UNITED STATES 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:  September 30, 1995



OR



[     ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

     For the transition period from                 to

                                    ---------------    ------------

     Commission file number:  0-16749



CERBCO, Inc.

(Exact name of registrant as specified in its charter)



                Delaware                   54-1448835

     (State or other jurisdiction of    (I.R.S. Employer

     incorporation or organization)   Identification No.)



    3421 Pennsy Drive, Landover, Maryland       20785

   (Address of principal executive offices)   (Zip Code)

Registrant's telephone and fax numbers, including area code:

          301-773-1784 (tel)

          301-322-3041 (fax)

          301-773-4560 (24-hour public information FaxVault System)





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 October 30, 1995, the following number of shares of each of

the issuer's classes of common stock were outstanding:

               Common Stock              1,151,001

               Class B Common Stock        310,955

                 Total                   1,461,956



<PAGE>



                   PART I - FINANCIAL INFORMATION



Item 1.  Financial Statements











<TABLE>

                            CERBCO, Inc.

           CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

                            (unaudited)



<CAPTION>                               For the three months ended

                                                 Sept. 30

                                          1995           1994



Sales

<S>                                    <C>             <C>       

  Sales of products                    $ 8,535,794     $6,760,163

  Sales of services and supplies         2,482,213      2,098,495

                                       -----------     ----------

                         TOTAL SALES    11,018,007      8,858,658

                                       -----------     ----------

Costs and Expenses:

  Cost of products sold                  5,897,992      4,829,357

  Cost of services and supplies          1,240,666      1,000,142

  Selling, general and administrative

    expenses                             2,107,357      1,815,831

                                       -----------     ----------

    Total Costs and Expenses             9,246,015      7,645,330

                                       -----------     ----------

Operating Profit                         1,771,992      1,213,328

Investment Income                           70,593         43,731

Equity in Earnings of Unconsolidated

  Affiliate                                185,951        173,645

Interest Expense                            (4,425)       (12,155)

Other Income - net                          74,682         15,880

Earnings Before Incomes Taxes and      -----------     ----------

  Non-Owned Interests                    2,098,793      1,434,429

Provision for Income Taxes                 835,000        649,000

                                       -----------     ----------

Earnings Before Non-Owned Interests      1,263,793        785,429

Non-Owned Interests in Earnings of

  Consolidated Subsidiaries                672,976        444,768

                                       -----------     ----------

                         NET EARNINGS  $   590,817     $  340,661

                                       ===========     ==========



Net Earnings per Share of Common Stock       $0.40          $0.23

                                             =====          =====





See notes to condensed consolidated financial statements.

</TABLE>



<PAGE>



<TABLE>

                            CERBCO, Inc.

               CONDENSED CONSOLIDATED BALANCE SHEETS

                            (unaudited)



<CAPTION>                                        As of

                                    Sept. 30, 1995  June 30, 1995

ASSETS



Current Assets:

<S>                                   <C>            <C>         

  Cash and cash equivalents           $  4,763,354   $  5,197,549

  Temporary investments                    981,917      1,760,950

  Accounts receivable                    8,473,655      6,386,343

  Inventories                            3,021,714      2,832,003

  Prepaid and refundable taxes              63,782         53,568

  Deferred income taxes                     82,000         82,000

  Prepaid expenses and other               526,875        325,013

                                       -----------    -----------

    Total Current Assets                17,913,297     16,637,426

                                       -----------    -----------

Property, Plant and Equipment -

  at cost

  Less accumulated depreciation of

    $9,339,301 at September 30, 1995

    and $9,094,562 at June 30, 1995      9,498,844      9,556,139

                                       -----------    -----------

Other Assets:

  Excess of acquisition cost over

    value of net assets acquired -

    net of accumulated amortization of

    $1,495,747 at September 30, 1995

    and $1,455,921 at June 30, 1995      4,848,142      4,887,968

  Investment in unconsolidated

    affiliate                            1,667,677      1,481,726

  Deferred income taxes                     27,000         27,000

  Deposits and other                       400,522        389,821

                                       -----------    -----------

    Total Other Assets                   6,943,341      6,786,515

                                       -----------    -----------

      Total Assets                     $34,355,482    $32,980,080

                                       ===========    ===========



See notes to condensed consolidated financial statements.

</TABLE>



<PAGE>





<TABLE>

                            CERBCO, Inc.



               CONDENSED CONSOLIDATED BALANCE SHEETS

                            (unaudited)



<CAPTION>                                         As of

                                    Sept. 30, 1995  June 30, 1995

LIABILITIES AND STOCKHOLDERS' EQUITY



Current Liabilities:

<S>                                    <C>            <C>        

  Accounts payable and accrued

    liabilities                         $4,160,665     $3,952,543

  Deferred revenue                         451,840        479,858

  Current portion of long-term debt         19,879         19,015

  Current portion of capital lease

    obligations                             29,454         34,156

                                       -----------    -----------

    Total Current Liabilities            4,661,838      4,485,572

                                       -----------    -----------

Long-Term Liabilities:

  Long-term debt (less current

    portion shown above)                         0          5,104

  Capital lease obligations (less

    current portion shown above)            33,483         37,129

  Deferred income taxes                    911,000        985,000

  Other long-term liabilities              117,765         99,672

                                       -----------    -----------

    Total Long-term Liabilities          1,062,248      1,126,905

                                       -----------    -----------

      Total Liabilities                  5,724,086      5,612,477

                                       -----------    -----------

Commitments and Contingencies



Non-Owned Interests in Consolidated

  Subsidiaries                          13,040,320     12,367,344

                                       -----------    -----------

Stockholders' Equity:

  Common stock, $.10 par value

  Authorized:  3,500,000 shares

  Issued and outstanding:

    1,150,989 shares                       115,099        115,099

  Class B Common stock (convertible),

    $.10 par value

  Authorized:  700,000 shares

  Issued and outstanding:

    310,967 shares                          31,096         31,096

  Additional paid-in capital             7,413,054      7,413,054

  Retained earnings                      8,031,827      7,441,010

                                       -----------    -----------

    Total Stockholders' Equity          15,591,076     15,000,259

      Total Liabilities and            -----------    -----------

        Stockholders' Equity           $34,355,482    $32,980,080

                                       ===========    ===========



See notes to condensed consolidated financial statements.

</TABLE>



<PAGE>





<TABLE>

                            CERBCO, Inc.



          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                            (unaudited)



<CAPTION>                                   For the three months

                                               ended Sept. 30

                                              1995           1994<PAGE>

Cash Flows from Operating Activities:

<S>                                    <C>            <C>        

  Net earnings                         $   590,817    $   340,661

  Adjustments to reconcile net

    earnings to net cash provided by

    (used in) operations:

    Depreciation and amortization          373,212        327,573

    Equity in earnings of

      unconsolidated affiliate            (185,951)      (173,645)

    Amounts attributable to non-owned

      interests                            672,976        444,768

    Deferred income taxes                  (74,000)       (10,000)

    (Increase) decrease in other assets    (14,701)         3,908

    Increase in long-term liabilities       18,093         15,870

    Changes in operating assets and

      liabilities:

      (Increase) decrease in accounts

        receivable                      (2,087,312)       408,584

      (Increase) decrease in

        inventories                       (189,711)      (553,095)

      (Increase) decrease in prepaid

        expenses and other current assets (212,076)      (215,609)

      Increase (decrease) in accounts

        payable and accrued expenses       (27,719)        43,231

      Increase (decrease) in income

        taxes payable                      413,484        578,900

      Increase (decrease) in deferred

        revenue                            (28,018)       (12,257)

  Net Cash Provided by (Used in)        ----------     ----------

    Operating Activities                  (750,906)     1,198,889

                                        ----------     ----------

Cash Flows from Investing Activities:

  Capital expenditures                    (272,091)      (181,312)

  Redemption (purchase) of temporary

    investments - net                      779,033       (684,761)

  Net Cash Provided by (Used in)        ----------     ----------

    Investing Activities                   506,942       (866,073)

                                        ----------     ----------

Cash Flows from Financing Activities:

  Proceeds from revolving lines of

    credit and long-term borrowings              0      1,010,000

  Principal payments on revolving

    lines of credit, capital lease

    obligations and long-term borrowings   (12,588)    (1,512,683)

  Dividends paid                          (177,643)      (148,036)

                                        ----------     ----------

  Net Cash Used in Financing Activities   (190,231)      (650,719)

                                        ----------     ----------

Net Increase (Decrease) in Cash and

  Cash Equivalents                        (434,195)      (317,903)

Cash and Cash Equivalents at

  Beginning of Period                    5,197,549      2,215,624

Cash and Cash Equivalents at            ----------     ----------

  End of Period                         $4,763,354     $1,897,721

                                        ==========     ==========

Supplemental disclosure of cash

  flow information:

  Interest paid                         $    4,425     $   11,355

                                        ==========     ==========

  Income taxes paid                     $  514,377     $  427,674

                                        ==========     ==========



See notes to condensed consolidated financial statements.

</TABLE>





<PAGE>



                            CERBCO, Inc.



        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            (unaudited)



1.   Financial Information



     The accompanying condensed consolidated financial statements

include the accounts of CERBCO, Inc. ( CERBCO ); its majority-owned

subsidiary, Capitol Copy Products, Inc. ( Capitol Copy ); and its

majority-controlled subsidiary, Insituform East, Incorporated

( Insituform East ).  The condensed consolidated Balance Sheet as

of September 30, 1995, the condensed consolidated Statements of

Earnings for the three months ended September 30, 1995 and 1994,

and the condensed consolidated Statements of Cash Flows for the

three months ended September 30, 1995 and 1994 have been prepared

by the Company without audit.  The condensed consolidated Balance

Sheet as of June 30, 1995 (unaudited) has been derived from the

Company s June 30, 1995 audited financial statements.  In the

opinion of management, all adjustments (which include only normal

recurring adjustments) necessary to present fairly the financial

position, results of operations and cash flows at September 30,

1995 and for all periods presented have been made.



     These statements have been prepared in accordance with the

instructions to Form 10-Q and therefore do not necessarily include

all information and footnotes necessary to a presentation of the

financial position, the results of operations and the cash flows,

in conformity with generally accepted accounting principles. 

Certain information and footnote disclosures normally included in

financial statements prepared in accordance with generally accepted

accounting principles have been condensed or omitted.  It is

suggested that these condensed financial statements be read in

conjunction with the audited financial statements and notes thereto

included in the CERBCO annual report on Form 10-K for the fiscal

year ended June 30, 1995.  Operating results for interim periods

are not necessarily indicative of operating results for an entire

fiscal year.



2.   Earnings Per Share



     Earnings per share data have been computed based upon the

weighted average number of common shares outstanding and common

share equivalents outstanding (when dilutive) during each period. 

The following numbers of shares have been used in the computations:





                       For the three months ended Sept. 30

                                1995         1994



                             1,461,956    1,457,456

                             =========    =========



3.   Accounts Receivable



<TABLE>

     Accounts receivable consist of:

<CAPTION>

                                    Sept. 30, 1995  June 30, 1995



<S>                                     <C>            <C>       

Due from municipal and commercial

  customers                             $8,141,341     $6,195,486

Miscellaneous                              387,314        245,857

                                        ----------     ----------

                                         8,528,655      6,441,343

Less: Allowance for doubtful accounts      (55,000)       (55,000)

                                        ----------     ----------

                                        $8,473,655     $6,386,343

                                        ==========     ==========

</TABLE>



4.   Inventories



<TABLE>

     Inventories consist of:

<CAPTION>                           Sept. 30, 1995  June 30, 1995



<S>                                     <C>            <C>       

Pipeline rehabilitation materials       $1,075,039     $1,111,202

Copier and facsimile equipment           1,439,262      1,274,977

Copier and facsimile supplies              231,158        172,908

Copier and facsimile parts                 276,255        272,916

                                        ----------     ----------

                                        $3,021,714     $2,832,003

                                        ==========     ==========

</TABLE>



5.   Equity in Insituform East



     At September 30, 1995, CERBCO beneficially held 1,100,000

shares of Insituform East Common Stock and 296,141 shares of

convertible Insituform East Class B Common Stock representing

approximately 27.1% of the Common Stock, 99.5% of the Class B

Common Stock, 32.0% of the total equity and 57.7% of the total

voting power of all outstanding classes of Insituform East common

stock.  Holders of Class B Common Stock, voting separately as a

class, have the right to elect the remaining members of the Board

of Directors after election of not less than 25% of such members by

holders of shares of Common Stock, voting separately as a class.



     From time to time, Insituform East issues additional shares of

stock as a result of stock dividends and exercised stock options. 

Changes in capital structure resulting from such additional stock

issues decrease CERBCO s equity ownership.  No additional shares

were issued during the three months ended September 30, 1995.  If

all the options outstanding at September 30, 1995 were exercised,

the resulting percentages of CERBCO s equity ownership and total

voting power would be 29.7% and 55.0%, respectively.



     From time to time, Insituform East purchases shares of its

common stock for treasury.  Changes in capital structure resulting

from such stock purchases increase CERBCO s equity ownership. 

Insituform East did not purchase any shares during the three months

ended September 30, 1995.



6.   Equity in Capitol Copy



     At September 30, 1995, CERBCO beneficially held 800 shares,

and Capitol Copy s president held 400 shares, of Capitol Copy Class

B Stock, representing 66 2/3% and 33 1/3%, respectively, of the one

outstanding class of Capitol Copy stock.



7.   Accounts Payable and Accrued Liabilities



<TABLE>

     Accounts payable and accrued liabilities consist of:



<CAPTION>                           Sept. 30, 1995  June 30, 1995



<S>                                     <C>            <C>       

Accounts payable                        $1,619,479     $1,366,338

Accrued compensation and

  related expenses                       1,604,736      1,885,596

Dividends payable                                0        177,643

Income taxes payable                       936,450        522,966

                                        ----------     ----------

                                        $4,160,665     $3,952,543

                                        ==========     ==========

</TABLE>



8.   Contingencies



     In March 1990, the controlling stockholders of the Company,

George Wm. Erikson and Robert W. Erikson (together, the

"Eriksons"), executed a letter of intent and subsequently executed

four amendments thereto (collectively referred to herein as the

"Letter of Intent") with Insituform Technologies, Inc. ("ITI") to

effect a sale of their controlling interest in the Company to ITI

for $6,000,000 (the "Proposed Transaction").  The Proposed

Transaction, if consummated, would have had the effect of making

ITI the controlling stockholder of the Company, and, indirectly, of

each of the Company's three direct subsidiaries at the time,

Insituform East, Capitol Copy, and CERBERONICS.  In September 1990,

the Eriksons informed the Company that the  Letter of Intent had

expired without consummation of any transaction, that it would not

be further extended, that negotiations had ceased, and that the

Eriksons had no further intention at the time of pursuing the

proposed sale of their controlling interest in the Company to ITI.



     In August 1990, a complaint against the Company and the

Eriksons was filed in the Delaware Court of Chancery by two

stockholders of the Company, on their own behalf and derivatively

on behalf of the Company, which sought (i) damages against the

individual defendants for alleged breach of fiduciary duties in an

amount not less than $6,000,000, together with interest thereon

from March 12, 1990; (ii) to permanently enjoin the Eriksons from

completing any transaction with ITI similar in substance to the

Proposed Transaction; (iii) a declaration of the invalidity of the

1982 authorization for and issuance of the Company's Class B Common

Stock, and, therefore, of the entitlement of holders of Class B

Common Stock to elect any members of the Company's Board; (iv) a

declaration of the invalidity of the 1990 election of the Company's

directors and the issuance of new proxy materials that fully and

fairly disclose all facts which plaintiffs claim are material to

the election of such directors; (v) an award to the plaintiffs of

their costs of bringing the action, including reasonable attorneys'

fees; and (vi) an award to plaintiffs of such further relief as the

Court of Chancery deemed appropriate.  In addition, the Complaint

asserted a claim against the individual defendants alleging that

the Company had forgone a corporate opportunity by the continued

failure to pursue a transaction with ITI.



     All but one of the plaintiffs' claims subsequently were

dismissed.  The claim remaining in the litigation was plaintiffs'

allegation that the Proposed Transaction was an opportunity

belonging to the Company and that the Eriksons breached their duty

to the Company by precluding the Company from taking advantage of

that opportunity so that the Eriksons might have a chance to do so. 

Trial in this matter was held beginning February 21, 1995.



     Following post-trial briefing and argument, Chancellor Allen

issued an opinion on August 9, 1995, in which he ruled in favor of

the Eriksons.  The court determined that, while the Eriksons failed

in certain limited respects to meet the standards of loyalty

required of them under Delaware corporate law, that "deviation from

proper corporate practice" neither caused injury to CERBCO nor

resulted in any substantial gain to the Eriksons.  The Court also

found that the Eriksons met their burden of showing that their

conduct was "wholly fair to the corporation."  With the decision,

all of the plaintiffs' claims have been resolved in favor of CERBCO

and/or the Eriksons.



     On August 25, 1995, the Court of Chancery issued its

Memorandum and Order on Final Judgment and a corresponding Final

Order and Judgment, which latter document formally entered judgment

in favor of the Eriksons and denied in toto the plaintiffs' request

for legal fees and expenses totaling $1,513,499.  The Court

concluded that the litigation conferred no substantial benefit on

CERBCO, so that it would be inappropriate to require CERBCO and its

stockholders to share the costs that plaintiffs incurred.



     Plaintiffs filed a Notice of Appeal with the Delaware Supreme

Court on August 30, 1995 and filed their opening appellant brief

with such court on October 13, 1995.  Defendants' brief was filed

on November 13, 1995.  Plaintiffs' reply is due on November 28,

1995.



     In January 1993, a separate lawsuit against the partners in

the law firm of Rogers & Wells and the Company, arising out of the

subject matter of the Delaware litigation, was filed in the

District of Columbia.  The plaintiffs are the same two

stockholders, and a former director of the Company, and have

alleged that Rogers & Wells breached its duty of loyalty and care

to the Company by representing allegedly conflicting interests of

the Eriksons in the Proposed Transaction with ITI.  The plaintiffs

also claim that Rogers & Wells committed malpractice by allegedly

making misrepresentations to the Company's Board and allegedly

failing to properly inform the Company's Board.  The plaintiffs

claim that the conduct of Rogers & Wells caused the Company to lose

an opportunity to sell its control of Insituform East to ITI,

caused the Company to incur substantial expense, and unjustly

enriched Rogers & Wells.  The complaint seeks to recover from

Rogers & Wells (i) damages in an amount equal to all fees paid to

Rogers & Wells, (ii) damages in an amount not less than $6,000,000

for the loss of the opportunity for the Company to sell its control

of Insituform East to ITI, and (iii) punitive damages.  Although

the complaint states that it was filed on behalf of the Company,

management does not believe that Rogers & Wells should be sued on

any of the claims set forth in the complaint.



     Motions to dismiss this case by the Company and Rogers & Wells

were denied, but a stay in the proceedings was granted until after

the Delaware trial.  After the Court of Chancery's August 9, 1995

opinion was rendered, the parties to the Superior Court action

filed status reports.  On November 13, 1995, plaintiffs agreed to a

stay in the Superior Court action pending the outcome of the appeal

to the Delaware Supreme Court.  The Superior Court will set a date

for status reports some time in the future.



     Management believes there are valid defenses to all of

plaintiffs' allegations in each of the above actions and that

ultimate resolution of these matters will not have a material

effect on the financial statements.  Accordingly, no provision for

these contingencies has been reflected therein.



     On April 18, 1995, Insituform Mid-America, Inc. ("IMA")

acquired the pipeline rehabilitation business of ENVIROQ

Corporation ("Enviroq"), including Enviroq's 42.5% interest in

MIDSOUTH Partners which is held through Enviroq's special purpose

subsidiary, E-Midsouth, Inc.   Under the MIDSOUTH Partners'

Partnership Agreement, it is an event of default if, among other

things, a change in the control of any partner occurs without the

prior written consent of all the other partners.  The IMA

acquisition of Enviroq, which resulted in a change in the control

of Enviroq and E-Midsouth, Inc., was made without the prior written

consent of the Partnership's two other partners, special purpose

subsidiaries of Insituform East and Insituform Technologies, Inc.

("ITI").



     The Partnership Agreement grants non-defaulting partners the

right to require compliance with the agreement, enjoin any breach,

seek dissolution of the partnership, replace Management Committee

appointees of the defaulting partner, or exercise any combination

of these rights and other remedies.  Insituform East has filed with

the American Arbitration Association a demand for arbitration

alleging a breach of the Partnership Agreement by E-Midsouth, Inc.

and intends to seek one or more of the foregoing remedies,

including replacement of a Management Committee appointee of E-

Midsouth, Inc.



     Separately, on April 4, 1995, ITI affiliated companies

initiated action against Enviroq and IMA in Tennessee Chancery

Court regarding ITI's rights as licensor to withhold consent to the

assignment of Insituform and NuPipe license agreements. 

Simultaneously with the initiation of its suit, ITI entered into

agreements with IMA and Enviroq to postpone, through April 30, 1995

(subsequently extended), the Tennessee court proceedings as well as

any other assertion by ITI of its rights under Insituform and

NuPipe license agreements and its rights under the MIDSOUTH

Partners' Partnership Agreement.  Concurrently, representatives of

ITI and IMA were engaged in discussions and negotiations regarding

a potential merger of these two companies.



     On May 24, 1995, ITI and IMA jointly announced that they had

entered into a definitive agreement providing for the combination

of ITI and IMA which, when completed on October 25, 1995, resulted

in IMA becoming a wholly-owned subsidiary of ITI.  The ITI

acquisition of IMA, which resulted in a second change in the

control of Enviroq and E-Midsouth, Inc., was made without the prior

written consent of one of the Partnership's partners, the special

purpose subsidiary of Insituform East.



     Insituform East intends to seek to amend its demand for

arbitration alleging, among other things, a breach of the

Partnership Agreement by ITI's special purpose subsidiary,

Insituform California, Inc. ("ICI") in connection with ICI's

wrongfully seeking to deny Insituform East's special purpose

subsidiary the rights and remedies to which it is entitled as a

non-defaulting partner under the Partnership Agreement.



     Although the Company cannot, at this time, predict the outcome

of the matters described herein, any potential outcome that

resulted in the loss by the Company of its ability to recognize its

share of the results of operations of MIDSOUTH Partners could have

a material adverse effect on the future earnings of the Company.



     CERBCO is involved in other contingencies, none of which

could, in the opinion of management, materially affect the

Company's financial position or results of operations.



9.   Segment Data and Reconciliation



     CERBCO s operations are classified into two principal industry

segments:  pipeline rehabilitation and copier equipment products

and services.  The following is a summary of pertinent industry

segment information.  General corporate expenses include items

which are of an overall holding company nature and are not

allocated to the segments.



<TABLE>

<CAPTION>



(in thousands)                                For the three months

                                                 ended Sept. 30

                                                 1995         1994

<S>                                           <C>           <C>   

Sales to Unaffiliated Customers:

  Pipeline rehabilitation                     $ 6,209       $4,895

  Copier equipment products and services        4,809        3,964

                                              -------       ------

    Total Sales                               $11,018       $8,859

                                              =======       ======

Earnings (Loss) before Income Taxes:

  Pipeline rehabilitation                     $   801       $  384

  Copier equipment products and services        1,082        1,007

  General corporate expenses                     (111)        (178)

                                              -------       ------

    Operating Profit                            1,772        1,213

  Equity in earnings (loss) of

    unconsolidated affiliate                      186          174

  Other income                                    185           99

  Other expenses                                  (44)         (52)

                                              -------       ------

    Earnings before income taxes              $ 2,099       $1,434

                                              =======       ======

Net Earnings (Loss) Contribution by Segment:

  Pipeline rehabilitation                     $   212       $  119

  Copier equipment products and services          446          383

  Corporate                                       (67)        (161)

                                              -------       ------

    Net earnings                              $   591       $  341

                                              =======       ======

</TABLE>



Item 2.  Management s Discussion and Analysis of Financial

Condition and Results of Operations



Overview and Outlook



     The Company realized consolidated net earnings of $590,817

($.40 per share) for the first quarter of fiscal year 1996, as

compared to consolidated net earnings of $340,661 ($.23 per share)

for the first quarter of fiscal year 1995.  The upsurge in

comparable period results is attributable to both increases in the

earnings contributions from the Company s two operating

subsidiaries, each of which is in a separate industry segment, and

a decrease in parent holding company expenses.



     Insituform East, the Company s pipeline rehabilitation

segment, experienced improved results from the combined impact of

expanded production capabilities, increased sales at normal

margins, installation performance in line with cost estimates and

continuing favorable operating results from MIDSOUTH Partners. 

While there can be no assurances regarding future operating

performance, based on the volume and mix of Insituform East s

present and expected backlog of customer orders, the favorable

results experienced during the last six quarters are presently

anticipated to continue through fiscal year 1996.  Insituform East

is expanding its production capabilities further during fiscal year

1996 to increase its Insituform installation capacity and to extend

its ability to provide complimentary products and services to its

trenchless rehabilitation customers.



     Capitol Copy, the Company s copier and facsimile equipment

products and services segment, continued to experience increased

sales and earnings in the first quarter of fiscal year 1996,

primarily as a result of continued increases in both its copier

equipment sales, and service and supply activities.  While again

there can be no assurances, sales revenues and earnings results are

anticipated to remain favorable, and the Company believes that the

future prospects of this majority-owned subsidiary remain

excellent.  In July 1995, Capitol Copy expanded its territory to

include the contiguous Baltimore metropolitan area.  The Company

anticipates it will take approximately four years to adequately

develop the additional territory.  During territory development,

the Company presently anticipates lower margins and increased

development expenses approximately offset by increased total sales. 

Accordingly, Capitol's net earnings for the current year are

estimated to remain even compared to fiscal year 1995.



     CERBCO s current earnings remain impacted by legal fees and

expenses related to the demands made of, and derivative litigation

being continued against, the Company by two associated, minority

stockholders in connection with the unconsummated private sale of a

controlling interest in the Company abandoned in September 1990. 

In August 1995, a Final Order and Judgment was rendered by the

Court in the Delaware derivative litigation in favor of the

defendants which has been appealed to the Delaware Supreme Court by

plaintiffs.  In the first quarter of fiscal year 1996, CERBCO

experienced unallocated general corporate expenses in the amount of

$110,900, of which approximately $36,700 were legal fees and

expenses in connection with the derivative litigation.  From

inception in 1990 through September 30, 1995, such legal fees and

expenses totaled approximately $2.0 million.  In addition, in

August 1995, plaintiffs in the Delaware derivative litigation

asserted a claim directly against the Company for $1,513,499 for

their legal fees and expenses in the unsuccessful Delaware suit,

subsequently denied in the Court's Final Order and Judgment, but

reasserted in plaintiffs' appeal.  The Company cannot, of course,

predict the outcome of pending litigation, including appeals.  Any

outcome from the appeal resulting in an award to plaintiffs of

their legal fees and expenses could have a material adverse effect

on the earnings of the Company.  For additional information on the

status of this litigation, see Part I, Item 1, "Notes to Condensed

Consolidated Financial Statements (unaudited) - Note 8. 

Contingencies."



     As discussed further in Part I, Item 1, "Notes to Condensed

Consolidated Financial Statements (unaudited) - Note 8. 

Contingencies," the Company filed a demand for arbitration in

connection with the acquisition of control of a 42.5% interest in

MIDSOUTH Partners by Insituform Mid-America, Inc. on April 18,

1995.  The Company intends to seek to amend this demand in

connection with the subsequent acquisition of control of this 42.5%

interest in MIDSOUTH Partners by Insituform Technologies, Inc.

("ITI") on October 25, 1995 and related actions taken by Insituform

California, Inc., ITI's special purpose subsidiary.  Although the

Company cannot, at this time, predict the eventual outcome of these

matters and their impact on the Company's interest in the

Partnership, any potential outcome that resulted in the loss by the

Company of its ability to recognize its share of the results of

operations of MIDSOUTH Partners could have a material adverse

effect on the future earnings of the Company.



Results of Operations



First Quarter ended 9/30/95 Compared with First Quarter Ended

9/30/94



     Consolidated sales increased $2.2 million (24.4%) in the first

quarter of fiscal year 1996 as compared to the first quarter of

fiscal year 1995.  Insituform East s pipeline rehabilitation sales

increased $1.3 million (26.8%) to $6.2 million, primarily due to

expanded production capabilities and a strong workable backlog of

customer orders throughout the first quarter of fiscal year 1996. 

Sales of copier equipment products and services by Capitol Copy

increased $0.8 million (21.3%) to $4.8 million, as equipment sales

and service and supply revenues increased 24.8% and 18.3%,

respectively, primarily as a result of an expanding customer base

and a richer mix of high volume, high revenue producing units.



     Consolidated operating profit increased $0.6 million (46.0%)

in the first quarter of fiscal year 1996 as compared to the first

quarter of fiscal year 1995, primarily as a result of an increase

in the operating profit of Insituform East.  Insituform East's

operating profit increased $0.4 million (108.6%).  Insituform

East's cost of sales increased 17.5%, a smaller percentage increase

than the increase in its sales and, as a result, gross profit as a

percentage of sales increased from 25.5% to 31.0%.  This increase

in gross profit as a percentage of sales is due primarily to the

mix of work performed.  During the first quarter of fiscal year

1995, Insituform East provided additional collateral services to

customers at gross profit margins lower than margins realized for

Insituform process installations.  Insituform East's selling,

general and administrative expenses increased 29.9%, a slightly

larger percentage increase than the increase in its sales,

primarily as a result of increased costs to support expanded

production activities.  Capitol Copy's operating profit increased

$0.1 million (7.4%).  Capitol Copy's cost of sales increased 30.8%,

a larger percentage increase than the increase in its sales and, as

a result, gross profit as a percentage of sales decreased from

44.9% to 40.7%.  This decrease in gross profit as a percentage of

sales is due primarily to a decrease in the gross profit margin on

equipment sales.  Capitol Copy's selling, general and

administrative expenses only increased 12.9%, a smaller increase

than the increase in its sales, to partially offset its decreased

gross profit margin.  Included in Capitol Copy's results are the

results of its efforts for its first three months in its new

Baltimore territory.  Sales revenues attributable to the new

Baltimore territory for the first quarter of fiscal year 1996 were

$148,704, and total costs and expenses for such territory exceeded

revenues by $18,379.  The parent company's operating loss decreased

approximately $66,700 (37.6%), primarily as a result of a decrease

in unallocated corporate legal expenses.



     Insituform East s equity in the operating results of MIDSOUTH

Partners increased 7.1% from pretax earnings of $173,645 for the

first quarter of fiscal year 1995 to pretax earnings of $185,951

for the first quarter of fiscal year 1996, primarily as a result of

increased comparable period sales, offset to some extent by reduced

gross profit margins.  The Partnership's sales increased 36.7% from

$1,805,292 during the three months ended September 30, 1994 to

$2,468,639 for the three months ended September 30, 1995 primarily

as a result of increased sales to Federal government customers and

an increase in collateral services performed in addition to

Insituform process installations, principally manhole

rehabilitation and lateral reconstruction services.  The

Partnership's gross profit as a percentage of sales decreased from

34.9% of sales for the first quarter of fiscal year 1995 to 28.4%

of sales for the first quarter of fiscal year 1996 primarily as a

result of the mix of work performed, to include increased manhole

rehabilitation and lateral reconstruction services, collateral

services generally performed at gross profit margins lower than

margins realized for Insituform process installations.



Liquidity and Capital Resources



     The Company s operating activities used $0.8 million in cash

during the first three months of fiscal year 1996 as compared to

providing $1.2 million in the first three months of fiscal year

1995.  The decrease in cash is primarily due to an increase in

Insituform East's accounts receivable resulting from a temporary

delay in billings and collections for several larger projects

performed during the first quarter of fiscal year 1996.



     Net cash in the amount of $0.5 million was provided by

investing activities in the first three months of fiscal year 1996

due to the redemption by the parent holding company of temporary

investments, offset by capital expenditures by Insituform East. 

Net cash in the amount of $0.9 million was used in investing

activities in the first three months of fiscal year 1995 primarily

due to the purchase by the parent holding company of temporary

investments and capital expenditures by Insituform East.



     Net cash used in financing activities was approximately $0.2

million and $0.7 million in the first three months of fiscal years

1996 and 1995, respectively.  The primary use of such funds in the

first three months of fiscal year 1996 was the payment of dividends

by Insituform East.  The primary use of such funds in the first

three months of fiscal year 1995 was paydowns on Capitol Copy s

line of credit and the payment of dividends by Insituform East.



     CERBCO believes that its two principal operating subsidiaries,

Insituform East and Capitol Copy, have existing open bank lines of

credit or borrowing potential against unencumbered assets

sufficient to meet the respective cash flow requirements of each

operating company.  Insituform East has available as undrawn the

amount of $3.0 million on its individual line of credit.  Capitol

Copy and the parent holding company, CERBCO, do not have separate

bank lines of credit, but have cash reserves in excess of $1.6

million and $2.1 million, respectively, which are believed to be

adequate to meet their respective cash flow requirements in the

foreseeable future, including continuing legal fees and expenses of

the parent in connection with the stockholder litigation now on

appeal to the Delaware Supreme Court.  The Company cannot, of

course, predict the outcome of pending litigation, including

appeals.  Any outcome that resulted in an award to plaintiffs of

their legal fees and expenses, however, could have a material

adverse effect on the future liquidity of the Company.



                    PART II - OTHER INFORMATION



Item 1.   Legal Proceedings



     The only material pending legal proceedings to which the

Company is a party or any such legal proceedings contemplated of

which the Company is aware are (a) a previously disclosed lawsuit

in which judgment was rendered in favor of the Company but

subsequently appealed to the Delaware Supreme Court by plaintiffs

(the  Delaware Complaint ), and (b) a previously disclosed lawsuit

pending in the Superior Court of the District of Columbia (the

 D.C. Complaint ) [see Part I, Item 1,  Notes to Condensed

Consolidated Financial Statements (unaudited) - Note 8. 

Contingencies ].



Item 2.   Changes in Securities



     Not applicable.



Item 3.   Defaults upon Senior Securities



     Not applicable.



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



     Not applicable.



Item 5.   Other Information



     Not applicable.



Item 6.   Exhibits and Reports on Form 8-K



(a)  Exhibits:



     27 - Financial Data Schedule



     99 - CERBCO, Inc. Consolidating Schedules: Statement of

Earnings Information for the three months ended September 30, 1995;

Balance Sheet Information; and Consolidating Elimination Entries as

of September 30, 1995.



(b)  Reports on Form 8-K:



     CERBCO filed one report on Form 8-K during the quarter ended

September 30, 1995.  The report, which did not include any

financial statements, reported on the following item:



     Item 5.  Other Events



     Press releases announcing rulings in Delaware Court of

Chancery in favor of the Company and its two controlling

stockholders, and denying plaintiffs' petition for fees and

expenses.



                             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.



Date:  November 14, 1995



                                 CERBCO, Inc.

                                 (Registrant)





                                 Robert W. Erikson

                                 President

                                 (Principal Financial Officer)





                                 Robert F. Hartman

                                 Vice President & Controller

                                 (Principal Accounting Officer)





<PAGE>







Exhibits to CERBCO, Inc. Form 10-Q







Exhibit 27.  CERBCO, Inc. Financial Data Schedule



Exhibit 99.  CERBCO, Inc. Consolidating Schedules: 

Statement of Earnings Information for the Three Months

Ended September 30, 1995; Balance Sheet Information; and

Consolidating Elimination Entries as of September 30,

1995.