  infringing
certain Lucent patents.  The Company has reviewed the  information  which Lucent
furnished  concerning these patents, and the Company currently believes that its
products  do not  violate  any  valid  claims  of  the  identified  patents.  In
September,  1997, Lucent advised the Company that in Lucent's opinion additional
Lucent  patents  were being  infringed by the  Company's  products and offered a
license on the identified  patents.  The Company is currently  evaluating  these
additional  patents,  and has not made a  determination  as to the  validity  of
Lucent's assertions.

     If the Company does determine that, for business or legal reasons, it needs
to obtain licenses from Lucent for the use of one or more patents,  there can be
no assurance that the terms of such licenses,  including  payments to Lucent for
products previously sold and for future sales, would not have a material adverse
affect on the Company's  financial  condition or results of  operations.  In the
event the Company  decides not to seek such  licenses,  or if the Company cannot
reach a  satisfactory  agreement  with  Lucent  as to the  terms  of one or more
licenses,  the Company could become involved in litigation which could be costly
and distracting to its management.  There can be no assurance as to the ultimate
outcome of any  litigation,  or that the costs and  effects  of such  litigation
would not have a material  adverse affect on the Company's  business,  financial
condition or results of operations.

     Item 2. Changes in Securities

     None

     Item 3. Defaults Upon Senior Securities

     None

     Item 4. Submission of Matters to a Vote of Security Holders

     (a) On  November  12,  1997,  the  Company  held  its  Annual  Meeting  of
Stockholders (the "Meeting").

     (b) At the Meeting,  the Stockholders of the Company elected Peter J. Cohen
and Jayandra Patel as Class III directors.

     (c) At the Meeting,  the Stockholders of the Company approved the amendment
of the  Company's  1995  Stock  Option  Plan to  increase  the  number of shares
reserved for issuance thereunder from 1,200,000 to 2,200,000.

     (d) The Stockholders of the Company then ratified the selection of Deloitte
& Touche LLP as the  Company's  independent  auditors for the fiscal year ending
May 31 1998. The following sets forth the results of voting on each matter voted
upon at the meeting:

     1.       Election of Directors
                                                  For                 Against
              Peter J. Cohen                   10,415,030             317,250
              Jayandra Patel                   10,415,130             317,150

     2.       Amendment of the Company's 1995 Stock Option Plan

                                                  For                 Against

                                                5,224,043             606,481

     3.       Ratification of Deloitte & Touche LLP as the Company's independent
              auditors for the fiscal year ending May 31, 1998

                                                  For                 Against

                                               10,666,731              48,795

<PAGE>

     Item 5. Other Information

     None

     Item 6. Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  10.1     1995 Stock Option Plan as amended
                  27.1     Financial Data Schedule

         (b)      Reports on Form 8-K

                  None


<PAGE>

                                   SIGNATURES

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


                                          PERIPHONICS CORPORATION
                                          Registrant



                                           By:  s/Peter J. Cohen
                                                ----------------
                                           Peter J. Cohen
                                           Chairman of the Board, President
                                           and Chief Executive Officer
                                           (Principal Operating Officer)




                                           By: s/Kevin J. O'Brien
                                               ------------------
                                           Kevin J. O'Brien
                                           Chief Financial Officer, Vice
                                           President-Finance and Administration
                                           (Principal Accounting Officer),
                                           Secretary and Director



Dated:  January 14, 1998