<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, 1998

   [ ]       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: 000-26496

                       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.  [ ]

     The aggregate market value of the voting stock held by non-affiliates of
Cybex Computer Products Corporation as of June 19, 1998, was approximately
$140,736,657.

     As of June 19, 1998, the number of shares of Cybex Computer Products
Corporation Common Stock outstanding was 8,272,521.

                       DOCUMENTS INCORPORATED BY REFERENCE

          (1) Part III incorporates by reference portions of the Cybex Computer
Products Corporation Proxy Statement for the fiscal year ended March 31, 1998 
(to be filed with the Commission on or about July 14, 1998).


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                                TABLE OF CONTENTS

<TABLE>
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<S>       <C>                                                                                         <C>
PART I
          ITEM 1.   BUSINESS.....................................................                      3
                    GENERAL......................................................                      3
                    RECENT DEVELOPMENTS..........................................                      3
                    THE INDUSTRY.................................................                      5
                    CYBEX SOLUTIONS..............................................                      5
                    BUSINESS STRATEGY............................................                      6
                    PRODUCTS.....................................................                      7
                    RESEARCH AND PRODUCT DEVELOPMENT.............................                      8
                    CUSTOMERS, SALES, AND MARKETING..............................                      9
                    CUSTOMER SERVICE AND SUPPORT.................................                      9
                    MANUFACTURING................................................                     10
                    TRADEMARK INFORMATION........................................                     10
                    COMPETITION..................................................                     10
                    EMPLOYEES....................................................                     10
                    RISK FACTORS.................................................                     11

          ITEM 2.   PROPERTIES...................................................                     15

          ITEM 3.   LEGAL PROCEEDINGS............................................                     15

          ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..........                     15


PART II

          ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                    SHAREHOLDER MATTERS..........................................                     16

          ITEM 6.   SELECTED FINANCIAL DATA......................................                     17

          ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND RESULTS OF OPERATIONS..........................                     18

          ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET 
                    RISK.........................................................                     23

          ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..................                     23

          ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                    ACCOUNTING AND FINANCIAL DISCLOSURE..........................                     23


PART III

          ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT...........                     24

          ITEM 11.  EXECUTIVE COMPENSATION.......................................                     24

          ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                    MANAGEMENT...................................................                     24

          ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............                     24


PART IV

          ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
                    ON FORM 8-K..................................................                     25
</TABLE>


                                        2

<PAGE>   3


                                     PART I

ITEM 1.  BUSINESS.

GENERAL

    Cybex Computer Products Corporation (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"), 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 reductions including lower initial
investment, reduced 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,
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")
(collectively with KVM Switch Products, "KVM Switch and Extension Products"),
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.

    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 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,
distributors, original equipment manufacturers ("OEMs") and end users, primarily
through its inside sales and customer support staff, advertisements in trade
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, major distributors,
end users and OEMs; (ii) expanding domestic and international sales through new
and existing distributors and utilizing its European sales, distribution, and
manufacturing facilities in Shannon, Ireland and Steinhagen, Germany, and its
sales offices in four European countries; (iii) recruiting and training
additional sales personnel; (iv) expanding its direct mail advertising and
telemarketing programs; and (v) increasing e-commerce and management to support
sales via the Internet. From Fiscal 1996 to Fiscal 1997 and from Fiscal 1997 to
Fiscal 1998, the Company's compound annual growth rates in net sales were 38.2%
and 52.0%, respectively. The growth rate in net income from Fiscal 1996 to
Fiscal 1997 was 24.4%. From Fiscal 1997 to Fiscal 1998, the growth rate for net
income was 41.7% excluding a $4.7 million write-off of purchased research and
development costs in connection with the acquisition of the PolyCon Companies,
as hereinafter defined. In Fiscal 1998, 86.1% of net sales was attributable to
KVM Switch Products, and 11.9% was attributable to KVM Extension Products.


RECENT DEVELOPMENTS

    The Company is nearing completion of its new, 120,000 square foot corporate
office facility located on an 18 acre tract of land owned by the Company in
Cummings Research Park in Huntsville, Alabama. The new offices will contain the
Company's sales, marketing, research and development, manufacturing,
administration and accounting departments. The Company will occupy the new
offices during the second quarter of Fiscal 1999.


                                       3

<PAGE>   4


    On March 30, 1998, the Company announced a 3-for-2 stock split, effected as
a 50% stock dividend. The additional new shares were distributed to shareholders
on April 28, 1998.

    In March 1998, Kieran MacSweeney, formerly Managing Director of Cybex Europe
Ltd., a wholly owned subsidiary of the Company ("Cybex Europe"), was promoted to
President of Cybex Europe. Mr. MacSweeney is responsible for overall management
of European operations, including manufacturing, distribution, customer service
and support, and sales and marketing.

    In December 1997, Cybex Europe acquired for $8.0 million cash Elsner
Computertechnik GmbH ("Elsner"), a German-based manufacturer and marketer of
high-end KVM switch products, and PolyCon Data Systems GmbH, a sales and
marketing company for Elsner products (collectively with Elsner, the "PolyCon
Companies"). With sales of approximately $9.0 million for the 12 months ended
March 31, 1998, the PolyCon Companies sell products to a wide variety of
companies, ranging from medium and large industrial-based companies to some of
the world's largest software and hardware manufacturers, including Microsoft
Corporation, Siemens Nixdorf Informationssysteme AG, Cicso Systems, Inc. and
Dell Computer Corporation. With the acquisition of the PolyCon Companies, the
Company believes that it is now the largest KVM product manufacturing, design
and distribution company in Europe.

    In October 1997, the Company announced the introduction of its new
SwitchView(TM) two and four-port KVM switch targeted at the desktop market.
SwitchView(TM) is capable of switching KVM signals between as many as 64
computers with PS/2 style and AT keyboards, VGA/SVGA video, and various types of
mice into a single keyboard, video monitor and mouse. SwitchView is the first
Company designed product to be mass marketed. For Fiscal 1998, Switch View sales
were $1.6 million.

    In August 1997, the Company entered into a distribution agreement with Tech
Data Corporation ("Tech Data"), a leading distributor of personal computer
products, to distribute the Company's products to Tech Data's customer base of
over 70,000 value-added resellers and retail dealers. Tech Data offers product
lines in software, networking and communications, mass storage, peripherals and
computer systems and provides extensive pre-sale and post-sale training. The
partnership with Tech Data is expected to expand and enhance the Company's
reseller base.

    In July 1997, Gary Johnson, formerly Vice President of Sales Channel
Development, was promoted to Senior Vice President of Sales and Marketing. Mr.
Johnson is responsible for all sales, marketing and product management in the
United States, Asia, the Pacific Rim and the Americas and for providing
marketing support to Cybex Europe.

    In July 1997, Christopher Thomas, formerly Vice President of Engineering,
was promoted to Senior Vice President of Engineering. Mr. Thomas is responsible
for the product development organization, including product definition, costing,
scheduling, and staff recruitment and development.

    In June 1997, the Company announced the introduction of its new QuickSwitch
Commander(TM), the Company's first product designed specifically for
keyboard/mouse switching. QuickSwitch Commander(TM) is targeted at trading
floors, power users and software developers who need to view multiple video
screens yet would like to use a single keyboard and mouse.

    In May 1997, the Company 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 PCs/Servers, password security, and
server power control through use of the Company's 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).


                                       4


<PAGE>   5
THE INDUSTRY

    The computer industry has experienced dramatic changes during the past 20
years. The personal computer 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 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 ("KVM
Peripherals"), 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 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 occupy 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
alongside 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 high-end AutoBoot Commander 4xP(TM) provides 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, and its high-end PolyCon/XS Matrix Console Switching Hub permits 32
independent consoles to control up to 256 PCs/Servers in a matrix format.
Elimination of KVM Peripherals for each of the connected Servers through use of
the KVM Switch Products provides significant cost reductions including lower
initial investment, reduced utility 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(TM) 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 

                                       5


<PAGE>   6


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.

BUSINESS STRATEGY

    The Company's strategy is to be the market leader in developing, producing
and marketing KVM Switch Products, Extension Products and console switching
solutions for the computer industry around the world. 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.
While continuing to introduce enhanced and new products through the various
distribution channels at different price points, the Company plans to expand and
centralize in Europe the development of its high-end switching products and
console switching solutions in order to leverage and integrate its research and
development resources around the world to develop enhanced and new high-end
products in the future. Given the high level of competition in and the
continually evolving nature of its product markets, the Company believes that
the introduction of 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, major distributors and end users; (ii)
expanding domestic and international sales through new and existing
distributors, utilization of its European distribution and manufacturing
facilities in Shannon, Ireland and Steinhagen, Germany, and its sales offices in
four European countries; (iii) recruiting and training additional sales
personnel domestically and abroad; (iv) expanding its direct mail advertising
and telemarketing programs; and (v) increasing e-commerce and management to
support sales via the Internet. 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 increase the
degree to which it outsources 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.


                                       6

<PAGE>   7
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 push
buttons on the front panel of the switch, a keyboard hot-key sequence or an
optional on-screen menu system. 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 major KVM Switch Products include the following:

         -        The SwitchView(TM) two and four port KVM switch is designed to
                  switch KVM signals among a maximum of 64 computers. The
                  SwitchView is the Company's first product designed for mass
                  marketing.

         -        The AutoView Commander(TM) adds computer selection through an
                  optional on-screen menu system and adds hot pluggable
                  operations to the AutoBoot(TM) 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
                  Auto View(TM) technology utilizing the optional Power
                  Commander(TM).

         -        The AutoBoot Commander 4xP(TM) 1xP(TM) adds multimedia,
                  multiplatform, and multiuser features (in addition to the
                  basic AutoBoot Commander(TM) 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 Slimline Commander(TM) and the Magnum Commander(TM)
                  incorporate AutoBoot(TM) 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 Auto View(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.
                  The Personal Commander(TM) II utilizes AutoView(TM) technology
                  to control two to four IBM compatible PCs/Servers. Both
                  products are designed for desktop use.

         -        The PolyCon/S Console Switching Hub is designed to control
                  eight servers and can be configured to control 32 PCs/Servers
                  from one console. A "console" is made up of a keyboard, a
                  monitor and the PolyCon/S Switching Hub.

         -        The PolyCon/XS Matrix Console Switching hub is designed to
                  simultaneously and independently control multiple PCs/Servers
                  from multiple consoles in a matrix format. Available in eight
                  or 16 ports, the PolyCon/XS product can be configured such
                  that 256 PCs/Servers can be controlled from 32 independent
                  consoles. In concert with other PolyCon products, the number
                  of PCs/Servers can be increased to 1,024.

    KVM Switch Products (other than the AutoBoot Commander 4xP(TM)) can be 
combined with the Company's KVM Converter 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 converter 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.

                                       7


<PAGE>   8


    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 
         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 KVM Converter 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.

    -    The PolyCon/RC and the RC+ (Remote Controller) allows the remote
         control of the PolyCon/S and the PolyCon/XS configurators with a single
         cable.

    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 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. While continuing to introduce enhanced and new products through the
various sales channels at different price points, the Company plans to expand
and centralize in Europe the development of its high-end switching products and
console switching solutions in order to leverage and integrate its research and
development resources around the world to develop enhanced and new high-end
products in the future. In Fiscal 1996, Fiscal 1997 and Fiscal 1998, the
Company's research and development expenditures were $1.7 million, $2.4 million
and $3.3 million (exclusive of the purchased research and development
write-off), respectively (6.7%, 6.9% and 6.3% of net sales, respectively). As of
June 1, 1998, the Company's research and development staff consisted of 41
full-time employees.



                                       8
<PAGE>   9


    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, results
of operations and cash flows.

    To meet the challenges of the rapidly changing technology in the computer
industry, the Company expects to continue to increase the level of investment 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 and
major distributors (71.0% of net sales in Fiscal 1998), OEMs (18.8% of net sales
in Fiscal 1998) and end users (10.2% of net sales in Fiscal 1998). 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 1997 and Fiscal 1998, no single customer accounted for more than 4.3% and
7.5%, 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, results of operations or cash flows.

    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 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, OEMs and end users. 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 seeks to establish relationships with additional
distributors, OEMs and systems integrators. As of June 1, 1998, the Company's
total sales and customer support staff consisted of 67 employees.


    In August 1997, the Company entered into a distribution agreement with Tech
Data Corporation ("Tech Data"), a leading full-time distributor of personal
computer products, to distribute the Company's products to Tech Data's customer
base of over 70,000 value-added resellers and retail dealers. Tech Data offers
product lines in software, networking and communications, mass storage,
peripherals and computer systems and provides extensive pre-sale and post-sale
training. The partnership with Tech Data is expected to expand and enhance the
Company's reseller base.

    The Company's international sales accounted for approximately 21% and 26% of
net sales in Fiscal 1997 and Fiscal 1998, respectively, and are placed primarily
through distributors located in Europe, Canada, and other foreign countries. The
Company plans to expand international sales within the European community, Asia
and the Pacific Rim through the utilization of its facilities in Shannon,
Ireland and Steinhagen, Germany.

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 and 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 also allows additional rights of return for certain of
its customers. The Company has not experienced significant product returns.



                                       9
<PAGE>   10


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 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, results of operations and
cash flows. 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 Annual Report on Form 10-K 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. ("Apex"), 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. As the Company's channels of
distribution expand, the Company expects to experience increased price
competition. Increased competition could result in price reductions and loss of
market share which would adversely affect the Company's business, financial
condition, results of operations and cash flows.

EMPLOYEES

    As of June 1, 1998, the Company had 183 full-time employees working in the
United States. Of the Company's domestic full-time employees, 45 were in
marketing, sales, and customer support; 30 were in engineering, research and
development; 87 were in manufacturing and operations; and 21 were in
administration. As of June 1, 1998, there were 53 full-time employees working in
the


                                       10
<PAGE>   11


Shannon, Ireland facility and 47 full-time employees working in the Steinhagen,
Germany 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.

RISK FACTORS

    This Annual Report on Form 10-K contains certain forward-looking statements
that are subject to certain risks and uncertainties that could cause actual
results to vary materially from those anticipated in the forward-looking
statements. Factors that might cause a difference include, but are not limited
to the following:

    Technological Changes; Need to Continue Developing New Products

    The markets for the Company's products are characterized by rapidly changing
technologies, evolving industry standards and continuing improvements. If
technologies used in the Company's products become obsolete or fail to gain
widespread commercial acceptance, the Company's business may be adversely
affected. Moreover, the introduction of products embodying new technologies and
the emergence of new industry standards could adversely affect the Company's
ability to sell its products. While the Company has competed favorably with its
competitors by continually developing a high performance line of products
utilizing leading technologies, competitors have developed products which offer
similar features. Although historically the timing of the introduction of new
products or enhancements to existing products by the Company has not had a
material adverse effect on the business, financial condition, results of
operations or cash flows of the Company, there can be no assurance that these
circumstances will continue in the future. The Company expects that the
continued development of comparable products by competitors will require that it
develop new and/or enhanced products on an ongoing basis to meet the competitive
demands of these markets. The Company's sales and profitability in the past have
resulted to a significant extent from its ability to anticipate or react quickly
to its customers' needs and to develop and introduce new and enhanced products.
The Company's continued ability to adapt to customer needs and technological
change will be a significant factor in maintaining or improving its competitive
position and its prospects for growth. However, the Company's failure to respond
on a timely basis to technological developments, changes in industry standards
or customer requirements, software innovations or any significant delay in
product development or introduction would have a material adverse effect on the
Company's business, financial condition, results of operations, or cash flows.

    Potential Fluctuations in Quarterly Results; Product Returns

    Most of the Company's sales in each quarter result from orders booked in
that quarter. The Company typically does not have firm commitments for the
purchase of products to be delivered in the future. Furthermore, many purchasers
typically require prompt delivery of products. This results in a limited backlog
of orders for these products and requires the Company to maintain sufficient
inventory levels to satisfy anticipated customer demand. If demand for the
Company's products declines or if significant potential sales in any quarter do
not occur as anticipated, the Company's financial results will be materially
adversely affected. The Company offers a 30-day unconditional money-back
guarantee and a twelve to fifteen month limited warranty for all of its products
and allows additional rights of return to certain of its customers. Although the
Company's historical return experience has not been significant, such returns,
should they occur, would have an adverse effect on sales and on the Company's
net sales. Operating expenses are relatively fixed over the short term, and,
therefore, a shortfall in quarterly revenues could impact the Company's
financial results significantly in a quarter. Furthermore, maintaining
sufficient inventory levels to assure prompt delivery of the Company's products
increases the amount of inventory that may become obsolete and increases the
risk that the obsolescence of such inventory may have a material adverse effect
on the Company's business and operating results. The Company's operating results
may also fluctuate as a result of a number of other factors, including increased
competition, changes in customer order patterns, changes in product mix, and
announcements of new products by the Company or its competitors.

    Current Dependence on Limited Product Lines; Technological Obsolescence

    A significant percentage of the Company's net sales during the last three
fiscal years has been derived from sales of the Company's KVM Switch and
Extension Products. Sales of these products accounted for approximately 98% of
net sales in Fiscal 1998 and Fiscal 1997 and 96% of net sales in Fiscal 1996.
There can be no assurance that the Company's sales of its KVM Switch and
Extension Products will continue at this level or that new product releases will
be successful. A significant decline in sales of KVM Switch and Extension
Products would have a material adverse effect on the Company's business,
financial condition, results of operations and cash flows. A principal feature
of KVM Switch Products is their ability to emulate a computer's associated
keyboard. Technology exists today that would allow computers to perform various
functions and to be accessed without electronic impulses from an associated
keyboard or keyboard emulation device. To date, this technology has not gained
acceptance, but to the extent that widespread commercial acceptance of this
technology occurred, it would have a material adverse effect on the Company's
business, financial condition, results of operations and cash flows.



                                       11
<PAGE>   12


    Intense Competition

    The markets for the Company's products are highly fragmented and intensely
competitive. The Company's business is becoming increasingly sensitive to new
product introductions, price changes and marketing efforts by its competitors.
Accordingly, the Company's future success will be highly dependent upon timely
completion and introduction of new products and product features at competitive
price and performance levels which address the evolving needs of the Company's
customers. The Company is currently experiencing increased price competition in
the market for KVM Switch and Extension Products and 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, results of operations and cash flows.
In the market for KVM Switch Products, the Company competes with independent
third parties such as Apex, Raritan Computer Inc. and Rose Electronics. The
Company may in the future face competition from software providers who are able
to offer a software solution to address many of the problems the Company's
switching systems are designed to address.

    The Company's current and potential competitors, many of which have
significantly greater financial, technical, marketing and other resources than
the Company, may be able to respond more quickly to new or emerging technologies
and changes in customer requirements or to devote greater resources to the
development, promotion and sale of their products than the Company. In addition,
current and potential competitors have established or may establish cooperative
relationships among themselves or with third parties that enhance the ability of
their products to address the needs of the Company's prospective customers.
There can be no assurance that the Company will be able to compete successfully
against current and future competitors or that competitive pressure faced by the
Company will not have a material adverse effect on the Company's business,
financial condition, results of operations and cash flows.

    Risks Relating to Expansion of International Distribution Network and 
International Sales

    The Company's strategy contemplates additional development and expansion of
its international distribution network through Cybex Europe in an effort to
increase international sales of its products. There can be no assurance that the
Company will be successful in expanding its international distribution network
or in increasing sales of its products in foreign markets. If the revenues
generated by international sales are not adequate to recover the expense of
establishing, expanding and maintaining an international distribution network,
the Company's business, financial condition, results of operations and cash
flows will be materially adversely affected. If international sales become a
more significant component of the Company's net sales, the Company's business
will become more vulnerable to the risks inherent in doing business on an
international level, including difficulties in managing foreign
distributors,longer payment cycles and problems in collecting accounts
receivable, the effects of seasonal customer demand, changes in regulatory
requirements, risks relating to intellectual property rights, export
restrictions, tariffs and other trade barriers, fluctuations in currency
exchange rates, potentially adverse tax consequences and political instability.
The existence or occurrence of any one of these factors could have a material
adverse effect on the Company's business, financial condition, results of
operations and cash flows.

    Dependence on Key Personnel

    The Company is dependent in large part upon its ability to retain its key
management and technical personnel, including Stephen F. Thornton, Chairman of
the Board, President and Chief Executive Officer; Remigius G. Shatas, Executive
Vice President - Technology and Acquisitions and Secretary; Doyle C. Weeks,
Senior Vice President - Finance, Chief Financial Officer and Treasurer; Robert
A. Asprey, Senior Vice President, Chief Scientist; R. Byron Driver, Senior Vice
President and Chief Operating Officer and Kieran MacSweeney, President of Cybex
Europe. The future success of the Company will be highly dependent upon the
personal efforts of these individuals and other key management and technical
personnel, and the loss of services of any one of them could have a material
adverse effect on the Company's business, financial condition, results of
operations and cash flows. Messrs. Thornton, Shatas, Weeks, Asprey and Driver
are the only executive officers or employees with whom the Company has entered
into employment agreements, and Messrs. Thornton, Shatas and Asprey are the only
executive officers upon whom the Company maintains "key-man" life insurance. The
Company's success will also be dependent in part upon its ability to attract,
retain and motivate highly skilled employees. Competition for employees with the
skills required by the Company, particularly engineering and other technical
personnel, is intense, and there can be no assurance that the Company will be
able to attract and retain highly skilled employees in sufficient numbers to
sustain its current business or to support future growth.

    Management of Growth

    In recent periods, the Company has experienced rapid revenue and customer
growth and expansion in the number of its employees, its product offerings and
the scope and complexity of its financial systems. This growth has placed
significant strain on the Company's management, operational and financial
resources and has resulted in new and increased responsibilities for management
personnel. The Company's officers have had limited or no experience in managing
companies larger than the Company. There can be no assurance that the Company's
management, personnel, systems, procedures and controls will be adequate to
support the Company's 


                                       12
<PAGE>   13


existing and future operations. The Company's ability to effectively manage its
recent growth and any future growth will require the Company to continue to
implement and improve its operational, financial and information systems and
will likely require additional management personnel. In addition, the Company
believes that it must develop greater engineering, marketing, sales and customer
support capabilities in order to develop new products and product enhancements,
secure new customers at a rate necessary to achieve desired growth and
effectively serve the evolving needs of present and future customers. There can
be no assurance that the Company will be successful in strengthening these
capabilities. Without adequate management, engineering, product development,
marketing and sales and customer support capabilities, the Company's ability to
effectively manage its growth, expand and enhance its product line, further
penetrate its existing markets and develop new markets will be significantly
limited. If the Company's management is unable to effectively manage the
Company's growth, the business, financial condition, results of operations and
cash flows of the Company will be materially adversely affected.

    Dependence Upon Suppliers and Outsourced Manufacturing

    The principal components of the Company's switch products are power
supplies, cable assemblies, line filters, enclosures, printed circuit boards and
electronic components, all of which are purchased from outside vendors. The
Company buys components under purchase orders and generally does not have
long-term agreements with its suppliers. While the Company attempts to maintain
multiple outside sources for all of the materials and components it purchases,
there can be no assurance that the materials or components of any one or more of
those sources could be promptly or adequately replaced. Any termination of or
significant disruption in the Company's relationship with suppliers of its
product components may prevent the Company from filling customer orders in a
timely manner, as the Company generally does not maintain large inventories of
its products or components. The Company purchases a number of the components for
its switch products from sole or a limited number of suppliers. The Company has
occasionally experienced and may in the future experience delays in delivery of
such components. Although alternate suppliers are available for most of the
components and services needed to produce the Company's products, the number of
suppliers of some components is limited, and qualifying a replacement supplier
and receiving components from alternate suppliers could take several months. The
Company depends upon its suppliers to deliver quality components that are cost
competitive and in compliance with the Company's specifications. Disruption in
supply, a significant increase in the cost of one or more components, failure of
a third party supplier to remain competitive in price, or the failure of a
supplier to comply with any of the Company's procurement needs could delay or
interrupt the Company's ability to manufacture and deliver its products to
customers on a timely basis, thereby adversely affecting the Company's business,
financial condition, results of operations and cash flows.

         The Company relies on third party manufacturers for subassembly of the
Company's products. These outsourcing arrangements and any future outsourcing
arrangements involve numerous risks, including reduced control over product
quality, delivery schedules, manufacturing yields and costs. Moreover, although
arrangements with such manufacturers may contain provisions for warranty
obligations on the part of such manufacturers, the Company remains primarily
responsible to its customers for warranty obligations.

    Reliance on PC/Server Market; Improving Network Reliability and Tools

    The Company's business is dependent upon the continued acceptance of the
PC/Server model of network computing. Although distributed network computing
utilizing PC/Server architecture has gained increasing acceptance, there can be
no assurance that use of this networking model will continue to grow or that it
will not be replaced by new technologies for network computing, thereby
rendering the Company's products obsolete. In addition, the market for the
Company's products is driven in part by the inherent unreliability of networks.
As networks continue to proliferate, however, PC/Server manufacturers and
software developers or providers may develop greater reliability and better
tools for managing networks. To the extent that greater reliability and better
network management tools are successfully developed, the Company's products
could be rendered obsolete, which would have a material adverse effect on the
Company's business, financial condition, results of operations and cash flows.

    Limited Protection of Proprietary Rights; Risks of Third Party Infringements

    The Company's success is highly dependent on proprietary technology. The
Company has been granted some patents and applications for additional patents
are pending. The Company also relies upon copyright, trademark and trade secret
laws to establish its proprietary rights in its products. The laws of certain
foreign countries in which the Company's products are or may be developed,
manufactured or sold may not protect the Company's products or intellectual
property rights to the same extent as do the laws of the United States and thus
increase the likelihood of piracy of the Company's technology and products.
There can be no assurance that the steps taken by the Company to protect its
intellectual property rights will be adequate to prevent misappropriation of its
technology or that the Company's competitors will not independently develop
technologies that are substantially equivalent or superior to the Company's
technology.


                                       13
<PAGE>   14


    The Company may initiate claims or litigation against third parties for 
infringement of the Company's proprietary rights or to establish the
validity of the Company's proprietary rights. The Company may also be subject to
claims or litigation initiated by third parties against the Company. Currently,
the Company is a party to litigation initiated by Apex. Apex contends in a
lawsuit filed in February 1998 against the Company and others in the US District
Court in Seattle, Washington that the Company has infringed Patent No.
5,721,842. Although the outcome of any litigation can never be certain, the
Company does not believe that any of its products are covered by any valid claim
of Apex's patent. As a result, it is the Company's opinion that the outcome of
such contingencies will not materially affect its business, financial condition,
results of operations or cash flows.

    Risks Relating to Expansion of Distribution Channels

    The Company expects to rely increasingly on major distributors, value-added
resellers, systems integrators, and OEMs for the distribution and sale of its
products, and the Company's strategy contemplates the expansion of its
distribution channels both domestically and internationally. The Company's
future success will depend in part on its ability to expand existing
relationships and develop new relationships in these distribution channels.
There can be no assurance that the Company will be successful in expanding its
distribution channels. The Company will be required to invest significant
additional resources in order to expand its distribution channels, and there can
be no assurance that the cost of the Company's investment in further developing
and expanding these channels will not exceed the revenues generated from such
investment. The Company provides and expects to continue providing discounts and
other special pricing arrangements throughout its distribution channels. As
sales through these distribution channels increase, the Company expects gross
margins on such sales, as a result of discounts and other special pricing
arrangements, to be lower than gross margins on sales made through other
distribution channels. Although the Company's product return arrangements in
these distribution channels do not provide significant rights of return, the
Company expects that as sales through these distribution channels increase, such
arrangements could result in an increased risk of significant product returns.
There can be no assurance that actual returns in the future will not have a
material adverse effect on the Company's business, financial condition, results
of operations or cash flows. (See "Potential Fluctuations in Quarterly Results;
Product Returns") The Company's distribution agreements generally are
nonexclusive and may be terminated on short notice by either party without
cause. Companies in these distribution channels are not within the control of
the Company, are not obligated to purchase products from the Company and
frequently offer products of several different manufacturers, including products
competitive with the Company's products. There can be no assurance that
companies in these distribution channels will not give higher priority to the
sale of such other products. A reduction in sales efforts by the companies in
these distribution channels could lead to reduced sales by the Company and could
materially adversely affect the Company's business, financial condition, results
of operations and cash flows.

    Increased Demands on Customer Support Operations

    Growth of the Company's sales, should it occur, is likely to be accompanied
by increasing demands on the Company's customer support operations. As a result
of the Company's commitment to a high level of customer support, the Company is
likely to need to invest significant resources in the maintenance and
improvement of its customer support resources. Any failure to maintain adequate
customer support could cause customer dissatisfaction, result in reduced sales
of the Company's products and, accordingly, materially adversely affect the
Company's business, financial condition, results of operations and cash flows.

    Control by Certain Shareholders

    At June 19, 1998, the executive officers and directors of the Company
beneficially owned or controlled approximately 23.5% of the outstanding shares
of Common Stock. Accordingly, such persons, if they were to act in concert,
would likely control the Company's Board of Directors and, therefore, the
business, policies and affairs of the Company. Furthermore, such control could
preclude any unsolicited acquisition of the Company and, consequently, adversely
affect the market price of the Common Stock.

    Possible Volatility of Stock Price

    There may be significant volatility in the market price for the Common
Stock. Quarterly operating results of the Company or companies within the same
or similar industry segments, changes in the general conditions of the economy,
the financial markets or the technology industry, adverse press or news
announcements or other developments affecting the Company or its competitors
could cause the market price of the Common Stock to fluctuate substantially.
Furthermore, the stock market may experience significant price and volume
fluctuations which may affect the price of the Company's Common Stock for
reasons unrelated to its operating performance.



                                       14
<PAGE>   15



ITEM 2.  PROPERTIES.

    The Company's headquarters, containing administrative, engineering and
manufacturing facilities, are located in Huntsville, Alabama in two adjacent
leased buildings occupying approximately 54,000 square feet. The leases provide
for annual rent of approximately $288,000.

    The Company is nearing completion of its new headquarters, which will
consolidate all of the Company's U.S. operations and will contain the
administrative, sales, marketing, research and development, engineering and
manufacturing functions. The new 120,000 square foot building is located on an
18-acre tract of land owned by the Company in Cummings Research Park in
Huntsville, Alabama. The Company will occupy the new offices beginning in the
second quarter of Fiscal 1999.

    In May 1998, Cybex Europe moved into a 35,000 square foot, leased facility
located in the Shannon Free Trade Zone, Shannon, Ireland. This facility conducts
manufacturing, marketing and distribution functions in the European community.
The lease with the Shannon Development Authority is for twenty years and
provides for annual rent of approximately $400,000.

    The PolyCon Companies' headquarters, containing administrative, engineering
and manufacturing facilities, are located on leased property in Steinhagen,
Germany. The lease, which provides for annual rent of approximately $87,000,
expires in the year 2000. The PolyCon Companies also have a U.S. distribution
facility in Fort Worth, Texas that occupies 7,300 square feet. The Fort Worth
property is subject to a five-year lease which expires in October 2002. The
lease provides for annual rent of $78,000.

ITEM 3.  LEGAL PROCEEDINGS.

    The Company has been involved from time to time in litigation in the normal
course of its business. In February 1998, Apex filed a lawsuit in the U.S.
District Court in Seattle, Washington asserting certain patent infringement
claims against the Company. Although the outcome of any litigation can never be
certain, the Company does not believe that any of its products are covered by
any valid claim of Apex's patent and does not believe that the Apex action will
have a material adverse effect on the Company's business, operations, financial
condition or cash flows. The Company is not aware of any other 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, 1998.



                                       15
<PAGE>   16


                                     PART II

 ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER 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 and gives retroactive effect to the stock split discussed
 herein:

<TABLE>
<CAPTION>
                     FISCAL 1997                                             HIGH        LOW
                     -----------                                             ----        ---
                     <S>                                                   <C>         <C>   
                     Quarter ended June 30, 1996.......................... $ 13.83     $ 8.50
                     Quarter ended September 30, 1996.....................   12.00       8.83
                     Quarter ended December 31, 1996......................   11.83       9.33
                     Quarter ended March 31, 1997.........................   12.67       9.50


                     FISCAL 1998
                     -----------

                     Quarter ended June 30, 1997.......................... $ 12.67     $ 9.50
                     Quarter ended September 30, 1997.....................   20.33      11.33
                     Quarter ended December 31, 1997......................   19.00      13.08
                     Quarter ended March 31, 1998.........................   23.50      14.83


                     FISCAL 1999
                     -----------
                     Quarter ended June 30, 1998 (through June 19, 1998).  $ 25.75     $19.33
</TABLE>


       On June 19, 1998, the closing sale price for the Company's Common Stock
 was $22.25 per share. At June 19, 1998, there were 211 holders of record of
 the Company's Common Stock.

    The Company paid no cash 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.


                                       16


<PAGE>   17


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, 1998, has been derived from
the audited financial statements of the Company.

    This data should be read in conjunction with the Company's 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,
                                                                  ----------------------------

                                                        1994       1995     1996      1997      1998
                                                        ----       ----     ----      ----      ----

                                                            (In thousands, except per share data)
<S>                                                   <C>        <C>       <C>       <C>       <C>    
STATEMENT OF INCOME DATA:
Net Sales                                             $12,812    $18,182   $25,010   $34,568   $52,564
Cost of Sales                                           6,039      8,040    11,152    16,408    24,980
Gross Profit                                            6,773     10,142    13,858    18,160    27,584
Research and development expenses                       1,150      1,600     1,686     2,374     3,312
Selling, general and administrative                     3,388      4,492     6,096     8,455    13,386
expenses
Acquired research and development
expense                                                    --         --        --        --     4,705
Operating income                                        2,235      4,050     6,076     7,331     6,181
Interest income (expense), net                            (13)        52     1,157     1,611     1,626
Other income                                               --         --        52       291       272
Income before income taxes                              2,222      4,102     7,285     9,233     8,079
Provision for income taxes                                811      1,402     2,592     3,393     4,508
Net income                                              1,411      2,700     4,693     5,840     3,571


Net income per common and common equivalent share:


Basic                                                     .32        .63       .65       .71       .44
Diluted                                                   .29        .55       .61       .70       .42

Weighted average common and common
equivalent shares outstanding:
Basic                                                   4,346      4,307     7,184     8,228     8,173
Diluted                                                 4,840      4,927     7,642     8,390     8,408

<CAPTION>


                                                                            March 31,
                                                                            ---------
                                                       1994       1995      1996      1997      1998
                                                       ----       ----      ----      ----      ----
                                                                         (In thousands)
<S>                                                   <C>        <C>       <C>       <C>       <C>    
BALANCE SHEET DATA:
Working capital                                       $2,524     $4,580   $39,394   $40,220   $35,432
Total assets                                           4,475      7,498    47,418    56,527    70,719
Total debt                                                --         --     5,000     8,000    12,137
Shareholders' equity                                   3,040      5,720    40,621    44,987    49,435
</TABLE>



                                       17
<PAGE>   18

 

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

     General

     The Company develops, produces and markets KVM Switch and Extension
Products for use in the computer industry. The Company's KVM Switch Products
provide up to four 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 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, Digital
Equipment Corporation (DEC), IBM and Silicon Graphics workstations functioning
either as stand-alone systems or as file, communications or Servers operating
within a LAN. The Company also has interfaces for its AutoBoot 4xP(TM)/1xP(TM),
which operate with models of IBM RS/6000, Hewlett Packard, DEC's Alpha; and
Silicon Graphic's Indigo workstations. The Company's AutoView Commander(TM),
introduced in mid Fiscal 1997, utilizes a cost reduced architecture, and was the
basis for mid and high range products developed since its introduction. The
Company introduced SwitchView(TM), a two and four port KVM Switch Product, in
mid Fiscal 1998, and is the Company's first product designed to be mass
marketed. As a result of the acquisition of the PolyCon companies discussed
herein, the Company obtained several switching solutions including the
PolyCon/S, a console switching hub, and the PolyCon/XS, a matrix console
switching hub. Certain KVM Switch Products were certified by Novell Corporation
for use with its network software Netware(TM) 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 KVM Extension Products allow users to separate the KVM
Peripherals 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 PC Extender(TM) SNAP, introduced in late Fiscal 1997, utilizes
standard Category 5 UTP cabling , a commonly installed cable in Ethernet
networks, and reduces cabling costs by half. 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 evaluates its products and its customer needs on an ongoing
basis to advance its competitive position in the marketplace. As part of this
process, the Company seeks expansion not only through internal development but
through strategic acquisition and expansion efforts. Consistent with this
philosophy, the Company completed its acquisition of the PolyCon Companies on
December 31, 1997, discussed later herein. The acquisition of the PolyCon
Companies included intellectual property that the Company plans to leverage and
integrate with its research and development resources worldwide to expand the
Company's high-end console switching products for mid- and large-scale networks.
The acquisition of the PolyCon Companies is consistent with the Company's
strategy to expand its operations in Europe and immediately adds new customer
relationships and expands distribution channels.

     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 which are price competitive as compared to prior 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. In Fiscal 1997, the Company 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. During this same period,
the Company began shipping certain KVM Switch Products to a major worldwide
catalog marketer under private label. During the second quarter of Fiscal 1998,
the Company also began distribution of its branded products with a major
distributor. These relationships have broadened the Company's channels of
distribution of its products and is expected to increase market share.

     The Company expanded its marketing strategy to include the retail channel
of distribution with the introduction of SwitchView(TM), which targets the
desktop market. SwitchView(TM) was designed to address the high volume sales
channels and is the Company's first product targeted to the mass market. With
the acquisition of the PolyCon Companies, the Company is the only KVM Switch
Product manufacturer offering products ranging from the entry level PC single
user switch to multi-user, multiplatform switches and console switching
solutions that can control thousands of computers in data centers and server
farms.


                                       18
<PAGE>   19


     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, participation in trade
shows and other sales promotions.

     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, a one year warranty on parts and allows additional rights of
return to certain of its customers. The Company estimates and accrues a
liability for sales and warranty returns. Actual returns have not been
significant to date. The Company also offers sales discounts to its customers
based on the level of sales. Such discounts have historically not had a
significant impact on the Company's results of operations.

     The Company believes that increasing its international sales is an
important element in the overall strategy of future revenue growth.
International sales comprised 26%, 21% and 20% of the Company's total sales in
Fiscal 1998, Fiscal 1997 and Fiscal 1996, respectively.

     On March 30, 1998, the Company announced a 3-for-2 stock split, effected as
a 50% stock dividend. The additional new shares were distributed to shareholders
on April 28, 1998.

     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 its new manufacturing and administrative facilities in
Huntsville, Alabama (iv) the establishment and expansion of its facility in
Shannon, Ireland and (v) acquisitions.

     On July 9, 1996, the Company formally established operations in Shannon,
Ireland, through its newly-formed subsidiary, Cybex Europe. Subsequently, the
Company entered into a month-to-month lease with the Shannon Development
Authority for temporary startup facilities located within the Shannon Free Trade
Zone. The lease for the 12,500 square foot facility expired in May of 1998 when
Cybex Europe moved into its new 35,000 square foot lease facility, also located
in the Shannon Free Trade Zone.

     On December 31, 1997, Cybex Europe acquired the PolyCon Companies,
privately held companies located in Steinhagen, Germany, pursuant to the terms
and conditions of a Purchase and Sale Agreement dated December 30, 1997 between
the Company, Cybex Europe and Edgar and Stephanie Elsner, for a combined
purchase price of $8,800,000 including acquisition related expenditures. In
accordance with generally accepted accounting principles, costs allocated to
acquired research and development assets with alternative future uses have been
capitalized, and the remaining $4,705,000 of acquired research and development
costs have been expensed as a one-time charge on December 31, 1997. The
acquisition of the PolyCon Companies was funded by Cybex Europe from its
available cash.



                                       19
<PAGE>   20


     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                                                           1996               1997               1998
  --------------------                                                           ----               ----               ----
  <S>                                                                            <C>               <C>                <C>   
  Net Sales                                                                      100.0%            100.0%             100.0%

       Cost of sales                                                              44.6              47.5               47.5
                                                                                 -----             -----              -----
  Gross Profit                                                                    55.4              52.5               52.5

       Research and development expenses                                           6.7               6.9                6.3

       Selling, general and administrative expenses                               24.4              24.4               25.5

       Purchased research and development expenses                                  --                --                8.9
                                                                                 -----             -----              -----

  Operating income                                                                24.3              21.2               11.8

       Other income                                                                4.8               5.5                3.6
                                                                                 -----             -----              -----

  Income before income taxes                                                      29.1              26.7               15.4

       Provision for income taxes                                                 10.3               9.8                8.6
                                                                                 -----             -----              -----

  Net income                                                                      18.8%             16.9%               6.8%
                                                                                 -----             -----              -----
</TABLE>


     Fiscal 1998 Compared to Fiscal 1997

     Net sales increased 52.1% to $52.6 million in Fiscal 1998 from $34.6
million in Fiscal 1997. The increased sales resulted from increased sales of the
Company's KVM Switch Products and Extension Products, as well as additional
revenues provided from the acquisition of the PolyCon Companies in December
1997. Sales of KVM Switch Products increased 57.3% to $45.3 million in Fiscal
1998 from $28.7 million in Fiscal 1997, primarily due to increased sales of the
Company's mid- and high-end KVM Switch Products, as well as the low-end KVM
Switch Products. The mid- to high-end products grew approximately 59% from
Fiscal 1997 to Fiscal 1998, while the low-end product sales increased 259% from
Fiscal 1997 to Fiscal 1998. The SwitchView(TM) product, introduced in mid Fiscal
1998, was a major contributor to the increase in the low-end product sales.
Sales of KVM Extension Products increased 24.6% to $6.2 million in Fiscal 1998
from $5.0 million in Fiscal 1997, primarily due to increased sales of PC
Extender(TM) SNAP, which increased 166% for the period and the PC Plus Line,
which increased 35% for the period. As a percentage of net sales, the Company's
KVM Switch Products increased to 86.1% in Fiscal 1998 from 83.0% in Fiscal 1997
and KVM Extension Products declined to 11.9% in Fiscal 1998 from 14.5% in Fiscal
1997. 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
1998, causing international sales as a percentage of net sales to increase to
25.9% as compared to 20.6% in Fiscal 1997. International sales increased 89.4%
to $13.5 million in Fiscal 1998 from $7.1 million in Fiscal 1997. European sales
accounted for approximately $8.4 million or 62% of international sales and grew
98.8% from Fiscal 1997 to Fiscal 1998.

     Gross profit is affected by many factors: product mix, discounts, price
competition, new product introductions and start-up costs, increasing material
and labor costs and the levels of outsourcing of manufacturing and assembly
services. Gross profit increased 51.0% to $27.6 million in Fiscal 1998 from
$18.2 million in Fiscal 1997. Gross profit as a percentage of net sales remained
constant at 52.5% due to increased volumes in newer products designed for margin
retention while being discounted for volume distributions, cost reductions due
to volume efficiencies and increased outsourcing, and design changes, all of
which were offset by increases in warranty and inventory reserves. The increase
in reserves was the result of the Company's evaluation of the composition of
inventory and the increased level of sales to major distributors and OEMs. The
Company believes its exposure to these risks is adequately reserved.

     Selling, general and administrative expenses increased 58.3% to $13.4
million (25.5% of net sales) in Fiscal 1998 from $8.5 million (24.4% of net
sales) in Fiscal 1997. This difference reflects increased expenditures in
administration, sales, customer 



                                       20
<PAGE>   21


support, channel development, and marketing activities required to support the
Company's expanded sales base, as well as amounts reserved for legal costs
associated with the defense of a patent infringement claim (see
"Contingencies"). The increase also reflects the added selling, general and
administrative costs of Cybex Europe and the newly acquired PolyCon Companies
for the fourth fiscal quarter. Management anticipates that the 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 1998, total costs for research and development, exclusive of the
one-time write-off of purchased research and development expenses, were $3.3
million (6.3% of net sales), compared to $2.4 million (6.9% of net sales) in
Fiscal 1997, representing a 39.5% increase. The Company anticipates that
expenses for research and development will continue to increase above the level
in Fiscal 1998.

     As a result of the factors discussed above, operating income before the one
time write-off of $4.7 million of purchased research and development expenses
related to the acquisition of the PolyCon Companies, increased 48.6% to $10.9
million (20.7% of net sales) in Fiscal 1998, from $7.3 million (21.2% of net
sales) in Fiscal 1997.

     Interest and other income amounted to $1.9 million (3.6% of net sales),
net, in Fiscal 1998, compared to $1.9 million (5.5% of net sales) in Fiscal
1997. Interest and other income includes realized gains on the sale of certain
investments, interest income and expense and the accretion of bond discounts.

     As a result of the factors discussed above, net income, before the one-time
write-off related to the acquisition of the PolyCon Companies, increased 41.7%
to $8.3 million (15.7% of net sales, 6.8% after the write-off) in Fiscal 1998,
from $5.8 million (16.9% of net sales) in Fiscal 1997.

     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
of the Company's KVM Switch Products 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) / 
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 their 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 Keyview, PC Extender(TM) SNAP, and Power Control Products, which had
limited sales during Fiscal 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 Cybex Europe.

     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 startup and incremental costs incurred by Cybex
Europe, 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 dollar increase reflects the increased level 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 Cybex Europe. Management anticipates that the dollar amount of selling,
general and administrative expense will continue to increase.

     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 40.7% increase. The Company anticipates that expenses, in
terms of dollars spent, for research and development will continue to increase
above the level in Fiscal 1997.

     As a result of the factors discussed above, operating income increased
20.6% to $7.3 million (21.2% of net sales) in Fiscal 1997, from $6.1 million
(24.3% of net sales) in Fiscal 1996.



                                       21
<PAGE>   22

     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 27,
1995. Realized gains on the sale of certain investments also contributed to the
increase in other income.

     As a result of the factors discussed above, 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.

     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, 1998, the Company
and its subsidiaries had an available line of credit of $7.5 million with no
outstanding borrowings. A short term note in the amount of $12.0 million was
outstanding on March 31, 1998. The Company repaid the note during the first week
of April, 1998.

     The Company's working capital position declined from $42,416,140 as of
March 31, 1997 to $38,472,549 (adjusted to include $2,196,218 and $3,040,833 of
long term-investments, respectively) as of March 31, 1998. This decline in the
Company's working capital position was due primarily to the increased earnings
during Fiscal 1998 offset by the acquisition of the PolyCon Companies, which is
discussed in Note 3 of the Notes to the Consolidated Financial Statements.

     Cash provided from operating activities increased from $4.3 million to $4.4
million for the year ended March 31, 1997, and March 31, 1998, respectively.
This slight increase was caused primarily by a decrease in net income due to the
one-time write-off of $4.7 million of purchased research and development expense
in connection with the acquisition of the PolyCon Companies, offset by increases
in accounts receivable, inventory and accounts payable. The increase in accounts
receivable is attributed to the increase in sales. The increase in inventory is
attributed to the overall anticipated demand for new products introduced in the
products mix, as well as the addition of inventory as a result of the
acquisition of the PolyCon Companies. The Company expects to continue to
increase the level of turnkey manufacturing of products as they mature and
designs stabilize, thereby reducing the level of inventory relative to those
products that the Company must maintain. The increase in accounts payable
relates directly to the increase in inventory.

     Capital expenditures totaled $5.1 million in Fiscal 1998, as compared to
$1.7 million in Fiscal 1997. Capital expenditures relating to the construction
of the new corporate facility in Huntsville, Alabama amounted to approximately
$4.2 million. The remaining capital expenditures were used to purchase equipment
for the Company including Cybex Europe.

     The Company began construction of its new headquarters facility in
Hunstville, Alabama during the first quarter of Fiscal 1998 on land purchased in
Fiscal 1997. The new facility will contain approximately 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 second quarter of Fiscal 1999. The
facility is expected to cost approximately $7.5 million.

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

     Financial Accounting Developments

     In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 130, Reporting
Comprehensive Income, which requires the reporting and display of comprehensive
income and its components in an entity's financial statements, and SFAS No. 131,
Disclosures About Segments of an Enterprise and Related Information, which
specifies revised guidelines for determining an entity's operating segments and
the type and level of financial information to be required. The Company is
required to adopt these standards in Fiscal 1999, but does not expect the impact
of these pronouncements to be material.

     Year 2000 Compliance

     The Company is in the process of reviewing current software and hardware to
assess the impact of the year 2000 issue. Initially, the Company has determined
that most of the Company's current business process software and hardware are
year 2000 compliant. The Company expects to complete its year 2000 analysis by
the end of Fiscal 1999 and does not believe that costs associated with bringing
the Company's computer systems into full compliance by the year 2000 will result
in material costs to the Company. The 


                                       22
<PAGE>   23


Company's products are year 2000 compliant as well and therefore, the Company
does not believe that they have any material exposure to contingencies related
to the year 2000 issue for products it has sold.

     The Company is also in the preliminary stages of assessing the impact of
the year 2000 issue on its major vendors and suppliers to determine the extent
to which the Company is vulnerable to those third parties' failure to remediate
their own year 2000 issue. Based on information presently available, the Company
does not anticipate any material impact on its business, financial condition,
results of operations or cash flows from the effect of the year 2000 issue on
the Company's internal systems or those of its major suppliers and customers.
However, there can be no guarantee that the systems of other companies on which
the Company's systems rely will be timely converted, or that a failure to
convert by another company would not have a material adverse impact on the
Company.

     Contingencies

     The Company has certain contingent liabilities resulting from litigation
initiated by Apex. Apex contends in a lawsuit filed in February 1998 against the
Company and others in the US District Court in Seattle, Washington that the
Company has infringed Patent No. 5,721,842. Although the outcome of any
litigation can never be certain, the Company does not believe that any of its
products are covered by any valid claim of Apex's patent. It is the
Company's opinion that the outcome of such contingencies will not materially
affect its business, operations, financial condition or cash flows.

     Forward Looking Statements

     When used in this Annual Report on Form 10-K, the words "believe,"
"anticipate," "think," "intend," "will be," "plan," 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 8K filed with the Securities and Exchange Commission.

ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     Not applicable.

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 27.

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

         Not applicable.



                                       23
<PAGE>   24


                                    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" in the Company's
Proxy Statement relating to the Annual Meeting of Shareholders to be held on
August 17, 1998, is incorporated herein by reference.

ITEM 11.       EXECUTIVE COMPENSATION.

         The information set forth under the caption "Executive Compensation"
set forth in the Company's Proxy Statement relating to the Annual Meeting of
Shareholders to be held on August 17, 1998, is incorporated herein by reference.
The Compensation Committee Report and the Comparative Performance Graph also
included in 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 in the Company's Proxy Statement
relating to the Annual Meeting of Shareholders to be held on August 17, 1998, is
incorporated herein by reference.

ITEM 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         There were no such transactions in Fiscal 1998.



                                       24
<PAGE>   25


                                     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 Accountants

         -  Consolidated Balance Sheets as of March 31, 1997 and 1998

         -  Consolidated Statements of Income for the years ended March 31, 
            1996, 1997, and 1998

         -  Consolidated Statements of Changes in Shareholders' Equity for the 
            years ended March 31, 1996, 1997, and 1998

         -  Consolidated Statements of Cash Flows for the years ended March 31, 
            1996, 1997, and 1998

         -  Notes to Consolidated Financial Statements

              (2)     SCHEDULES TO FINANCIAL STATEMENTS

         -  Report of Independent Accountants

         -  Schedule II - Valuation and Qualifying Accounts

              (3)     EXHIBITS

<TABLE>
<CAPTION>
              Exhibit                                                                                    
              Number                         Description                                                 
              ------                         -----------                                                 
                                                                                                         
          <S>       <C>                                                                                  
          2.1       Purchase  and Sale  Agreement  by and between  the  Company,
                    Cybex Europe and Edgar and Stephanie Elsner effective
                    December 31, 1997 incorporated by reference (pursuant to the
                    provisions of Rule 12(b)-32) to Exhibit No. 2.1 (b) to the 
                    Company's Current Report on Form 8-K filed January 14, 1998.

          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*      Commercial Variable Rate Revolving or Draw Note by and
                    between the Company and First Commercial Bank and related
                    Security Agreement dated July 1, 1997 and the related Loan
                    Modification Agreement dated March 5, 1998.

         10.3*      Commercial Fixed Rate Promissory Note by and between the
                    Company and First Commercial Bank and related Security
                    Agreement dated March 25, 1998.

         10.4       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.

         10.5       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.

         10.6       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.

         10.7*      1998 Employee Stock Incentive Plan.

         10.8       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, incorporated by reference (pursuant to
                    the provisions of Rule 12(b)-32) to Exhibit 10.6 of the
                    Company's Form 10-K for the fiscal year ended March 31,
                    1997.

         10.9       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.

         10.10      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.
</TABLE>



                                       25
<PAGE>   26


         10.11      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.

         10.12      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.

         10.13      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.

         13         Cybex Computer Products Corporation Annual Report to
                    Shareholders for the Fiscal Year Ended March 31, 1998. 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.

         21*        List of Subsidiaries of the Company.

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

         27.1-27.8* Financial Data Schedule for current period and restated
                    Financial Data Schedules for other periods (for SEC use
                    only).

    * As filed herewith.

    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.

    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)        Current Report on Form 8-K:

                    The Company filed a Current Report on Form 8-K dated January
                    14, 1998, under Item 2: Acquisition or Disposition of
                    Assets, to report the acquisition of the PolyCon Companies.
                    Copies of the German language version and the English
                    language version of the Purchase and Sale Agreement were
                    filed as exhibits.

         (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.


                                       26


<PAGE>   27


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                       CYBEX COMPUTER PRODUCTS CORPORATION

<TABLE>
<CAPTION>
                                                                                                     PAGE
                                                                                                    NUMBER
                                                                                                    ------

<S>                                                                                                 <C>
Report of Independent Accountants.............................................                        28

Consolidated Balance Sheets as of March 31, 1997 and 1998.....................                        29

Consolidated Statements of Income for the years ended March 31, 1996, 1997
 and 1998.....................................................................                        30

Consolidated Statements of Changes in Shareholders' Equity for the years
 ended March 31, 1996, 1997 and 1998..........................................                        31

Consolidated  Statements  of Cash Flows for the years ended  March 31,  
  1996, 1997 and 1998.........................................................                        32

Notes to Consolidated Financial Statements....................................                        33
</TABLE>



                                       27
<PAGE>   28


REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders 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, 1997 and 1998, 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, 1998. 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, 1997 and 1998, and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended March 31, 1998, in conformity with generally accepted accounting
principles.

                                                        COOPERS & LYBRAND L.L.P.


Birmingham, Alabama
May 1, 1998



                                       28
<PAGE>   29


CYBEX COMPUTER PRODUCTS CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, 1997 and 1998

<TABLE>
<CAPTION>
                                                                             1997             1998
<S>                                                                       <C>             <C>        
                                      ASSETS
Current assets:
Cash and cash equivalents                                                 $ 2,424,385     $ 2,411,085
Short-term investments                                                     38,688,836      34,919,924
Accounts receivable - trade, less allowance for doubtful accounts
of $350,837 and $963,083 in 1997 and 1998, respectively                     5,409,706      11,430,990
Inventories                                                                 3,835,356       6,046,919
Other current assets                                                          698,163         517,179
Deferred income taxes                                                         623,000       1,144,000
                                                                          -----------     -----------
  Total current assets                                                     51,679,446      56,470,097

Investments available for sale, at market                                   2,196,218       3,040,833
Property and equipment, net of accumulated depreciation                     2,422,292       7,251,912
Intangibles, net                                                              103,232       3,821,371
Other assets                                                                  125,525         134,691
                                                                          -----------     -----------

                                                                          $56,526,713     $70,718,904
                                                                          ===========     ===========


                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Note payable                                                              $ 8,000,000     $12,000,000
Accounts payable and accrued expenses                                       2,151,371       4,697,027
Income taxes payable                                                          158,734       1,313,415
Other current liabilities                                                   1,149,419       3,027,939
                                                                          -----------     -----------
  Total current liabilities                                                11,459,524      21,038,381

Deferred income taxes                                                          80,000         109,000
Note payable                                                                                  136,719
                                                                          -----------     -----------
  Total liabilities                                                        11,539,524      21,284,100
                                                                          -----------     -----------

Commitments and contingencies (Notes 14 and 17)

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;
 1997 - 9,135,762 shares issued, 8,144,075 shares outstanding
 1998 - 9,246,274 shares issued, 8,252,671 shares outstanding                   9,136           9,246
Additional paid-in capital                                                 34,116,652      34,714,753
Unrealized (loss) gain on investments                                         (77,669)        230,731
Retained earnings                                                          16,209,614      19,780,627
Treasury stock, at cost; 1997 - 991,687 shares; 1998 - 993,603 shares      (5,270,544)     (5,300,553)
                                                                          -----------     -----------

  Total shareholders' equity                                               44,987,189      49,434,804
                                                                          -----------     -----------
                                                                          $56,526,713     $70,718,904
                                                                          ===========     ===========
</TABLE>

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


                                       29



<PAGE>   30


CYBEX COMPUTER PRODUCTS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
for the years ended March 31, 1996, 1997, and 1998

<TABLE>
<CAPTION>
                                                          1996          1997          1998

<S>                                                    <C>           <C>           <C>
Net sales                                              $25,009,762   $34,568,465   $52,563,507
Cost of sales                                           11,151,343    16,408,703    24,979,458
                                                       -----------   -----------   -----------

  Gross profit                                          13,858,419    18,159,762    27,584,049

Research and development expenses                        1,686,448     2,374,174     3,311,988
Purchased research and development expenses (Note 3)                                 4,705,000
Selling, general, and administrative expenses            6,095,891     8,454,735    13,385,924
                                                       -----------   -----------   -----------

  Operating income                                       6,076,080     7,330,853     6,181,137
Interest income, net                                     1,156,597     1,611,064     1,625,363
Other income, net                                           52,232       290,583       272,062
                                                       -----------   -----------   -----------

  Income before provision for income taxes               7,284,909     9,232,500     8,078,562

Provision for income taxes                               2,591,624     3,393,000     4,507,549
                                                       -----------   -----------   -----------

  Net income                                           $ 4,693,285   $ 5,839,500   $ 3,571,013
                                                       ===========   ===========   ===========

Net income per common and common equivalent share:
  Basic                                                $       .65   $       .71   $       .44
                                                       ===========   ===========   ===========

  Diluted                                              $       .61   $       .70   $       .42
                                                       ===========   ===========   ===========

Weighted average common and common equivalent
shares outstanding:
  Basic                                                  7,184,066     8,228,408     8,173,440
                                                       ===========   ===========   ===========

  Diluted                                                7,641,689     8,390,286     8,408,025
                                                       ===========   ===========   ===========
</TABLE>

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


                                       30


<PAGE>   31


CYBEX COMPUTER PRODUCTS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY for the years ended
March 31, 1996, 1997, and 1998

<TABLE>
<CAPTION>
                                                                                    
                                                                           UNREALIZED
                                   COMMON STOCK            ADDITIONAL        GAIN
                              -----------------------       PAID-IN        (LOSS) ON       RETAINED       TREASURY
                               SHARES        AMOUNT         CAPITAL       INVESTMENTS      EARNINGS         STOCK           TOTAL
                              --------     ----------     ------------  --------------   -----------     ----------       -------- 
                               
<S>                           <C>          <C>           <C>              <C>            <C>             <C>            <C>
Balance, March 31, 1995       3,290,658    $   3,291     $   593,735                     $ 5,676,829     $  (554,000)   $ 5,719,855

Issuance of common stock        680,625          681         909,819                                                        910,500

Issuance of common stock
 through initial public
 offering, net of offering
 costs                        2,096,725        2,097      32,576,165                                                     32,578,262

Purchase of 351,000
shares of treasury stock                                                                                  (3,280,881)    (3,280,881)

Net income                                                                                 4,693,285                      4,693,285
                              ---------    ---------     -----------      ----------     -----------     -----------    -----------
Balance, March 31, 1996       6,068,008        6,069      34,079,719                      10,370,114      (3,834,881)    40,621,021

Issuance of common stock         22,500           22          39,978                                                         40,000

Purchase of 146,250
 shares of treasury stock                                                                                 (1,435,663)    (1,435,663)

Unrealized loss on
 investments                                                              $  (77,669)                                       (77,669)

Net income                                                                                 5,839,500                      5,839,500
                              ---------    ---------     -----------      ----------     -----------     -----------    -----------
Balance, March 31, 1997       6,090,508        6,091      34,119,697         (77,669)     16,209,614      (5,270,544)    44,987,189

Issuance of common stock         73,675           73         192,596                                                        192,669

Income tax benefit from
 exercise of
 nonqualified                                        
 stock options                                               405,542                                                        405,542

Purchase of 1,916 shares
 of treasury stock                                                                                           (30,009)       (30,009)

Unrealized gain on
 investments                                                                 308,400                                        308,400

Three-for-two stock split     3,082,091        3,082          (3,082)                                                             0

Net income                                                                                 3,571,013                      3,571,013
                              ---------    ---------     -----------      ----------     -----------     -----------    -----------

Balance, March 31, 1998       9,246,274    $   9,246     $34,714,753      $  230,731     $19,780,627     $(5,300,553)   $49,434,804
                              =========    =========     ===========      ==========     ===========     ===========    ===========
</TABLE>

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


                                       31


<PAGE>   32


CYBEX COMPUTER PRODUCTS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended March 31, 1996, 1997, and 1998

<TABLE>
<CAPTION>
                                                                        1996            1997             1998
<S>                                                                 <C>             <C>             <C>       
Cash flows from operating activities:
  Net income                                                        $ 4,693,285     $ 5,839,500     $ 3,571,013
  Adjustments to reconcile net income to net cash provided
  by operating activities:
     Depreciation                                                       235,138         355,996         574,917
     Amortization of intangibles                                                                        121,291
     Amortization of discount on investments                           (538,810)     (1,149,879)     (1,159,415)
     Provision for losses on accounts receivable                         11,074         416,000         717,722
     Loss on disposal of property and equipment                                                          17,345
     Purchased research and development expenses                                                      4,705,000
     Gain on sale of investments                                                       (277,047)       (363,000)
     Deferred income taxes                                               (9,856)       (234,385)       (492,000)
     Changes in operating assets and liabilities:
       Accounts receivable - trade                                   (1,731,352)     (1,549,066)     (6,105,006)
       Inventories                                                   (1,450,199)       (348,313)       (825,563)
       Accounts payable and accrued expenses                           (173,715)        672,778       1,021,656
       Other                                                            (21,861)        250,469       1,435,338
       Income taxes payable/receivable                                   (5,217)        277,385       1,154,681
                                                                    -----------     -----------     -----------
          Net cash provided by operating activities                   1,008,487       4,253,438       4,373,979
                                                                    -----------     -----------     -----------
Cash flows from investing activities:
  Purchases of property and equipment                                  (550,763)     (1,668,370)     (5,106,200)
  Purchases of investments available for sale                       (73,855,402)    (67,852,690)    (59,040,639)
  Purchase of the PolyCon Companies, net of cash acquired (Note 3)                                   (8,663,000)
  Purchase of intangible assets                                                                        (119,403)
  Proceeds from dispositions of property, plant, and equipment                                           41,291
  Proceeds from sale of investments                                  18,973,858       5,551,134      13,513,303
  Proceeds from maturities of investments                            19,876,000      59,673,658      50,282,448
                                                                    -----------     -----------     -----------
          Net cash used in investing activities                     (35,556,307)     (4,296,268)     (9,092,200)
                                                                    -----------     -----------     -----------
Cash flows from financing activities:
  Proceeds from note payable and line of credit                       6,100,000       8,000,000      12,136,719
  Repayment of note payable and line of credit                       (1,100,000)     (5,000,000)     (8,000,000)
  Proceeds from initial public offering                              32,578,262
  Proceeds from issuance of common stock                                910,500          40,000         192,669
  Income tax benefit from exercise of nonqualified stock options                                        405,542
  Purchase of treasury stock                                         (3,280,881)     (1,435,663)        (30,009)
                                                                    -----------     -----------     -----------
          Net cash provided by financing activities                  35,207,881       1,604,337       4,704,921
                                                                    -----------     -----------     -----------

          Net increase (decrease) in cash and cash equivalents          660,061       1,561,507         (13,300)
Cash and cash equivalents, beginning of year                            202,817         862,878       2,424,385
                                                                    -----------     -----------     -----------

Cash and cash equivalents, end of year                              $   862,878     $ 2,424,385     $ 2,411,085
                                                                    ===========     ===========     ===========

Supplemental disclosures of cash flow information:
     Cash paid during the year for interest                         $     3,579      $    8,021      $   21,083
                                                                    ===========      ==========      ==========

     Cash paid during the year for income taxes, net of refunds
       received                                                     $ 2,606,693      $3,350,000      $3,857,000
                                                                    ===========      ==========      ==========
</TABLE>

Noncash transactions:
  During the 1997 and 1998 fiscal year, the Company recorded $(77,669) and
  $308,400 of unrealized losses and gains, respectively, related to its
  available for sale investments. The unrealized losses and gains were recorded
  as non-cash changes of long-term investments and shareholders' equity,
  respectively.


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


                                       32


<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; Shannon,
         Ireland; and Steinhagen, Germany (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 20%, 21%, and 26% of the Company's net sales for the
         years ended March 31, 1996, 1997, and 1998, 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 notes 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, U.S.
         treasury notes, and common stock. 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, 1997 and 1998 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.

         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.


                                       33



<PAGE>   34


INTANGIBLE ASSETS - Intangible assets are being amortized using the following 
methods and estimated useful lives:

<TABLE>
<CAPTION>
                 DESCRIPTION                                  METHOD                               USEFUL LIFE
                 -----------                                  ------                               -----------
                 <S>                                     <C>                                       <C>
                 Trademarks                              Straight-line                                 15
                 Goodwill                                Straight-line                                  8
                 Licenses                                Straight-line                                  3
</TABLE>


         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 than the assets' carrying values. There were no
         such losses recognized during 1996, 1997, or 1998.

         LIABILITY FOR SALES AND WARRANTY RETURNS - The Company's sales
         generally include a one-month unconditional return policy and a
         twelve-month warranty for product defects. The Company also allows
         additional rights of return to certain of its distributors. The
         liability for sales and warranty returns which totaled approximately
         $345,000 and $786,000 at March 31, 1997 and 1998, 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.
         Approximately 65% of 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 and provision for warranty
         returns.

         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
         and 1998 as a reduction of related expenses totaled approximately
         $168,000 and $545,000, respectively. Accounts receivable of $410,500
         and $235,000 and deferred revenue of $352,000 and $93,000 related to
         the grants were included in the consolidated balance sheets at March
         31, 1997 and 1998, respectively.

         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 $2,239,000, $2,180,000,
         $2,865,000 for the years ended March 31, 1996, 1997, and 1998,
         respectively.

         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 



                                       34
<PAGE>   35


         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 June 1997, the Financial
         Accounting Standards Board (FASB) issued Statement of Financial
         Accounting Standards (SFAS) No. 130, Reporting Comprehensive Income,
         which requires the reporting and display of comprehensive income and
         its components in an entity's financial statements, and SFAS No. 131,
         Disclosures About Segments of an Enterprise and Related Information,
         which specifies revised guidelines for determining an entity's
         operating segments and the type and level of financial information to
         be required. The Company is required to adopt these standards in fiscal
         1999. The Company does not expect the impact of these pronouncements to
         be material.

         RECLASSIFICATIONS - Certain reclassifications have been made to the
         1997 consolidated financial statements in order to conform to the 1998
         presentation. These reclassifications had no effect on previously
         reported net income, operating cash flows, or total shareholders'
         equity.

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.

         On December 31, 1997, the Company through Cybex Europe acquired Elsner
         Computertechnik GmbH and PolyCon Data Systems GmbH (collectively the
         PolyCon Companies), both privately held companies in Steinhagen,
         Germany, for a combined purchase price of approximately $8.8 million
         including acquisition related expenditures. The closing of the
         acquisition occurred on December 31, 1997. The acquisition of the
         PolyCon Companies was funded by Cybex Europe from its available cash.
         The acquisition was accounted for using the purchase method of
         accounting and, accordingly, the purchase price has been allocated to
         the assets and liabilities of the PolyCon Companies based on their fair
         values at the date of acquisition. Operating results of the PolyCon
         Companies since December 31, 1997 are included in the Company's
         consolidated financial statements.

         Costs allocated to research and development assets with alternative
         future uses were capitalized and the remaining $4,705,000 of acquired
         research and development costs were expensed as a one-time charge on
         December 31, 1997.



                                       35
<PAGE>   36


    The estimated fair value of assets acquired and liabilities assumed in the
acquisition is as follows:

<TABLE>
        <S>                                                                          <C>      
        Cash                                                                         $       153,000
        Accounts receivable                                                                  634,000
        Inventory                                                                          1,386,000
        Other assets                                                                          37,973
        Property and equipment                                                               398,000
        Trademarks                                                                           806,000
        Acquired research and development                                                  4,705,000
        Goodwill                                                                           2,914,027

        Fair value of liabilities assumed:
           Accounts payable                                                                1,524,000
           Other liabilities                                                                 694,000
                                                                                     ---------------

        Cash paid                                                                    $     8,816,000
                                                                                     ===============
</TABLE>

         The following unaudited pro forma summary combines the results of
         operations of the Company with the acquisition of the PolyCon Companies
         as if the acquisition had occurred at April 1, 1996. Certain
         adjustments have been made to reflect the impact of the purchase
         transaction. These pro forma results have been prepared for comparative
         purposes only and do not purport to be indicative of what would have
         occurred had the acquisition been made at the beginning of the
         respective fiscal years, or of results which may occur in the future.

<TABLE>
<CAPTION>
                                                                                           1997              1998
                   <S>                                                               <C>               <C>        
                   Net sales (in thousands)                                          $     39,911      $    59,514
                   Net income (in thousands)                                         $      6,374      $     4,266
                   Earnings per share - basic and diluted                            $        .76      $       .51
</TABLE>

         Pro forma earnings per share for the years ended March 31, 1997 and
         1998 is calculated by dividing pro forma net income by the weighted
         average shares outstanding of 8,390,286 and 8,408,025, respectively.

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 and acquisitions.

5.       Stock Split

         On March 31, 1998, the Company declared a 3-for-2 stock split. All
         capital stock and stock option information included in the consolidated
         financial statements and notes thereto gives retroactive effect to the
         split except with respect to the consolidated statements of
         shareholders' equity prior to the year ended March 31, 1998.



                                       36
<PAGE>   37


6.       Stock Repurchase Plan

         The Board of Directors approved a stock repurchase plan during December
         1995 to purchase up to 750,000 shares of Company stock on the open
         market. During the 1996 fiscal year, the Company purchased 351,000
         shares of treasury stock at prices ranging from $8.33 to $9.83 per
         share. During the 1997 fiscal year, the Company purchased 146,250
         shares of treasury stock at prices ranging from $9.59 to $10.09 per
         share. The share and per share amounts have been retroactively adjusted
         to reflect the effect of the 3-for-2 stock split discussed in Note 5.

7.       Inventories

         A summary of inventories at March 31, 1997 and 1998 is as follows:

<TABLE>
<CAPTION>
                                                                                         1997             1998
        <S>                                                                     <C>                <C>           
        Raw materials                                                           $     2,358,877    $    4,060,360
        Work in process                                                                 888,089           957,288
        Finished goods                                                                  588,390         1,029,271
                                                                                ---------------    --------------

                                                                                $     3,835,356    $    6,046,919
                                                                                ===============    ==============
</TABLE>


8.       Investments

         The cost and approximate market values of available-for-sale securities
         at March 31, 1997 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                                      GROSS            GROSS          ESTIMATED
                                                 AMORTIZED         UNREALIZED        UNREALIZED         MARKET
                                                   COST               GAINS            LOSSES           VALUES
                                             --------------------------------------------------------------------
<S>                                           <C>                  <C>               <C>             <C>
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
                                              ================     ===========       ===========     ============
1998
----
          U.S. Treasury bills                 $     32,878,354                                       $ 32,878,354 
          U.S. Treasury notes                        2,041,570                                          2,041,570
          Marketable equity securities               2,810,102     $   279,669       $   (48,938)       3,040,833
                                              ----------------     -----------       -----------     ------------
                                              $     37,730,026     $   279,669       $   (48,938)    $ 37,960,757
                                              ================     ===========       ===========     ============
</TABLE>


                                       37


<PAGE>   38


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


<TABLE>
<CAPTION>
                                           1997                               1998
                                ----------------------------     -----------------------------
                                AMORTIZED        MARKET           AMORTIZED          MARKET
                                  COST           VALUE              COST              VALUE
                                -----------     ------------     ------------      -----------
<S>                             <C>             <C>              <C>              <C>        
Due in one year or less         $38,688,836      $38,688,836      $34,919,924      $34,919,924
Due after one year through
   five years                        46,000           46,000
                                -----------      -----------      -----------      -----------
                                $38,734,836      $38,734,836      $34,919,924      $34,919,924
                                ===========      ===========      ===========      ===========
</TABLE>


         Gross realized gains on the sale of investments available for sale were
         approximately $492,000 and $705,000 in 1997 and 1998, respectively.
         Gross realized losses were approximately $215,000 and $342,000 in 1997
         and 1998, respectively. There were no realized gains or losses in 1996.

9.       PROPERTY AND EQUIPMENT

         Property and equipment consists of the following at March 31, 1997 and
1998:


<TABLE>
<CAPTION>
                                                    1997             1998
        <S>                                    <C>               <C>
        Land                                   $   709,625       $   709,625
        Engineering and testing equipment          168,892           622,982
        Production equipment                       574,565           772,266
        Marketing fixtures and equipment           105,185           140,536
        Office furniture and equipment             408,702           513,231
        Computer software and equipment          1,260,473         1,604,136
        Automotive equipment                        17,124            49,727
        Leasehold improvements                      45,282           170,965
        Construction in progress                     3,750         4,090,721
                                               -----------       -----------

                                                 3,293,598         8,674,189
        Less accumulated depreciation             (871,306)       (1,422,277)
                                               -----------       -----------


                                               $ 2,422,292       $ 7,251,912
                                               ===========       ===========
</TABLE>


10.     INTANGIBLES

         Intangible assets as of March 31, 1997 and 1998 consist of the
following:


<TABLE>
<CAPTION>
                                                          1997              1998
        <S>                                            <C>             <C>
        Trademarks                                     $  79,077         1,002,523
        Goodwill and other                                28,446         2,944,430

           Total intangible assets                       107,523         3,946,953
        Less accumulated amortization                     (4,291)         (125,582)
                                                       ---------       -----------

           Intangible assets, net of amortization      $ 103,232       $ 3,821,371
                                                       =========       ===========
</TABLE>


11.      SHORT-TERM BORROWINGS

         At March 31, 1997 and 1998, the Company had $8,000,000 and $12,000,000,
         respectively, outstanding under short-term note payables bearing
         interest at the bank's prime rate (8.50% and 8.188% at March 31, 1997
         and 1998, respectively). The amounts outstanding at March 31, 1997 and
         1998 were repaid on April 3, 1997 and April 2, 1998, respectively.

                                       38


<PAGE>   39
         The Company has a bank line of credit which provides for borrowings up
         to $5,000,000. Interest on outstanding advances was payable monthly at
         the bank's prime rate at March 31, 1997 and LIBOR plus 2.5% at March
         31, 1998 (8.50% and 8.19% at March 31, 1997 and 1998, 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 June 30, 1998. The Company had no
         amounts outstanding on the line of credit at March 31, 1997 or 1998.

         The Company's newly acquired subsidiary, the PolyCon Companies, has a
         bank line of credit which provides for borrowings up to $2,500,000. The
         Company had no amounts outstanding on the line of credit at March 31,
         1998.

12.      INCOME TAXES

         The provision (benefit) for income taxes for the years ended March 31,
         1996, 1997, and 1998 is comprised of the following:


<TABLE>
<CAPTION>
                                                          1996              1997             1998
<S>                                                   <C>               <C>               <C>        
U. S. operations:
  Current:
     Federal                                          $ 2,377,923       $ 3,263,747       $ 4,326,000
     State                                                223,557           363,638           481,000
                                                      -----------       -----------       -----------
                                                        2,601,480         3,627,385         4,807,000
                                                      -----------       -----------       -----------
  Deferred:
     Federal                                               (8,952)         (185,747)         (468,000)
     State                                                   (904)          (20,638)          (52,000)
                                                      -----------       -----------       -----------
                                                           (9,856)         (206,385)         (520,000)
                                                      -----------       -----------       -----------
Total U. S. operations tax provision                    2,591,624         3,421,000         4,287,000
Total foreign operations tax provision (benefit)                            (28,000)          220,549
                                                      -----------       -----------       -----------
         Total provision                              $ 2,591,624       $ 3,393,000       $ 4,507,549
                                                      ===========       ===========       ===========
</TABLE>


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


<TABLE>
<CAPTION>
                                                        1996              1997              1998
<S>                                                 <C>               <C>               <C>
Computed "expected" federal income tax expense      $ 2,476,869       $ 3,139,050       $ 2,746,711
Add (deduct):
  CIC foreign sales corporation income                  (20,289)          (10,821)          (22,473)
  State income tax deduction                            (75,702)         (116,620)         (145,860)
  Change in valuation allowance                                                           2,352,500
  Tax effect resulting from foreign activities                                           (1,025,935)
  Other                                                 (11,907)           66,391           (46,943)
                                                    -----------       -----------       -----------
                                                    $ 2,368,971       $ 3,078,000       $ 3,858,000
                                                    ===========       ===========       ===========
</TABLE>

         The components of the deferred income tax assets and liabilities at
         March 31, 1997 and 1998 are as follows:


<TABLE>
<CAPTION>
                                                              1997              1998
<S>                                                       <C>               <C>        
Current deferred income tax asset:

  Allowance for doubtful accounts                         $   127,500       $   214,200
  Liability for sales and warranty returns                    114,800           230,300
  Accrued vacation                                             32,400            27,100
  Inventory                                                   348,300           527,300
  Other reserves                                                                145,100
                                                          -----------       -----------
                                                          $   623,000       $ 1,144,000
                                                          ===========       ===========
Net noncurrent deferred income tax asset (liability):

         Accumulated depreciation                         $  (108,000)      $  (109,000)
         Foreign subsidiary intangibles and other              28,000         2,352,500
                                                          -----------       -----------
                                                              (80,000)        2,243,500
Less valuation allowance                                                     (2,352,500)
                                                          -----------       -----------
                                                          $   (80,000)      $  (109,000)
                                                          ===========       =========== 
</TABLE>


         As discussed in Note 3, the Company expensed $4,705,000 of acquired
         research and development costs during the year ended March 31, 1998 in
         connection with the acquisition of the PolyCon Companies. For German
         tax purposes, the amount was capitalized as part of goodwill and will
         be amortized over 15 years. The Company has a full valuation allowance
         recorded against this asset at March 31, 1998. The Company intends to
         fully reserve this asset until it is determined that it is more likely
         than not that the asset can be realized through future taxable income
         from its German operations.

                                       39
<PAGE>   40


13.      EARNINGS PER SHARE

         A summary of the calculation of basic and diluted earnings per share
         for the years ended March 31, 1996, 1997, and 1998 is as follows:

<TABLE>
<CAPTION>
                                                   INCOME           SHARES      PER-SHARE
                                                 (NUMERATOR)     (DENOMINATOR)    AMOUNT
                                                ------------     -------------  ---------
<S>                                              <C>             <C>            <C>     
FOR THE YEAR ENDED 1996
-----------------------
BASIC EPS
Income available to common stockholders          $4,693,285      7,184,066      $   0.65
EFFECT OF DILUTIVE SECURITIES
Stock options                                                      457,623
DILUTED EPS
Income available to common stockholders and      $4,693,285      7,641,689      $   0.61
         assumed conversions

FOR THE YEAR ENDED 1997
-----------------------
BASIC EPS
Income available to common stockholders          $5,839,500      8,228,408      $   0.71
EFFECT OF DILUTIVE SECURITIES
Stock options                                                      161,878
DILUTED EPS
Income available to common stockholders and      $5,839,500      8,390,286      $   0.70
         assumed conversions

FOR THE YEAR ENDED 1998
-----------------------
BASIC EPS
Income available to common stockholders          $3,571,013      8,173,440      $   0.44
EFFECT OF DILUTIVE SECURITIES
Stock options                                                      234,585
DILUTED EPS
Income available to common stockholders and
         assumed conversions                     $3,571,013      8,408,025      $   0.42
</TABLE>


         The following options were outstanding during the respective year
         granted, but were not included in the computation of that year's
         diluted EPS because the options' exercise price was greater than the
         average market price of the common shares in the respective year.

<TABLE>
<CAPTION>
                                    OPTIONS            EXERCISE
                                    GRANTED              PRICE                   EXPIRATION
                                    -------           -------------              -----------
<S>                                 <C>               <C>                        <C>
FOR THE YEARS ENDED MARCH 31:

         1996                        39,750           $16.00-$17.42              2000 - 2007
         1997                       240,188           $10.67.$16.00              2000 - 2007
         1998                        41,438           $13.33-$16.00              2000 - 2005
</TABLE>



                                       40

<PAGE>   41


14.      COMMITMENTS

         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 $259,000,
         $312,000, and $401,000 for the years ended March 31, 1996, 1997, and
         1998, respectively. Minimum future rental payments under the
         noncancellable operating leases are approximately as follows:

<TABLE>
<CAPTION>
       YEAR ENDING MARCH 31:
        <S>                                                                <C>              
                1999                                                       $  737,000
                2000                                                          674,000
                2001                                                          582,000
                2002                                                          552,000
                2003                                                          499,000
                Thereafter                                                  3,777,000
                                                                           ----------
                                                                           $6,821,000
                                                                           ==========
</TABLE>


         The Company's lease for certain of its offices and manufacturing
         facilities expires July 31, 2003, 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.

15.      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 1,181,250 shares of common stock for the 1989 plan.
         The options granted under this plan are not exercisable during the
         first two year 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, 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 shareholder approved changes
         to the Company's stock option plans whereby the 1989 Plan was terminate
         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 421,875 shares of
         common stock for the 1995 Plan. During 1998, the shareholders approved
         450,000 additional shares of common stock to be set aside for the 1995
         plan.

         The Company's stockholders also approved options for 271,688 shares of
         common stock for 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
         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 84,375 shares of common stock for the 1995
         Directors Plan.


                                       41

<PAGE>   42
         Pertinent information regarding the plans which has been retroactively
         restated for the 3-for-2 stock split is as follows:

<TABLE>
<CAPTION>

                                                                 RANGE OF            WEIGHTED
                                             NUMBER OF           EXERCISE            AVERAGE           VESTING
                                              OPTIONS             PRICES          EXERCISE PRICE      PROVISIONS
                                            -------------    ---------------      --------------      -----------
<S>                                         <C>              <C>                  <C>                 <C>
Options outstanding, March 31, 1995             1,206,563    $  .45 - $ 1.78          $  .99           Various
Options granted                                    11,250    $11.33 - $16.00          $12.89           100%/year
Options granted                                   127,688    $ 9.17 - $13.33          $11.09            20%/year
Options exercised                              (1,020,938)   $  .45 - $ 1.71          $  .89           Various
                                            -------------

Options outstanding, March 31, 1996               324,563    $ 1.19 - $16.00          $ 5.65           Various
Options granted                                    18,750    $11.00 - $11.33          $11.13           100%/year
Options granted                                   142,500    $ 8.83 - $12.10          $11.19            20%/year
Options exercised                                 (33,750)            $ 1.19          $ 1.19            20%/year
                                            -------------

Options outstanding, March 31, 1997               452,063    $ 1.19 - $16.00          $ 7.96           Various
Options granted                                    11,250             $14.42          $14.42           100%/year
Options granted                                   234,750    $ 9.67 - $17.42          $12.41            20%/year
Options exercised                                (110,513)   $ 1.19 - $13.33          $ 1.75           Various
Options forfeited                                  (1,800)            $13.33          $13.33            20%/year
                                            -------------
Options outstanding, March 31, 1998               585,750
                                            =============
</TABLE>

         The following table summarizes information about stock options
outstanding at March 31, 1998.

<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                  44,063         7.81                $ 1.78                29,813        $ 1.78
  $ 8.83 - $11.00                 252,000         8.55                $10.27                46,350        $10.12
  $11.33 - $12.10                 153,000         8.62                $11.55                39,600        $11.43
  $12.33 - $15.00                  96,937         8.89                $14.16                24,525        $13.83
  $16.00 - $17.42                  39,750         9.46                $16.45                 3,750        $16.00
                           --------------                                              -----------
                                  585,750                                                  144,038
                           ==============                                              ===========
</TABLE>

         The options above were issued at exercise prices which approximate fair
         market value at the date of grant. At March 31, 1998, 411,862 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:

                                       42

<PAGE>   43

<TABLE>
<CAPTION>

                                                                     1996               1997              1998
<S>                                                            <C>                  <C>               <C>
Net income - as reported                                       $    4,693,285       $  5,839,500      $  3,571,013
Net income - pro forma                                         $    4,607,184       $  5,559,083      $  3,074,098
Diluted earnings per share - as reported                       $          .61       $        .70      $        .42
Diluted earnings per share - pro forma                         $          .60       $        .67      $        .37
</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                    1998
<S>                                            <C>                    <C>                     <C>
Dividend yield                                            0                      0                       0
Expected life (years)                                 3 - 5                  3 - 5                   3 - 5
Expected volatility                                    45.7%                  45.7%            44.2 - 45.7%
Risk-free interest rate (range)                5.77% - 5.88%          6.16% - 6.35%           5.98% - 6.35%
</TABLE>

16.      RETIREMENT PLAN

         The Company has a 401(k) savings and profit sharing plan, the Cybex
         Computer Products Corporation Retirement Plan, covering substantially
         all employees. 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,
         $53,000, and $91,000 for the years ended March 31, 1996, 1997, and
         1998, respectively. The Company may also elect to make discretionary
         contributions as determined by its Board of Directors. The Company did
         not make discretionary contributions during the fiscal years ended
         March 31, 1996, 1997, or 1998.

17.      CONTINGENCIES

         The Company has a contingent liability resulting from litigation
         enacted by Apex PC Solutions, Inc. (Apex). Apex contends in a lawsuit
         filed against the Company in the U.S. District Court in Seattle,
         Washington that the Company has infringed Patent No. 5,721,842. After
         extensive review of the claims at issue, management does not believe
         that any of its products are covered by any valid claim of Apex's
         patent. As a result, it is management's opinion that the probable
         resolution of such contingencies will not materially affect the
         financial position, results of operations, or cash flows of the
         Company. The Company has also been involved from time to time in
         litigation in the normal course of its business. In the opinion of
         management, the Company is not aware of any other pending or threatened
         litigation matter that will have a material adverse effect on the
         Company's business, operations, financial condition or cash flows.

                                       43

<PAGE>   44

18.      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 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.

<TABLE>
<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):

   Basic                                          $         .15   $         .18   $         .19   $         .20
   Diluted                                        $         .15   $         .17   $         .18   $         .19
</TABLE>

<TABLE>
<CAPTION>

                                                                           THREE MONTHS ENDED
                                                  -------------------------------------------------------------
(In Thousands, Except for Per Share Amounts)
                                                     JUNE 30,     SEPTEMBER 30,   DECEMBER 31,       MARCH 31,
                                                      1997            1997           1997              1998
                                                  -------------   -------------   -------------   -------------
<S>                                               <C>             <C>             <C>             <C>
Net sales                                         $      10,695   $      11,267   $      12,537   $      18,064
Gross profit                                      $       5,646   $       5,923   $       6,567   $       9,464
Operating income                                  $       2,159   $       2,388   $      (2,019)  $       3,653
Net income                                        $       1,702   $       1,937   $      (2,659)  $       2,591
Net income per share (1):

   Basic                                          $         .21   $         .24   $        (.33)  $         .31
   Diluted                                        $         .21   $         .23   $        (.31)  $         .31
</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 shares
     outstanding calculation.

                                       44

<PAGE>   45

                         [COOPERS & LYBRAND LETTERHEAD]

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders 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 28 of this Form 10-K. In connection with
our audit of such consolidated financial statements, we have also audited the
related financial statement schedule listed in the index on page 25 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
May 1, 1998


                                       45
<PAGE>   46


                                                                     SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS
for the years ended March 31, 1996, 1997, and 1998

<TABLE>
<CAPTION>
                                                                CHARGED       CHARGED
                                                 BEGINNING         TO            TO
                                                  BALANCE       EXPENSES      ACCOUNTS     DEDUCTIONS(1)      OTHER        BALANCE
                                                 ---------     ----------     --------     -------------    ---------     ----------
<S>                                              <C>           <C>            <C>          <C>              <C>           <C>
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
     Liability for sales and warranty returns    $371,792      $ (171,792)     $    --      $       --       $     --     $  200,000

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
     Liability for sales and warranty returns    $200,000      $  144,654      $    --      $       --       $     --     $  344,654

YEAR ENDED MARCH 31, 1998:
     Allowance for doubtful accounts             $350,837      $  717,721      $    --      $ (200,880)      $ 95,206     $  963,083
     Allowance for inventory obsolescence        $497,840      $  667,955      $    --      $       --       $199,980     $1,365,775
     Liability for sales and warranty returns    $344,654      $  440,966      $    --      $       --       $     --     $  785,620
     Valuation allowance for income taxes        $     --      $2,352,500      $    --      $       --       $     --     $2,352,500
</TABLE>

(1)  Deductions consist of specific accounts receivable written off against the
     allowance for doubtful accounts.



                                       46
<PAGE>   47

                                   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, 1998

    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, 1998
         Stephen F. Thornton                        Directors, President and Chief

                                                    Executive Officer
                                                    (Principal Executive Officer)
         /s/ Doyle C. Weeks
         -----------------------                    Senior Vice President - Finance,   June 26, 1998
         Doyle C. Weeks                             Chief Financial Officer, and
                                                    Treasurer (Principal Financial
                                                    and Accounting Officer) and
                                                    Director
         /s/ Remigius G. Shatas
         -----------------------                    Executive Vice President -         June 26, 1998
         Remigius G. Shatas                         Technology and Acquisitions,
                                                    Secretary and Director

         /s/ Oscar L. Pierce
         -----------------------                    Director                           June 26, 1998
         Oscar L. Pierce

         /s/ David S. Butler
         -----------------------                    Director                           June 26, 1998
         David S. Butler

         /s/ Douglas E. Pritchett
         ------------------------                   Director                           June 26, 1998
         Douglas E. Pritchett
</TABLE>
                                       47

<PAGE>   48
                                EXHIBIT INDEX

<TABLE>
<CAPTION>
        Exhibit                                                                                    
        Number                               Description                                                 
        ------                               -----------
                                                                                                         
        <S>         <C>                                                                                  
          2.1       Purchase  and Sale  Agreement  by and between  the  Company,
                    Cybex Europe and Edgar and Stephanie Elsner effective
                    December 31, 1997 incorporated by reference (pursuant to the
                    provisions of Rule 12(b)-32) to Exhibit No. 2.1 (b) to the 
                    Company's Current Report on Form 8-K filed January 14, 1998.

          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*      Commercial Variable Rate Revolving or Draw Note by and
                    between the Company and First Commercial Bank and related
                    Security Agreement dated July 1, 1997 and the related Loan
                    Modification Agreement dated March 5, 1998.

         10.3*      Commercial Fixed Rate Promissory Note by and between the
                    Company and First Commercial Bank and related Security
                    Agreement dated March 25, 1998.

         10.4       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.

         10.5       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.

         10.6       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.

         10.7*      1998 Employee Stock Incentive Plan.

         10.8       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, incorporated by reference (pursuant to
                    the provisions of Rule 12(b)-32) to Exhibit 10.6 of the
                    Company's Form 10-K for the fiscal year ended March 31,
                    1997.

         10.9       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.

         10.10      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.
</TABLE>
<PAGE>   49


         10.11      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.

         10.12      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.

         10.13      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.

         13         Cybex Computer Products Corporation Annual Report to
                    Shareholders for the Fiscal Year Ended March 31, 1998. 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.

         21*        List of Subsidiaries of the Company.

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

         27.1-27.8* Financial Data Schedule for current period and restated
                    Financial Data Schedules for other periods (for SEC use
                    only).

    * As filed herewith.