<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                 ____________

                                  FORM 10-K

(Mark One) 
             __X__Annual Report Pursuant to Section 13 or 15(d) of
                the Securities Exchange Act of 1934 (Fee Required)
                  for the fiscal year ended September 30, 1996
                                      or
             _____Transition Report Pursuant to Section 13 or 15(d) of
               the Securities Exchange Act of 1934 (No Fee Required)
                     for the transition period from_____to_____

Commission File No. 0-8836

                              NUCLEAR METALS, INC.
              (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

MASSACHUSETTS                                                  04-2506761
(STATE OR OTHER JURISDICTION OF                             (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION                              IDENTIFICATION NO.)

2229 Main Street, 
CONCORD, MASSACHUSETTS                                               01742
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                           (ZIP CODE)

                                 (508) 369-5410
               (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

    NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                  6,000,000 SHARES OF COMMON STOCK ($.10 PAR VALUE)
                                (TITLE OF CLASS)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
    Yes__X__  No____

Indicate by check mark if the disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in a definitive proxy or information
statement incorporated in Part III of this Form 10-K or any amendments to this
Form 10-K. _____

   
The aggregate market value of the Common Stock of the Registrant held by non-
affiliates was approximately $14,070,618 as of December 13, 1996.
    

As of December 13, 1996, there were issued and outstanding 2,392,014 shares of
the Registrant's Common Stock, $.10 par value.
                                __________________

DOCUMENTS INCORPORATED BY REFERENCE

(1) Registrant's Annual Report to Stockholders for the fiscal year ended 
September 30, 1996 (Items 5,6,7,8 and 14)

<PAGE>

                               NUCLEAR METALS, INC.
                       Securities and Exchange Commission

Item Numbers and Description                                           PAGE
----------------------------                                           ----
                                     PART I

ITEM 1.  Business                                                         3

ITEM 2.  Properties                                                      21

ITEM 3.  Legal Proceedings                                               22

ITEM 4.  Submission of Matters to a Vote of Security Holders             22


                                    PART II

ITEM 5.  Market for the Registrant's Common Equity                       23
  and Related Stockholder Matters

ITEM 6. Selected Financial Data                                          24

ITEM 7. Management's Discussion and Analysis of Financial                24
  Condition and Results of Operations

ITEM 8. Financial Statements and Supplementary Data                      24

ITEM 9. Changes in and Disagreements with Accountants                    24
  on Accounting and Financial Disclosure

                                    PART III

ITEM 10. Directors and Executive Officers of the Registrant              25

ITEM 11. Executive Compensation                                          27

ITEM 12. Security Ownership of Certain Beneficial Owners                 36
  and Management

ITEM 13. Certain Relationships and Related Transactions                  38

                                    PART IV

ITEM 14. Exhibits, Financial Statement Schedule and Reports              39
  on Form 8-K

SIGNATURES                                                               43

INDEX TO AUDITORS REPORT AND FINANCIAL STATEMENT SCHEDULE                45

   
Inasmuch as the calculation of shares of the registrant's voting stock held by 
non-affiliates requires a calculation of the number of shares held by 
affiliates, such figure, as shown on the cover page hereof, represents the 
registrant's best good faith estimate for purposes of this annual report on 
Form 10-K, and the registrant disclaims that such figure is binding for any 
other purpose.  The closing price of the Company's Common Stock as reported by 
NASDAQ for trading on December 13, 1996 was $18.00.  All outstanding shares 
beneficially owned by executive officers and directors of the registrant or by 
any shareholder beneficially owning more than 5% of registrant's common stock, 
as disclosed herein, were considered solely for purposes of this disclosure to 
be held by affiliates.
    

                                       2

<PAGE>

                                     PART I


ITEM 1.  BUSINESS

GENERAL 

     The Company is engaged in manufacturing a wide variety of 
specialty metal products using sophisticated metallurgical technology and 
metalworking processes.  The Company operates in three industry segments: (1) 
uranium services and recycling of low-level contaminated steel; (2) 
fabrication of a large assortment of specialty metal products using foundry, 
extrusion, and machining capabilities; including the manufacture of 
high-purity, spherically shaped metal powders; and (3) manufacture of 
depleted uranium penetrators.  

   
The Company participates in the uranium services and recycling 
industry segment primarily through its wholly-owned subsidiary, Carolina 
Metals, Inc. ("CMI") located in Barnwell, South Carolina. The uranium 
services and recycling segment of the Company's market segments include: (1) 
the manufacture of uranium tetrafluoride (UF(4)) and depleted uranium metal 
through chemical conversion processes; and (2) the recycling of various 
metals from decommissioned nuclear sites.  (SEE "INDUSTRY SEGMENT 
INFORMATION," elsewhere herein)
    

     As of September 30, 1996 the Company had 190 employees.

                                       3

<PAGE>

INDUSTRY SEGMENT FINANCIAL INFORMATION

     The following table sets forth certain information regarding the 
revenue, operating profit and identifiable assets attributable to the three 
industry segments in which the Company operates.

   
                                                    YEAR ENDED


                                        Sept. 30,     Sept. 30,    Sept. 30,
                                          1996          1995          1994 
                                          ----          ----          ----
                                                   (In Thousands)

Net Sales and Contract Revenues: 
  Uranium Services & Recycle          $   6,189      $   4,969     $   4,752
  Specialty Products                     13,730         12,102          7,284
  Depleted Uranium Penetrators            8,775          1,714          6,968

Operating Profit(Loss):
  Uranium Services & Recycle          $  (2,700)     $    (996)    $   (5,409)
  Specialty Products                      1,432           (341)          (162)
  Depleted Uranium Penetrators             (942)          (237)        (5,033)

Identifiable Assets:
  Uranium Services & Recycle          $  13,749      $  16,609     $   16,772
  Specialty Products                      6,195          5,140          5,646
  Depleted Uranium Penetrators            8,441         12,158          9,863

    
See Note 14 of Notes to Consolidated Financial Statements.
__________________________________________

   
     The Company does not have any foreign operations.  The Company does have 
export sales which accounted for 28% of net sales for the most recent fiscal 
year ended September 30, 1996.  In the prior two fiscal years, 1995 and 1994, 
export sales were 33% and 37%, respectively.
    

     The following is a general description of the Company's three business 
segments.  For additional information concerning developments in these 
business segments during fiscal 1996, reference is made to pages 4 through 11 
of the Company's 1996 Annual Report, which is incorporated herein by 
reference and is included as Exhibit 13.

                                       4

<PAGE>

URANIUM SERVICES & RECYCLE

     The Company's Uranium Services and Recycle business segment includes the
manufacture of depleted uranium and of uranium tetrafluoride, the recycle of
various low level radioactive metals, the production of DUCRETE-TM-, and the
supply of depleted uranium alloy material for use in United States Enrichment
Company's (USEC) Atomic Vapor Laser Isotope Separation (AVLIS) program.

Manufacture of Depleted Uranium
     A large-scale production contract from a foreign customer for depleted
uranium metal, produced at the CMI facility, was completed in 1996.

Recycle of Low Level Radioactive Metals
   
     The Company successfully completed a program in September, 1995 with 
Westinghouse Savannah River Company to demonstrate the beneficial reuse of 
contaminated stainless steel from the Department of Energy (DoE). The program 
demonstrated the technical feasibility and economic soundness of recycling 
radioactively contaminated steel into storage drums and boxes for containment 
of various radioactive wastes at DoE sites.  This pilot program is 
significant due to the large number of facilities within the DoE that were 
engaged in production of nuclear materials for our national defense that have 
substantial quantities of contaminated stainless steel that would benefit 
from the beneficial reuse program. These facilities contain millions of tons 
of carbon steel and stainless steel in the form of structural components and 
various types of processing equipment.  Through beneficial reuse of 
contaminated steel scrap, the DoE will be able to reduce the volume of 
low-level radioactive waste in a cost-effective manner.  In addition to the 
DoE facilities, it is estimated that an additional several million tons of 
low-level contaminated steel will be generated as a result of decommissioning 
the more than 100 currently operating commercial nuclear power plants over 
the next 30 years.  The Company continues to pursue additional contracts in 
this product area.
    
     During fiscal 1996, the Company teamed with ALARON Corporation in Cayce, 
SC to offer services to remelt slightly contaminated steel at the Company's 
CMI location.  The resultant metal is used in shielding applications through 
an interlocking shield called the RAM-LOC-TM- shielding block.  Radioactively 
contaminated steel remelt services are offered at only two other facilities 
in the United States.

Production of  Ducrete-TM- 
     The Company has licensed the production rights for a new product known 
as DUCRETE-TM-.  DUCRETE-TM- shielding was developed by the Idaho National 
Engineering Laboratory as a potential shielding for spent fuel and high level 
radioactive waste casks.  DUCRETE-TM- is a uranium oxide aggregate that is 
combined 

                                       5

<PAGE>

with concrete to form a stable and economical shielding.  The Company is 
actively pursuing the DoE to convert its 55,000 metric tons of Uranium 
Hexaflouride into Depleted Uranium aggregate for DUCRETE shielding 
production.  

Supply of Depleted Uranium Alloy

      The Company supplies Depleted Uranium (DU) alloy material to the USEC 
for use as Atomic Vapor Laser Isotope Separation (AVLIS) feedstock material.  
AVLIS is expected to replace the current gaseous diffusion process for 
separating the fissionable isotope, U235, from natural uranium within the 
next ten years.  The Company has offered conversion services to the USEC for 
converting Depleted Uranium Hexaflouride (UF(6)) to Uranium Tetraflouride 
(UF(4)).  This work would be performed at the Company's CMI facility.  The 
Company believes that USEC has a need for conversion of approximately 15-20 
million pounds annually.

   
     The Company continues to be the primary supplier of AVLIS feedstock 
material. However, other companies are attempting to compete for future 
business.  The Company's South Carolina facility is the country's only active 
facility for converting UF6 to UF4.
    

SPECIALTY METAL PRODUCTS

   
     The Company has several specialty metal products, including: beryllium
products; specialty, medical, and aerospace powders; and a variety of advanced
metal products and services for aerospace, energy, and commercial applications.
    

Beryllium Products
   
     The Company completed major development activities to fully utilize its 
patented Beralcast-Registered Trademark- investment cast beryllium aluminum 
alloy for production applications.  Beralcast-Registered Trademark-, a 
registered trademark, is a patented engineering material used in electronic 
and secondary structural applications for advanced missiles, helicopters, and 
a variety of other aerospace and avionics applications.  Cost and weight 
pressures on today's design engineers demand a transition to lightweight, 
strong, and high stiffness materials such as NMI's patented 
Beralcast-Registered Trademark-.  The alloy offers 3 1/2 times the stiffness 
of aluminum with 22% less weight and is investment castable to net and near 
net shape.  Lockheed Martin Corporation continues to view NMI's 
Beralcast-Registered Trademark- hardware for the Electro Optic Sensor System 
(EOSS) as the highest priority for provision of Comanche program funding.  
The Company was awarded Lockheed Martin's Small Business of the Year Award 
for 1995 based on the Company's successes in the Beralcast product area.
    
     High performance defense applications for Beralcast-Registered Trademark-
where cost premiums are permissible include: the Comanche (Advanced Attack
Helicopter), the F-22 (Advanced Tactical Fighter), the PAC-3 (the updated
Patriot missile), the French 

                                       6

<PAGE>

Rafael (Advanced Fighter Aircraft), and a number of other advanced design 
programs.  In addition, design engineers at various aerospace, computer, and 
electronic firms, are designing this new engineering material into emerging 
systems. Commercial uses for Beralcast-Registered Trademark- are expected to 
be introduced as production costs, which include the current high cost of 
beryllium input metal, are reduced.  The Company also continues to produce 
seamless beryllium tubes for satellite applications. Introduction of extruded 
Beralcast-Registered Trademark- tubing for satellites is a unique opportunity 
to supplant expensive graphite composites.  The Company's extrusion 
technology has been successfully demonstrated in the recent manufacture of 
tubing struts for the Comanche EOSS.

Advanced Metal Products and Services
     Highly-reliable bi-metallic tubes, manufactured by a proprietary NMI
process, are used by aerospace and nuclear companies to join dissimilar metals. 
Extruded tubes, bars, castings, and shapes of a variety of metals and alloys are
used as finished products or for further processing in a variety of industrial
applications. 

     The Company uses its large capacity for fabrication of depleted uranium 
components to produce shielding for cancer therapy units, Industrial 
Radiography, and Commercial/Government Nuclear applications. The Company also 
recycles DU armor scrap for remelt into rolling slabs for the Amy's M1A2 Main 
Battle Tank Program.

Metal Powders
     The Company manufactures metal powders by proprietary processes called the
Rotating Electrode Process-TM- (REP) and the Plasma Rotating Electrode Process-
TM-  (PREP), which produce spherical metal particles within a relatively
controllable size range.

     The metal powders produced by the Company include steel, titanium alloy and
several nickel and cobalt-base alloys generally known in the industry as
specialty powders.

     The principal markets for the Company's metal powders are medical
applications (titanium and cobalt-based alloy powders), which use the powder as
a porous coating on medical prostheses, and original equipment manufacturers
(steel, titanium alloy and specialty powders), which fabricate metal parts from
the powder through various processes.  In addition, the Company continues to
produce steel powders for the photocopy industry, and as a carrier for toner in
copy machines and high-performance laser printers.

     Management believes that the metal powders produced by its manufacturing
processes offer significant advantages for certain product applications compared
with metal powders produced by other processes.  In particular, the processes
produces inherently "cleaner" powders, more uniformly spherical particles and a

                                       7

<PAGE>

higher percentage of particles within the desired size range from a given amount
of raw material.

     Management believes that the markets for titanium alloy and specialty
powders represent significant business opportunities for the Company's powder
making capability, especially under the Government's Technology Reinvestment
Program.  This program is designed to assist defense contractors with
transitioning their products for commercial use by funding fifty percent (50%)
of the cost of transition.

     Key competitive factors in the metal powders market are price and the 
ability to meet exact dimensional, metallurgical and other specifications.  
The steel powder marketed by the Company for photocopy applications competes 
with powders produced by larger manufacturers.  The Company believes that the 
quality of its powder used in the photocopy processes helps to offset any 
price advantage that may exist for competing powders in this price sensitive 
market.  

     The principal raw material for the Company's steel powder is cold-rolled 
steel bars, which are readily available.  Other metal powders are 
manufactured to customer specifications, and the metals for these powders are 
generally available for purchase in job lots from specialty metal suppliers.

     The Company holds three U.S. patents relating to developments in 
Rotating Electrode Process production equipment, which provide patent rights 
through the year 2001.  These patents also are filed and effective in the 
principal industrialized European countries, Canada, Israel and Japan.  
Management believes that, although the original patent on the Rotating 
Electrode Process machine expired in July 1980, the development patents 
continue to benefit the Company's competitive position in the Metal Powders 
market.  It is also the opinion of management that the technical expertise 
which has evolved from the development and manufacture of metal powders is of 
equal importance in maintaining the Company's competitive position.

DEPLETED URANIUM PENETRATORS 

          The Company believes it is a technological leader in the 
manufacture of depleted uranium penetrators.  Depleted uranium (DU) is a 
dense, heavy metal that is 68% heavier than lead.  Because of its density and 
workability, DU is an effective low-cost material for anti-armor ammunition 
and is used in numerous United States Government and foreign government 
weapons systems.  DU is a low-level radioactive material which is a 
by-product of the production of enriched uranium for nuclear fuel and 
weapons.  

                                       8

<PAGE>

   
     The Company is one of two domestic DU penetrator manufacturers.  
Competition to supply penetrators is price sensitive.  The principal DU 
products manufactured by the Company, referred to as penetrators, have 
application in various military gun systems.  The Company generally sells 
penetrators directly to prime ammunition contractors.  The U.S. Government 
has funded and owns a portion of the manufacturing machinery and equipment 
used by the Company for producing penetrators.  
    

     In fiscal 1995, the Company was awarded an M829A2 penetrator production 
contract with options extending production to the year 1999. This contract is 
subject to appropriations by the Government.  The Company is currently in 
production on the second option of this contract.  Management strongly 
believes the Government will exercise the remaining options on the contract.  
The Company will continue to pursue both domestic and foreign military 
depleted uranium penetrator production requirements.  

   
     The Company believes that foreign military sales of the U.S. ABRAMS tank 
could result in additional foreign military requirements for DU penetrators 
in future fiscal years.  Additionally, the Company received a purchase order 
for DU products from a UK customer to support its UK based manufacture of 
tank ammunition containing DU penetrators during December, 1996.
    

SIGNIFICANT CUSTOMERS

     Olin Corporation is a significant customer of the Company's Depleted 
Uranium Penetrator segment.  In fiscal 1996, sales to Olin accounted for 20% 
of net sales.  The Company currently is under contract to provide Olin with 
120mm penetrators for the U.S. Army's ABRAMS Tank program with options 
extending another three years.  If Olin were lost as a customer, this would 
have a material adverse effect on the Company. 

     Lockheed Martin Corporation (LMC) is a significant customer of the 
Company's Specialty Products segment.  In fiscal 1996, sales to LMC accounted 
for 16% of sales.  The Company is currently under several contracts with LMC 
to provide Beralcast-Registered Trademark- hardware for the Comanche 
Helicopter Program.   The loss of LMC as a customer would have a material 
adverse effect on the Company.

   
     Cogema, of France, is a significant customer of the Company's Uranium 
Services & Recycle segment.  In fiscal 1996, sales to Cogema accounted for 
14% of net sales.  In March of 1996, the Company completed its multi-year 
contract to provide Cogema with depleted uranium.  The loss of Cogema as a 
customer has had a 
    
                                       9

<PAGE>

   
material adverse effect of the Company's Uranium Services & Recycle segment. 
(See "Management's Discussion and Analysis of Operations", pages 16-19, in 
the Registrant's 1996 Annual Report to Stockholders, which is included in 
this Report as Exhibit 13)
    

     Royal Ordnance, U.K. defense contractor, is also a significant customer 
of the Company's Depleted Uranium Penetrator segment.  In fiscal 1996, sales 
to Royal Ordnance accounted for 11% of net sales.  The Company has a purchase 
order from Royal Ordnance for the purchase of $8.5 million of penetrator 
blanks.  If Royal Ordnance were lost as a customer, this would have a 
material adverse effect on the Company.

     Lockheed Idaho Technology Company (LITCO) is another significant 
customer of the Company's Specialty Metals Products segment.  In fiscal 1996, 
sales to LITCO accounted for 4% of net sales (See Note 2 of Notes to 
Consolidated Financial Statements).  The Company currently is under contract 
with Lockheed Idaho Technology Company to produce, from furnished DU recycle 
metal, DU castings for the U.S. Army's heavy armor tank program.  This 
contract continues to have options for several additional years.  The loss of 
LITCO as a customer would have a material adverse effect on the Company.

MARKETING

   
     The Company relies on a variety of marketing strategies including 
advertising and direct sales.  Technical papers given at industry symposia, 
presented by both NMI and in conjunction with customers, are also used as 
marketing vehicles for the Company's advanced metal products and services. 
Strategic alliances are being developed with several key customers to 
strengthen the Company's customer and product base into the future and to 
reduce costs through joint research and development and marketing efforts.
    
   
     Understanding the importance of Design-To-Cost principles, especially 
those of Lockheed Martin Corporation, is tantamount to strategic teaming with 
our Beralcast-Registered Trademark- customers.  Concentrated efforts on cost 
reduction in the form of Concurrent Engineering, low cost Beryllium input 
metal production, facility expansion, and other efforts, add value for future 
sales volumes.  NMI has introduced Nucast, our Beralcast-Registered 
Trademark-teammate, to these cost reduction ideas which will form the basis 
for improved cost competitiveness in the future.  Direct marketing efforts 
are increasing.
    
     The Company is committed to expanding its product and customer base for
metal powders.  Market demands for fine metal powders, for re-consolidation or
incorporation into metal matrix composites, are on the rise and we are
positioning 

                                      10

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ourselves to exploit these opportunities. Novel product requirements for our 
advanced metal products and services will continue to receive the utmost 
attention for expansion of our product base.

     Uranium Services and Recycling activities are being directly marketed 
out of the Company's Oak Ridge, Tennessee and Idaho Falls, Idaho offices.  
Efforts to enhance the Company's reputation as a supplier with high value 
products are being strengthened through improved service, added advertising 
and increased presence in the marketplace. 



                                      11

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BACKLOG

     The following table sets forth certain information with respect to the
backlog of the Company's business segments at September 30, 1996 and September
30, 1995 including the portions thereof represented by orders from the Company's
principal customers, COGEMA, Lockheed Martin, Lockheed Idaho and Olin
Corporation.  The backlog for the Company is affected by the timing of orders
from these customers.  The Company believes all orders in backlog are firm.  

                                                 1996              1995
                                                 ----              ----
                                                     (In Thousands)

Uranium Services & Recycle
  COGEMA                                       $    --           $  4,262
  Other                                          1,827                 84
                                                ------             ------
    Total                                        1,827             4,346 
                                                ------             ------

Specialty Metal Product
  Lockheed Martin                              $ 4,664            $ 5,951
  Lockheed Idaho                                 1,970              1,053
  Other                                          5,868              5,052
                                                ------             ------
    Total                                       12,502             12,056
                                                ------             ------

Depleted Uranium Penetrators
  Olin Corp.                                     8,738             14,299
  Other                                            181                  8
                                                ------             ------
    Total                                        8,919             14,307
                                                ------             ------
  Company Total                                $23,248            $30,709
                                                ======             ======

     A significant portion of the Company's business is dependent on the 
award of contracts or subcontracts for the supply of products and materials 
to governmental departments and agencies.  Payments to the Company of all or 
a portion of the amounts called for under such contracts or subcontracts, is 
often subject to legislative funding appropriations, government agency 
purchasing requirements and other conditions and factors beyond the Company's 
control. Accordingly, the Company's performance under such contracts may be 
delayed or may not commence at all, in which case the payments thereunder may 
be recognized later than anticipated at the time of the contract award or not 
at all in cases in which the Company is not called upon to perform.  As a 
result, the timing and amount of revenues under such government contracts is 
uncertain and subject to change, which may result in fluctuations in the 
Company's operating results and cash flows.

                                      12

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RESEARCH AND DEVELOPMENT ACTIVITIES

   
     The Company engages in research and development activities for 
departments and agencies of the U.S. Government and commercial customers.  
During the last fiscal year, research has involved many product areas. The  
highlights of R&D activities in the uranium services & recycle product 
segment include recycling processes for radioactively contaminated steel 
scrap, uranium production technology for AVLIS feedstock, removal of uranium 
from MgF(2) slag, conversion of UF(4) to uranium oxide, and the manufacture 
of Ducrete as a means of incorporating depleted uranium oxide aggregate in a 
cement matrix to make shielded concrete structures. Activities in the 
Specialty Metal Products segment include extensive mechanical property 
characterization of the Company's patented Beralcast-TM- alloys to establish 
S basis allowable for inclusion in MIL Handbook 5, an alternate casting and 
forming process for manufacture of Beralcast-TM- alloys, and developing a 
method for producing fine metal powders.  A portion of the research and 
product development efforts is performed through funded contracts.  
    

   
     The Company also funds certain research and development activities, and 
funds other work through cost partnership arrangements with selected customers 
where there is potential for utilizing proprietary technology or specialized 
resources not directly available to the Company. Internal research and 
development funding has the objective of improving manufacturing techniques and 
developing new products.  The Company employs a staff of five Ph.D. 
technologists with backgrounds in chemistry, mechanical and metallurgical 
engineering to conduct research and new product development.  In addition, the 
Company added to the R&D staff a former Government scientist who is the 
inventor and patent holder for its DucreteTM technology. The cost for 
Company-sponsored research and development activities was $876,000 in fiscal 
1996 and $439,000 in fiscal 1995.  Total revenues from customer-funded research 
and development were $1,812,000 in fiscal 1996 and $557,000 in fiscal 1995.  
These revenues are included in the revenues of the industry segment to which 
the research and development relates.
    

ENVIRONMENTAL, SAFETY AND REGULATORY MATTERS

IN GENERAL
     Two of the materials regularly processed by the Company, depleted uranium
and beryllium, have characteristics considered to be health or safety hazards by
various federal, state or local regulatory agencies.  Processing of these
materials 

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<PAGE>

requires a high level of safety consciousness, personnel monitoring devices 
and special equipment.  Depleted uranium is a low-level radioactive material, 
and the Company is subject to regulation by the United States Nuclear 
Regulatory Commission (NRC).  Depleted uranium in the finely divided state, 
such as grinding dust or machine turnings, is combustible at room temperature 
and requires special handling for safe operations and disposal of process 
wastes. Beryllium is known to cause lung disease following significant 
exposure by inhalation of airborne particles.  Processing this material 
requires use of extensive ventilation and dust collecting systems.  
Management believes that the experience gained in its many years of working 
with these metals has resulted in capabilities for dealing effectively with 
their special characteristics.

   
     The presence and use in the Company's operations of materials with 
hazardous characteristics subjects the Company to regulation and scrutiny by 
various governmental agencies.  Management believes that the Company is 
presently in compliance in all material respects with existing federal, state 
and local regulations and has no knowledge of any threatened actions against 
the Company for violations of any such laws, statutes or regulations, except 
as described below under "Concord Site Remediation and Decommissioning 
Planning requirements" and in Item 3 below.  However, the potential effects 
of evolving legislation and regulations affecting the Company's business 
cannot be predicted.
    

   
     In the process of manufacturing depleted uranium products, the Company 
generates small amounts of low-level radioactive waste materials that must be 
disposed of at sites licensed by federal, state, and local governments. With 
the closing of the Barnwell, South Carolina, low-level radioactive waste 
repository to out-of-region generators in July 1994, the Company began 
storing waste on site in Concord and Barnwell.  Interim storage is permitted 
under the Company's NRC license. At present, the Barnwell repository remains 
available  for use by the Company's Carolina Metals, Inc. facility.  The 
Company has made provision to accommodate an extended period of interim 
storage of waste within existing buildings in Concord as the state government 
works toward a regional solution.  At the same time, the Company has made 
significant progress in developing and instituting alternatives to disposal 
of its waste.  The Company intends to continue the development of 
technologies and processes aimed at eliminating the generation of waste 
materials associated with its manufacturing process.
    

     For a number of years, ending in 1985, the Company deposited spent acid 
and associated depleted uranium waste and other residual materials by 
neutralizing with lime and discharging the neutralized mixture to a holding 
basin on its premises in Concord, Massachusetts.  In 1986 the holding basin 
was covered with Hypalon, an impervious material used to prevent rain and 
surface run-off water

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<PAGE>

   
from leaching through the holding basin.  The Company now uses a proprietary 
"closed loop" process that it developed to discontinue such discharges.  The 
Company believes that both practices were and are in compliance with all 
applicable regulations.  For a discussion of the status of remediation of the 
holding basin at the Company's Concord facility, see "Concord Site Remediation 
and Decommissioning Planning Requirements" elsewhere herein.
    


                                      15

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CONCORD SITE REMEDIATION AND DECOMMISSIONING PLANNING REQUIREMENTS
    

   
The Company is required to maintain certain licenses issued by the United 
States Nuclear Regulatory Commission ("NRC") and the South Carolina 
Department of Health and Environmental Control ("DHEC") in order to possess 
and process depleted uranium materials at its facilities in Massachusetts and 
South Carolina, respectively. Under applicable licensing regulations 
pertaining to decommissioning and disposal of certain hazardous materials 
("D&D") at licensed sites, the Company submitted to the NRC a Decommissioning 
Funding Plan ("DFP") to provide for possible future decommissioning of its 
Concord Facility, at an estimated cost of $11.7 million.  (This revised 
estimate is approximately $2 million lower than the original estimate because 
of lower than expected costs of decontamination resulting from utilization of 
the Company's expanded capabilities for metal melt at its CMI facility.) The 
Company is also required to provide financial assurance for such 
decommissioning pursuant to applicable regulations.  The Company has also 
recently submitted to DHEC a DFP for the possible future decommissioning of 
its CMI facility, at an estimated cost of $2.8 million and is also required 
to provide financial assurances for decommissioning this facility.
    

     Substantially all of the depleted uranium materials to which the DFP 
requirements apply were processed by the Company for the United States 
Government.  Based on the terms of certain contracts that the Company entered 
into with the United States Government to process such depleted uranium 
materials, the Company believes that such materials continue to be owned by 
the United States Government and that the United States Government is 
obligated, under applicable law, to pay for its percentage of eventual D&D.  
The Company's 

                                      16

<PAGE>

DFP's reflect its position that it is obligated to provide financial 
assurance only with respect to the portion of the materials which are 
attributable to the Company's commercial production for parties other than 
the United States Government and that this obligation has been satisfied by a 
letter of credit which have been issued by the Company's bank and restricted 
cash held in trust by the Company's bank support the Company's D&D 
obligations for each of its two facilities.

   
     The Company had requested partial exemption from the NRC for the 
regulatory D&D financial assurances requirements as they pertain to 
Government owned materials.  By letter dated July 16, 1996, the NRC's 
Division of Nuclear Materials Safety (Region I) (the "Division") denied the 
Company's request for partial exemption from certain aspects of the D&D 
financial assurances and directed that, within 60 days of the Division's 
letter, the Company provide satisfactory financial assurances from either the 
Company or Government sources.  In its letter, the Division indicated that it 
will accept, as a satisfactory assurance, a Statement of Intent ("SOI") in 
compliance with 10 CFR 40.36(e)(4) from the United States Army or another 
Government agency to the effect that such agency intends to fund any costs 
for which the Company has not directly provided financial assurances, subject 
to public appropriation of required funds.  In its letter, the Division 
indicated that failure to meet the NRC's requirements by September 14, 1996, 
could result in enforcement action, possibly in the form of a civil penalty, 
or by license modification, suspension or revocation.  Based on Memorandum of 
Decision (see next paragraph) such an action would have had the effect of 
preventing the Company from fulfilling its obligations to a substantial 
portion of its customer base and, accordingly, would have had a material and 
adverse impact on the Company's results of operations and financial position.
    
   
     The United States Army, in a Memorandum of Decision dated September 13, 
1996, determined pursuant to Public Law 85-804, that it should fund 
remediation of the Concord holding basin site as well as D&D related to the 
Concord facility, based in part on the Army's determination that the 
Company's activities are essential to the national defense.  The Army's 
Memorandum of Decision contained certain limits on funding of the holding 
basin remediation based upon the Company's current estimates of future costs, 
which are subject to change based upon a number of factors, such as the 
timing of the actual remediation and actual costs at the time of completion 
of the remediation. The Company remains comfortable with its current 
estimates with respect to remediation of the Concord site assuming 
remediation as planned. In addition, the remediation of the holding basin is 
subject to the usual government appropriation process.  As a result of the 
decision, the Company has reversed a previously established $3.4 million 
reserve for the holding basin. D&D costs for the Concord facility are to be 
awarded to the Company as part of ongoing contracts, but the Army has 
provided written assurances (also subject to funding 
    
                                      17

<PAGE>

appropriations) of its intention to provide funding for D&D costs at the 
Concord facility under future contracts or, in the event that no future 
contracts were awarded (which the Army has indicated is unlikely in view of 
its current plans), under an existing contract.  The actual remediation will 
proceed pursuant to a modification of an existing government contract, the 
terms of which have not yet been determined but will presumably be consistent 
with the Memorandum of Decision.

     The Company believes that the Memorandum of Decision, together with 
correspondence from the Army clarifying its intent with respect to the same, 
should satisfy the NRC with respect to the sufficiency of the Company's DFP 
for the D&D requirements, although the NRC has not responded or taken action 
to allow renewal of the Company's license.  DHEC has not yet responded with 
respect to the DFP which the Company has submitted with respect to its South 
Carolina facility.  The Company believes that, in the event that DHEC 
requires assurances from the Army with respect to what the Company believes 
is the Army's share of the estimated potential cost of D&D at the CMI 
facility, the United States Army will respond in a manner which is consistent 
with the Memorandum of Decision regarding the Concord site.  The Company 
believes that its proportionate share of D&D costs for its CMI facility are 
adequately covered by the existing letter of credit which is currently in 
place to assure it D&D obligations.

   
     The Company has no assurances that the Army will accept responsibility 
for its share of the estimated cost of D&D at CMI which are directly 
resulting from production work under U.S. government contracts on government 
supplied materials. Also, the Company is currently the sole source to the US 
Army of certain products which are investment cast with the Company's 
patented beryllium aluminum alloy and which are vital to certain Army 
programs.  The Company also believes that its capabilities with respect to 
the conversion of UF(6)  gas to depleted uranium metal stock make it 
strategically important to any future depleted uranium production which may 
be required for US Army DU pentrators and tank armor (although current 
inventories appear sufficient to supply announced procurement needs).  The 
Company believes that its production capabilities may also be used to serve 
several Department of Energy needs for remediation of certain other 
environment hazards posed by the process of Nuclear power generation.  For 
these reasons, the Company believes that the interests of the United States 
Government would be best served by the Company's continued operation under 
its current NRC and DHEC licenses, but there can be no assurance that the 
various Governmental agencies which regulate NMI will permit the Company's 
continued operation under its licenses.
    
                                      18

<PAGE>

EXECUTIVE OFFICERS OF THE REGISTRANT
  The executive officers of the Company are:

NAME                       AGE    POSITION WITH THE COMPANY
----                       ---    -------------------------
George J. Matthews         66      Chairman of the Board of Directors,
                                    CEO and Treasurer
Robert E. Quinn            43      President 
Wilson B. Tuffin           65      Vice Chairman of the Board of Directors
Douglas F. Grotheer        38      Vice President, Engineering & Programs
William T. Nachtrab        43      Vice President, Technology
James M. Spiezio           48      Vice President, Finance & Administration
Frank J. Vumbaco           43      Vice President, Health/Safety
Bruce E. Zukauskas         46      Vice President, Operations

    The term of office for each executive officer of the Company is one year 
or until a successor is chosen and qualified.  The executive officers are 
elected by the directors at their first meeting following the annual meeting 
of stockholders.  There are no family relationships among the directors and 
executive officers.

GEORGE J. MATTHEWS has been Chairman of the Board of Directors since 1972.  
He is employed by Matthews Associates Limited, a Massachusetts corporation. 
Matthews Associates Limited is engaged in the business of investing in and 
providing management consultation and assistance to small and medium sized 
businesses.  Mr. Matthews devotes approximately 75% of his time to the 
Company's affairs.  Mr. Matthews was elected CEO and Treasurer on November 
30, 1994.

ROBERT E. QUINN was elected President of the Company on November 30, 1994. 
Prior to November 30, 1994 he held the position of  Vice President, Sales 
with the Company for over five years.

WILSON B. TUFFIN has been Vice Chairman of the Board of Directors since 
November 1994.  From 1972 to November 1994, he held the positions of 
President, Chief Executive Officer and Treasurer of the Company.

DOUGLAS F. GROTHEER has held the position of Vice President, Engineering and 
Programs since July 1994.  Prior to July 1994, he was Manager, Engineering 
and Programs for two years, and Manager, Ordnance Programs for more than 
three years.

                                      19

<PAGE>

WILLIAM T. NACHTRAB, PH.D. has held the position of Vice President, Technology
with the Company since May 1993.  Prior to May 1993 he was Manager, Research &
Development for the prior five years. 

JAMES M. SPIEZIO has been the Vice President, Finance & Administration since
October 1993.  Prior to October 1993, he was Controller, and prior to April
1989, he served as Manager of Business Planning.

FRANK J. VUMBACO has held the position of Vice President, Health/Safety with the
Company since November 1993.  Prior to November 1993, he was Manager of
Health/Safety for over five years. 

BRUCE E. ZUKAUSKAS has held the position of Vice President, Operations since
October 1994.  Prior to October 1994, he was Quality Manager for over five
years.

                                      20

<PAGE>

ITEM  2.  PROPERTIES
    The majority of the Company's activities are conducted at a Company-owned
site in Concord, Massachusetts.  The site comprises approximately 46.4 acres and
is improved by a steel and masonry building originally constructed in 1958 and
subsequently enlarged.  The building contains approximately 180,000 square feet
used for manufacturing activities, offices and warehousing. 

   
    During fiscal 1995 the Company sold its 15,000 square foot office 
building located in Acton, Massachusetts.  
    
   
    Carolina Metals, Inc., the Company's wholly-owned subsidiary, is located 
on 321 acres of land in Barnwell, South Carolina.  This 109,000 square foot 
facility houses two manufacturing units.  One unit provides the capability of 
converting chemical gas (UF(6)) to chemical salt (UF(4)).  The second unit 
houses a reduction process to convert chemical salt (UF(4)) to metallic 
depleted uranium. In December 1991, the Company completed a 70,000 square 
foot DU Recycle Technology Center adjacent to the manufacturing facility in 
Barnwell, S.C.  This facility provides available space for recovery and 
recycle of useful materials under CMI's license.  In addition, Carolina 
Metals, Inc. maintains a full scale analytical laboratory. For a discussion 
of the current underutilization of the CMI facility, see "Management's 
Discussion and Analysis of Operations" contained on page 12 of the Company's 
1996 Annual Report to Stockholders, which is incorporated herein by reference 
and included in this Report as Exhibit 13.
    


                                      21

<PAGE>

ITEM  3.  LEGAL PROCEEDINGS

   
    The Company is named as a Potentially Responsible Party  (PRP) in regard 
to the Maxey Flats, Kentucky, Superfund Site.  This site was used until 1977 
as a licensed and approved low level radioactive waste disposal site.  A 
committee of PRP's including the Company has submitted a remedial 
investigation and feasibility study report to the Environmental Protection 
Agency.  The agreement signed by the settling parties in July 1995, outlines 
the responsibilities of all parties and states that the PRP's will undertake 
the initial remedial phase (IRP) of the site remediation at an estimated cost 
of $60 million.  The Company's liability is not expected to exceed 
approximately $80,000 over 10 years.  For a discussion of proceedings related 
to the renewal of the Company's nuclear regulatory licenses, see Part I, Item 
1 "Business - Environmental, Safety and Regulatory Matters -- Concord Site 
Remediation and Decommissioning Planning Requirements," elsewhere herein.
    

ITEM 4.  SUBMISSION OF MATTERS TO  A VOTE OF SECURITY HOLDERS
    None

                                      22

<PAGE>

                                   PART II

ITEM  5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
   STOCKHOLDER MATTERS

    The information required by this item is incorporated by reference to the 
Section entitled "Common Stock Information" in the Registrant's 1996 Annual 
Report to Stockholders, which is included in this Report as Exhibit 13.

                                      23

<PAGE>

   
ITEM  6.  SELECTED FINANCIAL DATA
    The information required by this item is incorporated by reference to the 
section entitled "Selected Financial Data", pages 10 and 11, in the 
Registrant's 1996 Annual Report to Stockholders, which is included in this 
Report as Exhibit 13.
    

   
ITEM  7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
    The information required by this item is incorporated by reference to the 
section entitled "Management's Discussion and Analysis of Operations", pages 
12-15, in the Registrant's 1996 Annual Report to Stockholders, which is 
included in this Report as Exhibit 13.
    

ITEM  8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    The information required by this item is incorporated by reference to the 
Consolidated Financial Statements at September 30, 1996 and notes thereto in 
the Registrant's 1996 Annual Report to Stockholders, which is included in 
this Report as Exhibit 13.

ITEM  9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
   FINANCIAL DISCLOSURE
   None

                                      24


<PAGE>

                                  PART III

ITEM  10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

  Pursuant to General Instruction G(3) of Form 10-K and instruction 3 to Item 
401(b), the information required by this item concerning executive officers 
is set forth in Part I, Item 1 under the heading "Executive Officers of the 
Registrant".

  The following table sets forth certain information concerning directors of 
the Company.

<TABLE>
<CAPTION>

                                   Present Principal Employment
Name                   Age        and Prior Business Experience           Director Since
----                   ---        -----------------------------           --------------
<S>                    <C>        <C>                                     <C>
George J. Matthews     66         Chairman of the Board of directors           1972
                                  since 1972.  Until July 1978 and since
                                  December 1, 1994, also Treasurer of 
                                  the Company.  Chairman of Matthews
                                  Associates Limited, which is engaged
                                  in the business of investing in and
                                  providing management consulting and
                                  assistance to small and medium sized
                                  businesses, including the Company.

Robert E. Quinn        43         President of the Company since               1994
                                  December 1, 1994.  Prior to
                                  becoming President, served as Vice
                                  President, Sales for over five years.
                                  Elected as a Director on 
                                  November 17, 1994 to fill a vacancy
                                  created by the enlargement of the Board
                                  of Directors by vote of the Directors.

Wilson B. Tuffin       65         Vice Chairman since November 1994,           1972
                                  From 1972 to November 30, 1994, 
                                  President, Chief Executive Officer, 
                                  prior to 1978, also Treasurer of the 
                                  Company.
</TABLE>


                                              25

<PAGE>

<TABLE>
<CAPTION>

                                   Present Principal Employment
Name                   Age        and Prior Business Experience              Director Since
----                   ---        -----------------------------              --------------
<S>                    <C>        <C>                                         <C>
Kenneth A. Smith       60         Professor of Chemical Engineering at            1985
                                  Massachusetts Institute of Technology
                                  since 1971.

Frank H. Brenton       71         Principal of Frank H. Brenton Associates,       1986
                                  a business consulting firm.  From
                                  1984 to 1986, Chairman of the Board of
                                  Directors of Marshall's Incorporated,
                                  an off-price retailer and division of 
                                  Melville, Inc.

</TABLE>

INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES

  The Board of Directors met six times during the fiscal year ended September 
30, 1996.  There was no director who during the fiscal year attended fewer 
than 75 percent of the aggregate of all board meetings and all meetings of 
committees on which he served.
   
  The Board of Directors has an Audit Committee which is reconstituted at the 
first meeting of the Board following the annual meeting of stockholders.  The 
Audit Committee, which met three times during fiscal 1996, meets with the 
Company's independent auditors and principal financial personnel to review the 
scope and results of the annual audit and the Company's financial reports.  The 
Audit Committee also reviews the scope of audit and non-audit services performed
by the independent public accountants, and reviews the adequacy and 
effectiveness of internal accounting controls.  The present members of the Audit
Committee are Messrs. Brenton and Smith.
    
   
  The "disinterested" directors, for purposes for Rule 16b-3 under the 
Securities Exchange Act of 1934, Messrs. Brenton and Smith, acting as a Stock 
Option Committee, have the authority, subject to express provisions of the 
Company's Employee Stock Option Plan and Non-Qualified Stock Option Plan (the 
"Plans"): to determine the employees of the Company to receive options, the 
number of shares to be optioned, and the terms of the options granted; to 
construe and interpret the Plans and outstanding options; and to make all other 
determinations that they deem necessary and advisable for administering the 
Plans.  The  Board of 
    

                                    25

<PAGE>

Directors as a whole has corresponding authority with respect to options 
issued under the Directors' Stock Option Plan.

  The Board of Directors does not have standing committees on compensation or 
nominations.

DIRECTORS' COMPENSATION AND STOCK OPTION PLAN

  Each outside director of the Company receives an annual fee of $15,000.
   
  On November 20, 1995, the Board of Directors adopted a Director's Stock 
Option Plan (the "Plan") in order to enhance the Company's ability to attract 
and retain skilled and competent members of its Board of Directors.  Only 
outside (non-management) directors of the Company and its subsidiaries are 
eligible to receive options under the Plan, and the maximum number of shares 
as to which such directors' options may be granted is 35,000 shares (subject 
to adjustments for stock splits, stock dividends and the like).  Pursuant to 
the Plan, each director eligible to participate in the Plan, upon first 
election to office at the annual meeting of stockholders and for each 
subsequent period of three years of service, receives an option to purchase 
1,000 shares of Common Stock of the Company at an exercise price equal to 
fair market value on the date of grant.  Options granted under the Plan are 
exercisable for a period of ten years and vest over a three-year period.  No 
options were granted pursuant to the Plan during fiscal 1996.
    
  During fiscal year 1996, Matthews Associates Limited, of which Mr. Matthews 
is sole owner, received compensation from the Company in connection with 
consulting services provided to the company pursuant to a management 
agreement between the Company and Matthews Associates Limited.  See 
"Executive Compensation" and "Executive Agreements".


                                     26

<PAGE>

ITEM  11. EXECUTIVE COMPENSATION

  The following table and notes present the compensation provided by the 
Company during the last three fiscal years to its chief executive officer and 
the four most highly compensated executive officers of the Company (other 
than the chief executive officer) who were serving as executive officers at 
the Company's fiscal year end of September 30, 1996.

   
<TABLE>
<CAPTION>
                                                                                 
                                                               Other                Restricted   Securities
                                                              Annual                  Stock      Underlying      LTIP
    Name and                                                  Compen-                Award (s)    Options/      Payouts  Comp
Principal Position      Year (1)   Salary ($)   Bonus       sation($) (2)             $  -        SARs (#)       $   -   sation
------------------      --------   ----------   -----       -------------           ----------   ----------     -------  ------
<S>                     <C>        <C>          <C>         <C>                     <C>          <C>            <C>      <C>
Robert E. Quinn          1996       180,768       --             --                     --           --            --      --
President(3)             1995       151,673        200         35,000                   --          30,000         --      --
                         1994       131,000       --             --                     --           --            --      --

George J. Matthews(4)    1996       350,000       --             --                     --           --            --      --
Chairman of Board of     1995       350,000       --             --                     --           --            --      --
Directors, CEO and       1994       350,000       --             --                     --           --            --      --
Treasurer

Wilson B. Tuffin(5)      1996       270,979       --             --                     --           --            --      --
Vice Chairman of         1995       172,039      3,800           --                     --           --            --      --
Board of Directors       1994       210,000       --             --                     --           --            --      --
and Consultant

James M. Spiezio         1996       130,096       --             --                     --           --            --      --
Vice President,Finance   1995       113,270     10,830           --                     --           6,000         --      --
& Administration         1994       105,987       --             --                     --           2,500         --      --

William T. Nachtrab      1996       116,581       --             --                     --           --            --      --
Vice President,          1995       108,703     10,830           --                     --           6,000         --      --
Technology               1994       103,558       --             --                     --           --            --      --

</TABLE>
    

(1) The Company's fiscal year ends on September 30th of each year.

(2) Excludes perquisites in amounts less than the threshold level required 
    for reporting.

   
(3) Mr. Quinn's compensation for the fiscal year ended September 30, 1996 was 
    determined pursuant to his Employment Agreement. See "Executive 
    Agreements."
    

   
(4) Mr. Matthews is assigned as a consultant to the Company pursuant to a 
    management agreement between Matthews Associates Limited and the Company.
    All compensation under the agreement is paid by the Company to 
    Matthews Associates Limited. See "Executive Agreements.
    

                                    27

<PAGE>

   
(5) Mr. Tuffin's compensation for the fiscal year ended September 30, 1996 
    was determined pursuant to his Employment and Consulting Agreement. 
    See "Executive Agreements."
    

OPTION/SAR GRANTS IN LAST FISCAL YEAR
   
  There were no options granted to any of the named executive officers of the 
Company during fiscal year ended September 30, 1996.
    

                                            28

<PAGE>
   
    
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND 
FISCAL YEAR-END OPTION VALUES

     The following table sets forth information with respect to the exercise 
of options by the executive officers named in the Summary Compensation Table 
during the last fiscal year and unexercised options held as of the end of the 
fiscal year.
   
<TABLE>
<CAPTION>
                                                         Number of Securities        Value of Unexercised
                                                        Underlying Unexercised       In-the-Money Options
                                                         Options at FY-End (#)           at FY-End (2)  -
                                                        ----------------------       --------------------
                   Shares Acquired   Value 
Name                On Exercise(#)   Realized($)(1)  Exercisable  Unexercisable  Exercisable  Unexercisable
----               ---------------   --------------  -----------  -------------  -----------  -------------
<S>                <C>               <C>             <C>          <C>            <C>          <C>
Robert E. Quinn           0                 0           9,999         20,001           0            0
George J. Matthews        0                 0           5,333          6,667           0            0
Wilson B. Tuffin          0                 0           1,666          3,334           0            0
James M. Spiezio          0                 0           3,665          4,835           0            0
William T. Nachtrab       0                 0           3,665          4,835           0            0

</TABLE>
    
(1)  Value realized equals fair market value on the date of exercise, less the 
     exercise price, times the number of shares acquired, without deducting 
     taxes or commissions paid by employee.
   
(2)  Value of unexercised options equals fair market value of the shares 
     underlying in-the-money options at September 30, 1996 ($16.00 per share), 
     less the exercise price, times the number of options outstanding.  All
     such options were "out of the money" as of September 30, 1996.
    

                                      29
<PAGE>

PENSION PLAN TABLE

  The following table sets forth the aggregate annual benefit payable upon
retirement at normal retirement age for each level of renumeration specified at
the listed years of service. 


                                   Years of Service          -
                       ---------------------------------------
Renumeration             15  -     20  -    25  -   30 or More
------------           -------   -------  -------   ----------
$100,000                23,520    31,360   39,220     47,040
 150,000                38,520    51,360   64,200     77,040
 200,000                53,520    71,360   89,200    107,040
 300,000                83,520   111,360  139,200    167,040
 400,000               113,520   151,360  189,200    227,040
 500,000               143,520   191,360  239,200    287,040


  The Company has a defined benefit plan (the "Pension Plan") designed to 
provide retirement benefits for employees and ancillary benefits to their 
beneficiaries, joint annuitants and spouses.  All employees of the Company 
become participants in the Pension Plan after attaining the later of age 21 or 
a year of service with the Company.  The Pension Plan provides retirement 
benefits based on years of service and compensation.  An employee's benefits 
under the Pension Plan generally become fully vested after five years of 
service.  At normal retirement (the later of age 65 and five years of Plan 
participation), participants are entitled to a monthly benefit for the 
remainder of their life in an amount equal to one-twelfth of the sum of their 
"Annual Credits" for their last 30 years or lesser period of employment with 
the Company and its predecessors.  An employee's "Annual Credit" is 1.25% of 
the portion of his annual compensation that is subject to Social Security tax 
and two percent (2%) of the balance of his annual compensation.  Participants 
with five years of service are entitled to retirement at age 55, but the 
monthly benefit payable under the Pension Plan is reduced by 0.5% for each 
month that early retirement precedes normal retirement but not less than $100 
per month if the Participant has ten or more years of service.  The surviving 
spouse of a retiree under the Plan is entitled to receive benefits equal to 
one-half the amount the retiree has been receiving.  Alternative benefit 
payments that are equivalent to the benefit described above are also available 
to participants.  Benefits payable under the plan are not reduced by Social 
Security payments to the retiree. Amounts shown assume benefits commence at age 
65.  Benefit amounts shown are straight-life annuities.  The executive officers 
named in the Summary Compensation Table have the following years of credited 
service for pension plan purposes:  Robert E. 


                                      30
<PAGE>

Quinn-21 years; Wilson B. Tuffin-22 years; James M. Spiezio-11 years; and 
William T. Nachtrab-7 years.  On February 1, 1995, Mr. Tuffin began to receive 
benefit payments under the Plan.  Mr. Matthews does not participate in the 
Pension Plan.

                             EXECUTIVE AGREEMENTS

EMPLOYMENT AGREEMENT WITH MR. TUFFIN
   
  In November 1994, the Company entered into an employment and consulting 
agreement (the "Employment and Consulting Agreement") with Mr. Tuffin.  
Pursuant to the Employment and Consulting Agreement, Mr. Tuffin received 
initial compensation at the annual rate of $210,000 through January 1995, for
his service as an employee.  Effective February 1, 1995, Mr. Tuffin's 
relationship as an employee of the Company ended and he continued with the
Company as a consultant with an initial compensation at the annual rate of
$105,000, subject to such annual increases as the Board of Directors may from 
time to time determine.  The Employment and Consulting Agreement shall continue
in force until February 28, 1999.  During the term of the Employment and 
Consulting Agreement and for a period of two (2) years after its expiration, or 
the termination of Mr. Tuffin's employment with the Company, whichever occurs
later, Mr. Tuffin may not compete directly or indirectly with the Company within
the continental United States.  The Employment and Consulting Agreement amends 
and supersedes the employment agreement which Mr. Tuffin had previously entered 
into with the Company.
    
EMPLOYMENT AGREEMENT WITH MR. QUINN
   
  In February 1995, the Company entered into an employment agreement (the 
"Employment Agreement") with Mr. Quinn.  Pursuant to the Employment Agreement, 
Mr. Quinn received initial compensation at the annual rate of $156,000, subject 
to such annual increases and bonuses as the Board of Directors may from time to 
time determine.  The Employment Agreement shall continue in force for an initial
period of three (3) years, unless terminated by either party in accordance with 
its terms.  The Employment Agreement shall automatically continue for 
additional one-year periods thereafter unless either party gives written notice 
to the other on or before November 30th of any year of its or his intention to 
terminate the Employment Agreement as of the last day of November of the 
subsequent year.  During the term of the Employment Agreement and for a period 
of two (2) years after its expiration, or after the termination of Mr. Quinn's 
employment with the Company, whichever occurs later, Mr. Quinn may not compete 
directly or indirectly with the Company within the continental United States.
    
MANAGEMENT AGREEMENT WITH MATTHEWS ASSOCIATES LIMITED
   
  The company has entered into a management agreement with Matthews Associates 
Limited, a Massachusetts corporation ("MAL"), of which Mr. George J. Matthews, 
Director and Chairman of the Board of Directors of the Company, is sole owner. 
The agreement expires on February 28, 2002, subject to renewal thereafter from 
year to year unless either party by written notice prior to February 28th of 
any year elects to terminate the agreement upon the last day of February of the
third subsequent year, but not prior to 2002.  Pursuant to the agreement, MAL 
provides professional management services as a consultant to the Company through
a senior executive whose duties include (i) financial management, (ii) 
    

                                      31
<PAGE>

serving, subject to election, as a director, as Chairman of the Board of 
Directors and as an officer of the Company and (iii) marketing and other advice 
to the Company including placement and modification of financing and contact 
with major customers, suppliers and governmental agencies.  Mr. Matthews is the 
senior executive assigned to the Company under the agreement.  Under the 
management agreement, Mr. Matthews devotes approximately 30 hours per week to 
the Company.
   
  MAL was paid $350,000 by the Company in fiscal 1996 for services under the 
management agreement and is to be paid at the rate of $350,000 per annum for 
all services under the agreement.  The management agreement provides that the 
Company may terminate the agreement if a majority of the directors determines 
in good faith that the MAL representative has willfully refused to perform any 
services under the management agreement or has been convicted of a crime of 
moral turpitude, and in such event the right of MAL to all future payments 
under the agreement shall cease.  In the event of termination by MAL for "good 
reason" or in the event of termination by the Company for reasons other than 
those described above, the Company is obligated to pay to MAL all of the 
amounts due under the agreement for the remaining term.  In the event of 
termination by MAL without "good reason," the Company is obligated to continue 
to make payment to MAL for one year from the date of such termination.  
"Good reason" for termination by MAL consists of circumstances which, in the 
reasonable judgment of the MAL representative (Mr. Matthews), constitute a 
material reduction in job title, perquisites, duties, authority, amenities, 
benefits or responsibilities of the MAL representative or which require him to 
perform services more than 25 miles from the Company's Concord, Massachusetts 
facility without his consent. In the event of Mr. Matthews' death, the 
management agreement automatically terminates and the Company is obligated to 
continue to make payments to the estate of Mr. Matthews for the lesser of one 
year from such termination or the end of the scheduled term of the agreement.
    
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
   
  During the fiscal year ended September 30, 1996, the Board of Directors of 
the Company was responsible for establishing executive compensation (other than 
stock option compensation).  Messrs. Quinn and Matthews participated in 
deliberations of the Company's Board of Directors concerning executive officer 
compensation.  No executive officer of the Company served as a director or 
member of a compensation committee, or its equivalent, of another entity, one 
of whose executive officers served as director of the Company.
    
  NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS 


                                      32
<PAGE>

AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS, IN WHOLE OR IN PART, THE 
FOLLOWING REPORT ON COMPENSATION AND THE STOCK PERFORMANCE GRAPH CONTAINED 
ELSEWHERE HEREIN SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS 
NOR SHALL BE DEEMED TO BE SOLICITING MATERIAL OR DEEMED FILED WITH THE 
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS 
AMENDED, OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

         REPORT OF THE BOARD OF DIRECTORS AND STOCK OPTION COMMITTEE
                        ON EXECUTIVE COMPENSATION

  During the fiscal year ended September 30, 1996, the Board of Directors of 
the Company was responsible for establishing and administering the policies 
which govern annual compensation (other than stock option compensation) for the 
Company's executive officers.  The Stock Option Committee was responsible for 
considering stock option compensation for the Company's executive officers.

OVERVIEW
   
  The Board of Directors has historically established levels of executive 
compensation that provide for a base salary intended to allow the Company to 
hire, motivate and retain qualified executive officers.  From time to time, the 
Board has also, on occasion, approved annual cash incentive bonuses based on 
the Company's performance or on the performance of the executive in question.  
In fiscal 1996, the Board approved cash incentive bonuses to certain executive 
officers based on their performance.  From time to time, the Stock Option 
Committee also grants stock options to executive officers and key  employees in 
order to bring the stockholders' interests more sharply into the focus of  such 
officers and employees.
    
  The Board of Directors establishes the annual salary and bonus of each of the 
executive officers other than the Chief Executive Officer, based on the 
recommendations made by the Chief Executive Officer.  In determining the 
recommendations for salary and bonus for each of the other executive officers, 
the Chief Executive Officer considers each officer's individual performance' 
attainment


                                      33
<PAGE>

of individual goals and the contribution to the overall attainment of the 
Company's goals.

STOCK OPTIONS AND OTHER COMPENSATION
   
  Long-term incentive compensation for executive officers consists exclusively
of stock options granted under the Company's Stock Option Plans (the "Plans"). 
Executive officers as well as other key  employees of the Company participate in
the Plans.  The Company also believes that its Pension Plan is an attractive 
feature for all employees.
    

BASIS FOR THE COMPENSATION OF THE CHIEF EXECUTIVE OFFICER

  The compensation of Mr. Matthews, the Company's Chief Executive Officer 
during fiscal 1996, was determined pursuant to a management agreement between 
Matthews Associates Limited and the Company.  All compensation under the 
agreement is paid by the Company to Matthews Associates Limited.

                                       THE BOARD OF DIRECTORS

                                         George J. Matthews
                                          Robert E. Quinn
                                          Wilson B. Tuffin
                                          Kenneth A. Smith
                                          Frank H. Brenton

                                       STOCK OPTION COMMITTEE

                                          Kenneth A. Smith
                                          Frank H. Brenton


                                      34
<PAGE>

COMPARISON OF FIVE YEAR CUMULATIVE RETURN

  Set forth below is a line graph comparing the five-year cumulative total 
return of the Company's Common Stock against the cumulative total return of the 
NASDAQ Stock Market (U.S.) Index and the Dow Jones Aerospace and Defense Index. 
Cumulative total return is measured assuming an initial investment of $100 and 
reinvestment of dividends.

              COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN *
         AMONG NUCLEAR METALS, INC., THE NASDAQ STOCK MARKET-US INDEX
              AND THE DOW JONES AEROSPACE & DEFENSE INDEX

D O L L A R S

                          Sep-91   Sep-92   Sep-93   Sep-94   Sep-95   Sep-96
"Nuclear Metals, Inc."     100       94      104      330      191      278
NASDAQ Stock Market-US     100      112      147      148      204      243
D J Aerospace & Defense    100       92      126      149      237      331


* $100 invested on 09/30/91 in stock or index - including reinvestment of 
dividends.  Fiscal year ending September 30.


                                      35
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
   
  The following table sets forth certain information as of December 30, 1996 
with respect to the Common Stock of the Company owned or deemed beneficially 
owned as determined under the rules of the Securities and Exchange Commission, 
directly or indirectly, by each stockholder known to the Company to own 
beneficially more than 5% of the Company's Common Stock, by each director, by 
the executive officers named in the Summary Compensation Table elsewhere 
herein, and by all directors and executive officers of the Company and its 
subsidiaries as a group.  In accordance with Rule 13d-3 under the Securities 
Exchange Act of 1934, as amended, a person is deemed to be beneficial owner, 
for purposes of this table, of any shares of Common Stock of the Company, if he 
or she has or shares voting power or investment power with respect to such 
security or has the right to acquire beneficial ownership at any time within 60 
days of December 13, 1996.  As used herein "voting power" is the power to 
dispose of or direct the disposition of shares.  Except as indicated in the 
notes following the table below, each person named sole voting and investment 
power with respect to the shares listed as being beneficially owned by such 
person.
    
Name and address                     Beneficial           Percent of
of Beneficial Owner                 Ownership (1)       Common Stock (1)
-------------------                 -------------       ----------------
WIAF Investors Co.                   1,212,340(2)           49.52%
466 Arbuckle Avenue
Lawrence, NY 11516
    and
Melvin B. Chrein, M.D.
Meryl J. Chrein
Marshall J. Chrein
Michael Chrein
21 Copper Beech Lane
Lawrence, NY 11559
Charles Alpert
Joseph Alpert
   
George J. Matthews                     239,930(3)(4)         9.99%
Chairman of the Board of Directors,
Director and Consultant
c/o Matthews Associates Limited
100 Corporate Place
Peabody, MA 01960
    
   
Wilson B. Tuffin                       205,474(5)            8.58%
Vice Chairman and Director
23 Arlington Street
    

                                      36
<PAGE>

Acton, MA 01720
   
Robert E. Quinn                                 17,739(6)     *
President and Director
    
Kenneth A. Smith, Director                       3,000        *

Frank H. Brenton, Director                       3,000        *
   
James M. Spiezio                                 5,832(7)     *
Vice President, Finance and Administration
    
   
William T. Nachtrab                              5,832(7)     *
Vice President, Technology
    
   
All directors and executive officers           480,807(8)   19.87%
    
*  Less than one percent

(1)    Does not reflect the effect on voting rights of the Massachusetts
       Control Share Acquisition Act.
   
(2)    Derived from Schedules 13DA, dated October 3, 1994, submitted to the   
       Company. The five persons named are described as a group in such 
       Schedules 13DA. The persons named reported ownership of the following 
       shares: WIAF Investors Co. (862,428); Melvin B. Chrein (88,400); Meryl 
       J. Chrein (128,100); Charles Alpert (25,000); and Marshall J. Chrein 
       (18,200).  Each person reported sole voting and dispositive power with 
       respect to the shares owned by such person. Also includes 7,022 and 
       28,090 shares which Melvin B. Chrein and WIAF Investors Co., 
       respectively, have the right to acquire upon conversion of outstanding 
       10% Convertible Subordinate Debentures and 13,500, 6,000 and 1,500 
       shares which Charles Alpert or nominee, Melvin B. Chrein and Marshall 
       J. Chrein, respectively, have the right to acquire under outstanding 
       Warrants.
    
   
(3)    Includes 25,445 shares owned by a trust established by his late wife of
       which Mr. Matthews is a permitted beneficiary.
    
   
(4)    Includes 3,333 shares which may be purchased upon the exercise of 
       options and 6,980 shares which Mr. Matthews' wife has the right to 
       acquire upon conversion of an outstanding 10% Convertible Subordinated 
       Debenture, as to which Mr. Matthews disclaims beneficial ownership.
    
   
(5)    Includes 1,666 shares which may be purchased upon the exercise of
       options.
    
   
(6)    Includes 6,666 shares which may be purchased upon the exercise of
       options.
    
   
(7)    Includes 4,832 shares which may be purchased upon the exercise of 
       options.
    
   
(8)    See notes (3), (4), (5), (6) and (7) above.
    
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

   
  Section 16(a) of the Securities Exchange Act of 1934 requires directors, 
executive officers and stockholders who own more than 10% of the outstanding 
common stock of the Company to file with the Securities and Exchange 
Commission and NASDAQ reports of ownership and changes in ownership of voting 
securities of the Company and to furnish copies of such reports to the 
company.  To the Company's knowledge, based solely on review of the copies of 
such reports furnished to the Company, during the fiscal year ended September 
30, 1996 or written representations in certain cases, all section 16(a) 
filing requirements were complied with except that the holders of the 
Company's Convertible Subordinated Debentures and its Warrants failed to report
the acquisition thereof.
    

                                      37

<PAGE>

ITEM  13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
   
  The Company has entered into an agreement with each of Messrs. Tuffin and 
Quinn, and with Matthews Associates Limited ("MAL"), a Massachusetts 
Corporation of which Mr. Matthews is the sole owner, relative to the 
compensation of Messrs. Tuffin and MAL. For a detailed description of these 
agreements, see "Item 11. Executive Compensation -- Executive Agreements," 
which is incorporated herein by reference to pages 31-32 of this Form 10-K.
    

   
  On January 10, 1996 the Company sold its 10% Convertible Subordinated 
Debentures to the following persons whose collective and/or individual 
ownership of the outstanding shares of the Company's Common Stock exceeds 5%:
    


   
                                                     Number of
Name                    Principal Amount($)      Conversion Shares(1)
----                    -------------------      --------------------
WIAF Investors Co.           334,000                  28,090
Melvin B. Chrein              83,500                   7,022
Kathleen Matthews(2)          83,000                   6,980

(1)  Principal convertible into shares of Common Stock at $11.89 per share.

(2)  Kathleen Matthews is the wife of George J. Matthews.
    

   
  On September 16, 1996 the Company sold its 10% Subordinated Debentures 
with detachable Warrants (exercisable at $15.00 per share) to the following 
individuals whose collective and/or individual ownership of the outstanding 
shares of the Company's Common Stock exceeds 5%:
    

   
Name                    Principal Amount($)     Number of Warrants(1)
----                    -------------------     ---------------------
Charles Alpert                $225,000                13,500
or nominee
Melvin B. Chrein              $100,000                 6,000
Marshall J. Chrein            $ 25,000                 1,500
    

   
  For a description of the terms of these Debentures and Warrants, see Notes 
6 and 8 to Notes to Consolidated Financial Statements, which are incorporated 
herein by reference. See also, "Item 12. Security Ownership of Certain 
Beneficial Owners and Management."
    


                                      38


<PAGE>

                                    PART IV

ITEM  14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

  (a)1. FINANCIAL STATEMENTS
          The following consolidated financial statements of the Company, 
  included in the Company's 1996 Annual Report are filed as part of this report:

          Auditors' Report
          Consolidated Balance Sheets - September 30, 1996 and September 30, 
          1995.
          Consolidated Statements of Income for the years ended September 30, 
          1996, September 30, 1995 and September 30, 1994.
          Consolidated Statements of Stockholders' Equity for the years ended
          September 30, 1996, September 30, 1995 and September 30, 1994.
          Consolidated Statements of Cash Flows for the years ended September 
          30, 1996, September 30, 1995 and September 30, 1994.
          Notes to Consolidated Financial Statements

     2. FINANCIAL STATEMENT SCHEDULE FOR THE THREE YEARS ENDED SEPTEMBER 30, 
        1996
     Auditors' Report on Schedule
     II-Valuation and Qualifying Accounts

     3. EXHIBITS: 
       Item No.*    Description
       ---------    ------------
          3(a)       Articles of Organization, as amended, of the Registrant, 
                     incorporated by reference to File No. 2-62266, Part II, 
                     Exhibit 3(a).

          3(b)       By-laws, as amended, of the Registrant, incorporated by 
                     reference to File No. 2-62266, Part II, Exhibit 3(b).
   
          4(a)       Financing Agreement, dated May 11, 1982, among Barnwell 
                     County, South Carolina, the Registrant and Carolina 
                     Metals, Inc. (a
    

                                      39

<PAGE>

       Item No.        Description
       --------        -----------
   
         wholly-owned subsidiary) relating to Barnwell County, South California 
         Industrial Development Revenue Bond (Nuclear Metals, Inc. project) 
         1982, incorporated by reference to File No.  2-70044, Part II, 
         Exhibit 4(d).
    
   
         4(b)        Financing Agreement, dated September 27, 1984 among 
                     Barnwell County, South Carolina, the Registrant and 
                     Carolina Metals, Inc. (a wholly-owned subsidiary) 
                     relating to Barnwell County, South Carolina Industrial 
                     Development Revenue Bond (Nuclear Metals, Inc. project) 
                     1984, incorporated by reference to File No. 0-8836, 
                     Part II, Exhibit 4(e).
    
         4(c)        Financing Agreement, dated June 1, 1985 among 
                     Massachusetts Industrial Finance Agency and the Registrant 
                     relating to Massachusetts Industrial Development Revenue 
                     Bond (NMI - 1985 Concord Issue) incorporated by reference 
                     to File No. 0-8836, Part II, Exhibit 4(f)

         4(d)        Nuclear Metals, Inc. Non-Qualified Stock Option Plan as 
                     amended.(1)

         4(e)        Nuclear Metals, Inc. Restated Employees' Stock Option 
                     Plan as amended. (1)
   
         4(f)        Nuclear Metals, Inc. Directors' Stock Option Plan as 
                     amended. (6)
    
   
         4(h)        Warrant to Purchase 25,000 shares of the Registrant's 
                     Common Stock issued to State Street Bank and Trust 
                     Company. (6)
    
   
         4(i)        Common Stock Purchase Warrant dated September 16, 1996
                     issued to Melvin B. Chrein and schedule of similar
                     warrants. **
    
         10(a)       Agreement, effective March 1, 1993, between the Registrant
                     and Matthews Associates Limited. (2)

         10(b)       Agreement, effective March 1, 1993, between the Registrant
                     and  Wilson B. Tuffin, as amended November 17, 1994. (2)
   
         10(c)       Employment Agreement, effective February 8, 1995, between
                     the Registrant and Robert E. Quinn. **
    
   
         10(d)       Agreement with Olin Corporation regarding large caliber 
                     penetrators. (Confidential treatment has been granted for 
                     certain portions of this Exhibit). (3)
    
   
         10(e)       Credit Agreement dated March 31, 1995 among the Registrant,
                     Carolina Metals, Inc. and State Street Bank and Trust 
                     Company.(4)
    

                                      40

<PAGE>
   
         10(f)        First Amendment to Credit Agreement dated as of June 30, 
                      1995 among the Registrant, Carolina Metals, Inc. and State
                      Street Bank and Trust Company. (5)

         10(g)        Amended and Restated Revolving Credit Note dated March 31,
                      1995 (as amended December 24, 1996) of the Registrant and 
                      Carolina Metals, Inc. **

         10(h)        Second Amendment to Credit Agreement dated as of 
                      December 24, 1996 among the Registrant, Carolina Metals, 
                      Inc. and State Street Bank and Trust Company. **

         10(i)        10% Convertible Subordinated Debenture dated January 10, 
                      1996 payable to WIAF Investors Co. in the amount of 
                      $334,000.00 and schedule of similar debentures. **

         10(j)        10% Subordinated Debenture dated September 16, 1996 
                      payable to Melvin B. Chrein in the amount of 
                      $100,000.00 and schedule of similar debentures. **

         10(k)        Letter agreement dated as of September 16, 1996 with 
                      Kathleen Matthews and schedule of similar letter 
                      agreements. **

         10(l)        Joint Security Agreement dated as of March 31, 1995 among
                      the Registrant, Carolina Metals, Inc. and State Street 
                      Bank and Trust Company. (6)

         10(m)        First Amendment to Joint Security Agreement dated  
                      September 26, 1995 among the Registrant, Carolina Metals, 
                      Inc. and State Street Bank and Trust Company. (6)

         10(n)        Patent Assignment of Security dated September 26, 1995 
                      between the Registrant and State Street Bank and Trust 
                      Company. (6)

         10(o)        Trademark Assignment of Security dated September 26,
                      1995 between the Registrant and State Street Bank and 
                      Trust Company. (6)

         10(p)        Purchase order dated August 23, 1995 between the 
                      Registrant and Olin Corporation. (Confidential treatment 
                      requested as to certain portions) (6)

         10(q)        Forbearance and Amendment Agreement dated as of January
                      11, 1996 between the Registrant, Carolina Metals, Inc. and
                      State Street Bank and Trust Company. (6)

         10(r)        Waiver of Breach of Covenant, by and among the 
                      Registrant, Carolina Metals, Inc. and State Street Bank 
                      and Trust Company. **

         13           Nuclear Metals, Inc. 1996 Annual Report to 
                      Stockholders. **
    

                                      41

<PAGE>
   
         21           Subsidiaries of the Registrant. (7)
    
         23(a)        Consent of Independent Public Accountants.  **

         27           Financial Data Schedule.**
   
        (99)          Memorandum of Decision dated September 13, 1996 from 
                      the United States Army Contract Adjustment Board. **
    
  (b)    REPORTS ON FORM 8-K
         None
         
----------------------------
*    Item numbers correspond to Exhibit Table, Item 601, Regulation S-K
**   Indicates an exhibit filed herewith
(1)  Incorporated by reference to the similarly numbered Exhibit filed with the
     Registrant's Annual Report on Form 10-K for the fiscal year ended 
     September 30, 1992.
(2)  Incorporated by reference to the similarly numbered Exhibit filed with the
     Registrant's Quarterly Report on Form 10-Q for the quarter ended 
     June 30, 1992.
(3)  Incorporated by reference to Exhibit 10 to the Registrant's Quarterly
     Report on Form 10-Q for the quarter ended March 31, 1993.
(4)  Incorporated by reference to Exhibit 10A to the Registrant's Form 10-Q for
     the Quarter ended March 31, 1995.
   
(5)  Incorporated by reference to Exhibit 10(c) to the Registrant's Annual 
     Report on Form 10-K for the fiscal year ended September 30, 1995.
    
   
(6)  Incorporated by reference to the similarly numbered Exhibit filed with 
     the Registrant's Annual Report on Form 10-K for the fiscal year ended 
     September 30, 1995.
    





















                                      42

<PAGE>

SIGNATURES

  Pursuant to the requirements of Section 13 or 15(d) 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.

Nuclear Metals, Inc.

     By   /s/ Robert E. Quinn 
        -----------------------------------------
          Robert E. Quinn, President 

   Date       December 30, 1996 
        -----------------------------------------
   
     By   /s/ James M. Spiezio 
        -----------------------------------------
          James M. Spiezio, Vice President Finance & Administration 
    

   Date        December 30, 1996
        -----------------------------------------

     By    /s/ Rebecca L. Perry
        -----------------------------------------
          Rebecca L. Perry, Controller

   Date              December 30, 1996 
        -----------------------------------------















                                      43

<PAGE>

Pursuant to the requirements of the Securities Exchange Act of 1934, this 
report has been signed below by the following persons on behalf of the 
registrant and in the capacities and on the dates indicated.


 By  /s/ George  J. Matthews 
    ----------------------------------------
    George J. Matthews,  Chairman of the Board of Directors, CEO
    and Treasurer

 Date              December 30, 1996 
        ------------------------------------

 By   /s/  Frank H. Brenton 
    ----------------------------------------
    Frank H. Brenton, Director

 Date              December 30, 1996 
       -------------------------------------

 By   /s/ Kenneth A. Smith 
    ----------------------------------------
    Kenneth A. Smith, Director

 Date              December 30, 1996 
      --------------------------------------

 By   /s/ Wilson B. Tuffin 
    ----------------------------------------
    Wilson B. Tuffin, Vice Chairman

 Date               December 30, 1996 
      --------------------------------------

















                                      44

<PAGE>

                   INDEX TO FINANCIAL STATEMENT SCHEDULES

Independent Auditors' Report

Schedule II  -  Valuation and Qualifying Accounts




























                                      45

<PAGE>

                      REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of Nuclear Metals, Inc.:

          We have audited the accompanying consolidated balance sheets of 
Nuclear Metals, Inc. (a Massachusetts Corporation) and subsidiaries as of 
September 30, 1996 and 1995, and the related consolidated statements of 
operations, stockholders' equity and cash flows for each of the three years 
in the period ended September 30, 1996. These financial statements are the 
responsibility of the Company's management. Our responsibility is to express 
an opinion on these financial statements based on our audits.

          We conducted our audits in accordance with generally accepted 
auditing standards. Those standards require that we plan and perform the 
audit to obtain reasonable assurance about whether the financial statements 
are free of material misstatement.  An audit includes examining, on a test 
basis, evidence supporting the amounts and disclosures in the financial 
statements. An audit also includes assessing the accounting principles used 
and significant estimates made by management, as well as evaluating the 
overall financial statement presentation. We believe that our audits provide 
a reasonable basis for our opinion.

          In our opinion, the consolidated financial statements referred to 
above present fairly, in all material respects, the financial position of 
Nuclear Metals, Inc. and subsidiaries as of September 30, 1996 and 1995, and 
the results of their operations and their cash flows for each of the three 
years in the period ended September 30, 1996, in conformity with generally 
accepted accounting principles.

     Our audit was made for the purpose of forming an opinion on the basic 
financial statements taken as a whole.  The schedule listed in the index of 
the financial statements is presented for purposes of complying with the 
Securities and Exchange Commissions rules and is not part of the basic 
financial statements. This schedule has been subjected to the auditing 
procedures applied in the audit of the basic financial statements and, in our 
opinion, fairly states in all material respects the financial data required 
to be set forth therein in relation to the basic financial statements as a 
whole.

Boston, Massachusetts                                      Arthur Andersen LLP
November 20, 1996
   
(Except with respect to the matters
discussed in Note 6 as to which the
date is December 24, 1996)
    









                                      46

<PAGE>

                   NUCLEAR METALS, INC. AND SUBSIDIARIES
                SCHEDULE II- VALUATION AND QUALIFYING ACCOUNTS
                 FOR THE THREE YEARS ENDED SEPTEMBER 30, 1996


                                        ADDITIONS
                           BALANCE AT   CHARGED TO
                           BEGINNING    COSTS AND                    END 
CLASSIFICATION              OF YEAR      EXPENSES    DEDUCTIONS    OF YEAR
--------------             ---------   ----------    ----------    --------
YEAR ENDED SEPTEMBER
     30, 1996:
Allowance for
  doubtful accounts        $  883,000   $  100,000    $ 162,000   $  821,000
                           ----------   ----------    ---------   ----------
                           ----------   ----------    ---------   ----------
Inventory Reserves         $1,522,000   $3,340,000    $     --    $4,862,000
                           ----------   ----------    ---------   ----------
                           ----------   ----------    ---------   ----------
YEAR ENDED SEPTEMBER
  30, 1995:
Allowance for
  doubtful accounts        $1,290,000   $  400,000    $ 807,000   $  883,000
                           ----------   ----------    ---------   ----------
                           ----------   ----------    ---------   ----------
Inventory Reserves         $2,000,000   $      --     $     --    $1,522,000
                           ----------   ----------    ---------   ----------
                           ----------   ----------    ---------   ----------
YEAR ENDED SEPTEMBER
  30, 1994:
Allowance for
  doubtful accounts        $1,670,000   $      --     $ 380,000   $1,290,000
                           ----------   ----------    ---------   ----------
                           ----------   ----------    ---------   ----------
Inventory Reserves         $2,000,000   $      --     $ 442,000   $1,522,000
                           ----------   ----------    ---------   ----------
                           ----------   ----------    ---------   ----------




















                                      47