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

                                   Form 10-Q

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

For the quarterly period ended December 31, 1997

                                       OR

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

For the transition period from _________________ to _________________ 

                         Commission file number 0-12329

                              LCS INDUSTRIES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

       Delaware                                          13-2648333 
------------------------                    ------------------------------------
(State of incorporation)                    (I.R.S. Employer Identification No.)

         120 Brighton Road, Clifton, New Jersey            07012-1694
--------------------------------------------------------------------------------
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code      (973)  778-5588
                                                  -----------------------------

                                      N/A
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934 during the  preceding  12 months,  and (2) has been  subject to such filing
requirements for the past 90 days.   Yes ( X )    No (  )

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         The number of shares outstanding of the registrant's  Common Stock, par
value of $.01 per share, as of February 3, 1998, was 4,802,131.
<PAGE>

                              LCS INDUSTRIES, INC.
                                AND SUBSIDIARIES

                                      INDEX


PART I                      FINANCIAL INFORMATION

Item 1.               Financial Statements

                                                                        
                      Consolidated Balance Sheets
                      As of December 31, 1997 (Unaudited) and
                      September 30, 1997                                

                      Consolidated Statements of Income
                      For the Three Months Ended
                      December 31, 1997 and 1996 (Unaudited)            

                      Consolidated Statements of Cash Flows
                      For the Three Months Ended
                      December 31, 1997 and 1996 (Unaudited)            

                      Notes to Consolidated Financial Statements
                      (Unaudited)                                       

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


PART II                     OTHER INFORMATION

Item 6.               Exhibits and Reports on Form 8-K                  


<PAGE>
<TABLE>
<CAPTION>
                                LCS INDUSTRIES, INC. AND SUBSIDIARIES
                                     CONSOLIDATED BALANCE SHEETS


                                                                      December 31,    September 30,
                                                                         1997              1997
                                                                     ------------      ------------
                                                                      (Unaudited)
<S>                                                                  <C>               <C>
ASSETS
Current assets:
   Cash and cash equivalents ...................................     $ 15,031,334      $ 14,619,271
   Investments - held-to-maturity ..............................       14,745,647        14,410,101
   Accounts receivable (less allowance
       for doubtful accounts:  December 31 - $560,000
       and September 30 - $496,000) ............................       23,342,574        23,163,774
   Prepaid expenses and other current assets ...................        1,459,077         1,460,990
   Deferred taxes ..............................................          696,000           684,000
                                                                     ------------      ------------
     Total current assets ......................................       55,274,632        54,338,136
                                                                     ------------      ------------

Investments - available-for-sale, net ..........................           26,512           123,708
Property and equipment, net ....................................        6,767,692         7,093,790
Goodwill (net of accumulated amortization:  December
    31 - $877,792 and September 30 - $806,204) .................        7,209,389         7,280,977
Other assets ...................................................          692,860           672,656
                                                                     ------------      ------------
                                                                     $ 69,971,085      $ 69,509,267
                                                                     ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable ............................................     $ 13,441,505      $ 14,798,326
   Accrued salaries and commissions ............................        2,697,648         3,127,141
   Other accrued expenses ......................................        3,646,516         3,899,876
   Income taxes payable ........................................        1,317,045           290,407
   Current portion of long-term debt ...........................        1,604,473         1,087,511
   Current portion of capital lease obligations ................          120,401           211,580
   Deferred revenue ............................................        2,849,199         4,124,699
                                                                     ------------      ------------
     Total current liabilities .................................       25,676,787        27,539,540
                                                                     ------------      ------------

Long-term debt, net of current portion .........................        3,331,238         3,444,533
Deferred taxes .................................................          205,000           249,000
Deferred compensation ..........................................          156,000              --
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                LCS INDUSTRIES, INC. AND SUBSIDIARIES
                                     CONSOLIDATED BALANCE SHEETS
                                            (continued)


                                                                      December 31,    September 30,
                                                                         1997              1997
                                                                     ------------      ------------
                                                                      (Unaudited)
<S>                                                                  <C>               <C>
Stockholders' equity:
   Preferred stock $.01 par value; authorized
       1,000,000 shares; issued - none
   Common stock $.01 par value; authorized
       15,000,000 shares; issued December 31 - 5,005,442
       shares and September 30 - 4,854,847 shares ..............           50,054            48,548
   Common stock issuable .......................................        1,071,532         1,490,431
   Additional paid-in capital ..................................        9,383,718         8,702,971
   Retained earnings ...........................................       30,659,261        28,245,206
                                                                     ------------      ------------
                                                                       41,164,565        38,487,156
   Less:  Treasury stock, at cost, December 31 - 205,996 shares
               and September 30 - 187,766 ......................         (562,505)         (207,953)
          Available-for-sale securities valuation adjustment,
               net of deferred income taxes ....................             --              (3,009)
                                                                     ------------      ------------
     Total stockholders' equity ................................       40,602,060        38,276,194
                                                                     ------------      ------------
                                                                     $ 69,971,085      $ 69,509,267
                                                                     ============      ============

</TABLE>
                 See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
                      LCS INDUSTRIES, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                     For the Three Months Ended December 31,
                                   (Unaudited)


                                                     1997              1996
                                                 ------------      ------------
<S>                                              <C>               <C>
Net sales ..................................     $ 25,646,160      $ 26,231,216
Cost of sales ..............................       17,771,754        18,247,366
                                                 ------------      ------------
Gross profit ...............................        7,874,406         7,983,850
Selling and administrative expenses ........        4,180,503         4,494,773
Other (income) expense:
   Dividend and interest income ............         (420,580)         (336,959)
   Interest expense ........................           96,706           124,461
   Other income ............................         (210,000)             --
                                                 ------------      ------------
Income before income taxes .................        4,227,777         3,701,575
Provision for income taxes .................        1,640,000         1,516,000
                                                 ------------      ------------
Net income .................................     $  2,587,777      $  2,185,575
                                                 ============      ============

Per common and common equivalent share:
Basic earnings .............................     $        .55      $        .48
                                                 ============      ============

Diluted earnings ...........................     $        .50      $        .43
                                                 ============      ============

Dividends ..................................     $       .038      $       .025
                                                 ============      ============



</TABLE>


                 See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
                           LCS INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                          For the Three Months Ended December 31,
                                        (Unaudited)

                                                                 1997              1996
                                                            ------------      ------------
<S>                                                         <C>               <C>               
Increase  (Decrease)  in cash and cash  equivalents
Cash flows from operating activities:
   Net income .........................................     $  2,587,777      $  2,185,575
                                                            ------------      ------------
   Adjustments  to  reconcile  net  income  to net cash
       provided  by  operating
       activities:
       Depreciation and amortization ..................          700,786           616,345
       Deferred income taxes ..........................          (58,000)           65,000
       Provision for doubtful accounts receivable .....           80,000            30,000
       Deferred compensation ..........................          156,000              --
                                                            ------------      ------------
       Total adjustments ..............................          878,786           711,345
   Changes in operating assets and liabilities:
       Accounts receivable ............................         (258,800)          762,351
       Prepaid expenses and other current assets ......         (234,314)         (106,735)
       Accounts payable and accrued expenses ..........       (1,986,754)           67,188
       Income taxes payable ...........................        1,289,560           441,807
       Deferred revenue ...............................       (1,275,500)         (266,805)
       Other assets ...................................          (20,204)           93,435
                                                            ------------      ------------
       Total adjustments and changes ..................       (1,607,226)        1,702,586
                                                            ------------      ------------
   Net cash provided by operating activities ..........          980,551         3,888,161
                                                            ------------      ------------
Cash flows from financing activities:
   Changes in note payable, long-term debt and capital
       leases (including current portion):
       Repayments .....................................         (246,682)         (336,582)
   Dividends paid .....................................         (173,671)         (109,652)
   Exercise of stock options ..........................          120,628           469,590
   Employee Stock Purchase Plan and employment
       agreement proceeds .............................           31,373            39,295
                                                            ------------      ------------
   Net cash (used in) provided by financing activities          (268,352)           62,651
                                                            ------------      ------------
Cash flows from investing activities:
   Additions to property and equipment ................         (303,100)         (343,602)
   Net sales of investments ...........................            2,964         2,068,600
                                                            ------------      ------------
   Net cash (used in) provided by  investing activities         (300,136)        1,724,998
                                                            ------------      ------------
Cash and cash equivalents:
   Net increase in cash and cash equivalents ..........          412,063         5,675,810
   Cash and cash equivalents at beginning of period ...       14,619,271        11,893,982
                                                            ------------      ------------
   Cash and cash equivalents at end of period .........     $ 15,031,334      $ 17,569,792
                                                            ============      ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                           LCS INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                          For the Three Months Ended December 31,
                                        (Unaudited)
                                        (continued)

                                                                 1997              1996
                                                            ------------      ------------
<S>                                                         <C>               <C>   
Supplementary disclosures of cash flow information:
Cash paid during the period for:
       Interest .......................................     $   44,055        $   61,960
       Income taxes ...................................     $  233,932        $  585,817
</TABLE>

Supplemental disclosures of non-cash investing
   and financing activities:

   Valuation adjustment:
       At December 31, 1997,  the account was no longer  required as a result of
       selling  the   available-for-sale   securities  portfolio  to  which  the
       valuation  adjustment  related.  For the quarter ended December 31, 1996,
       the account was  adjusted to reflect an increase in market  values of the
       available-for-sale  securities  portfolio  of  $24,316,  net of  deferred
       income taxes.

   Stock dividends:
       On October 7, 1997, 144 shares of the Company's common stock were paid as
       dividends upon exchange of 33 shares of the Company's "old" common stock.

   Treasury stock:
       During  the  quarter  ended  December  31,  1997,  18,230  shares  of the
       Company's  outstanding Common Stock were received in exchange for options
       exercised covering 132,000 shares of Common Stock.

   Long-term debt:
       As a result of Amendment No. 2 of the Catalog  Resources,  Inc.  purchase
       agreement,  (as  explained  in  Note  4  to  the  Consolidated  Financial
       Statements),  additional long-term debt of $506,250 was recorded,  offset
       by charges to common stock  issuable of $418,899 and  additional  paid-in
       capital of $87,351.


                 See Notes to Consolidated Financial Statements.
<PAGE>

                      LCS INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



1) In the opinion of management, the accompanying unaudited financial statements
include all adjustments (consisting only of normal recurring accruals) which are
necessary for a fair presentation of results for the periods indicated.  Certain
information and footnote  disclosures  normally  included in complete  financial
statements prepared in accordance with generally accepted accounting  principles
have been  omitted.  Therefore,  these  financial  statements  should be read in
conjunction  with the financial  statements  and the  footnotes  included in the
Company's  Annual Report on Form 10-K (as amended by Form 10-K/A-1) for the year
ended  September 30, 1997.  The results of operations for the three months ended
December  31, 1997 are not  necessarily  indicative  of the results for the full
year. The September 30, 1997 Balance Sheet was derived from the audited  Balance
Sheet at that date.

2) Other income for the quarter  ended  December  31, 1997  represents a payment
from McIntyre and King, Ltd. ("M&K")  representing final settlement of a portion
of the  down-payment  made  in  connection  with  the  1997  rescinded  purchase
agreement. During fiscal 1997, the Company had written off its entire investment
in M&K since any recovery, at that time, was uncertain.

3) For the financial statements ended December 31, 1997, the Company has adopted
the provisions of Statement of Financial  Accounting Standards ("SFAS") No. 128,
"Earnings  per Share",  issued in March,  1997.  The  Statement  requires dual p
resentation  of basic and diluted  earnings  per share by entities  with complex
capital  structures.  Basic  earnings  per share  includes  no  dilution  and is
computed  by  dividing   income   available  to  common   shareholders   by  the
weighted-average  number of common shares  outstanding  for the period.  Diluted
earnings per share  reflects the  potential  dilution of  securities  that could
share in the  earnings  of the  Company.  The prior  year's  earnings  per share
amounts have been restated to reflect the provisions of SFAS No. 128.

4) On  December  30,  1997,  the  Company  and  former  shareholders  of Catalog
Resources,  Inc. agreed to Amendment No. 2 of the purchase agreement dated April
1, 1993 and amended August 1, 1994. This Amendment provides for the payment made
January 2, 1998 of  $1,012,500  to be 100% in cash  compared  to the  previously
agreed 50% in cash and 50% in Common Stock of the Company,  subject to a maximum
number of shares to be issued of 660,000.  Accordingly,  the current  portion of
long-time  debt at December  31,  1997 was  increased  by  $506,250  (50% of the
$1,012,500 payment).  This was offset by a reduction in common stock issuable of
$418,899, representing the present value at September 30, 1995 of the originally
anticipated  stock  issuance,  and a charge to  additional  paid-in  capital  of
$87,351.

           As a result of Amendment No. 2, the parties have agreed to reduce the
maximum  number of shares  issuable  under the amended  agreement  by the shares
which would have been issued on January 2, 1998 based on the  provisions  of the
original agreement.  The revised maximum number of shares issuable is 628,020 of
which 538,287 shares have been previously issued.
<PAGE>
Item 2.          Management's Discussion and Analysis of Financial
                 Condition and Results of Operations.


Results of Operations

           Three Months ended December 31, 1997

           Revenues  decreased  2% in the  quarter  ended  December  31, 1997 to
$25,646,000 from $26,231,000 for the comparable  quarter of the prior year. This
decline is accounted for by a 2% increase in list marketing services offset by a
17% decrease in computer services while fulfillment  services were comparable to
the prior year. The increase in list marketing  revenues resulted generally from
an expanded  customer base and increased  volume with  existing  customers.  The
lower computer services revenues reflect reduced billings,  when compared to the
prior year, for the last phase of the  three-year $40 million  contract to build
and manage a marketing  database for a major  non-U.S.  communications  company.
This  initial  contract  will be  completed  by June 30,  1998.  As announced on
January 6, 1998,  the Company has entered  into an  additional  $6.0 million one
year  contract  with this non-U.S.  communications  company to provide  computer
services commencing July 1,1998. Although revenues for fulfillment services were
comparable, in total year over year,  the  components  reflect a 23% increase in
continuity services,  total decrease of 77% in telemarketing  services and a 12%
decrease  in  catalog  fulfillment.  The  increase  in  continuity  services  is
primarily a result of increased billings to existing customers.  The decrease in
telemarketing  services is in line with the  Company's  program to  de-emphasize
this activity.  The decrease in catalog fulfillment revenues reflects the impact
of the loss of billings to several  customers  upon their  acquisition  by third
parties.

           Gross profit  decreased 1% to $7,874,000 for the current quarter from
$7,984,000 in the comparable  quarter of 1996.  Gross profit margin  improved to
31% in the current quarter compared to 30% in 1996. The decrease in gross profit
amount primarily resulted from the decrease in revenues of computer services, as
described above, and catalog fulfillment services partially offset by the margin
generated from the increased continuity revenues. The higher gross profit margin
resulted from improved margins from list marketing  revenues partially offset by
a decline at the catalog fulfillment operation.

           Selling and administrative expenses decreased 7% to $4,181,000 in the
current quarter from $4,495,000 in the comparable  quarter of 1996.  Selling and
administrative  expenses,  as a  percentage  of sales,  were 16% for the current
quarter and 17% for the  comparable  period in 1996.  The decrease in amount and
percentage  of selling and  administrative  expenses is primarily  the result of
lower executive compensation and travel expenses.

           Net dividend and interest  income was $324,000 in the current quarter
compared to $212,000 in 1996.  Dividend and interest income increased $84,000 in
the current  fiscal period as a result of a higher level of funds  available for
short-term  investment  coupled with higher interest rates in the current fiscal
quarter.  The decrease in interest  expense,  quarter over  quarter,  of $28,000
resulted  primarily  from  reduced  debt  and  capital  lease  obligations.  The
unsecured  line of credit held  available  for the  Company was not  utilized in
either quarter.
<PAGE>
           During the current  quarter,  a payment of $210,000 was received from
McIntyre & King,  Ltd.  ("M&K")  and  recorded  as other  income.  This  payment
represents final settlement of a portion of the down-payment  made in connection
with the 1997 rescinded purchase agreement.  During fiscal 1997, the Company had
written off its entire  investment in M&K since any recovery,  at that time, was
uncertain.

           Net income was  $2,588,000  ($.50 per share  diluted)  in the current
quarter  compared to $2,186,000  (.43 per share diluted) in the comparable  1996
quarter.

Financial Condition, Liquidity and Capital Resources

           Working  capital was  $29,598,000  at December  31, 1997  compared to
$26,799,000 at September 30, 1997. Current assets increased $936,000 principally
from  increases in cash and  investments-held-to-maturity.  Current  liabilities
decreased  $1,863,000  primarily as a result of  decreases in accounts  payable,
deferred  revenue and accrued  salaries and  commissions  offset by increases in
current  portion of  long-term  debt and income taxes  payable.  At December 31,
1997, the ratio of long-term debt to equity was .08 to 1.

           For the current  quarter,  cash  generated  by  operations  decreased
$2,908,000  over such amounts  generated in the comparable  quarter of the prior
year. This decrease was primarily  attributed to decreases in adjustments to net
income and changes in operating  assets and liabilities of $3,310,000  offset by
an increase in net income of $402,000. The decrease in adjustments to net income
and changes in  operating  assets and  liabilities  resulted  primarily  from an
increase in accounts receivable of $1,021,000, decreases in accounts payable and
accrued  expenses of $2,054,000  and deferred  revenue of  $1,009,000  partially
offset by an increase in income taxes of $848,000.

           During  the  current  quarter,  funds  used by  financing  activities
increased  $331,000  compared to the comparable  quarter of the prior year. This
usage resulted from reduced receipts from the exercise of employee stock options
of $349,000,  increased  payment of dividends of $64,000  partially  offset by a
decrease in the repayment of debt of $90,000. For the same period, cash used for
investing  activities  increased  $2,025,000  primarily  as a  result  of  lower
proceeds from the sales of  investments  of $2,066,000  offset by a reduction in
additions to property and equipment of $41,000.

           Pursuant to the purchase agreement, as amended, with CRI, the Company
is obligated to pay to CRI's selling  shareholders,  in cash or stock,  up to an
aggregate of $10,000,000. Under such purchase agreement, as amended, the Company
paid  $1,012,500  (100%  in  cash-see  Note  4  to  the  consolidated  financial
statements for further  explanation) on January 2, 1998.  Further,  such amounts
will be payable each January 1 through  2002  totaling a maximum of  $4,050,000.
The discounted value of these future payments was recorded at September 30, 1995
since it was probable  that the future  earnings  levels will be attained  which
will require the maximum payments to be made.

           Management  believes cash generated from current operations and other
liquid assets combined with the available bank credit line will be sufficient to
meet cash flow needs during the fiscal year.

Year 2000 Issue

           Certain of the Company's operational computer programs use two digits
to identify a year in the date field which does not consider the impact, if any,
of the upcoming change in the century.  The Company  anticipates,  at a cost not
material to financial  results,  the timely completion of any programming needed
to address this issue and result in successful  computer  processing in the year
2000 and beyond.
<PAGE>



PART II                     OTHER INFORMATION


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

                    (a)  Exhibit 11 - Computation of earnings per share

                    (b)    Report on Form 8-K. - LCS  Industries,  Inc.  did not
                           file any reports on Form 8-K during the quarter ended
                           December 31, 1997.





<PAGE>



                                   SIGNATURES

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


Date:  Clifton, New Jersey
       February 10, 1998


                                         LCS INDUSTRIES, INC.
                                                      (Registrant)


                                         By:   /s/ William Rella
                                               -----------------
                                                   William Rella
                                                   President
                                                   (Chief Executive Officer)



                                         By:   /s/ Pat R. Frustaci
                                               -------------------
                                                   Pat R. Frustaci
                                                   Vice President-Finance
                                                   (Chief Financial Officer)



<PAGE>


                              LCS INDUSTRIES, INC.


                           Commission File No. 0-12329



                                     -------


                          Quarterly Report on Form 10-Q

                                     for the

                      Three Months Ended December 31, 1997





                                     EXHIBIT




<PAGE>



INDEX TO EXHIBIT


        Exhibit
          No.                         Description
          ---                         -----------

          11            Statement re: Computation of Earnings Per Share