SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-Q
(MARK ONE)
      ( X )   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934
                       FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1995

                                      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 0-12954

                       CADMUS COMMUNICATIONS CORPORATION

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

          VIRGINIA                                  54-1274108
(State or other jurisdiction of                  (I.R.S. employer
incorporation or organization)                identification number)

                       6620 WEST BROAD STREET, SUITE 500
                            RICHMOND, VIRGINIA 23230
          (ADDRESS  OF  PRINCIPAL   EXECUTIVE   OFFICES,   INCLUDING  ZIP  CODE)
              REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
                                 (804) 287-5680

     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 the number of shares  outstanding of each of the issuer's  classes
of common stock, as of January 31, 1996.

            CLASS                               OUTSTANDING AT JANUARY 31, 1996
Common Stock, $.50 Par Value                               7,872,806


<PAGE>


               CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                      INDEX



<TABLE>
<CAPTION>
                                                                                      Page
                                                                                     Number
<S>                                                                                  <C>

Part I.      Financial Information

             Item 1.  Financial Statements

                      Consolidated Balance Sheets --                                     3
                         December 31, 1995 and June 30, 1995

                      Consolidated Statements of Income --                               4
                         Three and Six-Month Periods Ended
                         December 31, 1995 and 1994

                      Consolidated Statements of Cash Flows --                           5
                         Six Months Ended December 31, 1995 and 1994

                      Notes to Consolidated Financial Statements                         6

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



Part II.     Other Information

             Item 4.  Submission of Matters to a Vote of Security Holders               12

             Item 6.  Exhibits and Reports on Form 8-K                                  12
</TABLE>



                                                            2

<PAGE>



                          PART I. Financial Information
               CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                               December 31,         June 30,
                                                                                                  1995                1995
                                                                                               (Unaudited)
<S>                                                                                            <C>                 <C>     
ASSETS
Current assets:
   Cash and cash equivalents                                                                   $   2,710           $     226
   Accounts receivable, net                                                                       71,620              57,204
   Inventories                                                                                    21,827              16,308
   Deferred income taxes                                                                           1,092               1,092
   Prepaid expenses and other                                                                      2,310               1,489
                                                                                                --------            --------

        Total current assets                                                                      99,559              76,319

Property, plant, and equipment (net of accumulated depreciation
   of $81,299 at December 31, 1995 and $76,789 at June 30, 1995)                                  92,104              84,570
Other assets                                                                                       3,497               2,400
Goodwill and intangibles, net                                                                     21,016               8,281
                                                                                                --------            --------

   Total Assets                                                                                 $216,176            $171,570
                                                                                                 =======             =======


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Short-term borrowings                                                                                           $   3,775
   Note payable - The Software Factory                                                         $   5,000
   Current maturities of long-term debt                                                              121               2,381
   Accounts payable                                                                               24,457              18,818
   Accrued expenses:
      Compensation                                                                                 8,329              10,905
      Other                                                                                       13,964               7,907
      Income taxes                                                                                   948
      Restructuring charge                                                                            40                 120
                                                                                                --------           ---------

        Total current liabilities                                                                 52,859              43,906

Long-term debt                                                                                    44,903              53,961
Other long-term liabilities                                                                        8,111               7,180
Deferred income taxes                                                                              4,641               4,641

Shareholders' equity:
   Common stock ($.50 par value; authorized-16,000 shares; issued and outstanding
      shares-7,872 at December 31, 1995 and 6,030 at June 30, 1995)                                3,935               3,015
   Capital in excess of par value                                                                 52,538              12,448
   Retained earnings                                                                              49,189              46,419
                                                                                                --------            --------

        Total shareholders' equity                                                               105,662              61,882
                                                                                                --------            --------

        Total Liabilities and Shareholders' Equity                                              $216,176            $171,570
                                                                                                 =======             =======

</TABLE>

See accompanying Notes to Consolidated Financial Statements.

                                        3

<PAGE>




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



                                                      Three Months Ended                      Six Months Ended
                                                           December 31,                          December 31,

                                                     1995               1994                1995           1994
                                                    ------             ------             --------       ------
<S>                                               <C>                 <C>                 <C>            <C>       
Net sales                                           $85,835           $67,237              $160,508        $127,620

Operating expenses
    Cost of sales                                    65,090            50,444               121,893          97,075
    Selling and administrative                       14,988            12,555                28,906          23,552
                                                     ------            ------               -------        --------

Operating income                                      5,757             4,238                 9,709           6,993

Interest and other (income) expenses
    Interest                                          1,395             1,473                 2,817           2,740
    Other                                               (23)             (179)                   34            (298)
                                                   --------           -------             ---------       ---------

Income before income taxes                            4,385             2,944                 6,858           4,551

Income taxes                                          1,649             1,160                 2,606           1,793
                                                    -------           -------              --------       ---------

Income before extraordinary item                      2,736             1,784                 4,252           2,758

Extraordinary loss on debt prepayment, net
    of $487 tax benefit                                 795                                     795
                                                    -------         ---------              --------

Net income                                         $  1,941          $  1,784             $   3,457      $    2,758
                                                    =======           =======              ========       =========

EARNINGS PER SHARE:

    Income before extraordinary item              $     .38          $    .29            $      .62      $      .45

    Extraordinary loss on debt prepayment, net          .12                                     .12
                                                   --------         ---------             ---------

    Net income per share                          $     .26         $     .29            $      .50     $       .45
                                                   ========          ========             =========      ==========


Average number of common shares outstanding           7,458             6,195                 6,886           6,191
                                                    =======           =======              ========       =========


Cash dividends per common share                    $     .05        $     .05            $      .10     $       .10
                                                    ========         ========             =========      ==========

</TABLE>


See accompanying Notes to Consolidated Financial Statements.

                                        4

<PAGE>



               CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                       Six Months Ended
                                                                                         December 31,

                                                                                    1995            1994
                                                                                   ------          -----
<S>                                                                               <C>             <C>  
OPERATING ACTIVITIES
Net income                                                                        $ 3,457         $ 2,758
Adjustments to reconcile net income to net cash
    provided by operating activities:
    Extraordinary loss on debt prepayment                                             795
    Depreciation and amortization                                                   6,443           5,989
    Other, net                                                                        786             265
                                                                                  -------         -------

                                                                                   11,481           9,012
                                                                                  -------          ------
Changes in operating assets and liabilities, excluding effects of acquisitions:
    Accounts receivable                                                           (11,008)           (396)
    Inventories                                                                    (5,129)         (2,765)
    Accounts payable, accrued expenses, and income taxes                            7,300            (732)
    Other, net                                                                     (1,144)           (187)
                                                                                 --------          ------

                                                                                   (9,981)         (4,080)

Net cash provided by operating activities                                           1,500           4,932
                                                                                  -------         -------

INVESTING ACTIVITIES
Purchases of property, plant, and equipment                                       (11,880)         (9,732)
Proceeds from sale of property and equipment                                          104           2,811
Cash paid for businesses acquired                                                  (8,334)           (902)
Cash deposited in escrow for business acquired                                       (500)
Other, net                                                                           (287)            547
                                                                                  -------         -------

Net cash used in investing activities                                             (20,897)         (7,276)
                                                                                 --------          ------

FINANCING ACTIVITIES
Proceeds from short-term borrowings                                                27,500           5,695
Repayment of short-term borrowings                                                (31,275)         (5,300)
Proceeds from long-term borrowings                                                                    171
Repayment of long-term borrowings                                                 (11,318)            (34)
Penalty on early extinguishment of debt                                            (1,282)
Proceeds from stock offering, net                                                  38,684
Dividends paid                                                                       (696)           (600)
Proceeds from exercise of stock options                                               326             252
Other, net                                                                            (58)
                                                                                  -------

Net cash provided by financing activities                                          21,881             184
                                                                                   ------          ------

Increase (decrease) in cash and cash equivalents                                    2,484          (2,160)

Cash and cash equivalents at beginning of period                                      226           3,855
                                                                                  -------          ------

Cash and cash equivalents at end of period                                       $  2,710         $ 1,695
                                                                                  =======          ======
</TABLE>

See accompanying Notes to Consolidated Financial Statements.

                                        5

<PAGE>



               CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 1. The  interim  financial   statements  are  unaudited.   In  the  opinion  of
    management,  they reflect all adjustments  (which consist only of those of a
    normal recurring  nature)  necessary for a fair  presentation of results for
    the periods indicated.  The results of operations for any interim period are
    not  necessarily  indicative of results for the full year.  These  financial
    statements  should be read in conjunction with the financial  statements and
    notes thereto  contained in the  Company's  annual report for the year ended
    June 30, 1995.

 2. Net income per common  share is  computed  based upon the  weighted  average
    number of shares outstanding  during the periods presented.  Shares issuable
    upon exercise of currently  exercisable  stock options are treated as common
    stock  equivalents  for purposes of computing  primary and fully diluted net
    income per share.

 3. Inventories are valued at the lower of cost or market, principally using the
    last-in, first-out (LIFO) method (66.4% as of December 31, 1995 and 70.5% as
    of June 30, 1995).  The first-in,  first-out  (FIFO) method is used to value
    the remaining inventories. The components of inventories were as follows (in
    thousands):                    

                                    December 31,        June 30,
                                       1995              1995

Raw materials and supplies           $ 8,140           $ 6,044
Work in process:
    Materials                          4,605             3,270
    Other manufacturing costs          7,058             5,315
Finished goods                         2,024             1,679
                                      ------            ------

                                     $21,827           $16,308
                                      ======            ======

4.  On November 1, 1995, the Company acquired substantially all of the assets
    and assumed certain liabilities of The Software Factory, Inc. (the "Software
    Factory").  The Software Factory provides software packaging and media
    duplication services and has annual sales of approximately $11.0 million.
    The purchase price of $13.9 million consisted of $2.0 million value of
    Cadmus common stock and $11.9 million in cash payments.  The Company issued
    79,681 common shares to the Software Factory shareholders based on an agreed
    upon share price of $25.10.  The cash payments included $0.5 million
    deposited in escrow at closing and $6.4 million cash disbursed.  The
    remaining $5.0 million is evidenced by a note payable to the Software
    Factory due January 1996.  This note was paid in January 1996.

    The  following  unaudited  pro  forma  consolidated   financial  information
    combines the results of the Software Factory as if they had been acquired as
    of the beginning of the periods presented. The periods presented include the
    impact of the following adjustments:  amortization of the costs in excess of
    the net assets  acquired  over twenty years and income taxes on the earnings
    at an  effective  tax rate of  38.0%  and  38.7%  for the six  months  ended
    December  31,  1995 and  1994,  respectively,  since  the  Software  Factory
    qualified as an "S" corporation which previously had no income tax expense.

<TABLE>
<CAPTION>
                                                                        Six Months Ended December 31,
                                                                         1995                     1994
<S>                                                                   <C>                       <C>

    Net sales                                                          $164,360                 $133,016
    Income before extraordinary item                                      4,641                    3,228
    Net income                                                            3,846                    3,228

    Earnings per share:
       Income before extraordinary item                              $      .68               $      .51
       Net income                                                           .56                      .51
</TABLE>

    The pro forma financial  information is not  necessarily  indicative of what
    would actually have occurred if the acquisition  took place at the beginning
    of the periods  presented,  nor is it intended  to be  indicative  of future
    results.

                                                                 6

<PAGE>




    On  December  18,  1995,  the  Company  acquired  the assets of the  Atlanta
    division of Encryption Technology Corporation ("ETC") for approximately $2.3
    million  in  cash  payments.   ETC  provides   software   packaging,   media
    duplication, and documentation services. The cash payments consisted of $1.3
    million paid at closing and $1.0 million paid in February 1996.

    In July 1995,  Cadmus acquired the assets of Na-Tex,  Inc.  ("Na-Tex"),  the
    publisher of  Collector's  World of Racing  (subsequently  renamed  RPM). In
    September  1995,  the Company  acquired  certain assets of The Mowry Company
    ("Mowry"), a direct marketing agency located in Long Beach,  California.  In
    October   1995,   the  Company   acquired  the  assets  of  PeachWeb   Corp.
    ("PeachWeb"),  a developer of Internet  web sites.  The Na-Tex,  Mowry,  and
    PeachWeb  acquisitions  were not  material,  either  individually  or in the
    aggregate, to the Company's financial statements.

    All  acquisitions   were  accounted  for  under  the  purchase  method  and,
    accordingly,  the costs of the  acquisitions  were  allocated  to the assets
    acquired and liabilities assumed based on their respective fair values, with
    the  excess  of  purchase  price  over  the  fair  value  amortized  by  the
    straight-line  method  over  twenty  years.  The funds used to  acquire  the
    Software  Factory,  ETC, and PeachWeb were provided from the proceeds of the
    issuance of 1.725 million shares of common stock (see Note 6).

5.  On December 14, 1995, the Company  retired $11.2 million  principal of 9.76%
    Senior Notes due June 2000,  and recorded a $1.3 million ($0.8 million after
    tax)  extraordinary  loss relating to the early retirement of this debt. The
    funds used for the debt  retirement  were  provided from the proceeds of the
    issuance of 1.725 million shares of common stock (see Note 6).

    On January 5, 1996,  the Company  entered into an agreement  for a revolving
    credit  facility of $85 million  with its four major  banks,  replacing  the
    former lines of credit.  This new  unsecured  line of credit has a five-year
    term  expiring  January 2001.  The Company has the  following  interest rate
    options:  (i) adjusted LIBOR,  (ii) the higher of the prime rate or one-half
    of one percent above the federal funds rate or (iii) money market rate. This
    agreement  also requires an annual  facility fee between 0.125% and 0.20% of
    the facility based on the Company's ratio of funded debt to total capital.

6.  On November 7, 1995,  the Company  completed  the issuance of an  additional
    1.725 million shares of common stock through a public offering, resulting in
    net proceeds (after deducting issuance costs) of $38.7 million.  The Company
    used the net  proceeds to (i) repay $11.2  million of 9.76% Senior Notes due
    June  2000,  plus a $1.3  million  prepayment  penalty,  (ii) fund the $14.5
    million cash portion of the  acquisition  cost of the assets of the Software
    Factory, ETC, and PeachWeb Corp., and (iii) repay short-term borrowings used
    to fund seasonal working capital needs with an interest rate.


                                        7

<PAGE>



               CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS
Net sales for the second quarter of fiscal 1996 increased 27.7% to $85.8 million
compared to $67.2 million for the second quarter last year. Operating income for
the second quarter rose to $5.7 million in fiscal 1996 from $4.2 million for the
same period of fiscal 1995. Income before  extraordinary  item was $2.7 million,
or $.38 per share, for the second quarter which represents a 50.0% increase from
fiscal 1995 income before extraordinary item of $1.8 million, or $.29 per share.
There were 7,458,000 average outstanding shares for the second quarter of fiscal
1996,  compared to 6,195,000 average  outstanding  shares for the same period of
last year. This increase reflects shares issued in connection with the Company's
equity offering completed on November 7, 1995.

For the six-month  period ended December 31, 1995, net sales increased to $160.5
million  up 25.8%  from  $127.6  million  for the same  period of  fiscal  1995.
Operating  income  increased  for the  first six  months of fiscal  1996 to $9.7
million up from $7.0 million for the same period of fiscal 1995.  Income  before
extraordinary  item was $4.3  million,  or $.62 per  share,  for the six  months
ending  December 31, 1995.  This  represents a 53.6%  increase  from fiscal 1995
income before  extraordinary item of $2.8 million, or $.45 per share. There were
6,886,000  average  outstanding  shares  for the second  quarter of fiscal  1996
compared to  6,191,000  average  outstanding  shares for the same period of last
year.

Net income for the second  quarter  and for the six months  ended  December  31,
1995, included an $0.8 million  extraordinary loss resulting from the prepayment
of $11.2  million of 9.76% Senior  Notes.  After this  extraordinary  item,  net
income was $1.9 million,  or $.26 per share,  compared to $1.8 million,  or $.29
per share,  for the second  quarter of fiscal 1996 and 1995,  respectively.  Net
income for the first six  months of fiscal  1996 was $3.5  million,  or $.50 per
share,  compared  to $2.8  million,  or $.45 per share,  for the same  period of
fiscal 1995.

The  following  table  presents  the  major  components  from  the  Consolidated
Statements of Income as a percent of sales for the three and  six-month  periods
ended December 31, 1995 and 1994:
<TABLE>
<CAPTION>

                                                            Three Months Ended             Six Months Ended
                                                                December 31,                  December 31,

                                                             1995         1994              1995         1994
                                                           --------     --------          --------     ------
<S>                                                        <C>         <C>                <C>          <C>

      Net sales                                             100.0%       100.0%            100.0%       100.0%
      Cost of sales                                          75.8         75.0              75.9         76.1
                                                          -------      -------           -------       ------
      Gross profit                                           24.2         25.0              24.1         23.9
      Selling and administrative                             17.5         18.7              18.0         18.4
                                                          -------      -------           -------      -------
      Operating income                                        6.7          6.3               6.1          5.5
      Interest expense                                        1.6          2.2               1.8          2.1
      Other (income) expenses                                 0.0         (0.3)              0.0         (0.2)
                                                          -------      -------           -------      -------
      Income before income taxes                              5.1          4.4               4.3          3.6
      Income taxes                                            1.9          1.7               1.6          1.4
                                                          -------      -------           -------      -------
      Income before extraordinary item                        3.2          2.7               2.7          2.2
      Extraordinary loss on debt prepayment, net              0.9                            0.5
                                                          -------     --------          --------      -------
      Net income                                              2.3%         2.7%              2.2%         2.2%
                                                           =======      =======           =======      =======


</TABLE>

                                                             8

<PAGE>



RESULTS OF OPERATIONS (continued)

SALES
The Company groups sales into three business groups:  printing,  marketing,  and
publishing.  The  table  below  displays  net  sales  for each of  these  groups
expressed as a percent of net sales:

<TABLE>
<CAPTION>

                                            Three Months Ended                  Six Months Ended
                                                December 31,                       December 31,

                                             1995           1994                  1995           1994
                                            ------         ------                ------         -----
<S>                                         <C>            <C>                  <C>            <C>

           Printing                           69.9%          75.1%                71.8%          74.4%
           Marketing                          23.0           18.2                 21.5           18.2
           Publishing                          7.1            6.7                  6.7            7.4
                                             ------         ------               ------         ------
                                             100.0%         100.0%               100.0%         100.0%
                                             =====          =====                =====          =====
</TABLE>

Sales increased in each business group for both the three and six-month  periods
of fiscal 1996 compared to the same periods of fiscal 1995 as follows:  printing
15.6% and 18.0% increases;  marketing 56.0% and 43.9% increases;  and publishing
32.2% and 10.7%  increases.  Adjusted  for  acquisitions  and the  cessation  of
operations  of Sports  Marketing and Kids Link in June 1995,  overall  marketing
sales were up 37.9% for the second quarter and 32.9% for the first six months of
fiscal 1996.

PRINTING SALES
The increase in printing sales for both the second quarter and six-month  period
ended  December  31,  1995,  compared to the same  periods in fiscal  1995,  was
attributable  to  growth  in each of the five  printing  product  lines.  Strong
performance  in the current fiscal year in the financial  communications  (81.3%
and 110.0%  increases),  magazines  (28.9%  and 31.2%  increases)  and  research
journals  (3.0% and 5.2%  increases)  product  lines  accounted for 86.8% of the
growth in printing  sales.  Sales in the financial  communications  product line
rose due to strong equity and debt new-issue markets, increased merger activity,
and increased mutual fund business.  Sales growth in the magazines  product line
is a result of the addition of several new accounts.

MARKETING SALES
The increase in marketing  revenues for the second  quarter and first six months
of fiscal 1996 compared to the same periods in fiscal 1995, was driven primarily
by increases in point-of-purchase  revenues (26.7% and 28.2% increases),  direct
marketing sales (65.1% and 45.3% increases),  and catalog photography and design
revenues  (76.2% and 59.9%  increases).  In addition,  the  introduction  of the
software  replication  product  line  through the  acquisition  of The  Software
Factory during the second quarter boosted marketing revenues.  Point-of-purchase
revenue  increases  were the result of both growth in existing  accounts and the
addition of several new  accounts,  primarily  in the quick  service  restaurant
division.  The growth in direct marketing  revenues resulted  primarily from the
acquisition  of Ronald James Direct,  Inc. in the fourth  quarter of fiscal 1995
and the acquisition of The Mowry Company in the first quarter of fiscal 1996.

In addition,  Cadmus  Interactive,  which was formed at the end of first quarter
fiscal  1995,  contributed  4.2% and 7.3% of the overall  increase in  marketing
revenues  for  the  three  and  six-month   periods  ended  December  31,  1995,
respectively.  This  multimedia  product line,  which provides  state-of-the-art
computer  graphics,  has attracted  several  Fortune 1000 customers to deliver a
wide variety of presentations aimed toward both marketing impact and educational
programs.  The Company has further  expanded its  capabilities in this area with
the acquisition of PeachWeb Corp., a developer of Internet web sites, in October
1995.


                                                             9

<PAGE>



RESULTS OF OPERATIONS (continued)

PUBLISHING SALES
After a slight decline in first quarter of fiscal 1996, publishing revenues rose
32.2% in the second quarter  resulting in an increase of 10.7% for the first six
months of this fiscal year compared to the first six months of fiscal 1995.  The
increase in  publishing  revenues was  attributable  to increases for the custom
publishing  product line of 78.1% and 43.8% for the second quarter and first six
months of fiscal 1996, respectively.  These increases are due to the addition of
several new  accounts  combined  with record  advertising  sales.  The growth in
advertising sales was the result of the SkyBuy program  introduced in the second
quarter of fiscal 1996 which expands in-flight  readership  through a partnering
of Cadmus and  Continental  Airlines  with TWA and America  West.  The  consumer
publishing  product line posted a gain for the second  quarter;  however,  sales
were down  slightly  for the first six months of fiscal  1996.  The  decrease in
consumer publishing sales for the first six months resulted from the timing of a
trade show and the absence of a Tuff Stuff special edition,  which were included
in fiscal 1995 first quarter revenues. Consumer publishing revenues are expected
to remain  relatively flat as the Company looks to expand the circulation of the
new RPM and publication of Mid-Atlantic Soccer! has been suspended.  In addition
to  expanding  the  circulation  of RPM,  the Company  will  continue to produce
various special issues  targeted toward niche markets such as Gamer,  for gaming
card  collectors,  Kenner,  for Kenner figurine  collectors,  and Grid Iron, for
football enthusiasts.

COSTS AND OTHER EXPENSES
Cost of sales for the second  quarter  of fiscal  1996 were up by 0.8% of sales.
However,  selling and administrative expenses decreased by 1.2% of sales for the
second  quarter.  The  increase  in the cost of sales  and the  decrease  in the
selling  and  administrative  expenses  as a percent  of sales are a result of a
change in the sales mix combined with various  capacity issues which resulted in
a higher level of outsourcing.

Cost of sales  decreased  to 75.9% of sales for the  first six  months of fiscal
1996  compared  to 76.1% of sales for the same  period  last year.  Selling  and
administrative  expenses also  decreased for the first six months of fiscal 1996
to 18.0% of sales  compared to 18.4% of sales in fiscal  1995.  Both the cost of
sales and the selling and administrative expense ratios were positively impacted
by the  savings  generated  from  reductions  in the  workforce  related  to the
restructuring of the Company's  composition and prepress  operations which began
during the first quarter of fiscal 1995.  In addition,  savings  generated  from
procurement activities with rebates and freight consolidation contributed to the
overall decrease in the cost of sales ratio.  However,  restructuring savings in
selling and  administrative  expenses were offset  somewhat by costs  associated
with establishing the team to service the General Electric  contract,  launching
the project to unify  Cadmus,  establishing  and operating a New York office for
the  financial  communications  product  line,  and adding human  resources  and
information technologies executives and support staff.

Other  (income)  expenses as a percent of sales  shifted from income of 0.3% and
0.2% of sales for the  second  quarter  and first six  months,  respectively  of
fiscal 1995 to zero percent for the current year. This shift was due to the sale
of the Company's fifty percent  ownership in Central Florida Press,  L.C. during
the third quarter of fiscal 1995. During the second quarter and first six months
of fiscal 1995,  equity  income from this  partnership  totaled $0.2 million and
$0.4 million, respectively.

The  effective  income tax rate  changed  from 39.4% for the second  quarter and
first six months of fiscal 1995 to 38.0% for the same period of fiscal  1996,  a
decrease  attributable  to both higher levels of pretax income and a decrease in
the overall effective state tax rate.




                                                            10

<PAGE>



LIQUIDITY AND CAPITAL RESOURCES

For the six-month  period,  net cash provided by operating  activities  declined
from $4.9  million  for fiscal 1995 to $1.5  million for fiscal year 1996.  This
decrease  resulted   primarily  from  an  $11.0  million  increase  in  accounts
receivable and a $5.1 million increase in inventories, somewhat offset by a $7.3
million  increase in accounts  payable,  accrued  expenses and income taxes. The
increase in accounts receivable was due to both the timing of higher sales and a
slowdown in collection cycles. September accounted for approximately half of the
increase in sales from the prior year first  quarter.  Slowdown  in  collections
occurred   primarily  in  Fortune  1000   companies   and  does  not  reflect  a
deterioration of the quality of the Company's receivable portfolio.  The Company
is undertaking  efforts to enhance its billing processes,  which are expected to
improve  collections.  The $5.1 million  increase in inventory levels was driven
primarily by a $3.1 million  increase in work in process which  typically  turns
around  within  a  quarter.  In  addition,  finished  goods  and  raw  materials
inventories  were up $0.3 million and $2.1 million,  respectively.  Increases in
all components of inventories were consistent with projected sales volume.

Net cash used in investing  activities  totaled  $20.9 million for the first six
months of fiscal  1996  compared  to $7.3  million for the same period of fiscal
1995.  The  increase was due  primarily to $8.8 million cash paid in  connection
with acquisitions during the current fiscal year.

For the  first six  months  of  fiscal  1996,  net cash  provided  by  financing
activities  totaled $21.9 million,  which represents a $21.7 million change from
the $0.2 million used in financing activities for the first six months of fiscal
1995. The change from prior year was due to $38.7 in net proceeds  received from
the issuance of 1.725 million  shares of common stock,  partially  offset by the
use of these funds to repay  $11.2  million of 9.76%  Senior  Notes and the $1.3
million prepayment penalty,  and to repay short-term  borrowings which were used
to finance seasonal working capital needs.

Capital  investment  in property,  plant,  and  equipment  totaled $11.9 million
during the first six months of fiscal  1996.  Significant  projects  included in
this  amount were  presses for both the  Richmond  and  Baltimore  manufacturing
facilities, various prepress equipment, an automated imposing platemaker for the
magazine  product line in Richmond,  a platesetter for the Easton  manufacturing
facility, and a die cutter and gluer for the Charlotte  manufacturing  facility.
For  fiscal  1996,  the  Company  projects  that  capital  spending  will  total
approximately $21.0 million.

Total debt at December 31, 1995 was $45.0 million,  representing a $15.1 million
decrease from the $60.1 million at June 30, 1995. The decline in debt levels was
due to the  repayment of 9.76% Senior Notes and  short-term  borrowings  used to
fund seasonal  working  capital needs.  The Company's  debt-to-capital  ratio at
December 31, 1995 was 32.1%  compared to 49.3% at June 30, 1995. At December 31,
1995, there were no borrowings under the Company's $25 million  revolving credit
agreements.

On January 5, 1996, the Company entered into an agreement for a revolving credit
facility of $85 million with its four major banks, replacing the former lines of
credit.  This new unsecured line of credit has a five-year term expiring January
2001. The Company has the following  interest rate options:  (i) adjusted LIBOR,
(ii) the higher of the prime rate or one-half  of one percent  above the federal
funds rate or (iii) money market rate.  This  agreement  also requires an annual
facility  fee between  0.125% and 0.20% of the facility  based on the  Company's
ratio of funded debt to total capital.

On November 7, 1995, the Company  completed the issuance of an additional  1.725
million  shares of common  stock  through a public  offering,  resulting  in net
proceeds (after deducting issuance costs) of $38.7 million. The Company used the
net  proceeds to (i) repay $11.2  million of 9.76%  Senior  Notes due June 2000,
plus a $1.3 million prepayment penalty, (ii) fund the $14.5 million cash portion
of the acquisition cost of the assets of the Software Factory, ETC, and PeachWeb
Corp.,  and (iii) repay  short-term  borrowings  used to fund  seasonal  working
capital  needs with an  interest  rate of  approximately  6.4%  which  mature at
February 1997.


                                                            11

<PAGE>



                           PART II. Other Information


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

     (a)     At the 1995 Annual Meeting of Shareholders of the Company  ("Annual
             Meeting")  held  on  November  8,  1995,  5,536,207  shares  of the
             Company's  outstanding  common  stock were  present in person or by
             proxy and entitled to vote.

     (b)     At the Annual Meeting, the following matters were voted upon and
             received the vote set forth below:


             (1)  Election of Directors.  Each nominee for director was elected,
                  having received the following
                  vote:
<TABLE>
<CAPTION>

 Nominee                              For          Withheld      Broker Non-vote
 <S>                               <C>             <C>           <C>

 Price H. Gwynn, III               5,530,179          6,028             0
 John C. Purnell, Jr.              5,530,395          5,812             0
 Russell M. Robinson, II           5,530,695          5,512             0
 John W. Rosenblum                 5,530,687          5,520             0
 Jeanne M. Liedtka                 5,528,508          7,699             0
</TABLE>


             (2)  Ratification   of  designation  of  Arthur   Andersen  LLP  as
                  independent   public   accountants   for  the  current   year.
                  Designation of the auditors was ratified,  having received the
                  following vote:

                  For:                              5,521,960
                  Against:                              3,814
                  Abstain:                             10,433
                  Broker Non-vote:                          0

Item 6. Exhibits and Reports on Form 8-K

     (a)     Exhibits:
                                                   Description

             Exhibit 11                     Statement Regarding Computation 
                                            of Net Income per Share

             Exhibit 27                     Financial Data Schedule


     (b)     Reports on Form 8-K:

             (1)    The Company  filed a Form 8-K,  dated  October 16, 1995,  to
                    report the acquisition of The Mowry Company, PeachWeb Corp.,
                    and The Software  Factory,  Inc.,  including  the  financial
                    statements of The Software Factory, Inc. and Cadmus proforma
                    financial statements as of June 30, 1995.

             (2)    The Company filed a Form 8-K, dated October 24, 1995, 
                    reporting fiscal year 1996 first quarter earnings.

             (3)    The  Company  filed a Form  8-K,  dated  November  8,  1995,
                    reporting the  consummation of the purchase of the assets of
                    The Software Factory, Inc.


                                                            12

<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.





                                CADMUS COMMUNICATIONS CORPORATION


Date:   February 14, 1996
                                 /s/ C. Stephenson Gillispie, Jr.
                                C. Stephenson Gillispie, Jr.
                                Chairman, President, and Chief Executive Officer



Date:   February 14, 1996

                                 /s/ Michael Dinkins
                                 Michael Dinkins
                                 Vice President and Chief Financial Officer