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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-K

               FOR ANNUAL REPORT AND TRANSITION REPORTS PURSUANT
         TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

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<C>        <S>
   /X/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
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                    FOR THE FISCAL YEAR ENDED APRIL 29, 2000
                                       OR

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<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
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                         Commission file number 1-4737

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

                      HIGH VOLTAGE ENGINEERING CORPORATION

             (Exact name of Registrant as specified in its charter)

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                MASSACHUSETTS                                   04-2035796
       (State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
       Incorporation or Organization)
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              401 EDGEWATER PLACE, SUITE 680, WAKEFIELD, MA 01880
              (Address of Principal Executive Offices) (Zip Code)

               Registrant's telephone number, including area code
                                 (781) 224-1001

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

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

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             TITLE OF EACH CLASS                 NAME OF EACH EXCHANGE ON WHICH REGISTERED
             -------------------                 -----------------------------------------
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                    None                                           None
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        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

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

    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.

                              (1) Yes /X/  No / /

                              (2) Yes / /  No /X/

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. /X/

    The number of shares of the Registrant's Common Stock, par value $.01 per
share, outstanding as of August 18, 2000 was 1082.7429.

                   DOCUMENTS INCORPORATED BY REFERENCE: NONE

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                                    CONTENTS

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                                            PART I

Item 1.                 Business....................................................      1
Item 2.                 Properties..................................................     19
Item 3.                 Legal Proceedings...........................................     20
Item 4.                 Submission of Matters to a Vote of Security Holders.........     21

                                           PART II

Item 5.                 Market for Registrant's Common Equity and Related
                        Stockholder Matters.........................................     21
Item 6.                 Selected Historical Consolidated Financial Data.............     22
Item 7.                 Management's Discussion and Analysis of Financial Condition
                        and Results of Operations...................................     26
Item 7A.                Quantitative and Qualitative Disclosures About Market
                        Risk........................................................     32
Item 8.                 Financial Statements and Supplementary Data.................     33
Item 9.                 Changes in and Disagreements With Accountants on Accounting
                        and Financial Disclosure....................................     33

                                           PART III

Item 10.                Directors and Executive Officers of the Registrant..........     34
Item 11.                Executive Compensation......................................     36
Item 12.                Security Ownership of Certain Beneficial Owners and
                        Management..................................................     38
Item 13.                Certain Relationships and Related Transactions..............     39

                                           PART IV

Item 14.                Exhibits, Financial Statement Schedules, and Reports on Form
                        8-K.........................................................     40
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                                    PART I.

ITEM 1.--BUSINESS

COMPANY OVERVIEW

    High Voltage Engineering Corporation (the "Company") owns and operates a
diversified group of five middle market industrial and technology based
manufacturing business segments. The Company was incorporated in Massachusetts
in 1946 by Robert J. van de Graaff, a Massachusetts Institute of Technology
professor of nuclear physics. In the 1970s, the Company began acquiring a
diversified group of industrial manufacturing businesses. In 1988, the Company
was acquired by Letitia Corporation, which is beneficially owned primarily by
Laurence S. Levy, the Chairman of the Board, Vice President and a Director of
the Company, and Clifford Press, President and a Director of the Company, and
certain of their affiliates and family members. Since the Company's acquisition
by Letitia Corporation, the Company has disposed of fourteen non-core businesses
and has made nine acquisitions.

    The Company's businesses focus on designing and manufacturing high quality,
applications engineered products which are designed to address specific customer
needs. The Company's products are sold to a broad range of domestic and foreign
Original Equipment Manufacturers (OEMs) and end-users in a variety of industries
including process automation, metal and steel, water and wastewater treatment,
petrochemicals, pulp and paper, marine and cable, semiconductor fabrication,
chemicals, construction, agriculture, materials handling, computers,
telecommunications and for scientific and educational research. The diversified
nature of the products sold and end-markets served by the Company's businesses
reduce the effect on the Company of operating performance fluctuations in any
single operating unit arising from cyclical downturns within individual
industries and end-markets. The Company also believes that its focus on middle
market manufacturing enhances its growth prospects. As used in this filing, the
terms "fiscal 2000", "fiscal 1999", "fiscal 1998", "fiscal 1997" and "fiscal
1996" refer to the Company's fiscal years ended April 29, 2000, April 24, 1999,
April 25, 1998, April 26, 1997, and April 27, 1996, respectively. The Company
operates on a 52 or 53 week fiscal year. Fiscal 2000 includes the results of
operations of the Company for a 53 week period. Fiscal 1999, fiscal 1998, fiscal
1997 and fiscal 1996 include the results of operations of the Company for 52
week periods, respectively.

BUSINESS SEGMENT INFORMATION

    The Company's products and services are divided into five segments: High
Power Conversion Products, Advanced Surface Analysis Instruments and Services,
High Performance Modular Power Connectors, Customized Monitoring Instrumentation
and Other, consisting of particle accelerator systems. The principal products
and services offered by the Company in the five industry segments are described
in detail below (see "The Operating Units"). Financial information concerning
the Company's industry segments is summarized in Note S to the Consolidated
Financial Statements included in Item 8, herein.

THE OPERATING UNITS

    The Company conducts its business through six independent operating units,
Ansaldo Sistemi Industriali, S.p.A. and subsidiaries ("ASI"), Robicon
Corporation and subsidiaries ("Robicon"), Physical Electronics, Inc. and
subsidiaries ("PHI"), Maxima Technologies, Inc. and subsidiaries ("Maxima"),
Anderson Interconnect, Inc. and subsidiaries ("Anderson") and High Voltage
Engineering Europa, B.V. ("HVE Europa"), each of which has its own management
team and manufacturing facilities and maintains its own independent market
identity. A discussion of the businesses conducted by each of the operating
units follows.

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ANSALDO SISTEMI INDUSTRIALI, S.P.A.

    On December 22, 1999, the Company acquired all the outstanding capital stock
of Ansaldo Sistemi Industriali, S.p.A., an Italian corporation, and subsidiaries
("ASI"), from Ansaldo Invest, S.p.A., an Italian corporation, which was the
corporate parent of ASI and a wholly owned subsidiary of Finmeccanica S.p.A.
pursuant to a Stock Purchase Agreement ("Purchase Agreement") for an aggregate
purchase price of $29.1 million in cash and Italian bank financing. The
acquisition was completed on January 18, 2000. The purchase price is subject to
an adjustment based on the difference between the actual working capital, as
defined, at December 31, 1999 and a minimum contractual amount per the Purchase
Agreement. The Company has filed for arbitration in Italy to settle this final
purchase price adjustment and both parties are continuing negotiations.

    ASI established itself in the electromechanical field in 1853 and is one of
the world-wide leading manufacturers of electrical and automation systems, power
electronics, motors and generators for various applications and industrial
sectors, such as iron and steel, non-ferrous metals, pulp and paper, rubber and
plastics, power generation, cement, marine and offshore, chemical and
petrochemical, cable transport, glass, textile, food and water treatment. ASI
headquarters are located in Milan, Italy and it has other operations in Genoa,
Montebello and Brendola (Vicenza), Monfalcone and Trieste, Italy. ASI also has
subsidiaries located in Roche la Molire France, Dusseldorf Germany, Houston,
Texas and High Wycombe, England.

    For fiscal 2000, ASI's net sales amounted to $53.9 million, which
represented 17.9% of the Company's consolidated net sales for such period.

    A restructuring process, initiated by the Company and focused on improving
synergies and efficiencies, commenced with the acquisition of ASI by the
Company. The Company is divesting the Hill Graham Controls subsidiary located in
Chesterfield, England, consolidating two operating facilities in France and
intends to consolidate ASI's domestic operations with that of Robicon.

PRODUCTS

    ASI power converters offer advanced technology, versatility, reliability and
lease of use with high technology power modules, standardization and unified
control systems. ASI power electronics are used in many applications such as
pumps, fans, compressors, mixers, extruders, mills, and cranes in many
industrial sectors. Power electronics products include AC/AC inverters, AC/DC
converters, special converters, excitation systems and static reactive power
compensators.

    The product power range comprises:

    - DC converters from 25A up to 20,000A

    - AC converters from 1kVA up to 30,000 kVA

    - Cyclo-converters for AC machines up to 30 MVA

    - Reactive power static compensators up to 200 MVAr, 36 kV

    - High current AC/DC for arc furnaces up to 300 kA

    - Static excitation systems for synchronous machines from 10 A up to 6,000 A

    - Special converters: DC feeders

    ASI supplies turn-key electrical and automation systems for manufacturing
industries, especially those requiring advanced real time control technologies,
where the Company's references are internationally recognized. A capability of
assuming complete project responsibility, starting from basic design up to the
system tuning, meets the customer requirements of having a unified interface and
reducing engineering, purchasing and plant maintenance costs. ASI provides power
distribution,

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coordinated drives, process automation, mathematical models and production
management facilities. Computer simulation tools are used for the in-house tests
of the complete systems with the aim of minimizing commissioning time. ARTICS
(Ansaldo Real Time Integrated Control System) automation systems are open
architecture VME-based systems designed to meet the requirements of
sophisticated real time applications. One advantage of ASI's products is the
capability to integrate most any brand of industry standard Programmable Logic
Controllers ("PLC's"). This is especially useful in plants with current
installed base of PLC's or in revamp projects. The ASI process knowledge, based
on hundreds of applications already supplied, is implemented in software
packages including:

    - level 1--basic automation

    - level 2--process control optimization

    - level 3--plant supervision and production management

ASI drives are fully integrated into the control system allowing set-up,
monitoring and diagnostics from a central room.

    In the sector of motors and generators, ASI's production range includes
machines with different mounting arrangements, degrees of protection, cooling
types, etc. Based on a long manufacturing and service experience in both
standard and specific custom applications, ASI motors and generators represent
the most modern design and technological criteria. A flexible modular design
structure using progressive computer engineering methods, allows easy and proper
selection of constant and variable speed rotating machinery for the most
different and sophisticated applications. Motors and generators produced by ASI
meet all acknowledgement standards: IEC, National Standards harmonized by
CENELEC (BSI, VDI, etc.), NEMA (electromagnetic performance only), industry
specific standards (API, AISE, etc.), etc.

    Production range includes :

    - High voltage, constant speed squirrel cage and wound rotor induction
      motors and generators from 150kW to 21,000kW

    - High voltage, constant speed synchronous motors and generators from 500kVA
      up to 40,000kVA

    - DC motors and generators from 2kW up to 5,000kW @ 400rpm

    - Variable speed induction and synchronous motors

    - High speed and low speed large power induction and synchronous motors

    - Low voltage AC machines for vector control inverters completely
      interchangeable with DC machines

MARKETS AND CUSTOMERS

    ASI markets and sells AC and DC drives (ASD's), motors and generators and
specialty power converters primarily in Europe and the Middle East with an
expanding presence in North America. Electrical and automation systems are sold
worldwide with significant sales in Europe, Asia and the Middle East.

    The metals industry represents over 60% of the global market for electrical
and automation systems. Steel processing can be broken down into two segments:
"primary" applications for blast furnaces, melt shop and continuous casting and
"secondary" applications for hot and cold rolling mills, tube mills and
finishing lines. In addition to metals, ASI provides comprehensive solutions for
the production and finishing of paper and paper products including converting.
ASI's electrical and automation systems customers include Danieli, SMS, Thyssen
Krupp Stahl, Valmet, Voest-Alpine, IPSCO Steel, Sollac, Pechiney, China Steel
and Cartiera.

                                       3
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    Major industrial markets for ASD's and motors and generators include oil and
gas extraction, transportation and storage, power generation and load
management, cement, marine including main propulsion and auxiliaries, chemical
and petro-chemical and cable transport including cable lifts and funicular
railways. In many cases ASI bundles ASD's, motors and auxiliary electrical
equipment to provide comprehensive process solutions. Industrial market
customers include Sulzer Turbo, Italcementi, Pirelli, Suncor, Snamprogetti,
Enel, British Gas, Duke Power, Schlumberger and Hyundai.

    The market for specialty power converters includes DC arc furnaces for iron
and steel making, traction and railway power distribution, static excitation
systems for synchronous motors and generators, static VAR Compensators for power
quality management and cyclo-converters for large AC machines. In the metals
industry specialty power converters and static VAR compensators are often
bundled as part of an integrated solution. Specialty power conversion customers
include Clecim, Mannesmann-Demag, S.N.C.F., Dalmine and Ansaldo Transporti.

SALES AND MARKETING

    ASI products are sold through direct sales force and by independent
representatives in Italy and worldwide. In Italy, ASI has six locations: Genoa,
Milan, Montebello and Brendola (Vicenza), Monfalcone and Trieste.

    In addition, ASI operates through its Subsidiaries: Ansaldo Loire
Automation, based in Roche la Molire, France operating in the sector of
industrial systems with special focus on the sector of iron and steel. Ansaldo
Industrial Systems, based in Dusseldorf, Germany operating in the sector of
industrial systems and components. Ansaldo Ross Hill based in Houston, Texas
operating in the sector of industrial systems and components, Hill Graham
Controls, based in High Wycombe, England operating in the sector of industrial
components.

    ASI also has equity investments in two companies in the same sector located
in Russia (Ansaldo VEI), and India (Kirloskar Ansaldo Industrial Systems), and
representative offices in Cairo, Egypt, Bangkok, Thailand and Beijing, China.
Technical assistance, warranty and support are provided by a large network of
service centers worldwide.

COMPETITION

    Within the metals and motors markets increased competition is evident,
especially in countries where low production costs and growing supply are
combined to improve technological capabilities. In addition, many international
groups are rationalizing their production and commercial synergies, thus
increasing their competition. Siemens, ABB, Alstom and General Electric ("GE")
are regarded as ASI's principal competitors.

ROBICON

    Robicon is a leading designer and manufacturer of high power conversion
products, which are used to regulate electric power, reduce energy costs and
improve process control in a wide variety of industrial applications. Products
include variable frequency drives ("VFDs") for large electric motors and power
control systems for other applications. These products are used in process
automation, water and wastewater treatment, oil and gas extraction and
transportation, petrochemical processing, silicon processing, glass
manufacturing, cement production and other general industrial applications. In
general, Robicon's products are designed to provide engineered solutions to
specific customer requirements by utilizing a combination of standard product
platforms and options, with customized features. Robicon's growth strategy is to
increase sales of existing product lines through focused global penetration of
existing markets, entrance into selected new end markets, and to add new
products and services complementary to its existing product lines. The Company
believes that Robicon is able to differentiate itself from its competitors
through the use of proprietary technology, innovative product

                                       4
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development, superior customer service, and the ability to offer
applications-engineered solutions based on standard platforms. Robicon's
headquarters and primary manufacturing facility are located in New Kensington,
Pennsylvania. For fiscal 2000, Robicon had net sales of $74.9 million, which
represented 25.0% of the Company's consolidated net sales for such period.

    PRODUCTS

    According to an article in SCIENTIFIC AMERICAN (September 1990), industry
sources estimate that motors consume 65% to 70% of all electricity used for
industrial applications, or more than half of the electric power generated in
the United States, at an annual cost of over $90 billion. In a single year, a
typical large industrial motor typically consumes electricity that costs 10 to
20 times its total capital cost. Many machines driven by electric motors,
particularly pumps and fans, need to vary their speed in response to changing
process needs. Particularly in large motor applications, this is often done by
operating the pump or fan at full power while "throttling" its output with a
partly closed valve or damper, which is comparable to driving a car with the
accelerator completely depressed and using the brake pedal to vary the car's
speed. Operating the pump or fan at full power wastes tremendous amounts of
electricity at significant cost and results in poor process control. A VFD is
analogous to an electric dimmer switch which regulates the brightness of light
in a lamp. VFDs regulate the amount of electricity supplied to electric motors
as an alternative means of varying output. For example, when only half the flow
from a pump is needed, the VFD supplies a reduced amount of electricity to the
electric motor driving the pump. As a result, according to industry sources,
electricity savings on motors using VFDs can range from 10% to 40%. Of
particular importance to Robicon, which participates in the VFD market for large
motors, is an estimate by industry sources that the largest 10% of the domestic
motor population accounts for at least 80% of all motor energy consumption. Use
of VFDs has been growing steadily, driven by the desire to achieve energy cost
savings, the need to control large industrial processes more accurately and
technological advances that have improved the cost and practicality of using
VFDs in large motor applications.

    Historically, Robicon primarily manufactured low voltage (480 volts) VFDs
for small and medium size electric motors (20 to 1,500 horsepower) for use in
industrial applications such as commercial building climate control,
incinerators and water and wastewater treatment plants, and in other general
industrial uses.

    In 1995, Robicon introduced the Perfect Harmony-TM- series of medium voltage
(2,300 to 7,200 volts) VFDs for large electric motors (400 to 15,000
horsepower). Heavy industrial processes such as water and wastewater treatment,
oil and gas extraction and transportation, petrochemical processing, and cement
production, utilize large electric motors that require high levels of power to
drive pumps and fans. An undesirable byproduct of using medium voltage VFDs on a
large electric motor is the creation of harmonic distortion which causes stress
and fatigue to the electric motor and shortens its useful life, as well as
current and voltage fluctuations which may result in damage to other equipment
on the power grid. Most VFDs also place greater demands on a power grid than the
actual power consumed by the motor, an occurrence referred to as reduced power
factor, which can result in assessments of penalty charges against the user by
the local utility. Perfect Harmony, Robicon's patented technology for medium
voltage VFDs, virtually eliminates harmonic distortion and poor power factor in
large electric motors and as a result has significantly expanded the market for
medium voltage VFDs. The Company believes that Perfect Harmony is the leading
technology for reducing harmonic distortion and improving power factor in medium
voltage VFD applications and that this technology complements Robicon's
applications expertise and long-term customer relationships. Perfect Harmony
drives can be installed on virtually any large electric motor without costly
modifications and can be customized using a standard set of options. Robicon has
recently expanded its Perfect Harmony series to include synchronous transfer, a
feature that allows a single VFD to regulate multiple electric motors
sequentially. These VFDs are currently targeted at new end users in the oil and
gas pipeline markets.

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Perfect Harmony medium voltage VFDs accounted for approximately $39.6 million of
Robicon's net sales for fiscal 2000, or approximately 52.2% of Robicon's total
net sales for such period.

    While VFDs regulate electricity for motors, power control systems regulate
electric power for other applications. Typical applications for Robicon's power
control systems include: (i) power supplies for high-power melting applications,
such as glass and fiberglass furnaces and plasma arc torches used in steel mills
and smelters; (ii) power supplies for polysilicon extraction and silicon crystal
growing for use in the semiconductor industry; and (iii) power supplies for
plasma generators used in sputtering equipment for coating the surface of glass
or plastics. Power control systems are critical to process control and reducing
overall energy costs in these applications. Robicon's power control systems
incorporate patented technology that virtually eliminates harmonic distortion
and "flicker."

    On December 31, 1998, Robicon acquired certain the assets of GE's Industrial
Power Rectifier ("IPR") product line and entered into certain related agreements
with GE including a license agreement and a production services agreement. Due
to the extended lead times involved with these products Robicon does not
anticipate recognizing material revenue from the assets acquired from GE until
fiscal 2001.

    MARKETS AND CUSTOMERS

    Robicon markets and sells VFDs primarily in North America and Southeast Asia
with an expanding presence in Europe, South America and the Middle East. The
market for VFDs is comprised primarily of two customer segments: industrial and
municipal. The industrial market for VFDs is comprised of large power users such
as metals smelting plants, cement plants, pulp and paper mills, chemical
processing plants and power generation facilities. Robicon's industrial
customers include Ingersoll Dresser Pump, Mobil Pipeline, General Electric,
Interprovincial Pipeline, Lafarge, Mead Paper, and Yaskawa Electric. The
municipal market for VFDs is comprised primarily of municipalities which operate
water and wastewater treatment facilities.

    Customers for Robicon's power control systems include OEMs such as British
Oxygen (Airco), Kayex and Wheelabrator and end-users such as Advanced Silicon
Materials, Geneva Steel and Owens-Corning. Demand for power control systems is
driven by the construction of new, or the upgrading of existing, steel mills or
smelting facilities, polysilicon extraction facilities, glass and fiberglass
furnaces and other large electrical process manufacturing facilities. Because of
the long lead time required to design, permit and build such facilities, demand
for power systems does not necessarily correlate to general economic cycles.

    SALES AND MARKETING

    Robicon's VFDs and power control systems are sold through Robicon's direct
sales force and by independent manufacturers' representatives. Robicon targets
large industrial users in select markets and segments and applications engineers
in both industrial and commercial projects. Bids for large municipal VFD
contracts are typically conducted through a "request for proposal" process and
handled by Robicon's independent manufacturers' representatives. Recently,
Robicon entered into a brand label agreement to supply medium voltage VFDs to
GE. In addition to direct sales efforts in the United States, Robicon has sales
offices in Edmonton, Alberta; Shanghai, China; and London, England.

    COMPETITION

    Robicon's principal competitors in the VFD market are Rockwell Automation
(Allen-Bradley) and Asea Brown Boveri ("ABB"). Other competitors include
divisions of multinational corporations such as Eaton (Cutler Hammer), Toshiba
and Siemens. Robicon's major competitors in the power control systems market
include multinational corporations such as ABB and Siemens, and several niche
engineering firms such as Inverpower Controls, Rapid Technology and Spang &
Company. As with

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VFDs, power systems are often produced by divisions of large multinational
corporations that may offer a broader product range than that of Robicon.

PHI

    On July 2, 1999, PHI acquired all the outstanding capital stock of Charles
Evans & Associates ("CE&A") pursuant to a Stock Purchase Agreement ("Agreement")
among PHI and the shareholders of CE&A. Under the Agreement, the former
shareholders of CE&A received in exchange for their stock an aggregate
consideration of $38.0 million in cash reduced by the amount of all debt of CE&A
outstanding at the closing. CE&A is an analytical service and contract research
laboratory specializing in state-of-the-art surface and micro-analysis of
materials. CE&A generally focuses on analytical services that require both high
technical skill (e.g., typically a Ph.D. scientist) and high capital costs.
These services are performed on a day-to-day or contract basis for commercial
customers as well as for contract analytical research for various U.S.
government agencies. In addition to its commercial analytical laboratory
business, CE&A conducts analytical research for the U.S. government and also
provides government and commercial customers with proprietary software in
PC-based systems for certain analytical instruments. CE&A's headquarters are
located in the heart of "Silicon Valley", Sunnyvale, California at a
newly-renovated 75,000 square foot leased facility.

    PHI is a leading designer and manufacturer of advanced surface analysis
instruments and components used to determine the elemental and/or chemical
composition of materials found on or near the surface of a sample. Advanced
surface analysis instruments are used in commercial applications in central
support laboratories and at or near the production line in the semiconductor
fabrication, computer peripherals, chemicals, aerospace, metals, polymers,
automotive and biomaterials industries, among others, for product and process
development, process control, defect review and failure analysis, advanced
highly accurate surface analysis and for other applications. Surface analysis
instruments are also used for materials science research by universities and
government institutions. PHI is also a leading supplier of ultrahigh vacuum ion
pumps and controls required for the production of clean vacuums used for
commercial products and scientific applications. PHI's headquarters are located
in Eden Prairie, Minnesota. For fiscal 2000, PHI and its subsidiaries had net
sales of $73.4 million, which represented 24.4% of the Company's consolidated
net sales for such period.

    PHI's growth strategy is to increase sales of its products through increased
penetration into the semiconductor fabrication market as a result of decreasing
linewidths on semiconductor devices, identification of new applications for its
existing products, increased penetration of international markets, enhancements
in the technological capability of its instruments, development of applications-
specific hardware configurations for its instruments and the continued
improvement in the operating ease and efficiency of its instruments through
increased automation and software development. The Company believes that PHI
differentiates itself from its competitors through its patented and proprietary
technology, expertise in the manufacture of instruments incorporating ultrahigh
vacuum technology, superior customer service, support and training as well as a
reputation for product quality, ease of operation and reliability.

    PRODUCTS

    PHI's products include Auger Electron Spectroscopy ("Auger"), Electron
Spectroscopy for Chemical Analysis ("ESCA"), Time-of-Flight Secondary Ion Mass
Spectrometry ("TOF-SIMS") and Dynamic Secondary Ion Mass Spectrometry ("Dynamic
SIMS") instruments. Under ultrahigh vacuum conditions, PHI's surface analysis
instruments direct a particle beam at the surface of a solid under
investigation, causing the emission of particles from the specimen that may be
analyzed to determine the elemental and/or chemical composition of the sample
surface. Highly sophisticated software, customized for each of PHI's surface
analysis instruments, interprets data received from the instrument's analyzer
and creates images that show the distribution of elements or molecules on a

                                       7
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surface. Graphical and numerical data may also be obtained. In addition, by
removing and analyzing successive layers of material each surface analysis
instrument is capable of generating a depth profile, which indicates how
elemental and/or chemical composition varies throughout the thickness of a
sample.

    PHI's Auger surface analysis instruments direct a highly focused continuous
electron beam onto a sample, which causes high energy "Auger electrons" to be
emitted from the sample surface. Because the energy level of such Auger
electrons is unique to the element from which they were emitted, it may be
measured to identify the elements present on the surface. Auger offers the
highest spatial resolution of all of PHI's surface analysis instruments,
providing high definition images of the distribution of elements on a
microscopic region of a surface. In general, Auger may be used to examine
inorganic samples that are electrically conductive, such as semiconductors and
metals. While PHI's Auger instruments are well-suited to a variety of
applications, they are primarily used in semiconductor and electronics
industries for process development, process control, defect review and failure
analysis. For example, PHI's Auger instruments are used to create high
resolution images showing the location of elements on a selected region of a
semiconductor wafer. The Company believes that, because of its high resolution
capabilities, Auger will be of increasing significance in semiconductor
fabrication as the dimensions of semiconductor devices are reduced. Auger also
offers high elemental sensitivity, enabling the identification of impurities in
or on semiconductor devices which may affect production yields in semiconductor
fabrication. PHI's introduction in 1994 of the SMART-200, an Auger surface
analysis instrument which has the ability to analyze every point on an 8-inch
semiconductor wafer, enabled PHI to expand the market for its Auger instruments
within the semiconductor industry. The SMART-200 was followed in 1999 by the
SMART-TOOL, an in-FAB version of the instrument capable of handling a variety of
samples including both 200mm and 300mm wafers. The first SMART-TOOL was recently
delivered and installed at a leading semiconductor equipment manufacturer. Two
SMART-TOOLS have been sold and will be delivered to leading semiconductor device
manufacturers in the near future. Interest in this world-leading product
continues to grow. PHI's 680 Auger instruments are primarily used in central
support laboratories to analyze materials in a variety of industries, including
the semiconductor, aerospace, computer peripherals, metals and automotive
industries. Another typical application of PHI's Auger instruments is the
analysis of corrosion of the read/write heads of computer hard drives.

    PHI's ESCA surface analysis instruments direct a continuous x-ray beam onto
a sample, which causes "photoelectrons" to be emitted from the sample surface.
Because the energy level of such photoelectrons is unique to the element or
arrangement of atoms from which they were emitted, it may be measured to
identify the elements and/or determine the chemical composition of molecules on
the surface. ESCA may be used to analyze a wide variety of materials, including
both conductive and non-conductive solids, and provides both elemental and
chemical data, although with lower spatial resolution than Auger. While PHI's
ESCA instruments are well-suited to a variety of applications, they are
primarily used by PHI's customers for the analysis of polymers, semiconductors,
chemicals, computer peripherals, biomaterials and automotive components. Typical
applications include the development and optimization of chemical processing for
etching semiconductor wafers, the application of thin polymer films on bulk
materials, such as polymer coatings on aluminum cans, anti-corrosion coatings on
metal surfaces and non-stick coatings for kitchen utensils, as well as the
analysis of multi-layered paint. PHI's ESCA product line currently includes the
5800 as its standard model and the Quantum 2000 Scanning Microprobe-TM-, which
offers enhanced spatial resolution and operation on a fully-automated "turn-key"
basis.

    PHI's TOF-SIMS surface analysis instruments direct short, intermittent
bursts of charged atoms or molecules called "ions" onto a sample, which causes
other ions to be emitted from the sample surface. These emitted ions traverse a
long flight path, with the time required for an ion to reach the analyzer (the
"time of flight") being directly related to its mass. Because the mass of such
ions is unique to the

                                       8
<PAGE>
material from which they were emitted, it may be measured to identify the
elements or molecules present. The "time of flight" method of determining the
mass of the emitted ions is highly precise and can be used to accurately
identify both the elemental and chemical composition of a surface. In addition,
TOF-SIMS is the best-suited of PHI's instruments to the detection of very large
molecules, such as those found in plastics and biomaterials, and PHI's TOF-SIMS
instruments can detect trace impurities in a sample at levels of one part per
million. PHI's TOF-SIMS products are used in a variety of applications including
the semiconductor industry for quality control and process development,
primarily in central support laboratories. For example, PHI's TOF-SIMS
instruments are capable of detecting contamination on semiconductor devices,
including photoresist used in semiconductor device manufacturing, which may
affect production yields. PHI's TOF-SIMS products are also sold for use in a
variety of other industries, including polymers, computer peripherals and
biomaterials. Applications include the process development of the application of
thin films on printer paper and lubricants on computer hard disks. In 1994, PHI
introduced the TRIFT II, a TOF-SIMS instrument which may be configured to
analyze every point on either small (1 inch), samples or an entire 8-inch
semiconductor wafer.

    PHI's Dynamic SIMS surface analysis instruments direct a highly focused
continuous beam of ions onto a sample, which causes other ions to be emitted
from the sample surface. Because the mass of such ions is unique to the material
from which they were emitted, it may be measured to identify the elements
present. In general, Dynamic SIMS is used to examine inorganic samples. PHI's
Dynamic SIMS instruments are capable of detecting trace impurities with a
sensitivity of greater than one part per billion, although without the chemical
sensitivity of PHI's TOF-SIMS instruments. While PHI's Dynamic SIMS instruments
are well-suited to a variety of applications, they are predominantly used in
central support laboratories in the semiconductor industry for process control
to monitor the precise elemental composition of semiconductor devices and in
quality control to identify contaminants that may affect yields in semiconductor
fabrication. Because the ion beam in PHI's Dynamic SIMS instruments removes the
surface layer of a material under investigation, depth profiles are generated as
a result of the operation of the instrument. This is in contrast to PHI's other
surface analysis instruments whereby an additional ion beam is required to
remove successive layers of material. The newly introduced ADEPT-1010 Dynamic
SIMS is PHI's standard model. Its newly designed optics with increased
sensitivity has led to its wide acceptance for characterizing the new "ultra
shallow" implants used in today's devices. All of PHI's Dynamic SIMS surface
analysis instruments are designed for ease of use and rapid sample change for
efficiency of sample analysis in industrial applications.

    CE&A's principal service in commercial analytical techniques use beams of
ions, electrons or x-rays to probe the surface and micro-regions of
high-technology materials in order to provide information on composition and
chemistry.

    MARKETS AND CUSTOMERS

    PHI markets and sells its surface analysis instruments worldwide, with Japan
representing its largest market and North America its second largest market. The
Company believes that demand for advanced surface analysis instruments will
increase most rapidly in Asia and the Pacific Rim region over the next several
years due primarily to an increased level of semiconductor fabrication facility
construction in those regions.

    Historically, customers have operated PHI's surface analysis instruments
primarily in industrial central support laboratories to conduct research and
development, pre-production testing of pilot processes, materials
characterization and process control and verification, typically where
understanding the elemental and/or chemical composition of a material's surface
is critical to product or process development. In addition, the Company believes
that production support applications, such as failure analysis, defect review
and quality control, represent an important growth area, particularly in

                                       9
<PAGE>
semiconductor fabrication. PHI's surface analysis instruments are also used by
universities and government institutions for materials science research.

    Due to the diversity of applications for PHI's surface analysis instruments,
PHI is not dependent on sales to customers in any single industry. PHI's
products are suitable for a wide variety of applications without the need for
customization or modification. This versatility of function permits PHI to
respond quickly to changes in the marketplace that favor new technologies or
demonstrate new applications. In addition, PHI has the ability to tailor each
surface analysis instrument to specific applications through changes in hardware
configuration, software customization and varying degrees of automation of
operation in response to industry-specific demands or customer requirements.

    PHI's customer base is principally comprised of industrial laboratories,
semiconductor manufacturers, data storage manufacturers and research facilities,
including those associated with universities and government institutions. Demand
for PHI's products is driven by the need for precise chemical and/or elemental
analysis of materials. Some of PHI's customers include Data Storage Institute,
SAE Magnetics, Xerox, Lucent Technologies, Applied Materials, Advanced Micro
Devices, Hewlett-Packard, IBM, Matsushita, Motorola, Nippon Steel, Samsung,
Seagate, Siemens, Texas Instruments, Toshiba and numerous universities and
government institutions worldwide. PHI seeks to cultivate long-term
relationships with its various customers through the continuous provision of
post-sale technical support and on-site training of new users of PHI's installed
base of surface analysis instruments.

    CE&A's services are used in industrial markets where there is a high
value-added in a high-technology product. Customers are typically industrial
engineers or scientists. CE&A's services are used primarily by the following
industries: semiconductors (manufacturers of integrate circuits and their
vendors of capital equipment and materials), optoelectronics, data storage and
biomedical devices. These services are used by customers in their research and
development, manufacturing yield improvements and failure analysis, and in
technical sales of their products. CE&A supports a "one-stop" world wide
analytical service business, through its California operations, related services
offered by PHI and through a U.S., European and Pacific rim network of
affiliates known as the Evans Analytical Group.

    SALES AND MARKETING

    PHI markets its products domestically and internationally on the basis of
product performance and quality, availability and quality of after-sales support
and industry reputation in the manufacture of advanced surface analysis
instruments. The significant cost of surface analysis instruments (ranging from
approximately $250,000 to $3.5 million) leads to careful consideration among
potential purchasers not only of product reliability and performance, but also
availability and quality of technical support and training, factors which the
Company believes favor PHI and enables it to realize a pricing premium over
competitors' comparable products.

    PHI's experienced and technically oriented sales force is organized
geographically and consists of teams responsible for North America, Japan, the
Pacific Rim region and Europe. Technical service personnel (most of whom are
scientists and engineers) are decentralized within each region and strategically
situated in close proximity to major customers. PHI presently has a 50% interest
in a joint venture with ULVAC, a Japanese company, which resells and services
PHI's surface analysis instruments in the Japanese market. This joint venture
(ULVAC-PHI) has enabled PHI to successfully sell products into Japan, currently
the largest market for advanced surface analysis instruments. In addition, PHI
provides surface analysis services on a contract basis in its analytical
laboratories located in the United States and Japan. Such services often serve
as an effective means of demonstrating the capabilities of PHI's surface
analysis instruments to customers who may then consider purchasing an
instrument.

                                       10
<PAGE>
    CE&A's services are sold worldwide, primarily through contacts initiated by
scientific/technical personnel, rather than through a separate direct sales
force. Due to the complex nature of technical problems clients want addressed,
frequent and extensive interaction is required between CE&A and its customers.
CE&A presents technical papers at, and participates in, scientific conferences,
advertises in scientific periodicals and distributes product literature and
information on new developments to its existing customers.

    COMPETITION

    Competition in the surface analysis market is highly concentrated. The only
broad line competitors in the markets served by PHI's products are Cameca and VG
Scientific (Thermo Electron). The Company believes that PHI has leading market
shares in the Auger, ESCA and TOF-SIMS and that PHI has the second largest
market share in Dynamic SIMS. In Auger, PHI's primary competitors are VG
Scientific and JEOL (Nihon Densi). In ESCA, PHI's primary competitors are Kratos
Analytical (Shimadzu) and VG Scientific. In TOF-SIMS, PHI's primary competitor
is ION-TOF, which is partially owned by and markets its products through Cameca.
In Dynamic SIMS, PHI's primary competitor is Cameca. The Company believes that
the technical expertise required for the design, production and support of
instruments incorporating ultrahigh vacuum technology are a significant barrier
to entry to potential competitors.

MAXIMA TECHNOLOGIES

    On March 19, 1998, Maxima Technologies acquired, directly or indirectly, all
of the capital stock of Stewart Warner Instrument Corporation ("Maxima-Juarez/El
Paso"), for an aggregate consideration of $24.7 million in cash (the "Stewart
Warner acquisition"). The operations of Maxima-Juarez/El Paso have been combined
with those of Maxima Technologies (Lancaster, Pennsylvania) and its wholly owned
subsidiary Maxima Technologies, S.L. ("Maxima Technologies-Barcelona") to form
Maxima Technologies, Inc. The company believes that the combined entity is now a
leading designer, manufacturer and supplier of electronic controls, monitoring
systems and accessories for the off-highway vehicle, industrial, specialty
vehicle and on-highway (truck & bus) markets, as well as the heavy-duty and
automotive retail aftermarket.

    Maxima's products include electronic control units (ECUs), instrument
controllers, vehicle and battery-related monitoring systems, Smart
Instrument-Registered Trademark- products with engine shut-down features, analog
and digital instrument clusters, displays and conventional instruments,
fuel/temperature/pressure and specialty gauges, tachometers and speedometers,
voltmeters and ammeters, hourmeters, pyrometers and thermocouples,
fuel/temperature/pressure senders, electronic fuel sensors
(IntelliSensor-Registered Trademark-) speed sensors, switches, flashers and
relays, steering column modules, vehicle accessories and custom-engineered
products. Markets served include the off-highway, industrial (in-plant
equipment), engine-powered equipment, on-highway (truck & bus), specialty
vehicle and motorcycle, marine, power turf equipment, emergency vehicle, and
recreational vehicle markets, as well as the heavy-duty aftermarket. The
company's business is split between original equipment manufacturers (OEMs)
(approximately 75% of total sales) and the aftermarket (25%). Products are sold
directly to either OEMs or through a worldwide network of more than 500
distributors.

    The company's European operation was acquired in March of 1995. Maxima
Technologies-Barcelona is a leading manufacturer and supplier to the
agricultural vehicle market in Western Europe and the firm reports that it
enjoys an estimated 30% share of the agricultural vehicle instrumentation
market. Maxima Technologies-Juarez/El Paso is a leading supplier to the
heavy-duty (truck) and automotive aftermarket in North America. Maxima also
acquired the exclusive distribution rights for Hobbs brand products for the
heavy-duty aftermarket from its acquisition of Stewart Warner. Hobbs is a
leading producer of hourmeters, lighting products and switches. In addition,
Maxima's Stewart

                                       11
<PAGE>
Warner brand distribution was designated as TRW's "master distributor" for VR
type vehicle speed sensors for the heavy-duty aftermarket.

    A principal element of Maxima's strategy is to position itself as a
consolidator of high-quality brands and a systems integrator in order to offer
value-added modules of products and services. As such, Maxima is able to provide
a more complete solution for OEM customers who will consolidate their supply
base. Maxima also opened a Technology Center in Lancaster, Pennsylvania in 1998
to bolster efforts to develop new products and applications for its core
markets.

    Maxima advocates a quality policy and approach that is based on ISO 9001,
the international quality standard embraced by the firm's customer base. All
Maxima locations are IS0 9001 certified through BVQI or TV, and Lancaster and
Juarez are QS-9000 certified, a quality standard that is based on the
requirements of the U.S. automotive and heavy truck industries. In addition, the
company's operations are certified by virtually all of their largest customers
including AGCO/Massey-Ferguson, Caterpillar, Case, New Holland and
Harley-Davidson. Of particular note, the company reports that only around 10% of
Caterpillar's suppliers are officially certified.

    For fiscal year 2000, Maxima Technologies' net sales totaled $61.3 million,
which represented 20.4% of the Company's consolidated net sales. Orders topped
$64.5 million, a 9.5% increase over the prior year.

    PRODUCTS

    Due in large measure to its recent acquisitions, partnerships and the
introduction of steering column modules and vehicle accessories, Maxima believes
that its product portfolio is one of the broadest in its markets. The company
has specifically defined its product lines along four categories: 1) "standard"
products (i.e. warehoused items that are sold "as is"), 2) "custom" (typically,
"same as except..." products that reflect only minor changes), 3) "engineered"
(meaning that products are significantly changed and/or substantially new), and
4) "IPD" (i.e. developed as completely new products using "Integrated Product
Development" and a method for planning and implementation called "Integrated
Product and Quality Planning", or IPQP that is compliant with QS-9000
requirements).

    In an ongoing effort to increase market share, Maxima has over the past
several years introduced many new innovative products including
IllumaSeal-Registered Trademark-, a line of fully sealed instruments for
applications in high-moisture environments (currently approved and in use by
Caterpillar, Harley-Davidson, Livorsi Marine--a premier high-end marine product
line privately labeled as Gaffrig-Registered Trademark- and many others); Smart
Instrument-Registered Trademark- products featuring integral warning lights,
switch outputs and engine shut-down features;
IntelliSensor-Registered Trademark-, a fully electronic hydrocarbon-based
liquid-level sensing unit now being sold to Case Corporation, Dina Camiones,
Ingersoll-Rand, Advance Mixer, Pierce Manufacturing and other OEMs); INFOTRAK
2000-TM- and DATLINK-TM- data-bus systems which include instrument controllers
and corresponding digital gauges and meters; Streamline-TM- instruments, a new
product line featuring unique retro styling and oversized meters; Sentinel-TM-
hourmeters, featuring a new quartz stepper motor movement that is also being
supplied to Maxima-Barcelona for another product line (Sentry-TM-); Sentry-TM-
vehicle/battery monitoring systems for gasoline and electrically powered
industrial and specialty vehicles; Compatino-TM-, a new line of stylish yet
compact instrument clusters; and Wings-TM-, a family of 1940s-style Stewart
Warner branded gauges and meters especially designed for the classic car and
performance oriented aftermarket.

    It is estimated that by 2002, over 65% of Maxima's products will be
"electronic" as the market moves toward more sophisticated microprocessor-based
instruments and "smart" applications that are interactive with the vehicle. To
this extent, the company has sought to develop a "menu" of electronically
oriented, data-bus related products that tap into a vehicle's "distributed
network" of nodes which in turn manage the vehicle's various functions.

                                       12
<PAGE>
    Maxima's latest expansion into systems integration is steering column
modules. The company has recently introduced 21 different standard models and
custom units may be developed as well. Units include the steering column shaft,
ABS cladding, steering wheel, turn signal lever, ignition switch, switches,
wiring harness and either AST, Datcon or Stewart Warner instrumentation. The
module simply mates to the vehicle's power steering unit, connects to the
harness and bolts to the floor, thus relieving the customer of a significant
amount of complexity and cost associated with handling discrete components.

    One benefit resulting from Maxima's focus on OEM business and its approach
to systems integration is that the company naturally extends these same products
into the aftermarket. Further, the aftermarket typically has different
expectations and thus, the company's products are more easily accepted without
the normal long and involved qualification process. The company believes that by
having a strong OEM focus, it naturally contributes to a certain amount of
"pull-through" of product into the aftermarket.

    MARKETS AND CUSTOMERS

    Approximately one third of Maxima's sales come from the OEM "off-highway"
vehicle market (agricultural, construction and mining equipment). Maxima's top
five market segments account for over 80% of sales and its top 25 customers
account for over 50% of total sales. Products are sold in 42 countries.

    Over the next several years, steady growth is forecasted for construction
equipment, specialty vehicles, on-highway (truck and bus), marine and
recreational vehicle markets and the aftermarket. In recent years, the
agricultural vehicle market has been sluggish as a result of excess supply in
1998 and 1999 and due to market slowdowns overseas coupled with a strong dollar
(thus reducing exports), which in turn has adversely impacted Maxima's business.
However, gains in other market segments have largely offset this slowdown.

    An obvious benefit resulting from Maxima's broad customer base is
diversification. In particular, Maxima-Barcelona's successes in Germany in
penetrating the material handling vehicle segment have served to reduce the
negative impact of slowdowns in the agricultural vehicle market. Likewise,
Maxima-Lancaster was successful in launching its first major program with a
heavy truck OEM in the fall of 1998, thereby effectively penetrating a new
segment. In 1999, the Stewart Warner brand was reclassified by the Maxima's
largest aftermarket distributor, NAPA/Balkamp to a rating that allows for
in-store stocking, thus representing a major pick-up in business.

    Maxima's frame of reference for its competition has fundamentally changed as
a result of the push toward electronic products and systems integration. Major
competitors include Ametek-Dixson, Phoenix, Pollak, Preco, Taytronics, Vansco
and VDO, as well as our OEM customers who maintain in-house operations and
sources. Some OEMs make their own display and control systems.

    COMPETITION

    Maxima's frame of reference for its competition has fundamentally changed as
a result of the push toward electronic products and systems integration. Major
competitors include Ametek-Dixson, Cobo, the OEMs, Planar, Phoenix, Pollak,
Preco, Taytronics, Vansco and VDO, among others. Some OEMs make their own
display and control systems, typically through specialized operations that
support assembly plants. In total (discounting the OEM portion), these nine
competitors accounted for an estimated $740 million in sales in 1998 in the
markets that Maxima competes for business (excluding senders).

    It is inevitable that consolidations and acquisitions will continue in 2000,
as the market is highly fragmented and competitive. Competition for traditional
business (e.g. round instruments) is driven

                                       13
<PAGE>
largely by price and delivery insofar as these products are regarded as
commodities. Even instrument clusters are becoming commodities as
non-traditional companies like wiring harness suppliers seek to add more content
to their bundle, in which case they are willing to take a lower price on a
product like a cluster that enables them to secure their core business. Smaller
niche companies with limited capital are at risk in this environment.

    Maxima's formula for differentiating itself from the competition depends on
a combination of the basics, high-quality, on-time delivery, competitive price,
good service and engineering support--coupled with breakthroughs in product
applications and a systems integration approach that seeks to provide
value-added solutions with Maxima's emphasis on speed-to-market its
customer-focused philosophy.

    SALES AND MARKETING

    Maxima's sales force is located primarily in North America and Europe.
Customers are supported based on certain criteria that take into account
customer preferences, geography and a particular expertise. In addition, Maxima
employs regionally based sales agents and in some cases, distributors use their
own sales personnel to provide coverage in the market.

    Marketing activities include direct mail, targeted advertising, media
relations and trade show participation, promotional support for distributors,
ongoing distributor training and workshops, and general control and support of
corporate ID programs. Each brand is also supported to retain their unique
identity and sustain brand awareness.

    DISTRIBUTION

    AST and Datcon products are distributed through a network of over 70 Class
"A" distributors who generally operate as "master" distributors. These two
brands are marketed through this channel to target smaller and/or start-up
companies who would not qualify for direct factory support. Stewart Warner
products are marketed through a large network of wholesale distributors located
in North America, who typically resell products to jobbers. In addition, Stewart
Warner brand products are distributed through large retail outlets such as NAPA
and CarQuest, where the products are marketed directly to end-users.
Distribution sales represent approximately 25% of Maxima's total business.

    OPERATIONS

    Maxima's European operation is located in Barcelona, Spain. Maxima's U.S.
operations are located in Lancaster, Pennsylvania and in El Paso, Texas where
Maxima warehouses Stewart Warner brand products. The operation in Juarez, Mexico
is set up as a "Maquiladora", wherein products are manufactured in Juarez and
moved to El Paso for warehousing and distribution.

ANDERSON

    Anderson is a leading designer and manufacturer of high performance modular
power connectors for use in high current, quick connect/disconnect applications.
Current markets include Uninterruptible Power Supplies (UPS), Telecom, Datacom,
Electric-powered vehicles, and Office Panel Electrification. Anderson
specializes in modular connectors and housings that are designed to provide
application specific solutions for power distribution and power management
challenges. Anderson is focused on increasing its penetration of the high growth
Telecom and Datacom markets by targeting new application requirements of the key
accounts which can be marketed to a broad base of customers. In addition,
Anderson will continue to search for new opportunities for its rugged, industry
standard connectors. Anderson's headquarters are located in Sterling,
Massachusetts. For fiscal 2000, Anderson had net sales of $28.7 million, which
represented 9.6% of the Company's consolidated net sales for such period.

                                       14
<PAGE>
    PRODUCTS

    Power connectors allow for the transmission of electric current to provide
distributed power within a device or system. Anderson focuses on the niche
market for wire-to-wire and wire-to-board, high current, quick disconnect
electric power connectors. Anderson's modular disconnect power connectors, in
contrast to lugs and terminal blocks, allow for easy and repeated disconnection
and reconnection to the power source without the requirement to power-down a
system (hot plug-able/hot swap-able). Anderson manufactures a broad range of
both custom applications and standard power connectors. Anderson connectors
utilize a flat interlock contact design. These contacts are supplied in a
variety of housings and a wide range of cable and Amperage sizes in two product
families. The SB-TM- series consists of two contacts, spring-mounted in a
genderless plastic housing design for easy connection and disconnection. The
Powerpole-TM- series consists of a single contact, mounted in a modular,
genderless housing which can be assembled with other connectors in any
configuration or quantity, offering customers wide flexibility in customized
connector packages at reasonable cost for low and high volume applications.

    Anderson differentiates its power connectors from those of its competitors
by focusing on applications that require unique, engineered solutions. As an
example, Anderson designed a special power connector for electric golf carts
manufactured by E.Z. GO-Textron. This "smart" design disables the electric drive
control while the cart is being recharged, thereby eliminating the possibility
of inadvertent drive-aways while the cart remains connected to the charging
stand. Anderson also specializes in uncovering new applications for its standard
power connectors. As an example, Anderson successfully applied its existing
power connector technology to the rapidly growing market for uninterruptible
power supply products.

    MARKETS AND CUSTOMERS

    Anderson's connectors are primarily used in OEM applications that require
high current capacity, high reliability and ease of installation, as well as
blind-mate, hot plug-able and quick disconnect capabilities. Typical
applications include: (i) electric-powered vehicles (including forklifts, golf
carts, wheelchairs, etc.) (ii) uninterruptible power supply (UPS) products and
other peripherals; (iii) telecommunications; (iv) data communications; and (v)
office panel electrification. Anderson's products are purchased both directly by
OEMs and indirectly through distributors.

    A majority of Anderson's sales are derived from products which are
incorporated into the design of an OEMs product. Therefore, Anderson focuses its
sales and marketing efforts on OEMs and engineers work directly with an OEMs
in-house product development team during the design phase to facilitate the
engineering of an effective interconnect solution. Frequently, this
collaborative effort results in a design for which Anderson is designated by the
OEM as a sole source supplier through the life of the program. Anderson believes
that OEMs choose Anderson's power connector products in large part due to its
reputation for innovative and customized solutions, ability to quickly design
products and create prototypes, and its long-term customer relationships.
Anderson's product design and prototyping capabilities were recently enhanced by
the addition in fiscal 1997 of a technical center located in Leominster,
Massachusetts.

    Anderson's current customer base includes industry leaders Ericsson, Lucent,
Motorola, E.Z. GO-Textron, Hyster-Yale, American Power Conversion (APC) and
Yuasa-Exide.

    SALES AND MARKETING

    Anderson markets and sells the majority of its products under the Anderson
Power Products-TM- name primarily in North America, Europe, Japan and the
Pacific Rim region both through an in-house direct sales force and through a
global third-party network of manufacturers' representatives, stocking

                                       15
<PAGE>
agents and authorized distributors. Anderson's products are generally purchased
directly by OEMs and by distributors for resale to OEMs and the aftermarket.

    COMPETITION

    The connector market served by Anderson is highly fragmented, although the
Company believes that the segment in which Anderson participates is less
fragmented than the overall connector market. Anderson's principal competitors
in its niche markets include Hypertronics, Elcon International, Multi-Contact,
SMH, ODU, and Positronics Industries. In addition, AMP and Molex produce low
power connectors for certain applications which compete directly with Anderson
products. AMP and Molex are beginning to recognize the trend toward higher power
and are expected to compete with Anderson with more products in the future.

    HVE EUROPA

    HVE Europa is a leading designer and manufacturer of particle accelerator
systems used in scientific, educational and industrial research. HVE Europa's
products are used primarily for materials science, semiconductor research and
"carbon dating." HVE Europa's headquarters are located in Amersfoort, The
Netherlands. For fiscal 2000, HVE Europa had net sales of $8.0 million, which
represented 2.7% of the Company's consolidated net sales for such period.

    In addition to its core research markets, HVE Europa supplies ion
accelerator subsystems to a major equipment supplier in the high energy ion
implantation market that supplies complete systems to semiconductor
manufacturers. In addition, HVE Europa is currently assessing the feasibility of
adapting its carbon dating systems for biomedical and biochemical applications.

    PRODUCTS

    HVE Europa's products include ion accelerator systems, research ion
implanters, accelerator mass spectrometer systems and component parts such as
accelerator tubes. In a particle accelerator, ions are accelerated to a high
velocity under the influence of a strong electrical field and then fired into
the material to modify its properties and/or analyze its structure. Accelerator
mass spectrometer systems are specialized ion accelerator systems used for among
others carbon dating in the fields of archeology, oceanography and geosciences.

    MARKETS AND CUSTOMERS

    Historically, demand for HVE Europa's products was driven by nuclear physics
research. However, since the end of the Cold War, HVE Europa's products have
been sold for various applications in materials science, including semiconductor
research. Other applications include ratio spectrometry in archaeology,
oceanography, geosciences, materials science and biochemistry. Accelerator mass
spectrometer systems are used by universities and research institutes for carbon
dating in the fields of archaeology, oceanography and geosciences. The demand
for particle accelerator systems has historically been tied to the construction
of new or expanded research facilities, which for educational institutions is
mainly dependent upon grants and fund raising. More recently, HVE Europa has
supplied ion accelerator subsystems to a major manufacturer of ion implantation
equipment that sells to semiconductor manufacturers.

    SALES AND MARKETING

    HVE Europa's products are sold worldwide by its direct sales force. Due to
the complex, custom-built nature of HVE Europa's particle accelerators, frequent
and extensive interaction is required between HVE Europa and the customer. HVE
Europa presents technical papers at, and participates in,

                                       16
<PAGE>
scientific conferences, advertises in scientific periodicals and distributes
product literature and information on new developments to its existing
customers.

    COMPETITION

    Competition in HVE Europa's market is highly concentrated. HVE Europa's
sales in the particle accelerator market are often bid competitively against
National Electrostatics Corporation, a privately-held U.S. manufacturer.

BACKLOG

    The Company's backlog was as follows as of the dates indicated (dollars in
thousands):

<TABLE>
<CAPTION>
                                       APRIL 29, 2000           APRIL 24, 1999           APRIL 25, 1998
                                   ----------------------   ----------------------   ----------------------
                                              PERCENTAGE               PERCENTAGE               PERCENTAGE
                                    AMOUNT     OF TOTAL      AMOUNT     OF TOTAL      AMOUNT     OF TOTAL
                                   --------   -----------   --------   -----------   --------   -----------
<S>                                <C>        <C>           <C>        <C>           <C>        <C>
ASI(1)...........................  $143,086       64.3%     $    --          --%     $    --          --%
Robicon..........................    44,296       19.9       35,741        59.2       36,790        48.0
PHI..............................    11,155        5.0        5,666         9.4       11,644        15.2
Maxima Technologies..............    13,129        5.9       10,324        17.1       12,394        16.2
Anderson.........................     1,782        0.8        4,057         6.7        4,133         5.4
HVE Europa.......................     9,168        4.1        4,607         7.6       11,604        15.2
                                   --------      -----      -------       -----      -------       -----
Total............................  $222,616      100.0%     $60,395       100.0%     $76,565       100.0%
                                   ========      =====      =======       =====      =======       =====
</TABLE>

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

(1) Does not include the backlog of ASI for the fiscal years ended April 24,
    1999 and April 25, 1998, respectively.

    The Company believes that its backlog as of any particular date may not be
indicative of sales for any future period. The Company expects that $201.9
million of its backlog will be shipped before April 28, 2001.

RESEARCH AND DEVELOPMENT

    Research and development activities are conducted separately by each
operating unit. The Company's operating units focus on developing
applications-engineered products designed to meet their customers' needs. Teams
representing different functional areas within an operating unit work closely
with customers early in the product design process to ensure that the product
meets the customer's specifications and is designed for ease of manufacturing.
In general, only Robicon, ASI and PHI have required substantial research and
development expenditures. Research and development expenditures that the Company
has made have resulted in innovative new products such as PHI's new ADEPT-1010
Dynamic SIMS, Robicon's Perfect Harmony series of medium voltage VFDs, Maxima's
Intellisensor fuel measurement systems, HVE Europa's Radiocarbon Accelerator
Mass Spectrometers and a series of Ultra Singletron accelerator systems and
numerous applications-engineered products for Anderson's customers. PHI incurs
significant research and development expenses due to the high technology content
of its surface analysis instruments and its growth strategy of increasing
penetration to the semiconductor fabrication market, increasing sales through
the identification of new applications for its existing products, enhancements
in the technological capability of its instruments, the development of
application-specific hardware configurations for its instruments and the
continued improvement in the operating ease and efficiency of its instruments
through increased automation and software development. The Company's research
and development expenses were $20.9 million, $17.6 million and $15.5 million for
fiscal 2000, 1999 and 1998, respectively. In addition, the Company recorded
charges to earnings of $1.7 million and $8.1 million in fiscal 2000 and fiscal
1998, respectively for the write-off of

                                       17
<PAGE>
purchased research and development related to the acquisitions of CE&A,
Maxima-Juarez/El Paso and PHI. Substantially all research and development
expenses of the Company are related to Company-sponsored research.

PATENTS AND TRADEMARKS

    The Company holds domestic and foreign patents covering certain products and
processes in all of its operating units, as well as trademarks covering certain
of its products. While these patents and trademarks are considered important to
the ability of the various operating units to compete, the Company believes that
these patents and trademarks are less important than the quality and
applications-engineered nature of its products and its unpatented manufacturing
expertise. Certain patents relating to Robicon's Perfect Harmony series of
medium voltage VFDs are of particular significance; these patents issued in
April and June of 1997 and expire in 2014. In addition, PHI holds key patents
relating to its Auger, ESCA and TOF-SIMS surface analysis instruments that
issued between 1991 and 1995 and expire between 2009 and 2014, and filed a
provisional patent application in December 1996 relating to its ESCA surface
analysis instruments. The Company also holds patents on certain products which,
although valuable to the Company, are not critical to its operations. Management
does not believe that the future profitability of the Company's operating units
is dependent upon any one patent or group of related patents.

EMPLOYEES

    At April 29, 2000 the Company had a total of 3,030 employees, of whom 3,015
were employed by the Company's operating units. The Company's domestic employees
are not covered by collective bargaining agreements, however, substantially all
of the personnel employed by its foreign subsidiaries belong to national
workers' councils. The Company considers it relations with its employees to be
good. The following table provides information relating to the employees of the
Company's operating units as of April 29, 2000:

<TABLE>
<CAPTION>
                                                                TOTAL
OPERATING UNIT                                                EMPLOYEES
--------------                                                ---------
<S>                                                           <C>
ASI.........................................................    1,454
Robicon.....................................................      329
PHI.........................................................      417
Maxima......................................................      632
Anderson....................................................      119
HVE Europa..................................................       64
                                                                -----
    Total Operating Unit Employees..........................    3,015
                                                                =====
</TABLE>

                                       18
<PAGE>
ITEM 2.--PROPERTIES

    The following are the principal operating facilities of the Company listed
by operating unit, each of which includes general office and administrative
space:

<TABLE>
<CAPTION>
                                                                         USABLE SPACE
                                                                           (SQUARE
OPERATING UNIT                                        FUNCTION              FEET)       OWNED/LEASED
--------------                                -------------------------  ------------   ------------
<S>                                           <C>                        <C>            <C>
ASI:
  Milan, Italy..............................  Design and assembly            45,000     Leased
  Monfalcone, Italy.........................  Design and assembly           270,000     Owned
  Montebello Vicentino, Italy...............  Design and assembly            37,980     Owned
  Brendola, Italy...........................  Design and assembly            27,000     Owned
  High Wycombe, Bucks, United Kingdom.......  Design and assembly            48,478     Leased
  Lyon, France..............................  Design and assembly            24,709     Leased

ROBICON:
  New Kensington, Pennsylvania..............  Design and assembly           123,000     Leased(a)
  Pittsburgh, Pennsylvania..................  Design and assembly            80,000     Owned

PHI:
  Eden Prairie, Minnesota...................  Design and assembly           206,800     Owned(b)
  Mountain View, California.................  Design and assembly            28,800     Leased(b)
  Sunnyvale, California.....................  Design and assembly            74,859     Leased(c)

MAXIMA:
  Lancaster, Pennsylvania...................  Design and assembly            71,873     Leased(a)
  Barcelona, Spain..........................  Design and assembly            76,803     Leased(a)
  El Paso, Texas............................  Warehouse                      20,000     Leased
  Juarez, Mexico............................  Assembly                       75,000     Leased

ANDERSON:
  Sterling, Massachusetts...................  Plastic injection molding
                                              and assembly                   42,400      Leased(a)
  Sterling, Massachusetts...................  Plastic injection molding
                                              and assembly                   31,000      Leased(a)
  Fermoy, Ireland...........................  Plastic injection molding
                                              and assembly                   23,000      Leased

HVE EUROPA:
  Amersfoort, The Netherlands...............  Design and assembly            60,000     Owned
</TABLE>

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

(a) The Company holds a fair value purchase option on these facilities.

(b) Approximately 26,000 square feet of space at the PHI facility in Eden
    Prairie, Minnesota and 10,944 sq. ft in Mountain View, California are
    currently leased by PHI to third parties.

   Approximately 7,133 sq. ft of space at the ASI facility at High Wycomb,
    Bucks, UK is leased to a third party.

(c) The building at Kifer Rd. Sunnyvale, California was under leasehold
    improvement construction as of April 29, 2000.

    In addition to the facilities described above, the Company leases various
warehouses and sales and administrative facilities. The Company believes that
its manufacturing facilities are properly maintained and that production
capacity is adequate to meet the requirements of its operating units.

                                       19
<PAGE>
ITEM 3.--LEGAL PROCEEDINGS

    The nature of the Company's business is such that it is regularly involved
in legal proceedings incidental to its business and the Company believes that
none of these proceedings are material.

    In March 1998, the Company was dismissed without prejudice as a defendant in
an action commenced in November 1996 against the Company and six others by
Chicago-Dubuque Foundry Corporation, and its property insurer. In May 1998, the
remaining claims against the Company by intervenor plaintiffs were also
dismissed without prejudice. During fiscal 1999, a plaintiff named the Company
as a Third-Party Defendant, claiming indemnity under the terms of its purchase
orders and under a "failure to warn" claim. Most, if not all, other defendants
have now also filed cross-claims against the Company for contribution or
indemnity. The Company moved for summary judgement on the basis that since the
connectors involved were not manufactured by the Company, it can have no
liability. In August 1999, the motion for summary judgement was sustained and
all claims against the Company were dismissed.

    In March 1998, the Company's Robicon Corporation subsidiary initiated
litigation against Toshiba International Corporation ("Toshiba") in the United
States District Court for the Western District of Pennsylvania alleging
infringement of one of Robicon's Perfect Harmony patents. In June 1998, Toshiba
filed suit against Robicon and several other defendants in the United States
District Court for the Southern District of Texas alleging, among other things,
false and disparaging comments concerning Toshiba, interference with contract,
violation of the Texas Competition and Trade Practices Statute and civil
conspiracy to restrict Toshiba's business and cause the wrongful termination of
a purchase order of one of its customers. Damages under each section are claimed
to be in excess of $75,000, the federal statutory minimum, in addition to a
claim for punitive damages. In its suit, Toshiba has also claimed that Robicon
is infringing a patent held by Toshiba and requested a declaratory judgment that
Robicon's patent, which is the subject of the Pennsylvania action, is invalid.
In March 1999, the Texas District Court dismissed without prejudice all claims
except the alleged patent infringement by Robicon and the request for
declaratory judgement. These claims were then transferred to the Western
District of Pennsylvania. Also in March 1999, Toshiba filed a petition in Harris
County, Texas in which it realleged the claims dismissed by the Texas district
court, citing the additional costs by Toshiba to reinstate its purchase order
and damages to its reputation not exceeding $5.0 million. On November 29, 1999,
the Pennsylvania district court granted Robicon's motion to dismiss Toshiba's
patent infringement claim against Robicon. The only remaining transferred claim
is Toshiba's request for declaratory judgment. In November 1999, Toshiba filed a
motion to dismiss without prejudice all of the claims pending in Harris County,
Texas pursuant to a Tolling Agreement which permits Toshiba one (1) year to
re-file its claims. In December 1999, the Texas state court granted Toshiba's
motion.

    In March 1998, the Company was dismissed without prejudice as a defendant in
an action commenced in November 1996 against the Company and six others by
Chicago-Dubuque Foundry Corporation, and its property insurer. In May 1998, the
remaining claims against the Company by intervenor plaintiffs were also
dismissed without prejudice. During fiscal 1999, a plaintiff named the Company
as a Third-Party Defendant, claiming indemnity under the terms of its purchase
orders and under a "failure to warn" claim. Most, if not all, other defendants
have now also filed cross-claims against the Company for contribution or
indemnity. The Company moved for summary judgement on the basis that since the
connectors involved were not manufactured by the Company, it can have no
liability. In August 1999, the motion for summary judgement was sustained and
all claims against the Company were dismissed.

    Certain other claims, suits and complaints have been filed or are pending
against the Company. In the opinion of the Company, all such matters are without
merit or are of such kind, or involve such amounts, as would not have a material
effect on the consolidated financial position or the results of

                                       20
<PAGE>
operations of the Company if resolved unfavorably to the Company. If estimates
change, there is no assurances these items will not require additional accruals
by the Company.

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

    None.

                                    PART II.

ITEM 5.--MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

    The Company's common stock is not publicly traded.

                                       21
<PAGE>
ITEM 6.--SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

                             (DOLLARS IN THOUSANDS)

    The Selected Historical Consolidated Financial Data presented below under
the captions "Statement of Operations Data" and "Balance Sheet Data" as of-and
for each of the fiscal years in the five-year period ended April 29, 2000, are
derived from the audited consolidated financial statements of High Voltage
Engineering Corporation and its subsidiaries, as restated.

    The Selected Historical Consolidated Financial Data of the Company should be
read in conjunction with the audited historical consolidated financial
statements of Company for the fiscal years in the three-year period ended April
29, 2000 and the notes thereto included elsewhere herein.

<TABLE>
<CAPTION>
                                                                FISCAL YEAR ENDED
                                            ---------------------------------------------------------
                                            APRIL 29,   APRIL 24,   APRIL 25,   APRIL 26,   APRIL 27,
                                              2000        1999        1998        1997        1996
                                            ---------   ---------   ---------   ---------   ---------
<S>                                         <C>         <C>         <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA:
  Net sales...............................  $300,174    $248,054    $217,907    $145,620    $119,906
  Cost of sales (Includes restructuring
    charge--inventory markdown of $855 in
    fiscal 2000)..........................   211,831     159,209     139,174      96,995      78,347
                                            --------    --------    --------    --------    --------
      Gross profit........................    88,343      88,845      78,733      48,625      41,559
  Administrative and selling
    expenses(b)...........................    62,120      51,655      49,292      30,269      27,990
  Research and development expenses.......    20,910      17,579      15,456       8,622       7,321
  Write off of purchased in-process
    research and development..............     1,650          --       8,100          --          --
  Restructuring charge(a).................     1,795         580         186          --         150
  Reimbursed environmental and litigation
    costs, net(c).........................       404         293       3,633          26        (450)
  Other, net(d)...........................     7,374      (1,424)        451       2,234       1,163
                                            --------    --------    --------    --------    --------
      (Loss) income from operations.......    (5,910)     20,162       1,615       7,474       5,385
  Interest expense........................    21,791      19,854      18,159      10,845      10,292
  Interest income.........................       921       1,897       1,008         351         278
    (Loss) income from continuing
      operations before income taxes,
      discontinued operations and
      extraordinary item..................   (26,780)      2,205     (15,536)     (3,020)     (4,629)
  Income taxes (credit)...................       887      (2,112)       (610)        106      (3,238)
                                            --------    --------    --------    --------    --------
  (Loss) income from continuing operations
    before discontinued operations and
    extraordinary item....................   (27,667)      4,317     (14,926)     (3,126)     (1,391)
  Discontinued operations:
    Income from discontinued operations,
      net of income taxes.................        --       1,083         875         629         793
    Gain on disposal of discontinued
      operations, net of income taxes.....       559       9,633       8,771          --       1,633
  Extraordinary loss, net of income
    taxes.................................        --          --      (7,464)       (259)       (422)
                                            --------    --------    --------    --------    --------
  Net (loss) income.......................  $(27,108)   $ 15,033    $(12,744)   $ (2,756)   $    613
                                            ========    ========    ========    ========    ========
</TABLE>

                                       22
<PAGE>

<TABLE>
<CAPTION>
                                                                FISCAL YEAR ENDED
                                            ---------------------------------------------------------
                                            APRIL 29,   APRIL 24,   APRIL 25,   APRIL 26,   APRIL 27,
                                              2000        1999        1998        1997        1996
                                            ---------   ---------   ---------   ---------   ---------
<S>                                         <C>         <C>         <C>         <C>         <C>
BALANCE SHEET DATA (AT PERIOD END):
  Working capital.........................  $  7,184    $ 67,299    $ 52,196    $  9,371    $ 11,894
  Total assets............................   363,999     250,235     233,270     113,587     113,718
  Total debt (including redeemable put
    warrants).............................   208,530     178,787     178,919      88,201      84,671
  Redeemable preferred stock..............    40,642      35,229      30,457      11,474      10,995
  Stockholders' deficiency................   (74,251)    (41,340)    (51,217)    (36,736)    (33,482)
OTHER DATA:
  Adjusted EBITDA(e)......................  $ 22,594    $ 29,764    $ 22,858    $ 13,059    $  9,303
  Depreciation and amortization(f)........    16,643      10,153       6,917       3,325       2,827
  Capital expenditures(g).................    14,124      12,484       5,426       4,363       2,914
  Backlog.................................   222,616      60,395      76,565      64,589      57,981
  Ratio of earnings to fixed charges(h)...     0.04x       1.09x          --          --          --
OPERATING UNIT DATA:
  Net sales:
    ASI...................................  $ 53,960    $     --    $     --    $     --    $     --
    PHI...................................    73,367      65,965      50,531          --          --
    Maxima................................    61,194      60,931      37,958      32,482      32,514
    Robicon...............................    74,913      84,299      94,192      83,096      56,145
    Anderson..............................    28,689      27,371      25,249      21,554      21,509
    HVE Europa............................     8,051       9,488       9,977       8,488       9,738
                                            --------    --------    --------    --------    --------
      Total net sales.....................  $300,174    $248,054    $217,907    $145,620    $119,906
                                            ========    ========    ========    ========    ========
  Adjusted EBITDA:
    ASI...................................  $ (5,762)   $     --    $     --    $     --    $     --
    PHI...................................     9,197       8,521       7,305          --          --
    Maxima................................     8,672       9,127       5,491       4,338       4,230
    Robicon...............................     3,407       5,927       8,140       6,030       1,425
    Anderson..............................     7,939       7,472       6,342       4,885       5,240
    HVE Europa............................     1,163       1,334       1,408         673       1,146
                                            --------    --------    --------    --------    --------
      Total operating unit Adjusted
        EBITDA............................    24,616      32,381      28,686      15,926      12,041
    Corporate overhead....................    (2,022)     (2,617)     (5,828)     (2,867)     (2,738)
                                            --------    --------    --------    --------    --------
      Total Adjusted EBITDA...............  $ 22,594    $ 29,764    $ 22,858    $ 13,059    $  9,303
                                            ========    ========    ========    ========    ========
CASH FLOW PROVIDED BY (USED FOR):
    Operating activities..................  $   (251)   $  9,827    $ (9,005)   $    627    $ (6,360)
    Investing activities..................   (70,555)     13,106     (61,012)     (3,066)      5,729
    Financing activities..................    46,145      (7,724)     85,460       1,893       1,853
</TABLE>

   See accompanying Notes to Selected Historical Consolidated Financial Data.

                                       23
<PAGE>
                 NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA
                             (DOLLARS IN THOUSANDS)

(a) In fiscal 2000, the Company incurred a total restructuring charge of $2,650
    comprised primarily of: (i) $1,830 at PHI for severance and inventory
    markdown relating to the outsourcing of certain manufacturing activities,
    (ii) $820 at Robicon for severance relating to the reduction of some
    engineering and administrative headcount. In fiscal 1999, the Company
    incurred a total restructuring charge of $580 comprised primarily of: (i)
    $390 at Robicon for severance relating to the reduction of some engineering
    and administrative headcount, (ii) $190 at PHI for severance paid to a
    former executive. In fiscal 1998, the Company incurred restructuring costs
    of $186 at PHI relating to a program designed to reduce costs to manage the
    weaker order rates expected from Asia. In fiscal 1996, the Company incurred
    restructuring costs of $150 in connection with the closing of a sales office
    in Europe.

(b) Adjusted EBITDA excludes severance expenses of $636 and $456 included in
    administrative and selling expenses in fiscal 1998 and 1996, respectively.
    See note (e) below.

(c) Represents insurance recoveries related to environmental litigation,
    remediation and consequential damages, net of actual legal costs, estimated
    settlement costs and changes in cost remediation estimates in connection
    with two properties formerly owned by the Company in Burlington,
    Massachusetts and Woodbridge Township, New Jersey.

(d) Other, net is comprised of the following:

<TABLE>
<CAPTION>
                                                                       FISCAL YEAR ENDED
                                                   ---------------------------------------------------------
                                                   APRIL 29,   APRIL 24,   APRIL 25,   APRIL 26,   APRIL 27,
                                                     2000        1999        1998        1997        1996
                                                   ---------   ---------   ---------   ---------   ---------
<S>                                                <C>         <C>         <C>         <C>         <C>
Writedown of notes receivable and impaired
  capital equipment..............................   $1,236      $   250      $  --      $   --      $1,200
Net loss (gain) on disposition of miscellaneous
  assets.........................................      163          507       (710)       (230)        (83)
Facilities (income) expense, net.................     (357)        (219)      (390)        319         (57)
Recoveries of aborted acquisition, offering costs
  and related litigation, net....................       28       (1,809)     1,442       2,145          --
Patent defense costs and related litigation, net
  of recoveries..................................      901           35         --          --          --
Equity in earnings of joint venture..............      239         (188)       109          --          --
Bondholders' consent fees and related costs......    3,451           --         --          --          --
Asset securitization costs.......................      895           --         --          --          --
Subassembly operation exit costs.................      405           --         --          --          --
Facility relocation costs........................      413           --         --          --         103
                                                    ------      -------      -----      ------      ------
Total............................................   $7,374      $(1,424)     $ 451      $2,234      $1,163
                                                    ======      =======      =====      ======      ======
</TABLE>

(e) Adjusted EBITDA is defined as earnings from continuing operations before
    interest, income taxes, depreciation, amortization and non-recurring items.
    Non-recurring items are comprised of: (i) restructuring charge, reimbursed
    environmental and litigation costs, net, and other, and (ii) non-recurring
    severance payments of $636 and $456 to certain former senior executives
    included in administrative and selling expenses of the Company in fiscal
    1998 and 1996, respectively, and (iii) purchase accounting expenses relating
    to the acquisition of CE&A of $1,650 in fiscal 2000, and purchase accounting
    expenses relating to the acquisitions of PHI of $6,800 and Stewart Warner of
    $2,620 in fiscal 1998. See notes (a) through (d) above and notes B and H to
    "Notes to Consolidated Financial Statements" of High Voltage Engineering
    Corporation and subsidiaries. Adjusted EBITDA is not considered a measure of
    performance under GAAP. While

                                       24
<PAGE>
    Adjusted EBITDA should not be considered as a substitute for net income,
    cash flows from operating activities, other income or cash flow statement
    data prepared in accordance with GAAP, or a measure of profitability or
    liquidity, management understands that some form of EBITDA is often used as
    a measurement in evaluating companies. In particular, since Adjusted EBITDA
    excludes the non-recurring items described above, the Company believes that
    trends in Adjusted EBITDA may provide meaningful information as to the
    Company's ability to satisfy its cash requirements on an on-going basis.
    Moreover, substantially all of the Company's financing agreements contain
    covenants in which EBITDA, as defined therein, is used as a measure of
    financial performance. See "Management's Discussion and Analysis of
    Financial Condition and Results of Operations" for a discussion of other
    measures of performance determined in accordance with GAAP and an analysis
    of changes in Adjusted EBITDA in recent periods. Investors should note,
    however, that "Adjusted EBITDA" as used in this document may not be
    comparable to similarly titled measures presented by other companies and
    could be misleading, since not all companies and analysts calculate such
    measures in the same fashion or on the same basis.

(f) Depreciation and amortization excludes $810, $1,069, $1,051, and $757
    attributable to discontinued operations in fiscal 1999, 1998, 1997 and 1996,
    respectively, and $217, $194 and $147 related to assets held for sale in
    fiscal 2000, 1999 and 1998, respectively.

(g) Capital expenditures include assets acquired under capital leases and
    exclude capital expenditures from discontinued operations in the amounts of
    $332, $1,355, $647 and $3,045 in fiscal 1999, 1998, 1997 and 1996,
    respectively.

(h) For purposes of this computation, earnings are defined as income or loss
    from continuing operations before income taxes, discontinued operations and
    extraordinary item and fixed charges. Fixed charges are the sum of: (i)
    interest cost; (ii) accretion of redeemable put warrants;
    (iii) amortization of deferred financing costs; (iv) the portion of
    operating lease rental expense that is representative of the interest factor
    (deemed to be one third); (v) accretion of preferred stock; (vi) preferred
    stock dividends; and (vii) capitalized interest. Earnings were inadequate to
    cover fixed charges by $15,536, $3,020 and $4,629 in fiscal 1998, 1997 and
    1996, respectively.

                                       25
<PAGE>
ITEM 7.-- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

    Except as otherwise indicated, the following discussion relates to the
Company on a historical basis without giving effect to certain acquisitions
completed by the Company. This report may make forward-looking statements
regarding future events or the future financial performance of the Company. We
caution you that these statements are only predictions and that actual events or
results may differ materially. We refer you to documents the Company files from
time to time with the Securities and Exchange Commission, and specifically the
latest "Risk Factors" section, in the Company's most recent Registration
Statement on Form S-4 on file. This document identifies and describes important
factors that can cause the after-results to differ materially from those
contained in any forward-looking statements we may make. The following
discussion should be read in conjunction with the Selected Historical
Consolidated Financial Data and the consolidated financial statements and notes
thereto contained elsewhere in this document.

    The consolidated financial statements of the Company include the accounts of
High Voltage Engineering Corporation and its subsidiaries after elimination of
material inter-company transactions and balances.

    As a result of the sale by the Company of substantially all of the assets of
the Company's General Eastern operating unit on April 15, 1998 and the Company's
Natvar operating unit in April 23, 1999, the Company's consolidated results have
been restated to reclassify the results of such operations as discontinued
operations.

SEASONALITY; VARIABILITY OF OPERATING RESULTS

    The majority of the Company's operating units have historically recorded the
strongest operating results in the fourth quarter of the fiscal year due in part
to seasonal considerations and other factors.

    The timing of orders placed by the Company's customers has varied with,
among other factors, the introduction of new products, product life cycles,
customer attempts to manage inventory levels, competitive conditions, general
economic conditions and the availability of funding for scientific and
educational research. The variability of the level and timing of orders has,
from time to time, resulted in significant periodic and quarterly fluctuations
in the operations of the Company's operating units. Such variability is
particularly evident at HVE Europa, which ships on average four particle
accelerator systems per year. These systems are typically sold for between $1.0
million and $2.0 million each and have long lead times. As a result, the timing
of HVE Europa's shipments within any fiscal year can have a material impact on
an individual quarter's results.

ACQUISITION OF ANSALDO SISTEMI INDUSTRIALI S.P.A.

    On December 22, 1999, the Company acquired all the outstanding capital stock
of Ansaldo Sistemi Industriali, S.p.A., an Italian corporation, and subsidiaries
("ASI"), from Ansaldo Invest, S.p.A., an Italian corporation, which is the
corporate parent of ASI and a wholly owned subsidiary of Finmeccanica S.p.A.
pursuant to a Stock Purchase Agreement ("Purchase Agreement") for an aggregate
purchase price of $29,061 in cash and Italian bank financing. The acquisition
was completed on January 18, 2000. The purchase price is subject to an
adjustment based on the difference between the actual working capital, as
defined, at the closing date and a minimum contractual amount per the Purchase
Agreement. The Company has filed for arbitration in Italy to settle this final
purchase price adjustment and both parties are continuing negotiations.

                                       26
<PAGE>
ACQUISITION OF CHARLES EVANS & ASSOCIATES

    On July 2, 1999, PHI acquired all the outstanding capital stock of CE&A for
an aggregate consideration of $38,624 in cash reduced by the amount of all debt
of CE&A outstanding at the closing.

ACQUISITION OF INDUSTRIAL POWER RECTIFIER BUSINESS

    On December 31, 1998, Robicon acquired certain assets of GE's Industrial
Power Rectifier business for $3.2 million in cash and entered into certain
Related agreements with GE including a license agreement and a production
services agreement. Due to the extended lead times involved with these products
the Company does not anticipate recognizing material revenue from the assets
acquired from GE until fiscal 2001.

RESULTS OF OPERATIONS

CONSOLIDATED

    Net sales for fiscal 2000 were $300.2 million, which was a $52.1 million or
21.0% increase from fiscal 1999. Excluding net sales from CE&A, which was
acquired on July 2, 1999, and net sales from ASI, which was acquired on
December 22, 1999, net sales decreased $19.6 million, or 7.9%, during fiscal
2000. The Company reported a net loss from continuing operations of $27.7
million for fiscal 2000 compared to net income of $4.3 million for fiscal 1999.
The loss was due primarily to: (i) lower sales volume, (ii) additional
restructuring charges at Robicon and PHI, (iii) acquisition related expenses at
ASI, (iv) incremental non recurring costs, and (v) a reduction of interest
income.

SEGMENT ANALYSIS:

FISCAL 2000 COMPARED TO FISCAL 1999

    THE HIGH POWER CONVERSION PRODUCTS SEGMENT reported net sales of $128.9
million for fiscal 2000 which was a increase of $44.6 million, or 52.9% from
fiscal 1999. Excluding net sales from ASI, which was acquired on December 22,
1999, net sales for Robicon decreased $9.4 million during fiscal 2000 as
compared to fiscal 1999. At the end of fiscal 1999 Robicon's backlog was at a
three year low. This decline in backlog coupled with lead time on orders of
three to six months, resulted in a net sales decline at Robicon. Specifically,
the decline in net sales was a result of reduced shipments of medium voltage
variable frequency drives into the international oil and gas markets which,
until recently suffered from reduced capital spending due to low energy prices,
combined with a slow down in demand for Robicon's low voltage drives due to
softness in the municipal marketplace, and the cyclical nature of power control
system orders. The backlog at April 29, 2000 has increased $8.6 million or 23.9%
over the ending backlog at April 24, 1999.

    Operating income decreased $12.6 million to a loss of $8.8 million in fiscal
2000 as compared to income of $3.7 million in fiscal 1999. Excluding an
operating loss of $8.0 million at ASI, operating income decreased $4.6 million
during fiscal 2000 to a loss of $0.8 million as compared to fiscal 1999. This
decrease in operating income was the net result of a decline in the gross margin
percentage of 3.3% or $2.5 million on fiscal 2000 sales due to reduced shipment
into core markets such as the international oil and gas markets; the
introduction by several major global competitors of new products in fiscal 1999
which competed directly with Robicon's products thus driving the sales price
lower than the prior year; $0.8 million in restructuring expense and $0.9
million expense relating to the Toshiba litigation. To combat the increased
pressure from competition Robicon introduced their 3rd generation medium voltage
drive in late fiscal 1999 which is substantially smaller and less costly.
Robicon benefited from the 3rd generation medium voltage drive throughout fiscal
2000 and believes it was able to maintain market share against increased
competition. The Company believes that the price erosion

                                       27
<PAGE>
trend has stopped coupled with a return to higher global energy prices and
further believe that some of Robicon's competitors are actually retrenching
slightly. During the first and third quarters of fiscal 2000, the Company took
actions to reduce costs at Robicon to compensate for the slow down in some of
its served markets mentioned above and to leverage the new ASI synergies. These
actions resulted in the Company recording a $0.8 million restructuring charge
for severance relating to the reduction of headcount at Robicon.

    The loss of $8.0 million at ASI for the period of January 1, 2000 through
the end of fiscal 2000 was primarily the result of (i) lower volume as compared
to prior period results, (ii) higher personnel costs due to a delay in the
implementation of planned headcount reductions, (iii) cost overruns resulting
from quality issues on certain contracts in process at the time of the
acquisition; and (iv) additional expenses resulting from the acquisition.

    It is the Company's belief that the acquisition of ASI will improve the
operating results of both Robicon and ASI. The combination of these businesses
should substantially improve the competitive position by expanding the product
offerings, expanding domain expertise, eliminating niche competition between the
businesses, and providing critical mass with regards to sourcing volume. In
addition, the Company has a plan to improve operating profitability specifically
at ASI by reducing headcount, limiting the use of outside contractors, the
simultaneous closing and integration of the ASI U.S. operations into Robicon,
the selling of the ASI U.K. systems business and the upgrade of the ASI
leadership team. Certain cost savings related to shared services and facility
rent were also negotiated in connection with acquisition of ASI.

    THE ADVANCED SURFACE ANALYSIS INSTRUMENTS SEGMENT reported net sales of
$73.4 million for fiscal 2000 which was an increase of $7.4 million, or 11.2%
from fiscal 1999. Excluding net sales from CE&A, which was acquired on July 2,
1999, net sales for PHI decreased $11.4 million during fiscal 2000 as compared
to the fiscal 1999. The decrease was the result of softness with PHI's AUGER
product, the 680 and a slower than anticipated acceptance of PHI's wafer tools
in the semiconductor market, weaker sales of PHI's Trift products as well as
reduced ESCA product sales to industrial lab markets. The Company believes that
the AUGER products will rebound during fiscal 2001 as acceptance of the Smart
Tool with in the market has increased with sales to PHI's larger customers.
Operating income decreased $8.9 million to a loss of $4.6 million in fiscal 2000
as compared to income of $4.4 million in fiscal 1999. Excluding operating income
from CE&A, which included a charge of $1.7 million to write off purchased
in-process research and development expense, which had been valued in accordance
with purchase accounting procedures, operating income decreased $9.5 million to
a loss of $5.1 million during fiscal 2000 as compared to income of $4.4 million
in fiscal 1999. This decrease in operating income was the net result of a
decline in the gross margin percentage of 5.0% or $2.7 million on PHI's fiscal
2000 sales due to the sales decline of the AUGER products (which is PHI's
highest gross margin product line) of 13% compared to fiscal 1999, an overall
discount rate increase for all U.S. sales of 2%, a high mix of shipments into
Japan, which have a lower gross margin, $1.8 million in restructuring expense,
and losses recorded in the Company's Joint Venture with ULVAC.

    THE HIGH PERFORMANCE MODULAR POWER CONNECTORS SEGMENT reported net sales of
$28.7 million for fiscal 2000 which was an increase of $1.3 million or 4.8% from
fiscal 1999. The increase is due to growth in the telecommunications networking
equipment market and the continued focus by Anderson on their niche custom high
power/current connectors products. Operating income increased slightly $0.1
million to $6.3 million for fiscal 2000 as compared to fiscal 1999 due to
favorable product mix during the year.

    THE CUSTOMIZED MONITORING INSTRUMENTATION SEGMENT reported net sales of
$61.3 million for fiscal 2000 which was a slight increase of $0.3 million, or
0.5%, from fiscal 1999. Gross profit for fiscal 2000 declined $2.2 million or
11.35% compared to fiscal 1999. This decrease is the result of higher warranty
costs on some discontinued Stewart Warner brand products and a shift toward
lower margin products.

                                       28
<PAGE>
The decrease was partially offset by expense savings due to the efficiencies
obtained in combining the acquired Stewart Warner Instruments Company operations
with those of the Company's existing Maxima Technologies subsidiary. Operating
income decreased slightly to $6.0 million during fiscal 2000 compared to fiscal
1999.

FISCAL 1999 COMPARED TO FISCAL 1998

    THE HIGH POWER CONVERSION PRODUCTS SEGMENT reported net sales of $84.3
million for fiscal 1999 which was a decrease of $9.9 million, or 10.5% from
fiscal 1999. The reduction in net sales was due to a $13.1 million decrease in
sales of power control systems. The power control systems decrease related to
reduced shipments to the polysilicon extraction markets and a $2.6 million
decrease in sales of low voltage VFDs as a result of customer requested delays
offset by an 22.5% increase in service revenue due to a new distribution
agreement with Argo International Corporation and the continued growth in sales
(14.6%) on medium voltage VFDs. Operating income decreased $3.8 million to $3.7
million in fiscal 1999 as compared to fiscal 1998. The decrease in operating
income was primarily a result of lower gross profit due to lower net sales which
was offset by lower commission expense of approximately $1.3 million and a
decrease in selling and administrative expenses in response to the reduction in
net sales. Also, Robicon recorded a $0.4 million restructuring charge relating
to the reduction of some engineering and administrative headcount.

    THE ADVANCED SURFACE ANALYSIS INSTRUMENTS SEGMENT reported net sales of
$66.0 million for fiscal 1999 which was an increase of $15.4 million, or 30.5%
from fiscal 1998. This increase is due to the fact fiscal 1998 reflects 9 months
of activity due to the purchase of PHI on August 8, 1997. Operating income
increased $7.2 million to $4.4 million in fiscal 1999 as compared to fiscal
1998. This increase in operating income was primarily due to a $5.8 million
charge in fiscal 1998 to write off in-process research and development expense.

    THE HIGH PERFORMANCE MODULAR POWER CONNECTORS SEGMENT reported net sales of
$27.4 million for fiscal 1999 which was an increase of $2.1 million or 8.4%
compared to fiscal 1998 due to continued growth in the uninteruptible power
supply markets as well as the telecommunications and networking equipment
markets in North America and Europe. Operating income increased $0.9 million to
$6.2 million for fiscal 1999 as compared to fiscal 1998.

    THE CUSTOMIZED MONITORING INSTRUMENTATION SEGMENT reported net sales of
$60.9 million for fiscal 1999 which was an increase of $22.9 million, or 60.6%,
from fiscal 1998. Excluding net sales from Maxima-Juarez/El Paso of $21.8
million, which was acquired during fiscal 1998, net sales increased $1.1 million
or 3.3%. The increase was due to higher shipments in both the United States and
Europe. Operating income increased $5.2 million to $6.2 million during fiscal
1999 compared to fiscal 1998. During fiscal 1998 Maxima-Juarez/El Paso recorded
charges of $2.3 million to write off purchased in-process research and
development expenses, which had been valued in accordance with purchase
accounting procedures. The gross profit from the increased sales and expense
savings of approximately $1.1 million due to operational efficiencies were
offset by higher warranty costs on some discontinued Stewart Warner brand
products.

LIQUIDITY AND CAPITAL RESOURCES

    The Company's liquidity needs are primarily for working capital, capital
expenditures and acquisitions. The Company's primary sources of liquidity have
been funds provided by operations, proceeds from the sale of discontinued
operations and asset sales, as well as proceeds from financing activities.

                                       29
<PAGE>
    The Company has made significant acquisitions which are inherently subject
to risk. The successful integration of the acquired operations and the
substantial demands on the attention of senior management may adversly impact
their ability to manage the Company's existing businesses.

    The Company maintains a $25.0 million revolving credit facility (the
"Revolving Credit Facility") which is primarily maintained to fund the Company's
working capital requirements and has a $10.0 million sub-limit for the issuance
of standby letters of credit. On December 29, 1999, in connection with the
Receivables Purchase Facility, the Revolving Credit Facility was amended to
exclude as collateral certain domestic receivables sold pursuant to the
Receivable Purchase Facility, described below, and included certain property,
plant and equipment of certain domestic subsidiaries. The Revolving Credit
Facility was also amended to extend the expiration date to August 1, 2003. As of
April 29, 2000, the Revolving Credit Facility was amended (the "Third Amendment
to Revolving Credit Facility") to among other things reduce the credit
availability to $5.0 million upon the earlier of February 1, 2001 or the Sale of
a Restricted Subsidiary, as defined, and to amend certain restrictive covenants,
as defined. In addition, the amendment requires the Company to terminate or
refinance the Receivables Purchase Facility upon the earlier of February 1, 2001
or the Sale of a Restricted Subsidiary, as defined. In connection with the
above, the Company intends to refinance the Revolving Credit Facility and the
Receivables Purchase Facility prior to February 1, 2001. Borrowings outstanding
under the Revolving Credit Facility as of April 29, 2000 were $8.4 million.
There were $3.2 million in letters of credit commitments outstanding resulting
in credit availability under this facility of $12.4 million as of such date. The
Revolving Credit Facility contains covenants restricting the ability of the
Company's operating units to, among other things, pay dividends or make other
restricted payments to the Company.

    On December 29, 1999, the Company entered into a Trade Receivables Purchase
Facility (the "Receivables Purchase Facility") with High Voltage Funding
Corporation, ("HV-FC"), a limited purpose subsidiary of the Company. Under this
agreement, other domestic subsidiaries of the Company sell a defined pool of
domestic trade accounts receivable ("Pool Assets"), and the related rights
inherited of the Company and its domestic subsidiaries to HV-FC. The Receivables
Purchase Facility allows the domestic subsidiaries to sell to the Company which,
in turn, sells to HV-FC an undivided ownership interest in the Pool Assets, up
to a limit of $22.5 million. HV-FC owns all of its assets and sells
participating interests in such accounts receivable to a third party which, in
turn, purchases and receive ownership and security interests in those assets. As
collections reduce accounts receivable included in the pool, the operating
subsidiaries sell new receivables to HV-FC. The limited purpose subsidiary has
the risk of credit loss on the receivables. At April 29, 2000, $13.2 million was
utilized under the Receivables Purchase Facility. The proceeds from the sale
were used to reduce borrowings and to fund operations and acquisitions. The
proceeds are less than face value of accounts receivable sold, by an amount that
approximates the cost that HV-FC would incur if it were to issue commercial
backed paper by these accounts receivable. The discount from the face value,
which amounted to $0.9 million at April 29, 2000, is accounted for as a loss on
the sale of receivables and has been included in other income and expenses in
the Company's Consolidated Statement of Operations. The Company's operating
subsidiaries retain the collections and administrative responsibilities for the
participating interests in the Pool Assets. As of April 29, 2000, the
Receivables Purchase Facility was amended (the "First Amendment to Receivables
Purchase Agreement") to conform certain restrictive covenants to the Third
Amendment to the Revolving Credit Facility.

    As of April 29, 2000, the Company had total indebtedness (including
redeemable put warrants) of $208.5 million and mandatory redeemable preferred
stock with an aggregate liquidation preference of $43.1 million.

    On December 22, 1999, the Company received the consent (the "Consent
Solicitation") of the holders of its outstanding $155.0 million, 10 1/2% Senior
Notes (the "Notes") due 2004, for the waiver of, and amendment to, certain
provisions of the indenture governing the Notes (the "Indentures"). As

                                       30
<PAGE>
more fully described in the Consent Solicitation, the Company entered into a
series of transactions including (i) the acquisition of ASI; (ii) the
simultaneous purchase by the Company of $8.5 million 5.0% unsecured notes of
Nicole Corporation (the "Nicole Intercompany Notes"), a wholly owned subsidiary
of the Company; (iii) the pledge by the Company of the Nicole Intercompany Notes
to secure the Company's obligations under the Notes; (iv) permission for the
Company to sell certain account receivables to a limited purpose unrestricted
subsidiary of the Company, pursuant to the Receivables Purchase Facility. The
purpose of the waivers was to waive any default arising under the Indenture as a
result of the completion of the ASI acquisition and the purchase by the Company
of the Nicole Intercompany Notes. The principal purposes of the amendments were
(i) to designate Nicole Corporation as an unrestricted subsidiary of the
Company, as defined under the Indenture; and (ii) to amend the amount available
to the Company to make Restricted Payments; and (iii) to include as Permitted
Investment the transfer of certain accounts receivable of the Company's
subsidiaries pursuant to the Receivables Purchase Facility. In consideration of
the Consent Solicitation, the Company, (i) paid a Consent Fee and related costs
of $3.5 million; (ii) increased the amount of interest payable on the Notes to
10 3/4% until such time the Company is able to incur additional indebtedness
under the Indenture; (iii) offered as collateral for the Notes the PHI Eden
Prairie facility and a pledge of the Nicole Intercompany Notes.

    As of April 29, 2000, the Company had outstanding redeemable put warrants
representing 6.25% of its fully diluted common stock. The holders of such
warrants have the right, as of May 1, 2000, to require the Company to purchase
all or any portion of such warrants or any shares of common stock issued upon
the exercise of such warrants at the greater of (i) a valuation prepared by an
independent financial advisor or (ii) a formula value calculated as 8.0x the
Company's EBITDA (as defined therein) less preferred stock and debt outstanding
plus excess cash.

    The ability of the Company to satisfy its obligations under existing
indebtedness and preferred stock will be primarily dependent upon the future
financial and operating performance of its operating units and upon the
Company's ability to renew or refinance borrowings or to raise additional equity
capital as necessary. In connection with the above, the Company intends to
refinance the Revolving Credit Facility and the Receivables Purchase Facility
prior to February 1, 2001. The Company does not anticipate any significant
principal payment obligations under any of its outstanding indebtedness prior to
maturity of the Senior Notes other than in connection with a refinancing.

    The Company's working capital was $7.2 million and $67.3 million at
April 29, 2000 and April 24, 1999, respectively. The Company's results from
continuing operations for the fiscal 2000 used $0.2 million in cash which is a
decrease of $8.8 million over fiscal 1999. Net loss after adjustments to
reconcile to net cash from operating activities used cash of $7.4 million, plus
cash provided by working capital of $7.1 million.

    The Company invested $14.1 million in capital expenditures during fiscal
2000, primarily at PHI for additional new product demonstration units and
research and development equipment. The Company used $62.0 million for the
purchase of CE&A on July 2, 1999, and ASI on December 22, 1999, net of cash
acquired.

    On April 23, 1999, the Company sold substantially all of the assets and
liabilities of its Natvar division. The price for Natvar was $26.0 million paid
in cash. The Company recorded a gain on the disposal of $9.3 million, net of
taxes and transaction related expenses.

NEW ACCOUNTING PRONOUNCEMENTS

    During 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
133, "Accounting for Derivative Instruments and Hedging Activities", which
establishes accounting and reporting standards for derivative instruments and
for hedging activities.

                                       31
<PAGE>
    In June 1999, the FASB issued SFAS 137, "Deferral of the Effective Date of
FASB Statement No. 133", to defer for one year the effective date of
implementation of SFAS 133. SFAS 133, as amended by SFAS 137, is effective for
fiscal years beginning after June 15, 2000, with earlier application encouraged.
The Company does not believe adoption will have a material impact on its
financial statement disclosures.

    In December 1999, the SEC issued Staff Accounting Bulletin No. 101 ("SAB
101"), "Revenue Recognition in Financial Statements." SAB 101 summarizes certain
of the SEC's views in applying generally accepted accounting principles to
revenue recognition in financial statements. In March 2000, the SEC issued
SAB 101A, to defer for one quarter the effective date of implementation of SAB
No. 101 with earlier application encouraged. In June 2000, the SEC issued SAB
101B which defers the effective date of implementation of SAB 101 to the fourth
fiscal quarter of fiscal 2001. The Company is currently evaluating the impact
that SAB 101 will have on its financial reporting requirements.

    In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, or FIN No. 44, "Accounting for Certain Transactions
Involving Stock Compensation." This Interpretation clarifies the application of
APB Opinion No. 25, "Accounting for Stock Issued to Employees" and is generally
effective July 1, 2000, with certain conclusions in this Interpretation covering
specific events that occur after either December 15, 1998, or January 12, 2000.
To the extent that this Interpretation covers events occurring during the period
after December 15, 1998, or January 12, 2000, but before the effective date of
July 1, 2000, the effects of applying this Interpretation are recognized on a
prospective basis from July 1, 2000. Management believes the adoption of FIN
No. 44 will not have a material impact on our financial position, results of
operations or cash flows.

YEAR 2000

    An issue which the Company faced was whether computer systems and
applications would recognize and process the Year 2000 and beyond. The Company
has not experienced any known material adverse impacts on our current products,
internal information systems, and non information technology systems (equipment
and systems) as a result of the year 2000 issue. In addition, the Company
believes it had devoted sufficient resources to identify and monitor customers,
suppliers and others whose failure to identify and remediate their internal
systems or product offerings would have adversely affect the operations of the
Company. However, there can be no assurance that the customers, suppliers and
others will continue to operate without incurring Year 2000 compliance issues.

    Costs related to the Year 2000 issues are being expensed during the period
in which they are incurred. The financial impact to the Company of implementing
the systems changes necessary to become Year 2000 compliant has not been
material to its business, operations, financial condition, liquidity and capital
resources. Those estimates do not include any allocation with respect to time
devoted by regular employees of the Company to these efforts, since the Company
does not separately track that time. There are uncertainties as to the future
costs associated with the Year 2000 date change but the Company believes that
any future costs will not be material to its financial condition.

ITEM 7A.-- QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The primary market risks for the Company is interest rate risk and foreign
currency risk. Other risks dealing with contingencies are described in Note Q to
the Company's consolidated financial statements included under Item 8.

INTEREST RATE RISK

    The Company's exposure to interest rate risk is limited to the Company's
borrowing arrangements under the revolving credit facility. The interest rates
on the Company's other long-term debt are fixed and primarily matures in fiscal
2005. The Company has not, to date, engaged in derivative transactions,

                                       32
<PAGE>
such as interest rate swaps, caps or collars, in order to reduce it risk, nor
does the Company have any plans to do so in the future. A 100 basis point
increase in interest rates would have approximately a $200,000 negative impact
on the earnings of the Company.

FOREIGN CURRENT RISK

    The Company manufactures product in the U.S., Italy, The Netherlands, Spain
Germany, France, England and Mexico and sells products worldwide. Therefore the
Company's operating results are subject to fluctuations in foreign currency
exchange rates, as well as the translation of its foreign operations into U.S.
dollars. The risks associated with operating in foreign currencies could
adversely affect the Company's future operating results. Additionally, currency
fluctuations could improve the competitive position of the Company's foreign
competition if the value of the U.S. Dollar rises in relation to the local
currencies of such competition. The Company sometimes enters into forward
exchange contracts to manage exposure related to certain foreign currency
commitments, certain foreign currency denominated balance sheet positions and
anticipated foreign currency denominated expenditures. All forward exchange
contracts are designated as and effective as a hedge and are highly inversely
correlated to the hedged item. If a derivative contract terminates prior to
maturity, the investment is shown at its fair value with the resulting gain or
loss reflected in operating results. Gains and losses on contracts to hedge
identifiable foreign currency commitments are deferred and accounted for as part
of the related foreign currency transaction. Gains and losses on all other
forward exchange contracts are included in current income.

ITEM 8.-- FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    The Company's Financial Statements, together with the auditors' reports
thereon, appear at pages F-1 through F-43 of this annual report Form 10-K.

ITEM 9.-- CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

    None.

                                       33
<PAGE>
                                   PART III.

ITEM 10.--DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

EXECUTIVE OFFICERS AND DIRECTORS

    The executive officers, directors and key employees of the Company as of
April 29, 2000 were as follows:

<TABLE>
<CAPTION>
NAME                                       AGE                            POSITION
----                                     --------   -----------------------------------------------------
<S>                                      <C>        <C>
Laurence S. Levy.......................     44      Chairman of the Board, Vice President and Director

Clifford Press.........................     46      Deputy Chairman of the Board, President and Director

Russell L. Shade, Jr...................     50      Chief Executive Officer and Director

Joseph W. McHugh, Jr...................     45      Vice President and Chief Financial Officer

Gary J. Rauscher.......................     42      President of Robicon

John R. Haddock........................     53      President of PHI

Oddie V. Leopando......................     54      President of Maxima

James A. Colony........................     42      President of Anderson

Renee Koudijs..........................     54      Managing Director of HVE Europa

Edward Levy............................     36      Director

H. Cabot Lodge III.....................     44      Director
</TABLE>

    LAURENCE S. LEVY is the Chairman of the Board and a Vice President of the
Company. Mr. Levy joined the Company in 1988 in connection with its acquisition
and reorganization and has been a member of the Board of Directors since that
time. Since 1988, he has served as Chairman and since 1991 he has been the
Company's Chief Executive Officer. From 1983 to 1986, Mr. Levy was a consultant
with Bain & Co., a leading strategic management company. Mr. Levy is a graduate
of the University of Witwatersrand in South Africa and the Harvard Business
School.

    CLIFFORD PRESS is the Deputy Chairman of the Board, President and a Director
of the Company. Mr. Press joined the Company in 1988 in connection with its
acquisition and reorganization and has been a member of the Board of Directors
since that time. Since 1991, he has served as President. From 1983 to 1986, Mr.
Press was employed by Morgan Stanley & Co., Incorporated in its Mergers and
Acquisitions Department. Mr. Press is a graduate of Oxford University and the
Harvard Business School. Mr. Press is also a director of Buck Hill Falls
Company.

    RUSSELL L. SHADE, JR. is the Chief Executive Officer and a Director of the
Company. Prior to joining the Company, Mr. Shade was Vice President, Industrial
Systems, at GE. Mr. Shade was named a Corporate Officer of GE and Vice President
of GE Drive Systems in March 1995. During his 25-year career with GE, Mr. Shade
held numerous design, engineering, and manufacturing positions in power
generation, as well as general management positions in the military and
industrial product lines. Mr. Shade graduated from M.I.T with a Master of
Science degree in Mechanical Engineering and holds five U.S. patents.

    JOSEPH W. MCHUGH, JR. is a Vice President and the Chief Financial Officer of
the Company. Mr. McHugh joined the Company in January 1992. From 1983 to 1992,
Mr. McHugh worked at GCA Corporation as a Division Controller and later as
Controller. In the former capacity, he participated in the workout and
recapitalization of GCA before its purchase in 1988 by General Signal. From 1977
to 1983, Mr. McHugh served in various financial management positions at
Honeywell Information

                                       34
<PAGE>
Systems. Mr. McHugh is a Certified Management Accountant and received both a
Bachelor of Science degree in accounting and a Masters degree in Business
Administration from Bentley College.

    GARY J. RAUSCHER was appointed acting President of Robicon effective
June 25, 1999 and subsequently appointed as President on January 18, 2000. Prior
to being appointed President, Mr. Rauscher was Vice President of Engineering
from 1996. From 1984 to 1996, Mr. Rauscher worked at Allen-Bradley, a division
of Rockwell International. He held numerous engineering management positions in
the Industrial Automation Products Group and in Corporate Research and
Engineering. From 1980 to 1984 he worked at Reliance Electric on large drive
systems for Paper Industry applications. Mr. Rauscher graduated with a Bachelor
degree in Electrical Engineering from Cleveland State University.

    JOHN R. HADDOCK became the President of PHI effective July 6, 1998. Prior to
being appointed President of PHI, Mr. Haddock was Senior Vice President,
Marketing for Ryder Systems, Inc. from 1994 to 1997. Prior to 1994, Mr. Haddock
was employed by GE. During his 13-year career with GE, Mr. Haddock held numerous
general manager and senior marketing positions. Mr. Haddock holds a Masters
degree in business from the Harvard Business School and a Bachelor of Science
degree in Mechanical Engineering from the University of Birmingham, England.

    ODDIE V. LEOPANDO has served as President of Datcon Instrument Company since
November 1995. Prior to joining the Company, Mr. Leopando was employed by
MascoTech, Inc. as President of the MascoTech Body Systems & Assembly Division
from 1994 to 1995. From 1991 to 1994, Mr. Leopando was the Senior Vice
President/General Manager of MascoTech Manufacturing & Assembly Division. Prior
to 1991, Mr. Leopando acted in managerial roles in several other companies,
including Massey Ferguson, Inc. and the Chrysler Corporation. Mr. Leopando
earned a Masters of Business Administration in Finance and Operations from the
University of Detroit and a Bachelor of Science in Mechanical Engineering from
the Mapua Institute of Technology in Manila, Philippines. Mr. Leopando is a
licensed professional engineer.

    JAMES A. COLONY became the president of Anderson effective July 6, 1998.
Prior to being appointed President of Anderson, Mr. Colony was employed by ITT
Cannon as the General Manager of Mobile Communications. From 1987 to 1995, Mr.
Colony was employed by FMS Corporation, most recently as the Vice President,
Business Development. From 1978 to 1987, Mr. Colony held various general
manager, engineering and manufacturing positions at the Electro-Optical Division
of the Hughes Aircraft Company. Mr. Colony earned a Bachelor of Science in
Electronics Engineering at Missouri Institute of Engineering.

    RENEE KOUDIJS has served as Managing Director of HVE Europa since May 1993,
and served as Engineering and Research and Development Manager at HVE Europa
from 1978 to 1993. From 1976 to 1978, Mr. Koudijs served as Engineering Manager
at Unicorp. Prior to that, Mr. Koudijs founded the Netherlands division of Sola
Basic Industries. Mr. Koudijs graduated from the Industrial and Commercial
Mechanical and Electrical College in The Netherlands and has a License for
Business Operation in The Netherlands through the General Commercial School.

    EDWARD LEVY became a Director of the Company effective August 8, 1997. Mr.
Levy has been a Managing Director of CIBC Oppenheimer, since August 1995.
Between 1991 and 1995, Mr. Levy held various positions at The Argosy Group L.P.
culminating in the position of Managing Director. Mr. Levy has also held
positions in the Mergers and Acquisitions Group of Drexel Burnham Lambert
Incorporated and the Corporate Finance Department of Kidder, Peabody & Co.
Incorporated. Mr. Levy is a graduate of Connecticut College. Mr. Levy is also a
director of Heating Oil Partners, L.P., Norcross Safety Products L.L.C. and
DSMax International Inc.

    H. CABOT LODGE III became a Director of the Company effective August 8,
1997. Mr. Lodge is Executive Vice President of iStar Financial, the largest
publicly traded finance company focused on the commercial real estate industry.
He is a principal of Carmel Lodge LLC, a New York based financial

                                       35
<PAGE>
advisory firm he founded in 1996. Mr. Lodge also served as Executive Vice
President, Managing Director and in other senior management positions at W.P.
Carey & Co., an investment banking firm from 1983 to 1995. Mr. Lodge is a
director of Meristar Hospitality Corporation and of TelAmeria Media, Inc. From
1995 to 1997 Mr. Lodge was Chairman of Superconducting Core Technologies, Inc.
("SCT"), a manufacturer of high tech wireless telecommunications equipment he
co-founded in 1988. Mr. Lodge is a graduate of Harvard University and the
Harvard Business School.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

    Not applicable.

ITEM 11.--EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

    During fiscal 2000, 1999 and 1998 Laurence S. Levy and Clifford Press, the
Company's Chairman of the Board and a Director, and President and a Director,
respectively (who together comprised the Board of Directors during fiscal 1997)
established the compensation of the Company's executive officers, including
their own compensation. The Board of Directors established the Compensation
Committee and appointed Mr. Edward Levy and Mr. Clifford Press as members during
the second quarter of fiscal 1998.

EXECUTIVE COMPENSATION

    Not applicable.

EMPLOYMENT AGREEMENTS

    Russell L. Shade, Jr., the Company's Chief Operating Officer and a Director,
entered into an employment agreement with the Company (the "Employment
Agreement"), dated February 24, 1998. For each year of Mr. Shade's employment,
the Compensation Committee of the Company's Board of Directors will establish a
base salary and an incentive compensation program generally based upon the
Company's performance. The Employment Agreement contains a customary
confidentiality provision and an agreement that Mr. Shade will not, for three
years after his employment ends, engage in business competitive with the Company
or solicit customers or employees of the Company.

    The Employment Agreement also provides shadow stock benefits, shadow stock
appreciation benefits and deferred compensation benefits described in the
following paragraphs.

    Upon the commencement of his employment with the Company, Mr. Shade received
twenty-two shadow stock units. The stock units vest in yearly increments over a
period of five years, beginning on April 30, 1998, with each vested stock unit
representing the right to receive, following the fifth anniversary after the
vesting thereof, an amount of cash equal to the market value of a share of the
Letitia common stock determined as of the end of the most recent fiscal quarter.

    Upon termination of employment for any reason other than death, all unvested
stock units shall be forfeited, and any vested units shall become redeemable by
the Company, at the market value of a share of Letitia Common Stock determined
as of the end of the most recent fiscal quarter preceding redemption, at any
time, but in any event the Company shall redeem the vested units on the
scheduled payment date therefor. Upon death, all stock units vest and each stock
unit shall be promptly redeemed at the market value of a share of common stock
of Letitia Corporation, the corporate parent of the Company, at the end of the
most recent fiscal quarter.

    The Employment Agreement further provides for a stock appreciation
arrangement whereby Mr. Shade is entitled to receive additional shadow stock
units each year during the term of the Employment Agreement. For the Company's
1999 fiscal year, the shadow stock units granted pursuant to this arrangement
shall represent 0.4% of the Company's outstanding common stock. For the
Company's fiscal 2000 and each subsequent year, the number of shadow stock units
granted shall be

                                       36
<PAGE>
calculated based on a formula taking into account Mr. Shade's base salary and
the market value of Letitia Common Stock.

    Under the deferred compensation arrangement, the Company shall contribute
$35,000 per year into a designated account and Mr. Shade may elect to make
additional contributions. Mr. Shade will receive distributions from the account
in ten installments, commencing in 2011, or earlier upon termination of
employment or death.

    The Employment Agreement terminates upon Mr. Shade's resignation or
discharge, with or without cause. Upon termination by reason of disability,
death, or resignation or discharge under certain circumstances, Mr. Shade shall
be entitled to receive compensation through the date of his termination,
including all benefits enjoyed under the Employment Agreement. Upon termination
by reason of resignation or discharge under certain other circumstances, Mr.
Shade shall be entitled to receive his base salary and all benefits until the
earlier of one year following the date of termination or receipt of income
earned from a source unaffiliated with the Company.

VALUE CREATION PLAN AND RELATED PLANS

    The Company's Value Creation Plan (the "VCP") is a long-term cash incentive
compensation plan for certain key officers and employees of the Company which is
intended to provide participants in the VCP with an opportunity to share in an
increase in the value of the Company or operating unit with which the
participating employee is associated. The VCP is designed to provide incentives
for employees in the Company's by tracking increases in the economic value based
generally upon a multiple of EBITDA, as defined in the VCP, but also reflecting
actual proceeds of dispositions of operating units or public offerings of
operating units. An aggregate amount equal to up to 5-7% of the incremental
increases in value achieved in the Company is allocated to the VCP. In the event
that the value of the Company or any of the operating units increases over time,
the interests of its participating employees in the VCP will increase
proportionally.

    Interests are granted in the VCP to certain key employees as they are hired
or promoted and vest over five years. The value of an employee's interest is
based on increases in value (based generally on a multiple of EBITDA but also
reflecting actual proceeds of dispositions of operating units or public
offerings by operating units) from the date of grant to the end of the year
prior to the determination date. Vested interests are cashed out when an
employee leaves the Company or retires, or when his operating unit is sold or he
is transferred to another division; provided that if the employee is dismissed
for cause, his interests (vested and unvested) are forfeited. Subject to the
Company's discretion to defer cash payments, an employee may cash out up to 50%
of his vested interest while remaining employed. The VCP is a non-qualified and
non-funded plan. While Messrs. Leopando, Haddock, and McHugh have each received
interests in the VCP, Mr. Laurence S. Levy, Mr. Press and Mr. Shade currently do
not participate in the VCP. As of April 29, 2000, the Company had an accrued
liability of $3.2 million under the VCP.

RETIREMENT PLANS

    The Company maintains the High Voltage Engineering Corporation 401(k)
Retirement Plan, a Section 401(k) savings plan for qualified domestic employees,
pursuant to which the Company matches fixed employee contributions up to $1,800
and currently contributes an annual profit-sharing amount equal to 2.5% of the
employee's annual salary and bonus. Messrs. Laurence S. Levy, Press, Leopando,
Shade, and McHugh currently participate in this plan.

    The Company also maintains the High Voltage Engineering Corporation
Retirement Plan (the "Retirement Plan"), a defined benefit plan, which provides
for the payment of annual pension benefits, payable on retirement, based on the
participating employee's salary during the time of accrual. Participation in the
Retirement Plan, and the accrual of additional benefits thereunder, was frozen
by the Company in 1992. Messrs. Laurence S. Levy and Press will receive monthly
benefits under the

                                       37
<PAGE>
Retirement Plan of $191.05 and $148.35, respectively, beginning upon their
retirement. Messrs. Shade and Haddock do not participate in the Retirement Plan.

STOCK APPRECIATION RIGHTS PLAN

    In 1998 PHI created a Phantom Stock Appreciation Rights Plan ("PSAR") which
has two variations, an Appreciation Rights Plan, under the terms of which PSARs
are offered at the fair market value ("FMV") of PHI and its wholly owned
subsidiaries including, CE&A and a Discounted Appreciation Rights Plan, under
the terms of which PSARs are offered at a discounted FMV. The authorized amount
of PSARs which can be issued under these Plans equals 12% of the authorized
capital of PHI. The Plans are designed to provide incentives for employees of
PHI and CE&A, by tracking increases in the FMV of the combined PHI and CE&A
subsidiaries. The exercise rights under the Plans are subject to vesting
schedules ranging from 4 to 5 years from date of award. The Plans have a ten
year termination date. Participants in the Plans are key employees, including
officers. Discounted PSARs were issued to certain employees of CE&A who at the
time of the acquisition of CE&A by PHI in July of 1999 had an "in the money
value" of their unvested CE&A options. The discount amounted equal 75% of the
then combined FMV. The CE&A vesting schedule was carried over for the exercise
rights of these discounted PSARs. The total number of PSARs issued and
outstanding as of April 29, 2000, were 417,216. Additionally, PHI created a
Deferred Value Plan, which is a deferred compensation plan and does not include
the issuance of PSARs. The Plan was created for the benefit of certain CE&A
employees at the time of the CE&A acquisition in July of 1999. Awards earn
interest at the rate of prime as of July 1st of each year, plus 1%. Exercise
rights are subject to a four or five year vesting schedule from date of award.
No additional awards have been made under this Plan since its inception. At the
time employees exercise their vested rights under any of these three plans, they
must execute a Protection Agreement which, among other items, stipulates that
for a period of 18 months after termination of a Participant's employment by
PHI, or any of its subsidiaries (the "PHI Group") the employee cannot
participate in any business which is then in competition with the PHI Group.
Appreciation Rights PSARs are awarded at their FMV to certain employees as they
are hired or promoted. All three Plans are non-qualified and non-funded. As of
April 29, 2000, the Company has recorded an accrued liability of $2.7 million
under these Plans.

BONUS PLAN

    The Company has in effect various plans pursuant to which the Company's
executive officers and certain other employees may receive incentive cash
bonuses based upon the achievement of certain earnings goals in the preceding
fiscal by an operating unit or by the Company as a whole, and upon individual
performance. The amounts of incentive and discretionary awards, and the
performance criteria for such awards, are currently fixed by the Board of
Directors. Such amounts, and the related performance criteria, will be set by
the Compensation Committee.

ITEM 12.--SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The following table sets forth information concerning the beneficial
ownership of the Company's common stock, as of the date of this filing by: (i)
each person known to the Company to own beneficially more than 5% of the
outstanding shares of common stock; (ii) each director and each executive
officer named in the "Summary Compensation Table;" and (iii) all directors and
executive

                                       38
<PAGE>
officers of the Company as a group. All shares are owned by such person with
sole voting and investment power.

<TABLE>
<CAPTION>
                                                                    COMMON STOCK
                                                              -------------------------
                                                              NUMBER OF    PERCENT OF
NAME OF STOCKHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS         SHARES     COMMON SHARES
------------------------------------------------------        ---------   -------------
<S>                                                           <C>         <C>
Letitia Corporation(1)......................................    1,000         92.4%
Laurence S. Levy(1)(2)......................................    1,000         92.4%
Clifford Press(1)(3)........................................    1,000         92.4%
Russell L. Shade, Jr........................................     0.60(4)        --(5)
James A. Colony.............................................       --           --
John R. Haddock.............................................       --           --
Oddie V. Leopando...........................................       --           --
Edward Levy.................................................       --           --
H. Cabot Lodge III..........................................       --           --
Directors and executive officers as a group.................    1,000         92.4%
</TABLE>

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

(1) The address of each of these persons or organizations is c/o Hyde Park
    Holdings, Inc., 595 Madison Avenue, 35th Floor, New York, New York 10022.

(2) All of such shares of the Company's Common Stock (92.4% of the outstanding
    common stock) are held by Letitia Corporation. Mr. Laurence S. Levy is the
    Chairman of the Board, Treasurer and Secretary of Letitia Corporation. Mr.
    Laurence S. Levy is also a limited partner of, and an executive officer and
    50% shareholder of the corporate general partner of, a limited partnership
    that owns all of the stock of Letitia Corporation. Mr. Laurence S. Levy
    disclaims beneficial ownership of any shares of the Company's common stock.

(3) All of such shares of the Company's common stock (92.4% of the outstanding
    common stock) are held by Letitia Corporation. Mr. Press is the President of
    Letitia Corporation. Mr. Press is also a limited partner of, and an
    executive officer and 50% shareholder of the corporate general partner of, a
    limited partnership that owns all of the stock of Letitia Corporation. Mr.
    Press disclaims beneficial ownership of any shares of the Company's common
    stock.

(4) Represents shares issuable upon exercise of warrants to purchase shares of
    the Company's common stock.

(5) Mr. Shade beneficially own less than 1% of the Company's common stock.

ITEM 13.--CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    Laurence S. Levy and Clifford Press, officers and directors of the Company,
are directors of Letitia Corporation, which owns 92.4% of the Company's
outstanding Common Stock. Hyde Park Holdings, Inc. ("Hyde Park"), a corporation
wholly owned by Laurence S. Levy and Clifford Press, is a minority stockholder
of Letitia Corporation.

    Historically, the Company has paid to Hyde Park and its affiliates: (i) an
annual fee for services performed in managing the Company; (ii) an acquisition
fee payable upon the closing of certain acquisitions by the Company of
additional businesses; and (iii) a disposition fee payable upon the closing of
the disposition of certain divisions or subsidiaries (or significant groups of
assets) of the Company.

    The management fees paid to Hyde Park and its affiliates were $750,000,
$750,000 and $769,535 for fiscal 2000, 1999 and 1998, respectively. Under the
terms of the Indenture, while there are any of the Senior Notes outstanding,
management fees to Hyde Park in excess of $750,000 for any fiscal year of the
Company subsequent to August 8, 1997 are limited by the Indenture. Acquisition
and disposition fees have been calculated as an amount equal to 1% of the sum of
the total price paid or received for shares of stock (or in the case of an asset
acquisition or disposition, the total price paid for such assets) in such
acquisition or divestiture.

                                       39
<PAGE>
                                    PART IV.

ITEM 14.-- EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

<TABLE>
<CAPTION>
       EXHIBIT
       NUMBER                                   DESCRIPTION
---------------------                           -----------
<C>                     <S>
         2.3            Asset Purchase Agreement between GEI Acquisition Inc. and
                        High voltage Engineering Corporation, dated as of March 25,
                        1998.**

         2.4            CE&A Purchase Agreement.***

         3.1            Restated Articles of Organization of the Registrant.*

         3.2            Amended and Restated By-laws of the Registrant.*

         4.1            Indenture, dated as of August 8, 1997, by and between
                        Registrant and State Street Bank and Trust Company as
                        Trustee.*

         4.2            First Supplemental Indenture, dated as of March 19, 1998 to
                        Indenture, dated as of August 8, 1997, by and between the
                        Registrant and State Street Bank and Trust Company, as
                        Trustee.**

         4.3            Registration Rights Agreement, dated as of March 19, 1998,
                        by and among the Registrant and CIBC Oppenheimer Corp.**

         4.4            Form of Exchange Note.**

        10.1            Senior Secured Revolving Credit Agreement, dated as of
                        August 8, 1997, by and between the Registrant and Fleet
                        National Bank.*

        10.2            Lease Agreement, dated as of November 10, 1988, by and
                        between Corporate Property Associates 8, L.P. and Datcon
                        Instrument Company (Lancaster, PA).*

        10.3            Lease Agreement, dated as of November 10, 1988, by and
                        between Corporate Property Associates 8, L.P. and the
                        Registrant (Sterling, MA).*

        10.4            Installment Sale Agreement, dated as of September 23, 1994,
                        by and between Monroeville Area Industrial Development
                        Corporation and Robicon Corporation (New Kensington, PA).*

        10.5            Lease with Option to Purchase, dated as of July 15, 1996, by
                        and between Raija Olkkola & Joseph Grammel, Co-Trustees of
                        THO Trust and Registrant. (Sterling, MA).*

        10.6            Amendment to Lease Agreement, dated as of May 8, 1996, by
                        and between Corporate Property Associates 8, L.P. and the
                        Registrant (Sterling, MA).*

        10.7            Value Creation Plan of the Registrant.*

        10.8            High Voltage Engineering Corporation Employment Agreement,
                        by and between Registrant and Russell L. Shade, Jr., dated
                        as of February 24, 1998.**

        10.9            Agreement and Plan of Merger, dated May 7, 1997, by and
                        between PHI Acquisition Holdings, Inc. and Chase Venture
                        Capital Associates, L.P.*

        12              Statement of Computation of Financial Ratios.

        21.1            List of Subsidiaries.

        24.1            Power of Attorney (included in signature page to Form 10-K).

        27.0            Financial Data Schedule.
</TABLE>

                                       40
<PAGE>
------------------------

*   Incorporated by reference from the Registrant's Registration Statement No.
    333-33969, on Form S-4, filed by the Registrant with respect to $135,000,000
    aggregate principal amount of the Registrant's 10 1/2% Senior Notes due
    2004.

**  Incorporated by reference from the Registrant's Registration Statement No.
    333-51643, on Form S-4, filed by the Registrant with respect to $20,000
    aggregate principal amount of the Registrants 10 1/2% Senior Notes due 2004.

*** Incorporated by reference to the Registrant's Current Report on Form 8-K,
    dated April 23, 1999 and filed on May 7, 1999, File No. 1-4737.

(b) All schedules have been omitted because either they are not required, are
    not applicable, or the information is otherwise set forth in the
    Consolidated Financial Statements and notes thereto.

REPORTS ON FORM 8-K

    (i) On February 2, 2000, the Company filed with the Securities and Exchange
Commission a Current Report on Form 8-K, dated February 2, 2000, in which the
Company reported under Item 2 of Form 8-K the acquisition of all of the
outstanding capital stock of Ansaldo Sistemi Industriali, S.p.A. The Company
also filed as part of Item 7 of this report an exhibit copy of the Share
Purchase Agreement, dated as of October 7, 1999, by and between the Company and
Ansaldo Invest, S.p.A.

    On April 2, 2000, the Company filed with the Securities and Exchange
Commission a Current Report on Form 8-K/A, dated April 2, 2000, in which the
Company reported under Item 2 of Form 8-K/A the acquisition of all of the
outstanding capital stock of Ansaldo Sistemi Industriali, S.p.A. The Company
also filed as part of Item 7 of this report an exhibit copy of the Share
Purchase Agreement, dated as of October 7, 1999, by and between the Company and
Ansaldo Invest, S.p.A.

    On April 13, 2000, the Company filed with the Securities and Exchange
Commission a Current Report on Form 8-K/A, dated April 13, 2000, in which the
Company reported under Item 2 of Form 8-K/A the acquisition of all of the
outstanding capital stock of Ansaldo Sistemi Industriali, S.p.A. The Company
also filed as part of Item 7 of this report an exhibit copy of the Share
Purchase Agreement, dated as of October 7, 1999, by and between the Company and
Ansaldo Invest, S.p.A.

                                       41
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                PAGE
                                                              --------
<S>                                                           <C>
Consolidated Financial Statements--April 29, 2000, April 24,
  1999, April 25, 1998
  Report of Grant Thornton LLP, Independent Certified Public
    Accountants.............................................    F-2
  Consolidated Balance Sheets...............................    F-3
  Consolidated Statements of Operations.....................    F-4
  Consolidated Statements of Stockholders' Deficiency.......    F-5
  Consolidated Statements of Cash Flows.....................    F-6
  Notes to Consolidated Financial Statements................    F-8
</TABLE>

                                      F-1
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
High Voltage Engineering Corporation

    We have audited the accompanying consolidated balance sheets of High Voltage
Engineering Corporation and Subsidiaries as of April 29, 2000 and April 24, 1999
and the related consolidated statements of operations, stockholders' deficiency,
and cash flows for each of the three years in the period ended April 29, 2000.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audits. We did not audit the 1998 financial statements
of Physical Electronics, Inc. and Subsidiaries, a wholly-owned subsidiary
acquired on August 8, 1997, which reflect total assets and revenues constituting
31% and 23%, respectively, of the fiscal 1998 consolidated totals. Those
statements were audited by other auditors whose report thereon has been
furnished to us and our opinion, insofar as it relates to the amounts included
for Physical Electronics, Inc. and Subsidiaries, is based solely on the report
of the other auditors.

    We conducted our audits in accordance with generally accepted auditing
standards in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the report of other
auditors provide a reasonable basis for our opinion.

    In our opinion, based on our audits and the report of the other auditors,
the financial statements referred to above present fairly, in all material
respects, the consolidated financial position of High Voltage Engineering
Corporation and Subsidiaries as of April 29, 2000 and April 24, 1999 and the
consolidated results of their operations and their consolidated cash flows for
each of the three years in the period ended April 29, 2000, in conformity with
generally accepted accounting principles in the United States.

GRANT THORNTON LLP

Boston, Massachusetts
July 14, 2000 (except for note H
as to which the date is August 17, 2000)

                                      F-2
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
                                      ASSETS
CURRENT ASSETS
  Cash and cash equivalents.................................  $  5,433    $ 31,459
  Restricted cash...........................................     4,061       1,281
  Accounts receivable, net of allowance for doubtful
    accounts................................................    91,594      58,057
  Refundable income taxes...................................     1,075         479
  Inventories...............................................    51,918      39,340
  Costs and earnings in excess of billings..................     7,414          --
  Prepaid expenses and other current assets.................    11,207       1,939
                                                              --------    --------
      Total current assets..................................   172,702     132,555
PROPERTY, PLANT AND EQUIPMENT, NET..........................   101,787      53,481
INVESTMENT IN JOINT VENTURE.................................     1,829       1,805
ASSETS HELD FOR SALE........................................     3,825       3,759
OTHER ASSETS, NET...........................................    47,210      16,494
RESTRICTED CASH.............................................        --      16,376
COST IN EXCESS OF NET ASSETS ACQUIRED, NET..................    36,646      25,765
                                                              --------    --------
                                                              $363,999    $250,235
                                                              ========    ========
                     LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
  Current maturities of long-term debt obligations..........  $ 10,067    $  4,139
  Foreign credit line.......................................     1,937          44
  Accounts payable..........................................    84,554      22,010
  Accrued interest..........................................     4,207       3,071
  Accrued liabilities.......................................    43,837      24,399
  Billings in excess of costs...............................     5,788       1,395
  Advance payments by customers.............................     7,450       4,724
  Federal, foreign and state income taxes payable...........     3,754       3,904
  Deferred income taxes.....................................     1,024       1,570
  Redeemable put warrants...................................     2,900          --
                                                              --------    --------
      Total current liabilities.............................   165,518      65,256
REDEEMABLE PUT WARRANTS.....................................        --       2,900
LONG-TERM OBLIGATIONS, LESS CURRENT MATURITIES..............   193,626     171,704
DEFERRED INCOME TAXES.......................................     6,485       6,838
OTHER LIABILITIES...........................................    31,979       9,648
REDEEMABLE PREFERRED STOCK (AGGREGATE LIQUIDATION PREFERENCE
  OF $43,137 AS OF APRIL 29, 2000)..........................    40,642      35,229
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIENCY
  Common stock..............................................         1           1
  Paid-in-capital...........................................    19,527      19,527
  Accumulated deficit.......................................   (94,863)    (62,342)
  Common stock warrants.....................................     2,200       2,200
  Other comprehensive (loss)................................    (1,116)       (726)
                                                              --------    --------
      Total stockholders' deficiency........................   (74,251)    (41,340)
                                                              --------    --------
                                                              $363,999    $250,235
                                                              ========    ========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      F-3
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                      YEARS ENDED
                                                        ----------------------------------------
                                                         APRIL 29,     APRIL 24,     APRIL 25,
                                                            2000          1999          1998
                                                        ------------   ----------   ------------
<S>                                                     <C>            <C>          <C>
Net sales.............................................  $    300,174   $  248,054   $    217,907
Cost of sales (Includes restructuring
  charge--inventory markdown of $855 in fiscal
  2000)...............................................       211,831      159,209        139,174
                                                        ------------   ----------   ------------
  Gross profit........................................        88,343       88,845         78,733
Administrative and selling expenses...................        62,120       51,655         49,292
Research and development expenses.....................        20,910       17,579         15,456
Write off of purchased in-process research and
  development.........................................         1,650           --          8,100
Restructuring charge..................................         1,795          580            186
Reimbursed environmental and litigation costs, net....           404          293          3,633
Other, net............................................         7,374       (1,424)           451
                                                        ------------   ----------   ------------
  (Loss) income from operations.......................        (5,910)      20,162          1,615
Interest expense......................................        21,791       19,854         18,159
Interest income.......................................           921        1,897          1,008
                                                        ------------   ----------   ------------
  (Loss) income from continuing operations before
    income taxes, discontinued operations and
    extraordinary item................................       (26,780)       2,205        (15,536)
Income taxes (credit).................................           887       (2,112)          (610)
                                                        ------------   ----------   ------------
  (Loss) income from continuing operations before
    discontinued operations and extraordinary item....       (27,667)       4,317        (14,926)
Discontinued operations:
  Income from discontinued operations, net of income
    taxes.............................................            --        1,083            875
  Gain on disposal of discontinued operations, net of
    income taxes......................................           559        9,633          8,771
                                                        ------------   ----------   ------------
                                                                 559       10,716          9,646
Extraordinary loss, net of income taxes...............            --           --         (7,464)
                                                        ------------   ----------   ------------
Net (loss) income.....................................       (27,108)      15,033        (12,744)
Preferred dividends...................................        (4,965)      (4,329)        (3,085)
Accretion of redeemable preferred stock...............          (448)        (443)          (270)
                                                        ------------   ----------   ------------
Net (loss) income applicable to common stockholders...  $    (32,521)  $   10,261   $    (16,099)
                                                        ============   ==========   ============
Basic (loss) income per common share:
  Continuing operations...............................  $ (30,544.78)  $  (420.13)  $ (17,262.51)
  Income from discontinued operations.................            --     1,000.00         826.25
  Gain on disposal of discontinued operations.........        516.16     8,894.74       8,282.34
  Extraordinary item..................................            --           --      (7,048.16)
                                                        ------------   ----------   ------------
  Net (loss) income applicable to common
    stockholders......................................  $ (30,028.62)  $ 9,474.61   $ (15,202.08)
                                                        ============   ==========   ============
Diluted (loss) income per common share:
  Continuing operations...............................  $ (30,544.78)  $  (217.46)  $ (17,262.51)
  Income from discontinued operations.................            --       875.51         826.25
  Gain on disposal of discontinued operations.........        516.16     7,787.39       8,282.34
  Extraordinary item..................................            --           --      (7,048.16)
                                                        ------------   ----------   ------------
  Net income applicable to common stockholders........  $ (30,028.62)  $ 8,445.44   $ (15,202.08)
                                                        ============   ==========   ============
Weighted average common stock outstanding.............         1,083        1,083          1,059
Weighted average common stock outstanding and dilutive
  equivalents outstanding.............................         1,237        1,237          1,210
                                                        ============   ==========   ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      F-4
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                             COMMON        OTHER
                                         COMMON    PAID-IN    ACCUMULATED    STOCK     COMPREHENSIVE
                                         STOCK     CAPITAL      DEFICIT     WARRANTS      (LOSS)        TOTAL
                                        --------   --------   -----------   --------   -------------   --------
<S>                                     <C>        <C>        <C>           <C>        <C>             <C>
Balance, April 26, 1997...............     $1      $17,326      $(54,104)    $   --       $    41      $(36,736)
Net loss..............................                           (12,744)                               (12,744)
Preferred stock dividends.............                            (3,085)                                (3,085)
Accretion of redeemable preferred
  stock...............................                              (270)                                  (270)
Distribution to fund Letitia common
  stock repurchase....................                            (2,400)                                (2,400)
Change in foreign currency
  translation.........................                                                       (383)         (383)
Proceeds from issuance of common stock
  warrants............................                                        2,200                       2,200
Proceeds from issuance of common
  stock...............................               2,201                                                2,201
                                           --      -------      --------     ------       -------      --------
Balance, April 25, 1998...............      1       19,527       (72,603)     2,200          (342)      (51,217)
Net income............................                            15,033                                 15,033
Preferred stock dividends.............                            (4,329)                                (4,329)
Accretion of redeemable preferred
  stock...............................                              (443)                                  (443)
Change in foreign currency
  translation.........................                                                       (384)         (384)
                                           --      -------      --------     ------       -------      --------
Balance, April 24, 1999...............      1       19,527       (62,342)     2,200          (726)      (41,340)
Net loss..............................                           (27,108)                               (27,108)
Preferred stock dividends.............                            (4,965)                                (4,965)
Accretion of redeemable preferred
  stock...............................                              (448)                                  (448)
Change in foreign currency
  translation.........................                                                       (390)         (390)
                                           --      -------      --------     ------       -------      --------
Balance, April 29, 2000...............     $1      $19,527      $(94,863)    $2,200       $(1,116)     $(74,251)
                                           ==      =======      ========     ======       =======      ========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      F-5
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                         YEARS ENDED
                                                              ---------------------------------
                                                              APRIL 29,   APRIL 24,   APRIL 25,
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Cash flows from operating activities:
  Net (loss) income.........................................  $(27,108)    $15,033    $(12,744)
  Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities:
    Income from discontinued operations, net of income
      taxes.................................................        --      (1,083)       (875)
    Extraordinary item, net of income taxes.................        --          --       1,574
    Depreciation and amortization...........................    16,643      10,347       7,064
    Write down for impairment of long lived assets and
      assets held for sale to net realizable value..........     1,236          --          --
    Restructuring charge--inventory markdown................       855          --          --
    Write-off of purchased inventory written up to selling
      price.................................................        --          --       1,320
    Write-off of purchased research and development.........     1,650          --       8,100
    Non-cash interest.......................................     1,223       1,421       3,079
    Deferred income taxes...................................      (897)      2,203         803
    Undistributed earnings of affiliate.....................      (269)       (222)       (175)
    Gain on sale of discontinued operations.................      (559)     (9,633)     (8,771)
    Gain on sale of assets and other........................      (149)       (364)     (1,229)
    Change in assets and liabilities, net of effects of
      business acquisitions and divestitures:
      Accounts receivable...................................    (1,874)        455      (8,656)
      Proceeds form the sale of accounts receivable.........    13,200          --          --
      Refundable income taxes...............................      (596)      2,013         102
      Inventories...........................................      (636)     (4,138)      3,723
      Cost and earnings in excess of billings...............     4,706          --          --
      Prepaid expenses and other current assets.............    (3,818)         56           7
      Other assets..........................................      (789)     (1,416)     (2,902)
      Accounts payable, accrued interest and accrued
        liabilities.........................................    (4,069)        (30)      1,775
      Billings in excess of cost............................      (526)         --          --
      Advance payments by customers.........................     2,726        (494)       (144)
      Federal, foreign and state income taxes payable.......    (1,200)     (5,587)     (3,273)
                                                              --------     -------    --------
        Net cash (used in) provided by continuing
          operations........................................      (251)      8,561     (11,222)
        Net cash provided by discontinued operations........        --       1,266       2,217
                                                              --------     -------    --------
        Net cash (used in) provided by operating
          activities........................................      (251)      9,827      (9,005)

Cash flows from investing activities:
  Additions to property, plant and equipment, continuing
    operations..............................................   (12,757)     (8,761)     (4,791)
  Additions to property, plant and equipment, discontinued
    operations..............................................        --        (332)     (1,355)
  Acquisition of Ansaldo Sistemi Industriali, S.p.A., net of
    cash acquired...........................................   (24,202)         --          --
  Acquisition of Charles Evans & Associates, net of cash
    acquired................................................   (38,001)         --          --
  Acquisition of Industrial Power Rectifier.................        --      (3,226)         --
  Acquisition of Stewart Warner, net of cash acquired.......        --          --     (24,690)
  Acquisition of Physical Electronics, net of cash
    acquired................................................        --          --     (54,272)
  Proceeds from sales of discontinued operations, net of
    expenses................................................     1,190      24,695      20,075
  Proceeds from sales of assets and other, net of
    expenses................................................     3,215         681       4,138
  Other.....................................................        --          49        (117)
                                                              --------     -------    --------
        Net cash (used in) provided by investing
          activities........................................   (70,555)     13,106     (61,012)
                                                              --------     -------    --------
</TABLE>

                                      F-6
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                         YEARS ENDED
                                                              ---------------------------------
                                                              APRIL 29,   APRIL 24,   APRIL 25,
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Cash flows from financing activities:
  Net payments from foreign credit line.....................     2,084      (2,129)       (282)
  Net decrease (increase) in restricted cash................    12,870      (2,986)    (12,461)
  Principal borrowing on long-term obligations..............    19,272      (2,084)    (56,609)
  Net borrowings (payments) under senior credit agreement...     8,374          --      (7,702)
  Proceeds from the issuance of long-term obligations, net
    of issuance costs.......................................     1,326          --     147,597
  Proceeds from the issuance of preferred stock, net of
    issuance costs..........................................        --          --      29,392
  Proceeds from the issuance of common stock................        --          --       2,201
  Proceeds from the issuance of redeemable put warrants and
    common stock warrants...................................        --          --       2,200
  Distribution to fund Letitia common stock repurchase......        --          --      (2,250)
  Cash dividends paid.......................................        --          --      (2,142)
  Redemption of redeemable put warrants.....................        --          --      (2,500)
  Redemption of redeemable preferred stock..................        --          --     (11,621)
  Cash overdraft, continuing operations.....................     2,219        (445)       (210)
  Cash overdraft, discontinued operations...................        --         (80)       (153)
                                                              --------     -------    --------
        Net cash provided by (used in) financing
          activities........................................    46,145      (7,724)     85,460
                                                              --------     -------    --------
Effect of foreign exchange rate changes on cash.............    (1,365)       (268)       (467)
                                                              --------     -------    --------
        Net (decrease) increase in cash and cash
          equivalents.......................................   (26,026)     14,941      14,976
Cash and cash equivalents, beginning of year................    31,459      16,518       1,542
                                                              --------     -------    --------
Cash and cash equivalents, end of year......................  $  5,433     $31,459    $ 16,518
                                                              ========     =======    ========

Supplemental Disclosure of Cash Flow Information:
  Cash paid for:
    Interest................................................  $ 19,368     $18,457    $ 21,014
    Income taxes............................................     3,919       2,013       1,043
Supplemental Schedule of Non-cash Investing and Financing
  Activities:
  Preferred stock dividends-in-kind and issuable preferred
    stock dividends-in-kind.................................  $  4,965     $ 4,329    $    942
  Leased asset additions....................................     1,367       3,723         635
  Fixed assets transferred to inventory.....................        --         243         740
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      F-7
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    A summary of significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows:

NATURE OF OPERATIONS

    High Voltage Engineering Corporation (the "Company") operates a diversified
group of five middle market industrial and technology based manufacturing
businesses with multiple product lines that serve a broad spectrum of original
equipment manufacturers and end-users. Business and customer concentration is
minimal due to the diversified nature of its portfolio of businesses, with
respect to products sold and end-markets served on a world-wide basis. Examples
of end-markets served include process automation, metal and steel, freshwater
and wastewater treatment, petrochemicals, pulp and paper, marine and cable,
semiconductor fabrication, chemicals, construction, agriculture, materials
handling, computers, telecommunications, scientific and educational research.

FINANCIAL STATEMENT PRESENTATION

    The Company is 92.4% owned by Letitia Corporation ("Letitia"). The Company's
wholly owned subsidiaries include Ansaldo Sistemi Industriali S.p.A. and
subsidiaries, Robicon Corporation and subsidiaries, Physical Electronics, Inc.
and subsidiaries, Maxima Technologies, Inc. and subsidiaries, Anderson
Interconnect, Inc. and subsidiaries and High Voltage Engineering Europa B.V.

    The consolidated financial statements include the accounts of the Company
and its domestic and foreign subsidiaries after elimination of material
intercompany transactions and balances.

    The Company maintains non-controlling interest in certain affiliated
companies which are accounted for using the equity method. Separate disclosure
is not presented as the amounts are not significant.

ACCOUNTING PERIOD

    The Company operates on a 52 or 53 week fiscal period. The terms "fiscal
2000", "fiscal 1999" and "fiscal 1998" refer to the Company's fiscal years ended
April 29, 2000, April 24, 1999 and April 25, 1998, respectively. Fiscal 2000,
fiscal 1999 and fiscal 1998 include the results of operations of the Company for
53 weeks, 52 weeks and 52 weeks, respectively.

REVENUE RECOGNITION

    The Company follows both the completed-contract method and the percentage-of
completion methods of accounting for contract revenue. Contracts are considered
complete upon completion of all essential contract work, including support for
integrated testing and customer acceptance.

    Under the completed-contract method revenue and costs of individual
contracts are included in operations in the year during which they are
completed. Losses expected to be incurred on contracts in progress are charged
to operations in the period such losses are determined. The aggregate of costs
of uncompleted contracts in excess of related billings is shown as a current
asset, and the aggregate of billings on uncompleted contracts in excess of
related costs is shown as a current liability.

    Under the percentage-of-completion method, income is recognized on contracts
as work progresses based on the relationship between total contract revenues and
total estimated contract costs. The

                                      F-8
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
percentage of work completed is determined by comparing the accumulated costs
incurred to date with management's current estimate of total costs to be
incurred at contract completion. Revenue is recognized on the basis of actual
costs incurred plus the portion of income earned.

    Contract costs include all direct material, subcontractor costs, and labor
costs and those indirect costs related to contract performance. Revisions in
profit estimates during the period of a contract are reflected in the accounting
period in which the revised estimates are made on the basis of the stage of
completion at the time. If estimated total costs on a contract indicate a loss,
the entire amount of the estimated loss is provided for currently.

    Costs and estimated earnings in excess of billings on uncompleted contracts
represent revenue recognized in excess of amounts billed to customers. These
amounts are not yet billable under the terms of the contracts and are
recoverable from customers upon various measures of performance. Billings in
excess of costs and estimated earnings on uncompleted contracts represents
billings to customers in excess of earned revenue and advances on contracts.

    Sales of goods that are not part of a long-term contract are recognized upon
shipment of products. Service revenue is recognized when the service is
performed and accepted by the customer.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

    A summary of activity in the allowance for doubtful accounts is as follows:

<TABLE>
<CAPTION>
                                                                         YEARS ENDED
                                                              ---------------------------------
                                                              APRIL 29,   APRIL 24,   APRIL 25,
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Balance at beginning of year................................   $ 2,095     $2,085      $1,857
Provision...................................................       187        105         703
Charge-offs, net of recoveries..............................    (1,581)      (128)       (540)
Acquisitions, divestitures and effect of receivable
  securitization............................................     6,435         33          65
                                                               -------     ------      ------
Balance at end of year......................................   $ 7,136     $2,095      $2,085
                                                               =======     ======      ======
</TABLE>

CASH EQUIVALENTS

    For purposes of the statements of cash flows, all highly liquid debt
instruments purchased with a maturity of three months or less are considered to
be cash equivalents.

    Cash overdrafts included in trade accounts payable were $6,723 and $1,309 at
April 29, 2000 and April 24, 1999, respectively.

    At April 29, 2000 and April 24, 1999, cash in the amounts of $7,765 and
$6,514 respectively, was in uninsured foreign bank accounts, including $4,061
and $1,281, respectively which was used for collateral for a bank guarantee
facility for customer advances.

INVENTORIES

    Inventories are primarily stated at the lower of cost (first-in, first-out
method) or market. Certain inventories are stated at the lower of cost or market
determined by the last-in, first-out method. The

                                      F-9
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
value of LIFO either approximated FIFO or was not material as of April 29, 2000
and April 24,1999, respectively.

PROPERTY, PLANT AND EQUIPMENT

    Property, plant and equipment are recorded at cost. Depreciation and
amortization are provided for in amounts sufficient to relate the cost of
depreciable assets to operations over their estimated service lives. Leasehold
improvements are amortized over the lives of the respective leases or the
service lives of the improvements, whichever is shorter. Leased property under
capital leases is amortized over the lives of the respective leases or over the
service lives of the assets for those leases which substantially transfer
ownership. The straight-line method of depreciation is followed for
substantially all assets for financial reporting purposes, while accelerated
methods are used for tax purposes. Future income taxes resulting from
depreciation temporary differences have been provided for as deferred income
taxes.

    Depreciation is based upon the following estimated useful lives:

<TABLE>
<S>                                                           <C>
Building and building improvements..........................  30 to 40 years
Leasehold improvements......................................  5 to 20 years
Machinery and equipment.....................................  2 to 15 years
Other.......................................................  3 to  5 years
</TABLE>

COST IN EXCESS OF NET ASSETS ACQUIRED

    The cost in excess of net assets acquired (goodwill) is amortized on a
straight-line basis over the expected period of benefit of twenty to forty
years. The Company continually evaluates the carrying value of goodwill. Any
impairments would be recognized when the expected undiscounted future operating
cash flows derived from such goodwill is less than the carrying value.

INTANGIBLE ASSETS

    Costs incurred to obtain debt financing are amortized over the expected term
of the related debt. Amortization of deferred financing costs is recorded as
interest expense. The costs associated with consulting agreements are amortized
over the period to which the agreements relate. Patents are amortized on a
straight line basis over the remaining legal lives.

LONG-TERM COMPENSATION PLAN

    Costs associated with a Valuation Creation Plan ("VCP") which provides
long-term compensation for key individuals are recorded, on a quarterly basis,
based on the formula as defined in the VCP. Cost associated with a Phantom Stock
Appreciation Rights Plan ("PSAR") which provides long-term incentive
compensation for key individuals of Physical Electronics, Inc. and subsidiaries
("PHI") are determined on an annual basis, based on an formula as defined in the
PSAR and are recorded on a quarterly basis.

                                      F-10
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
COMPREHENSIVE INCOME

    In February 1998, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income", which establishes standards for the reporting and display of
comprehensive income. For fiscal 2000, 1999 and 1998, respectively, the
components of other comprehensive income were immaterial. The components of
other comprehensive income consist solely of foreign currency translation
adjustments.

FOREIGN CURRENCY TRANSLATION

    Foreign subsidiaries primarily use the local currency as their functional
currency. Assets and liabilities of these entities are translated into U.S.
dollars at rates of exchange in effect at the balance sheet date. The resulting
translation adjustments are accumulated in a separate component of stockholders'
deficiency and are included in operations only upon the sale or liquidation of
the underlying foreign investment. Revenue and expense transactions are
translated at the weighted average exchange rates for the fiscal month in which
the transaction occurred.

    The financial statements of subsidiaries operating in highly inflationary
economies use the U.S. dollar as the functional currency. Property and
accumulated depreciation is translated at historical rates; other assets and
liabilities principally at rates in effect at the balance sheet date; and income
and expense accounts, other than depreciation and amortization; at average rates
of exchange in effect during the year. Gains and losses resulting from the
remeasurement are included in the statement of operations as exchange gains and
losses.

DERIVATIVES

    The Company sometimes enters into forward exchange contracts to manage
exposure related to certain foreign currency commitments, certain foreign
currency denominated balance sheet positions and anticipated foreign currency
denominated expenditures. All forward exchange contracts are designated as and
effective as a hedge and are highly inversely correlated to the hedged item as
required by generally accepted accounting principles. If a derivative contract
terminates prior to maturity, the investment is shown at its fair value with the
resulting gain or loss reflected in operating results. Gains and losses on
contracts to hedge identifiable foreign currency commitments are deferred and
accounted for as part of the related foreign currency transaction. Gains and
losses on all other forward exchange contracts are included in current income.

    At April 29, 2000, the notional amounts of forward exchange contracts,
primarily to sell or buy U.S. Dollars, totaled $8,003. All of these contracts
mature in fiscal 2001. Deferred unrealized gains from hedging firm commitments
are immaterial.

    The Company's forward exchange contracts contain credit risk in that its
banking counter-parties may be unable to meet the terms of the agreements. The
Company minimizes such risk by limiting its counter-parties to major financial
institutions. In addition, the potential risk of loss with any one party
resulting from this type of credit risk is monitored. Management does not expect
any material losses as a result of default by other parties.

    The Company does not use derivative financial instruments for speculative
trading purposes, nor does it hold or issue leveraged derivative financial
instruments.

                                      F-11
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CERTAIN RISKS AND CONCENTRATION

    The Company operates in highly competitive and rapidly changing markets and
some competitors have substantially greater sales and financial resources. Entry
into the market by new competition or the development of new technologies could
adversely affect operating results. Significant concentration of credit risk is
with trade receivables, which is somewhat mitigated due to the Company's
diversity of regions and customers.

    Financial instruments that potentially subject the Company to concentrations
of credit risk consist primarily of billed and unbilled receivables.
Concentrations of credit risk with respect to billed and unbilled contracts
receivable is mitigated by obtaining letters of credit to ensure payment from
international customers. Generally, collateral is not required of customers who
are located in countries where the Company has operations.

    The Company has manufacturing operations in eight foreign countries (Italy,
Spain, Germany, France, the United Kingdom, Ireland, the Netherlands and
Mexico). Risks inherent in foreign operations include changes in social,
political and economic conditions, changes in currency exchange rates, changes
in the laws and policies that govern foreign investments in countries, changes
in United States laws and regulations relating to foreign trade and investment.

    The Company has made significant acquisitions which are inherently subject
to risk. The successful integration of the acquired operations and the
substantial demands on the attention of senior management may adversely impact
their ability to manage the Company's existing businesses.

LIQUIDITY

    The ability of the Company to satisfy its obligations under existing
indebtedness and preferred stock will be primarily dependent upon the future
financial and operating performance of its operating units and upon the
Company's ability to renew or refinance borrowings or to raise additional equity
capital as necessary. The Company intends to refinance the Revolving Credit
Facility and the Receivables Purchase Facility prior to February 1, 2001
(note H). The Company does not anticipate any significant principal payment
obligations under any of its outstanding indebtedness prior to maturity of the
Senior Notes other than in connection with a refinancing.

USE OF ESTIMATES

    In preparing financial statements in conformity with generally accepted
accounting principles in the United States, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements as well as revenues and expenses during the
reporting period. Actual results could differ from those estimates.

INCOME TAXES

    Deferred tax assets and liabilities are determined based on the differences
between the financial statement and tax basis of assets and liabilities as
measured by the enacted tax rates which will be in effect when these differences
reverse, subject to a valuation allowance.

                                      F-12
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    Deferred income taxes result from changes in deferred tax assets, deferred
tax liabilities and changes in the valuation allowance. Income tax expense
consists of the taxes payable for the year and deferred income taxes as
discussed above.

NET INCOME (LOSS) PER SHARE

    The Company computes basic EPS utilizing only weighted shares outstanding,
while diluted EPS is computed considering the dilution of option and warrants.
Dilutive EPS is not presented for fiscal 2000 and 1998, respectively, because
losses from continuing operations exist for such periods and results in an
antidilutive effect.

ADVERTISING

    Advertising costs are expensed as incurred. Advertising expense was $4,242,
$3,664 and $3,380 for fiscal 2000, 1999 and 1998, respectively.

RESEARCH AND DEVELOPMENT

    Research and development costs are charged to operations as incurred.

ENVIRONMENTAL EXPENDITURES

    Costs associated with remediation activities are expensed except to the
extent such expenses were previously accrued. Liabilities relating to probable
remedial activities are recorded when the cost of such activities can be
reasonably estimated. The liability is discounted when the amount and timing of
the cash payments for that remediation site are fixed or reliably determinable.
The liabilities are adjusted as further information develops or circumstances
change.

FAIR VALUE OF FINANCIAL INSTRUMENTS

    The carrying amount of cash and cash equivalents approximates fair value.
The fair value of notes receivable which approximates carrying value is
estimated by discounting the expected future cash flows at interest rates
commensurate with the creditworthiness of the parties to the notes receivable.

    The carrying amounts of borrowings under short-term revolving credit
agreements, and variable rate long-term debt instruments approximate their fair
value as the floating rates applicable to the financial instruments reflect
changes in overall market interest rates. The fair value of other long-term debt
is estimated using discounted cash flow analysis, based on the Company's current
incremental borrowing rates for similar types of borrowing arrangements. The
fair value of the Company's long-term debt is estimated based on the quoted
market prices for the same or similar issues. At April 29, 2000, the carrying
amount and estimated fair value of long-term debt was $203,693 and $175,843,
respectively.

    The carrying value of the redeemable put warrants approximates the fair
value based on a third-party appraisal.

    The fair value of the Company's redeemable preferred stock at April 29,
2000, is estimated based on the quoted market prices for the same or similar
issues. At April 29, 2000, the carrying amount and estimated fair value of
redeemable preferred stock were $43,137 and $25,871, respectively.

                                      F-13
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    The estimate fair value of forward currency exchange contracts is calculated
using the exchange rate at the Company's year end as quoted by the respective
brokers and at April 29, 2000 was approximately $7,938.

    Fair value estimates are subjective in nature and involve uncertainties and
matters of significant judgement and therefore cannot be determined with
precision. Changes in assumptions could significantly affect these estimates.

NEW ACCOUNTING PRONOUNCEMENTS

    During 1998, the FASB issued SFAS 133, "Accounting for Derivative
Instruments and Hedging Activities", which establishes accounting and reporting
standards for derivative instruments and for hedging activities.

    In June 1999, the FASB issued SFAS 137, "Deferral of the Effective Date of
FASB Statement No. 133", to defer for one year the effective date of
implementation of SFAS 133. SFAS 133, as amended by SFAS 137, is effective for
fiscal years beginning after June 15, 2000, with earlier application encouraged.
The Company does not believe adoption will have a material impact on its
financial statement disclosures.

    In December 1999, the SEC issued Staff Accounting Bulletin 101 ("SAB 101"),
"Revenue Recognition in Financial Statements." SAB 101 summarizes certain of the
SEC's views in applying generally accepted accounting principles to revenue
recognition in financial statements. In March 2000, the SEC issued SAB 101A, to
defer for one quarter the effective date of implementation of SAB 101 with
earlier application encouraged. In June 2000, the SEC issued SAB 101B which
defers the effective date of implementation of SAB 101 to the fourth fiscal
quarter of fiscal 2001. The Company is currently evaluating the impact that
SAB 101 will have on its financial reporting requirements.

    In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, or FIN No. 44, Accounting for Certain Transactions
Involving Stock Compensation. This Interpretation clarifies the application of
APB Opinion No. 25, "Accounting for Stock Issued to Employees" and is generally
effective July 1, 2000, with certain conclusions in this Interpretation covering
specific events that occur after either December 15, 1998, or January 12, 2000.
To the extent that this Interpretation covers events occurring during the period
after December 15, 1998, or January 12, 2000, but before the effective date of
July 1, 2000, the effects of applying this Interpretation are recognized on a
prospective basis from July 1, 2000. Management believes the adoption of FIN
No. 44 will not have a material impact on our financial position, results of
operations or cash flows.

RECLASSIFICATIONS

    Certain reclassifications have been made to the fiscal 1999 and 1998
consolidated financial statements in order to conform with the current year's
presentation.

NOTE B--ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS

    On July 2, 1999, Physical Electronics, Inc. ("PHI"), a wholly owned
subsidiary of the Company, acquired all the outstanding capital stock of Charles
Evans & Associates ("CE&A") pursuant to a Stock Purchase Agreement
("Agreement")among PHI and the shareholders of CE&A. Under the Agreement,

                                      F-14
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE B--ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS (CONTINUED)
the former shareholders of CE&A received in exchange for their stock an
Aggregate consideration of $38,624 in cash reduced by the amount of all debt of
CE&A outstanding at the closing.

    The CE&A acquisition has been accounted for using the purchase method of
accounting, and accordingly, the purchase price has been allocated to the assets
purchased and the liabilities assumed based the fair values at the date of the
acquisition. The Company has charged historical earnings $1,650 for purchased
research and development which had been revalued. The excess of the purchase
price over the fair value of the net assets acquired has been recorded as cost
in excess of assets acquired, which will be amortized on a straight-line basis
over 20 years.

    On December 22, 1999 the Company received the consent (the "Consent
Solicitation") of the holders of its outstanding $155,000, 10 1/2% Senior Notes
(the "Notes") due 2004, for the waiver of, and amendment to, certain provisions
of the indenture governing the Notes (the "Indenture"). As more fully described
in the Consent Solicitation, the Company entered into a series of transactions
including (i) the acquisition of Ansaldo Sistemi Industriali, S.p.A., an Italian
corporation, and subsidiaries ("ASI"); (ii) the simultaneous purchase by the
Company of $8,500 of 5.0% unsecured notes of the Nicole Corporation (the "Nicole
Intercompany Notes"), a wholly owned subsidiary of the Company and holding
company of ASI; (iii) the pledge by the Company of Nicole Intercompany Notes to
secure the Company's obligations under the Notes; (iv) allow the Company to sell
certain account receivables to a limited purpose unrestricted subsidiary of the
Company, pursuant to the Receivables Purchase Facility. The purpose of the
waivers was to waive any default arising under the Indenture as a result of the
completion of the ASI acquisition and the purchase by the Company of the Nicole
Intercompany Notes. The principal purposes of the amendments were (i) to
designate Nicole Corporation as an unrestricted subsidiary of the Company, as
defined under the Indenture; and (ii) to amend the amount available to the
Company to make Restricted Payments; and (iii) to include as Permitted
Investment the transfer of certain accounts receivable of the Company's
subsidiaries pursuant to the Receivables Purchase Facility. In consideration of
the Consent Solicitation, the Company, (i) paid a Consent Fee and related
expenses of $3,451; (ii) increased the amount of interest payable on the Notes
to 10 3/4% until such time the Company is able to incur additional indebtedness
under the Indenture; (iii) offered as collateral for the notes, the PHI Eden
Prairie facility and a pledge of the Nicole Intercompany Notes.

    On December 22, 1999, the Company acquired all the outstanding capital stock
of ASI, from Ansaldo Invest, S.p.A., an Italian corporation, which was the
corporate parent of ASI and a wholly owned subsidiary of Finmeccanica S.p.A.
pursuant to a Stock Purchase Agreement ("Purchase Agreement") for an aggregate
purchase price of $29,061 for cash and Italian bank financing. The acquisition
was completed on January 18, 2000. The purchase price is subject to an
adjustment based on the difference between the actual working capital, as
defined, at the closing date and a minimum contractual amount per the Purchase
Agreement. The Company has filed for arbitration in Italy to settle this final
purchase price adjustment and both parties are continuing negotiations.

    The acquisition has been accounted for using the purchase method of
accounting, and accordingly, the purchase price has been allocated to the assets
purchased and the liabilities assumed based upon management's preliminary
estimate of the fair value at the date of acquisition. Adjustments to the asset
values, including inventories, fixed assets and liabilities in the final
allocation may differ from these

                                      F-15
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE B--ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS (CONTINUED)
estimates, which could impact future earnings. The Company has estimated that
there is an excess of book value over cost which has been allocated to certain
long term assets.

    The net purchase prices have been allocated as follows:

<TABLE>
<CAPTION>
                                                                CE&A       ASI       TOTAL
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Working capital, other than cash acquired...................  $   836    $13,089    $13,925
Property, plant and equipment...............................   15,737     36,583     52,320
Other assets (includes purchased in-process
  research and development).................................   10,014      2,785     12,799
Cost in excess of net assets acquired.......................   14,104         --     14,104
Other liabilities...........................................   (2,690)   (28,255)   (30,945)
                                                              -------    -------    -------
Purchase price, net of cash received........................  $38,001    $24,202    $62,203
                                                              =======    =======    =======
</TABLE>

    The operating results of CE&A has been included in the Company's
Consolidated Statement of Operations from the date of acquisition. Pursuant to
the Purchase Agreement, the operating results of ASI have been included in the
Company's Consolidated Statement of Operations from January 1, 2000.

    The following pro forma financial information illustrates the effects of the
acquisitions of CE&A and ASI after giving effect to the impact of certain
adjustments, such as amortization, depreciation and certain purchase accounting
adjustments. On the basis of a pro forma consolidation of the results of
operations as if the acquisitions had taken place at the beginning of the
periods presented, consolidated net sales would have been $435,737 and $550,488,
for the years ended April 29, 2000 and April 24, 1999, respectively.
Consolidated pro forma loss from continuing operations before discontinued
operations would have been $43,096 and $11,046 for the years ended April 29,
2000 and April 24, 1999, respectively. Consolidated pro forma net loss
applicable to common stockholders would have been $47,950 and $5,102 for the
years ended April 29, 2000 and April 24, 1999, respectively. Consolidated pro
forma basic and diluted net loss from continuing operations per common share
applicable to common shareholders would have been $44,791.38 and $14,605.72 or
the years ended April 29, 2000 and April 24, 1999, respectively.

    The pro forma results are not necessarily indicative of the actual results
as if the transactions had been in effect for the entire periods presented. In
addition, they are not intended to be a projection of future results.

    On December 31, 1998, a wholly owned subsidiary of the Company acquired
certain the assets of General Electric's ("GE") Industrial Power Rectifier
("IPR") product line for $3,226 in cash and entered into certain related
agreements with GE including a license agreement and a production services
agreement. Due to the extended lead times involved with these products the
Company does not anticipate recognizing material revenue from the assets
acquired from GE until fiscal 2001. The unaudited pro forma financial
information for fiscal 1999 has not been presented because the effect of the
transaction would not have been material to the results of operations.

    On April 23, 1999, the Company sold substantially all of the assets and
liabilities of its Natvar operating unit. The price for Natvar was $26,000, paid
in cash. Of the aggregate $26,000 received by

                                      F-16
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE B--ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS (CONTINUED)
the Company in connection with the sale, $1,250 was received by the Company in
fiscal 2000. Revenues applicable to discontinued operations were approximately
$15,636 for the year ended April 24, 1999.

    On December 29, 1999, the Company entered into a Trade Receivables Purchase
Facility (the "Receivables Purchase Facility") with High Voltage Funding
Corporation ("HV-FC"), a limited purpose subsidiary of the Company. Under this
agreement, other domestic subsidiaries of the Company sell a defined pool of
domestic trade accounts receivable ("Pool Assets"), and the related rights
inherited of the Company and its domestic subsidiaries to HV-FC. The Receivables
Purchase Facility allows the domestic subsidiaries to sell to the Company who,
in turn, sells to HV-FC an undivided ownership interest in the Pool Assets, up
to a limit of $22,500. HV-FC owns all of its assets and sells participating
interests in such accounts receivable to a third party who, in turn, purchases
and receives ownership and security interests in those assets. As collections
reduce accounts receivable included in the pool, the operating subsidiaries sell
new receivables to HV-FC. The limited purpose subsidiary has the risk of credit
loss on the receivables and, accordingly, an allowance for doubtful accounts has
been retained on the Consolidated Balance Sheets. At April 29, 2000, $13,200 was
utilized under the Receivables Purchase Facility. The proceeds from the sale
were used to reduce borrowings and to fund operations and acquisitions. The
proceeds are less than face value of accounts receivable sold, by an amount that
approximates the cost that HV-FC would incur if it were to issue commercial
backed paper by these accounts receivable. The discount from the face value,
which amounted to $895 at April 29, 2000, is accounted for as a loss on the sale
of receivables and has been included in other income and expenses in the
Company's Consolidated Statement of Operations. The Company's operating
subsidiaries retain the collections and administrative responsibilities for the
participating interests in the Pool Assets. As of April 29, 2000 the Receivables
Purchase Facility was amended (the "First Amendment to Receivables Purchase
Agreement") to conform certain restrictive covenants to the Third Agreement to
the Revolving Credit Facility. In addition, the Company has agreed to terminate
the Receivables Purchase Facility upon the earlier of February 1, 2001 or the
Sale of a Restricted Subsidiary, as defined.

NOTE C--INVENTORIES

    Inventories consisted of the following as of:

<TABLE>
<CAPTION>
                                                            APRIL 29,   APRIL 24,
                                                              2000        1999
                                                            ---------   ---------
<S>                                                         <C>         <C>
Raw materials.............................................   $26,628     $20,240
Work in process...........................................    19,875      15,885
Finished goods............................................     5,415       3,215
                                                             -------     -------
Total.....................................................   $51,918     $39,340
                                                             =======     =======
</TABLE>

                                      F-17
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE D--COSTS AND EARNINGS EXCESS OF BILLINGS--BILLINGS IN EXCESS OF COSTS

    Contract costs and related billings consisted of the following as of:

<TABLE>
<CAPTION>
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
Cost of uncompleted contracts...............................   $22,518     $    --
Related billings............................................    20,786          --
                                                               -------     -------
Excess of costs over billings--completed contract method....     1,732          --
                                                               -------     -------
Cost incurred and income recognized on uncompleted
  contracts.................................................    13,138          --
Related billings............................................     7,456          --
                                                               -------     -------
Excess of costs over billings--percentage of completion
  method....................................................     5,682          --
                                                               -------     -------
Total costs in excess of billings...........................   $ 7,414     $    --
                                                               =======     =======
</TABLE>

<TABLE>
<CAPTION>
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
Billings on uncompleted contracts...........................   $11,365     $    --
Related costs...............................................    10,696          --
                                                               -------     -------
Excess of billings over costs--completed contract method....       669          --
                                                               -------     -------
Billings on uncompleted contracts...........................    32,934       2,940
Related costs incurred and income recognized................    27,815       1,545
                                                               -------     -------
Excess of billings over costs--percentage of completion
  method....................................................     5,119       1,395
                                                               -------     -------
Total billings in excess of costs...........................   $ 5,788     $ 1,395
                                                               =======     =======
</TABLE>

    Accounts receivable include retainages of approximately $3,047 and $2,161 as
of April 29, 2000 and April 24, 1999, respectively. Bill and hold receivables
were $303 and $2,730 as of April 29, 2000 and April 24, 1999, respectively.
Unbilled receivables were immaterial as of April 29, 2000 and April 24, 1999,
respectively.

NOTE E--PREPAIDS AND OTHER CURRENT ASSETS

    Prepaid and other current assets consisted of the following as of:

<TABLE>
<CAPTION>
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
Value Added Tax Receivable..................................   $ 2,911     $    83
ASI Good Faith Deposit......................................     2,734          --
Prepayments and deposits....................................     2,726       1,298
Prepaid insurance...........................................       525         297
Employee advances and other receivables.....................     1,349         111
Other.......................................................       962         150
                                                               -------     -------
  Total.....................................................   $11,207     $ 1,939
                                                               =======     =======
</TABLE>

                                      F-18
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE F--PROPERTY, PLANT AND EQUIPMENT

    Property, plant and equipment consisted of the following as of:

<TABLE>
<CAPTION>
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
Land and buildings..........................................  $ 50,325     $27,558
Machinery and equipment.....................................    87,022      52,239
Construction in progress....................................     2,392       1,847
                                                              --------     -------
  Total.....................................................   139,739      81,644
Less accumulated depreciation and amortization..............   (37,952)    (28,163)
                                                              --------     -------
  Total.....................................................  $101,787     $53,481
                                                              ========     =======
</TABLE>

    Property under capital leases is included in these amounts (note P).

NOTE G--COST IN EXCESS OF NET ASSETS ACQUIRED AND OTHER NON-CURRENT ASSETS

INVESTMENT IN JOINT VENTURE

    A subsidiary of the Company owns a 50% interest in a joint venture which is
being accounted for under the equity method. The Company recorded a loss of $239
and $109 in fiscal 2000 and fiscal 1998, respectively and income of $188 in
fiscal 1999, related to this investment.

ASSETS HELD FOR SALE

    At April 29, 2000, assets held for sale consisted of a former manufacturing
facility. This property is recorded at the lower of the carrying amount or fair
value less costs to sell. It is reasonably possible that the proceeds from the
sale of this property will differ significantly from the carrying amount and
additional losses may be recorded. The property is leased to a third party. The
lease is for a term of five years which commenced in March, 1997 with annual
payments of $336 in year one, $360 in year two, $468 in year three, $528 in year
four and $567 in year five. This lease contains a buyout provision which has
been exercised.

    During fiscal 2000, the Company added certain assets in connection with the
acquisition of ASI. The Company recorded a loss of $608 as a result of the write
down to its net realizable value (note N).

    During fiscal 2000, a facility was sold for cash totaling $1,263. In
connection with the sale of this facility the Company recorded a gain in fiscal
2000 of $115, net of expenses which is included in the consolidated statements
of operations in Other, net (note N).

                                      F-19
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE G--COST IN EXCESS OF NET ASSETS ACQUIRED AND OTHER NON-CURRENT ASSETS
(CONTINUED)
    Other assets and costs in excess of net assets acquired consisted of the
following as of:

<TABLE>
<CAPTION>
                                                                                            APRIL 24,
                                                                 APRIL 29, 2000               1999
                                                       ----------------------------------   ---------
                                                                                   NET         NET
                                                        GROSS     ACCUMULATED    CARRYING   CARRYING
                                                        AMOUNT    AMORTIZATION    AMOUNT     AMOUNT
                                                       --------   ------------   --------   ---------
<S>                                                    <C>        <C>            <C>        <C>
Cost in excess of net assets acquired (note B).......  $42,743      $(6,097)     $36,646     $25,765
                                                       =======      =======      =======     =======
Deferred financing costs (note H)....................  $ 9,630      $(3,830)     $ 5,800     $ 6,638
Prepaid pension cost (note L)........................    2,832           --        2,832       2,605
Prepaid taxes on severance indemnities...............    2,589           --        2,589          --
Investment in HV-FC (note B).........................   20,563           --       20,563          --
Investment in affiliates.............................    3,286           --        3,286          --
Non-compete and other intangible assets..............    5,300         (250)       5,050          --
Patents..............................................    7,065       (1,410)       5,655       5,995
Other................................................    1,452          (17)       1,435       1,256
                                                       -------      -------      -------     -------
  Total..............................................  $52,717      $(5,507)     $47,210     $16,494
                                                       =======      =======      =======     =======
</TABLE>

    Amortization expense was $4,497, $3,219 and $2,540 for fiscal 2000, 1999 and
1998, respectively.

NOTE H--LONG-TERM OBLIGATIONS, REDEEMABLE PUT WARRANTS AND FOREIGN CREDIT LINE

    Long-term obligations consisted of the following as of:

<TABLE>
<CAPTION>
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
1998 Senior Notes...........................................  $155,000    $155,000
1998 Senior Notes Premium...................................        66          86
Secured Revolving Credit Facility...........................     8,374          --
Term Loan...................................................    18,776          --
Capital lease obligations (note P)..........................    12,680      12,264
Mortgage notes payable......................................     7,381       6,873
Notes payable...............................................     1,416       1,620
                                                              --------    --------
  Total.....................................................   203,693     175,843
  Less current maturities...................................   (10,067)     (4,139)
                                                              --------    --------
  Long-term obligations, net of current maturities..........  $193,626    $171,704
                                                              ========    ========
</TABLE>

1998 SENIOR NOTES

    On December 22, 1999, the Company received the consent (the "Consent
Solicitation") of the holders of the outstanding $155,000, 10 1/2% Senior Notes
(the "Notes") due 2004, for the waiver of, and amendment to, certain provisions
of the indenture governing the Notes (the "Indentures") as more fully described
in the Consent Solicitation. In consideration of the Consent Solicitation, the
Company paid a Consent Fee and related expenses of $3,451, increased the amount
of interest payable on the

                                      F-20
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE H--LONG-TERM OBLIGATIONS, REDEEMABLE PUT WARRANTS AND FOREIGN CREDIT LINE
(CONTINUED)
Notes to 10 3/4% until such time the Company is able to incur additional
indebtedness under the Indenture, offered as collateral certain real property of
the Company and a pledge of Intercompany Notes of an Unrestricted Subsidiary of
the Company as defined in the Indenture.

    The Notes are general unsecured obligations of the Company and rank senior
to any subordinated indebtedness and subordinated to all existing and future
secured indebtedness, including the Credit Agreement. Interest is payable
semiannually on February 15 and August 15. The 1998 Senior Notes may be redeemed
in whole or in part at any time on or after August 15, 2001 at redemption prices
expressed as a percentage of the face value of the 1998 Senior Notes plus
accrued and unpaid interest. In connection with the issue of the Notes, the
Company incurred financing costs of approximately $5,584 in fiscal 1998. The
Company's extraordinary losses in fiscal 1998 related to relate to the write off
of deferred financing costs, prepayment penalties and make whole premiums.

<TABLE>
<CAPTION>
YEAR                                                          PERCENTAGE
----                                                          -----------
<S>                                                           <C>
2001........................................................    105.250%
2002........................................................    102.625%
2003........................................................    100.000%
</TABLE>

    The Company, at its option, may redeem in the aggregate up to 35% of the
original principal amount, subject to certain provisions, at any time and from
time to time prior to August 15, 2000, at a redemption price equal to 110.500%
of the aggregate principal amount thereof, plus accrued and unpaid interest to
the redemption date, with the Net Proceeds, as defined, from one or more
Qualified Equity Offerings, as defined, of the Company or Letitia Corporation to
the extent such proceeds are contributed to the Company as common equity.

    The Company is obligated in certain instances to make an offer to purchase
the Senior Notes at a purchase price in cash equal to 100% of the principal
amount thereof, plus accrued and unpaid interest to the purchase date, with
portions of the Available Asset Sale Proceeds, as defined, of certain asset
sales. Upon occurrence of a Change of Control, as defined, each holder of the
1998 Senior Notes will be entitled to require the Company to purchase such
holder's 1998 Senior Notes at a purchase price equal to 101% of the principal
amount thereof, plus accrued and unpaid interest to the purchase date.

1998 CREDIT AGREEMENT

    The 1998 Credit Agreement ("Revolving Credit Facility"), as amended,
provides for a $25,000 maximum Revolving Credit Facility including a $10,000
sub-limit for outstanding letters of credit until the earlier of February 1,
2001 or the Sale of a Restricted Subsidiary, as defined, at which time credit
availability will be reduced to $5,000. On December 29, 1999, in connection with
the Receivables Purchase Facility, the Revolving Credit Facility was amended to
exclude as collateral certain domestic receivables sold pursuant to the
Receivable Purchase Facility and included certain property, plant and equipment
of certain domestic subsidiaries. The Revolving Credit Facility was also amended
to extend the expiration date to August 1, 2003. As of April 29, 2000, the
Revolving Credit Facility was amended to among other things reduce the credit
availability to $5,000 upon the earlier of February 1, 2001 or the Sale of a
Restricted Subsidiary, as defined, to amend the computation of interest payable
under the facility and to amend certain restrictive covenants as defined. In
addition, the amendment requires the

                                      F-21
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE H--LONG-TERM OBLIGATIONS, REDEEMABLE PUT WARRANTS AND FOREIGN CREDIT LINE
(CONTINUED)
Company to terminate or refinance Receivables Purchase Facility upon the earlier
of February 1, 2001 or the Sale of a Restricted Subsidiary, as defined. As of
April 29, 2000, interest under the Revolving Credit Facility was computed at the
banks base rate (9.0% at April 29, 2000) plus 0.25% for the first $5,000
advanced and 0.75% for advances in excess of $5,000 or LIBOR (6.1825% at
April 29, 2000) plus 1.75% on contracts up to $5,000 and 2.5% for contracts in
excess of $5,000. Interest under the Revolving Credit Facility, as amended, is
computed at the banks base rate plus 1.5% for all advances under the facility.
The Company is required to pay on a monthly basis a commitment fee of 0.4% of
the available funds. Availability under the Revolving Credit Facility is limited
to 85% of eligible foreign accounts receivable of Domestic Subsidiaries and 60%
of eligible inventory of domestic subsidiaries. Borrowings outstanding at
April 29, 2000 were $8,374. There were no borrowings outstanding at April 24,
1999. Letters of credit as of April 29, 2000 and April 24, 1999 were $3,234 and
$4,233, respectively which include $2,770 and $2,720, respectively relating to
environmental matters (see note Q). Obligations under the credit facility are
collateralized under a Security Agreement dated August 8, 1997.

TERM LOAN

    On January 18, 2000, in connection with the acquisition of ASI, the Company
entered in to the Term Loan with a syndicate of Italian Banks. The amount
outstanding at April 29, 2000 was $18,776. The loan is collateralized by certain
real property located in Italy and by a pledged of the shares of ASI. The Term
Loan is payable in five installments beginning in fiscal 2003. The Term Loan
contains certain restrictions, including the prohibition of ASI from paying fees
and dividends to the Company and the requirement that the Company meet certain
financial ratios in future.

MORTGAGE NOTES PAYABLE

    The mortgage notes generally are due June 2004, September 2009, July 2011
and January 2016, and bear interest between 2% and 9.75% (weighted average
interest rate of 7.6% at April 29, 2000). The notes are collateralized by land
and buildings with a net book value of approximately $9,975 as of April 29,
2000. Certain of these mortgages were issued through the Pennsylvania Economic
Development Financing Authority ("PEDFA") and the Pennsylvania Industrial
Development Authority in conjunction with the construction of a facility for a
subsidiary of the Company in 1995. The subsidiary may prepay the mortgage before
maturity, subject to a prepayment premium ranging from 101% to 105% of the
principal amount thereof.

    As of April 29, 2000, the Company was not in compliance of certain financial
covenants contained in the Loan Agreement with PEDFA governing a $3,360 mortgage
with a subsidiary of the Company. The Company has received a waiver with respect
to such non-compliance. The waiver does not extend to any future periods,
however, the Company believes it will be able to obtain additional waivers and
intends to negotiate an amendment.

RESTRICTIVE COVENANTS

    The 1998 Credit Agreement, the Notes, Term Loan and Mortgage Notes Payable
contain restrictive provisions relating to the maintenance of certain financial
ratios, as defined in the respective

                                      F-22
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE H--LONG-TERM OBLIGATIONS, REDEEMABLE PUT WARRANTS AND FOREIGN CREDIT LINE
(CONTINUED)
agreements, restrictions on the payment of common stock dividends, leases,
capital expenditures, borrowings, the acquisition or disposition of material
subsidiaries and other matters (notes B and J).

ANNUAL MATURITIES

    Aggregate maturities of long-term obligations are as follows:

<TABLE>
<CAPTION>
FISCAL
------
<S>                                                           <C>
2001........................................................  $ 10,067
2002........................................................     2,117
2003........................................................     5,471
2004........................................................    10,760
2005........................................................   163,785
Thereafter..................................................    11,493
                                                              --------
                                                              $203,693
                                                              ========
</TABLE>

REDEEMABLE PUT WARRANTS

    In connection with the sale of the 1996 Senior Subordinated Notes, the
Company issued to such note holders warrants to purchase and aggregate of 142.86
shares of the Company's Common Stock subject to a dilution adjustment, as
defined, which represented 12.5% of the fully diluted common stock, at an
exercise price of $0.01 per share. On August 8, 1998 the Company purchased
warrants for 71.43 shares representing 6.25% of then outstanding Common Stock on
a fully diluted basis for $2,500. The remaining warrants expire on May 9, 2004.
The holders of such warrants have the right, as of May 1, 2000, to require the
Company to purchase all or any portion of such warrants or any shares of common
stock issued upon the exercise of such warrants at the greater of (i) a
valuation prepared by and independent financial advisor or (ii) a formula value
calculated as 8.0x the Company's EBITDA (as defined therein) less preferred
stock and debt outstanding plus excess cash. Included in interest expense is $0,
$310 and $2,290 in fiscal 2000, 1999 and 1998, respectively, reflecting changes
in the value of the warrants. It is reasonably possible that the value of the
warrants will differ significantly from the carrying amount and additional
adjustments may be recorded.

FOREIGN CREDIT LINE

    At April 29, 2000 and April 24, 1999, the foreign credit line outstanding
balance is $1,937 and $44, respectively. The borrowing bears interest at 10% per
annum, and matures at the earlier of the collection of the receivables securing
the credit line or 120 days.

                                      F-23
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE I--ACCRUED LIABILITIES AND OTHER LIABILITIES

    Accrued liabilities consisted of the following:

<TABLE>
<CAPTION>
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
Employee compensation and related expenses, including
  current portion of long term compensation (note L)........   $17,445     $10,798
Product warranty costs......................................     4,520       2,662
Deferred maintenance revenue................................     3,999       3,352
Commissions.................................................     1,993       2,014
Restructuring costs.........................................     3,809          --
Sales, use tax and property tax.............................     1,359         294
Customer product installation and training..................     1,608       1,256
Legal and audit.............................................       566         793
Other.......................................................     8,538       3,230
                                                               -------     -------
  Total.....................................................   $43,837     $24,399
                                                               =======     =======
</TABLE>

    Other liabilities consisted of the following:

<TABLE>
<CAPTION>
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
Environmental cleanup and related litigation costs (note
  Q)........................................................   $ 4,697     $ 4,893
Long term severance and long term incentive compensation
  (note L)..................................................    25,692          --
Other.......................................................     2,579       5,384
                                                               -------     -------
  Total.....................................................    32,968      10,277
  Less current portion included in accrued liabilities......      (989)       (629)
                                                               -------     -------
                                                               $31,979     $ 9,648
                                                               =======     =======
</TABLE>

    In fiscal 2000, the Company recorded a restructuring charge in the High
Power Conversion Products segment of $3,986 which was comprised of $806 recorded
in connection with the acquisition of ASI for headcount reductions and $2,360
related to a facility closing and $820 at Robicon for severance relating to the
reduction of some engineering and administrative headcount. The Company also
recorded $975 in the Advanced Surface Analysis Instruments segment at PHI for
severance.

    In fiscal 1999, the Company recorded a restructuring charge in the High
Power Conversion Products segment of $390 at Robicon for severance relating to
the reduction of some engineering and administrative headcount and $190 in the
Advanced Surface Analysis Instruments segment at PHI for severance paid to a
former executive.

    In fiscal 1998, the Company recorded a restructuring charge of $186 in the
Advanced Surface Analysis Instruments segment at PHI relating to a program
designed to reduce costs to manage the weaker order rates expected from Asia.

                                      F-24
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE I--ACCRUED LIABILITIES AND OTHER LIABILITIES (CONTINUED)
HIGH POWER CONVERSION PRODUCTS

    Restructuring charge for headcount reductions consisted of the following:

<TABLE>
<CAPTION>
                                                                         YEARS ENDED
                                                              ---------------------------------
                                                              APRIL 29,   APRIL 24,   APRIL 25,
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Provisions..................................................   $  820      $  390      $   --
Restructuring accrual associated with the acquisition of
  ASI.......................................................      806          --          --
Charges.....................................................     (737)       (390)         --
Effect of foreign currency translation......................      (77)         --          --
                                                               ------      ------      ------
Balance at end of period....................................   $  812      $   --      $   --
                                                               ======      ======      ======
</TABLE>

    Restructuring charge for facility closing consisted of the following:

<TABLE>
<CAPTION>
                                                                         YEARS ENDED
                                                              ---------------------------------
                                                              APRIL 29,   APRIL 24,   APRIL 25,
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Provisions..................................................   $2,360      $   --      $   --
Effect of foreign currency translation......................     (226)         --          --
                                                               ------      ------      ------
Balance at end of period....................................   $2,134      $   --      $   --
                                                               ======      ======      ======
</TABLE>

ADVANCED SURFACE ANALYSIS INSTRUMENTS

    Restructuring charge for headcount reductions consisted of the following:

<TABLE>
<CAPTION>
                                                                         YEARS ENDED
                                                              ---------------------------------
                                                              APRIL 29,   APRIL 24,   APRIL 25,
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Balance at beginning of period..............................   $   --      $  186      $   --
Provisions..................................................      975         190         186
Charges.....................................................     (112)       (376)         --
                                                               ------      ------      ------
Balance at end of period....................................   $  863      $   --      $  186
                                                               ======      ======      ======
</TABLE>

NOTE J--REDEEMABLE PREFERRED STOCK

    Redeemable Preferred Stock consisted of the following:

<TABLE>
<CAPTION>
                                                                   SHARES ISSUED AND ISSUABLE
                                                          ---------------------------------------------
                                                            PAR        SHARES     APRIL 29,   APRIL 24,
                                                           VALUE     AUTHORIZED     2000        1999
                                                          --------   ----------   ---------   ---------
<S>                                                       <C>        <C>          <C>         <C>
Series A Exchange Redeemable Preferred Stock............  $     1      110,000     43,137      38,146
                                                          =======      =======     ======      ======
</TABLE>

                                      F-25
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE J--REDEEMABLE PREFERRED STOCK (CONTINUED)
    Changes in Redeemable Preferred Stock (issued and issuable) were as follows:

<TABLE>
<CAPTION>
                                                              SERIES A
                                                              --------
<S>                                                           <C>
Balance at April 25, 1998...................................  $30,457
Preferred stock dividends...................................    4,329
Accretion of redeemable preferred stock.....................      443
                                                              -------
Balance at April 24, 1999...................................   35,229
Preferred stock dividends...................................    4,965
Accretion of redeemable preferred stock.....................      448
                                                              -------
Balance at April 29, 2000...................................  $40,642
                                                              =======
</TABLE>

DIVIDENDS AND REDEMPTIONS

    Dividends on Series A Exchange Redeemable Preferred Stock are cumulative and
accrue at a rate of 12 1/2% per annum on the liquidation preference of $1,000
per share and are paid semiannually on February 15 and August 15. Dividends are
payable in cash or additional shares at the Company's option, on any dividend
payment date, occurring on or prior to August 15, 2002, except to the extent
restricted by other agreements of the Company. If any dividend payable on any
dividend payment date subsequent to August 15, 2000 is not paid in full in cash,
the per annum dividend rate will be increased by 0.50% from such dividend
payment date, and following two such non-cash payments, the per annum dividend
rate will be increased by 1.00% for each additional semiannual period in which
such non-cash payment occurs, up to a maximum of 2.0%. After the date on which
such dividend default is cured, the dividend rate will revert to the original
rate. After August 15, 2002, dividends must be paid in cash. Holders of
Series A Exchange Redeemable Preferred Stock have preference as to payments of
dividends over holders of common stock.

REDEMPTION PROVISIONS

    Except to the extent restricted by other agreements, the Series A Exchange
Redeemable Preferred Stock has the following redemption preferences. The Company
may redeem the Series A Exchange Redeemable Preferred Stock in whole or in part
at any time on or after August 15, 2002 at redemption prices expressed as a
percentage of the liquidation preference plus accrued and unpaid dividends. The
Series A Exchange Redeemable Preferred Stock has a mandatory redemption date of
August 15, 2005, at a redemption price equal to the liquidation preference
together with all accumulated and unpaid dividends.

VOTING RIGHTS

    The holders of Series A Exchange Redeemable Preferred Stock have no voting
rights except as provided by law or if: the Company after August 15, 2002 is in
arrears in the payment of dividends in an amount equal to or exceeding two
quarterly dividend payments; the Company fails to redeem the Series A Exchange
Redeemable Preferred Stock on or before August 15, 2005 or fails to discharge
any redemption obligation; the Company fails to make an offer to redeem the
Series A Exchange Redeemable Preferred Stock in the event of a change of control
or fails to purchase shares pursuant to

                                      F-26
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE J--REDEEMABLE PREFERRED STOCK (CONTINUED)
a change of control offer; or the Company is in default of any covenants as
defined in the Exchange Description or fails to pay the stated maturity of any
indebtedness in excess of $3,000. In each event, the holders of the Series A
Exchange Redeemable Preferred Stock have the right to elect directors to the
board of the Company.

NOTE K--COMMON STOCK AND COMMON STOCK WARRANTS

    At April 29, 2000 and April 24, 1999 the Company had 4,000 shares of $.01
Par value common stock authorized, and 1,083 shares issued and outstanding. The
declaration or payment of dividends is restricted as discussed in note H and J.

    The Company has common stock warrants (note H). Each common stock warrant
entitles the holder thereof to purchase .0025 shares of the Company's common
stock at an exercise price of $.01 per .0025 shares subject, under certain
circumstances, to adjustment or exchange for warrants to purchase shares of
common stock of certain of the Company's subsidiaries. The common stock warrants
are exercisable through August 15, 2005 and represent 6.6% of the Company's
common stock on a fully-diluted basis.

NOTE L--BENEFIT PLANS

DEFINED BENEFIT PLANS

    The Company and certain subsidiaries have a frozen defined benefit pension
plan (a U.S. Pension Plan). Pension costs are determined in accordance with SFAS
No. 87, "Employers' Accounting for Pensions". Service cost is determined using
the projected unit credit actuarial cost method. It is the Company's policy to
make annual contributions to the plan in amounts at least equal to the amounts
required by law.

    The change in the vested and accumulated benefit obligation is summarized as
follows:

<TABLE>
<CAPTION>
                                                                   YEARS ENDED
                                                              ---------------------
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
Vested and accumulated benefit obligation at the beginning
  of the year...............................................   $19,287     $17,715
Interest cost...............................................     1,410       1,417
Actuarial (gain) loss.......................................       (68)      1,981
Benefits paid...............................................    (1,690)     (1,826)
                                                               -------     -------
                                                                18,939      19,287
                                                               -------     -------
</TABLE>

                                      F-27
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE L -- BENEFIT PLANS (CONTINUED)

<TABLE>
<CAPTION>
                                                                   YEARS ENDED
                                                              ---------------------
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
    The change in the plan assets is summarized as follows:

Fair value of plan assets at the beginning of the year......   $19,578     $20,585
Actual return on plan assets................................     3,019         819
Benefits paid...............................................    (1,690)     (1,826)
                                                               -------     -------
                                                               $20,907     $19,578
                                                               =======     =======

Funded status...............................................   $ 1,968     $   291
Unrecognized net actuarial loss.............................       864       2,314
                                                               -------     -------
Prepaid benefit cost (note G)...............................   $ 2,832     $ 2,605
                                                               =======     =======

    Weighted-average assumptions:

Discount rate...............................................      7.75%       7.50%
Expected rate of return.....................................      9.00%       9.00%
</TABLE>

    The components of net periodic benefit is summarized as follows:

<TABLE>
<CAPTION>
                                                                         YEARS ENDED
                                                              ---------------------------------
                                                              APRIL 29,   APRIL 24,   APRIL 25,
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Interest cost...............................................   $1,410      $1,417      $1,369
Expected return on plan assets..............................   (1,680)     (1,764)     (1,508)
Net amortization and deferral...............................       43          --          --
                                                               ------      ------      ------
Net periodic benefit........................................   $ (227)     $ (347)     $ (139)
                                                               ======      ======      ======
</TABLE>

    No compensation increases have been assumed due to the plan being frozen.
The plan assets as of April 29, 2000 and April 24, 1999 consisted primarily of
equity securities, guaranteed interest contracts, fixed income securities and
cash equivalents.

    In fiscal 2000, the Company elected to adopt a revised discount rate in the
current year to more accurately reflect market conditions.

    A foreign subsidiary of the Company sponsors a defined benefit pension plan
which is covered by a group insurance policy. The plan covers 22 employees. The
benefits are based upon the number of years of service and the employees' past
compensation.

                                      F-28
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE L -- BENEFIT PLANS (CONTINUED)
    The change in the vested and accumulated benefit obligation is summarized as
follows:

<TABLE>
<CAPTION>
                                                                   YEARS ENDED
                                                              ---------------------
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
Vested and accumulated benefit obligation at the beginning
  of the year...............................................    $ 863       $ 846
Service cost................................................       67          78
Interest cost...............................................       58          55
Actuarial gain..............................................      (24)         (9)
Exchange rate adjustment....................................     (350)       (107)
                                                                -----       -----
                                                                $ 614       $ 863
                                                                -----       -----

    The change in the plan assets is summarized as follows:

Fair value of plan assets at the beginning of the year......    $ 410       $ 331
Premiums paid...............................................      156         133
Interest income.............................................       14           4
Exchange rate adjustment....................................      (91)        (58)
                                                                -----       -----
                                                                  489         410
                                                                -----       -----
Funded status...............................................    $(125)      $(453)
                                                                -----       -----

    Weighted-average assumptions:

Discount rate...............................................      7.0%        7.0%
Annual compensation increase................................      4.0%        4.0%
Social security contribution ceiling........................    $  54       $  55
Annual pension increase.....................................      3.0%        4.0%
</TABLE>

    The components of net periodic benefit cost is summarized as follows:

<TABLE>
<CAPTION>
                                                                         YEARS ENDED
                                                              ---------------------------------
                                                              APRIL 29,   APRIL 24,   APRIL 25,
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Service cost................................................    $ 67        $ 78        $ 70
Interest cost...............................................      58          55          50
Amortization of transition asset............................      18          10          10
                                                                ----        ----        ----
Net periodic benefit cost...................................    $143        $143        $130
                                                                ====        ====        ====
</TABLE>

    In fiscal 2000, the Company acquired a subsidiary that sponsors a defined
benefit pension plan (a non-U.S. Pension Plan). The plan is non-contributory.
The accrual rate for this plan is 1/60th of the Final Pensionable Salary (as
defined) for each year of Pensionable Service.

                                      F-29
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE L -- BENEFIT PLANS (CONTINUED)
    The policy is for the Company to contribute actuarially determined amounts
into a trust fund at a rate that is intended to remain at a pre-determined
percentage of total pensionable payroll.

    The funded status and net pension liability cost are as follows:

<TABLE>
<CAPTION>
                                                              APRIL 29,
                                                                2000
                                                              ---------
<S>                                                           <C>
Projected benefit obligation--beginning of period...........   $4,584
Foreign exchange impact.....................................     (437)
                                                               ------
Projected benefit obligation................................   $4,147
                                                               ------

Fair value of plan assets--beginning of period..............   $5,667
Foreign exchange impact.....................................     (541)
                                                               ------
Fair value of plan assets...................................   $5,126
                                                               ------

Plan assets in excess of benefit obligation.................   $  979
Unrecognized:
  Net variation liability...................................      200
  Plan (gains), net.........................................   (1,032)
                                                               ------
Funded status...............................................   $  147
                                                               ======

    Weighted-average assumptions:

Discount rate...............................................      6.3%
Annual compensation increase................................      5.0%
Expected rate of return.....................................      8.5%
</TABLE>

MULTI-EMPLOYER PLAN

    Certain foreign employees participate in a multi-employer pension plan.
Foreign pension expense totaled $191, $199 and $176 in fiscal 2000, 1999 and
1998, respectively.

EMPLOYEE BENEFIT OBLIGATIONS

    In fiscal 2000, the Company acquired a subsidiary that had a post-employment
benefit plan (an "Italian Plan"). In accordance with Italian Law, the Company
has an unfunded severance plan under which all employees are entitled to receive
severance indemnities upon termination of their employment. The amount payable
is based on the salary paid and increases in cost of living. The severance
indemnities accrue at a rate of approximately 7.4% of the gross salaries paid
during the year, and are revalued applying a cost of living factor established
by the Italian Government. The amounts accrued become payable upon termination
of the individual employee, for any reason, e.g., retirement, dismissal or
reduction in work force. Employees are fully vested in the plan benefits after
their first year of service.

                                      F-30
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE L -- BENEFIT PLANS (CONTINUED)
    Employee benefit obligations consisted of the following:

<TABLE>
<CAPTION>
                                                              APRIL 29,
                                                                2000
                                                              ---------
<S>                                                           <C>
Severance indemnity (included in Other Liabilities -- note
  I)........................................................   $20,470
                                                               =======
</TABLE>

    The change in benefit plan obligations is summarized as follow:

<TABLE>
<CAPTION>
                                                              APRIL 29,
                                                                2000
                                                              ---------
<S>                                                           <C>
Severance indemnity expense.................................   $ 1,014
Indemnities paid............................................    (1,657)
                                                               -------
                                                               $  (643)
                                                               =======
</TABLE>

DEFINED CONTRIBUTION PLANS

    The Company has 401(k) savings plans (the "Plans") covering substantially
all U.S. employees. Contributions to the Plans were $2,091, $2,225 and $2,055 in
fiscal 2000, 1999 and 1998, respectively. The Company provides certain other
retirement benefits, which are not material, to some former officers and former
key management employees which have been provided for in the consolidated
financial statements.

LONG-TERM COMPENSATION PLANS

    The Company maintains a Valuation Creation Plan which provides long-term
compensation for key individuals. Upon joining the VCP, benefits vest at twenty
percent a year and participants can "cash out", as defined, up to fifty percent
of their vested value anytime with the remainder paid at retirement or
termination. All payments under the VCP are subject to the availability of
general funds of the Company. The VCP is a nonqualified and non-funded plan. The
Company has accrued $3,117 and $2,716 as of fiscal 2000 and 1999, respectively
and administrative and selling expenses includes $425, $326 and $1,699 for
fiscal 2000, 1999 and 1998, respectively related to VCP. In the event of the
sale or certain other changes in ownership of a subsidiary or division, impacted
key individuals would become 100% vested. Benefits, if any, would be calculated
up to that date based upon fair values as established by the transaction. Such
benefits would be charged to operations immediately and may be greater than that
which would have been calculated under the original terms of the VCP.

    In 1998 PHI created a Phantom Stock Appreciation Rights Plan which has two
variations, an Appreciation Rights Plan, under the terms of which PSARs are
offered at the fair market value ("FMV") of PHI and its wholly owned
subsidiaries including, CE&A and a Discounted Appreciation Rights Plan, under
the terms of which PSARs are offered at a discounted FMV. The authorized amount
of PSARs which can be issued under these Plans equals 12% of the authorized
capital of PHI. The Plans are designed to provide incentives for employees of
PHI and CE&A, by tracking increases in the FMV of the combined PHI and CE&A
subsidiaries. The exercise rights under the Plans are subject to vesting
schedules ranging from 4 to 5 years from date of award. The Plans have a ten
year termination date. Participants in the Plans are key employees, including
officers. Discounted PSARs

                                      F-31
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE L -- BENEFIT PLANS (CONTINUED)
were issued to certain employees of CE&A who at the time of the acquisition of
CE&A by PHI in July of 1999 had an "in the money value" of their unvested CE&A
options. The discount amount equaled 75% of the then combined FMV. The CE&A
vesting schedule was carried over for the exercise rights of these discounted
PSARs. The total number of PSARs issued and outstanding as of April 29, 2000,
were 417,216. Additionally, PHI created a Deferred Value Plan, which is a
deferred compensation plan and does not include the issuance of PSARs. The Plan
was created for the benefit of certain CE&A employees at the time of the CE&A
acquisition in July of 1999. Awards earn interest at the rate of prime as of
July 1st of each year, plus 1%. Exercise rights are subject to a four or five
year vesting schedule from date of award. No additional awards have been made
under this Plan since its inception. At the time employees exercise their vested
rights under any of these three plans, they must execute a Protection Agreement
which, among other items, stipulates that for a period of 18 months after
termination of a Participant's employment by PHI, or any of its subsidiaries
(the "PHI Group") the employee cannot participate in any business which is then
in competition with the PHI Group. Appreciation Rights PSARs are awarded at
their FMV to certain employees as they are hired or promoted. All three Plans
are non-qualified and non-funded. As of April 29, 2000, the Company has recorded
an accrued liability of $2,960 under these Plans.

    An officer of the Company is the beneficiary of an incentive compensation
plan pursuant to which such officer shall be entitled to receive twenty-two
Shadow Stock Units, as defined. Such units vest in yearly increments over a
period of five years beginning on April 30, 1998, and each vested stock unit
represents the right to receive, following the fifth anniversary after the
vesting thereof, an amount of cash equal to the market value of Letitia Common
Stock determined as of the end of the most recent prior fiscal quarter. The plan
further provides for a stock appreciation arrangement whereby the officer is
entitled to receive additional Shadow Stock Units for each year during the term
of the plan. The Company has accrued the estimated vested balance.

NOTE M--INCOME TAXES

    The foreign and domestic components of (loss) income from continuing
operations before income taxes, discontinued operation and extraordinary item
were as follows:

<TABLE>
<CAPTION>
                                                 APRIL 29,   APRIL 24,   APRIL 25,
                                                   2000        1999        1998
                                                 ---------   ---------   ---------
<S>                                              <C>         <C>         <C>
Domestic.......................................  $(21,949)   $   (729)   $(19,613)
Foreign........................................    (4,831)      2,934       4,077
                                                 --------    --------    --------
Total..........................................  $(26,780)   $  2,205    $(15,536)
                                                 ========    ========    ========
</TABLE>

                                      F-32
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE M--INCOME TAXES (CONTINUED)
    The components of income taxes expense (credit) are:

<TABLE>
<CAPTION>
                                                              APRIL 29,   APRIL 24,   APRIL 25,
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Continuing operations:
  Current:
    Federal.................................................   $   --      $(5,572)    $(2,333)
    State...................................................       72          270         228
    Foreign.................................................    1,712          987         692
                                                               ------      -------     -------
                                                                1,784       (4,315)     (1,413)
                                                               ------      -------     -------
  Deferred (net of impact of valuation allowance):
    Federal.................................................     (897)       1,712         161
    Foreign.................................................       --          491         642
                                                               ------      -------     -------
                                                                 (897)       2,203         803
                                                               ------      -------     -------
  Total continuing operations...............................      887       (2,112)       (610)
                                                               ------      -------     -------
Discontinued operations:
  Current:
    Federal.................................................      373        6,517       6,674
    State...................................................       --        1,389       1,172
                                                               ------      -------     -------
  Total discontinued operations.............................      373        7,906       7,846
                                                               ------      -------     -------

Income from discontinued operations.........................   $   --      $   784     $   584
Gain on disposal of discontinued operations.................      373        7,122       7,262
                                                               ------      -------     -------
                                                               $  373      $ 7,906     $ 7,846
                                                               ------      -------     -------
Extraordinary item:
  Current:
    Federal.................................................       --           --      (4,409)
    State...................................................       --           --        (778)
                                                               ------      -------     -------
  Total extraordinary item..................................       --           --      (5,187)
                                                               ------      -------     -------
  Total discontinued operations and extraordinary item:.....      373        7,906       2,659
                                                               ------      -------     -------
Income taxes................................................   $1,260      $ 5,794     $ 2,049
                                                               ======      =======     =======
</TABLE>

                                      F-33
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE M--INCOME TAXES (CONTINUED)
    Total income taxes (benefit) from continuing operations differed from
"expected" income tax expense, computed by applying the U.S. Federal statutory
tax rate of 35 percent to income before income tax, as follows:

<TABLE>
<CAPTION>
                                                              APRIL 29,   APRIL 24,   APRIL 25,
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Federal statutory rate applied to income before income
  taxes, discontinued operations and extraordinary item.....   $(9,457)    $   772     $(5,460)
State and local taxes, net of Federal tax benefit...........        47          84         163
Effect of foreign operations................................     3,487         451         170
Nondeductible costs in excess of net assets acquired........       693         475         355
Change in valuation reserve.................................     7,881      (3,800)        777
Federal tax loss carryback benefit..........................      (897)         --          --
Nondeductible purchased research and development cost.......        --          --       2,835
(Benefit) provision for Internal Revenue Service ("IRS")
  examination...............................................        --        (225)        246
Other items.................................................      (867)        131         304
                                                               -------     -------     -------
Income tax (benefit) expense--continuing operations.........   $   887     $(2,112)    $  (610)
                                                               =======     =======     =======
</TABLE>

    A deferred income tax (expense) benefit results from temporary differences
in the recognition of income and expense for income tax and financial reporting
purposes. The temporary differences which gave rise to the following deferred
income tax assets and liabilities are:

<TABLE>
<CAPTION>
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
Deferred income tax assets:
  Accounts receivable.......................................  $    104    $    600
  Inventory.................................................     2,007       2,274
  Accrued liabilities.......................................     8,122       4,798
  Net operating losses......................................     2,238          --
  Tax credits...............................................       961         264
  Assets held for sale......................................       566         157
  Other.....................................................       875         584
                                                              --------    --------
    Total gross deferred income tax assets..................    14,873       8,677
  Valuation allowance.......................................   (14,444)     (6,563)
                                                              --------    --------
    Total net deferred income tax assets....................       429       2,114
Deferred income tax liabilities:
  Depreciation..............................................    (3,470)     (3,913)
  Cost in excess of net assets acquired.....................    (2,162)     (2,316)
  Reserve for IRS examination...............................      (411)     (2,098)
  Foreign items.............................................    (1,326)     (1,650)
  Other.....................................................      (569)       (545)
                                                              --------    --------
    Total gross deferred income tax liabilities.............    (7,938)    (10,522)
                                                              --------    --------
    Net deferred income tax liability.......................  $ (7,509)   $ (8,408)
                                                              ========    ========
</TABLE>

                                      F-34
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE M--INCOME TAXES (CONTINUED)
    These deferred income tax assets and liabilities are presented as follows in
the consolidated balance sheets:

<TABLE>
<CAPTION>
                                                              APRIL 29,   APRIL 24,
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
Current deferred tax liability..............................   $1,024      $1,570
Noncurrent deferred tax liability...........................    6,485       6,838
                                                               ------      ------
                                                               $7,509      $8,408
                                                               ======      ======
</TABLE>

    A valuation allowance against the recoverability of deferred tax assets has
been established because more likely than not the Company will not be able to
utilize certain credits in future years. The Company has offset certain deferred
tax liabilities, with deferred tax assets which are expected to generate
offsetting deductions within the same periods.

    A summary of the activity in the allowance for deferred tax assets is as
follows:

<TABLE>
<CAPTION>
                                                                         YEARS ENDED
                                                              ---------------------------------
                                                              APRIL 29,   APRIL 24,   APRIL 25,
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Balance at beginning of period..............................   $ 6,563     $10,363     $ 9,586
Net change..................................................     7,881      (3,800)        777
                                                               -------     -------     -------
Balance at end of period....................................   $14,444     $ 6,563     $10,363
                                                               =======     =======     =======
</TABLE>

    At April 29, 2000, the Company has available net operating loss
carryforwards of approximately $6,144 which generally expire in the fiscal year
ending in 2019. Such carryforwards are substantially limited upon an "ownership
change" as defined in the Internal Revenue Code. No such ownership change is
currently anticipated. The Company has been audited by the IRS through the 1995
tax year and maintains reserves for subsequent IRS examinations.

    The Company also utilized all foreign tax credits. As a result, the tax
benefit from continuing operations for fiscal 1999 reflects a tax benefit of
$3,800 related to the reduction of the valuation allowance.

                                      F-35
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE N--OTHER, NET

    Other, net includes the following:

<TABLE>
<CAPTION>
                                                                         YEARS ENDED
                                                              ---------------------------------
                                                              APRIL 29,   APRIL 24,   APRIL 25,
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Write down of notes receivable and impaired capital
  equipment.................................................   $1,236      $   250      $  --
Net loss (gain) on disposition of miscellaneous assets......      163          507       (710)
Facilities (income) expense, net (note G)...................     (357)        (219)      (390)
Recoveries of aborted acquisition, offering costs and
  related litigation, net (note Q)..........................       28       (1,809)     1,442
Patent defense costs and related litigation, net of
  recoveries................................................      901           35         --
Equity in earnings of joint venture.........................      239         (188)       109
Bondholders' consent fees and related costs.................    3,451           --         --
Asset securitization costs..................................      895           --         --
Subassembly operation exit costs............................      405           --         --
Facility relocation costs...................................      413           --         --
                                                               ------      -------      -----
    Total...................................................   $7,374      $(1,424)     $ 451
                                                               ======      =======      =====
</TABLE>

NOTE O--RELATED-PARTY TRANSACTIONS

MANAGEMENT FEES

    Management fees were incurred with respect to services rendered in
connection with financing, mergers and acquisitions and various operational and
strategic matters. Management fees were $750, $750 and $769 for fiscal 2000,
1999 and 1998, respectively.

NOTE P--LEASES

CAPITAL AND OPERATING LEASES

    The Company conducts a portion of its operations in facilities under capital
and operating leases and also has capital and operating leases covering certain
machinery and equipment. Certain of the leases contain renewal and purchase
options. Rental expenses charged to operations in fiscal 2000, 1999 and 1998,
were approximately $2,752, $1,900, and $1,963 respectively.

    Property under capital leases consisted of the following:

<TABLE>
<CAPTION>
                                                            APRIL 29,   APRIL 24,
                                                              2000        1999
                                                            ---------   ---------
<S>                                                         <C>         <C>
Land, buildings and improvements..........................   $10,056     $ 9,650
Machinery and equipment...................................     7,822       5,790
Less accumulated amortization.............................    (8,059)     (4,296)
                                                             -------     -------
    Total.................................................   $ 9,819     $11,144
                                                             =======     =======
</TABLE>

                                      F-36
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE P--LEASES (CONTINUED)

    At April 29, 2000, the minimum rental commitments for noncancelable leases
that have initial or remaining terms of more than one year are as follows:

<TABLE>
<CAPTION>
                                                           CAPITAL    OPERATING
                                                            LEASES     LEASES
                                                           --------   ---------
<S>                                                        <C>        <C>
2001.....................................................  $ 3,502     $ 3,696
2002.....................................................    2,670       3,410
2003.....................................................    2,233       3,153
2004.....................................................    1,920       2,675
2005.....................................................    1,607       2,118
Thereafter through 2015..................................   11,749      11,099
                                                           -------     -------
Minimum commitments......................................  $23,681     $26,151
                                                                       =======
Less amount representing interest........................  (11,001)
                                                           -------
Capital lease obligations (included in long-term
  obligations) (note H)..................................  $12,680
                                                           =======
</TABLE>

NOTE Q--LITIGATION, CLAIMS AND ENVIRONMENTAL MATTERS

    The Company is obligated to clean up two sites relating to former
manufacturing facilities and has accrued the estimated costs of remediation
(note I). Estimated costs are determined by external and internal environmental
remediation experts. The estimated costs of remediation of one site is based on
its estimated present value. The discount rate used was 6%. The gross
undiscounted amount differs from the estimated present value by approximately
$1,047 as of April 29, 2000. There are no assurances that additional costs will
not be incurred or that significant changes in estimates or changes in
environmental laws will not require additional amounts to be accrued. The
Company believes that it can continue to meet these environmental standards
without material adverse effect on its financial condition. The expected future
payments for the environmental liabilities is $558 in fiscal 2001, $988 in
fiscal 2002, $320 in fiscal 2003, $324 in fiscal 2004 and $3,554 thereafter.

    During fiscal 1999, the Company signed an agreement with the owner of a
property adjacent to one remediation sites. The settlement terms principally
include a mutual release of claims for past costs and an undertaking by the
Company to perform certain future remediation work on the site, for which the
Company will pay up to the first $500 in costs and two thirds of any cost over
this threshold. At April 29, 2000, the Company has accrued the estimated
remediation cost with respect to this matter. There are no assurances that
additional costs will not be incurred or that significant changes in estimates
or changes in environmental laws will not require additional amounts to be
accrued.

    In March 1998, the Company's Robicon Corporation subsidiary initiated
litigation against Toshiba International Corporation ("Toshiba") in the United
States District Court for the Western District of Pennsylvania alleging
infringement of one of Robicon's Perfect Harmony patents. In June 1998, Toshiba
filed suit against Robicon and several other defendants in the United States
District Court for the Southern District of Texas alleging, among other things,
false and disparaging comments concerning Toshiba, interference with contract,
violation of the Texas Competition and Trade Practices Statute and civil
conspiracy to restrict Toshiba's business and cause the wrongful termination of
a purchase order of

                                      F-37
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE Q--LITIGATION, CLAIMS AND ENVIRONMENTAL MATTERS (CONTINUED)
one of its customers. Damages under each section are claimed to be in excess of
$75, the federal statutory minimum, in addition to a claim for punitive damages.
In its suit, Toshiba has also claimed that Robicon is infringing a patent held
by Toshiba and requested a declaratory judgment that Robicon's patent, which is
the subject of the Pennsylvania action, is invalid. In March 1999, the Texas
District Court dismissed without prejudice all claims except the alleged patent
infringement by Robicon and the request for declaratory judgement. These claims
were then transferred to the Western District of Pennsylvania. Also in
March 1999, Toshiba filed a petition in Harris County, Texas in which it
realleged the claims dismissed by the Texas district court, citing the
additional costs by Toshiba to reinstate its purchase order and damages to its
reputation not exceeding $5.0 million. On November 29, 1999, the Pennsylvania
district court granted Robicon's Motion to dismiss Toshiba's patent infringement
claim against Robicon. The only remaining transferred claim is Toshiba's request
for declaratory judgment. In November 1999, Toshiba filed a motion to dismiss
without prejudice all of the claims pending in Harris County, Texas pursuant to
a Tolling Agreement which permits Toshiba one (1) year to re-file its claims. In
December 1999, the Texas state court granted Toshiba's motion.

    In March 1998, the Company was dismissed without prejudice as a defendant in
an action commenced in November 1996 against the Company and six others by
Chicago-Dubuque Foundry Corporation, and its property insurer. In May 1998, The
remaining claims against the Company by intervenor plaintiffs were also
dismissed without prejudice. During fiscal 1999, a plaintiff named the Company
as a Third-Party Defendant, claiming indemnity under the terms of its purchase
orders and under a "failure to warn" claim. Most, if not all, other defendants
have now also filed cross-claims against the Company for contribution or
indemnity. The Company moved for summary judgement on the basis that since the
connectors involved were not manufactured by the Company, it can have no
liability. In August 1999, the motion for summary judgement was sustained and
all claims against the Company were dismissed.

    Certain other claims, suits and complaints have been filed or are pending
against the Company. In the opinion of the Company, all such matters are without
merit or are of such kind, or involve such amounts, as would not have a material
effect on the consolidated financial position or the results of operations of
the Company if disposed of unfavorably. If estimates change, there is no
assurances these items will not require additional accruals by the Company.

NOTE R--FOREIGN SALES

    International sales represented 41%, 41% and 38% of the Company's net sales
in fiscal 2000, 1999 and 1998, respectively. These sales represented the
combined total of export sales made by United States operations and all sales
made by foreign operations.

    Export sales made by United States operations were less than 23% of the
Company's net sales for fiscal 2000, 24% for fiscal 1999 and 23% for fiscal
1998.

                                      F-38
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE R--FOREIGN SALES (CONTINUED)
    The following table summarizes the Company's sales and selected operating
data in different geographic areas:

<TABLE>
<CAPTION>
                                                                         ADJUSTMENTS
                                                    UNITED                   AND
                                                    STATES     EUROPE    ELIMINATIONS   CONSOLIDATED
                                                   --------   --------   ------------   ------------
<S>                                                <C>        <C>        <C>            <C>
FISCAL 1998
Sales to unaffiliated customers..................  $184,639   $ 33,268                    $217,907
Transfers between geographic locations...........     5,318        193      $ (5,511)           --
                                                   --------   --------      --------      --------
Net sales........................................   189,957     33,461        (5,511)      217,907
(Loss) income from operations....................    (1,340)     2,955                       1,615
Identifiable assets..............................   207,142     26,128                     233,270

FISCAL 1999
Sales to unaffiliated customers..................  $208,115   $ 39,939                    $248,054
Transfers between geographic locations...........     9,336        151      $ (9,487)           --
                                                   --------   --------      --------      --------
Net sales........................................   217,451     40,090        (9,487)      248,054
Income from operations...........................    16,051      4,111                      20,162
Identifiable assets..............................   225,138     25,097                     250,235

FISCAL 2000
Sales to unaffiliated customers..................  $227,329   $ 72,845                    $300,174
Transfers between geographic locations...........     6,384      5,885      $(12,269)           --
                                                   --------   --------      --------      --------
Net sales........................................   233,713     78,730       (12,269)      300,174
(Loss) from operations...........................    (1,282)    (4,628)                     (5,910)
Identifiable assets..............................   227,156    136,843                     363,999
</TABLE>

    Identifiable assets by geographic area are those assets used in the
Company's operations in each area.

    Net assets for European operations amounted to approximately $20,194 as of
April 29, 2000. Included in net assets of European operations were intercompany
receivables from affiliated companies amounting to approximately $15,591 as of
April 29, 2000.

    Insofar as can be reasonably determined, there are no foreign-exchange
restrictions that materially affect the financial position or the operating
results of the Company and its subsidiaries.

NOTE S--SEGMENT DATA

    The Company operates in five industry segments. The Company's reportable
segments are individual business units that offer different products and
services. Each business unit has its own management team and manufacturing
facilities and maintains its own independent market identity. The

                                      F-39
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE S--SEGMENT DATA (CONTINUED)
Company evaluates performance based on operating earnings of the respective
business units. Information concerning operations in these businesses is as
follows:

<TABLE>
<CAPTION>
                                                    OPERATING                  DEPRECIATION
                                           NET       INCOME     IDENTIFIABLE       AND          CAPITAL
                                          SALES      (LOSS)        ASSETS      AMORTIZATION   EXPENDITURES
                                         --------   ---------   ------------   ------------   ------------
<S>                                      <C>        <C>         <C>            <C>            <C>
YEAR END APRIL 25, 1998
High power conversion products.........  $ 94,192    $ 7,560      $ 38,693        $   543        $   519
Advanced surface analysis
  instruments..........................    50,531     (2,851)       71,946          3,061          2,256
High performance modular power
  connectors...........................    25,249      5,254        17,046          1,088          1,368
Customized monitoring
  instrumentation......................    37,958      1,082        49,080          1,789            932
Corporate and other....................     9,977     (9,430)       56,505            583            351
                                         --------    -------      --------        -------        -------
Consolidated...........................  $217,907    $ 1,615      $233,270        $ 7,064        $ 5,426
                                         ========    =======      ========        =======        =======

YEAR END APRIL 24, 1999
High power conversion products.........  $ 84,299    $ 3,739      $ 52,712        $ 1,484        $ 4,280
Advanced surface analysis
  instruments..........................    65,965      4,386        73,422          4,133          4,789
High performance modular power
  connectors...........................    27,371      6,200        18,424          1,272          1,920
Customized monitoring
  instrumentation......................    60,931      6,248        47,125          2,813          1,231
Corporate and other....................     9,488       (411)       58,552            645            264
                                         --------    -------      --------        -------        -------
Consolidated...........................  $248,054    $20,162      $250,235        $10,347        $12,484
                                         ========    =======      ========        =======        =======

YEAR END APRIL 29, 2000
High power conversion products.........  $128,873    $(8,835)     $170,084        $ 3,708        $ 1,972
Advanced surface analysis
  instruments..........................    73,367     (4,561)       98,210          8,513          9,002
High performance modular power
  connectors...........................    28,689      6,345        13,890          1,393          1,244
Customized monitoring
  instrumentation......................    61,194      6,048        42,173          2,472          1,637
Corporate and other....................     8,051     (4,907)       39,642            557            269
                                         --------    -------      --------        -------        -------
Consolidated...........................  $300,174    $(5,910)     $363,999        $16,643        $14,124
                                         ========    =======      ========        =======        =======
</TABLE>

                                      F-40
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE S--SEGMENT DATA (CONTINUED)
    The following represents the supplemental consolidating balance sheet for
the Company's restricted and unrestricted subsidiaries at April 29, 2000.

<TABLE>
<CAPTION>
                                                       TOTAL                 ELIMINATION
                                                     RESTRICTED     ASI      ADJUSTMENTS    TOTAL
                                                     ----------   --------   -----------   --------
<S>                                                  <C>          <C>        <C>           <C>
                      ASSETS

CURRENT ASSETS
  Cash and cash equivalents........................   $  2,392    $  3,041     $     --    $  5,433
  Restricted cash..................................      3,890         171           --       4,061
  Accounts receivable, net of allowance for
    doubtful accounts..............................     26,095      65,499           --      91,594
  Refundable income taxes..........................      1,075          --           --       1,075
  Inventories......................................     38,807      13,111           --      51,918
  Costs and earnings in excess of billings.........         --       7,414           --       7,414
  Prepaid expenses and other current assets........      4,962       6,463         (218)     11,207
                                                      --------    --------     --------    --------
    Total current assets...........................     77,221      95,699         (218)    172,702
PROPERTY, PLANT AND EQUIPMENT, NET.................     69,192      32,595           --     101,787
INVESTMENT IN JOINT VENTURE........................      1,829          --           --       1,829
ASSETS HELD FOR SALE...............................      2,628       1,197           --       3,825
OTHER ASSETS, NET..................................     44,621       2,589           --      47,210
COST IN EXCESS OF NET ASSETS ACQUIRED..............     36,646          --           --      36,646
Intercompany Accounts, Net.........................     11,209       6,376      (17,585)         --
                                                      --------    --------     --------    --------
                                                      $243,346    $138,456     $(17,803)   $363,999
                                                      ========    ========     ========    ========
     LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
  Current maturities of long-term debt
    obligations....................................   $  8,946    $  1,121     $     --    $ 10,067
  Foreign credit line..............................      1,937          --           --       1,937
  Accounts Payable and accrued expense.............     50,824      81,774           --     132,598
  Billings in excess of costs......................      2,778       3,010           --       5,788
  Advance payments by customers....................      7,009         441           --       7,450
  Federal, foreign and state income taxes
    payable........................................      3,479         275           --       3,754
  Deferred income taxes............................      1,206          36         (218)      1,024
  Redeemable put warrants..........................      2,900          --           --       2,900
                                                      --------    --------     --------    --------
    Total current liabilities......................     79,079      86,657         (218)    165,518
LONG-TERM OBLIGATIONS, LESS CURRENT MATURITIES.....    173,323      20,303           --     193,626
DEFERRED INCOME TAXES..............................      6,485          --           --       6,485
OTHER LIABILITIES..................................      9,151      22,828           --      31,979
REDEEMABLE PREFERRED STOCK (aggregate liquidation
  preference of $43,137 as of April 29, 2000)......     40,642          --           --      40,642
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIENCY, NET......................    (65,334)      8,668      (17,585)    (74,251)
                                                      --------    --------     --------    --------
                                                      $243,346    $138,456     $(17,803)   $363,999
                                                      ========    ========     ========    ========
</TABLE>

                                      F-41
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE S--SEGMENT DATA (CONTINUED)
    The following represents the supplemental consolidating statement of
operation for the Company's restricted and unrestricted subsidiaries as of
April 29, 2000.

<TABLE>
<CAPTION>
                                                        TOTAL                 ELIMINATION
                                                      RESTRICTED     ASI      ADJUSTMENTS    TOTAL
                                                      ----------   --------   -----------   --------
<S>                                                   <C>          <C>        <C>           <C>
Net sales...........................................   $247,195    $53,960       $(981)     $300,174
Cost of sales (Includes restructuring
  charge--inventory markdown of $855 in Total
  Restricted).......................................    166,157     46,655        (981)      211,831
                                                       --------    -------       -----      --------
    Gross profit....................................     81,038      7,305          --        88,343
Administrative and selling expenses.................     49,592     12,528          --        62,120
Research and development expenses...................     18,740      2,170          --        20,910
Write off of purchased in-process research and
  development.......................................      1,650         --          --         1,650
Restructuring charge................................      1,795         --          --         1,795
Reimbursed environmental and litigation costs,
  net...............................................        404         --          --           404
Other, net..........................................      6,766        608          --         7,374
                                                       --------    -------       -----      --------
    Income from operations..........................      2,091     (8,001)         --        (5,910)
Interest expense....................................     20,698      1,093          --        21,791
Interest income.....................................        457        464          --           921
                                                       --------    -------       -----      --------
    (Loss) from continuing operations before income
      taxes, discontinued operations and
      extraordinary item............................    (18,150)    (8,630)         --       (26,780)
Income taxes........................................        329        558          --           887
                                                       --------    -------       -----      --------
    (Loss) from continuing operations before
      discontinued operations and extraordinary
      item..........................................    (18,479)    (9,188)         --       (27,667)
Discontinued operations:
    Gain on disposal of discontinued operations, net
      of income taxes...............................        559         --          --           559
                                                       --------    -------       -----      --------
Net (loss)..........................................   $(17,920)   $(9,188)      $  --      $(27,108)
                                                       ========    =======       =====      ========

Supplemental Data:

    Depreciation....................................   $ 11,738    $ 1,631       $  --      $ 13,369
    Amortization....................................      3,274         --          --         3,274
    Capital Expenditures............................     13,692        432          --        14,124
</TABLE>

NOTE T--SUBSEQUENT EVENTS

    On June 2, 2000, PHI acquired all of the outstanding shares of Vivirad-High
Voltage Corporation ("Vivirad") pursuant to a Stock Purchase Agreement
("Agreement") among PHI and Vivirad U.S.A Corporation ("Holdings") the holding
company of Vivirad, and Vivirad S.A., a French corporation and the sole
stockholder of Holdings (the "Seller" and collectively with Vivirad and
Holdings, the "Seller Group"). Under the Agreement, the shareholders would
receive in exchange for their stock an

                                      F-42
<PAGE>
             HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE T--SUBSEQUENT EVENTS (CONTINUED)
aggregate purchase price of $2,850. The Seller Group would receive $1,000 in
cash and $1,300 in certain deferred payments. The deferred payments are
comprised of $500 in Seller Group financing (the "Seller Note"), and $800 paid
in quarterly installments commencing September 15, 2000 through June 15, 2001.
Also, as part of the purchase price, the Agreement provides for the Seller Group
to receive an amount equal to $550 ("Contingent Purchase Price"), provided
Vivirad achieves certain milestones, as defined.

                                      F-43
<PAGE>
                                   SIGNATURES

    The Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

<TABLE>
<S>                                                    <C>  <C>
                                                       HIGH VOLTAGE ENGINEERING CORPORATION

                                                       By:          /s/ RUSSELL L. SHADE, JR.
                                                            -----------------------------------------
                                                                      Russell L. Shade, Jr.
                                                                     CHIEF EXECUTIVE OFFICER
                                                                        AND VICE PRESIDENT
</TABLE>

                               POWER OF ATTORNEY

    Each person whose signature appears below hereby appoints Clifford Press,
Laurence S. Levy, Joseph W. McHugh, Jr. and Ronald R. Fortier, and each of them
severally, acting alone and without the other, his true and lawful
attorney-in-fact with the authority to execute in the name of each such person,
including exhibits thereto and other documents therewith, any and all amendments
to this Report on Form 10-K necessary or advisable to enable the Form 10-K to
comply with the Securities Act of 1933, as amended, and any rules, regulations
and requirements of the Securities and Exchange Commission in respect thereof
which amendments may make such other changes in the Form 10-K as the aforesaid
attorney-in-fact executing the same deems appropriate.

    Pursuant to the requirements of the Securities Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>
                      SIGNATURE                                    TITLE                    DATE
                      ---------                                    -----                    ----
<C>                                                    <S>                             <C>
                /s/ LAURENCE S. LEVY
     -------------------------------------------       Chairman of the Board, Vice     August 18, 2000
                  Laurence S. Levy                       President

                 /s/ CLIFFORD PRESS
     -------------------------------------------       Deputy Chairman of the Board,   August 18, 2000
                   Clifford Press                        President

                   /s/ EDWARD LEVY
     -------------------------------------------       Director                        August 18, 2000
                     Edward Levy

               /s/ H. CABOT LODGE III
     -------------------------------------------       Director                        August 18, 2000
                 H. Cabot Lodge III

              /s/ RUSSELL L. SHADE, JR.
     -------------------------------------------       Chief Executive Officer, Vice   August 18, 2000
                Russell L. Shade, Jr.                    President

                                                       Vice President and Chief
              /s/ JOSEPH W. MCHUGH, JR.                  Financial Officer (principal
     -------------------------------------------         financial and accounting      August 18, 2000
                Joseph W. McHugh, Jr.                    officer)
</TABLE>
<PAGE>
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
       EXHIBIT
       NUMBER                                   DESCRIPTION
---------------------                           -----------
<C>                     <S>
         2.3            Asset Purchase Agreement between GEI Acquisition Inc. and
                        High voltage Engineering Corporation, dated as of March 25,
                        1998.**

         2.4            CE&A Purchase Agreement.***

         3.1            Restated Articles of Organization of the Registrant.*

         3.2            Amended and Restated By-laws of the Registrant.*

         4.1            Indenture, dated as of August 8, 1997, by and between
                        Registrant and State Street Bank and Trust Company as
                        Trustee.*

         4.2            First Supplemental Indenture, dated as of March 19, 1998 to
                        Indenture, dated as of August 8, 1997, by and between the
                        Registrant and State Street Bank and Trust Company, as
                        Trustee.**

         4.3            Registration Rights Agreement, dated as of March 19, 1998,
                        by and among the Registrant and CIBC Oppenheimer Corp.**

         4.4            Form of Exchange Note.**

        10.1            Senior Secured Revolving Credit Agreement, dated as of
                        August 8, 1997, by and between the Registrant and Fleet
                        National Bank.*

        10.2            Lease Agreement, dated as of November 10, 1988, by and
                        between Corporate Property Associates 8, L.P. and Datcon
                        Instrument Company (Lancaster, PA).*

        10.3            Lease Agreement, dated as of November 10, 1988, by and
                        between Corporate Property Associates 8, L.P. and the
                        Registrant (Sterling, MA).*

        10.4            Installment Sale Agreement, dated as of September 23, 1994,
                        by and between Monroeville Area Industrial Development
                        Corporation and Robicon Corporation (New Kensington, PA).*

        10.5            Lease with Option to Purchase, dated as of July 15, 1996, by
                        and between Raija Olkkola & Joseph Grammel, Co-Trustees of
                        THO Trust and Registrant. (Sterling, MA).*

        10.6            Amendment to Lease Agreement, dated as of May 8, 1996, by
                        and between Corporate Property Associates 8, L.P. and the
                        Registrant (Sterling, MA).*

        10.7            Value Creation Plan of the Registrant.*

        10.8            High Voltage Engineering Corporation Employment Agreement,
                        by and between Registrant and Russell L. Shade, Jr., dated
                        as of February 24, 1998.**

        10.9            Agreement and Plan of Merger, dated May 7, 1997, by and
                        between PHI Acquisition Holdings, Inc. and Chase Venture
                        Capital Associates, L.P.*

        12              Statement of Computation of Financial Ratios.

        21.1            List of Subsidiaries.

        24.1            Power of Attorney (included in signature page to Form 10-K).

        27.0            Financial Data Schedule.
</TABLE>

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

*   Incorporated by reference from the Registrant's Registration Statement No.
    333-33969, on Form S-4, filed by the Registrant with respect to $135,000,000
    aggregate principal amount of the Registrant's 10 1/2% Senior Notes due
    2004.

**  Incorporated by reference from the Registrant's Registration Statement No.
    333-51643, on Form S-4, filed by the Registrant with respect to $20,000
    aggregate principal amount of the Registrants 10 1/2% Senior Notes due 2004.
<PAGE>
*** Incorporated by reference to the Registrant's Current Report on Form 8-K,
    dated April 23, 1999 and filed on May 7, 1999, File No. 1-4737.

(b) All schedules have been omitted because either they are not required, are
    not applicable, or the information is otherwise set forth in the
    Consolidated Financial Statements and notes thereto.

REPORTS ON FORM 8-K

(i) On February 2, 2000, the Company filed with the Securities and Exchange
    Commission a Current Report on Form 8-K, dated February 2, 2000, in which
    the Company reported under Item 2 of Form 8-K the acquisition of all of the
    outstanding capital stock of Ansaldo Sistemi Industriali, S.p.A. The Company
    also filed as part of Item 7 of this report an exhibit copy of the Share
    Purchase Agreement, dated as of October 7, 1999, by and between the Company
    and Ansaldo Invest, S.p.A.

    On April 2, 2000, the Company filed with the Securities and Exchange
    Commission a Current Report on Form 8-K/A, dated April 2, 2000, in which the
    Company reported under Item 2 of Form 8-K/A the acquisition of all of the
    outstanding capital stock of Ansaldo Sistemi Industriali, S.p.A. The Company
    also filed as part of Item 7 of this report an exhibit copy of the Share
    Purchase Agreement, dated as of October 7, 1999, by and between the Company
    and Ansaldo Invest, S.p.A.

    On April 13, 2000, the Company filed with the Securities and Exchange
    Commission a Current Report on Form 8-K/A, dated April 13, 2000, in which
    the Company reported under Item 2 of Form 8-K/A the acquisition of all of
    the outstanding capital stock of Ansaldo Sistemi Industriali, S.p.A. The
    Company also filed as part of Item 7 of this report an exhibit copy of the
    Share Purchase Agreement, dated as of October 7, 1999, by and between the
    Company and Ansaldo Invest, S.p.A.