SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


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

                       For The Quarter Ended June 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 number 0-19386

                           FISCHER IMAGING CORPORATION
             (Exact name of Registrant as specified in its charter)

        DELAWARE                                     36-2756787
 (State of incorporation)              (I.R.S. Employer Identification No.)

     12300 North Grant Street
         Denver, Colorado                               80241
(Address of principal executive offices)             (Zip Code)

       Registrant's telephone number, including area code: (303) 452-6800


Indicate by check mark whether the Registrant (i) 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  (ii)  has been  subject  to such  filing
requirements for the past 90 days. Yes [X]   No [ ]

                                               SHARES OUTSTANDING AS OF
      TITLE OF CLASS                                  JUNE 30, 1997

Common Stock,  $0.01 par value                          6,948,648


<PAGE>



                           FISCHER IMAGING CORPORATION


                                TABLE OF CONTENTS



PART I.   FINANCIAL INFORMATION                                        PAGE

     Item 1.   Consolidated Financial Statements

               Consolidated Balance Sheets -
               June 30, 1997 and December 31, 1996                        3

               Consolidated Statements of Operations -
               Three and six months ended  June 30, 1997 and 1996         4

               Consolidated Statements of Cash Flows -
               Six months ended  June 30, 1997 and  1996                  5

               Notes to Consolidated Financial Statements                 6


     Item 2.   Management's Discussion and Analysis of Financial
               Condition and Results of Operations                        8


PART II.  OTHER INFORMATION

     Item 6.   Exhibits and Reports on Form 8-K                          15



<PAGE>


                           FISCHER IMAGING CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                    (Amounts in thousands except share data)
<TABLE>
<CAPTION>
                                                                                             June 30,     December 31,
                                                                                               1997           1996
                                                                                            -----------   -------------
                                ASSETS                                                      (Unaudited)
CURRENT ASSETS:
<S>                                                                                         <C>             <C>     
    Cash and cash equivalents                                                               $   5,122       $  3,289
    Trade accounts receivable, net of allowance for doubtful accounts
        of approximately $644 and $641 at June 30, 1997 and
        December 31, 1996, respectively                                                        13,993         18,600
    Inventories                                                                                18,497         23,692
    Deferred income taxes                                                                       2,267          2,267
    Prepaid expenses and other current assets                                                   1,366          1,289
                                                                                             --------        -------
          Total current as                                                                     41,245         49,137
                                                                                             --------        -------
PROPERTY AND EQUIPMENT (at cost):
    Manufacturing equipment                                                                     9,345          8,198
    Office equipment and leasehold improvements                                                 5,143          4,666
Similar Product Sales                                                                        --------        -------
                                                                                               14,488         12,864
    Less- Accumulated depreciation and amortization                                             8,710          8,294
                                                                                             --------        -------
          Property and equipment, net                                                           5,778          4,570
                                                                                             --------        -------
INTANGIBLE ASSETS, net                                                                          3,968          4,327
DEFERRED INCOME TAXES                                                                             346            346
DEFERRED COSTS AND OTHER ASSETS                                                                 1,678          2,052
                                                                                             --------        -------
          TOTAL ASSETS                                                                      $  53,015       $ 60,432
                                                                                             ========        =======

                    LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES:
    Trade accounts payable                                                                  $   3,679       $  5,155
    Notes payable and current maturities of long-term debt                                        148            283
    Accrued salaries and wages                                                                  1,838          2,160
    Deferred service revenue                                                                      803            805
    Other current liabilities                                                                   3,030          3,587
                                                                                             --------        -------
          Total current liabilities                                                             9,498         11,990

LONG-TERM DEBT                                                                                     65            149

OTHER NONCURRENT LIABILITIES                                                                      489            488
                                                                                             --------        -------
          TOTAL LIABILITIES                                                                    10,052         12,627
                                                                                             --------        -------

STOCKHOLDERS' INVESTMENT:
   Common Stock, $.01 par value, 25,000,000 shares authorized, 6,948,648
       and 6,920,335 shares issued and outstanding at June 30, 1997 and
       December 31, 1996, respectively                                                             69             69
   Preferred Stock, 5,000,000 shares authorized:
       Series C Junior Participating Preferred Stock, $.01 par value, 500,000 shares
          authorized, no shares issued and outstanding                                              -              -
       Series D Convertible Preferred Stock, $.01 par value, 1,333,333 shares
          authorized, issued and outstanding at June 30, 1997 and
          December 31, 1996; liquidation preference of $10,000,000                                 13             13
   Additional paid-in capital                                                                  49,235         49,093
   Accumulated deficit                                                                         (6,679)         (1,388)
   Cumulative translation adjustment                                                              325             18
                                                                                             --------        -------
          TOTAL STOCKHOLDERS' INVESTMENT                                                       42,963         47,805
          TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT                                    $  53,015       $ 60,432
                                                                                             ========        =======
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                        3

<PAGE>


                           FISCHER IMAGING CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Amounts in thousands except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED                      SIX MONTHS ENDED
                                            JUNE 30,             JUNE 30,           JUNE 30,           JUNE 30,
                                              1997                 1996               1997               1996

<S>                                        <C>                 <C>                  <C>                <C>     
NET REVENUES                               $  15,151           $  21,906            $ 27,453           $ 41,979

COST OF SALES                                  9,808              13,021              18,360             24,609
                                            --------            --------            --------            -------
     Gross profit                              5,343               8,885               9,093             17,370

OPERATING EXPENSES:
     Research and development                  1,554               1,745               3,066              3,209

     Selling, marketing and service            4,040               4,467               8,716              8,825

     General and administrative                1,081               1,142               2,242              2,273
                                            --------            --------            --------            -------
          Total operating expenses             6,675               7,354              14,024             14,307
                                            --------            --------            --------            -------
(LOSS) EARNINGS FROM OPERATIONS               (1,332)              1,531              (4,931)             3,063

     Interest expense                            (12)               (200)                (49)              (420)
     Interest income                             103                   5                 128                 14
     Other (expense) income, net                (171)                (80)               (439)                22
                                            --------            --------            --------            -------
(LOSS) EARNINGS BEFORE INCOME TAXES           (1,412)              1,256              (5,291)             2,679
     Provision for income taxes                   --                 310                  --                660
                                            --------            --------            --------            -------
NET (LOSS) EARNINGS                        $  (1,412)          $     946           $  (5,291)          $  2,019
                                            ========            ========            ========            =======
NET (LOSS) EARNINGS PER COMMON AND 
COMMON EQUIVALENT SHARE                    $   (0.17)          $    0.13           $    (.64)          $   0.27
                                            ========            ========            ========            =======

WEIGHTED AVERAGE COMMON
AND COMMON EQUIVALENT
SHARES OUTSTANDING                             8,282               7,344               8,282              7,346
                                            ========            ========            ========            =======
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                        4

<PAGE>


                           FISCHER IMAGING CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (AMOUNTS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                              SIX MONTHS ENDED
                                                                                           June 30,       June 30,
                                                                                             1997           1996
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                       <C>             <C>     
   Net (loss) earnings                                                                    $  (5,291)      $  2,019
                                                                                           --------        -------
   Adjustments to reconcile net (loss) earnings to net cash
   provided by (used in) operating activities-
      Depreciation                                                                              904            808
      Amortization of intangible assets                                                         359            369
      Provision for doubtful accounts                                                            31             96
      Sales and retirements of assets                                                            49             21
      Other changes in current assets and liabilities-
          Decrease (Increase) in trade accounts receivable                                    4,576         (1,691)
          Decrease (Increase) in inventories                                                  5,195         (4,138)
          Decrease in deferred income taxes                                                      --            159
          Increase in prepaid expenses and other current assets                                 (77)          (561)
          Decrease (Increase) in deferred costs and other assets                                374           (208)
          Decrease in trade accounts payable                                                 (1,476)          (273)
          Decrease in accrued salaries and wages                                               (322)           (92)
          Decrease in deferred service revenue                                                   (2)           (97)
          (Decrease) Increase in other current liabilities                                     (557)           161
      Other                                                                                       1             79
                                                                                           --------        -------
             Total adjustments                                                                9,055         (5,367)
                                                                                           --------        -------
             Net cash provided by (used in) operating activities                              3,764         (3,348)
                                                                                           --------        -------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                                                      (2,161)          (895)
   Other                                                                                         --            (48)
                                                                                           --------        -------
              Net cash used in investing activities                                          (2,161)          (943)
                                                                                           --------        -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from sales of common stock                                                          142            445
   Net borrowings under line of credit agreement                                                 --          3,713
   Repayments of long-term debt                                                                (219)          (450)
                                                                                           --------        -------
              Net cash (used in) provided by financing activities                               (77)         3,708
                                                                                           --------        -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                         307             81
                                                                                           --------        -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                          1,833           (502)
CASH AND CASH EQUIVALENTS, beginning of period                                                3,289            968
                                                                                           --------        -------
CASH AND CASH EQUIVALENTS, end of period                                                  $   5,122       $    466
                                                                                           ========        =======
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                        5
<PAGE>


                           FISCHER IMAGING CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1. GENERAL

In the opinion of management,  the accompanying  unaudited  consolidated balance
sheets and  statements  of operations  and cash flows  contain all  adjustments,
consisting  only of normal  recurring  items,  necessary  to present  fairly the
financial  position of Fischer Imaging  Corporation  (the "Company") at June 30,
1997, its results of operations for the three and six months ended June 30, 1997
and 1996 and cash flows for the six months ended June 30, 1997 and 1996.

The  unaudited  consolidated  financial  statements  presented  herein have been
prepared in accordance with the instructions to Form 10-Q and do not include all
the information and note disclosures  required by generally accepted  accounting
principles.  The financial  statements  should be read in  conjunction  with the
audited financial statements and notes thereto contained in the Company's latest
annual report on Form 10-K for the year ended December 31, 1996.

The Company  typically  closes its first three fiscal  quarters as of the Sunday
closest  to the end of  March,  June  and  September.  In 1997,  to more  evenly
distribute the days between quarters,  the first three fiscal quarters are being
closed as of the Monday  closest to the end of the respective  months,  or March
31, June 30, and September 29, respectively.

2. INVENTORIES

Inventories include costs of materials, direct labor and manufacturing overhead.
Inventories  are  priced  at the lower of cost  (using  primarily  the  last-in,
first-out  ("LIFO")  method of  valuation) or market.  Writedowns  for excess or
obsolete  inventories  are charged to expense in the period in which  conditions
giving rise to the writedowns are first recognized.

Inventories consisted of the following components (in thousands):


                                            June 30,       December 31,
                                              1997             1996
                                          -----------     --------------
FIFO cost-
   Raw materials                            $12,539         $ 16,244
   Work in process and finished goods        11,943           13,467
LIFO valuation adjustment                      (893)            (893)
                                             ------         --------
   Total before valuation reserves           23,589           28,818
Less valuation reserves                      (5,092)          (5,126)
                                             ------          -------
Inventories, net                            $18,497        $  23,692
                                             ======          =======

3.  OTHER CURRENT LIABILITIES

Other current liabilities consisted of the following (in thousands):


                                              June 30,     December 31,
                                                1997          1996
                                             ----------   -------------
Customer  deposits                            $ 1,309       $  1,058
Accrued warranty and  installation costs        1,197          1,408
Other                                             524          1,121
                                                -----        -------
Total other current liabilities              $  3,030       $  3,587
                                              =======        =======

                                        6

<PAGE>

4. NOTES PAYABLE AND LONG-TERM DEBT

Notes payable and long-term debt consisted of the following (in thousands):



                                   June 30,     December 31,
                                     1997          1996
                                 -----------    ------------

Capitalized lease obligations      $   168       $   382
Other                                   45            50
                                   -------        ------
                                       213           432
Less--Current maturities              (148)         (283)
                                   -------        ------
Long-term debt                    $     65       $   149
                                   =======        ======

See "Management's  Discussion & Analysis - Liquidity and Capital  Resources" for
an additional discussion of the Company's line of credit.

5. ISSUANCE OF STOCK

On June 27, 1996,  the Company  completed  the sale of  1,200,000  shares of its
common stock at $12.00 per share.  Proceeds,  net of  underwriting  discount and
other  expenses,  of  $13,121,000  were  received  in early  July  1996 and were
primarily  utilized to repay  existing  indebtedness  under the  Company's  bank
revolving line of credit of approximately  $6.4 million.  The remaining proceeds
were invested in short-term, investment grade securities.

6.  NET EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE

Net earnings  (loss) per share is computed based on the weighted  average number
of common and  convertible  preferred  shares and,  if  dilutive,  other  common
equivalent shares outstanding  during each of the periods.  The Company uses the
treasury stock method for determining the effect of outstanding stock options on
earnings per share.

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards No. 128  "Earnings  per Share",  which is to be
effective December 15, 1997. This statement  establishes standards for computing
and presenting earnings per share. Had this statement been adopted as of January
1, 1997, (loss) earnings per share would have been as follows:

<TABLE>
<CAPTION>
                                        Three Months Ended             Six Months Ended
                                      ----------------------       ----------------------
                                       June 30,     June 30,        June 30,    June 30,
                                         1997         1996            1997        1996
                                      ----------  ----------       ----------- ----------

<S>                                    <C>            <C>            <C>          <C> 
Basic (loss) earnings per share        $ (.20)        $.16           $(.76)       $.34
Diluted (loss) earnings per share        (.17)         .13            (.64)        .27
</TABLE>


7.  FISCHER MIDWEST MINORITY INTEREST

During the first quarter of 1996, the Company acquired the 45% minority interest
of Fischer Imaging Midwest, Inc., its domestic marketing subsidiary, in exchange
for shares of the Company's stock. The Company accounted for this transaction as
a  purchase,   acquiring  the  minority  interest  with  a  net  book  value  of
approximately $331,000 and recording goodwill of approximately  $270,000,  which
is being amortized on a straight-line basis over 15 years.

                                        7

<PAGE>

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

The  following  discussion  of results of  operations  and  financial  condition
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.  For this purpose, any statements contained herein that
are not  statements  of  historical  fact may be  deemed  to be  forward-looking
statements.  Without limiting the foregoing,  the words  "believes",  "expects",
"anticipates",  "plans",  "estimates",  and similar  words and  expressions  are
intended  to  identify   forward-looking   statements.   These   forward-looking
statements  include  statements  about  the size  and  growth  of the  Company's
markets, the Company's future operating results including revenues and expenses,
the  success  of its  cost-cutting  measures,  the  effects of  outsourcing  and
transferring  certain production from the Company's Addison,  Illinois facility,
sales under its OEM  agreements and otherwise,  marketing  arrangements  for its
Mammotest products and other products,  development of new products, submissions
to the  FDA  and  receipt  of  FDA  approvals  and  clearances,  resolutions  of
deficiencies  noted by the FDA, the  availability  of sources of  liquidity  and
capital financing,  and other matters. These forward-looking  statements involve
risks and uncertainties. The actual results that the Company achieves may differ
materially  from those discussed in such  forward-looking  statements due to the
risks and uncertainties  described in this Form 10-Q, in the Business section of
the Company's  Form 10-K for the year ended  December 31, 1996 (the "Form 10-K")
under the "Risks Associated with OEM Agreements", "Risks of Technological Change
and New Products",  "Risks of New Product  Development  and Market  Acceptance",
"Manufacturing  and  Operating  Risks",  "Government  Regulation",  and "Product
Liability, Market Withdrawal, and Product Recalls" headings, in the Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results of  Operations
("MD&A")  section of the Form 10-K and elsewhere in the Form 10-K, as well as in
the "Risk Factors" section of the Company's  Registration  Statement on Form S-2
that was declared effective on June 27, 1996.

OVERVIEW

The Company  designs,  manufactures  and markets  specialty and general  purpose
medical  imaging  systems  for the  diagnosis  and  treatment  of  disease.  The
Company's newest product lines are directed towards medical specialties in which
image-guided,   minimally-invasive   therapies  are   replacing   open  surgical
procedures.  These products are used primarily in the diagnosis and treatment of
breast cancer,  heart disease and vascular disease. The Company also designs and
manufactures  specialty  x-ray imaging  components  and  subsystems  for several
leading medical products companies as an original equipment manufacturer ("OEM")
and  sells  general  radiology  systems  for  use  in  hospitals,   clinics  and
physicians' offices.

Revenues  for the  second  quarter  ended  June 30,  1997  were  $15,151,000,  a
$2,849,000  or 23%,  increase  as  compared  to the first  quarter of 1997.  The
revenue  increase was in all product  areas,  lead by a 42% increase in sales of
mammography  systems.  The resulting  increase in gross margin,  combined with a
$674,000  reduction in operating  expenses,  caused the  operating  loss for the
three  months  ended June 30, 1997 to be reduced  from  $3,879,000,  or $.47 per
share, in the first quarter of 1997, to $1,412,000, or $.17 per share.

                                       8

<PAGE>

The Company  experienced  substantial  losses for the six months  ended June 30,
1997 and break-even operating results in 1996, with losses in the second half of
the year.  The Company  cannot  predict  when it will  return to  profitability,
although it has taken significant steps to reduce costs and improve sales during
1997.  Improvement  in the Company's  results of operations  will depend on many
factors including, among other things, demand for the Company's products and the
ability  of  the  Company  to  maintain  or  increase  gross  margins,   control
manufacturing  and other  costs,  enter  into  distribution  agreements  for its
Mammotest  products  and  other  products,  implement  its  marketing  and sales
strategies in the United States and  internationally,  maintain orders under OEM
agreements,  renew OEM  agreements on favorable  terms and develop and introduce
new products that compete successfully.

The Company  experienced  decreases in the sales of its Mammotest systems in the
first six months of 1997. Sales of Mammotest  systems during the last six months
of 1996 were flat when compared to the  comparable six month period of 1995. The
Company is facing,  and expects to continue to face,  aggressive  and successful
competition  within the surgical  stereotactic  core needle breast biopsy market
from U. S.  Surgical  Corporation.  The Company may not regain  momentum in this
market until it enters into a distribution partnership that adequately addresses
this market.

The  Company  also   experienced   significantly   lower  sales  under  its  OEM
arrangements  during the fourth quarter of 1996 and the first six months of 1997
than in comparable prior periods, primarily due to decreased shipments of Tilt-C
systems to GE Medical Systems.

The Company  believes that improving  factory  utilization and further  reducing
operating  expenses  will be key elements in its efforts to return to acceptable
levels of profitability.  The Company intends to seek,  through  outsourcing and
transferring  the  production  of  certain  components  of its  products  during
upcoming quarters,  to significantly  reduce or cease production at its Addison,
Illinois facility as a means of reducing its overall  manufacturing costs. Plans
have  not  yet  been  finalized.  Due to the  potential  costs  associated  with
outsourcing and transferring production,  as well as other factors, there can be
no assurance as to the timing or ultimate success of such efforts.

The Company has experienced and is likely to continue to experience  significant
quarterly and annual  fluctuations  in net revenues,  operating  results and net
income,  depending on such  factors as the timing of large  system  shipments to
customers,  the timing of orders under OEM contracts  and related  manufacturing
and shipment scheduling, new product introductions and new marketing programs by
the Company and its competitors,  delays in contract development  projects,  the
effect of economic  conditions on the Company's markets,  the effects of managed
healthcare on capital expenditures and reimbursement, increases in marketing and
research  costs in  relation to sales,  regulatory  clearance  of new  products,
seasonal purchasing patterns of hospitals and the timing of purchasing decisions
by customers. Additionally, because the timing of the occurrence of such factors
is  difficult  to  anticipate  and many of the  Company's  costs are fixed,  the
Company  may not be able to  sufficiently  reduce its costs in periods  when its
revenues are less than  anticipated  and may suffer  unexpected  losses or lower
income in these periods.

The  Company is  attempting  to expand  its  international  sales and  marketing
efforts,  which can be  expected  to result  in  losses  from its  international
operations   until  its   international   revenues  reach   sufficient   levels.
Additionally,  the Company's  exposure to the risks of  international  business,
including  foreign  currency risks, may increase as its  international  business
grows. The Company attempts to minimize these risks through measures  including,
but  not  limited  to,  requiring  payments  in  U.S.  dollars  and  the  use of
dollar-denominated  letters of credit. There can be no assurance,  however, that
the  Company  will  be  successful  in its  international  sales  efforts  or in
minimizing any associated risks.

                                       9

<PAGE>

The  Company  is  subject  to  periodic   inspections   by  the  Food  and  Drug
Administration   ("FDA")  whose  primary  purpose  is  to  audit  the  Company's
compliance with Current Good Manufacturing  Practices ("CGMPs"), as set forth in
the Quality System Regulation. This regulation establishes standards for design,
testing, quality control and documentation procedures. Following a December 1996
inspection, the FDA issued Inspectional Observations Form 483 ("Form 483") and a
Warning Letter  regarding  manufacturing  practices at its Denver  facility.  As
requested,  the Company has responded to the Warning  Letter  regarding  planned
corrective  actions.  By November 1, 1997 (extended from the original  August 1,
1997 deadline),  the Company must also obtain  third-party  certification of the
Company's  manufacturing and quality systems. Until outstanding GMP concerns are
resolved, the Company will be unable to receive an award of a federal government
contract or new marketing or export  clearance for products  manufactured at its
Denver facility.  Failure to correct the noted deviations, to obtain third-party
certification,  and/or  other  ongoing  FDA  concerns  could also  result in FDA
enforcement   actions  which  could  include,   among  other  things,   seizure,
injunction, and/or criminal or civil proceedings being initiated without further
notice.  The Company has also  received a  Non-Compliance  Declaration  from the
Center for Device Evaluation and Research ("CDRH")  regarding  violations of the
Electronic  Product  Radiation  Control  Performance  Standard.  The Company has
responded  to  the  Non-Compliance  Declaration  describing  planned  corrective
actions as to some matters and  requesting  exemption as to others.  The Company
believes that it will be able to correct the deficiencies noted in the Form 483,
the FDA Warning Letter,  and the CDRH  Non-Compliance  Declaration,  although no
assurance  can be given that the  corrections  can be  accomplished  in a timely
manner, if at all.

Although the Company strives to operate within the  requirements  imposed by the
FDA, there can be no assurances that these deficiencies can be corrected or that
the Company will be able to satisfy FDA compliance concerns in the future. These
ongoing  compliance  reviews and/or related delays in future product  clearances
could have a material adverse effect on the Company.

RESULTS OF OPERATIONS

The  Company's  net  revenues  and net loss  were  $15,151,000  and  $1,412,000,
respectively,  for the second  quarter  of 1997,  as  compared  to  revenues  of
$21,906,000  and net  earnings of $946,000 for the second  quarter of 1996.  The
most  significant  factor in the  decline in  revenues as compared to the second
quarter of 1996 was an approximately  50% decline in OEM shipments,  principally
sales of Tilt-C systems to GE Medical Systems.  Sales of Mammotest breast biopsy
systems also declined,  as did shipments of general and specialty  purpose x-ray
systems.  The Company's operating results for the second quarter were negatively
affected  by  these  decreased  sales  and by  lower  absorption  of  its  fixed
manufacturing  costs,  which  declined  primarily as a result of lower levels of
production  activity  in  anticipation  of lower  shipments  and as a result  of
planned reductions in inventory levels.

See "Overview"  for a further  discussion of the recent decline in the Company's
sales and the Company's efforts to reduce its manufacturing costs.

                                       10

<PAGE>

The following  table sets forth the  percentage of net revenues  represented  by
certain data included in the Company's  statements of operations for the periods
indicated:

<TABLE>
<CAPTION>
                                                        Three Months Ended                       Six Months Ended
                                                  -----------------------------           -----------------------------

                                                     June 30,         June 30,              June 30,         June 30,
                                                       1997             1996                  1997             1996
                                                  --------------    ------------          -------------    ------------

<S>                                                   <C>             <C>                    <C>             <C>   
    Net revenues                                      100.0%          100.0 %                100.0%          100.0%

    Gross profit                                       35.3            40.6                   33.1            41.4

    Research and development                           10.3             8.0                   11.2             7.6

    Selling, marketing and service                     26.7            20.4                   31.7            21.0

    General and administrative                          7.1             5.2                    8.2             5.4

    (Loss) Earnings from operations                    (8.8)            7.0                  (18.0)            7.3

    Provision for income taxes                          ---             1.4                    ---             1.6

    Net (loss) earnings                                (9.3)            4.3                  (19.3)            4.8

</TABLE>


Net Revenues.  Second quarter net revenues were  $15,151,000,  a decrease of 31%
from second quarter 1996 net revenues of  $21,906,000.  Net revenues for the six
months ended June 30, 1997 were $27,453,000, a 35% decrease from net revenues of
$41,979,000 for the comparable six month period of 1996. The Company's  decrease
in revenues  for the three and six months  ended June 30,  1997  compared to the
same periods in 1996  principally  reflects a strong  decrease in OEM  shipments
(primarily the Tilt-C system sold to GE Medical  Systems) but also a significant
reduction  in sales  of  Mammotest  systems,  sold  through  direct  and  dealer
channels,  as well as reductions in general and specialty purpose x-ray systems.
International  revenues  were also  unfavorably  impacted  for the three and six
months ended June 30, 1997  compared to the same  periods of 1996,  due in large
part to the impact of the strong dollar on export sales to Europe and Australia.

Gross  Profit.  For the second  quarter of 1997,  gross  profit  expressed  as a
percentage  of net revenues  was 35.3%,  as compared to the 40.6% for the second
quarter of 1996. For the six months ended June 30, 1997,  gross profit expressed
as a  percentage  of revenues  was 33.1%,  as compared to 41.4% for the same six
month period of 1996.  The decline in gross  profit as a percentage  of revenues
was due to an increase in unfavorable  manufacturing variances, as a result of a
substantial  decline  in  production  caused by the  reduction  in OEM and other
shipments and by the Company's  successful  efforts to reduce inventory  levels.
The effects of increased unfavorable  manufacturing variances were partly offset
by a shift in product mix from OEM shipments to proprietary products and service
revenues, which generally have higher margins.

Research and Development  Expenses.  Research and  development  expenses for the
second quarter of 1997 and 1996 were  $1,554,000 and  $1,745,000,  respectively.
The lower level of research and development expenses over last year is primarily
attributable to efforts to narrow the focus of engineering efforts and eliminate
marginal  engineering  efforts. As a percentage of net revenues,  second quarter
1997  and  1996  research  and   development   expenses  were  10.3%  and  8.0%,
respectively.  The increase as a percentage  of net revenues is due to lower net
revenues in the second quarter of 1997.

                                       11

<PAGE>

For the six  months  ended  June 30,  1997 and 1996,  research  and  development
expenses were $3,066,000,  or 11.2% of net revenues, and $3,209,000,  or 7.6% of
net  revenues,  respectively.  The  reduction is expense  level is the result of
efforts to eliminate marginal  engineering  efforts;  whereas,  the reduction in
research and  development  as a  percentage  of net revenues is due to lower net
revenues  for the six months  ended June 30,  1997 as compared to the six months
ended June 30, 1996. The Company's  primary area of focus remains the continuing
development of digital imaging products for mammography.

Selling, Marketing and Service Expenses. Selling, marketing and service expenses
for the  second  quarter  of 1997  and  1996  were  $4,040,000  and  $4,467,000,
respectively,  or 26.7% and 20.4%,  respectively,  of net revenues.  For the six
months ended June 30, 1997 and 1996,  selling,  marketing  and service  expenses
were $8,716,000 and $8,825,000,  respectively, or 31.7% and 21.0%, respectively,
of net revenues. The decrease in selling,  marketing and service expense for the
three and six months ended June 30, 1997 as compared to the same periods of 1996
is the  result  of lower net  revenues.  The  increase  as a  percentage  of net
revenues  for both the three and six months  periods of 1997 as  compared to the
same  periods  of 1996 is due to the  shift in mix  from  OEM  sales to sales of
proprietary  products,  for  which the  Company  generally  incurs  commissions,
warranty and installation expenses.

General and Administrative Expenses. General and administrative expenses for the
second  quarter of 1997 and 1996 were  essentially  unchanged at $1,081,000  and
$1,142,000,   respectively.  As  a  percentage  of  net  revenues,  general  and
administrative  expenses  increased from 5.2% to 7.1% from the second quarter of
1996 to the second  quarter of 1997.  For the six  months  ended June 30,  1997,
general and administrative expenses were $2,242,000, or 8.2% of net revenues, as
compared to  $2,273,000,  or 5.4% of net revenues for the  comparable  period of
1996. The increase in general and administrative expenses as a percentage of net
revenues  is  primarily  due to the  change  in net  revenues,  which  decreased
significantly in 1997 as compared to 1996.

Interest Expense / Interest  Income.  Interest expense for the second quarter of
1997 and 1996 was $12,000 and $200,000,  respectively.  Interest  income for the
second quarter of 1997 and 1996 was $103,000 and $5,000,  respectively.  For the
six months ended June 30,  1997,  interest  expense was $49,000,  as compared to
$420,000  for the six months ended June 30,  1996.  Interest  income for the six
months ended June 30, 1997 and 1996 was $128,000 and $14,000,  respectively. The
reduction  in interest  expense for both the three and six month  periods  ended
June 30, 1997 as compared to the same periods of 1996 is principally  related to
reduced  borrowings  under the  Company's  revolving  line of  credit  and other
borrowing  arrangements.  The Company's borrowings under its line of credit have
been reduced as a result of lower working capital  requirements  and as a result
of  the  use  of  proceeds  from  sales  of  Company  stock  to  repay  existing
indebtedness  under the line of credit.  The increase in interest income for the
three and six month  periods ended June 30, 1997 as compared to the same periods
of 1996 is primarily due to average cash and cash equivalent  borrowings,  which
have  increased as a result of the investment in  short-term,  investment  grade
securities  of the proceeds from the sale of common stock that were not utilized
to repay existing  indebtedness  in 1996.  (See Note 5 to Notes to  Consolidated
Financial Statements.)

                                       12

<PAGE>

Net (Loss)  Earnings.  The Company's net loss for the second quarter of 1997 was
$1,412,000  as compared to net  earnings of $946,000  for the second  quarter of
1996.  For the six months ended June 30, 1997, the net loss was  $5,291,000,  as
compared to net earnings of $2,019,000  for the  comparable  six month period of
1996. For the three and six month periods ended June 30, 1997, operating results
as  compared  to the same  periods  in 1996  were  unfavorably  impacted  by the
reductions  in gross  margin  resulting  from lower  sales,  higher  unfavorable
manufacturing  variances,  marketing and service expenses  associated with sales
through  the  direct  sales  channel,  and the  unfavorable  effects  of foreign
translation losses caused by the strengthening U. S. dollar.

INCOME TAXES

The Company's  estimated effective tax rate for the year ended December 31, 1997
is currently  0%.  Accordingly,  no income tax benefit has been provided for the
three and six month periods ended June 30, 1997. This rate was determined  based
upon the  anticipated  1997  results of  operations  includable  in the domestic
consolidated  tax return and upon  projected net temporary  differences  between
operating results reflected in the financial statements and those required to be
reflected in the domestic  consolidated  tax return for 1997. As of December 31,
1996, the Company had approximately $2,613,000 of net deferred tax assets, which
represents  credits that are more likely than not to be realized against taxable
income  of  future  years.  The  amount of net  deferred  tax  asset  considered
realizable,  however,  could be reduced in the near term if  estimates of future
taxable income do not materialize.

No income tax provisions have been recognized for foreign tax  jurisdictions and
no income tax benefits have been  recognized for  subsidiary  losses outside the
domestic  consolidated  return  because  they are not expected to reverse in the
foreseeable future.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities for the six months ended June 30, 1997
was $3.8 million  compared to $3.3 million used in operations in the  comparable
period of 1996. The generation of cash flow from operations was primarily due to
a decrease in working  capital.  This decrease in working capital was the result
of $4.6 million in net  collections of trade  accounts  receivable and a reduced
investment in  inventories of $5.2 million,  partially  offset by a $1.5 million
reduction in trade accounts payable.  The decrease in working capital investment
was partially offset by a net loss before  depreciation and amortization of $4.0
million.

Net cash used in investing  activities was $2.2 million for the six months ended
June 30,  1997,  compared  to $0.9  million  for the same  period  in 1996.  The
increase was principally  related to capital  equipment  investments  related to
digital mammography.

Net cash used in financing activities for the six months ended June 30, 1997 was
$0.1 million,  compared to $3.7 million provided by financing activities for the
same period in 1996. The amount used in financing  activities for the six months
ended June 30, 1997 was  primarily  due to  repayments  of long-term  debt.  The
amount provided by financing during the comparable  period of 1996 was primarily
due to  borrowings  under the  Company's  line of credit,  which were related to
increased working capital requirements during the period.

                                       13

<PAGE>

As of June 30, 1997,  the Company had $5.1 million in cash and cash  equivalents
and working  capital of $31.7  million.  As of June 30, 1997, the Company had no
outstanding  borrowings  under any line of credit  arrangements.  The Company is
currently negotiating a working capital line of credit. The borrowings under the
line of credit are expected to be secured by accounts receivable,  inventory and
fixed  assets and to be subject to  borrowing  base  restrictions.  The  Company
expects its  long-term  liquidity  needs to be satisfied  principally  from cash
flows  generated  from  operations.  The Company  believes  that its  short-term
liquidity  needs can be satisfied  through cash  provided  from  operations  and
current cash and cash equivalent balances if a working capital line of credit is
not finalized or finalization is delayed.

                                       14

<PAGE>

                           PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:

(a)  EXHIBITS

               Exhibits filed with this report:

               EXHIBIT NO.                                  DESCRIPTION

                     27                              Financial Data Schedule

(b)  REPORTS ON FORM 8-K

               None



                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly caused this  Quarterly  Report on Form 10-Q for the quarter
ended June 30, 1997 to be signed on its behalf by the undersigned thereunto duly
authorized.



                                                 FISCHER IMAGING CORPORATION


                                                 /S/ WILLIAM C. FEE
                                                 William C. Fee
                                                 Vice President  /
                                                 Chief Accounting Officer
                                                 (Principal  Accounting Officer)


August 6, 1997

                                       15

<PAGE>

                                  EXHIBIT INDEX


EXHIBIT NO.                                             DESCRIPTION
    27                                                  Financial Data Schedule





                                                                    EXHIBIT 27