<PAGE>   1
================================================================================

                     SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                           -----------------------
                                  FORM 10-K
                           -----------------------

(MARK ONE)

    [X]           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                         OF THE SECURITIES EXCHANGE ACT OF 1934
                    FOR THE FISCAL YEAR ENDED MARCH 31, 1997

    [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
                        FOR THE TRANSITION PERIOD FROM     TO
                                                      -----  -----

                       COMMISSION FILE NUMBER 33-93124
                        -----------------------------

                     CYBEX COMPUTER PRODUCTS CORPORATION

           (Exact Name of Registrant as Specified in its Charter)
                        -----------------------------


                   ALABAMA                               63-0801728
      (State or Other Jurisdiction of                 (I.R.S. Employer
       Incorporation or Organization)                Identification No.)

      4912 RESEARCH DRIVE, HUNTSVILLE, ALABAMA              35805
      (Address of Principal Executive Offices)            (Zip Code)

                                205/430-4000
            (Registrant's Telephone Number, Including Area Code)
                        -----------------------------


         SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

                                    None

         SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                                COMMON STOCK
                               $.001 Par Value

      Indicate by check mark whether Cybex Computer Products Corporation (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, and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]

      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 aggregate market value of the voting stock held by non-affiliates of
Cybex Computer Products Corporation as of June 20, 1997, was approximately
$69,773,021.

      As of June 20, 1997, the number of shares of Cybex Computer Products
Corporation Common Stock outstanding was 5,434,383.

                     DOCUMENTS INCORPORATED BY REFERENCE

      (2) Part III incorporates by reference portions of the Cybex Computer
Products Corporation Annual Proxy Statement for the fiscal year ended March 31,
1997 (to be filed with the Commission on or about June 25, 1997).

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


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                              TABLE OF CONTENTS
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<S>      <C>      <C>                                                                                                    <C>   
PART I    
         ITEM 1.  BUSINESS..............................................................................................  1
                  GENERAL...............................................................................................  1
                  RECENT DEVELOPMENTS...................................................................................  2
                  THE INDUSTRY..........................................................................................  3
                  CYBEX SOLUTIONS.......................................................................................  4
                  BUSINESS STRATEGY.....................................................................................  5
                  PRODUCTS..............................................................................................  6
                  RESEARCH AND PRODUCT DEVELOPMENT......................................................................  8
                  CUSTOMERS, SALES, AND MARKETING.......................................................................  9
                  CUSTOMER SERVICE AND SUPPORT.......................................................................... 10
                  MANUFACTURING......................................................................................... 10
                  TRADEMARK INFORMATION................................................................................. 11
                  COMPETITION........................................................................................... 11
                  EMPLOYEES............................................................................................. 11

         ITEM 2.  PROPERTIES............................................................................................ 11

         ITEM 3.  LEGAL PROCEEDINGS..................................................................................... 12

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................................................... 12

PART II                          
         ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                  STOCKHOLDER MATTERS................................................................................... 12

         ITEM 6.  SELECTED FINANCIAL DATA............................................................................... 13

         ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS................................................................... 14

         ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........................................................... 20

         ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE................................................................... 20

PART III      
         ITEM 10  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.................................................... 20

         ITEM 11  EXECUTIVE COMPENSATION................................................................................ 20

         ITEM 12  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT............................................................................................ 20

         ITEM 13  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................................................ 20

PART IV   
         ITEM 14  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
                  ON FORM 8-K........................................................................................... 21
</TABLE>

<PAGE>   3



                                    PART I

ITEM 1.  BUSINESS.

GENERAL

         Cybex Computer Products Corporation ("Cybex" or the "Company")
develops, produces, and markets keyboard, video monitor and mouse ("KVM") switch
and extension products for use in the computer industry. The Company's KVM
switch products ("KVM Switch Products"), the first of which was introduced in
1989, provide up to four users, each with a separate keyboard, video monitor and
mouse, with the capability to control up to 2,160 personal computers ("PCs"),
thereby eliminating the need for individual keyboards, video monitors or mice
("KVM Peripherals") for the controlled PCs. Elimination of separate KVM
Peripherals can provide significant cost reduction (lower initial investment and
ongoing utilities costs) and space savings as well as more efficient technical
support capabilities. The Company's KVM Switch Products allow users to control
IBM- compatible and Macintosh PCs, and many Sun, Hewlett-Packard, IBM, DEC and
Silicon Graphics workstations functioning either as stand-alone systems or as
file, communications, or print servers ("Servers") operating within a local area
network ("LAN"). The Company's KVM Switch Products are particularly useful in
networking environments where multiple computers are dedicated as Servers and in
situations where multiple computers need to be controlled from one location to
facilitate network management.

         The Company's family of KVM extension products ("KVM Extension
Products"), the first product of which was introduced in 1987, allow users to
separate the keyboard, video monitor and mouse up to 600 feet from the PC. In
addition, certain KVM Extension Products allow multiple users shared access to
the same PC from different keyboards, video monitors and mice. KVM Extension
Products are particularly useful in congested work areas or where working
conditions may be hazardous to the function of the computer.

         The Company's products have benefited from the dramatic growth in the
use of PCs and the accompanying growth in Servers. The Company's products solve
many of the space management, security, and maintenance problems faced by
facilities managers, network administrators, and support personnel responsible
for monitoring and servicing PCs and Servers. All of the Company's KVM Switch
and Extension Products utilize technology developed or enhanced by the Company
that allows the boosting, splitting, switching, and converting of KVM signals
over distances greater than allowed by conventional computer hardware and
cabling. Although the Company does not rely exclusively on patent protection,
the Company seeks to protect its technology through patents and nondisclosure
agreements. From Fiscal 1995 to Fiscal 1996 and from Fiscal 1996 to Fiscal 1997,
the Company's compound annual growth rates in net sales were 37.6% and 38.2%,
respectively, and in net income were 73.8% and 24.4%, respectively. In Fiscal
1997, 83.0% of net sales was attributable to KVM Switch Products, and 14.5% was
attributable to KVM Extension Products.

         The Company's goal is to be the market leader in providing KVM Switch
and Extension Products to PC and Server ("PC/Server") users. The Company
believes that it offers a more comprehensive family of KVM Switch and Extension
Products than any of its competitors. The Company intends to build on its
position as an industry leader by continuing its aggressive research and
development efforts aimed at developing new and enhanced products to meet the
network management challenges faced by its customers. In this regard, the
Company introduced in February 1997, the "single wire" PC Extender(TM) SNAP-1,
which requires half as much cabling as previous versions of the same product.
The Company also introduced several new connectivity products and enhancements
to existing products, including the new AutoView KVM switch, which allows
computer selection through an on-screen menuing system. In order to concentrate
its capital resources on research and development, product design, marketing,
and customer support, the Company outsources most manufacturing functions.

         The Company markets its products to a diversified group of dealers, end
users, and original equipment manufacturers ("OEMs") primarily through its
inside sales and customer support staff, advertisements in trade 

<PAGE>   4

publications, and participation in major industry trade shows. The Company
intends to increase its marketing efforts by (i) expanding existing
relationships and developing new relationships with dealers, end users, and
OEMs; (ii) recruiting and training additional sales personnel; (iii) expanding
its direct mail advertising and telemarketing programs; and (iv) expanding
international sales through new and existing distributors and utilizing its
European sales, distribution, and manufacturing facility in Shannon, Ireland,
which opened in October, 1996, and its sales offices in four European countries.

RECENT DEVELOPMENTS

         In September 1996, the Company formed a new subsidiary, Cybex Europe
Ltd. ("Cybex Europe"), to operate a new marketing, distribution and
manufacturing facility located in Shannon, Ireland. Situated in the Shannon Free
Trade Zone, Cybex Europe will oversee manufacturing, distribution, sales and
marketing of the Company's connectivity products in the European Community. The
Company shipped its first products from the Cybex Europe facility in November
1996. In April 1997, Cybex opened sales and support offices in London, Paris,
Brussels, Aachen, and Munich to service and support customers, distributors,
resellers and original equipment manufacturers ("OEM") located throughout the
European Community.

         In April 1997 the Company announced plans to consolidate its operations
in Huntsville, Alabama into a new corporate office housing sales, marketing,
research and development, manufacturing, administration and accounting
functions. Scheduled for completion in January 1998, the new 120,000 square foot
facility will be located on an 18-acre tract owned by the Company in Cummings
Research Park in Huntsville, Alabama.

         During the past fiscal year, the Company introduced several new
connectivity products as well as enhancements to existing products. In August
1996 the Company announced the new AutoView Commander(TM) switch. Available in 4
or 8 server port configurations and expandable up to 64 servers, the AutoView
Commander(TM) includes the Company's on-screen display technology allowing
computer selection through a menu system and supports hot pluggable connections.
In November 1996, Cybex introduced the Personal Commander II, an advanced KVM
switch supporting 4 PCs and expandable up to 32, which offers enhanced switching
technology at an aggressive price point.

         In January 1997, the Company announced a new 6-port KVM Switch Product
designed specifically for the OEM market as well as a new version of the
AutoBoot Commander(TM) offering advanced performance and design features and
competitive pricing. During the same month, Cybex introduced the Duette
Commander(TM), a 2-port KVM switch incorporating AutoView(TM) technology
targeting the consumer market. In January 1997, the Company also introduced a
version of the AutoView Commander(TM) designed specifically to enhance the
Company's offerings in the OEM market. The Company introduced an enhanced
version of the PC Extender(TM) SNAP in February 1997, requiring half as much
cabling as previous versions of the same product.

         In May 1997, Cybex announced next generation versions of its KVM Switch
and Power Control products. The new KVM Switch Product, the AutoView Pro(TM),
includes all of the features of the AutoView(TM) family of KVM Switch Products
and adds support for up to 256 servers, password security, and server power
control through use of the Cybex Power Commander(TM) attachment. The Power
Commander(TM) was designed specifically to cold-boot servers and works as a
stand-alone product or as an attachment to the AutoView Pro(TM).

         The Company's AutoView Commander(TM) and AutoBoot Commander 4xP(TM)
proprietary KVM Switch Products, PC-Extender(TM) Snap extension product, and
ReBoot II(TM) power control product passed Novell Corporation's NetWare 4.1
compatibility testing requirements in January 1997. The Cybex KVM Switch
products were the first KVM Switch products to receive Novell certification and
will be marketed under the "Novell Yes(TM)" logo. In February 1997, the Company
announced that the AutoView Commander(TM) met the requirements for VCCI Class 1
certification in Japan. 



                                      2
<PAGE>   5

The Company's AutoView Commander(TM) and Personal Commander(TM) II received
Microsoft(R) Windows NT(TM) compatible certification in February, 1997.

         Expansion of the Company's distribution channels was a major emphasis
in Fiscal 1997. In January 1997, the Company announced an agreement to market
and distribute private-label versions of the AutoView Commander(TM) and AutoBoot
Commander 4xP(TM) KVM Switch Products through a major worldwide catalog
marketer. In the same month, Cybex announced plans to supply the Company's
6-port OEM KVM Switch to Ergotron, Inc., a leading supplier of ergonomic
computer workcenters, under the private label Ergoswitch. In February 1997, the
Company entered into an OEM agreement with Realstar Solutions to market a
private-label version of the Company's OEM version of the AutoView Commander(TM)
and other products through Realstar's reseller network and through unspecified
new sales channels.

         The Company entered into a marketing partnership with MicroAge Computer
Centers in February 1997 that will allow Cybex to market selected products
through MicroAge sales and distribution channels and to participate in various
MicroAge conferences, reseller pricing promotional programs, and sales training
events. In April 1997 the Company announced a trade-in program allowing users of
virtually all brands of KVM Switches to upgrade to the Company's latest KVM
Switch products at a competitive price.

         Gary Johnson, formerly Vice President of Sales Channel Development, was
promoted to Vice President of Sales and Marketing in April 1997. Mr. Johnson was
given responsibility for all sales, marketing and product management in the
United States, Asia/Pacific and Americas sales areas and will provide marketing
support to Cybex Europe.

THE INDUSTRY

         The computer industry has experienced dramatic changes during the past
20 years. The personal computer, introduced by IBM, has evolved from stand alone
PCs with limited application into powerful information management tools as part
of enterprise-wide networks. The evolution of computer hardware and software has
allowed PCs in many instances to replace larger and more expensive mainframe
computers as the preferred information management tool for individuals and
organizations of all types and sizes throughout the world.

         In the corporate environment, enterprise computing is evolving away
from large, centralized mainframe computers to distributed network computing
through PCs interconnected using a client/server design. The typical
client/server installation consists of a LAN with multiple centralized PCs
operating as "servers" dedicated to performing specific functions, such as file
servers, communications servers, and print servers, for multiple "client" PCs
connected to the LAN. Separate LANs within a single facility or in
geographically dispersed locations often are interconnected through a wide area
network ("WAN"). Although IBM-compatible systems constitute the majority of the
LANs in operation in the United States, many corporate information systems also
include LANs comprised of Sun, Hewlett-Packard, Silicon Graphics, and Digital
Equipment Corporation workstations and servers.

         The expansion of computer networks in recent years has created several
problems for corporate users. The computer hardware and peripheral devices
required to operate LANs and WANs can consume substantial physical space. Unlike
mainframe computers, which were designed for central configuration and support
of key components, PC-based systems were originally designed to operate as
stand-alone systems where each Server connected to the LAN was required to have
its own central processing unit ("CPU"), keyboard, video monitor and mouse, even
though generally only the CPU was necessary for the Server to perform its
designated function within the LAN. There are significant costs (initial
investment and ongoing utilities costs) and space requirements associated with
the KVM Peripherals dedicated to each Server. The multiple KVM Peripherals
required to operate individual servers consume valuable space and also make it
more difficult for technical staff to support the network. Currently, many
organizations 



                                      3
<PAGE>   6

have dealt with the space requirements by housing network servers on special
racks in dedicated rooms. While this approach has alleviated part of the
problem, the keyboards, video monitors and mice continue to take up space and
consume energy. Thus, the resulting facility space and network administration
costs required to support LANs and WANs have grown significantly.

         Computer networks have also created additional access, security, and
maintenance problems. Unlike terminal-based mainframe computer systems, PC-based
network systems generally require a separate CPU, keyboard, video monitor and
mouse for each user of the network. The hardware required for each PC causes
problems in space-constrained environments, such as brokerage firm trading
areas, and creates additional equipment replacement and maintenance expenses in
harsh work environments, such as manufacturing plants, where damage to the
PCs/Servers is more likely to occur. In addition, many organizations are
concerned about the security of the system (i.e., unauthorized copying of files
or loading of unauthorized programs into the system).

         Finally, increased concurrent use of Macintosh, Sun, and other systems
alonside PC-based LANs compounds the maintenance and efficiency problems faced
by facilities managers and systems administrators. Servers needed to control
separate operating systems also require space in the computer room for separate
CPUs and KVM Peripherals.

CYBEX SOLUTIONS

         Cybex develops products designed to solve many of the problems faced by
facilities managers, network administrators, and support personnel responsible
for monitoring and servicing the PCs/Servers comprising network installations.
The Company's KVM Switch Products provide up to four technicians, each utilizing
one keyboard, video monitor and mouse, with the capability to monitor and
control up to 2,160 interconnected PCs and network Servers. Elimination of KVM
Peripherals for each of the connected Servers through use of the KVM Switch
Products provides significant cost reduction (lower initial investment and
ongoing utilities costs) and space savings as well as more efficient technical
support capabilities. Because the KVM Switch Products incorporate technology
that intelligently manages the boot process ("AutoBoot Technology"), these
products allow support personnel to automatically boot all connected Servers
after a power failure or other problem without operator intervention. For
instance, using the KVM Switch Products, up to four technicians can
simultaneously monitor and diagnose multiple Servers located in different areas
of a facility. With these products, users can organize, maintain, and support
banks of IBM-compatible, Macintosh, and Unix-based Servers with the same
conveniences previously available with mainframe computers controlled from a
single user console.

         The Company's KVM Extension Products provide greater systems design
flexibility by allowing customers to locate keyboards, video monitors and mice
up to 600 feet away from a PC/Server. Certain KVM Extension Products also permit
the addition of one or more keyboards, monitors, and mice to a single PC/Server.
These products are particularly useful in providing access to PCs/Servers in
harsh environments such as manufacturing plants where it is not desirable to
locate PCs/Servers on the plant floor. The use of KVM Peripherals separated from
the PC/Server in this situation decreases the cost of replacing damaged
equipment because the PC/Server can be relocated to a safe area of the facility.
The products also provide advantages in work environments with limited space,
such as brokerage firm trading areas, because the PCs/Servers can be located
outside of the principal work area. In both harsh work environments and limited
space work areas, KVM Extension Products improve efficiency by allowing
maintenance and support functions to be performed from outside of the main work
areas. In addition, these products allow the PC/Server to be placed in a secure
area thereby limiting a user's ability to copy files onto transportable disks
and preventing the insertion of unauthorized programs into the network.






                                      4
<PAGE>   7
BUSINESS STRATEGY

         The Company's strategy is to be the market leader in developing,
producing, and marketing KVM Switch and Extension Products for the computer
industry. The key elements of this strategy are as follows:

         Capitalize on Opportunities Created by Networking Trend. The Company
         believes that its KVM Switch and Extension Products address many of the
         challenges faced by facilities managers, network administrators, and
         support personnel dealing with multiple hardware configurations and
         operating platforms as a result of the growth in the PC/Server market
         in recent years. The networking trend, in particular, has created
         various markets for products that increase space utilization, improve
         network management and maintenance functions, lower computer hardware
         and operating costs, and provide security. The Company intends to
         continue to develop products that enhance its customers' ability to
         utilize and support standard PC/Server hardware in stand-alone and
         network configurations.

         Expand Market/Product Position. The Company believes that it offers a
         more comprehensive family of KVM Switch and Extension Products than any
         of its competitors. The Company intends to build on its position in the
         KVM Switch and Extension Products markets by continuing its aggressive
         research and development efforts aimed at introducing enhanced and new
         products ahead of its competitors. Given the high level of competition
         in and the continually evolving nature of its product markets, the
         Company believes that the introduction of such products ahead of its
         competitors allows for greater sales and profit potential and an
         enhanced reputation in its markets. Many of the Company's new products
         have been and will continue to be enhanced versions of existing KVM
         Switch and Extension Products, which offer increased application of
         existing or additional functions.

         Increase Marketing and Sales. The Company intends to continue to
         emphasize marketing and sales by (i) expanding existing relationships
         and developing new relationships with OEMs, dealers, distributors, and
         end users; (ii) recruiting and training additional sales personnel;
         (iii) expanding its direct mail advertising and telemarketing programs;
         and (iv) expanding domestic and international sales through new and
         existing distributors, utilization of its European distribution and
         manufacturing facility in Shannon, Ireland, and its sales offices in
         four European countries. By offering multiple products addressing
         similar configuration problems at different price points, the Company
         believes that opportunities also exist to market its products to
         discount computer wholesale and retail outlets. The Company also relies
         on trade publication advertising, trade show participation, and repeat
         business from existing customers to generate sales.

         Continue Customer-Driven R&D. The Company's products and research and
         development efforts focus on meeting the challenges encountered by
         customers seeking to achieve efficient and cost-effective utilization
         of computing resources. The Company intends to continue its customer-
         driven research and development efforts, which focus on responding to
         the needs of its customers by producing innovative, practical and
         marketable products that have immediate applications in their markets.
         By maintaining extensive contact with customers throughout the
         installation and technical support process, the Company identifies and
         tests potential design modifications and improvements as well as new
         applications of existing products. This process also leads to the
         development of entirely new product categories and applications based
         on existing technology developed to meet specific customer needs.

         Outsource Manufacturing Operations. The Company intends to continue the
         outsourcing of the manufacturing of its products. Outsourcing of
         manufacturing functions enables the Company to avoid the capital
         investment required to establish and maintain an in-house manufacturing
         capability, and thereby allows the Company to allocate more of its
         resources to sales and marketing, research and development, product
         design, and customer support.


                                      5
<PAGE>   8

PRODUCTS

         KVM Switch Products. KVM Switch Products provide multiple users, each
with a separate keyboard, video monitor and mouse, with the capability to
control up to 2,160 PCs, thereby eliminating the need for individual keyboards,
video monitors and mice for the controlled PCs. The Company's products enable
users to control multiplatform configurations, either as a stand-alone system or
as a dedicated Server operating within a LAN.

         A PC/Server network utilizing the Company's products is configured so
that each PC/Server is attached to a specific channel of the KVM Switch. The
user simply selects the attached server he wishes to observe or control through
an on-screen menu system, push buttons on the front panel of the switch, or
through a keyboard hot-key sequence. The user's keyboard, video monitor and
mouse operate as though they are attached directly to the selected PC/Server.
The KVM Switch emits signals that emulate the existence of a keyboard, video
monitor and mouse, thereby causing the controlled PC/Server to operate just as
if the user's KVM Peripherals were connected directly to the PC/Server whether
or not selected. The Company's KVM Switch Products include the following:

         -        The AutoView Commander(TM) adds computer selection through an
                  on-screen menu system and adds hot pluggable operations to the
                  AutoBoot technology. Its higher level of integration results
                  in a cost reduced design. Both a four-port and an eight-port
                  model are available.

         -        The AutoView Pro(TM) adds an AC power control option into the
                  AutoView(TM) technology utilizing the optional Power
                  Commander(TM).

         -        The Personal Commander(TM) II utilizes AutoView(TM) technology
                  to control two to four IBM compatible PCs/Servers.

         -        The Duette Commander(TM) incorporates advanced technology to
                  control two PCs/Servers.

         -        The AutoBoot Commander 4xP(TM) adds multimedia, multiplatform,
                  and multiuser features (in addition to the basic AutoBoot
                  Commander features) providing the user with the capability to
                  configure up to four user consoles simultaneously managing an
                  array of up to 2,160 PCs/Servers located a maximum of 500 feet
                  from the control unit. It is hot-pluggable and can be
                  reconfigured while in operation without disruption of the
                  operation of the switch or the attached PCs/Servers.

         -        The AutoBoot Commander 1xP(TM) incorporates all of the 
                  features of the AutoBoot Commander 4xP(TM) in a 4-slot 
                  chassis.

         -        The Slimline Commander(TM) and the Magnum Commander(TM)
                  incorporate AutoBoot technology to control 8 or 16
                  PCs/Servers, respectively, in a housing designed for 19 inch
                  rack configurations, expandable up to 96 PCs/Servers located
                  up to 150 feet from the switch unit.

         -        The AutoBoot Commander(TM) was the industry's first KVM Switch
                  to incorporate the AutoBoot(TM) technology. It accommodates
                  two to eight PCs/Servers per unit and is expandable to a
                  maximum of 96 PCs/Servers located up to 150 feet from the
                  switch unit.

         -        The AutoBoot Commander(TM) II utilizes AutoView(TM) 
                  technology to control two to eight PCs/Servers.

         -        The Personal Commander(TM) incorporates AutoBoot(TM)
                  technology and adds mouse support, controlling two to four
                  PCs/Servers located up to 150 feet away from the switch unit.



                                      6
<PAGE>   9

         -        The Commander(TM), the Company's first switch product, allows
                  a single keyboard and video monitor to control up to six IBM
                  compatible PCs located up to 150 feet away from the user
                  console.

         KVM Switch Products (other than the AutoBoot Commander 4xP(TM)) can be
combined with the Company's Mediator products to mix Macintosh and Sun systems
with IBM PC-compatible systems within one configuration. The AutoBoot Commander
4xP(TM) and 1xP(TM) products support multiple operating platforms without the
need for separate Mediator devices. Most of the Company's KVM Switch Products
attach to PCs/Servers using the Company's proprietary cable assemblies and many
do not require an external power source.

         KVM Extension Products. KVM Extension Products allow users to separate
the keyboard, video monitor and mouse up to 600 feet from the PC without
degrading the video quality, as compared to six to eight feet allowed by
conventional cables. In addition, certain KVM Extension Products allow multiple
users shared access to the same PC from KVM Peripherals. KVM Extension Products
are particularly useful in work areas where space is constrained, where working
conditions may be hazardous to the function of the computer, or where PC/Server
security is an important consideration.

         The Company's KVM Switch and Extension Products utilize the Company's
proprietary technology that allows the boosting, splitting, switching, and
converting of usable video signals over distances greater than allowed by
conventional computer hardware and cabling. The Company's KVM Extension Products
include:

         -        The PC Extender(TM) SNAP enables a user to separate his PC
                  from the KVM Peripherals by as much as 600 feet using
                  standard, unshielded twisted pair, Category 5 cabling commonly
                  installed in Ethernet networks. The Company enhanced the SNAP
                  product in Fiscal 1997 to provide the same functionality
                  through a single cable.

         -        The PC Extender Plus(TM)allows a user to locate the KVM 
                  Peripherals up to 600 feet away from the PC/Server.

         -        The PC Companion Plus(TM) allows a user to locate the KVM
                  Peripherals up to 600 feet away from the PC/Server, with the
                  ability to have a separate KVM Peripherals attached to the
                  PC/Server.

         -        The PC Expander Plus(TM) allows a user to attach one local and
                  from three to seven remote KVM Peripherals to a single
                  PC/Server located up to 600 feet from the remote user
                  consoles.

         -        The Mediator products convert data entered through an IBM
                  PC-compatible keyboard and PS/2 mouse into a format compatible
                  with the Macintosh computer and Sun workstations. These
                  products can be combined with the Company's KVM Switch
                  Products to mix Macintosh and Sun systems with IBM
                  PC-compatible systems within one configuration.

         Other Products. The Company's Remote Activation and Power Control
Products, the PhoneBoot(TM) and the ReBoot(TM), allow PCs/Servers and other
AC-powered devices to be turned on or off by means of a telephone call
incorporating selective password protection. The PhoneBoot(TM) product is
designed to power up a Server for users requiring access outside of regular
working hours. When the user dials the correct phone number and activates the
PhoneBoot(TM), the power to the attached device is turned on and stays on until
the modem or other device is disconnected or goes off-hook. When a user
activates the ReBoot(TM) device through a telephone call, the ReBoot(TM) product
turns off the power to the attached device for forty-five seconds and then turns
the power back on. The ReBoot(TM) product is designed to restart file servers
and communications servers that have locked up due to software problems or
telephone line interference. The Key-View product is designed to provide
telephone line access to 



                                      7
<PAGE>   10

keyboard and video signals of PCs/Servers with VGA video resolution. It is
commonly used in conjunction with the Company's KVM Switch Products. The Power
Commander(TM) adds AC power control for controlling one to four PCs/Servers.

RESEARCH AND PRODUCT DEVELOPMENT

         The Company believes that the continued, timely development of new
products and enhancements to its existing products is essential to maintaining
its competitive position. The Company's research and development efforts focus
on responding to the needs of its customers by producing innovative, practical
and marketable products that have immediate applications in their markets. By
maintaining extensive contact with customers throughout the installation and
technical support process, the Company is able to identify and test potential
design modifications and improvements as well as new applications and extensions
for existing products. This process also leads to the development of entirely
new product categories and applications based on existing technology developed
to meet specific customer needs. The Company believes that product development
activities directed toward solving the practical needs of its customers provides
a competitive advantage in introducing new and enhanced products ahead of its
competitors. In Fiscal 1995, Fiscal 1996, and Fiscal 1997, the Company's
research and development operating expenditures were $1.6 million, $1.7 million,
and $2.4 million, respectively (8.8%, 6.7% and 6.9% of net sales, respectively).
As of June 1, 1997, the Company's research and development staff consisted of 32
full-time employees.

         The Company's products utilize components manufactured by third parties
that are generally available to the Company's competitors and potential
competitors. The Company's success in the future will depend in part upon its
ability to continue to apply such commercially available components to the
development of new products and new product categories and enhancement of
existing products designed to meet technological changes and customer needs in a
cost-effective manner. By emphasizing customer-driven research and development,
the Company has been able to develop innovative, practical and marketable
products that have had immediate application and acceptance in its markets. The
failure by the Company to respond timely to technological changes or customer
requirements could have a material adverse effect on the Company's business,
financial condition and results of operations.

         To meet the challenges of the rapidly changing technology in the
computer industry, the Company expects to make substantial investments in
research and development in the future. The Company's primary product
development efforts emphasize new or enhanced versions of its KVM Switch and
Extension Products or related products. There can be no assurance that these new
or enhanced versions or any other product development efforts of the Company
will lead to commercially viable products, will be completed on a timely basis,
or will include the features required to achieve market acceptance.

CUSTOMERS, SALES, AND MARKETING

         The Company's principal customers include a diversified group of
dealers (82.1% of net sales in Fiscal 1997), end users (15.4% of net sales in
Fiscal 1997), and OEMs (2.5% of net sales in Fiscal 1997). The Company believes
that its broad range of products sold at different price points offers the
Company the opportunity to market its products to customers of all sizes, in
different industries, and with varying degrees of technical sophistication. In
Fiscal 1996 and Fiscal 1997, no single customer accounted for more than 3.3% and
4.3% respectively of the Company's net sales, and the loss of any customer would
not have a material adverse effect on the Company's business, financial
condition, or results of operations.

         The Company markets its products primarily through an internal sales
and customer support staff, advertising in trade publications, and participating
in major industry trade shows. The Company's staff of inside sales and customer
support personnel process written and telephonic orders, service existing
customers, and respond to information 


                                      8
<PAGE>   11

inquiries. The Company devotes a substantial portion of its marketing efforts to
developing, monitoring, and enhancing its relationships with its network of
independent dealers, distributors, end users, and OEMs. The sales personnel are
supported by the Company's engineering department and its customer service
representatives who provide "hot line" technical support and advice to
customers. While the Company continues to emphasize its traditional marketing
efforts, it has also increased its sales and customer support personnel staff
and increased its direct mail advertising, telemarketing, publicity programs and
enhanced its home page on the World Wide Web. In addition to enhancing its
relationships with its existing customer base, the Company is seeking to
establish relationships with additional OEMs, distributors and systems
integrators. As of June 1, 1997, the Company's sales and customer support staff
consisted of 28 employees.

         The Company's international sales accounted for approximately 20% and
21% of net sales in Fiscal 1996 and Fiscal 1997, respectively, and are placed
primarily through distributors located in Europe, Canada, and other foreign
countries. To facilitate its plans to expand international sales within the
European community, the Company established a facility in Shannon, Ireland in
October 1996.

CUSTOMER SERVICE AND SUPPORT

         The Company emphasizes customer service and support by developing
quality products, encouraging customer feedback through extensive contact with
key customers, maintaining extensive documentation of technical support requests
and customer profiles, and providing a customer hot-line that offers technical
support for the life of its products. Any problems that cannot be solved by the
technical support personnel are referred to the Company's engineering
department. The Company offers a 30-day money back guarantee for all of its
products, a one year limited warranty on parts and service, and incidental
repairs. The Company seeks to respond quickly to customers' requests for
technical support and service, including overnight exchange of defective parts
or products. The Company has not experienced significant product returns.

MANUFACTURING

         The Company does not manufacture any of its products in their entirety.
In order to avoid the capital investment required to establish and maintain
in-house manufacturing capabilities, the Company relies on subcontractors for
assembly of printed circuit board assemblies, subassemblies, chassis, and
equipment enclosures. The Company believes that such assembly can typically be
done by subcontractors at a lower cost than if the Company assembled such items
internally. Outsourcing manufacturing operations allows the Company to
concentrate its resources on marketing, research and development, product
design, quality assurance and customer support. The Company does, however,
subject all of the components and products to automated testing, equipment
burn-in procedures, comprehensive quality audits, functional testing, and
regulatory screening to assure quality and reliability.

         The Company outsources substantially all capital intensive
manufacturing functions and intends to continue to use third-party manufacturers
to control more effectively the unit cost of the Company's products. This
reliance on third party subcontractors for the assembly of its products involves
several risks, including reduced control over product quality, delivery
schedules, manufacturing yields, and costs. The Company attempts to diversify
and currently believes that it has diversified its outsourced manufacturing
operations and has an adequate supply of alternative subcontractors.

         The Company purchases industry-standard parts and components for the
assembly of its products from multiple vendors and suppliers through a
world-wide sourcing program. Custom molded cables procured from outside sources
have significant delivery times (10 to 12 weeks), and failure to obtain adequate
supplies could adversely affect product deliveries. In the past, the Company has
experienced delays in the receipt of certain of its components, which have
resulted in delays in related product deliveries. The Company attempts to manage
such risks through developing alternative sources and maintaining relationships
and close personal contact with each of its suppliers. There can be 



                                      9
<PAGE>   12

no assurance, however, that delays in component and product deliveries will not
occur in the future. The inability to obtain sufficient components or to develop
alternative sources if and as required in the future, could result in delays or
reductions in product shipments, which, in turn, could have a material adverse
effect on the Company's business, financial condition, and results of
operations. The Company believes that there are adequate alternative sources for
its components.

         A substantial portion of the Company's shipments in any fiscal period
relate to orders received in that period. To meet this demand, the Company
maintains a substantial level of inventory. The Company believes that because a
substantial portion of customer orders are filled within the fiscal quarter of
receipt, the Company's backlog is not a meaningful indicator of actual sales for
any succeeding period.

TRADEMARK INFORMATION

         Various trademarks, service marks, and trade names to which reference
is made in this Report are the property of owners other than the Company. Such
owners have all applicable rights with respect to their respective trademarks,
service marks, and trade names.

COMPETITION

         The market for the Company's new products is highly competitive, and
the Company expects competition to increase in the future. The Company believes
that its primary competitors are other manufacturers of keyboard, video monitor
and mouse access devices, such as Apex PC Solutions, Inc., Raritan Computer,
Inc. and Rose Electronics. Large OEM server manufacturers, such as
Hewlett-Packard Company and Compaq Computer Corporation, offer switch products
supplied by the Company's competitors. Some of the Company's competitors have
greater name recognition; more extensive engineering, manufacturing and
marketing capabilities; and significantly greater financial, technological, and
personnel resources than the Company. The Company competes for customers on the
basis of performance in relation to price, product features, adherence to
standards, quality, reliability, development capabilities, product availability,
and support. The Company's future success will depend to a significant degree
upon its ability to remain competitive in the areas of marketing, research and
development, technology and distribution. Price has not historically been a
factor in the market for the Company's products, however, the Company is
beginning to experience increased price competition and as the Company's
channels of distribution expand, the Company expects that pricing pressures will
increase in the future. Increased competition could result in price reductions
and loss of market share which would adversely affect the Company's business,
financial condition, and results of operations.

EMPLOYEES

         As of June 1, 1997, the Company had 159 full-time employees working in
the United States. Of the Company's total domestic employees, 34 were in
marketing, sales, and customer support; 32 were in research and development; 75
were in manufacturing and operations; and 18 were in administration. As of June
1, 1997, there were 31 employees working in the Shannon, Ireland facility. None
of the Company's employees are represented by a collective bargaining agreement,
nor has the Company ever experienced any work stoppage. Management believes that
the Company's relationship with its employees is good.

ITEM 2.  PROPERTIES.

         The Company's headquarters, administrative, engineering, and
manufacturing facilities are located in two adjacent leased buildings with a
total of approximately 54,000 square feet in Huntsville, Alabama. The leases
provide for annual rent of approximately $288,000. The Company intends to
construct a new 120,000 square foot headquarters facility in Huntsville, Alabama
to house its complete operations. In fiscal 1997, the Company purchased
approximately 



                                      10
<PAGE>   13

18.0 acres of land adjacent to the current facilities for construction of the
new facilities. The purchase price of the land was approximately $700,000,
including all costs and fees associated with the closing. Construction of the
new facility commenced in May 1997, and is expected to be completed in early
1998.

         In July 1996, the Company entered into a month-to-month lease with the
Shannon Development Authority for a 12,500 square foot facility in the Shannon
Trade Free Zone, Shannon, Ireland. This facility, which opened in October 1996,
conducts manufacturing, marketing and distribution functions in the European
community.

ITEM 3.  LEGAL PROCEEDINGS.

         The Company has been involved from time to time in litigation in the
normal course of its business. The Company is not aware of any pending or
threatened litigation matters that will have a material adverse effect on the
Company.

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

         The Company did not submit any matters to a vote of its security
holders during the fourth quarter of its fiscal year ended March 31, 1997.

                                   PART II

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

         The Company's Common Stock is traded in the over-the-counter market and
is quoted on the NASDAQ National Market System under the symbol CBXC. The
following table sets forth, for the fiscal periods indicated, the reported high
and low sale prices:

<TABLE>
<CAPTION>
          FISCAL 1996                                                          HIGH                       LOW
                                                                               ----                       ---

          <S>                                                                  <C>                        <C>
          Quarter ended September 30, 1995.....................................$26                        $22 1/2
          Quarter ended December 31, 1995......................................$25                        $12
          Quarter ended March 31, 1996.........................................$15                        $10 1/2

          FISCAL 1997                                                          HIGH                       LOW
                                                                               ----                       ---

          Quarter ended June 30, 1996..........................................$19                        $14 1/4
          Quarter ended September 30, 1996.....................................$17 3/4                    $14
          Quarter ended December 31, 1996......................................$18                        $13 1/4
          Quarter ended March 31, 1997.........................................$20 3/4                    $12 3/8

          FISCAL 1998

          Quarter ended June 30, 1997 (through June 20)........................$18 3/4                    $14 1/4
                                                                                ---                        ---
</TABLE>


         On June 20, 1997, the closing sale price for the Company's Common Stock
was $18 1/8 per share. As of June 23, 1997, there were 153 holders of record of
the Company's Common Stock.



                                      11
<PAGE>   14

         The Company paid no dividends to its shareholders during the last two
fiscal years. Future dividends will be dependent upon the Company's earnings,
financial requirements, and other relevant factors.

ITEM 6.  SELECTED FINANCIAL DATA.

         The following selected consolidated financial data as of and for each
of the fiscal years in the five-year period ended March 31, 1997, has been
derived from the audited financial statements of the Company.

         This data should be read in conjunction with the Consolidated Financial
Statements, the notes thereto and Management's Discussion and Analysis of
Results of Operations and Financial Condition included elsewhere in this
document.

<TABLE>
<CAPTION>                               
                                                                            Fiscal Years Ended March 31,
                                                                            ---------------------------
                                                  1993               1994               1995               1996               1997
                                                  ----               ----               ----               ----               ----
                                                                           (In thousands, except per share data)
                                        
<S>                                             <C>               <C>                <C>                <C>                <C>
STATEMENT OF INCOME DATA:               

Net Sales                                        8,548            $12,812            $18,182            $25,010            $34,568
                                        
   Cost of Sales                                 4,175              6,039              8,040             11,152             16,408
                                        
   Gross Profit                                  4,373              6,773             10,142             13,858             18,160
                                        
   Research and development expenses               770              1,150              1,600              1,686              2,374
                                        
   Selling, general and administrative           2,282              3,388              4,492              6,096              8,455
    expenses                            
                                        
   Operating income                              1,321              2,235              4,050              6,076              7,331
                                        
   Interest income (expense), net                    3                (13)                52              1,157              1,611
                                        
   Other                                            --                 --                 --                 52                291
                                        
   Income before income taxes                    1,324              2,222              4,102              7,285              9,233
                                        
   Provision for income taxes                      399                811              1,402              2,592              3,393
                                        
   Net income                                      925              1,411              2,700              4,693              5,840
                                        
                                        
                                        
Net income per common and common equivalent 
share:

Primary                                            .28                .44                .82                .92               1.04
                                        
Fully diluted                                      .28                .43                .73                .92               1.04

Weighted average common and common equivalent 
shares outstanding:

Primary                                          3,259              3,227              3,285              5,094              5,594
                                        
Fully diluted                                    3,259              3,273              3,781              5,094              5,594

</TABLE>




                                      12
<PAGE>   15


<TABLE>
<CAPTION>
                                                                                            March 31,

                                                       1993                1994               1995             1996           1997
                                                       ----                ----               ----             ----           ----
                                
                                                                                         (In thousands)
<S>                                                  <C>                 <C>                <C>             <C>            <C>    
BALANCE SHEET DATA:             
                                
Working capital                                      $1,497              $2,524             $4,580          $39,394        $40,220
                                
Total assets                                          3,023               4,475              7,498           47,418         56,527
                                
Total debt                                               20                  --                 --            5,000          8,000
                                
Shareholders' equity                                  1,806               3,040              5,720           40,621         44,987

</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

GENERAL

         The Company develops, produces and markets keyboard, video monitor and
mouse ("KVM") switch and extension products for use in the computer industry.
The Company's KVM switch products ("KVM Switch Products"), the first of which
was introduced in 1989, provide up to four users, each with a separate keyboard,
video monitor and mouse, with the capability to control up to 2,160 personal
computers ("PCs"), thereby eliminating the need for individual keyboards, video
monitors or mice ("KVM Peripherals") for the controlled PCs. Elimination of KVM
Peripherals can provide significant cost reduction (lower initial investment and
ongoing utility costs) and space savings as well as more efficient technical
support capabilities. The Company's KVM Switch Products allow users to control
IBM-compatible and Macintosh PCs, and many Sun, Hewlett-Packard, IBM, Digital
Equipment Corporation and Silicon Graphics workstations functioning either as
stand-alone systems or as file, communications or print servers ("Servers")
operating within a local area network ("LAN"). During Fiscal year 1997, the
Company designed computer interfaces for its AutoBoot Commander 4xP(TM)/1xP(TM),
which operate with models of IBM RS/6000, Hewlett Packard, DEC's Alpha, and
Silicon Graphics' Indigo workstations. The Company introduced the AutoView
Commander(TM) in August 1996, which utilizes a cost reduced design. This new
design was the basis for all new KVM Switch Product introductions made during
the year: AutoView Commander(TM), Personal Commander(TM) II, AutoBoot
Commander(TM) II, a six-port switch for original equipment manufacturers (OEM),
and Duette Commander(TM). Certain KVM Switch Products were certified by Novell
Corporation for use with its network operating system software NetwareTM 4.1.
The Company's KVM Switch Products are particularly useful in networking
environments where multiple computers are dedicated as Servers and in situations
where multiple computers need to be controlled from one location to facilitate
network management.

         The Company's family of KVM extension products ("KVM Extension
Products"), the first of which was introduced in 1987, allow users to separate
the keyboard, video monitor and mouse up to 600 feet from the PC. In addition,
certain KVM Extension Products allow multiple users shared access to the same PC
from different KVM Peripherals. The Company introduced an enhanced version of
the PC Extender(TM) SNAP in February 1997. The latest version, which reduces
cabling costs by half, utilizes standard Category 5 UTP cabling, a commonly
installed cable in Ethernet networks. KVM Extension Products are particularly
useful in congested work areas or where working conditions may be hazardous to
the function of the computer.

         The Company's net sales have increased in each fiscal year due
primarily to increases in the number of units sold to both new and existing
customers. These annual net sales increases reflect the Company's strategy of
increasing unit volume and market share through the introduction of new products
as well as increasingly enhanced generations of already accepted products with
increased functionality and yet are price competitive as compared to prior



                                      13
<PAGE>   16

generations of the Company's products and to the products of competitors. As a
part of this strategy, the Company seeks to be price competitive and to be the
high quality provider of products in its markets. This strategy has enabled the
Company to sell succeeding generations of products to existing customers as well
as to increase its market share by selling products to new customers.

         The Company has broadened its marketing strategy of expanding channels
of distribution by increased penetration in the OEM market and the worldwide
catalog market. The Company recently announced its first products designed
specifically for the OEM market. These products are intended to expand the
Company's share of sales in the OEM marketplace. Also the Company recently began
shipping certain KVM Switch Products to a major worldwide catalog marketer under
private label. This broadened channel distribution strategy is expected to
expand the Company's distribution channels and increase market share.

         The Company contracts with third parties to provide completed
subassemblies of its products. The Company outsources entire products (turnkey)
for certain stable high volume products. The Company believes that outsourcing
manufacturing generally enables the Company to control product costs more
effectively.

         The Company continually evaluates new product opportunities and engages
in substantial research and product development efforts. The Company expenses
all product research and development costs as incurred. Additionally, the
Company also incurs substantial expenses related to advertising and
participation in trade shows.

         Another important part of the Company's strategy is to emphasize
customer service and support. The Company offers a 30-day money back guarantee
for all of its products plus a one year limited warranty on parts. The Company
has not incurred significant sales and warranty returns expense to date. The
Company also offers sales discounts to its customers based on the level of sales
to the customers. Such discounts have historically not had a significant impact
on the Company's results of operations.

         The Company believes that increasing its international sales will be an
important aspect of future revenue growth. International sales comprised 15%,
20% and 21% of the Company's total sales in Fiscal 1995, Fiscal 1996 and Fiscal
1997, respectively. All international sales are made in US dollars.

         On July 28, 1995, the Company completed an initial public offering of
Common Stock, receiving net proceeds of $32,578,262 from the sale of 2,096,725
shares of Common Stock. The Company has used and expects to continue to use the
net proceeds for working capital and other general corporate purposes, including
(i) product development activities to enhance its existing products and to
develop new products (ii) expansion of sales and marketing activities (iii)
construction of additional manufacturing and administrative facilities and (iv)
establishment of an offshore facility in the European Community.

         On July 9, 1996, the Company formally established operations in Shannon
Ireland, through its newly-formed subsidiary Cybex Europe Ltd. (the Subsidiary).
The Company reached an agreement in principle with The Shannon Development
Authority for long-term leased facilities to be located in the Shannon Free
Trade Zone (SFTZ). The definitive agreement is subject to final negotiations and
execution.

         In July 1996, the Company subsequently entered into a month to month
lease with the Shannon Development Authority for temporary startup facilities
located within the SFTZ. The lease is for a 12,500 square foot facility, which
will expire when the Subsidiary occupies the long-term lease facility. The
Subsidiary became operational late in the third quarter with the first products
being shipped in December 1996.





                                      14
<PAGE>   17
RESULTS OF OPERATIONS

         The following table presents selected financial information derived
from the Company's statements of income expressed as a percentage of net sales
for the fiscal years indicated:


<TABLE>
<CAPTION>

                                                                                          YEARS ENDED
                                                                                            MARCH 31,

                                                                         1995                 1996                  1997
                                                                         ----                 ----                  ----
<S>                                                                      <C>                  <C>                   <C>
Net sales.................................................               100.0%               100.0%                100.0%

   Cost of Sales..........................................                44.2                 44.6                  47.5
                                                                         -----                -----                 -----

Gross profit..............................................                55.8                 55.4                  52.5

   Research and development expenses......................                 8.8                  6.7                   6.9

   Selling, general and administrative
   expenses...............................................                24.7                 24.4                  24.4
                                                                         -----                -----                 -----

Operating income..........................................                22.3                 24.3                  21.2

Other income..............................................                 0.3                  4.8                   5.5
                                                                         -----                -----                 -----

Income before income taxes................................                22.6                 29.1                  26.7

Provision for income taxes................................                 7.7                 10.3                   9.8
                                                                         -----                -----                 -----

Net income................................................                14.9%                18.8%                 16.9%
                                                                         =====                =====                 ===== 
</TABLE>





                                      15
<PAGE>   18

Fiscal 1997 Compared to Fiscal 1996

         Net sales increased 38.2% to $34.6 million in Fiscal 1997 from $25.0
million in Fiscal 1996. The increased sales resulted from increased sales volume
to existing customers and from an increase in sales volume to new customers of
the Company's KVM Switch and Extension Products. Sales of KVM Switch Products
increased 45.8% to $28.7 million in Fiscal 1997 from $19.7 million in Fiscal
1996 primarily due to sales of newer, higher end switches: the Slimline
Commander(TM), the Magnum Commander(TM), and the AutoBoot Commander 4xP(TM) and
1xP(TM). Also, a portion of the sales increase can be attributed to products
introduced in Fiscal 1997: the AutoView Commander(TM) and other products based
on its cost reduced design. Sales of KVM Extension Products increased 14.2% to
$5.0 million in Fiscal 1997 from $4.4 million in Fiscal 1996, primarily due to
sales of Key-View, PC Extender(TM) SNAP, and Power Control Products which had
limited sales during Fiscal year 1996. As a percentage of net sales, the
Company's KVM Switch Products increased to 83.0% from 78.7% and KVM Extension
Products declined to 14.5% from 17.5% in Fiscal 1997 as compared to Fiscal 1996.
Management anticipates that sales of KVM Extension Products will continue to be
a substantial portion of the Company's net sales.

         The Company's international sales volume continued to increase in
Fiscal 1997, causing international sales as a percentage of net sales to
increase to 20.6% as compared to 20.4% in Fiscal 1996. International sales
increased 39.2% to $7.1 million in Fiscal 1997 from $5.1 million in Fiscal 1996.
European sales accounted for approximately 59% of international sales. Over 88%
of fourth quarter European sales were shipped by the Subsidiary.

         Gross profit increased 31.0% to $18.2 million in Fiscal 1997 from $13.9
million in Fiscal 1996. Gross profit as a percentage of net sales declined to
52.5% from 55.4% during the same period. The decline in gross profit was
attributed in part to the start-up and incremental costs incurred by the new
Subsidiary, and also due to an overall increase in the mix of newer KVM Switch
Products, with overall lower margins.

         Selling, general and administrative expenses increased 38.7% to $8.5
million (24.4% of net sales) in Fiscal 1997 from $6.1 million (24.4% of net
sales) in Fiscal 1996. This increase in dollars spent reflects the increased
level 




                                      16
<PAGE>   19

of expenditures in administration, sales, customer support, channel development,
and marketing activities required to support the Company's expanded sales base.
The increase also reflects the added selling, general and administrative costs
of the new Subsidiary. Management anticipates that the dollar amount of selling,
general and administrative expense will continue to increase, however, the
anticipated expanding sales volume should cause the expenses to remain
relatively constant as a percentage of net sales.

         For Fiscal 1997, total costs for research and development were $2.4
million (6.9% of net sales), compared to $1.7 million (6.7% of net sales) in
Fiscal 1996, representing a 40.8% increase in dollars. The Company anticipates
that expenses for research and development will continue to increase above the
level in Fiscal year 1997.

         As a result of the factors discussed above, operating income increased
20.7% to $7.3 million (21.2% of net sales) in Fiscal 1997, from $6.1 million
(24.3% of net sales) in Fiscal 1996.

         Interest and other income amounted to $1.9 million (5.5% of net sales)
in Fiscal 1997, compared to $1.2 million (4.8% of net sales) in Fiscal 1996.
This increase related primarily to interest income from the investment of cash
reserves and the proceeds from the initial public offering completed July 28,
1995. Realized gains on the sale of certain investments also contributed to the
increase in other income.

         Net income increased 24.4% to $5.8 million (16.9% of net sales) in
Fiscal 1997, from $4.7 million (18.8% of net sales) in Fiscal 1996, as a result
of the factors discussed above.

Fiscal 1996 Compared to Fiscal 1995

         Net sales increased 37.6% to $25.0 million in Fiscal 1996 from $18.2
million in Fiscal 1995. The increased sales resulted from increased sales volume
to existing customers and from an increase in sales volume to new customers of
the Company's KVM Switch Products. Sales of KVM Switch Products increased 50.4%
to $19.7 million in Fiscal 1996 from $13.1 million in Fiscal 1995. The Company's
international sales volume for all products continued to increase in Fiscal
1996, causing international sales as a percentage of net sales to increase to
20.4% as compared to 15.4% in Fiscal 1995.

         Sales of KVM Extension Products remained flat at $4.4 million in Fiscal
1996 and Fiscal 1995. As a percentage of net sales, the Company's KVM Switch
Products increased to 78.7% from 72.0% and KVM Extension Products declined to
17.5% from 24.0% in Fiscal 1996 as compared to Fiscal 1995. International sales
increased 85.1% to $5.1 million in Fiscal 1996 from $2.8 million in Fiscal 1995.

         Gross profit increased 36.6% to $13.9 million in Fiscal 1996 from $10.1
million in Fiscal 1995. Gross profit as a percentage of net sales declined to
55.4% from 55.8% during the same period. The decrease reflected an overall
increased sales volume of newer KVM Switch and Extension Products, which yielded
overall lower margins than the more mature products. Sales of newer KVM Switch
products in Fiscal 1996 were a significant part of the mix of that product
segment. Newer Switch products accounted for $5.4 million and 21.7% of Fiscal
1996 net sales, as compared to $.3 million and 1.6% of Fiscal 1995 net sales.
Initial sales of new KVM Extension Products had lower margins due to the low
volume of these products.

         Selling, general and administrative ( S G & A) expenses increased 35.7%
to $6.1 million (24.4% of net sales) in Fiscal 1996 from $4.5 million (24.7% of
net sales) in Fiscal 1995. This increase in dollars spent reflected the
increased level of expenditures in administration, sales, customer support,
advertising, and marketing activities required to support the Company's expanded
sales base.


                                      17
<PAGE>   20

         For Fiscal 1996, total costs for research and development were $1.7
million (6.7% of net sales), compared to $1.6 million (8.8% of net sales) in
Fiscal 1995, representing a 5.4% increase in dollars.

         As a result of the factors discussed above, operating income increased
50.0% to $6.1 million (24.3% of net sales) in Fiscal 1996, from $4.1 million
(22.3% of net sales) in Fiscal 1995.

         Other income amounted to $1.2 million (4.8% of net sales) in Fiscal
1996, compared to $52,000 (0.3% of net sales) in Fiscal 1995. This increase
related primarily to interest income from the investment of the proceeds from
the initial public offering completed July 28, 1995.

         Net income increased 73.8% to $4.7 million (18.8% of net sales) in
Fiscal 1996, from $2.7 million (14.9% of net sales) in Fiscal 1995, as a result
of the factors discussed above.

LIQUIDITY AND CAPITAL RESOURCES

         Prior to its initial public offering in July 1995, the Company financed
its operations primarily through cash flow from operations, supplemented with
borrowings under its line of credit as needed. As of March 31, 1997, the Company
had an available line of credit of $2.5 million with no outstanding borrowings.
A short term note in the amount of $8.0 million was outstanding on March 31,
1997. The Company repaid the note during the first week of April, 1997.

         The Company's working capital position improved from $39,394,062 as of
March 31, 1996 to $42,416,140 (adjusted to include $2,196,218 of long
term-investments) as of March 31, 1997. This improvement in the Company's
working capital position was due primarily to increased earnings.

         Cash provided from operating activities increased from $1.0 million to
$4.3 million for the years ended March 31, 1996, and March 31, 1997,
respectively. This increase was caused primarily by an increase in net income,
accounts payable and accrued expenses, which is offset by smaller increases in
accounts receivable and inventory than in the prior fiscal year. The increase in
accounts payable may be attributed to timing of payments for current
liabilities, while the increase in other current liabilities related primarily
to the deferred recognition of employment grants associated with the Subsidiary.
The decline in inventory growth rate was due to an improved inventory turnover
rate and the increased level of turnkey products, which reduced the level of raw
components needed for production.

         Capital expenditures totaled approximately $1.7 million during Fiscal
1997. The expenditures included the purchase of 18 acres of land adjacent to the
existing Corporate facility for approximately $700,000. Approximately $400,000
in capital expenditures related to equipment purchases for the Subsidiary. The
remaining amounts were used to purchase equipment to support the Company's
continued domestic growth.

         The Company expects to begin construction of a new facility in
Huntsville, Alabama during the first quarter of FY 1998 on the land purchased
during FY 1997. The new facility will approximate 120,000 square feet with space
for future expansion. The facility is designed to house the Company's sales,
marketing, research and development, manufacturing and administrative functions.
Occupancy is expected during the fourth quarter of FY 1998. Although the total
cost of the project is not definite, it is expected to approximate $6.5 million.
Proceeds from the initial public offering will be used to fund the construction
of the facility.

         During Fiscal 1997, the Company purchased 97,500 shares of its common
stock for $1.4 million (at prices ranging from $14.38 to $15.13 per share). The
shares were purchased under a stock repurchase program authorized in the third
quarter of Fiscal 1996 by the Company's Board of Directors. The program allows
for the purchase of up 



                                      18
<PAGE>   21

to 500,000 shares of common stock on the open market at market price. To date
the Company has purchased 331,500 shares of common stock under the repurchase
program.

         The Company believes that its current financial position and existing
cash and investments along with earnings and amounts available under its line of
credit will be sufficient to meet the Company's cash requirements over the next
twelve months.

FINANCIAL ACCOUNTING DEVELOPMENTS

         In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per Share.
SFAS No.128, which supersedes existing generally accepted accounting principles
relative to the calculation of earnings per share, is effective for years ending
after December 15, 1997, and requires restatement of all prior period earnings
per share information upon adoption. Generally, SFAS No.128 requires a
calculation of basic earnings per share, which takes into consideration income
(loss) available to common shareholders and the weighted average of common
shares outstanding. SFAS No. 128 also requires the calculation of a diluted
earnings per share, which takes into effect the impact of all additional common
shares that would have been outstanding if all dilutive potential common shares
relating to options, warrants, and convertible securities had been issued, as
long as their effect is dilutive, with a related adjustment of income available
for common shareholders, as appropriate. SFAS No. 128 requires dual presentation
of basic and diluted earnings per share on the face of the statement of
operations and requires a reconciliation of the numerator and denominator of the
basic earnings per share computation. The Company does not expect the effect of
its adoption of SFAS No. 128 to be material.

FORWARD LOOKING STATEMENTS

         When used in this Form 10-K , the words "believe," "anticipate,"
"think," "intend," "will be," and similar expressions identify forward looking
statements. Such statements are subject to certain risks and uncertainties which
could cause actual results to differ materially from those projected. Readers
are cautioned not to place undue reliance on these forward looking statements
which speak only as of the date hereof. Readers are also urged to carefully
review and consider the various disclosures made by the Company which attempt to
advise interested parties of the factors which affect the Company's business,
including the disclosures made in other periodic reports on Forms 10-K, 10-Q and
8-K filed with the Securities and Exchange Commission.

YEAR 2000 COMPLIANCE

         The Company has and will continue to make certain investments in
its software systems and applications to ensure the Company is year 2000
compliant. The financial impact has not been and is not anticipated to be
material to its financial position or results of operations in any given year.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         Reference is made to the Financial Statements contained in Part IV
hereof and to the Index to Consolidated Financial Statements on Page F-1.





                                      19
<PAGE>   22
ITEM 9        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE.

Not applicable.

                                   PART III

ITEM 10       DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

              The information with respect to the directors and officers of the
Company set forth under the captions "Nominees" and "Officers," on pages 3 and 4
of the Company's Proxy Statement relating to the Annual Meeting of Shareholders
to be held on July 29, 1997, is incorporated herein by reference.

ITEM 11       EXECUTIVE COMPENSATION.

              The information set forth under the caption "Executive
Compensation" set forth on pages 7 through 9 in the Company's Proxy Statement
relating to the Annual Meeting of Shareholders to be held on July 29, 1997, is
incorporated herein by reference. The Compensation Committee Report and the
Comparative Performance Graph also included at pages 10 and 13, respectively of
the Proxy Statement, are expressly not incorporated by reference.

ITEM 12       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

              The information under the captions "Security Ownership of Certain
Beneficial Owners and Management" set forth on pages 6 through 7 in the
Company's Proxy Statement relating to the Annual Meeting of Shareholders to be
held on July 29, 1997, is incorporated herein by reference.

ITEM 13       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

              There were no such transactions in Fiscal 1997.

                                   PART IV

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

    (a)       The following documents are filed as a part of this report:

              (1) FINANCIAL STATEMENTS

                  The following consolidated financial statements of Cybex
                  Computer Products Corporation are filed as a part of this
                  Annual Report on Form 10-K:

                  -   Report of Independent Public Accountants

                  -   Consolidated Balance Sheets as of March 31, 1996 and 1997

                  -   Consolidated Statements of Income for the years ended 
                      March 31, 1995, 1996, and 1997




                                      20
<PAGE>   23

                  -   Consolidated Statements of Changes in Shareholders' 
                      Equity for the years ended March 31, 1995, 1996, and 1997

                  -   Consolidated Statements of Cash Flows for the years ended 
                      March 31, 1995, 1996, and 1997

                  -   Notes to Consolidated Financial Statements

              (2)     SCHEDULES TO FINANCIAL STATEMENTS

                  -   Report of Independent Public Accountants

                  -   Schedule II - Valuation and Qualifying Accounts

              (3)     EXHIBITS

<TABLE>
<CAPTION>
Exhibit                                                                               Sequential                             
Number                Description                                                    Page Number                             
------                -----------                                                    -----------                             

<S>           <C>                                                                      <C>     
 3.1          Amended and Restated Articles of Incorporation of the Company, 
              incorporated by reference (pursuant to the provisions of Rule
              12(b)-32) to Exhibit No. 3.1 to Amendment No. 1 to Registration
              Statement No. 33-93124.

 3.2          Amended and Restated By-Laws of the Company, incorporated by 
              reference (pursuant to the provisions of Rule 12(b)-32) to Exhibit
              No. 3.2 to Amendment No. 1 to Registration Statement No. 33-93124.

 4.1          Specimen of Common Stock Certificate of the Company, incorporated
              by reference (pursuant to the provisions of Rule 12(b)-32) to
              Exhibit No. 4 to Amendment No. 1 to Registration Statement No.
              33-93124.

10.1          Revolving Line of Credit Agreement by and between the Company and 
              First Commercial Bank, incorporated by reference (pursuant to the
              provisions of Rule 12(b)-32) to Exhibit No. 10.1 to Registration
              Statement No. 33-93124.

10.2          Restated 1989 Employee Incentive Stock Option Plan, incorporated 
              by reference (pursuant to the provisions of Rule 12(b)-32) to
              Exhibit No. 10.2 to Registration Statement No. 33-93124, and
              Amendment to 1989 Employee Incentive Stock Option Plan,
              incorporated by reference (pursuant to the provisions of Rule
              12(b)- 32) to Exhibit No. 10.13 to Amendment No. 1 to Registration
              Statement No. 33- 93124.

10.3          1995 Employee Stock Option Plan, incorporated by reference 
              (pursuant to the provisions of Rule 12(b)-32) to Exhibit No. 10.3
              to Registration Statement No. 33-93124.

10.4          1995 Outside Directors Stock Option Plan, incorporated by 
              reference (pursuant to the provisions of Rule 12(b)-32) to Exhibit
              No. 10.4 to Registration Statement No. 33-93124.
</TABLE>



                                      21
<PAGE>   24

<TABLE>
<S>           <C>
 10.5         Lease Agreement dated May 19, 1993, by and among the Company, 
              Harold L. Eskew and Fred A. Beam, incorporated by reference
              (pursuant to the provisions of Rule 12(b)-32) to Exhibit No. 10.5
              to Registration Statement No. 33-93124.

 10.6         Smith Barney Shearson Flexible Prototype Nonstandardized
              401(k) Plan Adoption Agreement #007 and Smith Barney Shearson
              Prototype Defined Contribution Plan Document #005 and Trust
              Agreement.

 10.7         Employment and Noncompetition Agreement by and between the 
              Company and Stephen F. Thornton, dated June 1, 1995, incorporated
              by reference (pursuant to the provisions of Rule 12(b)-32) to
              Exhibit No. 10.7 to Registration Statement No. 33-93124.

 10.8         Employment and Noncompetition Agreement by and between the 
              Company and Remigius G. Shatas, dated June 1, 1995, incorporated
              by reference (pursuant to the provisions of Rule 12(b)-32) to
              Exhibit No. 10.8 to Registration Statement No. 33-93124.

 10.9         Employment and Noncompetition Agreement by and between the 
              Company and Robert R. Asprey, dated June 1, 1995, incorporated by
              reference (pursuant to the provisions of Rule 12(b)-32) to Exhibit
              No. 10.9 to Registration Statement No. 33-93124.

10.10         Employment and Noncompetition Agreement by and between the 
              Company and Doyle C. Weeks, dated June 1, 1995, incorporated by
              reference (pursuant to the provisions of Rule 12(b)-32) to Exhibit
              No. 10.10 to Registration Statement No. 33-93124.

10.11         Employment and Noncompetition Agreement by and between the 
              Company and R. Byron Driver, dated June 1, 1995, incorporated by
              reference (pursuant to the provisions of Rule 12(b)-32) to Exhibit
              No. 10.11 to Registration Statement No. 33-93124.

11            Statement of Computation of Per Share Earnings.

13            Cybex Computer Products Corporation Annual Report to Shareholders
              for the Fiscal Year Ended March 31, 1997. Such Annual Report shall
              not be deemed to be filed with the Securities and Exchange
              Commission as a part of this Form 10- K Annual Report or otherwise
              subject to the liabilities of Section 18 of the Securities
              Exchange Act of 1934, as amended.

23.1          Consent of Coopers & Lybrand L.L.P.

27            Financial Data Schedule (for SEC use only).
</TABLE>

    The Company agrees to furnish to the Securities and Exchange Commission,
upon request, a copy of each instrument defining the rights of holders of the
Company's long-term debt.




                                      22
<PAGE>   25

THE COMPANY WILL FURNISH TO EACH SHAREHOLDER, UPON WRITTEN REQUEST, COPIES
OF THE EXHIBITS REFERRED TO ABOVE AT A COST OF TEN CENTS PER PAGE.  REQUESTS
SHOULD BE ADDRESSED TO:  DOYLE C. WEEKS, CHIEF FINANCIAL OFFICER, CYBEX
COMPUTER PRODUCTS CORPORATION, 4912 RESEARCH DRIVE, HUNTSVILLE, ALABAMA
35805.

    (b)       No Form 8-K was filed by the Company during the last quarter of
              the fiscal year ended March 31, 1997.

    (c)       Exhibits.  See Item 14(a)(3) above and the separate Exhibit Index 
              attached hereto.

    (d)       Financial Statement Schedules.  See Item 14(a)(2) above.



                                      23
<PAGE>   26



                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                     CYBEX COMPUTER PRODUCTS CORPORATION

                                       
<TABLE>
<CAPTION>

                                                                                                                   PAGE
                                                                                                                  NUMBER
                                                                                                                  ------
<S>                                                                                                                 <C>
Report of Independent Accountants.........................................................................          F-2

Consolidated Balance Sheets as of March 31, 1996 and 1997.................................................          F-3

Consolidated Statements of Income for the years ended March 31, 1995, 1996 and 1997.......................          F-4

Consolidated Statements of Changes in Shareholders' Equity for the years ended March 31,
  1995, 1996 and 1997.....................................................................................          F-5

Consolidated Statements of Cash Flows for the years ended March 31, 1995, 1996
  and 1997................................................................................................          F-6

Notes to Consolidated Financial Statements................................................................          F-8

</TABLE>


                                     F-1


<PAGE>   27



REPORT OF INDEPENDENT ACCOUNTANTS



To the Stockholders and Board of Directors
Cybex Computer Products Corporation
Huntsville, Alabama

We have audited the accompanying consolidated balance sheets of Cybex Computer
Products Corporation (the Company) as of March 31, 1996 and 1997, and the
related consolidated statements of income, changes in shareholders' equity, and
cash flows for each of the three years in the period ended March 31, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Cybex Computer
Products Corporation as of March 31, 1996 and 1997, and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended March 31, 1997, in conformity with generally accepted accounting
principles.

                                                        COOPERS & LYBRAND L.L.P.

BIRMINGHAM, ALABAMA
APRIL 22, 1997



                                     F-2


<PAGE>   28



CYBEX COMPUTER PRODUCTS CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, 1996 and 1997

<TABLE>
<CAPTION>
                                                                                              1996                 1997

                                     ASSETS

<S>                                                                                       <C>                  <C>
Current assets:                                                                        
  Cash and cash equivalents                                                               $   862,878          $ 2,424,385
  Short-term investments                                                                   36,907,899           38,688,836
  Accounts receivable - trade, less allowance for doubtful accounts of
      $131,383 and $350,837 in 1996 and 1997, respectively                                  4,276,640            5,409,706
  Income tax refund receivable                                                                118,651
  Inventories                                                                               3,487,043            3,835,356
  Other current assets                                                                         59,029              698,163
  Deferred income taxes                                                                       393,639              623,000
                                                                                          -----------          -----------
    Total current assets                                                                   46,105,779           51,679,446
Long-term investments, net of unrealized loss                                                                    2,196,218
Property and equipment, net of accumulated depreciation                                     1,109,918            2,422,292
Other assets                                                                                  202,065              228,757
                                                                                          -----------          -----------

                                                                                          $47,417,762          $56,526,713
                                                                                          ===========          ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Note payable                                                                            $ 5,000,000          $ 8,000,000 
  Accounts payable and accrued expenses                                                     1,478,593            2,151,371 
  Income taxes payable                                                                                             158,734 
  Other current liabilities                                                                   233,124            1,149,419 
                                                                                          -----------          -----------
    Total current liabilities                                                               6,711,717           11,459,524 
Deferred Income taxes                                                                          85,024               80,000 
                                                                                          -----------          -----------
    Total liabilities                                                                       6,796,741           11,539,524 
                                                                                          -----------          -----------

Shareholders' equity:
  Preferred stock, par value $.001 per share; 5,000,000 shares
   authorized, no shares issued
  Common stock, par value $.001 per share; 25,000,000 shares authorized; 1996 -
   6,068,008 shares issued, 5,504,383 shares outstanding
   1997 - 6,090,508 shares issued, 5,429,383 shares outstanding                                 6,069                6,091      
  Additional paid-in capital                                                               34,079,719           34,119,697      
  Unrealized loss on investments                                                                                   (77,669)     
  Retained earnings                                                                        10,370,114           16,209,614      
  Treasury stock, at cost; 1996 - 563,625 shares, 1997 - 661,125 shares                                                         
                                                                                           (3,834,881)          (5,270,544)     
                                                                                          -----------          -----------      
    Total shareholders' equity                                                             40,621,021           44,987,189       
                                                                                          -----------          -----------      
                                                                                                                                
                                                                                          $47,417,762          $56,526,713       
                                                                                          ===========          ===========      

</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.

                                     F-3


<PAGE>   29



CYBEX COMPUTER PRODUCTS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
for the years ended March 31, 1995, 1996, and 1997

<TABLE>
<CAPTION>



                                                                                1995                1996               1997

<S>                                                                    <C>                 <C>                <C>       
Net sales                                                              $      18,181,579   $     25,009,762   $     34,568,465

Cost of sales                                                                  8,040,118         11,151,343         16,408,703
                                                                       -----------------   ----------------   ----------------

   Gross profit                                                               10,141,461         13,858,419         18,159,762

Research and development expenses                                              1,599,941          1,686,448          2,374,174
Selling, general, and administrative expenses                                  4,491,476          6,095,891          8,454,735
                                                                       -----------------   ----------------   ----------------

   Operating income                                                            4,050,044          6,076,080          7,330,853
Interest income, net                                                              51,908          1,156,597          1,611,064
Other income, net                                                                                    52,232            290,583
                                                                       -----------------   ----------------   ----------------

   Income before provision for income taxes                                    4,101,952          7,284,909          9,232,500

Provision for income taxes                                                     1,401,785          2,591,624          3,393,000
                                                                       -----------------   ----------------   ----------------

   Net income                                                          $       2,700,167   $      4,693,285   $      5,839,500
                                                                       =================   ================   ================

Net income per common and common equivalent share:

   Primary                                                             $             .82   $            .92   $           1.04
                                                                       =================   ================   ================

   Fully diluted                                                       $             .73   $            .92   $           1.04
                                                                       =================   ================   ================

Weighted average common and common equivalent shares outstanding:

   Primary                                                                     3,284,881          5,094,459          5,593,524
                                                                       =================   ================   ================

   Fully diluted                                                               3,717,903          5,094,459          5,593,524
                                                                       =================   ================   ================

</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.

                                     F-4


<PAGE>   30



CYBEX COMPUTER PRODUCTS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
for the years ended March 31, 1995, 1996, and 1997

<TABLE>
<CAPTION>

                                                                                        
                                     COMMON STOCK            ADDITIONAL      UNREALIZED     
                              --------------------------       PAID-IN         LOSS ON   
                                  SHARES        AMOUNT         CAPITAL       INVESTMENTS    
                              ------------   ------------   ------------   -------------   

<S>                            <C>                 <C>        <C>              <C>   
Balance, March 31, 1994          3,138,783         $3,139     $  374,317             
                                                                                     
Issuance of                                                                          
  common stock                     151,875            152        219,418             
                                                                                     
Purchase of 90,000                                                                   
  shares of treasury stock              
                                                                                     
                                                                                     
Net Income                              
                               -----------         ------     ----------   
                                                                                     
Balance, March 31, 1995          3,290,658          3,291        593,735             
                                                                                     
Issuance of common stock           680,625            681        909,819             
                                                                                     
Issuance of common stock                                                             
  through initial public                                                             
  offering, net of offering                                                          
  costs                          2,096,725          2,097     32,576,165             
                                                                                     
Purchase of 234,000 shares                                                           
  of treasury stock                                                                  
                                                                                     
Net income                                                                           
                               -----------         ------    -----------   
                                                                                     
Balance, March 31, 1996          6,068,008          6,069     34,079,719             
                                                                                     
Issuance of common stock            22,500             22         39,978             
                                                                                     
Purchase of 97,500 shares                                                            
  of treasury stock                               
                                                  
Unrealized loss on                                                             $(77,669)
  investments                          
                                       
Net income                                           
                               -----------         ------    -----------       --------

Balance, March 31, 1997          6,090,508         $6,091    $34,119,697       $(77,669)
                               ===========         ======    ===========       ========

<CAPTION>

                                                   
                                RETAINED        TREASURY                     
                                EARNINGS         STOCK            TOTAL   
                              ------------   -------------    -----------
<S>                            <C>            <C>             <C>   
Balance, March 31, 1994        $ 2,976,662    $  (314,000)    $ 3,040,118

Issuance of
  common stock                                                    219,570

Purchase of 90,000
  shares of treasury stock                       (240,000)       (240,000)


Net Income                       2,700,167                      2,700,167
                               -----------    -----------     -----------

Balance, March 31, 1995          5,676,829       (554,000)      5,719,855

Issuance of common stock                                          910,500

Issuance of common stock
  through initial public
  offering, net of offering
  costs                                                        32,578,262


Purchase of 234,000 shares
  of treasury stock                            (3,280,881)     (3,280,881)

Net income                       4,693,285                      4,693,285
                               -----------    -----------     -----------

Balance, March 31, 1996         10,370,114     (3,834,881)     40,621,021

Issuance of common stock                                           40,000

Purchase of 97,500 shares
  of treasury stock                            (1,435,663)     (1,435,663)

Unrealized loss on                                                (77,669)
  investments

Net income                       5,839,500                      5,839,500
                               -----------    -----------     -----------

Balance, March 31, 1997        $16,209,614    $(5,270,544)    $44,987,189
                               ===========    ===========     ===========

</TABLE>



The accompanying notes are an integral part of these consolidated financial
statements.


                                     F-5


<PAGE>   31



CYBEX COMPUTER PRODUCTS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended March 31, 1995, 1996, and 1997

<TABLE>
<CAPTION>
                                                                           1995               1996              1997
                                                                                                          
<S>                                                                     <C>              <C>                <C>
Cash flows from operating activities:                                                                     

 Net income                                                             $ 2,700,167      $  4,693,285       $  5,839,500
                                                                                                          
 Adjustments to reconcile net income to net cash provided by operating                                    
    activities:                                                                                           
                                                                                                          
   Depreciation                                                             137,824           235,138            355,996
                                                                                                          
   Amortization of discount on investments                                   (8,803)         (538,810)        (1,149,879)
                                                                                                          
   Provision for losses on accounts receivable                              190,950            11,074            416,000
                                                                                                          
   Gain on sale of investments                                               (4,038)                            (277,047)
                                                                                                          
   Deferred income taxes                                                   (109,663)           (9,856)          (234,385)
                                                                                                          
   Changes in operating assets and liabilities:                                                           
                                                                                                          
     Accounts receivable - trade                                           (994,371)       (1,731,352)        (1,549,066)
                                                                                                          
     Inventories                                                           (724,742)       (1,450,199)          (348,313)
                                                                                                          
     Accounts payable and accrued expenses                                  633,221          (173,715)           672,778
                                                                                                          
     Other                                                                 (106,521)          (21,861)           250,469
                                                                                                          
     Income taxes payable/receivable                                       (176,590)           (5,217)           277,385
                                                                        -----------      ------------       ------------ 
       Net cash provided by operating activities                          1,537,434         1,008,487          4,253,438
                                                                        -----------      ------------       ------------ 
                                                                                                          
Cash flows from investing activities:                                                                     
                                                                                                          
  Purchases of property and equipment                                      (511,203)         (550,763)        (1,668,370)
                                                                                                          
  Purchases of investments available for sale                            (1,935,679)      (73,855,402)       (67,852,690)

  Proceeds from sale of investments                                         304,975        18,973,858          5,551,134
                                                                                                          
  Proceeds from maturities of investments                                   280,000        19,876,000         59,673,658
                                                                        -----------      ------------       ------------ 
   Net cash used in investing activities                                 (1,861,907)      (35,556,307)        (4,296,268)
                                                                        -----------      ------------       ------------ 
                                                                                                          
Cash flows from financing activities:                                                                     
                                                                                                          
  Proceeds from note payable and line of credit                             250,000         6,100,000          8,000,000
                                                                                                          
  Repayment of note payable and line of credit                             (250,000)       (1,100,000)        (5,000,000)
                                                                                                          
  Proceeds from initial public offering                                                    32,578,262     
                                                                                                          
  Proceeds from issuance of common stock                                    219,570           910,500             40,000
                                                                                                          
  Purchase of treasury stock                                               (240,000)       (3,280,881)        (1,435,663)
                                                                        -----------      ------------       ------------ 
   Net cash provided by (used in) financing activities                      (20,430)       35,207,881          1,604,337
                                                                        -----------      ------------       ------------ 

                                                                                                          
   Net increase (decrease) in cash and cash equivalents                    (344,903)          660,061          1,561,507
                                                                                                          
Cash and cash equivalents, beginning of year                                547,720           202,817            862,878
                                                                        -----------      ------------       ------------ 
Cash and cash equivalents, end of year                                  $   202,817      $    862,878       $  2,424,385
                                                                        ===========      ============       ============
                                                                                                          
Supplemental disclosures of cash flow information:                                                        
                                                                                                          
  Cash paid during the year for interest                                $     1,074      $      3,579       $      8,021
                                                                        ===========      ============       ============
</TABLE>



                                      F-6
<PAGE>   32

<TABLE>

  <S>                                                                   <C>              <C>                <C>    
  Cash paid during the year for income taxes,
   net of refunds received                                              $ 1,691,520      $  2,606,693       $  3,350,000
                                                                        ===========      ============       ============
</TABLE>

Noncash transactions:
During the 1997 fiscal year the Company recorded $77,669 of unrealized losses
related to its available-for- sale investments. The unrealized losses were
recorded as non-cash reductions of long-term investments and shareholders'
equity.

The accompanying notes are an integral part of these consolidated financial
statements.

                                     F-7


<PAGE>   33



CYBEX COMPUTER PRODUCTS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       NATURE OF BUSINESS

         Cybex Computer Products Corporation (the Company) develops, produces
         and markets computer keyboard, video monitor and mouse switch and
         extension products. The Company sells its products to dealers,
         end-users and original equipment manufacturers in the United States,
         Canada, and Europe as well as in other foreign markets. The Company has
         manufacturing facilities located in Huntsville, Alabama and Shannon,
         Ireland (see Note 3). In addition, the Company has a wholly owned
         subsidiary, Cybex International Corporation (CIC), to facilitate sales
         in certain overseas markets and obtain more favorable U.S. income tax
         treatment on those sales. International sales, principally to customers
         in European countries, accounted for approximately 15%, 20%, and 21% of
         the Company's net sales for the years ended March 31, 1995, 1996, and
         1997, respectively.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The principal accounting policies of the Company are as follows:

         PRINCIPLES OF CONSOLIDATION - The Company's consolidated financial
         statements include the Company and its two wholly owned subsidiaries,
         CIC and Cybex Europe Ltd. All significant intercompany amounts and
         transactions have been eliminated in consolidation.

         CASH EQUIVALENTS - The Company considers all highly liquid debt
         instruments purchased with an original maturity of three months or less
         to be cash equivalents.

         INVENTORIES - Raw materials, work in process, and finished goods are
         recorded using the lower of standard cost, which approximates average
         cost, or market.

         FINANCIAL INSTRUMENTS - The carrying amounts reported in the balance
         sheets for cash and cash equivalents, accounts receivable, accounts
         payable, and the note payable approximate fair value because of the
         immediate or short-term maturity of these financial instruments.

         The Company's investments are composed of U.S. treasury bills, common
         stock, and corporate bonds. Debt securities that the Company has the
         positive intent and ability to hold to maturity are classified as
         held-to-maturity securities and reported at amortized cost. Debt and
         equity securities that are bought and held principally for the purpose
         of selling them in the near term are classified as trading securities
         and reported at fair value, with unrealized gains and losses included
         in earnings. Debt and equity securities not classified as either
         held-to-maturity securities or trading securities are classified as
         available-for-sale securities and reported at fair value, with
         unrealized gains and losses excluded from earnings and reported in a
         separate component of shareholders' equity. All of the Company's
         investments at March 31, 1996 and 1997 have been classified as
         available-for-sale (see Note 8).

         Realized gains or losses on the Company's investments are computed
         using the specific identification method.

         PROPERTY AND EQUIPMENT - Property and equipment are carried at cost,
         less accumulated depreciation, and include expenditures that
         substantially increase the useful lives of existing assets. Maintenance
         and repairs are charged to current operations as incurred. Upon sale,
         retirement, or other disposition of these assets, the cost and related
         accumulated depreciation are removed from the respective accounts, and
         any gain or loss on the disposition is included in net income.



                                     F-8


<PAGE>   34


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


         Provisions for depreciation are computed using the straight-line method
         over the estimated useful lives of the assets which generally range
         from 5 to 7 years.

         LONG-LIVED ASSETS - The Company recognizes impairment losses on
         long-lived assets used in operations when indicators of impairment are
         present and the undiscounted cash flows estimated to be generated by
         those assets are less then the assets' carrying values. There were no
         such losses recognized during 1995, 1996, or 1997.

         LIABILITY FOR SALES AND WARRANTY RETURNS - The Company's sales
         generally include a one-month unconditional return policy and a
         twelve-month limited warranty for product defects. The liability for
         sales and warranty returns, which totaled approximately $200,000 and
         $345,000 at March 31, 1996 and 1997, respectively, is management's
         estimate of the Company's liability for such sales returns (at gross
         profit foregone) and warranty returns (at cost to repair or replace
         products) on sales made by the Company. This liability is included in
         other current liabilities in the consolidated balance sheets.

         INCOME TAXES - The Company accounts for income taxes using the asset
         and liability method. The Company provides for income taxes currently
         payable and, in addition, provides deferred income taxes for temporary
         differences between the tax bases of assets and liabilities and their
         reported amounts in the financial statements. Temporary differences
         relate principally to the allowance for doubtful accounts, liability
         for sales and warranty returns, accrued vacation, accumulated
         depreciation, and inventory. Valuation allowances are established when
         necessary to reduce deferred tax assets to the amount expected to be
         realized.

         FOREIGN CURRENCY - The Company records transactions denominated in
         foreign currency on a monthly basis, using the average monthly exchange
         rate. Bank accounts denominated in foreign currency are translated as
         of the ending balance sheet dates using the current exchange rates.
         Substantially all bank accounts are denominated in United States
         currency.

         REVENUE RECOGNITION - The Company records sales upon shipment of the
         related products, net of any discounts.

         GOVERNMENT GRANTS - The Company records government grants received in
         connection with its Ireland operations (see Note 3) as reductions of
         the corresponding expense in the consolidated statements of income.
         Proceeds from the rent reduction grant are recognized as reductions to
         rent expense as the related rent expense is incurred. Proceeds from the
         employment grant, which are received in multiple installments, are
         amortized as reductions of expense over a twelve month period from the
         creation of the related job. Grants recognized during fiscal year 1997
         as a reduction of related expenses totaled $168,000. Accounts
         receivable of $410,500 and deferred revenue of $352,000 related to the
         grants were included in the balance sheet at March 31, 1997.

         RESEARCH AND DEVELOPMENT EXPENSE - Research and development expenses
         for Company- sponsored projects are expensed as incurred.

         ADVERTISING EXPENSE - Advertising costs are expensed as incurred.
         Advertising expense totaled approximately $1,674,000, $2,239,000, and
         $2,180,000 for the years ended March 31, 1995, 1996, and 1997,
         respectively.

         NET INCOME PER SHARE - Net income per common and common equivalent
         share is based on the weighted average number of shares of common stock
         outstanding during each period and the assumed exercise of dilutive
         stock options (less the number of treasury shares assumed to be
         purchased from the proceeds using the estimated market price [average
         market price during the 



                                     F-9
<PAGE>   35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

         year for primary net income per share and the higher of average market
         price during the year or year-end market price for fully diluted net
         income per share] of the Company's common stock).

         USE OF ESTIMATES - The preparation of the Company's consolidated
         financial statements in conformity with generally accepted accounting
         principles requires management to make estimates and assumptions that
         affect the reported amounts of assets and liabilities and disclosures
         of contingent assets and liabilities at the dates of the financial
         statements and reported amounts of revenues and expenses during the
         reporting periods. Actual results could differ from those estimates.

         RECENTLY ISSUED ACCOUNTING STANDARDS - In February 1997, the Financial
         Accounting Standards Board issued Statement of Financial Accounting
         Standards (SFAS) No. 128, Earnings Per Share. SFAS No. 128 supersedes
         existing generally accepted accounting principles relative to the
         calculation of earnings per share, is effective for years ending after
         December 15, 1997 and requires restatement of all prior period earnings
         per share information upon adoption. Generally, SFAS No. 128 requires a
         calculation of basic earnings per share, which takes into consideration
         income (loss) available to common shareholders and the weighted average
         of common shares outstanding. SFAS No. 128 also requires the
         calculation of a diluted earnings per share, which takes into effect
         the impact of all additional common shares that would have been
         outstanding if all dilutive potential common shares relating to
         options, warrants, and convertible securities had been issued, as long
         as their effect is dilutive, with a related adjustment of income
         available for common shareholders, as appropriate. SFAS No. 128
         requires dual presentation of basic and diluted earnings per share on
         the face of the statement of income and requires a reconciliation of
         the numerator and denominator of the basic earnings per share
         computation. The Company does not expect the effect of its adoption of
         SFAS No. 128 to be material.

3.       EUROPEAN OPERATIONS

         On July 9, 1996, the Company formally established operations in 
         Shannon, Ireland through its newly-formed subsidiary, Cybex Europe Ltd.
         (Cybex-Europe).

         Cybex-Europe executed an agreement with the Shannon Free Airport
         Development Company Limited (Shannon Development) under which
         Cybex-Europe will receive grant monies related to salary and rent
         expense. The maximum amount attainable under the agreement is
         approximately $1.6 million. The grant monies would be repayable, in
         whole or in part, should (1) Cybex-Europe fail to meet certain business
         related objectives established under the agreement which are to be
         achieved over a three-year implementation period and/or (2) the Company
         discontinues operations in Ireland prior to the termination of the
         agreement. The agreement terminates five years from the date the last
         claim is made by the Company for grant monies paid by Shannon
         Development.


4.       INITIAL PUBLIC OFFERING

         On July 28, 1995, the Company completed an initial public offering
         (IPO) of its common stock, receiving net proceeds (after deductions of
         underwriting discounts and other offering expenses) of $32,578,262 from
         the sale of 2,096,725 shares of common stock at the IPO price of $17
         per share. The Company has used and expects to continue to use the
         proceeds for working capital and other general corporate purposes,
         including product development activities to enhance its existing
         products and develop new products, expansion of sales and marketing
         activities, expansion of the Company's current facilities and
         construction of additional facilities.

5.       RECAPITALIZATION AND STOCK SPLIT



                                     F-10
<PAGE>   36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

         On July 10, 1995, the Company's shareholders approved a
         recapitalization plan for the Company whereby all of the Company's $.01
         par value common stock was exchanged for $.001 par value common stock,
         the number of authorized shares of common stock was increased to
         25,000,000 from 10,000,000, and 5,000,000 shares of preferred stock
         were authorized for issuance at later dates at amounts and dividend
         rates that will be determined by the Board of Directors when any shares
         of preferred stock are issued. Following approval by the shareholders,
         the Company declared a 2.25 for 1 stock split. All capital stock and
         stock option information included in the consolidated financial
         statements and notes thereto gives retroactive effect to these
         transactions.

6.       STOCK REPURCHASE PLAN

         The Board of Directors approved a stock repurchase plan during December
         1995 to purchase up to 500,000 shares of Company stock on the open
         market. During the 1996 fiscal year, the Company purchased 234,000
         shares of treasury stock at prices ranging from $12.50 to $14.75 per
         share. During the 1997 fiscal year, the Company purchased 97,500 shares
         of treasury stock at prices ranging from $14.38 to $15.13 per share.

7.       INVENTORIES

         A summary of inventories at March 31, 1996 and 1997 is as follows:

<TABLE>
<CAPTION>
                                                 1996                 1997
        <S>                                   <C>                    <C>
        Raw materials                         $2,035,335              2,358,877
        Work in process                          903,883                888,089
        Finished goods                           547,825                588,390
                                              ----------             ----------   
                                              $3,487,043             $3,835,356
                                              ==========             ==========   
</TABLE>



8. INVESTMENTS

         The cost and approximate market values of available-for-sale securities
         at March 31, 1996 and 1997 are as follows:


<TABLE>
<CAPTION>

                                                          GROSS                GROSS              ESTIMATED
                                    AMORTIZED          UNREALIZED           UNREALIZED             MARKET
                                      COST                GAINS               LOSSES               VALUES
                                -----------------   -----------------  --------------------  -------------------
<S>                             <C>                 <C>                <C>                   <C>
1996
  U.S. Treasury bills           $      36,907,899                                            $        36,907,899
                                =================                                            ===================

1997
  U.S. Treasury bills           $      38,688,836                                            $        38,688,836
  Marketable equity securities          2,227,887   $          58,327  $           (135,996)           2,150,218
  Corporate bonds                          46,000                                                         46,000
                                -----------------   -----------------  --------------------  -------------------

                                $      40,962,723   $          58,327  $           (135,996)          40,885,054
                                =================   =================  ====================  ===================
</TABLE>




                                     F-11
<PAGE>   37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

The amortized cost and market values of debt instruments with fixed maturities
at March 31, by expected maturity, are shown as follows:


<TABLE>
<CAPTION>

                                                  1996                                          1997
                             ----------------------------------------------   ----------------------------------------

                                    AMORTIZED                 MARKET               AMORTIZED              MARKET
                                      COST                     VALUE                 COST                  VALUE
                             -----------------------   --------------------   -------------------   ------------------

<S>                          <C>                       <C>                    <C>                   <C>       
Due in one year or less      $            36,907,899   $         36,907,899   $        38,688,836   $       38,688,836
Due after one year
through five years                                                                         46,000               46,000
                             -----------------------   --------------------   -------------------   ------------------

                             $            36,907,899   $         36,907,899   $        38,734,836   $       38,734,836
                             =======================   ====================   ===================   ==================
</TABLE>


Gross gains on the sale of investments available for sale were approximately
$4,000 and $492,000 in Fiscal 1995 and Fiscal 1997, respectively. Gross losses
were approximately $215,000 in Fiscal 1997. There were no realized gains or
losses in Fiscal 1996.



                                     F-12


<PAGE>   38


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

9.       PROPERTY AND EQUIPMENT

         Property and equipment consists of the following at March 31, 1996 and
         1997:

<TABLE>
<CAPTION>
                                                                1996                       1997

          <S>                                        <C>                       <C>               

          Land                                                                 $          709,625
          Engineering and testing equipment          $           63,308                   168,892
          Production equipment                                  206,799                   574,565
          Marketing fixtures and equipment                      100,960                   105,185
          Office furniture and equipment                        224,126                   408,702
          Computer software and equipment                       967,582                 1,260,473
          Automotive equipment                                    2,200                    17,124
          Leasehold improvements                                 24,745                    45,282
          Construction in progress                               49,781                     3,750
                                                     ------------------        ------------------     

                                                              1,639,501                 3,293,598
          Less accumulated depreciation                        (529,583)                 (871,306)
                                                     ------------------        ------------------     

                                                     $        1,109,918        $        2,422,292
                                                     ==================        ==================     
</TABLE>


10.      SHORT-TERM BORROWINGS

         At March 31, 1996 and 1997, the Company had $5,000,000 and $8,000,000,
         respectively, outstanding under short-term note payables bearing
         interest at the bank's prime rate (8.25% and 8.50% at March 31, 1996
         and 1997, respectively). The amounts outstanding at March 31, 1996 and
         1997 were repaid on April 4, 1996 and April 3, 1997, respectively.

         The Company has a bank line of credit which provides for borrowings up
         to $2,500,000. Interest on outstanding advances is payable monthly at
         the bank's prime rate which was 8.25% and 8.50% at March 31, 1996 and
         1997, respectively. The line of credit is collateralized by the
         Company's accounts receivable, inventories, and certain intangible
         assets and is due on demand. The line of credit expires July 1, 1997.
         The Company had no amounts outstanding on the line of credit at March
         31, 1996 or 1997.



                                     F-13


<PAGE>   39


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

11.      INCOME TAXES

         The provision (benefit) for income taxes for the years ended March 31,
         1995, 1996, and 1997 is comprised of the following:


<TABLE>
<CAPTION>
                                                               1995                   1996                 1997

<S>                                                          <C>                   <C>                  <C>      
Current:
  Federal                                                    $1,361,474            $2,377,923           $3,263,747
  State                                                         149,974               223,557              363,638
                                                             ----------            ----------           ----------

                                                              1,511,448             2,601,480            3,627,385
Deferred:
  Federal                                                       (99,298)               (8,952)            (185,747)
  State                                                         (10,365)                 (904)             (20,638)
  Ireland                                                                                                  (28,000)
                                                             ----------            ----------           ----------
                                                               (109,663)               (9,856)            (234,385)
                                                             ----------            ----------           ----------
Total provision                                              $1,401,785            $2,591,624           $3,393,000
                                                             ==========            ==========           ==========

</TABLE>

The provision for federal income taxes differs from the amount computed by
applying the statutory rate to taxable income as follows:

<TABLE>
<CAPTION>
                                                                1995                  1996                  1997

<S>                                                          <C>                   <C>                  <C>      
Computed "expected" federal income tax expense               $1,394,664            $2,476,869           $3,139,050
Add (deduct):
  Research and development credit                               (61,965)               (4,523)              (9,231)
  CIC foreign sales corporation income                          (11,397)              (20,289)             (10,821)
  State income tax deduction                                    (50,394)              (75,702)            (116,620)
  Other                                                          (8,732)               (7,384)              75,622
                                                             ----------            ----------           ----------

                                                             $1,262,176            $2,368,971           $3,078,000
                                                             ==========            ==========           ==========

</TABLE>

The components of the deferred income tax assets and liabilities at March 31,
1996 and 1997 are as follows:

<TABLE>
<CAPTION>
                                                                                       1996                  1997

<S>                                                                                  <C>                  <C>    
Current deferred income tax asset:
  Allowance for doubtful accounts                                                    $ 47,587             $127,500
  Liability for sales and warranty returns                                             72,440              114,800
  Accrued vacation                                                                     37,187               32,400
  Inventory                                                                           236,425              348,300
                                                                                     --------             --------
    Current deferred income tax asset
                                                                                     $393,639             $623,000
                                                                                     ========             ========
Net noncurrent deferred income tax liability:

  Accumulated depreciation                                                           $ 85,024             $108,000
  Foreign subsidiary net operating loss carryforwards                                                      (28,000)
                                                                                     --------             --------
    Net noncurrent deferred income tax liability                                     $ 85,024             $ 80,000
                                                                                     ========             ========
</TABLE>

12.      COMMITMENTS



                                     F-14


<PAGE>   40


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


         The Company leases the buildings containing its offices and
         manufacturing facilities and certain equipment under various operating
         leases. Rent expense under these leases totaled approximately $203,000,
         $259,000, and $312,000 for the years ended March 31, 1995, 1996, and
         1997, respectively. Minimum future rental payments under the
         noncancelable operating leases are approximately as follows:

<TABLE>
                                  YEAR ENDING MARCH 31:  
                                    <S>                         <C>     
                                    1998                        $296,000
                                    1999                         120,500
                                    2000                          17,000
                                    2001                          16,700
                                    2002                           6,800
                                                                --------
                                                         
                                                                $457,000
                                                                ========
</TABLE>

         The Company's lease for certain of its offices and manufacturing
         facilities expires July 31, 1998, but may be renewed for an additional
         five-year term. The Company has the option to purchase the facilities
         at any time during the lease term for $1,800,000 less $40,000 per year
         for each year that the Company leases the facilities.

         Shannon Development is currently constructing a permanent facility to
         be leased, under an operating lease, by Cybex-Europe for a period of 25
         years. The lease agreement has not been finalized. In the interim,
         Cybex Europe is leasing a temporary facility from Shannon Development
         until the permanent facility is completed.

13.      STOCK OPTIONS

         In 1989 the Company adopted an Employee Incentive Stock Option Plan
         (the 1989 Plan) whereby the Board of Directors may, from time to time,
         grant stock options to officers and key employees of the Company. The
         Company set aside 787,500 shares of common stock for the 1989 plan. The
         options granted under this plan are not exercisable during the first
         two years following the grant date and expire five years from the date
         of grant. The plan provides that the exercise price be equal to the
         fair market value of the common stock, as defined in the plan, at the
         date of grant, except for options issued to persons who own more than
         10% of the Company's outstanding common stock whose exercise price is
         equal to 110% of the fair market value of the common stock at the date
         of grant. On July 10, 1995, the Company's shareholders approved changes
         to the Company's stock option plans whereby the 1989 Plan was
         terminated and replaced by the 1995 Employee Stock Option Plan (the
         1995 Plan). Under the 1995 Plan, options vest and are exercisable in
         twenty percent increments beginning one year from the date of grant and
         expire ten years from the date of grant. The Company set aside 281,250
         shares of common stock for the 1995 Plan.

         The Company's stockholders also approved options for 181,125 shares of
         common stock for the directors who are not employees of the Company
         under the Company's Directors' Compensation Equity Program (the
         Program). During 1995, the Company's shareholders approved changes to
         the Company's stock option plans whereby the Program was terminated
         and replaced by the 1995 Outside Directors Stock Option Plan (the 1995
         Directors Plan). Under the 1995 Directors Plan, options vest and are
         immediately exercisable on date of grant and expire ninety days after
         the time the Participant ceases to be a Director if the Director is
         terminated for cause or three years after the date of termination if
         such termination is due to retirement, permanent disability, or death.
         The Company has set aside 56,250 shares of common stock for the 1995
         Directors Plan.




                                     F-15


<PAGE>   41


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

Pertinent information regarding the plans are as follows:

<TABLE>
<CAPTION>
                                                                                   WEIGHTED
                                                              RANGE OF              AVERAGE
                                         NUMBER OF            EXERCISE             EXERCISE             VESTING
                                          OPTIONS              PRICES                PRICE            PROVISIONS
                                     -----------------   -------------------  -------------------   ---------------
<S>                                   <C>                   <C>                 <C>                     <C>   
                                                                                    
Options outstanding, March 31, 1994     839,250             $.67 - $2.56        $     1.35                Various
Options granted                          33,750             $2.67               $     2.67              100%/year
Options granted                          67,500             $2.67               $     2.67               20%/year
Options exercised                      (136,125)            $.67 - $2.67        $     1.61                Various
                                      ---------                                     
                                                                                    
Options outstanding, March 31, 1995     804,375             $.67 - $2.67        $     1.48                Various
Options granted                           7,500             $17.00 - $24.00     $    19.33              100%/year
Options granted                          85,125             $13.75 - $20.00     $    16.63               20%/year
Options exercised                      (680,625)            $.67 - $2.56        $     1.34                Various
                                      ---------                                     
                                                                                    
Options outstanding, March 31, 1996     216,375             $1.78 - $24.00      $     8.48                Various
Options granted                          12,500             $16.50 - $17.00     $    16.70              100%/year
Options granted                          95,000             $13.25 - $18.15     $    16.79               20%/year
Options exercised                       (22,500)            $1.78               $     1.78               20%/year
                                      ---------                                    
                                                                                   
Options outstanding, March 31, 1997     301,375             $1.78 - $24.00      $    11.94                Various
                                      =========

</TABLE>

The following table summarizes information about stock options outstanding at
March 31, 1997:

<TABLE>
<CAPTION>
                                         OPTIONS OUTSTANDING                            OPTIONS EXERCISABLE
                       ------------------------------------------------------   -----------------------------------
                                            WEIGHTED
                                             AVERAGE            WEIGHTED                              WEIGHTED
      RANGE OF                              REMAINING            AVERAGE                               AVERAGE
      EXERCISE             NUMBER          CONTRACTUAL          EXERCISE            NUMBER            EXERCISE
       PRICES            OUTSTANDING          LIFE                PRICE           EXERCISABLE           PRICE
--------------------   ---------------   ---------------   ------------------   ---------------   -----------------
<S>                    <C>                    <C>          <C>                  <C>               <C>            
        $1.78                   39,375        0.71         $      1.78                   39,375   $      1.78
        $2.67                   61,875        2.47         $      2.67                   36,000   $      2.67
$13.25 - $16.50                 85,500        8.61         $     15.24                   14,500   $     15.26
$17.00 - $18.15                 87,000        8.54         $     17.23                   15,000   $     17.00
$20.00 - $24.00                 27,625        8.09         $     20.36                    7,525   $     21.33
                       ---------------                                          ---------------
                               301,375                                                  112,400
                       ===============                                          ===============

</TABLE>



         The options above were issued at exercise prices which approximate fair
         market value at the date of grant. At March 31, 1997, 138,275 shares
         are available for grant under the plans.

         The Company applies Accounting Principles Board Opinion 25 and related
         Interpretations in accounting for its stock plans. Accordingly, no
         compensation cost has been recognized related to stock options. Had
         compensation cost for the Company's stock-based compensation plans been
         determined based on the fair value at the grant dates for awards under
         those plans consistent with the method prescribed in SFAS No. 123,
         Accounting for Stock-Based Compensation, the Company's net income and
         earnings per share would have been reduced to the pro forma amounts
         indicated below:







                                     F-16
<PAGE>   42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                                 
<TABLE>
                                                                  1996                         1997
           <S>                                                 <C>                          <C>         
           Net income - as reported                            $4,693,285                   $5,839,500
           Net income - pro forma                              $4,607,184                   $5,559,083
           Earnings per share - as reported                    $      .92                   $     1.04
           Earnings per share - pro forma                      $      .90                   $     1.00
</TABLE>



         The pro forma amounts reflected above are not representative of the
         effects on reported net income in future years because, in general, the
         options granted typically do not vest for several years and additional
         awards are made each year. The fair value of each option grant is
         estimated on the grant date using the Black-Scholes option-pricing
         model with the following weighted-average assumptions:

<TABLE>
<CAPTION>
                                                          1996                        1997
          <S>                                         <C>                         <C>      
          Dividend yield                                    0                           0
          Expected life (years)                           3 - 5                       3 - 5
          Expected volatility                             45.7%                       45.7%
          Rick-free interest rate (range)             5.77% - 5.88%               6.16% - 6.35%
</TABLE>

14.      RETIREMENT PLAN

         The Company established a 401(k) savings and profit sharing plan, the
         Cybex Computer Products Corporation Retirement Plan, covering
         substantially all employees effective April 1, 1993. The Company will
         match 25% of an employee's contributions up to 6% of the employee's
         compensation. The Company's expense for matching contributions totaled
         approximately $32,000, $32,000, and $53,000 for the years ended March
         31, 1995, 1996, and 1997, respectively. The Company may also elect to
         make discretionary contributions as determined by its Board of
         Directors. The Company elected to make discretionary contributions of
         approximately $229,000 for the year ended March 31, 1995. The Company
         did not make discretionary contributions during the fiscal years ended
         March 31, 1996 or 1997.

15.      SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED)

         The following table presents unaudited quarterly operating results for
         each of the Company's last eight fiscal quarters. This information has
         been prepared by the Company on a basis consistent with the Company's
         audited financial statements and includes all adjustments, consisting
         only of normal recurring adjustments, that the Company considers
         necessary for a fair presentation of the data.



                                     F-17


<PAGE>   43


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

<TABLE>
<CAPTION>

                                                                   THREE MONTHS ENDED
(In Thousands, Except for Per Share Amounts)

                                         JUNE 30,         SEPTEMBER 30,         DECEMBER 31,          MARCH 31,
                                           1995               1995                  1995                1996
                                       -------------   -------------------   ------------------   ----------------
<S>                                    <C>             <C>                   <C>                  <C>             
Net sales                              $        5,653  $            6,001    $            6,488   $          6,868
Gross profit                           $        3,169  $            3,297    $            3,485   $          3,907
Operating income                       $        1,349  $            1,393    $            1,552   $          1,782
Net income                             $          872  $            1,152    $            1,334   $          1,335
Net income per share (1):
  Primary                              $          .24  $              .22    $              .23   $            .24
  Fully diluted                        $          .24  $              .22    $              .23   $            .24

<CAPTION>
                                                                   THREE MONTHS ENDED
(In Thousands, Except for Per Share Amounts)
                                          JUNE 30,         SEPTEMBER 30,         DECEMBER 31,          MARCH 31,
                                            1996               1996                  1996                1997
                                       -------------   -------------------   ------------------   ----------------

<S>                                    <C>             <C>                   <C>                  <C>             
Net sales                              $        7,428  $            8,050    $            8,917   $         10,173
Gross profit                           $        3,941  $            4,279    $            4,695   $          5,245
Operating income                       $        1,543  $            1,840    $            1,846   $          2,102
Net income                             $        1,231  $            1,473    $            1,533   $          1,603
Net income per share (1):
  Primary                              $          .22  $              .26    $              .27   $            .29
  Fully diluted                        $          .22  $              .26    $              .27   $            .29
</TABLE>



(1)The net income per share for each quarter within a fiscal year does not
   necessarily equal the total net income per share for that particular fiscal
   year due to variations in the estimated value of the Company's common stock
   during the year and the effect these variations had on the fully diluted
   shares outstanding calculation.



                                     F-18


<PAGE>   44


                                  SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Cybex Computer Products Corporation has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.


                                            CYBEX COMPUTER PRODUCTS CORPORATION

                                            By: /s/ Stephen F. Thornton
                                               ---------------------------------
                                               Stephen F. Thornton, Chairman of
                                               the Board of Directors, President
                                               and Chief Executive Officer
                                               (Principal Executive Officer)
                                               
                                               DATED:  June 26, 1997

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Cybex
Computer Products Corporation and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature                                Title                                                Date
---------                                -----                                                ----
<S>                                      <C>                                                  <C> 
/s/ Stephen F. Thornton                  Chairman of the Board of                             June 26, 1997
------------------------                 Directors, President and Chief 
Stephen F. Thornton                      Executive Officer              
                                         (Principal Executive Officer)  
                                                                        

/s/ Doyle C. Weeks                       Senior Vice President - Finance,                     June 26, 1997
------------------------                 Chief Financial Officer, and
Doyle C. Weeks                           Treasurer (Principal Financial      
                                         and Accounting Officer)             
                                                                             
                                                                             

/s/ Remigius G. Shatas                   Senior Vice President,                               June 26, 1997
------------------------                 Chief Technical Officer,        
Remigius G. Shatas                       Secretary and Director         
                                                                        

/s/ Oscar L. Pierce                      Director                                             June 26, 1997
------------------------
Oscar L. Pierce

/s/ David S. Butler                      Director                                             June 26, 1997
------------------------
David S. Butler

/s/ Douglas E. Pritchett                 Director                                             June 26, 1997
------------------------
Douglas E. Pritchett
</TABLE>


<PAGE>   45
                        [COOPERS & LYBRAND LETTERHEAD]



REPORT OF INDEPENDENT ACCOUNTANTS


To the Stockholders and Board of Directors
Cybex Computer Products Corporation
Huntsville, Alabama

Our report on the consolidated financial statements of Cybex Computer Products
Corporation has been included on page F-2 of this Form 10-K.  In connection
with our audit of such financial statements, we have also audited the related
financial statement schedule listed in the index on page 21 of this Form 10-K.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic consolidated financial statements taken as
a whole, presents fairly, in all material respects, the information required to
be included therein.




                                            COOPERS & LYBRAND L.L.P.



Birmingham, Alabama
April 22, 1997
<PAGE>   46
                                                                     SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS
for the years ended March 31, 1995, 1996, and 1997



<TABLE>
<CAPTION>
                                                           Charged        Charged
                                           Beginning          to             to                               Ending
                                            Balance        Expenses       Accounts      Deductions (1)        Balance
                                            -------        --------       --------      --------------        -------
<S>                                        <C>              <C>           <C>           <C>                   <C>
Year ended March 31, 1995:
 Allowance for doubtful accounts           $ 90,896         $190,950      $      -      $(147,860)            $134,076
 Allowance for inventory obsolescence      $      -         $150,000      $      -      $       -             $150,000

Year ended March 31, 1996:
 Allowance for doubtful accounts           $134,076         $ 11,074      $      -      $ (13,767)            $131,383
 Allowance for inventory obsolescence      $150,000         $103,000      $      -      $       -             $253,000

Year ended March 31, 1997:
 Allowance for doubtful accounts           $131,383         $416,000      $      -      $(196,546)            $350,837
 Allowance for inventory obsolescence      $253,000         $244,840      $      -      $       -             $497,840

</TABLE>

(1) Deductions consist of specific accounts receivable written off against the
allowance for doubtful accounts
<PAGE>   47
                                EXHIBIT INDEX


<TABLE>
<CAPTION>
Exhibit                                                                               Sequential                             
Number                Description                                                    Page Number                             
------                -----------                                                    -----------                             

<S>           <C>                                                                      <C>     
  3.1         Amended and Restated Articles of Incorporation of the Company, 
              incorporated by reference (pursuant to the provisions of Rule
              12(b)-32) to Exhibit No. 3.1 to Amendment No. 1 to Registration
              Statement No. 33-93124.
     
  3.2         Amended and Restated By-Laws of the Company, incorporated by 
              reference (pursuant to the provisions of Rule 12(b)-32) to Exhibit
              No. 3.2 to Amendment No. 1 to Registration Statement No. 33-93124.
     
  4.1         Specimen of Common Stock Certificate of the Company, incorporated
              by reference (pursuant to the provisions of Rule 12(b)-32) to
              Exhibit No. 4 to Amendment No. 1 to Registration Statement No.
              33-93124.
     
 10.1         Revolving Line of Credit Agreement by and between the Company and 
              First Commercial Bank, incorporated by reference (pursuant to the
              provisions of Rule 12(b)-32) to Exhibit No. 10.1 to Registration
              Statement No. 33-93124.
     
 10.2         Restated 1989 Employee Incentive Stock Option Plan, incorporated 
              by reference (pursuant to the provisions of Rule 12(b)-32) to
              Exhibit No. 10.2 to Registration Statement No. 33-93124, and
              Amendment to 1989 Employee Incentive Stock Option Plan,
              incorporated by reference (pursuant to the provisions of Rule
              12(b)- 32) to Exhibit No. 10.13 to Amendment No. 1 to Registration
              Statement No. 33- 93124.
     
 10.3         1995 Employee Stock Option Plan, incorporated by reference 
              (pursuant to the provisions of Rule 12(b)-32) to Exhibit No. 10.3
              to Registration Statement No. 33-93124.
     
 10.4         1995 Outside Directors Stock Option Plan, incorporated by 
              reference (pursuant to the provisions of Rule 12(b)-32) to Exhibit
              No. 10.4 to Registration Statement No. 33-93124.

 10.5         Lease Agreement dated May 19, 1993, by and among the Company, 
              Harold L. Eskew and Fred A. Beam, incorporated by reference
              (pursuant to the provisions of Rule 12(b)-32) to Exhibit No. 10.5
              to Registration Statement No. 33-93124.

 10.6         Smith Barney Shearson Flexible Prototype Nonstandardized
              401(k) Plan Adoption Agreement #007 and Smith Barney Shearson
              Prototype Defined Contribution Plan Document #005 and Trust
              Agreement.

 10.7         Employment and Noncompetition Agreement by and between the 
              Company and Stephen F. Thornton, dated June 1, 1995, incorporated
              by reference (pursuant to the provisions of Rule 12(b)-32) to
              Exhibit No. 10.7 to Registration Statement No. 33-93124.

 10.8         Employment and Noncompetition Agreement by and between the 
              Company and Remigius G. Shatas, dated June 1, 1995, incorporated
              by reference (pursuant to the provisions of Rule 12(b)-32) to
              Exhibit No. 10.8 to Registration Statement No. 33-93124.

 10.9         Employment and Noncompetition Agreement by and between the 
              Company and Robert R. Asprey, dated June 1, 1995, incorporated by
              reference (pursuant to the provisions of Rule 12(b)-32) to Exhibit
              No. 10.9 to Registration Statement No. 33-93124.

 10.10        Employment and Noncompetition Agreement by and between the 
              Company and Doyle C. Weeks, dated June 1, 1995, incorporated by
              reference (pursuant to the provisions of Rule 12(b)-32) to Exhibit
              No. 10.10 to Registration Statement No. 33-93124.

 10.11        Employment and Noncompetition Agreement by and between the 
              Company and R. Byron Driver, dated June 1, 1995, incorporated by
              reference (pursuant to the provisions of Rule 12(b)-32) to Exhibit
              No. 10.11 to Registration Statement No. 33-93124.

 11           Statement of Computation of Per Share Earnings.

 13           Cybex Computer Products Corporation Annual Report to Shareholders
              for the Fiscal Year Ended March 31, 1997. Such Annual Report shall
              not be deemed to be filed with the Securities and Exchange
              Commission as a part of this Form 10- K Annual Report or otherwise
              subject to the liabilities of Section 18 of the Securities
              Exchange Act of 1934, as amended.

 23.1         Consent of Coopers & Lybrand L.L.P.

 27           Financial Data Schedule (for SEC use only).
</TABLE>