UNITED STATES
                       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 September 30, 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: 0-26902

                          NIMBUS CD INTERNATIONAL, INC.
             (exact name of registrant as specified in its charter)

                       Delaware                  54-1651183
           (State or other jurisdiction of    (I.R.S. Employer
            incorporation or organization)   Identification No.)

                               623 Welsh Run Road
                          Ruckersville, Virginia 22968
                    (Address of principal executive officers)

                         Telephone Number (804) 985-1100
              (Registrant's telephone number, including area code)

      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    _______

      As of November 12, 1997 there were 21,388,581  shares of the  Registrant's
Common Stock outstanding.

<PAGE>
                          NIMBUS CD INTERNATIONAL, INC.
                                      INDEX
                          PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements:

      Condensed Consolidated Balance Sheets
      September 30, 1997 and March 31, 1997.......................3

      Condensed Consolidated Statements of Income
      Three and six months ended September 30, 1997 and 1996......4

      Condensed Consolidated Statements of Cash Flows
      Six months ended September 30, 1997 and 1996................5

      Notes to Condensed Consolidated Financial Statements........6

Item 2. Management's Discussion and Analysis of Financial Condition
      and Results of Operations...................................9

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings........................................13

Item 4. Submission of Matters to a Vote of Security Holders......14

Item 5. Other Information........................................14

Item 6. Exhibits and Reports on Form 8-K.........................14

Signatures  .....................................................15

<PAGE>

PART I.     FINANCIAL INFORMATION
ITEM 1.     CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                 NIMBUS CD INTERNATIONAL, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (Dollars in thousands, except share data)
<TABLE>
<S>                                                 <C>               <C>
                                                    September 30,     March 31,
                                                       1997              1997
                      ASSETS                        (Unaudited)
Current Assets:
  Cash and cash equivalents                           $  8,728          $ 7,790
  Accounts and notes receivable, less allowances
   for doubtful accounts of $2,772 and $2,014           31,606           26,393
  Inventories                                            1,922            2,217
  Prepaid expenses                                       1,859            1,329
  Deferred income taxes                                  3,412            3,415
                                                   ------------     ------------
   Total current assets                                 47,527           41,144
                                                   ------------     ------------
Property, plant, and equipment, net                     70,090           63,431
Other assets and intangibles                             4,124            3,697
                                                   ============     ============
                                                      $121,741         $108,272
                                                   ============     ============
       LIABILITIES AND STOCKHOLDERS' EQUITY 
Current Liabilities:
  Accounts payable                                    $  8,597         $  5,617
  Current portion of long-term debt                      6,076            5,159
  Accrued expenses and other liabilities                14,793           13,533
  Income taxes payable                                   9,177            6,665
                                                   ------------     ------------
   Total current liabilities                            38,643           30,974
                                                   ------------     ------------

Long-term debt                                          20,985           20,840
Deferred income taxes                                    3,557            3,561
Minority interest and other liabilities                  1,828              475

Commitment and contingencies

Stockholders' equity:
  Preferred stock, $0.01 par value; authorized
   2,000,000 shares, no shares issued or outstanding
  Common stock, $0.01 par value, 60,000,000
   shares authorized, 39,012,786 shares issued;
   21,388,581 and 20,870,579 shares outstanding            390              390
  Paid-in capital                                       65,431           66,775
  Retained earnings                                     36,337           31,969
  Cumulative foreign currency translation adjustments      315              378
                                                   ------------     ------------
                                                       102,473           99,512
  Treasury stock, at cost, 17,624,205 and              (45,745)         (47,090)
   18,142,207 shares
                                                   ------------     ------------
   Total stockholders' equity                           56,728           52,422
                                                   ============     ============
                                                      $121,741         $108,272
                                                   ============     ============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

<PAGE>

                          NIMBUS CD INTERNATIONAL, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  (Amounts in thousands, except per share data)
                                   (Unaudited)
<TABLE>
<S>                                <C>        <C>          <C>        <C>
                                     Three months ended       Six months ended
                                         September 30,           September 30,
                                   ---------------------   ---------------------
                                      1997       1996         1997       1996
                                   ---------  ----------   ---------  ----------
Net sales                           $32,496     $31,361     $60,718     $60,590
Cost of goods sold                   22,335      21,960      43,639      43,237
                                   ---------  ----------   ---------  ----------
  Gross profit                       10,161       9,401      17,079      17,353

Selling, general and administrative   3,943       3,360       9,225       7,579
expenses
                                   ---------  ----------   ---------  ----------
  Operating income                    6,218       6,041       7,854       9,774

Interest expense                        691         671       1,389       1,271
Other (income) expense, net           (260)       (110)       (477)       (190)
                                   ---------  ----------   ---------  ----------
  Income before income taxes          5,787       5,480       6,942       8,693

Provision for income taxes            2,123       1,933       2,573       3,137
                                   ---------  ----------   ---------  ----------

  Net income                         $3,664      $3,547      $4,369      $5,556
                                   =========  ==========   =========  ==========

Earnings per share                    $0.16       $0.15       $0.19       $0.24
                                   =========  ==========   =========  ==========

Weighted average shares outstanding  23,056      23,052      23,009      23,037
                                   =========  ==========   =========  ==========
</TABLE>
     See accompanying notes to condensed consolidated financial statements.

<PAGE>

                 NIMBUS CD INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                   (Unaudited)
<TABLE>
<S>                                                      <C>         <C>
                                                            Six months ended
                                                              September 30,
                                                         -----------------------
                                                           1997        1996
                                                         ----------  ----------
Cash flows from operating activities:
  Net income                                               $4,369      $5,556
  Adjustments to reconcile net income to net cash provided
   by operating activities:
  Depreciation and amortization                             5,590       4,296
  Minority interest                                          (212)
  Net (gain) on sale of equipment                             (54)
  Other, net                                                   16        (40)
  Change in operating assets and liabilities:
   Accounts receivable-trade                               (5,278)     (2,706)
   Inventories                                                282      (1,051)
   Prepaid expenses                                          (547)       (617)
   Accounts payable                                         2,968       1,735
   Accrued expenses                                         1,304       1,243
   Income taxes payable                                     2,594       1,812
                                                         ----------  ----------
   Net cash provided by operating activities               11,032      10,228
                                                         ----------  ----------
Cash flows from investing activities:
  Purchase of property, plant and equipment               (11,799)    (12,940)
  Proceeds from sale of equipment                             113
  Other investing activities                                 (339)        (12)
  Expenditures for computer software                         (255)     (1,230)
                                                         ----------  ----------
   Net cash used in investing activities                  (12,280)    (14,182)
                                                         ----------  ----------
Cash flows from financing activities:
  Proceeds from exercise of stock options                                  41
  Revolving credit borrowings, net                          4,259       1,250
  Repayment of debt                                        (2,958)
  Capital contribution by minority interest                 1,010
                                                         ----------  ----------
   Net cash provided by financing activities                2,311       1,291
                                                         ----------  ----------

Effect of exchange rate changes on cash                      (125)         79
  Net increase (decrease) in cash                             938     (2,584)
                                                         ----------  ----------

Cash and cash equivalents, beginning of period              7,790       3,593
                                                         ----------  ----------

   Cash and cash equivalents, end of period                $8,728      $1,009
                                                         ==========  ==========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

<PAGE>

                          NIMBUS CD INTERNATIONAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in thousands)
                                   (Unaudited)

1.    Preparation of Interim Financial Statements:

      The   condensed   consolidated   financial   statements   of   Nimbus   CD
      International,  Inc.  (referred to as "Nimbus" or the "Company") have been
      prepared in accordance  with the rules and  regulations  of the Securities
      and  Exchange  Commission  ("SEC").  In the opinion of  management,  these
      statements  include all adjustments  necessary for a fair  presentation of
      the financial  position,  operating  results and cash flows of all interim
      reporting  periods reported  herein.  All such adjustments are of a normal
      recurring nature. Certain information and footnote disclosures prepared in
      accordance with generally accepted accounting  principles have been either
      condensed  or  omitted  pursuant  to SEC rules and  regulations.  However,
      management  believes  that the  disclosures  made are  adequate for a fair
      presentation  of results  of  operations  and  financial  position.  It is
      suggested that these financial  statements be read in conjunction with the
      Company's  audited financial  statements and notes thereto,  together with
      management's discussion and analysis of financial condition and results of
      operations,  contained  in the  Company's  Annual  Report to  Stockholders
      incorporated by reference in the Company's  Annual Report on Form 10-K for
      the fiscal year ended March  31,1997.  The results of  operations  for the
      three and six month periods ended  September 30, 1997 are not  necessarily
      indicative  of the  results for the entire  fiscal  year ending  March 31,
      1998.

2.    Inventories:
      Inventories consist of the following:
<TABLE>
<S>                                              <C>         <C>
                                                 September    March 31,
                                                  30, 1997      1997
                                                 ----------  -----------
       Raw materials                                $1,341       $1,518
       Work-in-process                                 466          236
       Finished goods                                  115          463
                                                 ==========  ===========
                                                    $1,922       $2,217
                                                 ==========  ===========
</TABLE>

3.    Property, Plant and Equipment:
      Property, plant and equipment consisted of the following:
<TABLE>
<S>                                            <C>           <C>
                                               September 30,    March 31,
                                                    1997          1997
                                                 ----------  -----------
       Land, buildings and improvements             $20,811      $20,865
       Machinery and equipment                       67,586       62,925
       Construction in progress                      12,437        5,976
                                                 ----------  -----------
                                                    100,834       89,766
       Less accummulated depreciation              (30,744)     (26,335)
                                                 ----------  -----------
       Net property, plant and equipment            $70,090      $63,431
                                                 ==========  ===========
</TABLE>
<PAGE>

                          NIMBUS CD INTERNATIONAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  (Dollars in thousands except per share data)
                                   (Unaudited)
 4.   Commitments and Contingencies:

      (a)   Capital Expenditures:  At September 30, 1997 commitments for capital
            expenditures amounted to approximately $ 6,449.

      (b)   Royalties: The Company is party to various licensing agreements in
            both the United States and the United Kingdom for technology
            associated with its product and the related manufacturing processes,
            under which the Company is obligated to pay royalties ranging from
            $.015 to $.045 per disc manufactured.  In the United States, one
            such licensor's patents were found invalid in a third party civil
            action in July 1996, and accordingly, the Company suspended payment
            of royalties as provided in the license agreement. The licensor has
            appealed the verdict and a decision is not anticipated until
            mid-1998. In the United Kingdom, the Company has suspended payment
            of royalties to a licensor due to a dispute regarding breach of the
            license agreement. Pending their ultimate disposition, the Company
            continues to accrue royalty expense under these agreements, for
            which the balance aggregates to $6.8 million at September 30, 1997.
            The Company believes that the outcome of these cases will not result
            in a material adverse impact on the results of operations or the
            consolidated financial position of the Company.

      (c)   Litigation and related matters:  On  March 18,1996, the Company
            received notification from the United States Environmental
            Protection Agency ("EPA") alleging that the Company was a
            Potentially Responsible Party  ("PRP") for the cleanup of surface
            water contamination at the Cherokee Oil Company Site (the "Site") in
            Charlotte, North Carolina which was used by the Company for the
            disposal of certain byproducts of its manufacturing processes.
            Subsequently, the U.S. Department of Justice notified the Company
            that it intended to seek recovery of the approximately $6.4 million
            environmental cleanup cost incurred at the site from the Company and
            the other PRP's, each of which was considered jointly and severally
            liable. In April, 1997, the Company and numerous other PRPs reached
            a settlement with the EPA. Under the terms of the settlement, 58
            PRPs and the Site owner have reimbursed the EPA $4.0 million for the
            cleanup costs. The Company's share of the aggregate settlement, paid
            June 25, 1997, was $277, which was fully provided for at March 31,
            1997.

5.    Accounting Standard Changes

      Effective  March 31,  1998,  the Company will adopt  Financial  Accounting
      Standards Board ("FASB") Statement of Financial  Accounting  Standards No.
      128  "Earnings  Per Share"  (SFAS 128)  which  will  supercede  Accounting
      Principles  Board Opinion No. 15 "Earnings  Per Share".  SFAS 128 requires
      that "basic earnings per share" be computed by dividing  income  available
      to common  stockholders  by the weighted  average  number of common shares
      outstanding for the period.  "Diluted earnings per share" will reflect the
      potential  dilution if stock options or other  securities  would result in
      the  issuance or  exercise of  additional  shares of common  stock.  Early
      adoption of the standard is prohibited;  however, the Company has computed
      the pro  forma  earnings  per share  amounts  using  the new  standard  as
      follows:
<TABLE>
<S>                               <C>      <C>           <C>      <C>
                                  Three months ended     Six months ended
                                    September 30,          September 30,
                                  ----------------       ---------------
                                    1997     1996          1997     1996
                                  -------  --------      -------  -------
       Basic earnings per share     $0.17    $0.17        $0.21    $0.27
       Diluted earnings per share   $0.16    $0.15        $0.19    $0.24
</TABLE>
<PAGE>

                          NIMBUS CD INTERNATIONAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in thousands)
                                   (Unaudited)

In June 1997, the FASB issued Statement No. 130 "Reporting Comprehensive Income"
("SFAS 130") which is effective for fiscal years  beginning  after  December 15,
1997, including interim periods. SFAS 130 establishes standards of reporting and
display  of   comprehensive   income  and  its  components  in  a  full  set  of
general-purpose  financial statements,  either in the statement of operations or
in a separate  statement.  Additionally,  SFAS 130  requires  the display of the
accumulated balance of other  comprehensive  income as a separate caption in the
equity  section  of the  balance  sheet as well as the  disclosure  of  material
components of accumulated other  comprehensive  income either on the face of the
balance sheet,  in a statement of changes in equity or in notes to the financial
statements.  The Company does not believe that  adoption of SFAS 130 will have a
material effect on the Company's financial statements.

The FASB also  issued  Statement  No.  131  "Disclosures  about  Segments  of an
Enterprise and Related Information" ("SFAS 131") in June 1997 which is effective
for fiscal years  beginning after December 15, 1997,  including  interim periods
after the year of initial adoption.  SFAS 131 established  standards for the way
that  public  companies  report  information  about  operating  segments in both
interim and annual financial  statements,  including  related  disclosures about
products and services,  geographic  areas, and major customers.  The Company has
not determined what, if any, impact SFAS 131 will have on the operating segments
reported  or the  impact  SFAS 131 will  have on its  financial  statements  and
related disclosures.

<PAGE>

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Results of Operations

Three Months Ended September 30, 1997 Compared to Three Months Ended September
30, 1996

Net Sales.  Total discs sold increased  23.3% to 45.5 million discs in the three
months ended  September  30, 1997 from 36.9 million  discs in the same period of
1996.  The increase  was the result of a 37.1%  increase in CD-ROM unit sales to
27.0  million  discs in the three  months  ended  September  30,  1997 from 19.7
million  discs in the same  period  of 1996  combined  with a 6.4%  increase  in
CD-Audio  unit sales to 18.3 million  units in the three months ended  September
30,  1997 from 17.2  million  units in the same  period of 1996.  In the  United
States, CD-ROM volume increased 19.9% to 18.7 million discs in the second fiscal
quarter  of 1998  from 15.6  million  discs in the same  period of fiscal  1997.
United Kingdom CD-ROM volume  increased 97.6% to 8.3 million discs in the second
quarter of fiscal 1998 from 4.2 million discs in the same period of fiscal 1997.
CD-Audio  volume  decreased in the United States by 2.5% to 7.9 million discs in
the three months ended September 30, 1997 from 8.1 million discs during the same
period of 1996 while the United Kingdom experienced a 15.6% increase in CD-Audio
sales units to 10.4 million discs during the second  quarter of fiscal 1998 from
9.0 million  units in the same period of fiscal 1997.  In addition,  227,000 DVD
discs  were sold in the  United  States  during the three  month  period  ending
September 30, 1997.

Net sales  increased  3.5% to $32.5 million in the three months ended  September
30, 1997 from $31.4 million in the same period of 1996.  Compact disc  revenues,
excluding  DVD,  increased  6.4% to $31.7  million  in the  three  months  ended
September 30, 1997 from $29.8 million in the second  quarter of fiscal 1997. DVD
revenues were $0.8 million in the three months ended  September 30, 1997,  while
turnkey and other related  service  revenues of Nimbus Software  Services,  Inc.
("NSS"),  which was closed in the first quarter of fiscal 1998, contributed $1.5
million of revenues  for the three month period ended  September  30, 1996.  The
increase in net sales is due to the  increase in disc volumes  described  above,
offset by a decline in the average  disc  selling  price from $0.81 to $0.70 for
the three month periods  ended  September  30, 1996 and 1997,  respectively,  or
13.6%.  The price decline,  which was experienced  both in the United States and
the United  Kingdom,  reflects an  oversupply  of  production  capacity in North
America  and  Europe as well as a shift in sales mix to  CD-ROM  from  CD-Audio,
which typically has a higher per unit packaging configuration.  In addition, the
Company has realized  lower disc prices under a vendor supply  agreement,  under
which  cost  efficiencies   resulting  from  increased  production  volumes  are
reflected in the disc sales price. The price declines noted above were partially
mitigated  by exchange  rate  changes  between the United  States and the United
Kingdom  during the three  month  periods  ended  September  30,  1997 and 1996,
respectively.

The Company believes that disc sales in its third fiscal quarter ending December
31, 1997 will continue to reflect growth in its CD-ROM volume. While the Company
expects  continued  strong demand for CD-ROM,  CD-Audio and  continued  emerging
demand for DVD products, net revenues in its third fiscal quarter continue to be
dependent on product sales and packaging mix.

Gross Profit.  Gross profit  increased 8.5% to $10.2 million in the three months
ended  September  30, 1997 from $9.4  million in the same period of 1996.  Gross
profit as a percent of net sales  increased  to 31.4% in the three  months ended
September  30, 1997 from 29.9% in the same period of 1996.  The  increase in the
Company's  gross profit margin during the second  quarter of fiscal 1998 was due
to the higher unit volumes  mentioned above,  reduced raw material and packaging
material costs and a reduction in the overall level of factory  overhead charges
due to the closure of the Company's  Sunnyvale  facility.  The  Company's  gross
profit margin was unfavorably  impacted by an increase in  depreciation  expense
resulting  from capital  expansion and  acquisition  projects in fiscal 1997 and
1998,  primarily  DVD related.  The Company also incurred  higher  packaging and
factory  direct  labor  due to higher  sales  levels  of  non-automated  packing
configurations  and the absorption of training  salaries as the Company expanded
its  production  capacity.  Finally,  the Company  incurred  additional  factory
overhead charges related to the acquisition and set-up of additional warehousing
facilities  at  both  the  Charlottesville  and  Provo  locations.  The  Company
anticipates  improvement  in the gross  profit as a  percentage  of sales in the
third fiscal quarter as depreciation  and factory  overhead charges are absorbed
by higher  production  volumes and the Company continues to realize the benefits
of restructuring its North American operations into the two remaining plants.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses  increased  14.7% to $3.9  million in the three  months
ended  September  30, 1997 from $3.4  million in the same  period of 1996.  As a
percentage of net sales, selling,  general and administrative expenses increased
to 12.0% in the three  months  ended  September  30, 1997 from 10.8% in the same
period of the prior year.  The increase in the second  fiscal  quarter  includes
$0.3 million of costs  incurred in the process of  establishing  the  EuroNimbus
operations in Luxembourg.  In addition, the Company experienced higher sales and
marketing costs,  primarily  personnel and office facilities expenses associated
with efforts to penetrate the OEM and DVD markets in the United States,  and bad
debt expense in the United Kingdom.

Operating  Income.  Operating income increased 3.3% to $6.2 million in the three
months  ended  September  30, 1997 from $6.0 million in the same period of 1996.
The  increase in  operating  income  primarily  reflects  the higher unit volume
mentioned  above,  partially  offset by the  increase  in  selling,  general and
administrative expenses.  Operating income as a percentage of net sales remained
constant at 19.1% in the three month periods ended  September 30, 1997 and 1996,
respectively.

Interest Expense.  Interest expense was $0.7 million for each of  the three
month periods ended September 30, 1997 and 1996.

Income Taxes.  Income tax expense  increased to $2.1 million in the three months
ended  September  30,  1997 from $1.9  million in the same  period of 1996.  The
increase in income tax expense is  attributable to the increase in income before
taxes. The effective tax rate was 36.7% for the three months ended September 30,
1997 as compared with 35.3% for the three month period ended September 30, 1996.

Six Months Ended September 30, 1997 and 1996

Net Sales.  Total discs sold  increased  17.7% to 82.3 million  discs in the six
months ended  September  30, 1997 from 69.9 million  discs in the same period of
1996.  The  increase  resulted  from a 18.8%  increase in CD-ROM  volume to 46.7
million discs from 39.3 million discs for the six month periods ended  September
30, 1997 and 1996, respectively, combined with a 14.7% increase in CD-Audio unit
sales to 35.1 million  discs in the six month period  ended  September  30, 1997
from 30.6 million discs for the same period of 1996. The increase in CD-ROM unit
sales was experienced primarily in the United Kingdom,  which increased 72.3% to
14.3 million  discs in fiscal 1998 from 8.3 million discs in fiscal 1997. In the
United States,  CD-ROM unit sales increased 4.5% to 32.4 million discs from 31.0
million   discs  for  the  six  months  ended   September  30,  1997  and  1996,
respectively.  CD-Audio  volumes  increased both in the United States and in the
United Kingdom. In the United States, CD-Audio unit sales increased 7.6% to 15.6
million units from 14.5 million  units in the six month periods ended  September
30, 1997 and 1996,  while in the United  Kingdom,  CD-Audio unit sales increased
21.7% to 19.6  million  units for the first six months of fiscal  1998 from 16.1
million units in the same period of the prior fiscal year. DVD discs sold during
the six month period ended September 30, 1997 were 0.4 million units.

Net sales increased to $60.7 million for the six months ended September 30, 1997
from $60.6 million for the same period of 1996. Compact disc revenues, excluding
DVD,  increased 3.9% to $59.0 million in the six months ended September 30, 1997
from $56.8  million in fiscal 1997.  DVD  revenues  were $1.5 million in the six
months  ended  September  30,  1997,  while  turnkey and other  related  service
revenues  of NSS,  which  was  closed  in the  first  quarter  of  fiscal  1998,
contributed  $3.8 million of revenues  for the six month period ended  September
30,  1996.  Approximately  $8.6 million of the increase in CD revenues is due to
the  increase in disc  volume,  offset by a decline in the average  disc selling
price from $0.81 to $0.72,  or 11.1%,  for the six month periods ended September
30, 1996 and 1997, respectively.

Gross  Profit.  Gross profit  decreased  1.7% to $17.1 million for the six month
period ended  September  30, 1997 from $17.4 million in the same period of 1996.
Gross margin decreased to 28.2% in the six month period ended September 30, 1997
from  28.7% in the same  period  of  1996.  The  decrease  in gross  profit  was
attributable  to the decline in the average  selling  price noted above,  a $1.4
million  increase in depreciation  expense  associated with fiscal 1997 and 1998
capital  acquisitions,  and a $0.5  million  increase  in  freight  expense.  In
addition,  the Company incurred  additional  factory overhead charges associated
with the transferring of the CD  manufacturing  equipment and inventory from the
Sunnyvale  facility to the Provo  plant,  and the  establishment  of  additional
warehouse  facilities at both the  Charlottesville  and Provo  locations.  These
costs were partially  offset by reduced raw material costs and a decrease in the
overall level of factory  overhead  expenses due to the closure of the Company's
Sunnyvale facility.

Gross profit for the six month period ended  September 30, 1997 does not reflect
an estimated  $0.7  million  recoverable  under a vendor  supply  agreement  for
under-utilization  of dedicated  manufacturing  capacity at the Company's  Provo
facility  during  this  period.  Income  recognition  under  the  "take  or pay"
provisions of the agreement has been deferred  since the required  annual volume
may ultimately be purchased over the remainder of fiscal 1998.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses increased 21.1% to $9.2 million in the six month period
ended  September  30,  1997 from $7.6  million in the same  period of 1996.  The
increase in the current year  includes a $0.6 million  increase in the allowance
for  doubtful  accounts,  and $0.6  million of costs  incurred in the process of
establishing the EuroNimbus operations in Luxembourg.  In addition,  the Company
incurred higher corporate, administrative support, and sales and marketing costs
due to the increased level of sales noted above and by the Company's  efforts to
penetrate  additional  product  markets.  The prior year  selling,  general  and
administrative  expenses  includes  a $0.3  million  reserve  for  environmental
clean-up   costs.   As  a  percentage  of  net  sales,   selling,   general  and
administrative expenses increased to 15.2% in the six months ended September 30,
1997 from 12.5% in the same period of 1996.

Operating  Income.  Operating  income decreased 19.4% to $7.9 million in the six
month  period ended  September  30, 1997 from $9.8 million in the same period of
1996.  The decrease in operating  income is primarily due to the higher level of
selling,  general and administrative  expenses mentioned above. Operating income
as a  percentage  of net  sales  decreased  to  13.0%  in the six  months  ended
September 30, 1997 from 16.2% in the same period of 1996.

Interest  Expense.  Interest expense increased to $1.4 million in the six months
ended  September  30,  1997 from $1.3  million in the same  period of 1996.  The
increase in interest  expense  reflects an increase in the  Company's  effective
interest rate during fiscal 1998.

Income  Taxes.  Income tax expense  decreased  to $2.6 million in the six months
ended  September  30,  1997 from $3.1  million in the same  period of 1996.  The
effective  tax rate was 37.1% for the six months  ended  September  30,  1997 as
compared with 36.1% for the same period of 1996.

Liquidity and Capital Resources

Working capital was $8.9 million at September 30, 1997 compared to $10.2 million
at March 31, 1997. Accounts receivable  increased $5.2 million for the six month
period ended September 30, 1997, and  inventories  decreased $0.3 million due to
the cessation of turnkey and related service sales which require the acquisition
of collateral inventories.  Accounts payable and accrued expenses increased $4.2
million for the six month period ended  September 30, 1997,  largely  reflecting
the  remaining  amounts due for  equipment  purchases and an increase in accrued
royalties,  while income taxes payable  increased  $2.6 million  reflecting  the
timing of estimated tax payments.

Capital  expenditures  were  $12.1  million  for the  six  months  period  ended
September  30,  1997.  Capital  expenditures  in fiscal  1998 are related to the
expansion of disc  manufacturing  capacity,  the  replacement  and  expansion of
ancillary  production  equipment,  additional  DVD  bonding  equipment,  and the
continued  upgrading of the Company's worldwide  management  information system.
The  Company  believes  that these  capital  expenditures  and  working  capital
requirements  will be  financed  through  a  combination  of funds  provided  by
operating activities and availability under its borrowing arrangements.

The Company is party to various  licensing  agreements in both the United States
and the United  Kingdom  for  technology  associated  with its  product  and the
related  manufacturing  processes,  under which the Company is  obligated to pay
royalties  ranging  from  $.015 to $.045 per disc  manufactured.  In the  United
States,  one such  licensor's  patents  were found  invalid in a separate  civil
action in July 1996, and accordingly, the Company suspended payment of royalties
as provided in the license agreement.  The licensor has appealed the verdict and
a decision is not anticipated until mid 1998. In the United Kingdom, the Company
has  suspended  payment of royalties  to a licensor  due to a dispute  regarding
breach of the license agreement. Pending their ultimate disposition, the Company
continues to accrue  royalty  expense under these  agreements,  whose  liability
balance  has  increased  to $6.8  million at  September  30,  1997.  The Company
believes  that the outcome of these cases will not result in a material  adverse
impact on the liquidity,  results of operations,  or the consolidated  financial
position of the Company.

Accounting Standard Changes

Effective March 31, 1998, the Company will adopt Financial  Accounting Standards
Board Statement of Financial  Accounting  Standards No. 128 "Earnings Per Share"
which will supercede  Accounting  Principles  Board Opinion No. 15 "Earnings Per
Share".  This new statement requires that "basic earnings per share" be computed
by dividing  income  available to common  stockholders  by the weighted  average
number of common shares outstanding for the period. "Diluted earnings per share"
will reflect the potential  dilution if stock options or other  securities would
result in the issuance or exercise of additional  shares of common stock.  Early
adoption of the standard is  prohibited;  however,  the Company has computed the
pro forma earnings per share amounts using the new standard as follows:
<TABLE>
<S>                            <C>        <C>           <C>      <C>
                               Three months ended        Six months ended
                                  September 30,           September 30,
                               ------------------       -----------------
                                 1997      1996          1997      1996
                               --------   -------       -------  --------
       Basic earnings per share $0.17     40.17         $0.21     $0.27
       Diluted earnings per     $0.16     $0.15         $0.19     $0.24
       share
</TABLE>
In June 1997, the FASB issued Statement No. 130 "Reporting Comprehensive Income"
(SFAS 130) which is effective  for fiscal  years  beginning  after  December 15,
1997, including interim periods. SFAS 130 establishes standards of reporting and
display  of   comprehensive   income  and  its  components  in  a  full  set  of
general-purpose  financial statements,  either in the statement of operations or
in a separate  statement.  Additionally,  SFAS 130  requires  the display of the
accumulated balance of other  comprehensive  income as a separate caption in the
equity  section  of the  balance  sheet as well as the  disclosure  of  material
components of accumulated other  comprehensive  income either on the face of the
balance sheet,  in a statement of changes in equity or in notes to the financial
statements.  The Company does not believe that  adoption of SFAS 130 will have a
material effect on the Company's financial position.

The FASB also  issued  Statement  No.  131  "Disclosures  about  Segments  of an
Enterprise and Related  Information"("SFAS 131") in June 1997 which is effective
for fiscal years  beginning after December 15, 1997,  including  interim periods
after the year of initial adoption.  SFAS 131 established  standards for the way
that  public  companies  report  information  about  operating  segments in both
interim and annual financial  statements,  including  related  disclosures about
products and services,  geographic  areas, and major customers.  The Company has
not determined what, if any, impact SFAS 131 will have on the operating segments
reported or the impact SFAS 131 will have on  financial  statements  and related
disclosures.

Year 2000

As part of the  upgrade of its  worldwide  information  systems,  the Company is
updating all of its systems to ensure that they will continue to function beyond
the turn of the century.  The Company  believes that its enterprise wide systems
will be year 2000 compliant by March 31, 1999.

<PAGE>

Seasonality and Quarterly Information

The Company's sales are seasonal, with peak sales activity normally occurring in
the third fiscal quarter as retail chains increase  inventory before the holiday
season.  As a result,  operating  income is typically higher in the third fiscal
quarter as fixed operating costs are spread over generally  higher sales volume.
In addition, in order to provide for capacity demands, long lead time production
equipment is typically ordered for delivery during the first fiscal quarter and,
to a lesser extent, the second fiscal quarter. Equipment installations generally
result in some level of production inefficiency which may have a negative impact
on margins.  The effect on margins may be amplified  when equipment is installed
in the lower sales volume first and second quarters.  Further,  pricing and unit
volumes can impact comparative  quarterly financial results either positively or
negatively in a manner that may not  necessarily  be indicative of a full year's
results.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995

The  statements  included  or  incorporated  by  reference  into  the  Company's
Securities and Exchange Commission filings and shareholder  communications which
are not historical facts are forward -looking  statements that involve risks and
uncertainties,  including,  but not  limited  to,  the  effect  of  changing  CD
technology and the possibility  that, over time, CD technology could be replaced
by another form of information storage and retrieval technology,  the dependence
of the Company's growth  prospects on the development of new  technologies  that
achieve market acceptance and create new demand for CDs and related services and
the  highly  competitive  nature  of the CD  manufacturing  industry  which  may
adversely affect prices for CDs and other aspects of the Company's business.

PART II.  OTHER INFORMATION

Item 1.     Legal Proceedings

On March  18,1996,  the Company  received  notification  from the United  States
Environmental  Protection  Agency  ("EPA")  alleging  that  the  Company  was  a
Potentially   Responsible  Party  ("PRP")  for  the  cleanup  of  surface  water
contamination at the Cherokee Oil Company Site (the "Site") in Charlotte,  North
Carolina which was used by the Company for the disposal of certain byproducts of
its  manufacturing  processes.  Subsequently,  the U.S.  Department  of  Justice
notified the Company that it intended to seek recovery of the approximately $6.4
million environmental cleanup cost incurred at the site from the Company and the
other PRP's,  each of which was  considered  jointly and  severally  liable.  In
April,  1997, the Company and numerous other PRPs reached a settlement  with the
EPA.  Under  the  terms  of the  settlement,  58 PRPs and the  Site  owner  have
reimbursed  the EPA $4.0 million for the cleanup costs.  The Company's  share of
the aggregate settlement, paid June 25, 1997, was $277, which was fully provided
for at March 31, 1997.

From time to time, the Company is involved in litigation that it considers to be
in the normal course of business.

<PAGE>

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

At the Company's  Annual  Meeting of  Stockholders  held on August 5, 1997,  the
following individuals were elected to the Board of Directors:
<TABLE>
<S>                      <C>             <C>
                           Votes For     Vote Withheld
                         --------------  --------------
       Charles Ayres      19,688,424         76,148
       Darryl G. Behrman  19,687,174         77,398
       Grant G. Behrman   19,687,374         77,198
       Robert H. Davidson 19,686,924         77,648
       David E. De Leeuw  19,687,924         76,648
       Anthony V. Dub     19,688,924         75,648
       Lyndon J. Faulkner 19,688,224         76,348
       George E. McCown   19,688,424         76,148
       Glenn S. McKenzie  19,687,424         77,148
       L. Steven Minkel   19,688,424         76,148
</TABLE>

The following proposals were approved at the Company's Annual Meeting:
<TABLE>
<S>                                <C>            <C>             <C>
                               Affirmative Votes  Negative Votes  Votes Withheld
                                   -------------  -------------   -------------
       Ratify the appointment of
       Coopers & Lybrand L.L.P. as     19,764,572       16,040          14,950
       independent auditors for the
       fiscal year ending March 31,
       1998
</TABLE>

Item 5.     Other Information

On September 2, 1997, Chase Manhattan Investments  Holdings,  L.P. exercised its
remaining  518,453 warrants which converted into 518,002 shares of voting common
stock.

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

A.    Exhibit 11 - Computation of Net Income Per Share of Common Stock.

B.    Reports on Form 8-K
      No reports on form 8-K were filed during the quarter  ended  September 30,
1997.

<PAGE>

SIGNATURES

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

Dated: November 14, 1997
                                       NIMBUS CD INTERNATIONAL, INC.
                                       (Registrant)

                                       /S/ L. Steven Minkel
                                       L. Steven Minkel
                                       Executive Vice President and
                                       Chief Financial Officer

                                       /S/ Gary E. Krutul
                                       Gary E. Krutul
                                       Corporate Controller
                                       (Principal Accounting Officer)

<PAGE>
                                                                      Exhibit 11

                          NIMBUS CD INTERNATIONAL, INC.
               COMPUTATION OF NET INCOME PER SHARE OF COMMON STOCK
                      (In thousands, except per share data)
                                   (Unaudited)

<TABLE>
<S>                                     <C>       <C>        <C>      <C>
                                          Three months         Six months
                                              ended               ended
                                          September 30,       September 30,
                                        ------------------   ----------------
                                          1997      1996       1997     1996
                                        --------  --------   -------  -------
Primary and Fully Diluted:

  Weighted average common shares         21,043    20,869    20,957   20,854
   outstanding
  Net additional common shares
   issuable upon exercise of dilutive
   warrants and stock options,
   determined by the treasury stock
   method using the average market        2,013     2,183     2,052    2,183
   price for options and warrants
   outstanding during the periods
                                        --------  --------   -------  -------

Common shares and equivalents            23,056    23,052    23,009   23,037
                                        ========  ========   =======  =======

Net income                               $3,664    $3,546    $4,369   $5,556
                                        ========  ========   =======  =======

Earnings per share                        $0.16     $0.15     $0.19    $0.24
                                        ========  ========   =======  =======
</TABLE>