13


                                     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, 1996
                                           OR

____ Transition Report Pursuant To Section 13 Or 15(d) Of The Securities 
Exchange Act Of 1934

For the transition period from ___________ to __________.

                            Commission File Number: 0-26902


                             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.)

                            State Route 629, Guildford Farm
                              Ruckersville, Virginia 22968
                        (Address of principal executive offices)

                            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  11,  1996 there were  20,868,571  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, 1996 and March 31, 1996................3

      Condensed Consolidated Statements of Income
      Three and six months ended September 30, 1996 and 1995      4

      Condensed Consolidated Statements of Cash Flows Six months ended September
      30, 1996 and 1995.........5

      Notes to Condensed Consolidated Financial Statements.6

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


                               PART II. OTHER INFORMATION

Item 1.     Legal Proceedings.............................11

Item 4.     Submission of Matters to a Vote of Security Holders   11

Item 5.     Other Information.............................12

Item 6.     Exhibits and Reports on Form 8-K..............12

      Signatures..........................................13


<PAGE>


PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements

                     NIMBUS CD INTERNATIONAL, INC. AND SUBSIDIARIES
                         CONDENSED CONSOLIDATED BALANCE SHEETS
                          (In thousands, except share amounts)
<TABLE>

                                         ASSETS
<CAPTION>
                                                  September 30,    March 31,
                                                       1996           1996
                                                    (Unaudited)
<S>                                                         <C>            <C>

Current assets:
  Cash and cash equivalents                           $  1,009        $  3,593
  Accounts and notes receivable, less allowances
   for doubtful accounts of $2,244 and $2,014           28,944          26,121
  Inventories                                            3,254           2,177
  Prepaid expenses                                       1,371             729
  Deferred income taxes                                  1,784           1,766
                                                   ---   -----    ---    -----
   Total current assets                                 36,362          34,386
                                                        ------    -     ------
  Property, plant, and equipment, net                   60,256          50,809
  Other assets and intangibles                           6,403           5,558
                                                   ---   -----    ---    -----
                                                      $103,021        $ 90,753
                                                      ========        ========

                          LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                       8,178           6,437
  Current portion of long-term debt                      3,976           1,463
  Accrued expenses and other liabilities                 8,549           7,297
  Income taxes payable                                   5,332           3,427
                                                   ---   -----    ---    -----
   Total current liabilities                            26,035          18,624
                                                   -    ------    -     ------

Long-term debt                                          23,877          24,668

Deferred income taxes                                    4,420           4,395

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; 39,011,782 and 38,973,173
     shares issued; 20,868,571 and 20,829,962              390             390
     outstanding
   Paid-in capital                                      66,775          66,734
   Retained earnings                                    28,350          22,794
   Cumulative foreign currency translation                 267             241
                                                   ------- ---    -------  ---
   adjustments
                                                        95,782          90,159
     Treasury stock, at cost, 18,143,211 shares       (47,093)        (47,093)
      Total stockholders' equity                        48,689          43,066
                                                     $103,021         $ 90,753
                                                     =========        ========

</TABLE>
         See accompanying notes to condensed consolidated financial statements.


<PAGE>


                     NIMBUS CD INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (Dollars in thousands, except per share amounts)
                                      (Unaudited)

<TABLE>
                                              Three months         Six months
                                            ended September           ended
                                                   30,            September 30,
                                               1996     1995      1996     1995
<S>                                               <C>    <C>       <C>      <C>

Net sales                                   $31,361  $30,545   $60,590  $51,852
Cost of goods sold                           21,960   21,563    43,237   35,659
                                             ------   ------    ------   ------
  Gross profit                                9,401    8,982    17,353   16,193

Selling, general and administrative           3,360    2,909     7,579    6,591
                                        -     ----- -  ----- -   ----- -  -----
expenses
  Operating income                            6,041    6,073     9,774    9,602

Interest expense                                671    1,735     1,271    3,506
Other (income) expense, net                   (110)     (23)     (190)       91
                                        --    ----- --- ---- --  ----- ----- --
  Income before income taxes                  5,480    4,361     8,693    6,005

Provision for income taxes                    1,933    1,552     3,137    2,202
                                        --    ----- -- ----- --  ----- -- -----

  Net income                                 $3,547   $2,809    $5,556   $3,803
                                             ======   ======    ======   ======

Net income (1995 is pro forma for the        $3,547   $3,451    $5,556   $5,109
                                             ======   ======    ======   ======
Offering)

Earnings per share (1995 is pro forma
  for the Offering)                         $  0.15  $  0.15   $  0.24  $  0.22
                                            =======  =======   =======  =======

Weighted average shares outstanding          23,052   22,743    23,037   22,743
                                             ======   ======    ======   ======
</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>
                                                          Six months ended 
                                                            September 30,
                                                           1996         1995
<S>                                                         <C>          <C>

Cash flows from operating activities:
  Net income                                             $5,556       $3,803
  Adjustments to reconcile net income to net cash
   provided by operating activities:
   Depreciation and amortization                          4,296        3,694
   Deferred income taxes                                               1,156
   Gain on settlement of royalty obligations                         (1,744)
   Other, net                                                39           25
   Change in operating assets and liabilities, (1995 is net of acquisition):
     Accounts receivable                                (2,706)      (7,506)
     Inventories                                        (1,051)      (1,577)
     Prepaid expenses                                     (617)           26
     Accounts payable                                     1,735        1,720
     Accrued expenses                                     1,243          451
     Income taxes payable                                 1,812          860
                                                    --    -----   -----  ---
        Net cash provided by operating activities        10,307          908
                                                         ------   -----  ---

Cash flows from investing activities:
  Purchase of property, plant and equipment            (12,940)      (6,692)
  Acquisition of business, net of cash acquired                      (2,295)
  Expenditures for computer software                    (1,230)
  Other investing activities                               (12)        (293)
                                                    -----------   ---  -----

   Net cash used in investing activities               (14,182)      (9,280)
                                                       --------      -------

Cash flows from financing activities:
  Proceeds from exercise of stock options                    41
  Revolving credit borrowings, net                        1,250        5,051
  Proceeds of debt                                                     2,000
  Repayment of debt                                                    (500)
  Payment of costs related to initial public                           (132)
  offering
  Payment of financing fees                               _____        (301)
                                                                  ---  -----
   Net cash provided by financing activities              1,291        6,118
                                                    -     -----   --   -----

  Net increase (decrease) in cash                       (2,584)      (2,254)
                                                        -------      -------

Cash and cash equivalents, beginning of period            3,593        2,318
                                                    --    -----   --   -----

   Cash and cash equivalents, end of period              $1,009     $     64
                                                         ======     ========

</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, 1996.  The results of  operations  for the
      three and six month periods ended  September 30, 1996 are not  necessarily
      indicative  of the  results for the entire  fiscal  year ending  March 31,
      1997.

2.    Inventories
      Inventories consisted of the following:
<TABLE>

                                                  September 30,     March 31,
                                                       1996            1996
<S>                                                        <C>          <C>

         Raw materials                                 $ 2,362      $ 1,849
         Work-in-process                                   530          263
         Finished goods                                    362
                                                 -----     ---
                                                                         65
                                                                         --
                                                      $ 3,254       $ 2,177
                                                      ========      =======
</TABLE>

3.    Property, Plant and Equipment
      Property, plant and equipment consisted of the following:
<TABLE>

                                                  September 30,     March 31,
                                                       1996            1996
<S>                                                        <C>          <C>

         Land, buildings, and improvements            $ 18,783     $ 18,652
         Machinery and equipment                        50,831       46,986
         Construction in progress                       11,096
                                                        ------
                                                                      1,549
                                                        80,710       67,187
         Less accumulated depreciation                (20,454)     (16,378)
                                                      --------     --------

          Net property, plant and equipment          $ 60,256      $ 50,809
                                                     =========     ========
</TABLE>
<PAGE>


4.    Commitments and Contingencies
      a) Capital Expenditures:  At September 30, 1996, commitments for capital 
     expenditures amounted to approximately $5,759.

      b) Royalties:  The Company is party to various  licensing  agreements  for
      technology  associated  with its  product  and the  related  manufacturing
      process under which the Company is obligated to pay royalties ranging from
      $.019 to $.048 per disc manufactured.  In June 1995, the Company reached a
      settlement  with one licensing  company and reduced its accrued  liability
      for this and certain  other prior year  royalties by $1,744.  This royalty
      fee adjustment is reflected in cost of goods sold.

      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 is 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 intends to seek recovery of the approximately $6.4 million
      environmental  cleanup cost  incurred at the Site from the Company and the
      other PRPs, each of which is considered  jointly and severally liable. The
      EPA has  preliminarily  determined that the Company's share of the cleanup
      costs,  based on the volume of material  contributed by the Company to the
      Site,  will be  approximately  5% of the  overall  cost.  The  Company  is
      challenging  the  EPA's  basis  of  allocation,  but has  recorded  a $300
      provision for settlement  costs  associated  with the cleanup of the Site.
      Management of the Company  believes  that the ultimate  settlement of this
      matter will not have a material adverse effect on the Company's  financial
      position or results of operations.

5.    Earnings Per Share
      Earnings per share is based on the weighted  average number of outstanding
      common  shares  and  dilutive  options  and  warrants,  determined  by the
      treasury  stock method using the average  trading  price of the  Company's
      common stock during the three and six months ended September 30, 1996.

6.    Pro Forma Earnings Per Share
      The pro forma net  income  per share data  presented  in the  accompanying
      condensed  consolidated  statement  of income  for the three and six month
      periods ended  September  30, 1995 has been computed  based upon the total
      number of shares  issued  and  outstanding,  net of  treasury  shares,  at
      September 30, 1995, as adjusted for the following  assumptions  as if they
      had  occurred  on  April  1,  1995:  (i)  the  assumed  exercise  of  then
      outstanding  warrants and stock options,  determined by the treasury stock
      method  using the  initial  public  offering  price of $7.00 per share for
      options and warrants granted within one year prior to the October 31, 1995
      Offering;  (ii) the issuance by the Company of 6,350,000  shares of common
      stock in the Offering and 500,000 shares in a private placement; (iii) the
      application  by the Company of the net proceeds of the  Offerings to repay
      $41.7 million of outstanding  debt;  (iv) an assumed  average  outstanding
      borrowing of $28,300 at an average  interest rate of 9.2%,  resulting in a
      reduction  of  interest  expense  of $1,035  ($642 net of tax) and  $2,106
      ($1,306  net of tax) for the fiscal  quarter  and six month  period  ended
      September 30, 1995.

      Historical  net income per share data for the fiscal 1995 periods has been
      omitted  as the  historical  capitalization  of the  Company  prior to the
      Offering and Private  Placement is not indicative of its capital structure
      following such events.


<PAGE>


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

Results of Operations

Three Months Ended June 30, 1996 Compared to Three Months Ended June 30, 1995

Net Sales.  Total discs sold increased  11.1% to 36.9 million discs in the three
months ended  September  30, 1996 from 33.2 million  discs in the same period of
1995. The increase was primarily due to a 23.1% increase in CD-ROM unit sales to
19.7  million  discs in the three  months  ended  September  30,  1996 from 16.0
million discs in the same period of 1995.  CD-Audio unit sales decreased 0.5% to
17.2  million  units in the three  months  ended  September  30,  1996 from 17.3
million  units in the same period of 1995. In the United  States,  CD-ROM volume
increased  20.9% to 15.6 million discs in the second fiscal quarter of 1997 from
12.9 million  discs in the same period of fiscal  1996.  United  Kingdom  CD-ROM
volume  increased  35.5% to 4.2 million discs from 3.1 million  discs.  CD-Audio
volume  decreased in the United States by 2.4% to 8.1 million discs in the three
months ended  September 30, 1996 from 8.3 million discs while the United Kingdom
experienced a 1.1% increase in CD-Audio  sales units to 9.0 million discs during
the second  quarter of fiscal 1997 from 8.9 million  units in the same period of
fiscal 1996. Net sales increased 2.9% to $31.4 million in the three months ended
September  30, 1996 from $30.5  million in the same period of 1995.  CD revenues
increased  3.1% to $29.8  million in the three months ended  September  30, 1996
from $28.9 million in the second quarter of fiscal 1996, while turnkey and other
related services of Nimbus Software Services,  Inc. ("NSS"),  acquired in August
1995,  contributed $1.5 million and $1.3 million of revenues for the three month
periods  ended  September 30, 1996 and 1995,  respectively.  The increase in net
sales is due to the disc  volume  described  above,  offset by a decline  in the
average disc selling price from $0.87 to $0.81 for the three month periods ended
September 30, 1995 and 1996,  respectively,  or 6.9%. The price decline reflects
an industry increase in production capacity in both North America and Europe, as
well as the increased number of unpackaged discs sold to equipment manufacturers
which are included with the sales of CD-ROM drives. 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 Company believes that disc sales in its third fiscal quarter ending December
31, 1996 will continue to reflect growth in its CD-ROM volume. While the Company
expects continued strong demand for CD-ROM and CD-Audio  products,  net revenues
in its third  fiscal  quarter  continue  to be  dependent  on product  sales and
packaging  mix,  and may be  impacted  by the  effect of  changes  in demand for
CD-Audio and CD-ROM products in the marketplace.

Gross Profit.  Gross profit  increased  4.4% to $9.4 million in the three months
ended  September  30, 1996 from $9.0  million in the same period of 1995.  Gross
profit as a percent of net sales  increased  to 30.0% in the three  months ended
September 30, 1996 from 29.4% in the same period of 1995.  The  Company's  gross
profit margin during the second quarter of fiscal 1997 was unfavorably  impacted
by  the  absorption  of  factory  overhead  charges  at the  Sunnyvale  facility
resulting  from  increases  in labor and  equipment  to achieve full CD capacity
capability,  which was not supported by disc volumes. Exclusive of the Sunnyvale
facility,  gross  profit  as a  percent  of sales  was  33.8%  and 30.2% for the
quarters  ended  September 30, 1996 and 1995,  respectively.  The improved gross
margin on CD replication  sales was  attributable  to reduced raw material costs
and increased per unit overhead efficiencies resulting from higher unit volumes.
The Company anticipates improvement in gross margin as production volumes at the
Sunnyvale facility increase in the third fiscal quarter.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses  increased  17.2% to $3.4  million in the three  months
ended  September  30, 1996 from $2.9  million in the same  period of 1995.  As a
percentage of net sales, selling,  general and administrative expenses increased
to 10.7% in the three  months  ended  September  30,  1996 from 9.5% in the same
period of the prior year.  The increase in selling,  general and  administrative
expenses  is  attributable  to the  addition  of  NSS,  higher  personnel  costs
associated  with the  installation  of CD  production  capacity at the Sunnyvale
facility,  increased  sales and  marketing  efforts  in the United  States,  and
expanded administrative support associated with the greater number of production
facilities.

Operating  Income.  Operating income decreased 1.6% to $6.0 million in the three
months  ended  September  30, 1996 from $6.1 million in the same period of 1995.
The decrease in operating income primarily reflects the higher level of selling,
general and  administrative  expenses  mentioned  above.  Operating  income as a
percentage of net sales  decreased 19.3% in the three months ended September 30,
1996 from 19.9% in the same period of 1995.

Interest  Expenses.  Interest  expense  decreased  to $0.7  million in the three
months  ended  September  30, 1996 from $1.7 million in the same period of 1995.
The decrease in interest expense reflects the application of the proceeds of the
Company's initial public offering in October 1995 to repay outstanding debt.

Income Taxes.  Income taxes  increased to $1.9 million in the three months ended
September 30, 1996 from $1.6 million in the same period of 1995. The increase in
income tax expense is attributable  to the increase in income before taxes.  The
effective  tax rate was 35.3% for the three months ended  September  30, 1996 as
compared with 35.6% for the three month period ended September 30, 1995.

Six Months Ended September 30, 1996 and 1995

Net Sales.  Total discs sold  increased  27.3% to 69.9 million  discs in the six
months ended  September  30, 1996 from 54.9 million  discs in the same period of
1995. The increase resulted  primarily from a 65.1% increase in CD-ROM volume to
39.3  million  discs  from 23.8  million  discs for the six month  period  ended
September 30, 1996 and 1995, respectively. The increase in CD-ROM unit sales was
experienced  both in the United States,  which  increased  66.9% to 31.0 million
discs in fiscal  1997 from 18.6  million  discs in fiscal 1996 and in the United
Kingdom  which  increased  56.6% to 8.3 million discs from 5.3 million discs for
the six  months  ended  September  30,  1996 and  1995,  respectively.  Overall,
CD-Audio  unit volume  decreased  1.6% to 30.6 million  units for the six months
ended September 30, 1996 from 31.1 million discs in the same period of the prior
fiscal year. The CD-Audio  volume decrease was 3.3% to 14.5 million units in the
United States and remained  constant at 16.1 million units in the United Kingdom
for the first six  months of fiscal  1997.  Net sales  increased  16.8% to $60.6
million for the six months ended  September  30, 1996 from $51.9 million for the
same period of 1995.  Approximately $6.2 million of the sales increase is due to
the  increase in disc volume  offset by a decrease in the average  disc  selling
price from $0.92 to $0.81, or 12.0%,  and $2.5 million of the increased sales is
due to turnkey and other related  services of NSS, which was acquired August 31,
1995.

Gross  Profit.  Gross profit  increased  7.4% to $17.4 million for the six month
period ended  September  30, 1996 from $16.2 million in the same period of 1995.
The gross profit for the period ended  September  30, 1995 included the reversal
of accrued  royalties  of $1.7  million to reflect a  settlement  reached with a
licenser of technology  regarding  prior royalty  obligations.  See Note 4(b) of
Notes to  Condensed  Consolidated  Financial  Statements.  This  adjustment  was
partially offset by a $0.4 million writedown of obsolete  production  equipment.
Gross margin decreased to 28.6% in the six month period ended September 30, 1996
from  31.2%  in the same  period  of 1995.  Exclusive  of the two  non-recurring
adjustments  noted  above,  gross  profit as a percent  of net sales for the six
month period ended  September  30, 1995 was 28.6%.  The  Company's  gross profit
margin  during the six month period  ended  September  30, 1996 was  unfavorably
impacted by the  additional  revenues  from the turnkey and  collateral  related
services of NSS, which have a lower gross margin than CD replication  sales, and
the  absorption  of  factory  overhead  charges  related  to the  start up of CD
capacity at the Sunnyvale facility.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses increased 15.2% to $7.6 million in the six month period
ended  September  30,  1996 from $6.6  million in the same  period of 1995.  The
increase in the current year includes a $0.3 million  reserve for  environmental
clean-up costs as well as higher  administrative  support and expanded sales and
marketing  costs due to the greater number of production  facilities.  The prior
year included an increase of $0.5 million in the allowance for doubtful accounts
resulting,  in part,  from the filing  for  bankruptcy  by one of the  Company's
customers.  As a percentage of net sales,  selling,  general and  administrative
expenses  decreased  to 12.5% in the six months  ended  September  30, 1996 from
12.7% in the same period of 1995.

Operating  Income.  Operating  income  increased 2.1% to $9.8 million in the six
month  period ended  September  30, 1996 from $9.6 million in the same period of
1995. The increase in operating income primarily reflects the higher unit volume
mentioned above. Operating income as a percent of net sales declined to 16.1% in
the six months ended September 30, 1996 from 18.5% in the same period of 1995.

Interest  Expense.  Interest expense decreased to $1.3 million in the six months
ended  September  30,  1996 from $3.5  million in the same  period of 1995.  The
decrease in interest  expense  reflects the  application  of the proceeds of the
Company's initial public offering in October 1995 to repay outstanding debt.

Income  Taxes.  Income tax expense  increased  to $3.1 million in the six months
ended  September  30,  1996 from $2.2  million in the same  period of 1995.  The
effective  tax rate was 36.1% for the six months  ended  September  30,  1996 as
compared  with 36.7% for the same period of 1995.  The decrease in the effective
tax rate reflects the higher percentage of income attributable to United Kingdom
operations, which has a lower statutory rate than the United States.

Liquidity and Capital Resources

Working  capital was $10.3  million at  September  30,  1996,  compared to $15.8
million at March 31, 1996.  Accounts  receivable  increased $2.7 million for the
six month  period  ended  September  30,  1996 due to higher  sales  volumes and
inventories  increased  $1.1 million to support the increased  level of seasonal
sales.  Accounts payable and accrued expenses increased $3.0 million for the six
month period ended September 30, 1996,  largely reflecting the remaining amounts
due for equipment purchases.

Capital expenditures were $14.2 million for the six month period ended September
30, 1996. Capital expenditures in fiscal 1997 are related to the installation of
CD manufacturing  capacity at the Sunnyvale facility, the expansion of mastering
capacity at the Provo  facility,  the addition of full Digital  Video Disc (DVD)
manufacturing capacity at the Charlottesville  facility, and equipment purchases
to increase manufacturing process efficiencies. In addition, the Company expects
to spend approximately $2.1 million on equipment installation and implementation
costs to upgrade its worldwide  management  information system, and $1.0 million
to  manufacture  holographic  CDs.  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.

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  is  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 intends to seek recovery of the approximately  $6.4
million environmental cleanup cost incurred at the Site from the Company and the
other  PRPs each of which is  considered  jointly  and  severally  liable.  At a
meeting held June 27, 1996,  the EPA  indicated  that it intends to allocate the
cleanup costs among the PRPs based on volume of product  disposed at the site by
each PRP. The EPA has  preliminarily  determined that the Company's share of the
cleanup costs, based on the EPA's estimate of the volume of material contributed
by the Company to the Site,  will be  approximately  5% of the overall cost. The
Company  has joined a group of major PRPs  which has formed the  Cherokee  Sites
Interim Group ("The Interim  Group"),  which is currently  seeking to reduce the
aggregate  settlement  costs to the major  PRPs.  The  Company  has  recorded  a
$300,000 provision for settlement costs associated with the cleanup of the Site.
Management of the Company  believes that the ultimate  settlement of this matter
will not have a material adverse effect on the Company's  financial  position or
results of operations.

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

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

At the Company's  Annual  Meeting of  Shareholders  held on August 6, 1996,  the
following individuals were elected to the Board of Directors:

                              Votes For     Votes Withheld
      Charles Ayres           18,345,403         7,628
      Darryl G. Behrman       18,345,403         7,628
      Grant G. Behrman        18,345,403         7,628
      Robert H. Davidson      18,345,403         7,628
      David E. De Leeuw       18,345,403         7,628
      Anthony V. Dub          18,345,403         7,628
      Lyndon J. Faulkner      18,345,403         7,628
      Robert B. Hellman,      18,345,403         7,628
      Jr.
      David E. King           18,345,403         7,628
      George E. McCown        18,345,403         7,628
      Glenn S. McKenzie       18,345,403         7,628
      David B. Wilson         18,345,403         7,628

The following proposals were approved at the Company's Annual Meeting:

                                  Affirmative    Negative Votes  Votes Withheld
                                      Votes
Ratify the appointment of
Coopers & Lybrand L.L.P. as        18,344,423         4,683          3,925
independent auditors for the
fiscal year ending March 31, 1997

Item 5.  Other Information

On September  1, 1996,  David B. Wilson  resigned  from the  Company's  Board of
Directors.

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, 1996.



<PAGE>


SIGNATURES

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

Dated:  November 12, 1996

                  ......            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
<TABLE>

                             NIMBUS CD INTERNATIONAL, INC.
                  COMPUTATION OF NET INCOME PER SHARE OF COMMON STOCK
                     (Dollars in thousands, except per share data)
                                      (Unaudited)
<CAPTION>

                                        Three months ended   Six months ended
                                           September 30,       September 30,
                                             1996      1995      1996      1995
<S>                                           <C>       <C>       <C>       <C>

Primary and Fully Diluted (A):

Weighted average common shares             20,869    13,805    20,854    13,805
outstanding

Net additional  common shares  issuable  upon exercise of dilutive  warrants and
  stock  options,  determined  by the treasury  stock method using the estimated
  initial public offering price for options and warrants granted within one year
  prior to the Offering and Private Placement and
  the average market price for options      2,183     2,088     2,183     2,088
  and warrants outstanding in periods
  after the Offering and Private
  Placement

Issuance of common shares by the
  Company in the Offering and Private      ______     6,850     _____     6,850
                                           ------ --  -----     ----- --  -----
  Placement

Common shares and equivalents - 1995
  is pro forma for the Offering and        23,052    22,743    23,037    22,743
                                        =  ====== =  ====== =  ====== =  ======
  Private Placement

Net income - 1995 is pro forma for the
  Offering and Private Placement          $ 3,546   $ 3,451   $ 5,556   $ 5,109
                                          =======   =======   =======   =======

Earnings per share - 1995 is pro forma
  for the Offering and Private           $   0.15  $   0.15  $   0.24  $   0.22
                                         ========  ========  ========  ========
  Placement
</TABLE>

(A) See Notes 5 and 6 of Notes to Condensed Consolidated Financial Statements.