<PAGE>   1



                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

                  FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 1998

                                       OR

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

          FOR THE TRANSITION PERIOD FROM ___________ TO ______________


                         COMMISSION FILE NUMBER: 0-16937
                                                 -------

                             SUMMIT TECHNOLOGY, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

         Massachusetts                                  04--2897945
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)



21 Hickory Drive, Waltham, Massachusetts                  02154
----------------------------------------                ----------  
(Address of principal executive officer)                (Zip Code)


                                 (781) 890-1234
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

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

                  COMMON STOCK AND COMMON SHARE PURCHASE RIGHTS
                                (TITLE OF CLASS)

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                   [X]  YES   [ ]  NO

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

    Indicate the number of shares outstanding of each of the issuer's classes of
stock, as of the latest practicable date.

    On July 31, 1998, 31,283,765 shares of common stock, par value $0.01 per
share were outstanding.



<PAGE>   2

                          PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

                    SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                    (UNAUDITED)
                                                                  JUNE 30, 1998  DEC. 31, 1997
----------------------------------------------------------------------------------------------
<S>                                                                    <C>            <C>     
ASSETS

Current assets:
     Cash and cash equivalents                                         $ 57,594       $ 33,720
     Short-term investments                                              24,827         26,770
     Receivables, net of allowances                                      13,541          8,896
     Inventories                                                         13,875         14,494
     Prepaid expenses and other current assets                            3,182          2,533
     Due from related party                                                  72              4
     Restricted cash                                                         --          1,264
                                                                       -----------------------
               Total current assets                                     113,091         87,681
Long-term investments                                                    30,615         13,583
Property and equipment, net                                               9,248          8,593
Patents, net                                                              4,538          4,769
Other assets                                                                477            477
----------------------------------------------------------------------------------------------

               TOTAL ASSETS                                            $157,969       $115,103
==============================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                                  $  4,620       $  4,482
     Accrued expenses                                                    11,962          7,197
     Current maturities of long-term debt                                 5,208          5,142
     Deferred revenue                                                     2,227          2,937
     Due to related party                                                    --             28
                                                                       -----------------------
               Total current liabilities                                 24,017         19,786
Long-term debt, less current maturities                                   2,739          6,330
----------------------------------------------------------------------------------------------
               Total liabilities                                         26,756         26,116
----------------------------------------------------------------------------------------------

Stockholders' equity:
     Preferred stock, $.01 par value. Authorized 5,000,000 shares            --             --
     Common stock, $.01 par value. Authorized 60,000,000
          shares; Issued 31,321,038 shares in 1998
          and 31,299,803 in 1997                                            314            313
     Additional paid-in capital                                         152,788        153,982
     Accumulated deficit                                                (29,632)       (60,313)
                                                                       -----------------------
                                                                        123,470         93,982


     Net unrealized gain (loss) on investment                             8,080         (4,835)

     Treasury stock, at cost, 38,615 shares
          in 1998 and 6,125 shares in 1997                                 (337)          (160)
----------------------------------------------------------------------------------------------
               Total stockholders' equity                               131,213         88,987
----------------------------------------------------------------------------------------------

               TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              $157,969       $115,103
==============================================================================================
</TABLE>


See accompanying notes to consolidated financial statements.




                                       2
<PAGE>   3
                    SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
               (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS; UNAUDITED)


<TABLE>
<CAPTION>
                                                       THREE MONTHS               SIX MONTHS
                                                       ENDED JUNE 30,            ENDED JUNE 30,
                                                     1998         1997          1998         1997
---------------------------------------------------------------------------------------------------
<S>                                                 <C>          <C>          <C>           <C>    

Net revenues:
     Systems                                        $ 5,395      $ 1,873      $ 8,683       $ 3,281
     License fees, service and other                  7,459        7,461       14,294        12,668
     Contact lens and related products               10,542       11,772       22,259        23,510
                                                    -----------------------------------------------
Total net revenues                                   23,396       21,106       45,236        39,459

Cost of revenues                                     14,155       12,443       27,463        24,424
                                                    -----------------------------------------------

Gross profit                                          9,241        8,663       17,773        15,035
                                                    -----------------------------------------------
Operating expenses:
     Selling, general and administrative              7,242        5,323       14,417        11,774
     Research, development and regulatory             1,761        1,513        3,599         3,236
                                                    -----------------------------------------------
               Total operating expenses               9,003        6,836       18,016        15,010
                                                    -----------------------------------------------

Operating income (loss)                                 238        1,827         (243)           25

Litigation settlement, net of related expenses       34,386           --       34,386            --   

Other income                                            776          762        1,458         1,255
                                                    -----------------------------------------------

Income before provision for income taxes             35,400        2,589       35,601         1,280

Provision for income taxes                            4,896           17        4,920           108
---------------------------------------------------------------------------------------------------

               Net income                           $30,504      $ 2,572      $30,681       $ 1,172
===================================================================================================

Earning per share:
         Basic earnings  per share                  $  0.98      $  0.08      $  0.98       $  0.04
         Diluted earnings per share                 $  0.97      $  0.08      $  0.98       $  0.04

Weighted average number of common
      shares used for basic earnings
      per share calculation                          31,277       31,158       31,178        31,020

Weighted average number of common
      shares and dilutive securities used for
      diluted earnings per share calculation         31,327       31,312       31,209        31,191

===================================================================================================
</TABLE>



See accompanying notes to consolidated financial statements.



                                       3
<PAGE>   4


                    SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                            (IN THOUSANDS; UNAUDITED)

<TABLE>
<CAPTION>
                                                 THREE MONTHS              SIX MONTHS
                                                ENDED JUNE 30,            ENDED JUNE 30,
                                               1998       1997          1998        1997
=========================================================================================
<S>                                           <C>        <C>           <C>         <C>   

Net income                                    $30,504    $2,572        $30,681     $1,172
                                              -------------------------------------------

     Net unrealized gain on investment          8,213        --         12,915         --

     Provision for income taxes at 39%          3,203        --          5,037         --
                                              -------------------------------------------
                                                5,010        --          7,878         --
=========================================================================================

Comprehensive income                          $35,514    $2,572        $38,559     $1,172
=========================================================================================

</TABLE>





See accompanying notes to consolidated financial statements.



                                       4
<PAGE>   5

                    SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                            (IN THOUSANDS; UNAUDITED)

<TABLE>
<CAPTION>
                                                                        SIX MONTHS
                                                                       ENDED JUNE 30,
                                                                    1998             1997
------------------------------------------------------------------------------------------
<S>                                                               <C>             <C>     
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                        $30,681         $  1,172
Adjustments to reconcile net income to net cash provided 
     by operating activities:
       Depreciation and amortization                                1,743            2,086
       Changes in operating assets and liabilities:
               Accounts receivable, net                            (4,645)            (635)
               Inventories, net                                       619           (1,168)
               Prepaid expenses and other current assets             (649)             590
               Accounts payable                                       138             (190)
               Accrued expenses                                     4,765             (915)
               Deferred revenue                                      (710)          (1,046)
               Related party, net                                     (96)           2,546
       Discontinued operations                                         --            1,433
------------------------------------------------------------------------------------------
               Net cash provided by operating activities           31,846            3,873
------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in short-term investments                       1,943          (14,499)
(Increase) decrease in long-term investments                       (4,229)           3,426
Additions to property and equipment                                (2,167)          (1,434)
Decrease in restricted cash                                         1,264              149
Other                                                                  --            1,242
------------------------------------------------------------------------------------------
               Net cash used by investing activities               (3,189)         (11,116)
------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds (repayments) of long-term debt                        (3,525)          (2,619)
Proceeds from exercise of stock options                                34               24
Proceeds from other shares issued                                      68              301
Purchases of treasury stock                                        (1,360)              --
------------------------------------------------------------------------------------------
               Net cash used by financing activities               (4,783)          (2,294)
------------------------------------------------------------------------------------------

Increase (decrease) in cash and cash equivalents                   23,874           (9,537)

Cash and cash equivalents at beginning of period                   33,720           44,013
------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                        $57,594         $ 34,476
==========================================================================================

Supplemental cash flow information:
       Interest paid                                              $   548         $    782
       Income taxes paid                                          $    70         $     35
==========================================================================================


</TABLE>


See accompanying notes to consolidated financial statements.




                                       5
<PAGE>   6


SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.    NATURE OF BUSINESS

Summit Technology, Inc. and subsidiaries (the "Company") develops, manufactures
and markets ophthalmic laser systems designed to correct common vision disorders
such as nearsightedness, farsightedness and astigmatism. The Company also
collects per procedure license fees from users of its systems and participated
in per procedure license fees paid to Pillar Point Partners, a partnership,
formed by the Company and VISX, Inc. ("VISX") to hold certain U.S. patents
covering excimer laser systems and procedures. On June 4, 1998, the Company and
VISX dissolved Pillar Point Partners and have granted to each other worldwide,
royalty-free cross-licenses to all of their respective U.S. and foreign patents
in the field of laser ablation of corneal tissue, including all patents included
or includable in Pillar Point Partners. Through its wholly-owned subsidiary,
Lens Express, Inc., the Company primarily sells contact lenses and related
products.


2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation: The accompanying consolidated financial statements have
been prepared by the Company without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. In the opinion of the
Company, these consolidated financial statements contain all adjustments
(consisting of only normal, recurring adjustments) necessary to present fairly
the consolidated financial position, results of operations and cash flows of the
Company for the interim period.

The accompanying consolidated financial statements and related notes should be
read in conjunction with the Company's Annual Report on Form 10-K for the year
ended December 31, 1997. The results of operations for the six months ended June
30, 1998 are not necessarily indicative of the results to be expected for the
full year.


Net Income Per Share: Basic earnings per share are computed by dividing net
income by the weighted-average number of common shares outstanding during the
year. The number of shares used to compute basic earnings per share were (in
thousands) 31,277 for the second quarter of 1998 and 31,158 for the second
quarter of 1997. The number of shares used to compute basic earnings per share
were (in thousands) 31,178 for the first half of 1998 and 31,020 for the first
half of 1997. Diluted earnings per share includes the effect of all dilutive
potential common shares that were outstanding during the period. Diluted
earnings per share are computed by dividing net income by the weighted-average
number of common shares and dilutive securities. The number of shares used to
compute diluted earnings per share were (in thousands) 31,327 for the second
quarter of 1998 and 31,312 for the second quarter of 1997. The number of shares
used to compute diluted earnings per share were (in thousands) 31,209 for the
first half of 1998 and 31,191 for the first half of 1997.


New Accounting Standards: The Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 130, Reporting Comprehensive Income at the beginning of
fiscal 1998. SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general purpose
financial statements.

The Company will adopt SFAS No. 131, Disclosure about Segments of an Enterprise
and Related information in the fourth quarter of 1998. SFAS No. 131 establishes
standards for the way that public business enterprises report selected
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial statements. SFAS No. 131 is not expected to have a material
impact on the Company's financial position or results of operations.


Reclassifications: Prior to 1998, the Company recorded gross license fee
revenues upon allocation from Pillar Point Partners and the net license fee
liability owed to Pillar Point Partners as cost of revenues. Administrative
expenses paid to Pillar Point Partners were classified as operating expenses as
incurred. Effective January 1, 1998, license fee revenues due the Company from
Pillar Point 



                                       6
<PAGE>   7

Partners are recorded net of license fees payable to Pillar Point Partners and
net of related expenses. Certain prior year information has been reclassified to
conform with present year presentation of data.


3.    DISCONTINUED OPERATIONS

In August 1997, the Company sold Refractive Centers International, Inc., (RCII)
a wholly owned subsidiary of the Company , to LCA-Vision Inc. (LCA) in exchange
for 16,164,361 newly issued shares of LCA common stock. RCII owned and operated
the Company's vision center business. The sale of the discontinued operation
resulted in a net gain of $10.7 million in 1997, which includes a gain on the
sale of net assets held for discontinued operation and accruals for other
estimated costs to be incurred in connection with the sale of RCII and
distribution of LCA common stock. On December 29, 1997, the Company distributed
9.0 million shares of LCA common stock to its shareholders in the form of a
dividend. A dividend of one share of common stock of LCA was issued for every
3.5 (approximate) shares of the Company's common stock outstanding. The
remaining shares, which represent approximately 19.5 percent of LCA's
outstanding shares have been classified as a long-term investment. The operating
loss from discontinued operations for the year ended December 31, 1997 was $3.3
million.


4.    INVENTORIES

      Inventories consist of the following:

<TABLE>
<CAPTION>
                                             JUNE 30,       DEC. 31,
           (in thousands)                     1998           1997
      =============================================================
      <S>                                     <C>            <C> 
   
      Raw materials and subassemblies        $ 3,581        $ 3,195
      Work in process                          1,937          2,147
      Finished goods                           8,357          9,152
      -------------------------------------------------------------
              Total                          $13,875        $14,494
      =============================================================
</TABLE>


5.    CONTINGENCIES

Pillar Point Partners Antitrust And Patent Litigation. Pillar Point Partners,
the Company, VISX, Inc. ("VISX") and certain affiliates of the Company and VISX
are presently involved in a series of patent and antitrust lawsuits which have
been administratively consolidated for pretrial purposes in the United States
District Court for the District of Arizona by the Federal Judicial Panel on
Multidistrict Litigation ("MDL Panel"). These cases are presently pending as IN
RE: PILLAR POINT PARTNERS ANTITRUST AND PATENT LITIGATION (CIVIL ACTION NO. MDL
1202) and are described below.

Patent Litigation. Pillar Point Partners commenced patent infringement
litigation against certain ophthalmologists believed to have used or be using
homemade laser systems not licensed under patents held by Pillar Point Partners,
as well as one alleged manufacturer of such laser systems. These actions were
originally pending as PILLAR POINT PARTNERS, et al. v. DAVID DULANEY, et al.
(U.S. DISTRICT COURT, DISTRICT OF ARIZONA, CIVIL ACTION NO. 96-2051PHXPGR),
PILLAR POINT PARTNERS, et al. v. JON G. DISHLER, et al. (U.S. DISTRICT COURT,
DISTRICT OF COLORADO, CIVIL ACTION NO. 96-N-2351), and PILLAR POINT PARTNERS, et
al. v. JUI-TENG LIN, et al. (U.S. DISTRICT COURT, MIDDLE DISTRICT OF FLORIDA,
CIVIL ACTION NO. 97-54-CV-ORL-22). The defendants in the Dulaney and Dishler
actions have asserted counterclaims seeking declarations that the patents in
suit are invalid and unenforceable. Those defendants have also raised antitrust
and Lanham Act counterclaims.

Antitrust Litigation. In June, 1996, a Texas ophthalmologist, Robert G.
Burlingame, sued Pillar Point, VISX, the Company and certain affiliates of VISX
and the Company in the Federal District Court for the Northern District of
California alleging that the defendants have violated and are violating federal
and state antitrust laws. The plaintiff seeks damages of an unspecified amount,
treble damages, attorneys' fees and a permanent injunction against future
violations. On September 5, 1996, a Nevada 



                                       7
<PAGE>   8
ophthalmologist, John R. Shepherd, through his professional corporation,
commenced a similar lawsuit against the same parties, in the same court,
alleging substantially similar claims and seeking substantially similar relief.
Pillar Point Partners has stated that it believes these California lawsuits are
without merit and is contesting the suits vigorously. Plaintiff's counsel in the
Shepherd case has indicated that he intends to seek certification of the case as
a class action.

On November 5, 1997, Antoine Garabet, M.D., Inc. and Abraham Shammas, M.D.,
d/b/a Laser Eye Center, sued Pillar Point, VISX, the Company and certain
affiliates of VISX and the Company in the Federal District Court for the
Northern District of California seeking a declaratory judgment that the patents
held by Pillar Point are invalid and unenforceable on account of alleged
antitrust violations and alleging fraud in connection with certain of the
Company's sales and marketing activities. The plaintiffs seek compensatory
damages of at least $48,585.69, punitive damages of an unspecified amount,
injunctions against enforcement of the Pillar Point patents and against alleged
continuing violations of the antitrust laws, attorneys' fees and costs.
Defendants' motion to dismiss this case is pending.

In May, 1998, The Eye Professionals, P.A. of Millville, New Jersey commenced an
action in the Federal District Court for the District of New Jersey against the
Company and VISX. The case purports to be a class action on behalf of all
individuals or entities that have paid a per-procedure fee directly to either
defendant for use of a Summit or VISX laser to perform laser vision correction
surgery. The complaint alleges, inter alia, price-fixing in violation of Section
1 of the Sherman Act. The action seeks, inter alia, treble damages, costs of
suit, attorneys' fees, and various forms of declaratory and injunctive relief.
Similar actions were also filed in May, 1998 by Metropolitan Eye Center and
Outpatient Surgical Facility, Inc. in the U.S. District Court for the Northern
District of California against the Company, VISX, Summit Partner, Inc., and VISX
Partner, Inc., and by New England Laser Vision, Inc. in the U.S. District Court
for the District of New Jersey against the Company and VISX. In June, 1998,
Leslie L. Chisholm, Jr., M.D. filed another similar action in the Federal
District Court for the District of Arizona against the Company, VISX, Summit
Partner, Inc., VISX Partner, Inc., and Pillar Point Partners. In addition to
price-fixing claims, the CHISHOLM action also asserts, inter alia, claims for
monopolization, attempted monopolization, and conspiracy to monopolize in
violation of Section 2 of the Sherman Act, as well as claims under the
California Cartwright Act and other California statutes, for which disgorgement
of alleged illegal profits and ill-gotten gains is sought. Plaintiffs in each of
these cases have indicated that they will agree to consolidation of the four
purported class actions and file a single consolidated amended complaint. The
Company has yet to be served with that complaint.

In late March, 1998, Janice Camp of Atlanta, Georgia commenced an action in
Federal District Court for the District of Massachusetts against the Company
and VISX. As amended in April, 1998, the complaint adds as a named plaintiff
Jon Singer of Congers, New York. The case has been transferred to Federal
District Court for the District of Arizona for consolidated pretrial
proceedings. The case purports to be a class action on behalf of all similarly
situated individuals who have undergone laser vision correction surgery. The
complaint alleges, inter alia, price-fixing, monopolization, conspiracy to
monopolize, violations of the Clayton Act, violations of the RICO Act, and
violations of state consumer protection statutes. The action seeks, inter alia,
treble damages, punitive or exemplary damages, costs of suit, attorneys' fees,
and various forms of equitable relief. In response to defendants' motion to
dismiss, plaintiffs have abandoned their federal antitrust claims. Defendants'
motion to dismiss the RICO and state law claims is pending.

There can be no assurance that the federal antitrust actions pending as part of
IN RE PILLAR POINT PARTNERS ANTITRUST AND PATENT LITIGATION will be resolved in
the Company's favor or that an adverse judgment or settlement would not have a
material adverse effect on the Company.

Consolidated California State Litigation. Beginning in late March, 1998, a
number of actions brought by individuals under the Cartwright Act and California
unfair competition laws were commenced against the Company, VISX, and related
defendants in Superior Court of Santa Clara County. In May, 1998, these actions
were consolidated as IN RE PRK/LASIK CONSUMER LITIGATION. In June, 1998,
plaintiffs B.J. Snyder, Donna McMahan, Paula Mobsby, Helen Thomas, Carmen
Ocariz, Martin Hermans, Ken Bartlett, Grace Geniusz, Jocelyn Joseph, Andrew
Stoddard, and Cynthia Brubecker filed an Amended Consolidated Master Complaint
for Damages ("Amended Complaint") in this matter against the Company, Summit
Partner, Inc., VISX, and VISX Partner, Inc. The Amended Complaint purports to be
filed on behalf of a nationwide class of persons who have undergone excimer
laser surgery with a laser manufactured by the Company or VISX. The Amended
Complaint seeks, inter alia, unspecified compensatory damages, restitution
and/or disgorgement of alleged ill-gotten gains, prejudgment and postjudgment
interest, costs of suit, and attorneys' fees, as well as various forms of
declaratory and injunctive relief, including an order permitting any person or
entity with which the Company or VISX or both have entered into any agreement
since June 3, 1992, for the purchase, license, or use of any of the Pillar Point
Patents to withdraw from such agreement without penalty or obligation. The
Company and Summit Partner, Inc. have filed an answer denying generally the
allegations of the Amended Complaint in this litigation. James Ballard filed a
similar suit against the Company,




                                       8
<PAGE>   9

Summit Partner, Inc., VISX, VISX Partner, Inc., Pillar Point Partners, and other
individual defendants in Superior Court of San Diego County. This suit has been
transferred to Santa Clara County and may be consolidated as part of IN RE
PRK/LASIK CONSUMER LITIGATION.

There can be no assurance that the actions described above will be resolved in
the Company's favor or that an adverse judgment or settlement would not have a
material adverse effect on the Company.

Unconsolidated Antitrust and Patent Cases. In April, 1998, Penny Marks, an
individual who allegedly has had laser vision correction surgery performed,
commenced an action in Florida state court against the Company and VISX. The
case purports to be a class action on behalf of all individuals similarly
situated in the State of Florida. The complaint alleges various violations of
the Florida Deceptive Trade and Unfair Practices Act. The complaint seeks
unspecified damages, costs, expenses, and attorneys' fees, as well as
declaratory and injunctive relief. Defendants have removed this case to Federal
District Court in Florida, and plaintiff has filed a motion to remand the action
to state court.

In June, 1998, Barbara Worcester, an individual who allegedly has had laser
vision correction surgery performed, filed an action in Wisconsin state court
against the Company, Summit Partner, Inc., VISX, VISX Partner, Inc., and Pillar
Point Partners. The case purports to be a class action on behalf of all
Wisconsin purchasers of refractive laser surgery procedures. The complaint
alleges violations of Chapter 133 of the Wisconsin Statutes. The complaint seeks
unspecified treble damages, attorneys' fees and costs, and declaratory and
injunctive relief. Defendants have removed this action to Federal District Court
in Wisconsin.

There can be no assurance that these actions will be resolved in the Company's
favor or that an adverse judgment or settlement would not have a material
adverse effect on the Company.

In October, 1996, Autonomous Technologies Corporation ("ATC") sued Pillar Point
Partners, the Company and VISX (and certain affiliates of the Company and VISX)
in the Federal District Court for the District of Delaware. In this action,
Autonomous seeks, inter alia, a declaratory judgment that it does not infringe a
certain United States Patent held by Pillar Point Partners, or, alternatively, a
judgment ordering that all U.S. patents held by Pillar Point Partners, together
with their foreign counterparts, be deemed unenforceable and/or be licensed to
Autonomous.

In July, 1997, John Taboada filed a complaint in the United States District
Court for the Western District of Texas against Stephen L. Trokel, VISX, VISX
Partner, Inc., Summit Partner, Inc., and Pillar Point Partners. In December,
1997, Taboada amended his complaint to include the Company as an additional
defendant. Taboada seeks a declaration that he is either the sole inventor or a
joint inventor of U.S. Patent No. 5,108,388 (the " `388 Patent") which names Dr.
Trokel as the inventor. The `388 Patent has been assigned to VISX and is
licensed to Pillar Point Partners. Taboada also seeks to recover royalties paid
to one or more of the defendants for licenses granted under `388 Patent, charges
defendants with infringement of the `388 Patent, alleges Lanham Act claims, and
seeks monetary damages and injunctive relief.

Seriani Litigation. On October 26, 1992, Joseph Seriani brought suit against
Lens and certain of its former shareholders in the Florida Circuit Court. The
suit alleged violations of the Florida Civil Remedies for Criminal Practices Act
- the Florida civil RICO statute -- based on events which allegedly occurred in
the mid-1980s. Seriani's claims against Lens were dismissed several times for
failure to state a viable claim, but in each instance with leave to amend and
refile. On May 15, 1996, the date of the Company's acquisition of Lens, Seriani
and his wife Rhonda Seriani filed an amended complaint which included the
Company as an additional defendant. On November 25, 1996, the Serianis
voluntarily dismissed their action against the Company and on March 7, 1997
voluntarily dismissed their action against the remaining defendants, in each
case without prejudice. On March 24, 1997, the Serianis commenced a new lawsuit
against Lens and others in the United States District Court for the Southern
District of Illinois, alleging substantially similar claims. The Company
believes that the Serianis' suits against the Company and Lens are and were
without merit.

Lens Express Employee Litigation. On or about February, 1997, a former employee
allegedly filed an administrative complaint with the Florida Commission on Human
Relations against Lens and a former employee of Lens, alleging sexual
discrimination and harassment by the former employee, retaliatory demotion, and
constructive discharge. On or about May, 1997, a current employee filed an
administrative complaint with the same Florida agency, also alleging sexual
discrimination and harassment by the same former employee. The Florida
Commission referred both complaints to the U.S. Equal Employment Opportunity
Commission for investigation. No investigations were completed before each
complainant, represented by the same counsel, sued Lens and the former employee
in Florida Circuit Court on or about September, 1997. Each complaint alleges
sexual discrimination and harassment under the Florida Civil Rights Act and
various other state common law claims; the former employee also alleges
retaliatory demotion under 



                                       9
<PAGE>   10
the Florida Civil Rights Act. Each plaintiff seeks a court order prohibiting
such alleged discrimination as well as unspecified compensatory and punitive
damages. Lens answered each complaint, denying the allegations. On or about June
15, 1998, Lens settled all claims of the current employee for a nominal amount
and without admitting any wrongdoing or liability. While Lens believes the
claims of the former employee to be without merit, there can be no assurance
that it will prevail in either litigation. Lens cannot predict the range of
possible compensatory damages, if any, or whether punitive damages may be
assessed.

Lens Express Woodstock Litigation. On or about April, 1997, three current and
two former employees sued Lens, ten employees and four former employees of Lens,
alleging racial discrimination under 42 USC ss. 1981. The plaintiffs seek an
unspecified amount of compensatory damages, punitive damages, lost wages and a
court order declaring the alleged conduct unlawful. Lens and the other employees
have denied the allegations; the former employees apparently have never been
served with the complaint. After the Court sua sponte dismissed the complaint
for improper pleading and Lens moved to dismiss the second amended complaint,
plaintiffs filed a third amended complaint, which alleges the same causes of
action. Lens also moved to dismiss most of the third amended complaint, and the
Court granted the motion with leave for plaintiffs to file a fourth amended
complaint. This case is presently pending as WOODSTOCK, et al. v. LENS EXPRESS,
INC., et al., In the United States District Court for the Southern District of
Florida, Case No. 97-6529-Civ-Hurley. Lens intends to move to dismiss the fourth
amended complaint as well. Lens made offers of judgement for $750 to each
plaintiff; one plaintiff accepted the offer. While Lens believes the claims to
be without merit, there can be no assurance that it will prevail. Lens cannot
predict the range of possible compensatory damages, if any, or whether punitive
damages may be assessed.

Shareholder Actions. Between August, 1996 and February, 1997 various shareholder
actions were commenced against the Company and certain of its officers in the
United States District Court for the District of Massachusetts (the "District of
Massachusetts") claiming, among other things, violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 arising out of public statements
made by defendants. The actions were consolidated, by order of the Court entered
December 2, 1996, as IN RE SUMMIT TECHNOLOGY SECURITIES LITIGATION, Civil Action
No. 96-11589-JCT (the "Securities Litigation"). Plaintiffs seek certification of
the action as a class action on behalf of all purchasers of the Company's common
stock, other than defendants and certain affiliated persons and entities,
between March 31, 1995 and July 3, 1996. They seek unspecified damages,
interest, costs and expenses.

On October 1, 1996 an additional action was commenced in the District of
Massachusetts against the Company, its directors, certain of its officers and
the four underwriters of the Company's October, 1995 Common Stock offering
claiming violations of Sections 11, 12(2) and 15 of the Securities Act of 1933
arising out of alleged material misstatements of fact in the Registration
Statement issued in connection with the offering. The action was coordinated
with the Securities Litigation by order of the Court dated December 2, 1996. It
also seeks unspecified damages, interest, costs and expenses.

On December 20, 1996, a shareholder of the Company filed in the District of
Massachusetts a derivative action, purportedly on behalf of the Company, against
the Company as nominal defendant, its directors and certain of its present or
former officers. This action was consolidated with the Securities Litigation by
order of the Court entered July 22, 1997. The complaint alleges that the conduct
of the individual defendants has exposed the Company to the expense and
inconvenience of defending the Securities Litigation and has harmed the
Company's reputation, thereby limiting its access to capital markets. It also
alleges that the individual defendants improperly traded in the Company's Common
Stock based upon material non-public information.

The Company believes that the allegations in all of the complaints in the
actions described herein are without merit, and it intends to defend the actions
vigorously. There can be no assurance that the Company will not be served with
additional complaints of a similar nature in the future, that the Company will
ultimately prevail in the pending or any possible additional actions, or that
the actions, individually or in the aggregate, will not have a material adverse
effect on the Company.





                                       10
<PAGE>   11


PART I: FINANCIAL INFORMATION (CONTINUED)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

GENERAL

The operations of Summit Technology, Inc. and subsidiaries (the "Company")
presently consist of (i) manufacturing, selling and servicing laser systems and
related products to correct vision disorders; (ii) collecting per procedure
license fees from users of its systems and (iii) selling contact lenses and
related products by mail order through its wholly-owned subsidiary Lens Express,
Inc. ("Lens"), which the Company acquired on May 15, 1996. On June 4, 1998, the
Company and VISX Inc. ("VISX") dissolved Pillar Point Partners and have granted
to each other worldwide, royalty-free cross-licenses to all of their respective
U.S. and foreign patents in the field of laser ablation of corneal tissue,
including all patents included or includable in Pillar Point Partners. In August
1997, the Company sold its wholly-owned subsidiary Refractive Centers
International, Inc. ("RCII") to LCA-Vision Inc. ("LCA") for 16,164,361 shares of
LCA common stock. Prior to the sale, RCII owned and operated the Company's
vision center business, which was accounted for as a discontinued operation in
1996.

The Company is continuing to evaluate its operations and strategies, which may
result in the acquisition by the Company of one or more additional businesses,
or additional dispositions of all or part of one or more of the Company's
businesses.

SECOND QUARTER RESULTS OF OPERATIONS

Revenues: Revenues for the three months ended June 30, 1998 increased 11% to
$23.4 million from $21.1 million for the three months ended June 30, 1997.
Revenues from system sales in the second quarter of 1998 increased substantially
compared to the same period a year ago. Revenues from the Company's vision
correction business increased 38% to $12.9 million in the second quarter of 1998
compared to $9.3 million in the same period a year ago. In the second quarter of
1998, sales of contact lens and related products decreased to $10.5 million from
$11.8 million in the second quarter of 1997.

Cost of Revenues: Cost of revenues as a percentage of revenues increased to 61%
in second quarter of 1998 from 59% in the second quarter of 1997. This increase
was primarily attributable to higher cost of revenues associated with system
sales offset by the favorable impact from increased manufacturing levels.

Operating Expenses: Selling, general and administrative expenses in the second
quarter of 1998 were $7.2 million compared to $5.3 million in the same period a
year ago, a 36% increase. Selling, general and administrative expenses as a
percentage of revenues were 31% and 25% in the second quarter of 1998 and 1997,
respectively. The Company has been making significant investments in the sales
and marketing areas in order to grow laser vision correction procedure volume.
To help offset this increase, the Company has worked aggressively to reduce its
legal expenses. In the second quarter of 1997, the Company received a net
payment of $4.5 million from VISX resulting from the settlement of patent
litigation. This settlement resulted in a reduction of legal costs of $0.6
million in the second quarter of 1998 and $1.7 million in the second quarter of
1997. Research, development and regulatory expenses in the second quarter of
1998 increased to $1.8 million from $1.5 million in the second quarter of 1997,
primarily as a result of increased spending on the Company's research and
development efforts.

Net Income: In the second quarter of 1998, the Company and VISX, Inc. agreed to
dissolve Pillar Point Partners and settled all pending litigation between the
two companies. Under the settlement agreement, VISX paid the Company a total of
$35.0 million. Excluding this settlement and related taxes and expenses, net
income for the second quarter of 1998 was $0.9 million, or $0.03 per diluted
share as compared to $2.6 million, or $0.08 per diluted share in the second
quarter of 1997. Including the litigation settlement and related taxes and
expenses, net income in the second quarter of 1998 was $30.5 million, or $0.97
per diluted share. Basic earning per share was $0.98 for the second quarter of
1998 and $0.08 per share for the second quarter of 1997.

Income Taxes: The Company has continued to provide a 100% valuation allowance
against its net deferred tax asset of $20.6 million as of December 31, 1997.




                                       11
<PAGE>   12

FIRST HALF RESULTS OF OPERATIONS

Revenues: Revenues for the six months ended June 30, 1998 increased 15% to $45.2
million from $39.5 million for the six months ended June 30, 1997. Revenues from
system sales in the first half of 1998 increased substantially compared to the
same period a year ago. Revenues from the Company's vision correction business
increased 44% to $23.0 million in the first half of 1998 compared to $15.9
million in the same period a year ago. In the first half of 1998 and 1997, sales
of contact lens and related products were $22.3 million and $23.5 million,
respectively.

Cost of Revenues: Cost of revenues as a percentage of revenues decreased to 61%
in first half of 1998 from 62% in the first half of 1997. This decrease was
primarily attributable to the favorable impact from increased manufacturing
levels which more than offset the higher cost of revenues associated with system
sales.

Operating Expenses: Selling, general and administrative expenses in the first
half of 1998 were $14.4 million compared to $11.8 million in the same period a
year ago, a 22% increase. Selling, general and administrative expenses as a
percentage of revenues were 32% and 30% in the first half of 1998 and 1997,
respectively. The Company has been making significant investments in the sales
and marketing areas in order to grow laser vision correction procedure volume.
To help offset this increase, the Company has worked aggressively to reduce its
legal expenses. In the first half of 1997, the Company received a net payment of
$4.5 million from VISX resulting from the settlement of patent litigation. This
settlement resulted in a reduction of legal costs of $0.6 million in the first
half of 1998 and $1.7 million in the first half of 1997. Research, development
and regulatory expenses in the first half of 1998 increased to $3.6 million from
$3.2 million in the first half of 1997, primarily as a result of increased
spending on the Company's research and development efforts.

Net Income: In the first half of 1998, the Company and VISX, Inc. agreed to
dissolve Pillar Point Partners and settled all pending litigation between the
two companies. Under the settlement agreement, VISX paid the Company a total of
$35.0 million. Excluding this settlement and related taxes and expenses, net
income for the first half of 1998 was $1.1 million, or $0.04 per diluted share
as compared to net income of $1.2 million, or $0.04 per diluted share in the
first half of 1997. Including the litigation settlement and related taxes and
expenses, net income for the first half of 1998 was $30.7 million, or $0.98 per
diluted share. Basic earning per share for the first half of 1998 and 1997 was
$0.98 and $0.04, respectively.

Income Taxes: The Company has continued to provide a 100% valuation allowance
against its net deferred tax asset of $20.6 million as of December 31, 1997.

LIQUIDITY AND CAPITAL RESOURCES

The Company's liquidity requirements have been met through external debt and
equity financing. As of June 30, 1998, the Company's cash and cash equivalent
balances and short and long-term investments increased to $113.0 million from
$74.1 million as of December 31, 1997. Shares of LCA common stock valued at
$20.9 million and $8.1 million were included in long-term investments as of June
30, 1998 and December 31, 1997, respectively. Working capital increased to $89.1
million as of June 30, 1998 from $67.9 million as of December 31, 1997. In the
first half of 1998, net cash provided by operating activities was $31.8 million
compared to $3.9 million in the first half of 1997. As previously discussed, the
Company received a $35.0 million payment in the second quarter of 1998 under a
settlement agreement with VISX. Net income before depreciation and amortization
in the first half of 1998 and 1997 was $32.4 million and $3.3 million,
respectively.

In the first half of 1998, net cash used by investing activities of $3.2 million
resulted primarily from a net increase in short and long-term investments of
$2.3 million and capital expenditures of $2.2 million offset by a decrease in
restricted cash of $1.3 million. In the first half of 1997, net cash used by
investing activities of $11.1 million resulted primarily from a net increase in
short and long-term investments of $11.1 million and capital expenditures of
$1.4 million offset by a decrease in patents due to settlement of litigation of
$1.3 million.

In the first half of 1998, net cash used by financing activities of $4.8 million
were attributable to net repayments of long-term debt of $3.5 million and
purchases of 250,000 shares of treasury stock for $1.4 million. In the second
quarter of 1998, the Company agreed to privately place an aggregate of 217,510
shares of treasury stock with the former Lens shareholders as part of a
litigation settlement. In the first half of 1997, net cash used by financing
activities of $2.3 million were primarily attributable to repayments of
long-term debt of $2.6 million.



                                       12
<PAGE>   13

In March 1996, the Company obtained a $20.0 million unsecured revolving credit
facility. The facility expires in March 1999 and allows the Company to borrow at
LIBOR plus 75 basis points or Prime Rate. At June 30, 1998, the Company had no
borrowings under this facility. Also in March 1996, the Company's then wholly
owned subsidiary, RCII, obtained a $20.0 million unsecured term loan, which was
guaranteed by the Company. In July 1997, the Company and RCII entered into a
Loan Modification Agreement with their lenders pursuant to which, inter alia,
RCII was released from liability and the Company became the principal obligor
under the term loan. At June 30, 1998, $7.5 million of borrowings were
outstanding under this loan.





                                       13
<PAGE>   14


                           PART II: OTHER INFORMATION


ITEM 1: LEGAL PROCEEDINGS

      a)    See Note 5 to Notes to Condensed Consolidated Financial Statements 
            above (Part I, Item 1 of this filing), for description of pending 
            material litigation

      b)    Material developments since March 31, 1998:

                  (i)   In July, 1998, the Company reached a consent agreement
                        with the FTC staff resolving all charges against the
                        Company. The agreement includes a consent order
                        requiring that Pillar Point Partners be dissolved and
                        also prohibits the Company from entering into license
                        fee agreements with VISX. In addition, the consent order
                        requires that various rights and information be provided
                        to customers. The consent agreement does not prohibit
                        the Company from charging a per procedure fee for use of
                        its equipment, nor is it an admission or finding of any
                        wrongdoing. Under the FTC's regulations, the consent
                        agreement has been presented to the FTC Commissioners.
                        If accepted by the Commissioners, it will be published
                        in the Federal Register for public comment.

                  (ii)  On June 4, 1998, the Company and VISX settled all
                        outstanding litigation between them, including the
                        equipment royalty litigation in Federal Court in
                        Massachusetts, and the LASIK royalty and Partnership
                        dissolution litigation in Santa Clara County,
                        California. Under the settlement, VISX and Summit have
                        dissolved Pillar Point Partners and have granted to each
                        other worldwide, royalty-free cross-licenses to all of
                        their respective U.S. and foreign patents in the field
                        of laser ablation of corneal tissue, including all
                        patents presently included or includable in Pillar
                        Point. These cross-licenses permit each company, inter
                        alia, to license each other's patents to users of their
                        equipment. The Company and VISX will retain all rights
                        to license their own patents to other manufacturers. As
                        part of the settlement, VISX made a single, lump sum
                        cash payment to the Company in the amount of $35
                        million.


ITEM 4: MATTERS SUBMITTED TO SHAREHOLDERS

The following matters were submitted to a vote of the shareholders at the
Company's annual meeting held on May 28, 1998:

      PROPOSAL 1: Jeffrey A. Bernfeld and Richard M. Traskos were reelected to
                  the Board of Directors, each for a three-year term.

THE FOLLOWING TABLE SUMMARIZES THE ELECTION RESULTS:

<TABLE>
<CAPTION>
                                                       PROPOSAL 1
                                            ----------------------------------- 
                                              FOR            WITHHOLD AUTHORITY
                                            ----------       ------------------ 
         <S>                                         <C>                   <C>      
                  Jeffrey A. Bernfeld       25,892,143            1,734,331

                  Richard M. Traskos        25,886,522            1,739,952
</TABLE>


ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

a.)  Exhibits:

      10    Settlement and Dissolution Agreement with VISX, Inc. dated June 4,
            1998




                                       14
<PAGE>   15

      11    Statement Re: Computation of per share earnings

      27    Financial Data Schedule (For EDGAR Filing Purposes Only)

b.)  Reports on Form 8-K:

        During the second quarter of 1998, the Company filed the following
reports on Form 8-K:

                  (i)   Form 8-K dated June 4, 1998 regarding settlement with
                        VISX and dissolution of Pillar Point Partners

                  (ii)  Form 8-K dated June 18, 1998 regarding change in
                        registrant's certifying accountant


CAUTIONARY STATEMENTS AND RISK FACTORS AFFECTING FUTURE OPERATING RESULTS

Statements made in this Report contain information about the Company's future
business prospects. These statements are considered "forward-looking" as defined
by the Private Securities Litigation Reform Act of 1995 and are subject to risks
and uncertainties. Important factors that could cause actual results to differ
materially from those set forth in or implied by such forward-looking statements
include competition in the vision correction industry, the uncertain market
acceptance of laser vision correction, risks related to the Company's patent
portfolio, safety and efficacy concerns, risks and uncertainties of litigation
and possible failure to obtain regulatory approvals.

For additional information and risks associated with the Company's business,
please review the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, a copy of which is available from the Company without charge.





                                       15
<PAGE>   16


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                          SUMMIT TECHNOLOGY, INC.


Date: August 13, 1998                     By: /s/ Robert J. Palmisano
                                              --------------------------------
                                              Robert J. Palmisano
                                              Chief Executive Officer




Date: August 13, 1998                     By: /s/ Robert J. Kelly
                                              --------------------------------
                                              Robert J. Kelly
                                              Executive Vice President, Chief
                                              Financial Officer and Treasurer






                                       16