U.S.SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549


                                  FORM 10-KSB

(Mark One) 


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

    [FEE REQUIRED]

For the fiscal year ended November 30, 1996 or 

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

    [NO FEE REQUIRED] 

For the transition period from         to       
Commission file number 0-18253 

                              NDC AUTOMATION, INC.

                 (Name of small business issuer in its charter)


               Delaware                                   56-1460497 

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


            3101 Latrobe Drive, Charlotte, North Carolina  28211-4849
               (Address of principal executive offices)   (Zip Code)


    Issuer's telephone number (704) 362-1115 


    Securities registered pursuant to Section 12(b) of the Exchange Act: 

                                        Name of each exchange on 
    Title of each class                          which registered 


          None                                        None 


      Securities registered pursuant to Section 12(g) of the Exchange Act:


                           .01 Par Value Common Stock

                                (Title of Class)


    Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. 

                                   Yes X No 


    Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. 


                                     [X]


    State issuer's revenues for its most recent fiscal year: $ 6,142,954. 

    The aggregate market value of the voting stock held by non-affiliates of the
Registrant was $973,543, based upon the closing sales price of Common Stock on
OTC Bulletin Board on January 31, 1997 of $0.46875 per share. 


    As of January 31, 1997, 3,453,451 shares of Registrant's Common Stock, par
value $.01 per share, were outstanding. 


    Portions of the Registrant's Annual Report to the security holders filed
pursuant to Rule 14a-3(b) under the Securities Exchange Act of 1934 are
incorporated by reference in Part II, Items 6 and 7.  In addition, portions of
the Registrant's definitive proxy statement for the 1997 Annual Meeting of
Shareholders to be filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 are incorporated by reference in Part III, Items 9, 10, 11
& 12. 


    Transitional Small Business Disclosure Format (check one): Yes No X 


    This document contains 66 pages.  The Exhibit Index is located on Page 13.

<PAGE>


                                     PART I


ITEM 1.  DESCRIPTION OF BUSINESS 


BUSINESS DEVELOPMENT 


    NDC Automation, Inc.  conducts the business previously carried on by
Netzler and Dahlgren Company Technologies, Inc. ("NDCT"), NDC Systems, Inc.
("NDCS"), and another company also called NDC Automation, Inc. ("NDCA") (all
collectively referred to hereunder as the "Company"). 


    NDCT was founded in 1982 as the North American affiliate of NDC, Netzler &
Dahlgren Co. AB ("Netzler & Dahlgren"), a Swedish Company.  NDCT's strategy was
to acquire or license European control technologies and products, and to
enhance, modify, and otherwise adapt them for use by customers in North America.



    In 1984, NDCS was organized to market radio frequency identification
technology products. 


    Automation Technologies, Inc. ("ATI") was formed in 1985, but did not
engage in the active conduct of business. 


    In 1987, NDCA was formed to provide standard hardware and software packages
for Original Equipment Manufacturers (OEM) to expand applications of automatic
guided vehicle systems ("AGVS") and RFID technologies into industries that
traditionally did not use such technologies. 


    Effective December 1, 1987, NDCT, NDCS, and NDCA were all merged into ATI. 
The surviving corporation changed its name to NDC Automation, Inc.  The effect
of the merger was to combine the business activities of three separate, but
market-related, companies into a single, integrated enterprise.  The Company
became a Delaware corporation in December 1989 through a merger entered into for
the purpose of changing the Company's state of incorporation.  At that time its
sole subsidiary was N/S Technology, Inc., an inactive North Carolina corporation
which was dissolved in 1994. 


    On March 28, 1990, the Companyis successfully completed its Initial Public
Offering netting $1,996,598 to improve its financial position. 


    On June 30, 1991, the Company acquired all of the common stock of
Southeastern Software Developers, Inc. ("SSDI"), a South Carolina corporation,
from its shareholders for stock in the Company and cash.  SSDI developed and
owned proprietary control and monitoring software used primarily in the textile
industry. The Company has essentially absorbed the operations of SSDI and
dissolved SSDI's corporate charter in 1996. 


    Effective July 1, 1992, the Company acquired for cash and stock all of the
outstanding shares of NDC Technology Australia PTY Ltd. ("NDCTA"), a company
formed to acquire, develop, market, and sell hardware, software and engineering
services incorporated into and used to control AGVS in the international market.
NDCTA was sold on November 30, 1995 to its managing director. 


    On June 22, 1993, the Company purchased the assets of AutoNavigator AB
("ANAB"), of Lulea, Sweden.  A subsidiary of the Company, NDC Laser AB ("NDC
Laser"), was formed to produce and distribute ANAB's laser device and related
software, enhancing the Company's know-how.  NDC Laser was sold November 30,
1995 to NDC AB. 


    During the fiscal year ending November 30, 1996, the Company discontinued
its marketing and distribution of the radio frequency identification products to
primarily focus on its AGVS business.  The Company also refocused its marketing
and sales of AGVS equipment to OEM customers and system suppliers and away from
end-users.  The Company's strategy is to ensure that it does not compete with
its existing and potential customers. 







                                       1

<PAGE>




BUSINESS OF THE ISSUER 


    The Company's core business is to be a leading supplier of controls
hardware, software, engineering services and other components that are
incorporated into automated guided vehicles ("AGV's" or "vehicles") and into
systems that incorporate one or more such vehicles ("AGV systems").  AGV's are
driverless, computer-controlled vehicles that are programmed to transport
materials through designated pickup and delivery routines within a particular
facility (usually a manufacturing or distribution facility) and to transmit
information concerning system status, inventory tracking and system controls to
a system controller.  In 1996, sales of AGV related products and services have
accounted for almost all of the Company's net revenues compared to 89% in prior
years. 


    The Company's AGV system products and services have been used in a variety
of industries, including textiles, automotive, newspaper publishing and
electronics.  These control products are designed to be of such general
applicability as to be incorporated into many kinds of material handling
vehicles.  Consequently, they are used not only in custom-designed AGV vehicles
and systems, but also to automate conventional material handling equipment such
as forklifts and pallet jacks. 


    The Company markets a laser guidance AGV control system, Lazerway(TM), which
is viewed by management as superior to the traditional "wire guidepath"
technology for controlling the direction of an AGV.  Management believes that
this laser technology, which permits the end user to alter the guidepaths of
AGV's without changes in its facility, will allow the Company to penetrate new
markets and attract new partners. 


    The Companyis philosophy is to sell its hardware, software and engineering
services to Original Equipment Manufacturer (OEM) customers, i.e.  manufacturers
of AGVs, AGV systems and other vehicles that can be equipped for automation for
the full satisfaction of the end-users' needs.  The Company will sell such
services through regular distribution or as a sub-contractor to such OEM
customers.  However, the Company may supply, from time to time, an end user only
in circumstances where an OEM customer or system supplier is not available to
implement or support the system. 


    The Company was incorporated in North Carolina in 1987 and reincorporated
in Delaware in 1989, although its predecessors had been in existence since 1982.
Its principal office is located at 3101 Latrobe Drive, Charlotte, North
Carolina, 28211, and its telephone number is (704) 362-1115. 






                                       2

<PAGE>



STRATEGY 


    The Company's mission is to strengthen its core business through active
marketing, distribution and support of AGV system control technology,
engineering and related products through sales to AGV manufacturers, material
handling system integrators and other equipment manufacturers who typically
integrate the Company's products into system products for sale to the actual
users of AGV systems. 


    The Company is focusing its marketing efforts on its laser technology,
Lazerway(TM), towards OEM customers as well as to existing users of AGV 
systems for up-grading and retrofitting purposes. 


    The Company has divested itself of all previous acquisitions to focus on
its core business in North America.  The Company's strategy is to increase
awareness of its AGV technology among end users while creating new relationships
with existing AGV suppliers and system suppliers to distribute the products or
systems to potential end users.  As part of the strategy, the Company intends to
pursue undeveloped potential markets to the end users through OEM distribution
relationships.  The Company believes that its focus on laser technology rather
than on wire technology can give it an advantage in the existing and future
market place.  The primary focus of such sales effort will be to provide
products and services to OEM customers and system suppliers while eliminating
system sales to end users.  The above strategy in the near term may, however,
lower revenues as the Company reduces its sales of non-standard products that it
typically sold in providing an entire AGV systems to customers.  The Company
receives a higher margin, however, on its standard AGV product revenues compared
to its non-standard product revenues, while limiting its risk exposure (see Part
II, item 6 of this report). 


    The Company also intends to pursue other but related product lines that can
be distributed to its targeted customers to supplement its existing AGV
business.  This should allow the Company to grow, while making the Company less
dependent on its present product lines.  There can be no assurance, however,
that this strategy will meet management's objectives for growth.


                                       3

<PAGE>


AUTOMATED GUIDED VEHICLE SYSTEMS 


GENERAL 


    AGV's are driverless, computer-controlled vehicles that are programmed to
transport materials through designated pickup and delivery routines within a
particular facility (usually a manufacturing or distribution facility) and to
transmit system status, inventory tracking and control and other information. 
In many manufacturing and distribution processes, material handling needs are
met by roller tables, conveyors, manually operated vehicles and other
conventional methods. The vehicles can be rerouted within the constraints
imposed by the particular system. The Company's AGV system products and services
have been used in a variety of industries, e.g. warehousing, textiles, newspaper
publishing and electronics. Control systems and technology supplied by the
Company are used for guidance and control of AGV systems in numerous existing
production facilities. 


    The vehicles can be made to move and stop, load and unload, and perform
other functions. The AGV's load handling equipment is adapted to the type and
weight of the material that it handles and may consist of a roller table,
forklift, mechanical arm or other device. The vehicle's wheel and drive
configurations vary, depending upon the degree of maneuverability required
within the manufacturing or distribution facility. 


    Automatic guided vehicles can be guided between pick-up and delivery points
by several methods.  The traditional method is an inductive loop, called a wire
guidepath, which is embedded in the floor of the facility when the AGV system is
installed. The vehicles in an AGV system are equipped with a sensor and guidance
equipment that cause them to follow the guidepath. Because the installation of a
wire guidepath requires cutting a channel in the floor of the facility, the wire
guidepath method makes rerouting of AGV's less flexible.  Moreover, this method
of installation of the system makes it inappropriate for clean room environments
and certain other applications. 


    An alternative, new vehicle guidance method uses laser technology, which
eliminates the need for extensive facility reconfiguration upon installation.
The laser guidance technology employs a rotating laser beam emitted from a
vehicle to sweep the room and calculate angles to detected reflectors. The data
gathered in this manner is used by the vehicle's computer to determine its
location and progress towards its destination. The vehicle can be rerouted
remotely by computer.  Management believes that the Company's new laser guidance
is superior to traditional technology because it permits the end user to alter
the designated routines of AGV's without extensive reconfiguration or facility
changes. 


    The end users of AGV systems typically are firms that need to move objects
by vehicle within a single manufacturing or distribution facility.  For example:



    A US Army facility uses vehicles to transport nuclear waste. 


    A significant number of newspapers, including twelve in North America, use
AGV systems incorporating the Company's products to move paper rolls and
finished editions through their printing plants. 


    A computer work station manufacturer uses an AGV system incorporating the
Company's products to move component assemblies, parts, work-in-process and
finished goods through its plant. 


    The Company offers 62 standard items of equipment and 41 standard software
products to its customers for their use and incorporated into AGV systems for
end users.  These control products are designed to be of such general
applicability as to be useful in many kinds of material handling vehicles.
Consequently, they are used not only in custom-designed AGV vehicles and
systems, but also to upgrade conventional material handling equipment such as
forklifts and pallet jacks. 






                                       4

<PAGE>

    AGV systems are custom-designed by system houses and OEM's, and occasionally
by end users, to satisfy the material handling needs of an end user's
facilities. The more complex AGV systems perform several functions and are
controlled by highly sophisticated computer software. These systems track and
maintain the flow of materials through an entire manufacturing or distribution
process. In doing so, they use numerous vehicles to move parts and assemblies
through the various operations necessary to produce the finished product. The
AGV system's own computers provide host production computers with the
information necessary for management to make real-time production decisions. 



THE MASTER LICENSE AGREEMENT 


    The Company's AGV system products and services incorporate technology
licensed by, and products purchased from, Netzler and Dahlgren Co.  AB ("Netzler
& Dahlgren"), as well as technology that it has acquired or developed itself. In
accordance with the Master License Agreement dated December 1, 1987, the Company
receives Netzler & Dahlgren's AGV technology, hardware, software, know-how and
consulting services.  The Master License Agreement provides that the Company has
the exclusive rights to commercially and technically utilize, apply and
sublicense Netzler & Dahlgren's AGV system control technology and to sell its
AGV system products in North America.  Ongoing use by the Company of AGVS
technology unavailable from Netzler & Dahlgren, however, would allow Netzler &
Dahlgren to terminate the Company's exclusive rights. 


    On November 30, 1995, the Company sold its laser technology to Netzler &
Dahlgren and extended the Master License Agreement.  The amended agreement
continues to allow the Company to distribute the Netzler & Dahlgren laser
technology exclusively in North America. The Master License Agreement further
provides that any enhancements or improvements of existing technology sponsored
or developed by one party shall be the property of the original developer
(subject to a royalty-free grant back to the other party for marketing outside
the owner's territory). The agreement was extended for ten (10) years and will
expire on December 1, 2005 and is subject to automatic two year extensions
unless and until one party, in compliance with certain procedures, notifies the
other of its intention to terminate the agreement. It provides for payment of a
10% royalty on license fees received by the Company with respect to AGV system
technology. It also provides for the sale of products at prices determined
annually. Royalties are due 30 days following receipt of payment by the Company.
During the fiscal year ended November 30, 1996, the Company incurred no
royalties to Netzler & Dahlgren with respect to technology licenses and
purchased an aggregate of $1,049,324 of hardware, software and engineering
consulting services. 


RESOLUTION OF SCHLAFHORST, INC. ARBITRATION 


    The Company had a working agreement with Schlafhorst, a leading textile
industry OEM.  Schlafhorst, domiciled in Germany but with offices in Charlotte,
North Carolina, supplies equipment to the yarn manufacturing sector of the
textile industry.  Its agreement with the Company terminated on August 18, 1994.
Under that agreement, the Company was developing and supplying to Schlafhorst a
complete AGV system product line to be integrated with equipment manufactured
and marketed by Schlafhorst. 


    In August 1993, Schlafhorst and the Company agreed in principle to modify
their working agreement to increase involvement by Schlafhorst in the completion
of existing projects. The parties also agreed in principle that Schlafhorst
would increase its long-term participation in textile automation projects using
the Company's AGV system control technology and equipment.  During September
1993, the Company entered into an exclusive know-how license agreement with
Schlafhorst for the laser technology.  In February 1994, Schlafhorst acquired an
AGV system manufacturer based in Michigan that relies on chemical guidepath
technology. 








                                       5

<PAGE>


    In April 1994, Schlafhorst filed a demand against the Company for
arbitration with the American Arbitration Association.  Schlafhorst claimed that
it was entitled to a refund of approximately $1,000,000 on account of the
alleged failure of a system sold by the Company to Schlafhorst to meet a March
31, 1994 throughput test at the facilities of Schlafhorst's customer.  The
Company disagreed with Schlafhorst as to the results and proper interpretation
of the throughput test and asserted claims against Schlafhorst in the
arbitration proceeding in excess of $31,500,000, plus punitive damages and
treble damages. The Company and Schlafhorst submitted their claims and disputes
to non-binding mediation, which did not result in a settlement.  In December
1994, Schlafhorst submitted an additional claim in this proceeding, which claim
sought to terminate all Project Agreements entered into by and between
Schlafhorst and the Company and to recover all sums paid by Schlafhorst to the
Company under all the Project Agreements, for a total claim of $8,501,483 (which
included the initial Schlafhorst claim) plus costs, attorneys' fees and
interest.  The arbitration began on March 1, 1995 and was completed June 22,
1995.  The American Arbitration Association announced on July 24, 1995 that a
$2,132,066 award was to be paid to the Company by Schlafhorst.  The award was
subsequently paid in early September, 1995. In addition to the award, the 
Company was entitled to retain inventory set aside under "cost and estimated 
earnings in excess of billings on uncompleted contracts" for Schlafhorst 
projects.  The net effect of the award on the Company's consolidated 
statement of operations was a reduction of cost of goods sold of 
approximately $150,000 for the quarter ended August 31, 1995. 


    In a related matter, in June 1994 the Company filed a lawsuit against
Schlafhorst alleging misappropriation of trade secrets and unfair deceptive
trade practices.  The Company asserted that Schlafhorst misappropriated
confidential computer software belonging to the Company.  The Company sought an
injunction barring Schlafhorst from using or divulging the software and
requiring Schlafhorst to return all copies of the software to the Company. These
claims were in addition to those which the Company has asserted against
Schlafhorst in their arbitration proceedings described above.  The Company has
settled its previously described lawsuit against Schlafhorst, Inc. and
Schlafhorst's counterclaim with respect to trade secrets and related matters. 
Neither party admitted any liability with respect to any of the allegations of
the complaint or counterclaim. 


    As a result of the foregoing, the Company experienced cash flow
difficulties, restructured bank debt and arranged deferred payment terms with
its existing major creditors.  The Schlafhorst proceedings raised substantial
doubt about the Company's ability to continue as a going concern.  The receipt
of the award and completion of recent transactions (see Part I of the Business
Development and Part II Item 6 as described herein) greatly alleviated working
capital needs for the Company. 


RFID PRODUCTS 


    RFID products are attached to materials at an early stage of production and
accompany those materials throughout a manufacturing or distribution process,
using radio waves to transmit information specific to such material. 


    RFID products are used in the automobile, manufacturing and electronics
industries. RFID products are also used in access control systems to identify
people for security and other purposes. 


    RFID products simplify manufacturing and distribution processes by
decentralizing processing and decision-making functions, thereby reducing the
processing requirements of the host computer. Such products offer both item
identification and data management capabilities. Although RFID products are
sometimes used in AGV systems, the application of such products is not limited
to such systems. 


    Increased competition and decreased demand from the North American
automobile industry generally have resulted in declining net revenues for the
Company's RFID product line.  On March 1, 1996, the Company reassigned its
distribution and manufacturing rights to Statec subject to monthly cash payments
by Statec to the Company.  For the fiscal years ended November 30, 1996, 1995
and 1994, RFID product sales accounted for approximately 3%, 11%, and 9%,
respectively, of the Company's net revenues. 



                                       6

<PAGE>

CUSTOMERS 


    A substantial portion of the Company's business in any given year is
derived from a limited number of customers, although the identity of those
customers varies somewhat from year to year.  For the fiscal year ended November
30, 1996, orders from the three largest customers accounted for 10.9%, 8.7%
and 7.7% of the Company's net revenues. For fiscal 1995, orders from the three
largest customers accounted for 13.2%, 12.8% and 11.5% of the Company's net
revenues.  For fiscal 1994, orders from the three major customers
accounted for 14.0%, 7.8% and 7.5% of the Company's net revenues. 


    End users of the Company's products and services are reached by the
Company's sales through system suppliers and OEM's . 


    The Company's system supplier and OEM customers include 17 firms that
acquire the Company's products under various types of agreements. Under the
terms of such agreements, the system supplier can obtain hardware, software and
access the Company's specific AGV system know-how. 


    AGV system products and services sold to system suppliers, OEM's and
Netzler & Dahlgren as a group accounted for approximately 75%, 37% and 
60% of the Company's net revenues in the fiscal years ended 
November 30, 1996, 1995 and 1994, respectively.  For the fiscal year 
ended November 30, 1996, such customers accounted for approximately 
$4.6 million in net revenues. 



    The Company sold also in 1996 its AGV system products and services
directly to end users to incorporate such components and equipment into AGV
systems suitable for their particular needs.  These end users often are major
manufacturing concerns experienced in the application of sophisticated material
handling systems for in-house use. The two primary reasons for system sales to
end users are that no suitable OEM supplier can be identified or the need for
the Company to maintain its application know-how. AGV system products and
services sold to end users accounted for approximately 22%, 52% and 31% of the
Company's net revenues in the fiscal years ended November 30, 1996, 1995 and
1994, respectively. 


MARKETING 


    The Company's marketing strategy is to promote the advantages of its AGV
control technology to the whole market, particularly its laser guidance
Lazerway(TM).  The technology consists of a family of products, both hardware 
and software, capable of being incorporated into a broad variety of systems
while preserving the identity and independence of the system supplier. The
Company sales and distribution efforts are directed toward its OEM customers and
system suppliers only. However, to increase demand for the products and services
of the AGV suppliers, the Company's marketing program targets North American end
users, system suppliers and OEMs. These firms add value and supply finished
products to end users. In its approach to certain prospective customers, the 
Company will suggest a teamed technology arrangement. In such an arrangement, 
the Company will work with its OEM customer to integrate the Company's 
products and services with their equipment. The goal is to fashion a 
material movement system that will satisfy the end user's particular 
needs.  Such technology once installed can be maintained by factory 
floor technicians and has been used in more than 1000 AGV systems with over 
6,000 vehicles (composed of as few as one vehicle and as many 
as 50 vehicles) . 


    The Company's marketing program is led by its President, and implemented by
its Marketing Manager and Sales Group, who are responsible for developing
relationships with system suppliers, OEM's, distributors and manufacturers'
representatives.  The Company attends the major trade shows held by the
materials handling industry and advertises in various industry publications. 






                                       7

<PAGE>


    Although the Company actively markets all of its products and services, a
substantial part of its business is unsolicited. For example, a potential end
user of the Company's products might solicit requests for proposals from more
than one system supplier. A system supplier will incorporate the features of the
Company's products and services in the technical specifications of its bid, in
which case the pricing of its bid would reflect the cost of such products and
services.  It is not unusual for several system suppliers or OEMs to incorporate
features of the Company's products and services into their bids, thus enhancing
the likelihood that such products and services will be included in the AGV
system finally selected by the end user. The bidding process takes, on the
average, three months to one year for completion.  The design, manufacture and
installation of AGV systems utilizing the Company's products and services
require an additional six to twelve months. 


BACKLOG 


    Backlog consists of all amounts contracted to be paid by customers but not
yet recognized as net revenues by the Company.  At November 30, 1996, the
Company had a backlog of approximately $780,000 compared to $1,415,000 total
backlog one year earlier.  Substantial fluctuations in backlog are considered
normal due to the size of AGV system contracts. Substantial fluctuations in the
industry makeup of the Company's backlog also are considered normal. 


PATENTS AND PROPRIETARY INFORMATION 


    The Company has obtained marketing and manufacturing rights to control
technology, components, equipment and know-how developed by Netzler & Dahlgren,
and the Company is not permitted to apply for any patent thereon.  Product
developments sponsored and funded by the Company are the property of the Company
and may be patented by the Company.  The Company owns and licenses various
patents and trademarks with varying expiration dates. 


    Management believes that the Company's strong ability to modify and adapt
its products to changing applications is just as significant to the maintenance
of its competitive position as is the protection afforded by its own patents and
trademarks. 


RESEARCH AND DEVELOPMENT 


    The Company's research and development activities are designed to
complement existing products and services and not to innovate radically
different technologies.  Management relies upon Netzler & Dahlgren to innovate
technology to which the Company would be entitled according to the terms of the
Master License Agreement. 


    The Company expensed $3,942 in fiscal 1996, $141,220 in fiscal 1995, and
$113,356 in fiscal 1994 for research and development, all relative to AGV
systems. 


INVENTORY 


    The Company purchases considerable amounts of hardware and software from
Netzler & Dahlgren. The lead time required for such purchases averages
approximately sixteen weeks. Other manufactured products inventoried by the
Company require similar lead times. Due to the long lead times required, a
general increase in the volume of business can relate to increased inventory
levels.  In 1996 inventories decreased due to the sale of inventories awarded 
back to the Company related to the Schlafhorst dispute and to the return of 
such inventory back to the manufacturer. 







                                       8

<PAGE>

COMPETITION 


    The material handling industry is highly competitive, and technologies are
changing rapidly.  The Company is the major supplier in North America of AGV
system control technology, products and services designed to be incorporated
into vehicles manufactured by others. Management believes that the flexibility
and functionality of its controls and technology offer a competitive advantage
relative to the technology of system suppliers and OEM's that produce controls
and vehicles only for use in their own AGV systems. There can be no assurance
that this competitive advantage will continue. 


    In summary, competition is derived much less from non-OEM companies
supplying AGV control technology, than from the continuing reliance by OEM's on
their own internally designed AGVS technology. 


    While the Company endeavors continually to improve and upgrade its product
and service offerings, there can be no assurance that other firms having greater
financial resources for research, development and marketing will not develop
products with characteristics superior to the Company's products or that render
the Company's products obsolete. 


    The Master License Agreement as amended provides that the Company has the
exclusive right to distribute in North America the control technology and
products supplied to it by Netzler & Dahlgren. As companies begin to increase
their international business, AGV suppliers and OEMs based outside North America
that distribute Netzler & Dahlgren products are not subject to limitations on
their ability to compete with the Company's customers for end user sales in
North America. The results of operations and business outlook of the Company
would be affected adversely if Netzler & Dahlgren and its customers outside
North America were to sell products incorporating laser technology in the
Company's actual or potential markets.  The Company, however, may also increase
its sales if its customers or potential customers begin to sell internationally.



EMPLOYEES 


    The Company presently employs 28 persons full-time.  None of the Company's
employees is a party to a collective bargaining agreement. The Company considers
its employee relations to be excellent. 







                                       9

<PAGE>


ITEM 2.  PROPERTIES 

    The Company owns the premises that it occupies at 3101 Latrobe Drive in
Charlotte. A bank holds a mortgage on the property in an original amount of
$1,387,000, of which $1,170,674 was outstanding at November 30, 1996. The
productive capacity of the building is approximately 13,000 square feet, all of
which is currently utilized for executive offices, engineering, distribution and
administration. 

    The Company ceased leasing the building that houses its demonstration and
testing in February of 1997. This facility incorporated approximately 3,000
square feet of warehouse and office space. 

    The Company is seeking additional financing to expand its existing facility.
Until such time, however, management believes that the Company's facilities are
adequate to meet its present needs. 


ITEM 3.  LEGAL PROCEEDINGS 

    None. 

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 

    None. 





                                       10

<PAGE>




                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters


    The Company's Common Stock previously traded on the National  Association of
Securities Dealers, Inc. ("NASDAQ") National Market under the symbol "AGVS". The
Company's  common  stock began  trading on the OTC  Bulletin  Board in November,
1995. As of November 30, 1996, 3,453,451 of the Company's 11,000,000  authorized
shares of Common Stock were issued and outstanding.


    Trading in the Company's  securities  commenced on March 28, 1990. The table
below indicates  quarterly high and low bid and asked  information for the years
ended  November 30, 1996 and 1995,  respectively,  as provided to the Company by
NASDAQ and OTC Bulletin Board. The quotations reflect inter-dealer prices, 
without dealer mark-up, mark-down, or commission, and may not represent actual 
transactions.



    The  approximate number of holders of record of common stock of the Company
as of December 31, 1996 was 175.

                                         Market Price per Share

                  ------------------------------------------------------------
                                1996                      1995

                  ------------------------------------------------------------
                        High ^           Low ^         High          Low
Quarter Ended       Bid     Ask      Bid      Ask    Bid   Ask    Bid    Ask
------------------------------------------------------------------------------

February 29         5/8     7/8      3/8     15/32    1 9/16*         1*
May 31             1 1/16  1 5/16    3/8      1/2     1 9/16*        7/8*
August 31           5/8     7/8      1/4      1/2      2 5/8*       1 1/8*
November 30         5/8     3/4      1/4      3/8      1 1/2*   7/16^    13/16^
===============================================================================

*    Prior to the quarter ended November 30, 1995, the Company's stock traded on
     the NASDAQ National Market System.

^    November  21,  1995,  the  Company's  stock began  trading on the OTC 
     Bulletin Board.

     The Company has never paid any cash  dividends and has no present intention
     to declare or pay cash  dividends.  The Company intends to retain any 
     earnings which it may realize in the foreseeable  future to finance the
     development and expansion of its business.

     


                                       11




<PAGE>


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
        CONDITION AND RESULTS OF OPERATIONS 

    The information under the captions "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Registrant's Annual Report
to the security holders furnished to the Commission under Rule 14a-3(b) of the
Securities Exchange Act of 1934 (a copy of which is included in the 
exhibits hereto) is incorporated herein by reference.

ITEM 7. FINANCIAL STATEMENTS

    The Financial Statements in the Registrant's Annual Report to the security
holders furnished to the Commission under Rule 14a-3(b) of the Securities
Exchange Act of 1934 (a copy of which is included in the exhibits 
hereto) are incorporated herein by reference.








ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURES
 None. 

                                    PART III


ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
        COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT 

    The information under the captions "Election of Directors", "Management" and
"Compliance with Section 16(a) of the Securities Exchange Act of 1934" in the
Registrant's definitive Proxy Statement are incorporated herein by reference.

ITEM 10. EXECUTIVE COMPENSATION 


    The information under the captions "Compensation of Directors" and
"Executive Compensation" in the Registrant's definitive Proxy Statement are
incorporated herein by reference.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 

    The information set forth under the caption "Security Ownership of
Management and Others" in the Registrant's definitive proxy statement is
incorporated herein by reference.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 

    The information set forth under the captions "Certain Transactions" in the
Registrant's definitive proxy statement is incorporated herein by reference. 


                                    PART IV


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K 

(a) Exhibits 

(b) Reports on Form 8-K 
    None filed in 4th quarter


                                       12

<PAGE>


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K 


Exhibit 
No.      Description 


   (A) Exhibits: 


Exhibit No.      Description 


    3.1(a)*     Certificate of Incorporation of the Company (incorporated
                by reference to Exhibit 3.1 to the Company's Form 10-K for the
                fiscal year ended November 30, 1990 (the 1990 Form 10-K).

    (b)*        Certificate of Amendment dated May 27, 1993 (incorporated by
                reference to Exhibit 3.1 to the Company from S-1 dated August
                27, 1993).

    3.2*        Bylaws of the Company (incorporated by reference to Exhibit
                3.2 to the Company's 1990 Form 10-K).

    4.1*        Form of Common Stock certificate (incorporated by reference to
                Exhibit 4.1 to the Company's Registration Statement (No.
                33-32925) on Form S-18 (the Form S-18)).

    10.1(a)*    Profit Sharing Plan and Trust Agreement dated April 1,
                1983, as amended (incorporated by reference to Exhibit 10.1 to
                the Company's 1990 Form 10-K).

    (b)*        Nonstandardized Code 401(k) Profit Sharing Plan (incorporated by
                reference to Exhibit 10.48 to the Company's 1990 Form 10-K).

    (c)*        Adoption Agreement #004 Nonstandard Code 401(k) Profit Sharing
                Plan dated October 26, 1992 (incorporated by reference to
                Exhibit 10.1(b) to the Company's Form 10-K for the fiscal year
                ended November 30, 1992 (the 1992 Form 10-K)).

    10.2(a)*    Master License Agreement dated December 1, 1987 (the Master
                License Agreement) between Netzler & Dahlgren and the Company
                (incorporated by reference to Exhibit 10.2 to the Form S-18).

    (b)*        Letter Amendment dated March 28, 1990 between the Company and
                Netzler & Dahlgren, amending the Master License Agreement
                (incorporated by reference to Exhibit 10.2(b) to the Company's
                1990 Form 10-K).

    (c)*        Amendment to Master License Agreement dated May 31, 1990
                between the Company and Netzler & Dahlgren, amending the Master
                License Agreement (incorporated by reference to Exhibit 10.2(c)
                to the Company's 1990 Form 10-K).

    (d)*        Agreement dated October 18,1993 between the Company and Apogeum
                AB regarding Conveyance of Laser Know-How and Rights
                (incorporated by reference to exhibit 10.2(D) 1994 form 10KSB).

    (e)*        Restated Master License Agreement dated November 30, 1995
                between the Company and Netzler and Dahlgren Co. AB
                (incorporated by reference to exhibit 10.2(e) 1995 form 10KSB).

    10.3(a)*    Agreement of Understanding dated January 21, 1990 between
                the Company, Statec S.A., Angro et El srl., Valtronic Holdings
                SA, Valtronic France SA, Mr. Dominique Saulnier, personally and
                on behalf and for the account of Mrs. C. Saulnier, his wife
                (incorporated by reference to Exhibit 10.3(a) to the Company's
                1990 Form 10-K).

    (b)*        License Agreement dated April 6, 1987 between Dominique Saulnier
                and NDC Systems, Inc. (incorporated by reference to Exhibit
                10.3(b) to the Form S-18).

    (c)*        Sole Distributorship Agreement dated January 21, 1990 between
                Statec Technologies, S.A. and NDC Automation, Inc. (incorporated
                by reference to Exhibit 10.3(c) to the Company's 1990 Form
                10-K).




                                       13

<PAGE>

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K 


Exhibit 
No. Description 


(A) Exhibits: 


Exhibit No.      Description 


    (d)*        Letter of understanding between the Company and Statec
                Technologies SA dated February 21, 1996 to reassigning exclusive
                distribution for North America back to Statec (incorporated by
                reference to exhibit 10.3(d) 1995 form 10KSB).

    (e)*        Termination and Release Agreement between the Company and Statec
                Technologies, S.A. effective March 1, 1996 (incorporated by
                reference to exhibit 2 of the Company's February 29, 1996
                10QSB).

    10.4(a)*    Agreement dated June 20, 1989 between the Company and
                Schabmuller GmbH (incorporated by reference to Exhibit 10.4 to
                the Form S-18).

    (b)*        Exclusive Distribution Agreement dated February 9, 1995 between
                the Company and Schabmuller GmbH (incorporated by reference to
                exhibit 10.4(b) to the Company's 1994 form 10-KSB).

    10.5(a)*    Know-How, Firmware and Documentation License Agreement
                dated November 30,1990 between the Company and Production
                Machinery Corporation (incorporated by reference to Exhibit
                10.8(a) to the Company's Form 10-K for the fiscal year ended
                November 30, 1991 (the 1991 Form 10-K)).

    10.6(a)*    Agreement dated January 1, 1991 between Clark Material
                Handling Company (a business unit of Clark Equipment Company)
                and the Company (incorporated by reference to Exhibit 10.16 to
                the Company's 1990 Form 10-K).

    (b)*        Development Contract dated April 24, 1991 between the Company
                and Control Science, Inc. (incorporated by reference to Exhibit
                10.16(b) to the Company's 1991 Form 10-K).

    10.7(a)*    Know-How License Agreement dated May 30, 1984 between
                Netzler and Dahlgren Company Technologies, Inc. and FMC
                Corporation, MHS Division (incorporated by reference to Exhibit
                10.17(a) to the Form S-18).

    (b)*        Requirements Supply Agreement dated May 30, 1984 between Netzler
                and Dahlgren Company Technologies, Inc. and FMC Corporation, MHS
                Division (incorporated by reference to Exhibit 10.17(b) to the
                Form S-18).

    (c)*        Software License Agreement dated May 30, 1984 between Netzler
                and Dahlgren Company Technologies, Inc. and FMC Corporation, MHS
                Division (incorporated by reference to Exhibit 10.17(c) to the
                Form S-18).

    10.8*       Employment Contract between Ralph G. Dollander and the Company.
                (incorporated by reference to exhibit 10.14, 1995 form 10KSB).

    10.9(a)*    NDC Automation, Inc. 1990 Stock Option Plan, as adopted
                October 10, 1990 (incorporated by reference to Exhibit 10.47(a)
                to the Company's 1990 Form 10-K).

    (b)*        Form of Stock Option Agreement (incorporated by reference to
                Exhibit 10.47(b) to the Company's 1990 Form 10-K).

    10.10(a)*   Form of Stock Purchase Agreement dated July 1, 1992 between
                the Company and NDC Technologies International, Ltd.
                (incorporated by reference to Exhibit 10.50 to the Company's
                1992 Form 10-K).

    (b)*        Agreement to purchase corporate stock of NDC Technologies
                Australia Pty, Ltd. dated November 30, 1995 between the Company
                and Tommy Hessler. (incorporated by reference to Exhibit
                10.18(b) to the Company's 1995 Form 10-KSB).



                                       14

<PAGE>

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K 


Exhibit 
No. Description 


(A) Exhibits: 


Exhibit No.      Description 


    10.11(c )*  Guaranty and Pledge Agreement between Tommy Hessler and
                the Company dated November 30, 1995. (incorporated by reference
                to Exhibit 10.18 (c ) to the Company's 1995 Form 10-KSB).

    (d)*        Promissory Note dated November 30, 1995 between the Company and
                NDC Technology Australia Pty. Ltd. (incorporated by reference to
                Exhibit 10.18(d) to the Company's 1995 Form 10-KSB).

    10.12*      Promissory Note from the Company to First Citizens Bank & Trust
                Company (incorporated by reference to Exhibit 10.56 to the
                Company's 1992 Form 10-K).

    10.13(a)*   Amended and restated Loan Agreement dated July 28, 1994
                between the Company and NationsBank of North Carolina, N.A.
                (incorporated by reference to Exhibit 4 to the Company's August
                31, 1994 Form 10-QSB).

    (b)*        First amendment dated November 30, 1994 modifying the amended
                and restated Loan Agreement dated July 28, 1994 between the
                Company and NationsBank of North Carolina, N.A. (incorporated by
                reference to exhibit 10.25(b) to the Company's 1994 form 10KSB).

    (c)*        Second Amendment dated December 19, 1994 modifying the amended
                and restated Loan Agreement dated July 28, 1994 between the
                Company and NationsBank of North Carolina, N.A. (incorporated by
                reference to exhibit 10.25(c) to the Company's 1994 form 10KSB).

    (d)*        Copy of First Amendment to the amended and restated Loan
                Agreement between the Company and NationsBank of North Carolina,
                N.A. dated November 30, 1994 (incorporated by reference to
                exhibit 1 of the Company's February 28, 1995 10QSB).

    (e)*        Third Amendment dated March 31, 1995 modifying the amended and
                restated loan agreement dated July 28, 1994 between the Company
                and NationsBank of North Carolina, N.A. (incorporated by
                reference to exhibit 2 of the Company's February 28, 1995 Form
                10QSB).

    (f)*        Fourth Amendment dated August 30, 1995 to the amended and
                restated Loan Agreement, between the Company and NationsBank of
                North Carolina, N.A. (incorporated by reference to exhibit 1 of
                the Company's August 31, 1995 10QSB).

    (g)*        Fifth Amendment dated November 30, 1995 to the amended and
                restated loan agreement between the Company and NationsBank of
                North Carolina, N.A. (incorporated by reference to exhibit 
                10.25(g) to the Company's 1995 form 10KSB).

    (h)*        First Amendment dated November 30, 1995 to the amended
                collateral assignment between the Company and NationsBank of
                North Carolina, N.A. (incorporated by reference to exhibit
                10.25(h) to the Company's 1995 form 10KSB).

    (i)*        Sixth Amendment dated March 31, 1996 to amended and restated 
                Loan Agreement between the Company and NationsBank of North
                Carolina, N.A. (incorporated by reference to exhibit 1 to the 
                Company's February 29, 1996 form 10QSB).

    (j)*        Seventh Amendment dated May 31, 1996 to the amended and restated
                Loan Agreement between the Company and NationsBank of North 
                Carolina, N.A. (incorporated by reference to the Company's 
                May 31, 1996 form 10QSB).

    (k)         Eighth Amendment dated November 29, 1996 to the amended and
                restated Loan Agreement between the Company and NationsBank of
                North Carolina, N.A.

    10.14       Commitment letter dated December 18, 1996 for a revolving line
                of credit of $1,250,000 to be provided by National Canada
                Business Corp's to the Company.




                                       15

<PAGE>


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K 


Exhibit 
No. Description 


(A) Exhibits: 


Exhibit No.     Description 


    10.15(a)*   Asset Purchase Agreement dated June 22, 1993 between the
                Company and AutoNavigator AB (ANAB) (incorporated by reference
                to Exhibit 10.32 (a) to the Company's August 27, 1993 Form S-1).

    (b)*        Agreement relating to Patent Licenses and Other Intellectual
                Property dated June 22, 1993 between the Company and Kalevi
                Hyyppa, Slipvagen 13 A, 951 56 Lulea, Sweden (incorporated by
                reference to Exhibit 10.32 (b) to the Company's August 27, 1993
                Form S-1).

    (c)*        Purchase agreement dated November 30, 1995 between the Company
                and Netzler and Dahlgren Co. AB for NDC Laser AB and all
                tangible and intangible rights to the techology. (incorporated
                by reference to exhibit 10.30(c ), 1995 Form 10KSB).

    (d)*        Consent of Kalevi Hyypa (the "inventor") for the sale of NDC
                laser and related assets between the Company and Netzler &
                Dahlgren Co. AB dated November 24, 1995. (incorporated by
                reference to exhibit 10.30(d), 1995 Form 10KSB).

    10.16*      Know-How, Firmware and Documentation License Agreement and
                Requirements Supply Agreement dated May 21, 1993 between the
                Company and Pulver Systems, Inc. (incorporated by reference to
                Exhibit 10.32 to the Company's November 30, 1993 Form 10-KSB).

    10.17*      Agreement dated November 30, 1995 between the Company and
                Netzler and Dahlgren Co. AB for future marketing and support
                activites (incorporated by reference to exhibit 10.37, 1995 Form
                10KSB).

    10.18       Development and Demonstration Agreement dated January 31, 1997
                between the Company, Hyster Company and Mentor AGVS, Inc.

    11.1        Computation of Earnings Per Share for November 30, 1996.

    13.         Company's 1996 annual report.

    23.3        Consent of McGladrey & Pullen, LLP to the incorporation by
                reference in this Form 10-KSB.

    27.         Financial Data Schedule

    99.1*       United States Letters Patent for Optical Navigation System for
                an Automatic Guided Vehicle, and Method (Patent No. 4,626,132;
                Date of Patent 08/15/89) (incorporated by reference to Exhibit
                28.1 to the Form S-18).

    99.2*       United States Patent for Method and Apparatus for Providing
                Destination and Vehicle Function Information to an Automatic
                Guided Vehicle (Patent No. 4,780,817; Date of Patent 10/25/88)
                (incorporated by reference to Exhibit 28.2 to the Form S-18).

    99.3*       United States Patent and Trademark Office Notice of Recordation
                of Assignment Document for Automatic Guided Vehicle Traffic
                Control System and Method (Document Date 02/19/88) (incorporated
                by reference to Exhibit 28.3 to the Form S-18).

    99.4*       Canadian Letters Patent for Apparatus and Method for Optical
                Guidance System for Automatic Guided Vehicle (Patent No.
                1,236,132; Date of Patent 05/17/88) (incorporated by reference
                to Exhibit 28.4 to the Form S-18).




                                       16

<PAGE>

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K 


Exhibit No.  Description 


(A) Exhibits: 


Exhibit No.     Description 


    99.7*       United States Certificate of Registration of Trademark NDC
                (No. 1,360,353; Date of Registration 09/17/85) (incorporated by
                reference to Exhibit 28.7 to the Form S-18).

    99.8*       United States Certificate of Registration of Trademark SENS-
                O-GUIDE (No. 1,360,354; Date of Registration 09/17/85)
                (incorporated by reference to Exhibit 28.8 to the Form S-18).

    99.9*       Canadian Certificate of Registration Trademark MAGIC POINT
                (No. 331696; Date of Registration 09/04/87) (incorporated by
                reference to Exhibit 28.9 to the Form S-18).

    99.10*      United States Certificate of Registration of Trademark MAGIC
                POINT (No. 1,417,335; Date of Registration 11/18/86)
                (incorporated by reference to Exhibit 28.10 to the Form S-18).

    99.11*      United States Certificate of Registration of Trademark ESCORT
                (No. 1,468,835; Date of Registration 12/15/87) (incorporated by
                reference to Exhibit 28.11 to the Form S-18).



  (Bullet) Certain of the exhibits to this Report, indicated by an asterisk, are
           hereby incorporated by reference to other documents on file with the
           Commission, with which they are filed in fact, to be a part hereof 
           as of their respective dates. 



(B) Reports on Form 8-K 





                                       17

<PAGE>




                                   SIGNATURES


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


                                         NDC AUTOMATION, INC.
                                         Registrant

                                         By: /s/ Ralph G. Dollander
                                            _______________________________
                                               Ralph G. Dollander
                                               President
                                               Chief Executive Officer, Director

                                         By: /s/ Claude Imbleau
                                             _______________________________
                                               Claude Imbleau
                                               Vice President Finance
                                               Chief Financial Officer
Date: February 24, 1997                        Chief Accounting Officer



In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant  and in the  capacities and date
indicated.


                                       By: /s/ Goran P. R. Netzler
                                          ________________________________
                                            Goran P. R. Netzler
                                            Chairman of the Board of Directors

                                       By: /s/ Ralph G. Dollander
                                          ________________________________
                                            Ralph G. Dollander
                                            President
                                            Chief Executive Officer, Director

                                       By: /s/ Jan H. L. Jutander
                                           ________________________________
                                            Jan H. L. Jutander
                                            Director

                                       By: /s/ Richard D. Schofield
                                          _______________________________
                                            Richard D. Schofield
                                            Director


                                       By: /s/ T. Randolph Whitt
                                           _______________________________
                                            T. Randolph Whitt
Date: February 24, 1997                     Director

                                       18