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, 1996

                                       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      (201)  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, 1997, was 4,648,753.
<PAGE>
                              LCS INDUSTRIES, INC.
                                AND SUBSIDIARIES

                                      INDEX


PART I                       FINANCIAL INFORMATION

Item 1.               Financial Statements

                                                                     
                      Consolidated Balance Sheets                           
                      As of December 31, 1996 (Unaudited) and
                      September 30, 1996                                    

                      Consolidated Statements of Income
                      For the Three Months Ended
                      December 31, 1996 and 1995 (Unaudited)                

                      Consolidated Statements of Cash Flows
                      For the Three Months Ended
                      December 31, 1996 and 1995 (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,
                                                                       1996            1996
                                                                   ------------    ------------ 
                                                                    (Unaudited)
<S>                                                                <C>             <C>
ASSETS
Current assets:
   Cash and cash equivalents ...................................   $ 17,569,792    $ 11,893,982
   Investments - held-to-maturity ..............................      8,431,121      10,435,026
   Accounts receivable (less allowance
       for doubtful accounts:  December 31  - $506,000
       and September 30 - $627,000) ............................     23,726,699      24,519,050
   Prepaid expenses and other current assets ...................      1,638,858       1,596,819
   Deferred taxes ..............................................        284,000         338,000
                                                                   ------------    ------------
     Total current assets ......................................     51,650,470      48,782,877
                                                                   ------------    ------------

Investments - available-for-sale, net ..........................        411,039         369,722
Property and equipment, net ....................................      7,348,074       7,549,229
Goodwill (net of accumulated amortization:  December
    31 - $591,443 and September 30 - $519,855) .................      7,495,738       7,567,326
Other assets ...................................................        607,358         700,793
                                                                   ------------    ------------
                                                                   $ 67,512,679    $ 64,969,947
                                                                   ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable ............................................   $ 14,153,699    $ 14,726,387
   Accrued salaries and commissions ............................      1,946,185       2,389,837
   Other accrued expenses ......................................      3,534,309       2,513,841
   Income taxes payable ........................................        318,441         215,635
   Current portion of long-term debt ...........................        968,276       1,047,989
   Current portion of capital lease obligations ................        373,656         390,399
   Deferred revenue ............................................      7,872,962       8,139,767
                                                                   ------------    ------------
     Total current liabilities .................................     29,167,528      29,423,855
                                                                   ------------    ------------
<PAGE>
<CAPTION>
                                    LCS INDUSTRIES, INC. AND
                                          SUBSIDIARIES
                                   CONSOLIDATED BALANCE SHEETS
                                          (continued)

                                                                   December 31,    September 30,
                                                                       1996            1996
                                                                  ------------    ------------ 
                                                                    (Unaudited)
<S>                                                                <C>             <C>

Long-term debt, net of current portion .........................      4,240,536       4,331,542
Capital lease obligations, net of current portion ..............        164,937         250,997
Deferred taxes .................................................        131,000         103,000
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 - 4,797,457
       shares and September 30 - 4,611,487 shares ..............         47,975          46,115
   Common stock issuable .......................................      1,945,983       1,945,983
   Additional paid-in capital ..................................      8,069,289       7,223,263
   Retained earnings ...........................................     23,963,660      21,887,737
                                                                   ------------    ------------
                                                                     34,026,907      31,103,098
   Less:  treasury stock, at cost, 187,766 shares ..............       (207,953)       (207,953)
          available-for-sale securities valuation adjustment,
           net of deferred income taxes ........................        (10,276)        (34,592)
                                                                   ------------    ------------
     Total stockholders' equity ................................     33,808,678      30,860,553
                                                                   ------------    ------------
                                                                   $ 67,512,679    $ 64,969,947
                                                                   ============    ============

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

                                   (Unaudited)


                                                      1996              1995
                                                 ------------      ------------ 
<S>                                              <C>               <C>
Net sales ..................................     $ 26,231,216      $ 25,654,057
Cost of sales ..............................       18,247,366        17,468,923
                                                 ------------      ------------
Gross profit ...............................        7,983,850         8,185,134
Selling and administrative expenses ........        4,494,773         4,031,676
Other (income) expense:
   Dividend and interest income ............         (336,959)         (182,695)
   Interest expense ........................          124,461           100,459
                                                 ------------      ------------
Income before income taxes .................        3,701,575         4,235,694
Provision for income taxes .................        1,516,000         1,727,000
                                                 ------------      ------------
Net income .................................     $  2,185,575      $  2,508,694
                                                 ============      ============

Per common and common equivalent share:
Net Income .................................     $        .43      $        .49
                                                 ============      ============

Weighted average number of
     shares outstanding ....................        5,093,246         5,078,420
                                                 ============      ============

Dividends ..................................     $       .025      $       .019
                                                 ============      ============



                 See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                              LCS INDUSTRIES, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    For the Three Months Ended December 31,
                                  (Unaudited)
                                                                 1996              1995
                                                            ------------      ------------ 
<S>                                                         <C>               <C>
Increase  (Decrease)  in cash and cash  equivalents
Cash flows from operating activities:
   Net income .........................................     $  2,185,575      $  2,508,694
                                                            ------------      ------------
   Adjustments  to  reconcile  net  income  to net cash
       provided  by  operating activities:
       Depreciation and amortization ..................          616,345           547,712
       Deferred income taxes ..........................           65,000           (29,000)
       Provision for doubtful accounts receivable .....           30,000            30,000
                                                            ------------      ------------
       Total adjustments ..............................          711,345           548,712
   Changes in operating assets and liabilities:
       Accounts receivable ............................          762,351          (755,472)
       Prepaid expenses and other current assets ......         (106,735)          688,202
       Accounts payable and accrued expenses ..........           67,188           238,258
       Income taxes payable ...........................          441,807           935,185
       Deferred revenue ...............................         (266,805)        2,180,819
       Other assets ...................................           93,435           184,960
                                                            ------------      ------------
       Total adjustments and changes ..................        1,702,586         4,020,664
                                                            ------------      ------------
        Net cash provided by operating activities .....        3,888,161         6,529,358
                                                            ------------      ------------
Cash flows from financing activities:
   Changes in long-term debt and capital
       leases (including current portion):
       Repayments .....................................         (336,582)         (250,007)
   Dividends paid .....................................         (109,652)          (77,291)
   Exercise of stock options ..........................          469,590           186,654
   Employee Stock Purchase Plan and employment
       agreement proceeds .............................           39,295            42,616
                                                            ------------      ------------
   Net cash provided by (used in) financing activities            62,651           (98,028)
                                                            ------------      ------------

Cash flows from investing activities:
   Additions to property and equipment ................         (343,602)       (1,620,932)
   Net sales of investments-held-to-maturity ..........        2,068,600              --
                                                            ------------      ------------
   Net cash provided by (used in) investing activities         1,724,998        (1,620,932)
                                                            ------------      ------------
Cash and cash equivalents:
   Net increase in cash and cash equivalents ..........        5,675,810         4,810,398
   Cash and cash equivalents at beginning of period ...       11,893,982         8,630,831
                                                            ------------      ------------
   Cash and cash equivalents at end of period .........     $ 17,569,792      $ 13,441,229
                                                            ============      ============
                             Continued on next page.
</TABLE>
<PAGE>
                      LCS INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                          Continued from previous page.

<TABLE>
<CAPTION>


For the Years Ended September 30,                         1996            1995
                                                       --------        --------
<S>                                                    <C>             <C>
Supplementary disclosures of cash flow information:
 Cash paid during the period for:
       Interest                                        $ 61,960        $ 27,738
       Income taxes                                    $585,817        $331,316
</TABLE>

Supplemental disclosures of non-cash investing
   and financing activities:

   Valuation adjustment:
       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.  For the three months
       ended December 31, 1995, $189, net of deferred income taxes, was added to
       the available-for-sale securities valuation adjustment.

   Stock Dividend:
       On October 24, 1995,  2,061,087 shares of the Company's common stock were
       issued  as a  result  of a 2 for 1  stock  split  paid  as a  100%  stock
       dividend.


                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 for the year ended September 30, 1996. The
results of  operations  for the three  months  ended  December  31, 1996 are not
necessarily  indicative of the results for the full year. The September 30, 1996
Balance Sheet was derived from the audited Balance Sheet at that date.

<PAGE>

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



Results of Operations

           Three Months ended December 31, 1996

           Sales  increased  2% in  the  quarter  ended  December  31,  1996  to
$26,231,000 from $25,654,000 for the comparable  quarter of the prior year. This
improvement  is accounted for by a 10% increase in  fulfillment  services,  a 3%
increase  in list  marketing  services  partially  offset by a 13%  decrease  in
computer  services.  The fulfillment  increase includes  increases in continuity
fulfillment  services  (15%),  catalog  fulfillment  services  (8%) and  inbound
telemarketing  services  (123%)  partially  offset  by  a  decline  in  outbound
telemarketing  services (67%).  Sales to new customers and increased volume with
continuing  customers  contributed  to the  continuity  and catalog  fulfillment
increases.  The  inbound  telemarketing  increase  was the  result  of a special
project completed for a continuing customer although the Company continues, as a
strategic  plan,  to  de-emphasize  this  service.  The  outbound  telemarketing
decrease   resulted   from   reduced   volume   under  a  contract   to  provide
business-to-consumer  services  for a  telecommunications  company and a reduced
customer base. As previously  reported,  this function has been made an integral
part of the customer service function within  continuity  fulfillment.  Computer
services' decrease was the result of the December,  1995 quarter including sales
from  the   completion   of  one  major   project   in  North   America   for  a
telecommunications  company while launching another  previously  announced three
year $40 million  service project for another non  U.S.-communications  company.
The current  quarter  includes the  revenues  from this  continuing  contract to
provide  computer  services  through the building of a marketing  database.  The
contract extends through June, 1998,  subject to early  termination  provisions.
Revenue is recognized based on the percentage-of-completion method of accounting
measured  by the  percentage  of labor hours  incurred to date to the  estimated
total labor hours required for the contract.

           Gross profit  decreased 2% to $7,984,000 for the current quarter from
$8,185,000 in the comparable quarter of 1995. Gross profit margin was 30% in the
current quarter compared to 32% in 1995. The decrease in gross profit amount and
margin primarily  resulted from the decrease in sales of computer  services,  as
described above,  which contribute a higher profit margin than other operations.
The decline in computer  services'  gross profit amount and margin was partially
offset  by  improvements   in  both  the  continuity  and  catalog   fulfillment
operations.

           Selling and  administrative  expenses  increased 11% to $4,495,000 in
the current quarter from $4,032,000 in the comparable  quarter of 1995.  Selling
and administrative  expenses, as a percentage of sales, were 17% for the current
quarter and 16% for the  comparable  period in 1995.  The increase in amount and
percentage of selling and  administrative  expenses is the result of the overall
increase in sales volume combined with the mix of services rendered.
<PAGE>
           Net dividend and interest  income was $212,000 in the current quarter
compared to $82,000 in 1995.  Dividend and interest income increased $154,000 in
the current  fiscal period as a result of a higher level of funds  available for
short-term  investment  partially  offset by lower interest rates in the current
fiscal quarter. The increase in interest expense quarter over quarter of $24,000
resulted primarily from the $2,500,000 proceeds received in March and June, 1996
in conjunction  with a five-year term loan entered into by Catalog  Resources to
fund  expansion of its warehouse and office  facilities.  The unsecured  line of
credit available to the Company was not utilized in either quarter.

           Net income was  $2,186,000  ($.43 per share) in the  current  quarter
compared to $2,509,000 (.49 per share) in the comparable 1995 quarter.

Financial Condition, Liquidity and Capital Resources

           Working  capital was  $22,483,000  at December  31, 1996  compared to
$19,359,000  at September 30, 1996.  Fluctuations  in the  components of working
capital  resulted  primarily from the increase in cash and cash  equivalents and
decreases in accounts  payable and accrued  salaries and  commissions  partially
offset by decreases in investments  held-to-maturity and accounts receivable and
an increase in other accrued expenses.

           For the current  quarter,  cash  generated  by  operations  decreased
$2,641,000  over such amounts  generated in the comparable  quarter of the prior
year.  This  decrease  was  primarily  the result of  decreases in net income of
$323,000,  deferred revenue of $2,448,000,  income taxes payable of $493,000 and
increases in prepaid  expenses and other current assets of $795,000 and deferred
expenses of $94,000  partially  offset by a decrease in accounts  receivable  of
$1,518,000.

           In the quarter ended December 31, 1996, financing activities provided
funds of $63,000  compared  to net cash used of  $98,000 in 1995 which  resulted
from increased receipts from the exercise of stock options of $283,000 partially
offset by increased  repayments  of debt of $87,000 and  increased  dividends of
$32,000.  Cash  provided  by  investing  activities,  in  the  current  quarter,
increased    $3,346,000    compared    to   1995    due   to   net    sales   of
investments-held-to-maturity  of  $2,069,000  coupled with reduced  additions to
property and equipment of $1,277,000.

           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,  the Company  paid
$1,012,500 (one-half in cash and one-half in stock) on January 1, 1997. Further,
such amounts  will be payable each January 1 through 2002  totaling a maximum of
$5,062,500.  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 and the five-year
term loan mentioned  above will be sufficient to meet cash flow needs during the
fiscal year.
<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, 1996.

<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, 1997


                                                    LCS INDUSTRIES, INC.
                                                        (Registrant)


                                              By:   /s/Arnold J. Scheine
                                                    --------------------
                                                       Arnold J. Scheine
                                                       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, 1996





                                     EXHIBIT




<PAGE>



                                INDEX TO EXHIBIT


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

        11                 Statement re: Computation of Per Share Earnings