<PAGE>   1
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON. D.C. 20549

                                  FORM 10-Q

(X)  Quarterly report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

For the Quarterly Period Ended November 30, 1996

                or

( )  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934.

Commission file number 0-200600

                              NORAND CORPORATION
            (Exact name of registrant as specified in its charter)

        Delaware                                        42-1323151
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or organization)

                            550 Second Street S.E.
                          Cedar Rapids, Iowa  52401
              (Address of principal executive offices)(Zip Code)
                       Telephone Number (319) 369-3100
             (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 January 6, 1997, there were 7,842,905 shares of the Registrant's
Common Stock, $0.01 par value, outstanding.
<PAGE>   2
                              NORAND CORPORATION
                                    INDEX


        PART I. FINANCIAL INFORMATION                                   Page No.
                                                                        --------

Item 1. Consolidated Fincancial Statements:

        Consolidated Balance Sheets                                          
        November 30, 1996 and August 31, 1996                                3

        Consolidated Statements of Operations
        Three Months Ended November 30, 1996
        and December 2, 1995                                                 4

        Consolidated Statements of Stockholders' Equity
        November 30, 1996, August 31, 1996
        and August 31, 1995                                                  5

        Consolidated Statements of Cash Flows
        Three Months Ended November 30, 1996
        and December 2, 1995                                             6 - 7

        Notes to Consolidated Financial Statements                       8 - 9

Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations                             10 - 15

        PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K                                     16

        Signatures                                                           17

        Index to Exhibits                                                    18


<PAGE>   3

                     PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                           NORAND CORPORATION
                      CONSOLIDATED BALANCE SHEETS
             (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>                                                  NOVEMBER 30,    AUGUST 31,
                                                              1996           1996
                                                           -----------    -----------
                                                           (UNAUDITED)
<S>                                                        <C>            <C>
                                 ASSETS

Current assets:
  Cash and cash equivalents                                 $  3,199       $  3,604
  Accounts receivable, net of allowances for doubtful
    accounts and estimated sales returns of $9,332
    (unaudited) and $9,278                                    60,978         69,841
  Inventories                                                 32,497         33,565
  Deferred tax assets                                          8,947          8,523
  Prepaid expenses and other current assets                    7,329          8,011
                                                           -----------    -----------
     Total current assets                                    112,950        123,544

Noncurrent assets:
  Property, plant and equipment, net                          25,236         25,601
  Deferred tax assets                                          9,318          9,318
  Patents and intellectual properties, net                     5,836          6,157
  Goodwill, net                                                3,074          3,112
  Other noncurrent assets                                      4,463          4,333
                                                           -----------    -----------
    Total assets                                            $160,877       $172,065
                                                           ===========    ===========

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Short-term debt                                           $ 49,443       $ 52,460
  Accounts payable                                            18,477         23,195
  Accrued payroll and employee benefits                        9,850          9,809
  Other accrued liabilities                                   30,775         33,449
  Deferred income                                              9,696         10,418
                                                           -----------    -----------
    Total current liabilities                                118,241        129,331
                                                           -----------    -----------
Stockholders' equity:
  Common stock, $.01 par value: Authorized 15,000,000
    shares;  issued and  outstanding 7,665,546 shares
    (unaudited) and 7,664,535 shares                              77             77
  Additional paid-in capital                                  75,242         75,237
  Accumulated deficit                                        (28,715)       (28,482)
  Equity adjustment from foreign currency translation         (3,968)        (4,098)
                                                           -----------    -----------
    Total stockholders' equity                                42,636         42,734
                                                           -----------    -----------
    Total liabilities and stockholders' equity              $160,877       $172,065
                                                           ===========    ===========
                          
</TABLE>

       See accompanying notes to the consolidated financial statements.



                                     -3-
<PAGE>   4
                                   NORAND CORPORATION
                          CONSOLIDATED STATEMENTS OF OPERATIONS
                    (Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED
                                             --------------------------------
                                             NOVEMBER 30,         DECEMBER 2,
                                                1996                 1995
                                             ------------        ------------
                                             (UNAUDITED)          (UNAUDITED)
<S>                                          <C>                 <C>
Revenues:
  Product sales revenue                        $44,836              $39,231
  Customer service revenue                      10,600               10,575
                                             ------------        ------------
    Total revenues                              55,436               49,806

Cost of products and services                   31,692               30,966
                                             ------------        ------------
    Gross profit                                23,744               18,840

Operating expenses:
  Product development and
    engineering expenses                         5,174                7,020
  Selling expenses                              12,996               13,126
  General and administrative expenses            4,167                4,201
                                             ------------        ------------
    Total operating expenses                    22,337               24,347
                                             ------------        ------------

    Income (loss) from operations                1,407               (5,507)

Interest and other expenses                      1,740                1,112
Litigation settlement                                -                  300
                                             ------------        ------------
    Loss before income taxes                      (333)              (6,919)

Income tax benefit                                (100)              (2,076)
                                             ------------        ------------
    Net loss                                   $  (233)             $(4,843)
                                             ============        ============
Net loss per common share                      $ (0.03)             $ (0.63)
                                             ============        ============
Average number of common and common
  equivalent shares outstanding              7,664,865            7,663,691
                                             ============        ============
</TABLE>

       See accompanying notes to the consolidated financial statements.

                                   - 4 -


<PAGE>   5




                               NORAND CORPORATION
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                   (Dollars in thousands, except share data)
<TABLE>
<CAPTION>
                                                                                                  EQUITY
                                                                                                ADJUSTMENT
                                                                    ADDITIONAL                 FROM FOREIGN
                                                COMMON STOCK          PAID-IN    ACCUMULATED     CURRENCY
                                            SHARES       AMOUNT       CAPITAL      DEFICIT      TRANSLATION
                                          -----------  -----------  -----------  -----------  ---------------
<S>                                       <C>          <C>          <C>          <C>          <C>
Balances, August 31, 1994                   7,350,574          $73      $69,594     $(10,606)         $(2,084)

Exercises of stock options                    174,455            2        2,737            -                -
Tax benefit from exercise of stock
options                                             -            -          382            -                -
Acquisition of subsidiary                       9,817            -          437            -                -
Foreign currency translation                        -            -            -            -           (1,558)
Net loss                                            -            -            -       (3,706)               -
                                          -----------  -----------  -----------  -----------  ---------------
Balances, August 31, 1995                   7,534,846           75       73,150      (14,312)          (3,642)

Exercises of stock options                    129,689            2        2,087            -                -
Foreign currency translation                        -            -            -            -             (456)
Net loss                                            -            -            -      (14,170)               -
                                          -----------  -----------  -----------  -----------  ---------------
Balances, August 31, 1996                   7,664,535           77       75,237      (28,482)          (4,098)

Exercises of stock options (unaudited)          1,011            -            5            -                -
Foreign currency translation (unaudited)            -            -            -            -              130
Net loss (unaudited)                                -            -            -         (233)               -
                                          -----------  -----------  -----------  -----------  ---------------
Balances, November 30, 1996 (unaudited)     7,665,546          $77      $75,242     $(28,715)         $(3,968)
                                          ===========  ===========  ===========  ===========  ================
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                    - 5 -


<PAGE>   6
                               NORAND CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
<TABLE>
<CAPTION>                                                             THREE MONTHS PERIOD ENDED
                                                                   -------------------------------
                                                                   NOVEMBER 30,        DECEMBER 2,
                                                                       1996                1995
                                                                   -----------         -----------
                                                                   (UNAUDITED)         (UNAUDITED)
<S>                                                                <C>                 <C>
Cash flows from Operating Activities:
Net loss                                                                 $(233)            $(4,843)
                                                                   -----------         -----------
Adjustments  to reconcile net loss to net cash provided by
  (used in) operating activities:
  Depreciation                                                           1,746               1,590
  Amortization                                                           1,119                 845
  Amortization of deferred royalty income                                    -                (542)
  Deferred tax assets                                                    (424)              (2,076)
  Provision for doubtful accounts and sales returns                      1,389               1,757
  Changes in assets and liabilities:
    Accounts receivable                                                  7,751               2,031
    Inventories                                                          1,278              (3,041)
    Prepaid expenses and other assets                                      753                 (76)
    Deferred income                                                       (721)               (468)
    Accounts payable and accrued liabilities                            (7,539)             (9,144)
                                                                   -----------         -----------
      Total adjustments                                                  5,352              (9,124)
                                                                   -----------         -----------
      Net cash provided by (used in) operating activities                5,119             (13,967)
                                                                   -----------         -----------

Cash flows from Investing Activities:
  Additions to property, plant and equipment                            (1,310)             (2,977)
  Additions to software, patents, and intellectual properties             (411)               (935)
                                                                   -----------         -----------
      Net cash used in investing activities                             (1,721)             (3,912)
                                                                   -----------         -----------
Cash flows from Financing Activities:
  Net borrowings under line of credit agreement                         (3,040)             21,360
  Issuances of common stock                                                  5                   5
  Payments of refinancing expenses                                        (466)                (45)
                                                                   -----------         -----------
      Net cash provided by (used in) financing activities               (3,501)             21,320
                                                                   -----------         -----------

Effect of exchange rate changes on cash                                   (302)               (126)
                                                                   -----------         -----------
Net increase (decrease) in cash and cash equivalents                      (405)              3,315
Cash and cash equivalents:
  Beginning of period                                                    3,604               3,809
                                                                   -----------         -----------
  End of period                                                         $3,199              $7,124
                                                                   ===========         ===========

</TABLE>

       See accompanying notes to the consolidated financial statements.

                                   - 6 -


<PAGE>   7




                               NORAND CORPORATION
              CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                        THREE MONTHS PERIOD ENDED
                                                                     -------------------------------
                                                                     NOVEMBER 30,        DECEMBER 2,
                                                                         1996                1995
                                                                     -----------         -----------
                                                                     (UNAUDITED)         (UNAUDITED)
<S>                                                                  <C>                 <C>
Supplemental disclosures of cash flow information:
  Interest paid on all debt obligations                                  $1,668                $803
                                                                     ===========         ===========
  Income taxes refunded, net                                                $99                $911
                                                                     ===========         ===========

</TABLE>

        See accompanying notes to the consolidated financial statements.

                                    -7-


<PAGE>   8
                               NORAND CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in thousands)


     1. BASIS OF PRESENTATION

          In the opinion of management, the accompanying unaudited consolidated
     financial statements include all necessary adjustments (consisting of
     normal recurring accruals) to present fairly the Company's financial
     position as of November 30, 1996, and the results of its operations and
     cash flows for the three months ended November 30, 1996 and December 2,
     1995, in conformity with generally accepted accounting principles applied
     on a consistent basis.  The preparation of financial statements in
     conformity with generally accepted accounting principles requires
     management to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and disclosure of contingent assets and
     liabilities at the date of the financial statements and the reported
     amounts of revenues and expenses during the reporting period.  Actual
     results could differ from those estimates.
          The Company is subject to various potential risks and uncertainties
     which include, without limitation, continued pressures in the marketplace,
     the Company's ability to realize the benefits of the implemented
     restructuring, the future need for restructuring, the Company's ability to
     achieve increased revenues from new products and achieve lower operating
     expenses as a percent of revenues, the Company's ability to obtain debt
     financing, remain in compliance with debt covenants and maintain
     liquidity.  Additionally, the Company is subject to potential risks and
     uncertainties related to foreign operations, the effect of technological
     changes on the carrying value of inventories and specialized manufacturing
     equipment, the estimated realization of deferred tax assets, the potential
     for additional third party claims against the Company's Italian subsidiary
     and the possible adverse effects of certain pending litigation.
          The results of operations for the three months ended November 30,
     1996 are not necessarily indicative of the results to be expected for the
     full year.  For further information, refer to the consolidated financial
     statements and footnotes thereto included in the Company's annual report
     on Form 10-K for the year ended August 31, 1996.

     2. INVENTORIES

          Inventories are stated at the lower of cost (first-in, first-out)
     or market, and consist of the following:




<TABLE>                                         
<CAPTION>                                       
                         November 30,  August 31,    
                            1996          1996       
                           -------      -------      
     <S>                   <C>          <C>          
     Parts and materials   $15,522      $16,383      
     Work in process         2,256        1,671      
     Finished goods         11,008       11,957      
     Field service and                               
     sales supplies          3,711        3,554      
                           -------      -------      
     Total                 $32,497      $33,565      
                           =======      =======      
</TABLE>
      
     3. SHORT-TERM DEBT

          At August 31, 1996, the Company had $52.0 million of borrowings
     outstanding under a credit facility (the "Agreement") with a group of
     lending banks.  In November 1996, as a result of noncompliance

                                     - 8 -

<PAGE>   9


     with certain covenants under the Agreement due to losses incurred for
     the year ended August 31, 1996, the Company and its lenders amended the
     Agreement (the "Amended Agreement") wherein the lending group agreed to
     waive any defaults under or violations of the Agreement occurring on or
     before August 31, 1996.  The Amended Agreement provides for maximum
     borrowings of $60.5 million.  Maximum allowable borrowings decline to
     $59.5 million on December 16, 1996 and then decline periodically to $48.25
     million on September 15, 1997.  Obligations under the Amended Agreement
     will mature on September 30, 1997.  Obligations under the Amended
     Agreement will continue to be secured by substantially all of the assets
     of the Company.  No foreign currency borrowings are permitted under the
     Amended Agreement.  The effective interest rate increases periodically
     from the agent's alternate base rate (ABR) plus 1.75% for all borrowings
     up to $57.4 million and ABR plus 2.75% for borrowings above $57.4 million
     on September 15, 1996 to ABR plus 4% on December 31, 1996 for all
     borrowings.  The Amended Agreement will continue to contain financial
     covenants relating to tangible net worth, capital additions, earnings and
     cash flows. At November 30, 1996, the Company had $49.0 million of
     borrowings outstanding under the Amended Agreement.
          In addition to a fee amounting to $0.3 million which was paid on
     September 15, 1996 to maintain the aggregate borrowing capacity under the
     Agreement, the Company paid additional fees to maintain aggregate
     borrowings under the Amended Agreement amounting to 0.1% of the total
     facility due at closing, and will be  required to pay 0.1% of the total
     facility due monthly from January 31, 1997 to April 30, 1997, and 0.25% of
     the total facility due June 30, 1997.
          Concurrently with entering into the Amended Agreement, the Company
     issued to its lending group Series A Warrants exercisable for an aggregate
     of 250,000 shares of the Company's common stock (the "Series A Warrants")
     and Series B Warrants exercisable for an aggregate of 300,000 shares of
     the Company's common stock (the "Series B Warrants"), in each case at an
     exercise price of $21.15.  The Series A Warrants and Series B Warrants are
     not exercisable until May 31, 1997 and August 31, 1997, respectively, and
     may be repurchased by the Company for an aggregate of one dollar ($1) for
     the Series A Warrants and an aggregate of one dollar ($1) for the Series B
     Warrants in the event that, with respect to each of the Series A Warrants
     and Series B Warrants, prior to such dates, all indebtedness under the
     Amended Agreement has been repaid in full.  Additionally, with respect to
     the Series B Warrants, the Company may repurchase such Warrants before
     August 31, 1997, for an aggregate of one dollar ($1) if it has received at
     least $20 million in net cash proceeds from additional equity.
          The Company is currently seeking alternative sources of capital which
     will be more advantageous to the Company.  Management believes that they
     will be able to replace the Amended Agreement with such sources during
     fiscal 1997, although there can be no assurances that such sources will be
     available.

     4.  LITIGATION

          On December 19, 1996, the settlement announced on August 28, 1996 of
     the securities class action lawsuit against the Company and certain of its
     officers was given final approval by the Federal District Court in Cedar
     Rapids.  Under the settlement, shareholders who are members of the class
     certified by the Court will receive $4.5 million in cash and $4.5 million
     worth of Norand stock, plus interest from October 17, 1996, less attorneys
     fees and certain other expenses.  The cash portion of the settlement is
     covered by insurance.  The Company has the option to pay $4.5 million in
     cash instead of issuing stock.
          The Company is also subject to certain legal proceedings and claims
     which have arisen in the ordinary course of its business and have not been
     finally adjudicated.  In management's opinion,  the ultimate resolution of
     these matters will not be material to the Company's consolidated financial
     position or results of operations.



                                     - 9 -

<PAGE>   10

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

RESULTS OF OPERATIONS AS A PERCENTAGE OF TOTAL REVENUES (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                       THREE MONTHS ENDED
                                                                -------------------------------------------------------------
                                                                      NOVEMBER 30,                         DECEMBER 2,
                                                                          1996                                 1995
                                                                      (UNAUDITED)                          (UNAUDITED)
                                                                -------------------------           -------------------------
<S>                                                             <C>                <C>              <C>                <C>
Revenues:
  Product sales revenue                                         $44,836             80.9%           $39,231             78.8%
  Customer service revenue                                       10,600             19.1%            10,575             21.2%
                                                                --------           ------           --------           ------
    Total revenues                                               55,436            100.0%            49,806            100.0%

Cost of products and services                                    31,692             57.2%            30,966             62.2%
                                                                --------           ------           --------           ------
    Gross profit                                                 23,744             42.8%            18,840             37.8%

Operating expenses:
  Product development and
    engineering expenses                                          5,174              9.3%             7,020             14.1%
  Selling expenses                                               12,996             23.4%            13,126             26.4%
  General and administrative expenses                             4,167              7.5%             4,201              8.4%
                                                                --------           ------           --------           ------
    Total operating expenses                                     22,337             40.2%            24,347             48.9%
                                                                --------           ------           --------           ------
    Income (loss) from operations                                 1,407              2.6%            (5,507)           (11.1%)

Interest and other expenses                                       1,740              3.2%             1,112              2.2%
Litigation settlement                                                 -                 -               300              0.6%
                                                                --------           ------           --------           ------
    Loss before income taxes                                       (333)            (0.6%)           (6,919)           (13.9%)

Income tax benefit                                                 (100)            (0.2%)           (2,076)            (4.2%)
                                                                --------           ------           --------           ------
    Net loss                                                      $(233)            (0.4%)          $(4,843)            (9.7%)
                                                                ========           ======           ========           ======

</TABLE>

                                    - 10 -


<PAGE>   11
     INTRODUCTION

          Norand designs, manufactures, and markets mobile computing systems
     and wireless data communication networks using radio frequency technology.
     Norand systems allow businesses worldwide to apply information technology
     to industrial and field automation settings.  Typical applications include
     route accounting, field sales automation, and inventory database
     management in manufacturing, warehouse and retail settings.  Norand
     provides hardware, application software, systems integration and support
     to thousands of customers in dozens of industries to improve
     accountability, productivity and management control.

     SAFE HARBOR STATEMENT

          Except for the historical information contained herein, certain of
     the matters discussed herein are "forward-looking statements" as defined
     in the Private Securities Litigation Reform Act of 1995, which involve
     risks and uncertainties.  Potential risks and uncertainties include,
     without limitation, continued pressures in the marketplace, the Company's
     ability to realize the benefits of the implemented restructuring of the
     Company, the future need for additional restructuring, the Company's
     ability to achieve increased revenues from new products and achieve lower
     operating expenses, and other factors that may affect future results as
     described below.
          Product shipments made during any particular quarter generally
     represent orders received either during that quarter or shortly before the
     beginning of that quarter.  Shipments for orders received in a fiscal
     quarter are generally from products manufactured in that quarter.  It is
     the Company's objective to maintain sufficient levels of inventories to
     facilitate meeting delivery requirements of its customers.  However, there
     can be no assurance that during any given quarter the Company has or can
     procure the appropriate mix of raw materials in order to accommodate any
     given order.  The Company's financial performance in any quarter is
     dependent to a significant degree upon obtaining orders in that quarter
     which can be manufactured and delivered to its customers in that quarter.
     As such, financial performance for any given quarter cannot be known or
     fully assessed until near the end of that quarter.
          A substantial portion of the Company's total revenues is from
     customers located outside of the United States.  Foreign sales are subject
     to the normal risk of foreign operations such as global and regional
     economic conditions, trade protection measures, regulatory acceptance of
     the Company's products, longer accounts receivable collection patterns,
     and other considerations peculiar to the conduct of international
     business.  Additionally, the majority of the Company's foreign sales are
     billed in foreign currencies which are subject to fluctuations.  The
     Company is subject to similar risks in its procurement of certain of its
     materials and components from foreign sources.
          Traditionally, the selling price of the Company's products decreases
     over the life of the product.  The Company endeavors to reduce
     manufacturing costs of existing products and to introduce new products,
     functions and other price/performance-enhancing features in order to
     mitigate the effect of such decreases.  To the extent that such cost
     reductions, product enhancements and new product introductions do not
     occur in a timely manner or do not achieve market acceptance, the
     Company's operating results could be materially, adversely affected.
          The business in which the Company is engaged is highly competitive
     and influenced by advances in technology, product improvements and new
     product introduction, and price competition.  Failure to keep pace with
     product and technological advances could adversely affect the Company's
     competitive position and prospects for growth.
          There can be no assurance that the Company's research and development
     activities will lead to the

                                     - 11 -


<PAGE>   12


     successful introduction of new or improved products or that the Company
     will not encounter delays or problems in connection therewith.  The cost
     of completing new technologies to satisfy customer design, quality and
     delivery expectations may exceed original estimates and could adversely
     affect operating profits during any financial period.  There can be no
     assurance that newly designed technologies and products will ever result
     in volume production and shipments.  In addition, products under
     development are frequently announced before introduction and such
     announcements may cause customers to delay purchases of existing products
     in anticipation of new or improved versions of those products.
          The Company seeks to protect its proprietary information and
     technology through reliance on contractual confidentiality provisions and
     the application of patent, trademark and copyright laws.  There can be no
     assurance that such applications will result in the issuance of patents,
     trademarks or copyrights or that third parties will not seek to challenge,
     invalidate or circumvent such applications or resulting patents,
     trademarks or copyrights.  Moreover, competitors may independently develop
     equivalent or superior, non-infringing technologies which could adversely
     effect the Company's ability to market its products and deliver revenue
     growth.
          Many of the Company's products incorporate technologies licensed from
     third parties.  There can be no assurance that the Company will be able to
     license needed technologies in the future.  Additionally, the Company
     believes that its products, processes and trademarks do not infringe on
     the rights of third parties; however, there can be no assurance that third
     parties will not assert claims of infringement of intellectual property
     rights against the Company and that such claims will not lead to
     litigation and/or require the Company to significantly modify or even
     discontinue sales of certain of its products.
          The Company has in the past, and may in the future, encounter
     shortages of supplies and delays in deliveries of necessary components
     from both domestic and foreign suppliers.  While past shortages and delays
     have not had a material adverse effect on the Company, shortages and
     delays could have such effect in the future.  Certain components,
     subassemblies and products are sourced from a single supplier or a limited
     number of suppliers.  The loss of any such supplier may cause the Company
     to incur additional set-up costs and delays in manufacturing and delivery
     of products.
          Certain of the Company's products operate through the transmission of
     radio signals.  These products are subject the regulation by the Federal
     Communications Commission of the United States and corresponding
     authorities in other countries.  Currently, operation of such products in
     specified frequency bands does not require licensing by such regulatory
     authorities.  Regulatory changes restricting the use of such bands or
     allocating frequencies could have a materially adverse effect on the
     Company's business and its results of operations.
          The Company procures certain components and subassemblys subject to
     long lead times and extended sales forecasts that may be affected by rapid
     technological obsolescence.  The effect of technological obsolescence has
     resulted in previous material inventory writedowns and may result in
     future writedowns which could adversely effect results of operations.
          It is the Company's policy to depreciate specialized manufacturing
     equipment over its remaining useful life using the units of production
     method and to evaluate the remaining life and recoverability of such
     equipment based on unit sales projections of underlying products.  Given
     the rapid changes in technology, there can be no assurance that the
     Company's estimate that it will recover the carrying amount of this
     equipment from future operations will not change in the near term.
          The Company has recorded deferred tax assets totaling $18.3 million
     at November 30, 1996, which include $7.6 million of domestic net operating
     loss (NOL) carryforwards.  Realization of the benefit of the NOL
     carryforwards is dependent on generating sufficient taxable income prior
     to the expiration of the loss carryforwards.  Although realization is not
     assured, management believes it is more likely than not that all of the
     deferred assets will be realized.  The amount of the deferred tax asset
     considered realizable, however,

                                     - 12 -

<PAGE>   13


     could be reduced in the near term if estimates of future taxable income
     during the carryforward period are reduced.


          As a result of losses in fiscal 1995, the Company was not in 
     compliance with certain covenants under its credit facility.
     Additionally, in November 1996, as a result of noncompliance with certain
     covenants due to losses recorded in fiscal 1996, the Company and its
     lenders amended its credit facility. Although management believes that the
     Company will comply with the covenants under the amended facility, there
     can be no assurance that the Company will comply with any or all of the
     covenants under the amended credit facility in future periods.  Future
     noncompliance with covenants under the amended credit facility could
     adversely impact the Company's ability to secure adequate borrowings at a
     reasonable cost to fund future operations and working capital
     requirements.
          The Company  recorded charges in its 1995 and 1994 financial
     statements related to irregularities discovered at its Italian subsidiary.
     Although management believes that the aggregate charges relating to the
     irregularities will not exceed the amounts already recorded, there can be
     no assurance that additional third party claims against the Italian
     subsidiary will be discovered in future periods which will result in
     further losses which could have an adverse financial impact on the
     Company.
          The Company has in the past and may in the future acquire businesses
     as a way of expanding its product offerings and acquiring new technology.
     Failure of the Company to identify future acquisition opportunities and/or
     to integrate effectively businesses that it may acquire could have a
     material adverse effect on the Company's growth.
          The Company's future depends in large part on the continued
     recruitment and retention of key technical, marketing and management
     personnel, particularly those highly skilled design, process and test
     engineers involved in the manufacture of existing products and the
     development of new products and processes.  The competition for such
     personnel is intense, and the loss of key employees could have a
     materially adverse effect on the Company's business, financial condition
     and results of operations.
          In addition to factors described above, the Company's future
     financial results are subject to possible adverse effects of certain
     pending litigation as discussed in Note 4 of the Consolidated Financial
     Statements.

     RESULTS OF OPERATIONS

     Revenues

          Consolidated revenues for the quarter ended November 30, 1996
     increased $5.6 million or 11.3% compared to revenues for the same period
     in the prior fiscal year.  Product revenues increased $5.6 million or
     14.3% from the comparable prior period.  The growth in product revenue was
     supported by continued demand for the Company's new products, progress in
     penetrating new vertical markets, particularly home services,
     transportation, package trucking and field services; and growth in the
     Systems Integration business. Customer service revenues remained flat at
     $10.6 million from the comparable prior period.  Growth in customer
     service revenues compared to the first quarter of fiscal 1996 has been
     slowed due to the expiration of certain long-term maintenance contracts
     for the Company's legacy products combined with an increase in the
     standard warranty period for the Company's new products.

     Gross Profit

          The Company's gross profit for the quarter November 30, 1996
     increased $4.9 million or 26.0% from the comparable prior period.  Gross
     profit as a percent of total revenues increased from 37.8% to

                                     - 13 -

<PAGE>   14


     42.8% for the quarter ended November 30, 1996.  The increase in gross
     profits is due primarily to the achievement of certain cost reduction
     initiatives combined with decreases in costs for ongoing product
     enhancements.
          The Company expects gross margins to remain in the range of gross
     margin percentages recorded in the three month period ended November 30,
     1996.

     Operating Expenses

          Product Development and Engineering.  Product development and
     engineering expenses for the quarter ended November 30, 1996 decreased
     $1.8 million or 26.3% from the comparable prior  period due primarily to
     the timing of costs incurred in the completion of development projects
     combined with $0.6 million of reimbursed expenses.  Product development
     and engineering expenses as a percent of total revenue were 9.3% for the
     quarter ended November 30, 1996, compared with 14.1% for the comparable
     prior period.

          Selling.  Selling expenses for the quarter ended November 30, 1996
     decreased $0.1 million or 0.1% from the comparable prior period due
     primarily to the effects of the fiscal 1996 restructuring and continued
     control over expenses, partially offset by higher commissions on higher
     revenues.  Selling expenses as a percent of total revenues were 23.4% for
     the quarter ended November 30, 1996, compared to 26.4% for the comparable
     period in the prior year.

          General and Administrative.  General and administrative expenses for
     the quarter ended November 30, 1996  remained flat at $4.2 million from
     the comparable prior period due primarily to the effects of restructuring
     and continued control over expenses.  General and administrative expenses
     as a percent of total revenues were 7.5% for the quarter ended November
     30, 1996, compared to 8.4% for the comparable period in the prior year.

     Interest and Other Expenses

          Interest and other expenses for the quarter ended November 30, 1996
     increased $0.6 million due primarily to higher interest rates.

     Income Taxes

          The Company's effective tax rate was 30.0% for the quarter ended
     November 30, 1996.  The effective tax rate for the quarter ended November
     30, 1996 is comparable to the same period in fiscal 1995.

     Net Income

          Net loss of $0.2 million for the quarter ended November 30, 1996
     improved from a net loss of $4.8 million for the comparable period in
     fiscal 1995.  The improvement is due to higher revenues, and improved
     gross margins and operating expenses as a percentage of revenues,
     partially offset by higher interest and other expenses.




                                     - 14 -

<PAGE>   15


     LIQUIDITY AND CAPITAL RESOURCES

          Cash flows provided by operating activities were $5.1 million for the
     three months ended November 30, 1996, compared to cash flows used in
     operating activities of $14.0 million for the three months ended December
     2, 1995.
          The Company invested $1.7 million and $3.9 million in capital
     equipment and intellectual properties in the three month periods ended
     November 30, 1996 and December 2, 1995, respectively.  Capital equipment
     investments were primarily concentrated in production machinery, tooling
     and equipment, office automation tools, continued investment in the
     implementation of SAP business systems software, and sales and product
     development equipment to support continued business growth.
          At August 31, 1996, the Company had $52.0 million of borrowings
     outstanding under a credit facility (the "Agreement") with a group of
     lending banks.  In November 1996, as a result of noncompliance with
     certain covenants under the Agreement due to losses incurred for the year
     ended August 31, 1996, the Company and its lenders amended the Agreement
     (the "Amended Agreement") wherein the lending group agreed to waive any
     defaults under or violations of the Agreement occurring on or before
     August 31, 1996.  The Amended Agreement provides for maximum borrowings of
     $60.5 million.  Maximum allowable borrowings decline to $59.5 million on
     December 16, 1996 and then decline periodically to $48.25 million on
     September 15, 1997.  Obligations under the Amended Agreement will mature
     on September 30, 1997.  Obligations under the Amended Agreement will
     continue to be secured by substantially all of the assets of the Company.
     No foreign currency borrowings are permitted under the Amended Agreement.
     The effective interest rate increases periodically from the agent's
     alternate base rate (ABR) plus 1.75% for all borrowings up to $57.4
     million and ABR plus 2.75% for borrowings above $57.4 million on September
     15, 1996 to ABR plus 4% on December 31, 1996 for all borrowings.  The
     Amended Agreement will continue to contain financial covenants relating to
     tangible net worth, capital additions, earnings and cash flows. At
     November 30, 1996, the Company had $49.0 million of borrowings outstanding
     under the Amended Agreement.
          In addition to a fee amounting to $0.3 million which was paid on
     September 15, 1996 to maintain the aggregate borrowing capacity under the
     Agreement, the Company paid additional fees to maintain aggregate
     borrowings under the Amended Agreement amounting to 0.1% of the total
     facility due at closing, and will be  required to pay 0.1% of the total
     facility due monthly from January 31, 1997 to April 30, 1997, and 0.25% of
     the total facility due June 30, 1997.
          Concurrently with entering into the Amended Agreement, the Company
     issued to its lending group Series A Warrants exercisable for an aggregate
     of 250,000 shares of the Company's common stock (the "Series A Warrants")
     and Series B Warrants exercisable for an aggregate of 300,000 shares of
     the Company's common stock (the "Series B Warrants"), in each case at an
     exercise price of $21.15.  The Series A Warrants and Series B Warrants are
     not exercisable until May 31, 1997 and August 31, 1997, respectively, and
     may be repurchased by the Company for an aggregate of one dollar ($1) for
     the Series A Warrants and an aggregate of one dollar ($1) for the Series B
     Warrants in the event that, with respect to each of the Series A Warrants
     and Series B Warrants, prior to such dates, all indebtedness under the
     Amended Agreement has been repaid in full.  Additionally, with respect to
     the Series B Warrants, the Company may repurchase such Warrants before
     August 31, 1997, for an aggregate of one dollar ($1) if it has received at
     least $20 million in net cash proceeds from additional equity.
          The Company is currently seeking alternative sources of capital which
     will be more advantageous to the Company.  Management believes that they
     will be able to replace the Amended Agreement with such sources during
     fiscal 1997, although there can be no assurances that such sources will be
     available.
          The Company believes that projected capital equipment and systems
     additions and working capital requirements can be funded from
     operations or by existing borrowing capacity under the Company's current
     credit facility.
                                     - 15 -

<PAGE>   16
                              NORAND CORPORATION

PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         See Exhibit Index which is incorporated herein by reference.











                                     -16-

<PAGE>   17


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.


                                    NORAND CORPORATION
                                    (Registrant)

Dated: January 10, 1997
       ----------------
                                    /s/ N. Robert Hammer
                                    --------------------
                                    N. Robert Hammer
                                    Chairman, President and Chief Executive
                                    Officer


Dated: January 10, 1997
       ----------------
                                    /s/ Robert A. Hurd
                                    ------------------
                                    Robert A. Hurd
                                    Controller, Chief Accounting Officer and
                                    Assistant Treasurer






                                     -17-

<PAGE>   18


                              NORAND CORPORATION
                                EXHIBIT INDEX




Exhibit No.     Description                                      Page Number
-----------     -----------                                      -----------
    11          Computation of Per-Share Income                       19

    27          Financial Data Schedule                               20










                                     -18-