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                                    UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549

                                      FORM 10-K
(Mark One)

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

    For the fiscal year ended September 28, 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 0-19717

                                   WPI GROUP, INC.
                                   ---------------
                (Exact Name of Registrant as Specified in Its Charter)

         New Hampshire                              02-0218767 
-------------------------------     ---------------------------------------
(State or other jurisdiction of     (I.R.S. Employer Identification Number)
incorporation or organization)

1155 Elm Street, Manchester, New Hampshire                 03101 
------------------------------------------               ----------
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number: (603) 627-3500
                               --------------

Securities registered under Section 12(b) of the Act: None
                                                      ----

Securities registered under Section 12(g) of the Act: 
Common Stock, par value $.01 per share
--------------------------------------
(Title of Class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 
405 of Regulation S-K is not contained herein, and will not be contained, to 
the best of the registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K or any 
amendment to this Form 10-K [ X ]

As of December 8, 1997, the aggregate market value of the 5,268,635 
outstanding shares of voting stock held by non-affiliates of the registrant 
was $41,158,576.

As of December 8, 1997, 6,007,247 shares of the Registrant's Common Stock, 
par value $.01 per share, were issued and outstanding.

                         Documents Incorporated by Reference
                         ----------                ---------

Portions of the following documents are incorporated by reference in this 
report on Form 10-K:

1)  Annual Report to Shareholders for fiscal year ended September 28,1997 
    (Part II).

2)  Proxy Statement dated January 9, 1998 for the Registrant's Annual     
    Shareholder's Meeting to be held on February 10, 1998 (Part III).

<PAGE>

                                        PART I

Item 1. Description of Business

General

WPI Group, Inc. ("WPI" or the "Company") designs, manufactures and markets 
high value added information and power solutions products used in mission 
critical systems for a wide range of applications. WPI operates through two 
business units:  The Information Solutions Group and the Power Solutions 
Group.  The Information Solutions Group is a leading manufacturer of rugged 
handheld computers and terminals designed to function under harsh 
environmental conditions.  Unlike conventional computer equipment, WPI's 
computers and terminals can function after a 10 foot drop to concrete, total 
immersion in water, exposure to extreme temperatures as well as dust 
and other harmful agents and can operate for up to 30 hours on a single 
battery charge.  WPI's products are used in a variety of applications such as 
vehicle monitoring and maintenance, utility field service and factory 
automation. The Power Solutions Group produces three distinct product lines:  
Industrial Power Conversion Systems (heavy duty power supplies used in 
elevators and semiconductor and thermal processing equipment); Electronic 
Ballasts (small specialized power supplies that power lamps used in medical 
equipment, multimedia projectors and lighting systems); and Precision 
Solenoids (electro-mechanical devices which are incorporated into cameras, 
printers and other products). 

The Information Solutions Group's product line consists of three types of 
handheld devices:  terminals, sold under the Oyster/Termiflex and MPSI brand 
names; handheld computers, sold under the Husky and MicroPalm brand names; 
and laptop computers, sold under the Husky and MPSI brand names.  WPI sells 
these products through a direct sales force, value-added resellers ("VARs") 
and distributors primarily to original equipment manufacturers ("OEMs") and 
end-users.  

The Power Solutions Group manufactures highly engineered electrical and 
electronic equipment and electro-mechanical devices which are typically 
mission critical components designed into larger systems.  These systems are 
used in products as diverse as elevators, semiconductor processing and 
thermal processing, specialty lamps, cameras, printers and computer 
equipment.  WPI sells its Power Solutions Group products through a direct 
sales force and independent sales representatives, primarily to OEMs and 
end-users.  

WPI was incorporated in New Hampshire in 1948 and its corporate headquarters 
are located at 1155 Elm Street, Manchester, New Hampshire 03101.  Its 
telephone number is (603) 627-3500.

Growth Strategy

WPI employs an aggressive growth strategy focused on internal expansion and 
growth through acquisitions.  The following are key elements of WPI's 
strategy:
    
-   Expansion Into New Vertical Markets.  The rugged handheld market is
    composed of a series of discrete vertical markets focused on application
    software, such as utility meter reading or vehicle maintenance.  The WPI
    salesforce works closely with OEMs, VARs and end-users to identify niche
    market applications and develops products, driven from existing technology
    when possible, to meet customer requirements in these markets.  By
    collaborating with software suppliers or in some cases supplying the
    software itself, WPI works aggressively to increase the number of vertical
    markets into which its rugged handheld products are sold.
    
-   Penetration of Existing Vertical Markets.  Once WPI has developed a
    specific market application, it works to expand its market penetration
    through strategic alliances with OEMs, VARs and distributors who are market
    leaders within their industries.  For example, WPI sells its hardware and
    vehicle maintenance software to the trucking industry through SPX
    Corporation, one of the largest suppliers 

                                         -2-
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    of vehicle service solutions in North America.  WPI also increases its
    penetration of the markets it serves by collaborating with its existing
    customers to design and manufacture specialized products, driven from
    existing technology when possible, to meet its customers' individual needs
    on a cost-effective and timely basis.

-   Leverage of Existing Customer Relationships.  WPI's substantial
    applications and engineering expertise positions it to capitalize on the
    trend among manufacturers to rely more heavily on specialized component
    providers for key value-added components and services.  WPI strives to
    become an integral part of the customer's product development activities
    and an exclusive or preferred supplier to the customer over the product
    life cycle.  By bringing its extensive engineering capabilities to the
    development effort, WPI is able to design creative solutions for its
    customers' product requirements, maximize the performance features and
    functionality of the components it sells and shorten the time-to-market for
    new product introductions, allowing its customers to focus on their core
    technologies and rationalize their production activities.  
    
-   Emphasis on Product Value.  WPI designs its products for efficient and
    low-cost manufacturing and structures its manufacturing operations to
    achieve low manufacturing costs while maintaining maximum production
    flexibility.  By manufacturing products with "dock to stock" reliability,
    WPI enables its customers to minimize costly and time consuming in-house
    inspections and to bring their products to market as quickly and
    cost-effectively as possible.  Moreover, WPI products must perform
    consistently over the product's life cycle.  Its ability to design and
    manufacture highly reliable, cost-effective products on a timely basis
    gives WPI a competitive advantage.
    
-   Strict Profit Center Management.  While WPI's corporate management team
    provides overall guidance, strategic direction and administrative support. 
    In addition, group vice presidents have responsibility for the day-to-day
    operations of its two business units and supervision of their respective
    managers.  WPI operates each business unit as a largely autonomous separate
    profit center which is held accountable for achieving its financial goals. 
    WPI believes that this profit center approach to management increases its
    responsiveness to changes in the market place and its customers'
    requirements and contributes to the Company's ability to grow profitably.
    
-   Acquisitions.  Since 1993, WPI has acquired six companies.  Management
    analyzes each acquisition opportunity using a stringent set of criteria,
    including its fit with existing operations, opportunities for product line
    enhancements and rationalizations, facilities consolidation and marketing
    leverage.  For example, the acquisition of Husky in June 1997 enabled the
    Information Solutions Group to reduce the number of manufacturing
    facilities, reduce operating overhead and increase sales capacity by
    offering WPI's products through Husky's European sales offices.  WPI
    intends to aggressively pursue acquisitions which will expand and enhance
    its existing products and sales and service capabilities as well as provide
    entry into new vertical markets.

Acquisitions

In October 1993, WPI acquired the solenoid product line from Magnetec 
Corporation ("Magnetec").  Magnetec had been a supplier of standard and 
custom linear actuators to the industry for more than two decades.  The 
Magnetec product line complemented the product offerings and manufacturing 
capabilities of WPI's Power Solutions Group.  

In May 1994, WPI completed the acquisition of all of the outstanding stock of 
Termiflex Corporation, a Merrimack, New Hampshire-based manufacturer of 
rugged hand-held and panel-mounted programmable terminals.  The acquisition 
allowed WPI to expand into the rapidly growing market for industrial 

                                         -3-
<PAGE>


information solutions.  Later that year, in September 1994, WPI acquired all 
of the outstanding stock of Micro Palm Computers, Inc. ("Micro Palm"), a 
Clearwater, Florida-based manufacturer of rugged, DOS/386 compatible 
hand-held PCs designed for use in hostile, field-based applications.  Micro 
Palm's operations were moved to Termiflex's New Hampshire facility in 1994.

In November 1995, WPI acquired all of the outstanding stock of Micro 
Processor Systems, Inc. ("MPSI"), a Michigan-based manufacturer of diagnostic 
and information-related systems and equipment, including Windows-Registered 
Trademark--based computers, for the automotive and heavy duty vehicle 
industries.  In addition to the expansion of its hardware offerings, the 
acquisition of MPSI gave WPI significant capabilities in the development of 
advanced diagnostic and decision support software as well as a significant 
presence in the growing market for information systems in the transportation 
industry.

In July 1996, WPI acquired all of the outstanding stock of Oyster Terminals 
Limited ("Oyster"), a United Kingdom - based manufacturer of rugged hand-held 
programmable terminals, including RF terminals, used in a variety of 
industries.  Oyster is widely-known in Europe and the United States for the 
wide variety of options available on its standard terminals and for its 
ability to customize for unique applications.

In June 1997, WPI completed the acquisition of Husky Computers Limited.  
Based in the United Kingdom with locations throughout Europe and the United 
States, Husky is a leading producer of rugged handheld computers used in 
utility meter reading, geotechnical, field service and other applications.

Products 

Information Solutions

WPI's Information Solutions Group designs, manufactures and markets rugged 
handheld terminals, PCs and laptop computers for a variety of applications 
worldwide.  The designation "rugged" signifies that the products are capable 
of withstanding levels of impact,  moisture, dust and temperature range in 
excess of the design tolerances of conventional handheld terminals and 
computers.  For example, WPI's products are designed to endure up to a ten 
foot drop to concrete, submersion in water indefinitely, temperature ranges 
from minus 20 degrees to 140 degrees Fahrenheit and exposure to heavy dust 
and other harmful agents.  Because these characteristics are most useful in 
non-office locations such as construction sites, service vehicles, garages, 
forests and other remote locations where electric power is often unavailable, 
WPI's products are battery-operated and designed to run up to 30 hours on a 
single battery charge. WPI achieves these performance characteristics through 
a combination of proprietary design techniques and the use of special 
components.  Special shock-resistant internal suspensions, together with 
casings of high impact plastics or light weight magnesium, shield the circuit 
boards and other components from severe impacts.  

WPI's rugged handheld product line is divided into three main categories: 

PCs:  The handheld PCs are rugged DOS-based, fully programmable computers 
with alpha/numeric keyboards and displays, internal memory and modems that 
perform sophisticated data collection and other computing functions.  Rugged 
handheld PCs are used in applications which require equipment that is 
portable, flexible, able to collect and process large amounts of data and, 
perhaps most importantly, rugged and reliable enough to ensure the absolute 
safety and integrity of the data being collected, whatever the field 
conditions might be.  They are used for many applications, including 
over-the-road vehicle management, meter reading, oil and gas production, 
surveying and forestry.  

Laptop Computers:  These rugged devices are Windows-Registered 
Trademark--based systems with full function displays.  WPI's rugged laptop 
computers are specifically designed for use in the field.  Although they have 
the same computing power, flexibility and connectivity as a conventional 
laptop computer, WPI's laptops, unlike conventional equipment, can withstand 
knocks, dust, dampness and temperature shocks.  Moreover, while 

                                         -4-
<PAGE>

a conventional computer might have a battery life of 2 to 3 hours, WPI's 
laptops can last up to 10 hours on a single charge.  They are used in 
applications which require a full function computer and the absolute safety 
and integrity of data in all field conditions.  WPI's rugged laptop computers 
are used in many applications, including field service engineering, mapping, 
geographic information processing and "scene of incident" reporting. 

Terminals:  These devices are designed to be either passive terminals with 
functionality limited to simple data input or programmable terminals capable 
of performing low level data processing.  The rugged, passive terminals have 
easily customizable displays, keypads, colors and cables, and are found in 
many commercial and industrial settings.  The programmable terminals have 
expanded memory, larger displays, RF and infrared communications 
capabilities, and can serve as gateways to networks.  They are used in many 
applications, including portable theater lighting controls, environmental 
monitoring and setup of industrial inkjet printers.  

In addition to the three WPI rugged handheld product lines, WPI offers 
diagnostic and decision support software, ranging from application cartridges 
with connectivity and diagnostic support for particular vehicles to powerful 
database building tools incorporated with expert "reasoning agents" that 
support solving maintenance and service problems and decision making.  WPI 
has developed programs for the maintenance and monitoring of autos, 
construction equipment and agricultural vehicles.  

Power Solutions

WPI's Power Solutions Group designs, manufactures and sells three lines of 
power products:  Industrial power conversion systems, electronic ballasts and 
precision solenoids.  All three product lines are highly engineered 
application-critical components that are designed into larger systems. 
Typically, WPI engineers will work closely with a customer during the design 
of the customer's system.  This high degree of customer involvement results 
in WPI's products being designed into the system, often making WPI a sole 
source or preferred supplier.  The Power Solutions Group contains the 
original product line on which WPI was founded.  The predecessor company to 
WPI entered the industrial transformer business in 1948, the electronic 
ballast business in 1983 and the precision solenoid business in 1993, with 
the acquisition of the Magnetec product line.

Industrial Power Conversion Systems.  These systems are large power supplies 
that are sold for industrial applications.  Power supplies are specialized 
electrical devices that are used to control, condition, convert or alter an 
electrical current within a larger electrically powered system.  These 
functions include converting alternating current to direct current, 
controlling the wave form of a current and changing the voltage of a current.

The largest current market for WPI's power conversion systems is the 
high-rise elevator market.  WPI's systems are used in both new elevator 
construction and modernization of existing elevators. The second largest 
market is the thermal processing industry.  Customers are manufacturers of 
high temperature furnaces used for heat treating, crystal growing and 
material processing.  WPI's power conversion systems regulate the power 
applied to the furnace heating elements, allowing for control of the furnace 
temperature. Other applications include industrial microwave ovens, plasma 
cutting equipment and electronic test equipment.

Electronic Ballasts.  These products are specialized power supplies used to 
ignite and power high intensity arc lamps.  Arc lamps provide approximately 
five times the light intensity of filament incandescent lamps and are used in 
a variety of medical and commercial applications, including medical 
endoscopes, multimedia projection, entertainment lighting and high intensity 
discharge ("HID") commercial lighting.  An arc lamp is a sealed glass bulb 
containing gases or metal vapors and electrodes.  Upon application of high 
voltage by the ballast, an arc is ignited between the electrodes, resulting 
in the ionization of the gas or vapor and the emission of light.  Following 
ignition, the ballast maintains constant power to assure consistent light 
intensity. WPI's electronic ballasts are used to power metal halide, mercury 
vapor, high pressure sodium and xenon arc lamps.  

                                         -5-
<PAGE>

Precision Solenoids.  These products convert electrical energy into linear 
mechanical motion.  When electrical power is applied to a solenoid, its 
plunger moves, either pulling or pushing a load a predetermined distance to 
accomplish a repetitive function as part of a larger system.  WPI's solenoids 
are used in a variety of commercial and industrial applications, including 
instant camera shutter controls, dot matrix printer heads, printer paper 
cutters, banking ATMs, door locks, blood gas analyzers, ground fault circuit 
interrupters and aircraft air supply controls. 

Customers
    
For Fiscal 1997, one customer represented 11% of WPI's net sales.  For Fiscal 
1996, two customers accounted for 11% and 10%, respectively, of WPI's net 
sales. For 1995, one of these customers accounted for 12% of WPI's net sales.

Sales and Marketing

WPI's marketing efforts are directed at identifying emerging markets for its 
products.  WPI's cooperative marketing efforts and design capabilities often 
result in long-term customer relationships and have contributed to a stable 
customer base.  Further, such cooperative efforts enable WPI to identify new 
product opportunities and participate in new product specifications as they 
are determined.  Other marketing efforts include market research, lead 
generation, production and distribution of WPI's product literature, trade 
shows and advertising.

Sales and marketing of rugged handheld hardware and software is carried out 
by a group of approximately 65 employees.  The sales force operates out of 
offices in the United States, the United Kingdom, France, Germany and Sweden. 
 Information Solutions Group products are sold directly to OEMs, end-users, 
VARs and distributors.  A typical end-user utilizes WPI's products for 
specific applications rather than general computing purposes.  Accordingly, 
applications software is an integral part of the rugged handheld hardware 
products and is an important part of the sale.  WPI has focused its sales 
efforts on a number of vertical markets where it sells its own applications 
software, on VARs that supply the applications software and on sophisticated 
end-users that develop their own application software.

WPI's Power Solutions Group products are sold through approximately 25 sales 
and marketing employees and approximately 25 manufacturers' representatives 
throughout North America and, to a lesser extent, in Europe.  Because of the 
technical nature of the products and WPI's emphasis on custom-design and 
development, the Company relies on its engineering staff to support sales 
efforts.  Applications engineers are available to discuss new applications, 
technical matters and customer needs with existing and potential customers. 
WPI's sales force works closely with its marketing group to follow up on 
sales leads and with the product development team to develop cost-effective 
solutions to its customers' requirements.  To complement these activities, 
the customer service staff interfaces with customers regarding delivery 
schedules and monitors customer satisfaction.

Manufacturing and Raw Materials

WPI manufactures nearly 100% of its products. The Company generally operates 
its manufacturing facilities one shift per day, five days per week. WPI uses 
many different raw materials in its manufacturing processes. However, WPI is  
not dependent on any one or several raw materials used in its manufacturing.  
WPI has multiple sources for each raw material used in the manufacture of its 
products and is not dependent on any one or group of its vendors for its raw 
material purchases. 

                                         -6-
<PAGE>

Backlog

WPI manufactures its products against orders from customers.  Backlog is 
comprised of orders for products that have scheduled shipment dates within 12 
months.  Some orders in WPI's backlog may be canceled under certain 
conditions, although cancellation rarely occurs.  As of September 28, 1997, 
WPI had a backlog of approximately $16,915,000, compared with a total backlog 
of approximately $11,978,000 at September 29, 1996.  Management believes that 
all of WPI's backlog at September 28, 1997 will be shipped in the 12 months 
following that date.  Because many of its contracts are performed within 
short time periods after receipt of an order, WPI does not believe that the 
level of its backlog is a meaningful predictor of its future results.

Product Development
    
WPI believes that its commitment to product development in its Information 
Solutions and Power Solutions groups  is a critical element of its strategy 
aimed at exploiting niche markets for each group's products.  WPI's product 
development activities are focused on the design of products identified by 
both its customers and its sales and marketing groups.  A key element of 
WPI's product development activities is the expansion of product offerings 
based on its existing technologies.  WPI charged to operations approximately 
$1,509,000, $2,940,000 and $4,005,000 for new product development 
in Fiscal 1995, 1996 and 1997, respectively.  Expenditures on new 
product development represented 5.8%, 6.2% and 6.4% of net revenues in Fiscal 
1995, 1996 and 1997, respectively.

Patents and Proprietary Information
    
WPI has a number of United States and foreign patents on certain products.  
WPI also relies on trade secrets, in-house expertise and technological 
advancement to maintain its competitive position.

WPI does not believe patent protection to be significant to its current 
operations.  However, WPI considers its patents to be a strong deterrent 
against unauthorized copying of its products and key product attributes.  WPI 
believes in vigorously protecting its rights under its patents.

Similarly, WPI and its subsidiaries have certain registered trademarks, none 
of which is considered significant to current operations.

Competition

Although WPI believes it is one of the leading manufacturers and distributors 
of certain of its products, the industries in which WPI competes are highly 
competitive. WPI competes with a relatively small number of full-line 
national manufacturers and a much larger number of regional manufacturers and 
manufacturers with limited product lines.  WPI believes that competition is 
largely based on, among other things, price, quality, breadth of product 
lines, distribution capabilities (including quick delivery times) and 
customer service. Certain of WPI's competitors are larger and have greater 
financial, technical and marketing resources than the Company. In certain 
circumstances, due primarily to factors such as freight rates, quick delivery 
times and customer preference for local suppliers, certain manufacturers and 
suppliers may have a competitive advantage over WPI in a given geographic 
region.  WPI believes that its size provides it with certain advantages of 
scale in both distribution and production relative to its competitors.  In 
addition, WPI believes that it competes effectively by offering superior 
customer service. 

Information Solutions Group

The major competitive factors in the programmable and DOS-based hand-held 
terminals and computer markets are portability, product performance, the 
ability to customize the unit to a customer's specific needs, customer 
support and ruggedness.  WPI has several competitors in specified niche 
markets. Certain of the Company's competitors in the data entry terminal 
market have developed terminals to complement their own product lines. Many 
of WPI's potential customers for 

                                         -7-
<PAGE>

handheld terminals and control panels now satisfy their needs by designing 
and producing their own units. Management believes that WPI competes 
effectively in this market by offering products that are rugged and easily 
customized and by providing excellent customer service.

Currently, WPI's diagnostic systems and related software are sold primarily to
the transportation industry. The major competitive factors in this market 
include product features, portability, product knowledge and customer service.  
WPI has a number of competitors in certain segments of the transportation 
market. Management believes that WPI competes effectively in these markets by 
offering innovative, rugged and portable products and by providing excellent 
customer service.

Power Solutions Group

WPI has a number of competitors in the markets for industrial power 
conversion systems. The major competitive factors in the markets for 
industrial power conversion systems are applications knowledge, product 
reliability, fully integrated design and manufacturing, delivery schedule, 
performance features and cost.  Management believes that WPI competes 
effectively in these markets by offering high quality products, applications 
expertise, superior customer service and quick delivery. 

WPI has some competition in the market for ballasts in endoscopes and 
multimedia projectors incorporating metal halide and xenon arc lamps.  In 
addition, some of WPI's potential customers for electronic ballasts now 
satisfy their needs by designing and producing their own units. The Company's 
principal sources of competition in the metal halide lamp ballast market 
outside of endoscopes and multimedia projection are manufacturers of magnetic 
lamp ballasts and, to a more limited extent, certain manufacturers of 
electronic ballasts.  In such applications where cost is a more important 
factor, magnetic lamp ballasts are often preferred over electronic ballasts.  
In each of these markets, WPI believes that it competes favorably against its 
competitors by offering quality, reliability and solutions tailored to its 
customers' unique needs.

WPI has several established competitors in the market for solenoids, some of 
which are larger, and some of which are smaller, than WPI.  WPI believes that, 
in these markets, it competes favorably against its competitors by offering 
high quality,dependable products, superior engineering expertise, and 
inovative, custom-tailored solutions.

Employees

As of December 15, 1997, WPI employed approximately 650 people, 400 of whom 
work in manufacturing, 75 of whom work in administration, 90 of whom work in 
product development and 90 of whom work in sales and marketing. None of the 
Company's employees is represented by a union, and management believes that 
the Company's employee relations are good.

Item 2. Description of Property

Properties

The Company currently owns and operates properties located in Warner, New 
Hampshire and Cwmbran, United Kingdom.  The Warner property is comprised of 
approximately 80,000 square feet of modern facilities used primarily for the 
manufacture of Power Solutions Group products.  The Cwmbran property is 
comprised of approximately 26,000 square feet of manufacturing facilities to 
produce handheld terminals. The Company leases approximately 17,000 square 
feet of modern manufacturing facilities in Sterling Heights, Michigan to 
produce diagnostic tools and 40,000 square feet of manufacturing facilities 
in Coventry, United Kingdom to produce handheld and laptop computers. The 
Company leases approximately 12,000 square feet of office space in 
Manchester, New Hampshire which houses its corporate offices.  In addition, 
the Company leases office space in six locations in the United States, 
France, Germany and Sweden for use by its sales and service staff.  WPI 
believes that its existing space is adequate for its current needs.

Regulatory Matters

The Company is subject to regulation under various and changing federal, 
state, local and foreign laws and regulations relating to the environment and 
to employee safety and health.  These environmental laws and regulations 
govern the generation, storage, transportation, disposal and emission of 
various 

                                         -8-
<PAGE>

substances.  Permits are required for operation of the Company's business and 
these permits are subject to renewal, modification and, in certain 
circumstances, revocation.  The Company believes that it is in substantial 
compliance with such laws and permitting requirements.  The Company is also 
subject to regulation under various and changing federal, state, local and 
foreign laws and regulations which allow regulatory authorities to compel (or 
seek reimbursement for) cleanup of environmental contamination at its own 
sites and at facilities where its waste is or has been disposed.

The Company expects to incur on-going capital and operating costs to maintain 
compliance with currently applicable environmental laws and regulations.  The 
Company does not expect such costs, in the aggregate, to be material to its 
financial condition, results of operations or liquidity.

Item 3. Legal Proceedings

The Company is not a party to any litigation that in management's opinion 
would have a material adverse effect upon the Company's financial position or 
results of operations.

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

Not applicable.
                                           
                                       Part II
                                           
Item 5. Market for Registrant's Common Stock and Related Stockholder Matters

The information required by this item is incorporated herein by reference to 
the information captioned "Shareholder Information" on page 27 of the 
Registrant's Annual report to Shareholders for the fiscal year ended 
September 28, 1997 (the "1997 Annual Report").

Item 6. Management's Discussion and Analysis of Financial Condition and 
Results of Operations

The information required by this item is incorporated herein by reference to 
the information captioned "Management's Discussion and Analysis of Financial 
Condition and Results of Operations" on pages 13 and 14 of the 1997 Annual 
Report.

Item 7. Financial Statements and Supplementary Data

The financial statements of the Registrant required by this item are 
incorporated herein by reference to pages 15 through 26 of the 1997 Annual 
Report.

                                       Part III
                                           
Item 9. Directors and Executive Officers of the Registrant

(a)   Directors.  The information with respect to directors required by this
      item is incorporated herein by reference to pages 4, 5 and 6 of the
      Registrant's Proxy Statement dated January 9, 1998 for the annual
      shareholders meeting to be held on February 10, 1998 (the "1998 Proxy
      Statement").

                                         -9-
<PAGE>

(b)   Executive Officers.  The information with respect to executive officers
      required by this item is set forth below:

                         EXECUTIVE OFFICERS OF THE REGISTRANT

NAME                 AGE       POSITION WITH THE COMPANY
----                 ---       -------------------------         
Michael Foster       62        Chairman of the Board of Directors and Chief
                               Executive Officer
         
Dennis Deegan        53        President and Chief Operating Officer
         
John Powers          40        Vice President and Chief Financial Officer
         
Dr. John Allen       45        Vice President, Power Solutions Group
         
Karen Hebert         37        Vice President, Human Resources
         
Timothy Jones        53        Vice President, Information Solutions Group
         
Michael Tule         36        Vice President, General Counsel and Secretary


Michael Foster, Chairman of the Board of Directors and Chief Executive 
Officer, led the leveraged buy-out of the Company from Walker Magnetics 
Group, Inc. in October 1988.

Dennis Deegan has served as President and Chief Operating Officer of the 
Company since June 1996.  From October 1988 to June 1996, Mr. Deegan served 
as Executive Vice President, Treasurer and Chief Financial Officer. 

John Powers has been Vice President and Chief Financial Officer of WPI since 
February 1997.  From August 1993 to February 1997, he was the Chief Financial 
Officer of Janco Companies, a manufacturer of medical and electronic 
products. From October 1987 to August 1993, he was a principal of Smith, 
Batchelder & Rugg, a certified public accounting firm.

Dr. John  Allen has served as Vice President, Power Solutions Group since 
November 1995.  From August 1995 he served as Corporate Vice President of 
Planning and Development.  From December of 1994 to August 1995,  he served 
as Director of Planning and Development.  From 1985 to December 1994, Dr. 
Allen was President of his own consulting firm, Allen Associates.

Karen Hebert has served as Vice President of Human Resources since August 
1995. From November 1993 to August 1995, she served as Director of Human 
Resources. From 1987 until 1993,  Ms. Hebert served as Manager of Human 
Resources with the Company.

Timothy Jones has served as Vice President, Information Solutions Group since 
November 1995.  From September 1995 to November 1995, Mr. Jones served as 
Assistant to the Chairman.  From 1993 to 1995, Mr. Jones was President of 
Ionic Fuel Technology, Inc..  From 1991 to 1995,  Mr. Jones was President of 
Plume & Atwood, Inc..

Michael Tule has served as Vice President and General Counsel of the Company 
since March 1996.  Mr. Tule has served as Secretary since December 1994.  
From 1987 to 1996, Mr. Tule was an attorney at McLane, Graf, Raulerson & 
Middleton, Professional Association.

                                         -10-
<PAGE>


Item 10. Executive Compensation

The information required under this item is incorporated herein by reference 
to pages 6 through 9 of the 1998 Proxy Statement.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The information required by this item is incorporated herein by reference to 
pages 3 and 4 of the 1998 Proxy Statement.

Item 12. Certain Relationships and Related Transactions

None.

Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)   Documents filed as part of the Report:
    
         (1)  Financial Statements of the Registrant and Report of Independent
              Public Accountants thereon incorporated herein by reference to
              pages 15 through 26 of the 1997 Annual Report.
              
              Consolidated Balance Sheets, September 28, 1997 and September 29,
              1996.

              Consolidated Statements of Income for the Years Ended September
              28, 1997, September 29, 1996 and September 24, 1995.
              
              Consolidated Statements of Stockholders' Equity for the Years
              Ended September 28, 1997, September 29, 1996 and September 24,
              1995.
              
              Consolidated Statements of Cash Flows for the Years Ended
              September 28, 1997, September 29, 1996 and September 24, 1995.
              
              Notes to Consolidated Financial Statements.
              
              Report of Independent Public Accountants.
              
         (2)  Exhibits:

              Incorporated by reference to the Exhibit Index at the end of this
              report.
    
    (b)  The Registrant has filed the following reports on Form 8-K since the
         beginning of the quarter ended September  28, 1997:
    
              On September 8, 1997 the Registrant filed Amendment No. 1 to 
              Form 8-K dated June 25, 1997. In that report, the Registrant 
              reported the acquisition of Husky Computers Limited. The 
              amendment contained the financial statements required by 
              Regulation S-X as follows:

                   Husky Computers Combined Financial Statements as of 
                   December 31, 1996 and 1995.

                   Pro Forma Combined Financial Statements for WPI Group, 
                   Inc. and Husky Computers as of September 29, 1996 and 
                   June 29, 1997.

                                         -11-
<PAGE>


                                      SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Registrant has duly caused this report to be signed 
on its behalf of the undersigned, thereunto duly authorized.

                                       WPI GROUP, INC.

December 18, 1997                      By:/s/Michael Foster
                                          -----------------
                                          Chairman

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

Signature                       Title                            Date
---------                       -----                            ----

/s/Michael Foster       Director, Chairman                 December 18, 1997
Michael Foster          and Chief Executive Officer
                        (Principal Executive Officer)


/s/Dennis Deegan        Director, President and            December 18, 1997
----------------        Chief Operating Officer       
Dennis Deegan           


/s/ John Powers         Vice President and                 December 18, 1997
----------------        Chief Financial Officer
John Powers             (Principal Financial and 
                        Accounting Officer)

/s/ Stephen Carlotti    Director                           December 18, 1997
--------------------
Stephen Carlotti

/s/Peter Danforth       Director                           December 18, 1997
--------------------
Peter Danforth

/s/Paul Giovacchini     Director                           December 18, 1997
--------------------
Paul Giovacchini

/s/Irving Gutin         Director                           December 18, 1997
--------------------
Irving Gutin 

/s/ Robert McCray       Director                           December 18, 1997
--------------------
Robert McCray

/s/ Steven Shulman      Director                           December 18, 1997
--------------------
Steven Shulman

/s/Bernard Tenenbaum    Director                           December 18, 1997
--------------------
Bernard Tenenbaum

                                         -12-
<PAGE>




                                    EXHIBIT INDEX
                                           
     Certain of the following exhibits, designated with an asterisk (*) are 
filed herewith. The exhibits not designated have been previously filed with 
the Commission and are incorporated herein by reference to the documents 
indicated following the descriptions of such exhibits.

<TABLE>
<CAPTION>
                                                                                          PAGE NO.
    EXHIBIT NO.    DESCRIPTION                                                        OF PAPER FILING
---------------    -----------                                                        ----------------
    <S>            <C>                                                                <C>
         3.1       Amended and Restated Articles of Incorporation of the
                   Company are incorporated by reference to Exhibit 3.1 to the
                   Registrant's Report on Form 10-KSB for the year ended
                   September 29, 1996. 

         3.2       Bylaws of the Company are incorporated by reference to
                   Exhibit 3.2 of the Registrant's Registration Statement on
                   Form S-4 filed with the Commission on February 22, 1994,
                   Registration No. 33-75656.
    
         10.1      Asset Purchase Agreement, dated September 28, 1993 among WPI
                   Group, Inc. and Magnetec Corporation and Tridex Corporation,
                   previously filed and incorporated by reference to
                   Registrant's report on Form 10-KSB for the year ended
                   September 26, 1993.
    
         10.2      Agreement and Plan of Merger, dated as of January 27, 1994,
                   by and between WPI Group, Inc. and Termiflex Corporation, 
                   previously filed and incorporated by reference to Exhibit
                   28.11 of Registrant's report on Form 8-K filed on September
                   30, 1994.
    
         10.3      Agreement and Plan of Merger, dated August 31, 1994, by and
                   between WPI Group, Inc. and Micro Palm Computers, Inc.,
                   previously filed and incorporated by reference to Exhibit
                   28.11 of Registrant's report on Form 8-K filed on September
                   30, 1994.
    
         10.4      Stock Purchase Agreement, dated November 7, 1995 between WPI
                   Group, Inc. and IVHS Technologies, Inc., previously filed
                   and incorporated by reference to Exhibit 28.13 of
                   Registrant's report on Form 8-K, dated November 10, 1995.
    
         10.5      Share Purchase Agreement dated July 16, 1996 by and between
                   WPI Group (U.K.) and D.R. Watkins and others, previously
                   filed and incorporated by reference to Exhibit 28.15 in
                   Registrant's Report on Form 8-K, dated July 16, 1996.
    
         10.6      Agreement for the sale and purchase of the share capital of
                   Husky Computers Limited, Husky Computers, Inc. and Husky
                   Computers GmbH, previously filed and incorporated by
                   reference to Exhibit 4.12 in Registrant's report on Form 8-K
                   dated June 25, 1997.
    
         10.7      Walker Power, Inc. Employee Stock Purchase Plan and Bonus
                   Award Plan adopted May 7, 1992, previously filed and
                   incorporated by reference to Exhibit 28.1 of Registrant's
                   Registration on Form S-8 filed on June 1, 1992, Registration
                   No. 33-48285.
    
         10.8      Termiflex Corporation 1981 Employee Incentive Stock Option
                   Plan, previously filed and incorporated by reference to
                   Exhibit 10.1 of the Termiflex Registration Statement No.
                   2-85910-B on Form S-8.

</TABLE>
                                         -13-
<PAGE>

<TABLE>
<CAPTION>
                                                                                          PAGE NO.
    EXHIBIT NO.    DESCRIPTION                                                        OF PAPER FILING
---------------    -----------                                                        ----------------
    <S>            <C>                                                                <C>

         10.9      The 1992 Stock Option Plan for Directors of Micro Palm
                   Computers, Inc., previously filed and incorporated by
                   reference to Exhibit 99.4 of the Registrant's Registration
                   Statement on Form S-8 filed February 28, 1996, Registration
                   No. 333-1696.
    
         10.10     WPI Group, Inc. Change in Control Plan adopted December 15,
                   1995, previously filed and incorporated by reference to
                   Exhibit 10.8 to the Registrant's Report on Form 10-KSB for
                   the year ended September 29, 1996.
    
         10.11     WPI Group, Inc. 1997 Employee Stock Purchase Plan and Bonus
                   Award Plan, each adopted on February 12, 1997, previously
                   filed and incorporated by reference to Exhibit 99 to the
                   Registrant's Registration on Form S-8 filed June 3, 1997
                   Registration No. 333-28335.
    
         10.12     WPI Group, Inc. 1997 Equity Incentive Plan, adopted June 10,
                   1997, as amended on December 12, 1997, previously filed and
                   incorporated by reference to Exhibit A of the Registrant's
                   Proxy Statement dated January 9, 1998.
    
         10.13     Noncompetition agreement, dated January 17, 1994, by and
                   between WPI Group, Inc. and William E. Fletcher, previously
                   filed and incorporated by reference to Exhibit 10.7 of the
                   Registrant's report on Form 10-KSB for the year ended
                   September 25, 1996.
    
         10.14     Lease agreement, dated October 7, 1994, by and between WPI
                   Group, Inc. and State Mutual Life Assurance Company of
                   America, previously filed and incorporated by reference to
                   Exhibit 10.9 of the Registrant's report on Form 10-KSB for
                   the year ended September 24, 1995.
    
         10.15     WPI Group, Inc. 1995 Stock Option Plan, adopted June 6,
                   1995, previously filed and incorporated by reference to
                   Exhibit 10.10 of Registrant's report on Form 10-KSB for the
                   year ended September 24, 1995.
    
         10.16     Commercial Loan Agreement, dated October 24, 1995,
                   previously filed and  incorporated by reference to Exhibit
                   4.9 of the Registrant's Report on Form 10-KSB for the year
                   ended September 24, 1995.
    
         10.17     First Amendment dated March 20, 1996 to Commercial Loan
                   Agreement dated October 24, 1995, previously filed and
                   incorporated by reference to Exhibit 4.4 of the Registrant's
                   Report on Form 10-KSB for the year ended September 29, 1996.
    
         10.18     Second Amendment dated July 12, 1996 to Commercial Loan
                   Agreement dated October 24, 1995, previously filed and
                   incorporated by reference to Exhibit 4.6 of the Registrant's
                   Report on Form 10-KSB for the year ended September 29, 1996.
    
         10.19     Third Amendment dated February 27, 1997 to Commercial Loan
                   Agreement dated October 24, 1995 is incorporated by
                   reference to Registrant's report on Form 10-Q for the period
                   ended March 30, 1997.
</TABLE>
                                         -14-
<PAGE>

<TABLE>
<CAPTION>
                                                                                          PAGE NO.
    EXHIBIT NO.    DESCRIPTION                                                        OF PAPER FILING
---------------    -----------                                                        ----------------
    <S>            <C>                                                                <C>


         10.20     Revolving Line of Credit Promissory Note dated February 27,
                   1997, replacement to Revolving Line of Credit Promissory
                   Note dated July 12, 1996, previously filed and incorporated
                   by reference to Exhibit 4.1 of the Registrant's Report on
                   Form 8-K for the period ended March 30, 1997.
    
         10.21     Fourth Amendment dated June 20, 1997 to Commercial Loan
                   Agreement dated October 24, 1997, previously filed and
                   incorporated by reference to Exhibit 4.13 in Registrant's
                   Report on Form 8-K dated June 25, 1996.
    
         10.22     Promissory Note dated June 20, 1997, previously filed and
                   incorporated by reference to Exhibit 4.14 in Registrant's
                   Report on Form 8-K dated June 25, 1997.
    
         10.23     Stock Pledge and Security Agreement dated June 20, 1997,
                   previously filed and incorporated by reference to Exhibit
                   4.15 in Registrant's Report on Form 8-K dated June 25, 1997.
    
    *    13        Portions of the 1997 Annual Report.
    
    *    21        List of subsidiaries of the Registrant as of September 28,
                   1997.

    *    23        Consent of Arthur Andersen LLP.
    
    *    27        Financial Data Schedule.

</TABLE>

                                         -15-