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 Quarter Ended September 30, 1997
                                       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 0-11370
                      ---------



                              CERPROBE CORPORATION
             (Exact name of registrant as specified in its charter)

               Delaware                                      86-0312814
   ------------------------------                       ----------------------
  (State or other jurisdiction of                       (I.R.S. Employer
   incorporation or organization)                       Identification Number)

  1150 North Fiesta Boulevard, Gilbert, Arizona                85233
  ----------------------------------------------        ----------------------
  (Address of principal executive offices)                   (Zip Code)

                                 (602) 333-1500
              ----------------------------------------------------
              (Registrant's telephone number, including area code)




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  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

 Yes    X                 No
     -------                 -------

As of October 31, 1997, there were 8,070,313  shares of the Registrant's  common
stock outstanding.
<PAGE>
                              CERPROBE CORPORATION


                          QUARTERLY REPORT ON FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 30, 1997

                                TABLE OF CONTENTS




                         PART I - FINANCIAL INFORMATION


                                                                            Page
                                                                            ----
Item  1. Financial Statements:

         Condensed Consolidated Balance Sheets -

         September 30, 1997 and December 31, 1996..............................3

         Condensed Consolidated Statements of Operations -
         Three and Nine Months Ended September 30, 1997 and 1996...............4

         Condensed Consolidated Statements of Cash Flows -

         Nine Months Ended September 30, 1997 and 1996.........................6

         Notes to Condensed Consolidated Financial Statements..................7

Item  2. Management's Discussion and Analysis of Financial
         Condition and Results of Operations..................................13




                           PART II - OTHER INFORMATION



Item  6. Exhibits and Reports on Form 8-K.....................................19

Signatures        ............................................................21
                                       2
<PAGE>
                              CERPROBE CORPORATION
                     Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                September 30,   December 31,
                                    ASSETS                          1997            1996
                                                                ------------    ------------
                                                                 (unaudited)
<S>                                                             <C>             <C>         
Current assets:
     Cash and cash equivalents                                  $ 24,443,687    $  5,564,557
     Accounts receivable, net of allowance of $312,278
        in 1997 and $223,000 in 1996                              11,452,878       5,564,203
     Inventories, net                                              6,990,722       3,862,753
     Note receivable                                                    --           250,000
     Prepaid expenses                                                391,602         377,003
     Income taxes receivable                                            --           214,097
     Deferred tax asset                                              506,129         202,476
                                                                ------------    ------------
        Total current assets                                      43,785,018      16,035,089

Property, plant and equipment, net                                14,588,884      11,446,291
Intangibles, net                                                   2,491,340       2,602,812
Other assets                                                       1,491,382       1,326,592
                                                                ------------    ------------
        Total assets                                            $ 62,356,624    $ 31,410,784
                                                                ============    ============

                        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                           $  4,335,407    $  2,739,064
     Accrued expenses                                              4,317,611       1,600,120
     Demand note payable                                             988,911       1,030,000
     Current portion of notes payable                                132,786         128,180
     Current portion of capital leases                               581,608         634,755
                                                                ------------    ------------
        Total current liabilities                                 10,356,323       6,132,119

Notes payable, less current portion                                  185,031         278,645
Capital leases, less current portion                               1,010,346       1,462,799
Other liabilities                                                    490,992         394,011
                                                                ------------    ------------
        Total liabilities                                         12,042,692       8,267,574
                                                                ------------    ------------

Minority interest                                                       --            12,851
                                                                ------------    ------------

Commitments and contingencies
Stockholders' equity:
     Preferred stock, $.05 par value; authorized
        10,000,000 shares; issued and outstanding 330
        shares of Series A Convertible Preferred Stock,
        liquidation preference of $10,164 per share at
        December 31,1996                                                --                16
     Common stock, $.05 par value; authorized, 10,000,000
        shares; issued and outstanding 7,765,113 shares at
        September 30, 1997 and 6,027,714 at December 31, 1996        388,255         301,386
     Additional paid-in capital                                   48,231,185      20,652,290
     Retained earnings                                             1,762,462       2,105,674
     Foreign currency translation adjustment                         (67,970)         70,993
                                                                ------------    ------------
        Total stockholders' equity                                50,313,932      23,130,359
                                                                ------------    ------------

        Total liabilities and stockholders' equity              $ 62,356,624    $ 31,410,784
                                                                ============    ============
</TABLE>
     See accompanying notes to condensed consolidated financial statements.
                                       3
<PAGE>
                              CERPROBE CORPORATION
                Condensed Consolidated Statements of Operations
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                           Three Months Ended September 30,       Nine Months Ended September 30,
                                                           --------------------------------       -------------------------------
                                                                  1997           1996                  1997            1996
                                                                  ----           ----                  ----            ----
<S>                                                          <C>             <C>                   <C>             <C>         
Net sales                                                    $ 19,886,447    $  8,799,247          $ 54,469,368    $ 28,159,069
Costs of goods sold                                            11,698,566       4,937,571            32,101,895      15,285,366
                                                             ------------    ------------          ------------    ------------
                                                                                                
          Gross profit                                          8,187,881       3,861,676            22,367,473      12,873,703
                                                             ------------    ------------          ------------    ------------

Expenses:                                                                                       
    Selling, general and administrative                         4,746,863       2,595,559            13,874,174       7,870,390
    Engineering and product development                           412,905         345,963             1,030,679         724,230
    Acquisition related costs (recovery)                       (1,167,689)           --               4,996,467            --   
                                                             ------------    ------------          ------------    ------------
                                                                                                
          Total expenses                                        3,992,079       2,941,522            19,901,320       8,594,620
                                                             ------------    ------------          ------------    ------------
                                                                                                
Operating income                                                4,195,802         920,154             2,466,153       4,279,083
                                                             ------------    ------------          ------------    ------------

Other income (expense):                                                                         
    Interest income                                                10,609         177,113                78,274         345,356
    Interest expense                                             (170,050)        (50,737)             (466,905)       (167,194)
    Other income, net                                             107,153          64,348               221,999         151,830
                                                             ------------    ------------          ------------    ------------
                                                                                                
          Total other income (expense)                            (52,288)        190,724              (166,632)        329,992
                                                             ------------    ------------          ------------    ------------

Income before income taxes and                                                                  
    minority interest                                           4,143,514       1,110,878             2,299,521       4,609,075
                                                                                                
Minority interest share of loss                                    67,394          21,521                96,379          83,809
                                                             ------------    ------------          ------------    ------------
                                                                                                
Income before income taxes                                      4,210,908       1,132,399             2,395,900       4,692,884
                                                                                                
Provision for income taxes                                     (1,248,812)       (469,000)           (2,739,112)     (2,162,000)
                                                             ------------    ------------          ------------    ------------
                                                                                                
Net income (loss)                                            $  2,962,096    $    663,399          $   (343,212)   $  2,530,884
                                                             ============    ============          ============    ============
                                                                                                
Net  income (loss) per common and common equivalent share:                                  
     Primary                                                 $       0.44    $       0.13          $      (0.05)   $       0.49
                                                             ============    ============          ============    ============
     Weighted average number of common                                                          
       and common equivalent shares                                                             
       outstanding                                              6,706,347       5,297,528             6,318,243       5,125,943
                                                             ============    ============          ============    ============
                                                                                                
     Fully diluted                                           $       0.44    $       0.11          $      (0.05)   $       0.45
                                                             ============    ============          ============    ============
                                                                                                
     Weighted average number of common                                                          
       and common equivalent shares                                                             
       outstanding                                              6,786,973       5,782,576             6,318,243       5,647,789
                                                             ============    ============          ============    ============
</TABLE>
     See accompanying notes to condensed consolidated financial statements.
                                       4
<PAGE>
                              CERPROBE CORPORATION
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                 Nine Months Ended September 30,
                                                                                                --------------------------------
                                                                                                     1997            1996
                                                                                                --------------------------------
<S>                                                                                             <C>                <C>         
Cash flows from operating activities:                                                                             
     Net income (loss)                                                                          $   (343,211)      $  2,530,884
     Adjustments to reconcile net income (loss) to net cash provided by operating activities:                     
        Depreciation and amortization                                                              2,627,529          1,339,227
        Purchased research and development                                                         4,496,467               --
        Loss on sale of fixed assets                                                                     508               --
        Tax benefit from stock options excercised                                                     28,000            407,000
        Deferred income taxes                                                                       (303,553)           (65,999)
        Provision for losses on accounts receivable, net                                              79,395              5,000
        Provision for obsolete inventory, net                                                        624,132             46,000
        Compensation expense                                                                             888             49,383
        Income (loss) applicable to minority interest in consolidated subsidiaries                    96,379            (83,809)
     Changes in operating assets and liabilities, net of effects of acquisitions:                                 
        Accounts receivable                                                                       (5,143,871)          (797,178)
        Inventories                                                                                 (393,353)        (1,055,273)
        Prepaid expenses and other assets                                                           (204,855)          (461,780)
        Income taxes receivable                                                                      214,097           (200,652)
        Accounts payable and accrued expenses                                                      2,310,621            869,365
        Other liabilities                                                                             20,140            292,358
                                                                                                ------------       ------------
            Net cash provided by operating activities                                              4,109,313          2,874,526
                                                                                                ------------       ------------
                                                                                                                  
Cash flows from investing activities:                                                                             
     Purchase of property, plant and equipment                                                    (5,011,726)        (2,896,861)
     Purchase of marketable securities                                                                  --           (2,260,063)
     Investment in CRPB Investors, L.L.C                                                                (607)          (600,000)
     Investment in Upsys-Cerprobe, L.L.C                                                              19,333               --
     Supplemental acquisition costs for CompuRoute                                                   (80,102)              --
     Purchase of SVTR, net of cash acquired                                                       (2,590,697)              --
     Proceeds from sale of equipment                                                                  71,183               --
     Payment of notes receivable                                                                     250,000               --
                                                                                                ------------       ------------
            Net cash used in investing activities                                                 (7,342,616)        (5,756,924)
                                                                                                ------------       ------------
                                                                                                                  
Cash flows from financing activities:                                                                             
     Principal payments on notes payable and capital leases                                       (3,715,538)          (261,000)
     Net proceeds from issuance of convertible preferred stock                                          --            9,400,000
     Redemption of convertible preferred stock                                                    (5,250,000)              --
     Net proceeds from issuance of common stock                                                   30,710,000            564,980
     Net proceeds from stock options exercised                                                       506,936               --
     Capital contribution by minority interest partner                                                  --              113,020
                                                                                                ------------       ------------
            Net cash provided by financing activities                                             22,251,398          9,817,000
                                                                                                ------------       ------------
                                                                                                                  
Effect of exchange rates on cash and cash equivalents                                               (138,965)            34,712
                                                                                                ------------       ------------
Net increase in cash and cash equivalents                                                         18,879,130          6,969,314
Cash and cash equivalents, beginning of period                                                     5,564,557            263,681
                                                                                                ------------       ------------
Cash and cash equivalents, end of period                                                        $ 24,443,687       $  7,232,995
                                                                                                ============       ============
</TABLE>
     See accompanying notes to condensed consolidated financial statements.
                                       5
<PAGE>
                              CERPROBE CORPORATION
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                 Nine Months Ended September 30,
                                                                                                --------------------------------
                                                                                                     1997            1996
                                                                                                --------------------------------
<S>                                                                                             <C>                <C>         
Supplemental schedule of noncash investing and financing activities:                                              
     Conversion of subordinated debentures to common stock                                      $      --          $    110,000
                                                                                                ------------      --------------
     Equipment acquired under capital leases and issuances of notes payable                     $     4,144        $    253,378
                                                                                                ------------      --------------
                                                                                                                  
Supplemental disclosures of cash flow information:                                                                
     Interest paid                                                                              $   466,903        $    118,685
                                                                                                ------------      --------------
     Income taxes paid                                                                          $ 1,917,596        $  1,812,000
                                                                                                ------------      --------------
                                                                                                               
Supplemental disclosures of noncash investing activities: 
     The Company made an acquisition for $4.5 million.
        The purchase price was allocated to the assets acquired and liabilities assumed
        based on their fair values as indicated in Note 4 to the condensed consolidated
        financial statements. A summary of the acquisition after adjustment is as follows:
     Purchase price                                                                             $ 4,546,825
     Less cash acquired                                                                            (285,316)
     Common stock issued                                                                         (1,670,812)
                                                                                                ----------- 
        Cash invested                                                                           $ 2,590,697
                                                                                                =========== 
</TABLE>
     See accompanying notes to condensed consolidated financial statements.
                                       6
<PAGE>
                              CERPROBE CORPORATION
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

(1)      Basis of Preparation

         The  accompanying  condensed  consolidated  financial  statements as of
         September  30,  1997 and for the three  months  and nine  months  ended
         September 30, 1997 and September 30, 1996 are unaudited and reflect all
         adjustments  (consisting  only of normal recurring  adjustments)  which
         are, in the opinion of management, necessary for a fair presentation of
         financial  position and operating results for the interim periods.  The
         condensed  consolidated  balance  sheet  as of  December  31,  1996 was
         derived  from the audited  consolidated  financial  statements  at such
         date.

         Pursuant to  accounting  requirements  of the  Securities  and Exchange
         Commission   applicable  to  quarterly   reports  on  Form  10-Q,   the
         accompanying  condensed  consolidated financial statements and notes do
         not include all disclosures  required by generally accepted  accounting
         principles  for  complete  financial  statements.   Accordingly,  these
         statements  should be read in conjunction  with Cerprobe  Corporation's
         (the "Company") annual financial  statements and notes thereto included
         in the  Company's  Annual  Report  on Form  10-KSB  for the year  ended
         December 31, 1996.

         Results  of  operations  for  interim   periods  are  not   necessarily
         indicative of those to be achieved for full fiscal years.

         Principles of Consolidation


         The consolidated  financial statements include the accounts of Cerprobe
         and its wholly-owned  subsidiaries:  Cerprobe Europe Limited,  Cerprobe
         Asia Holdings PTE LTD, CompuRoute,  Inc., Silicon Valley Test & Repair,
         Inc. and Cobra Venture Management, Inc.

         Cerprobe Asia Holdings PTE LTD,  together with Asian investors,  formed
         Cerprobe Asia PTE LTD in 1995.  Cerprobe Asia Holdings PTE LTD is a 70%
         owner of Cerpobe  Asia PTE LTD.  Cerprobe  Asia PTE LTD created  wholly
         owned subsidiaries,  Cerprobe Singapore PTE LTD ("Cerprobe  Singapore")
         and  Cerprobe  Taiwan  Co. LTD  ("Cerprobe  Taiwan"),  to operate  full
         service  sales  and  manufacturing  plants.  Cerprobe-Singapore  became
         operational  in April 1996 and  Cerprobe-Taiwan  in January  1997.  All
         significant   intercompany   transactions   have  been   eliminated  in
         consolidation.

         The  consolidated  balance sheet at December 31, 1996 also includes the
         assets  and   liabilities  of  CompuRoute,   Inc.   ("CompuRoute"),   a
         wholly-owned subsidiary,  acquired on December 27, 1996. As a result of
         the  date  of  acquisition,   the  condensed   consolidated   financial
         statements do not include the 1996 operations of CompuRoute.

         On January 15, 1997, the Company acquired all of the outstanding  stock
         of  Silicon  Valley  Test &  Repair,  Inc.  ("SVTR"),  a  company  that
         refurbishes,   reconfigures,  and  services  wafer  probing  equipment.
         Accordingly,  the  condensed  consolidated  financial  statements
                                       7
<PAGE>
         as of September 30, 1997 and for the three months and nine months ended
         September  30,  1997  include  SVTR's  activities  since  the  date  of
         acquisition.

         On May 30, 1997,  the Company  entered into a joint  venture with Upsys
         Reseau  Eurisys  ("Upsys"),  a French  company owned by IBM and GAME, a
         French  test  and  engineering  company.  The  joint  venture,   called
         Upsys-Cerprobe,  L.L.C.,  assembles  and  repairs  the  Cobra  Probe in
         Arizona for  distribution by Cerprobe  throughout the United States and
         Asia. Cerprobe owns 55% of the joint venture and Upsys owns 45%.

         The Company  manages the joint  venture and  established a wholly owned
         subsidiary called Cobra Venture Management, Inc. to function as manager
         of  Upsys-Cerprobe,  L.L.C.  Accordingly,  the  condensed  consolidated
         financial  statements as of September 30, 1997 and for the three months
         and nine months ended September 30, 1997 include the activities of both
         organizations since the formation of the venture.

         On August 18,  1997,  Cerprobe  Asia  Holdings  PTE LTD sold 10% of its
         ownership   in  Cerprobe   Asia  PTE  LTD  to  a  Taiwanese   Investor.
         Accordingly,  the  condensed  consolidated  financial  statements as of
         September  30,  1997 and for the three  months  and nine  months  ended
         September  30, 1997 show a 60% ownership in Cerprobe Asia PTE LTD since
         the transaction date.


(2)      Commitments and Contingencies


         Lease Line of Credit

         In February  1997,  the Company  entered into a  $10,000,000  unsecured
         revolving  line of credit,  which  matures  August 15,  1998,  with its
         primary lender, Wells Fargo Bank. Advances under the revolving line may
         be made as prime rate advances,  which accrue interest payable monthly,
         at the Bank's prime lending rate, or as LIBOR rate advances, which bear
         interest  at 175 basis  points in excess of the LIBOR base rate.  As of
         September 30, 1997, no amounts were outstanding under the line.

         In May 1997,  the  Company  entered  into a  $3,000,000  lease  line of
         credit,  which  matures  February  28,  1998,  with  Banc  One  Leasing
         Corporation.  The maximum term for each lease  schedule will not exceed
         60 months.  Pricing  will be indexed to like term  treasuries  plus 170
         basis points.  The advances will be  collateralized  by the  underlying
         leased manufacturing equipment,  furniture,  fixtures, software, and/or
         hardware. As of September 30, 1997, no advances had been made under the
         agreement.

         Convertible Preferred Stock


         On August 25, 1997,  the Company  reached an agreement,  which included
         mutual  releases,  with the  holders  of the  remaining  330  shares of
         convertible  preferred  stock to redeem their shares for  $5,250,000 in
         cash.  The  redemption  was funded  through an advance on the Company's
         line of credit which was paid off in September  1997, with the proceeds
         from the Secondary Offering. See Note 3.
                                       8
<PAGE>
(3)      Common Stock

         In September  1997, the Company  completed a Secondary  Public Offering
         (the "Secondary  Offering") of 2,000,000 shares of the Company's Common
         Stock at a price of $22 per share.  Of the shares,  1,500,000 were sold
         by the Company and the  remaining  500,000  shares were sold by selling
         stockholders.  The Company did not receive proceeds from shares sold by
         selling stockholders. The Company received approximately $30,710,000 in
         net proceeds from the offering.

         In  addition,  on  October  6, 1997 the  managing  underwriters  of the
         offering,  Adams,  Harkness & Hill, Inc. and Dain Bosworth Incorporated
         exercised  their  over-allotment  options  to  purchase  an  additional
         300,000  shares  of the  Company's  Common  Stock at a price of $22 per
         share.  The  Company  received  $6,222,000  in net  proceeds  from  the
         exercise of the over-allotment.

(4)      Acquisitions

         SVTR, Inc.

         On January 15, 1997, the Company acquired all of the outstanding  stock
         of SVTR. The purchase price paid by the Company consisted of $2,753,217
         in cash and 300,000 shares of common stock.

         The  acquisition  has been  accounted for using the purchase  method of
         accounting.  Accordingly,  the  purchase  price has been  allocated  to
         assets acquired and liabilities assumed based upon their estimated fair
         values at the date of acquisition.

         The purchase price of $5,617,467 plus acquisition  costs of $97,796 was
         allocated as follows.

                    Purchase price:
                    Cash                                          $  2,753,217
                    Common stock                                     2,864,250
                    Costs of acquisition                                97,796
                                                                  ------------
                                                                  $  5,715,263
                                                                  ============


                    Assets acquired and liabilities assumed:
                    Current assets                                $  4,979,145
                    Property, plant, and equipment                     651,781
                    Other assets                                       185,007
                    Purchased research and development               5,664,156
                    Current liabilities                             (4,795,473)
                    Noncurrent liabilities                            (969,353)
                                                                  ------------
                                                                  $  5,715,263
                                                                  ============
                                       9
<PAGE>
         At acquisition,  the state of the research and development products was
         not yet at a technologically or commercially  viable stage. The Company
         does not believe that the research and  development  products  have any
         future  alternative  use because if these products are not finished and
         brought  to  ultimate  product  completion,  they have no other  value.
         Therefore,  consistent with generally accepted  accounting  principles,
         the Company  recorded a one-time  charge of  $5,664,156  on January 15,
         1997 for the full value of the purchased  research and development.  In
         addition,  at the date of acquisition  the Company  recorded a $500,000
         accrual for the estimated costs to move SVTR's manufacturing operations
         from California to Arizona during 1997.

         Under the original terms of the acquisition,  the Company agreed to pay
         up to an additional $500,000 in cash and up to 50,000 additional shares
         of common  stock if certain  sales and  operating  profit  targets  for
         calendar year 1997 were achieved by SVTR.

         On August 18, 1997, a letter of understanding  detailing the settlement
         of certain open terms related to the purchase of SVTR by the Company on
         January 15, 1997 was signed by the former  owners of SVTR.  In general,
         the  letter  of  understanding  required  the  former  owners to return
         125,000 shares of the Company's common stock then held in escrow to the
         Company.  In addition,  the former  owners were required to release any
         claims or interests  they may have to receive any payments or shares of
         common  stock of the  Company  with  respect  to an  earnout  provision
         detailed in the January 15, 1997  agreement  of merger  between the two
         entities.  On  September  26,  1997,  a  formal  agreement  was  signed
         consummating the details in the letter of  understanding.  As a result,
         the Company has recorded a $1,167,689  reduction in previously recorded
         acquisition related expenses.

         The  re-negotiated  purchase price of $4,546,825 plus acquisition costs
         of $122,795 was allocated as follows.




                    Purchase price:
                    Cash                                           $ 2,753,217
                    Common stock                                     1,670,813
                    Costs of acquisition                               122,795
                                                                   -----------
                                                                   $ 4,546,825
                                                                   ===========




                    Assets acquired and liabilities assumed:
                    Current assets                                 $ 4,918,904
                    Property, plant and equipment                      517,413
                    Other assets                                       146,867
                    Purchased research and development               4,496,467
                    Current liabilities                             (4,795,473)
                    Noncurrent liabilities                            (737,353)
                                                                   -----------
                                                                   $ 4,546,825
                                                                   ===========
                                       10
<PAGE>
         Pro forma Results

         The  following  summary,  prepared on a pro forma basis,  excluding the
         charges for purchased research and development, presents the results of
         operations as if the  acquisitions  of CompuRoute and SVTR had occurred
         January 1, 1996:

                                                       Nine Months Ended
                                                          September 30,
                                                 ------------------------------
                                                     1997            1996
                                                 ------------------------------
                                                          (unaudited)

          Net sales                              $  54,522,748    $  48,041,518
          Net income                             $   4,325,282    $   2,778,633
          Primary net income per share           $         .65    $         .48
          Fully diluted net income per share     $         .64    $         .44



         The pro forma results are not necessarily indicative of what the actual
         consolidated  results of operations might have been if the acquisitions
         had been effective at the beginning of 1996 and are not a projection of
         future results.


(5)      Recent Accounting Pronouncements

         In February  1997,  the  Financial  Accounting  Standards  Board issued
         Statement of Financial  Accounting  Standards  No. 128,  "Earnings  per
         Share"  (Statement  128).  This  Statement  establishes  standards  for
         computing and presenting earnings per share ("EPS"), and supersedes APB
         Opinion No. 15. The Statement  replaces  primary EPS with basic EPS and
         requires dual  presentation  of basic and diluted EPS. The Statement is
         effective for both interim and annual periods ending after December 15,
         1997.  Earlier  application  is  not  permitted.  After  adoption,  all
         prior-period  EPS data shall be restated to conform to  Statement  128.
         Basic and diluted EPS, as calculated under Statement No. 128 would have
         been $.47 and $.44 for the fiscal three months ended September 30, 1997
         and $(.05) and $(.05) for the nine months ended September 30, 1997.
                                       11
<PAGE>
                              CERPROBE CORPORATION
                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

Introduction and General Development of Business

Cerprobe offers  comprehensive  solutions for semiconductor test integration and
is a leading manufacturer of probe cards, ATE interface assemblies, and ATE test
boards. The Company's products and services enable  semiconductor  manufacturers
to test integrated circuits ("ICs") in wafer form and as packaged ICs.

The Company has grown  substantially over the last five years as the Company has
increased its market share and has benefited from the substantial  growth in the
worldwide demand for ICs. Net sales have increased from $8.1 million for 1992 to
$37.3 million for 1996, representing an average annualized growth rate of 46.5%.
Similarly,  the Company's net income has increased  from $.8 million for 1992 to
$3.2  million for 1996  (before a one-time  charge for  purchased  research  and
development  of $4.6 million,  resulting in a net loss of $1.4  million).  Until
1995, substantially all of the Company's growth was from the existing probe card
product line.

Beginning with the April 1995  acquisition of Fresh Test Technology  Corporation
("Fresh Test"),  acquisitions  have contributed to the Company's  growth.  Fresh
Test,  which  expanded  the  Company's  product  line to include  ATE  interface
assemblies,   contributed  approximately  $4  million  to  1995  net  sales  and
approximately $7 million to 1996 net sales.  The Company acquired  CompuRoute in
December 1996, which enabled the Company to offer ATE test boards.  CompuRoute's
net sales and net income for its fiscal year ended  December 31, 1996 were $10.4
million and $.5  million,  respectively.  The Company  acquired  SVTR in January
1997, which added wafer prober refurbishing and upgrading  services.  SVTR's net
sales and net loss for its  fiscal  year  ended  December  31,  1996 were  $14.6
million and $.4 million, respectively.  Together, these acquisitions contributed
approximately  $19.5  million to net sales for the first nine months of 1997. In
May 1997,  the Company  entered into a joint  venture with Upsys Reseau  Eurisys
("Upsys"), a French company owned by IBM and GAME, a French test and engineering
company.  The joint venture,  called  Upsys-Cerprobe,  L.L.C., will assemble and
repair the Cobra probe card for distribution by the Company in the United States
and Asia. The Company  believes the Cobra probe is well-suited  for  multiple-IC
and memory IC testing.

The Company believes that it is positioned to continue its growth as a result of
its  strength  in  designing,   producing,  and  delivering,  on  a  timely  and
cost-efficient  basis, a broad range of custom or customized,  high quality test
products and  services for  semiconductor  manufacturers  in the United  States,
Europe,  and Asia.  There can be no assurance  that the Company can continue its
growth.  The Company  maintains  regional  full service  facilities  in Arizona,
California,   and  Texas  as  well  as  sales  offices  in  Colorado,   Florida,
Massachusetts,  and  Oregon to service  the U.S.  market  for its  products  and
services. The Company continues to expand into international markets,  including
Europe and Asia.  The Company  maintains a full service  facility in Scotland to
serve the European market and full service facilities in Singapore and Taiwan to
serve the Southeast Asia market. Each of the Company's  facilities is located in
proximity to semiconductor manufacturing centers.
                                       12
<PAGE>
Results of Operations

Three Months Ended  September 30, 1997 Compared to Three Months Ended  September
30, 1996.

Net  Sales.  Net  sales for the  three  months  ended  September  30,  1997 were
$19,886,447,  an increase of 126.0% over net sales of  $8,799,247  for the three
months  ended  September  30,  1996.  This  increase in net sales is a result of
Cerprobe's two recent acquisitions, higher order rates for Cerprobe's probe card
and  interface  products  and  increased  sales  from  Cerprobe's  international
operations.

Gross Profit.  Gross profit for the three months ended  September 30, 1997,  was
$8,187,881,  an increase of 112.0% over the gross profit of  $3,861,676  for the
same period in 1996.  Gross profit as a percentage of sales decreased from 43.9%
for the three  months ended  September  30, 1996 to 41.2% for the same period in
1997. The decrease in gross profit was primarily a result of a change in product
mix due to the recent acquisitions.  Approximately 27.8% of net sales within the
period  were  attributed  to ATE  test  boards  from  the  Company's  CompuRoute
subsidiary  and wafer  prober  products  and services  from the  Company's  SVTR
subsidiary.  Both  product  lines  currently  have lower  gross  profit than the
Company's core products of probe cards and ATE interfaces.

Selling,  General  and  Administrative.   Selling,  general  and  administrative
expenses  were  $4,746,863,  or 23.9% of net sales,  for the three  months ended
September  30, 1997 as compared to  $2,595,559,  or 29.5% of net sales,  for the
same period in 1996, an increase of 82.9%. The increase in selling,  general and
administrative expenses resulted primarily from the two recent acquisitions, the
start up of the  joint  venture  with  Upsys,  and the  continued  domestic  and
international expansion. Of the increase,  $1,428,743,  or 66%, was attributable
to Cerprobe's two recent acquisitions and the joint venture with Upsys.

Engineering  and  Product  Development.   Engineering  and  product  development
expenses  were  $412,905  for the three  months ended  September  30,  1997,  an
increase  of 19.3% over  $345,963  for the same  period in 1996.  This  increase
resulted from Cerprobe's recent  acquisitions and Cerprobe's  continued emphasis
on  engineering  and product  development in an effort to anticipate and address
technological advances in semiconductor testing.

Acquisition Related Recovery. Acquisition related recovery was $1,167,689 of the
original $5,664,156  purchased research and development expenses associated with
the  acquisition  of SVTR on January  15,  1997.  The  recovery is a result of a
formal  agreement  signed  September 26, 1997 by the former owners of SVTR which
settled  certain  open  terms  relating  to  Cerprobe's  purchase  of SVTR.  The
agreement  required the former owners to return to the Company 125,000 shares of
the Company's  common stock  currently held in escrow.  In addition,  the former
owners were  required to release any claim or interest  they may have to receive
any payments or shares of common stock of the company with respect to an earnout
provision  detailed in the January 15, 1997  agreement of merger between the two
entities.

Interest  Income.  Interest  income  was  $10,609  for the  three  months  ended
September  30, 1997 as compared  to  $177,113  for the same period in 1996.  The
decrease was a result of utilizing  the net
                                       13
<PAGE>
proceeds of the Series A Convertible Preferred Stock offering for the CompuRoute
and SVTR  acquisitions in the fourth quarter of 1996 and in the first quarter of
1997, respectively. Interest income is expected to increase significantly in the
quarter ending December 31,1997 due to the investment of the net proceeds of the
Company's recent Secondary Offering.

Interest  Expense.  Interest  expense was  $170,050  for the three  months ended
September  30,  1997 as  compared  to $50,737  for the same  period in 1996,  an
increase of 235.2%.  The majority of the 1997  increase in interest  expense was
due to the debt acquired in the  acquisition of CompuRoute  and SVTR.  This debt
was  liquidated at September  30, 1997,  with a portion of the net proceeds from
the  Company's  recent  Secondary  Offering.  Accordingly,  interest  expense is
expected to be substantially lower in the quarter ending December 31, 1997.

Minority  Interest  Share of loss.  The  minority  interest  share of loss  from
operations of $67,394 for the three months ended  September 30, 1997  represents
the Company's joint venture  partners'  share (40.0%,  prior to August 18, 1997,
30.0%  thereafter)  of the income from  Cerprobe Asia PTE LTD of $47,704 and the
Company's joint venture partner's share (45.0%) of the loss from Upsys-Cerprobe,
L.L.C. of $115,098.

Provision for Income Taxes.  The provision for income taxes was $1,248,812 which
represents an effective tax rate of 41.0%, excluding the recovery of acquisition
costs of  $1,167,689  for the three months ended  September  30, 1997 versus the
provision  for income  taxes for the three months  ended  September  30, 1996 of
$469,000 which represents an effective tax rate of 41.4%.

Net  Income.  Net income  for the three  months  ended  September  30,  1997 was
$2,962,096,  an  increase  of  $2,298,697,  or  346.5%,  from the net  income of
$663,399  for the same  period in 1996.  Excluding  the  $1,167,689  recovery of
purchased  research  and  development  expenses,  net  income  would  have  been
$1,794,407  or 9.0% of sales  compared  to 7.5% of sales for the same  period in
1996.

Nine Months Ended September 30, 1997 Compared to Nine Months Ended September 30,
1996.

Net  Sales.  Net  sales  for the nine  months  ended  September  30,  1997  were
$54,469,368,  an  increase of 93.4% over net sales of  $28,159,069  for the nine
months  ended  September  30,  1996.  This  increase in net sales is a result of
Cerprobe's two recent acquisitions, higher order rates for Cerprobe's probe card
and  interface  products  and  increased  sales  from  Cerprobe's  international
operations.

Gross Profit.  Gross profit for the nine months ended  September  30, 1997,  was
$22,367,473,  an increase of 73.7% over the gross profit of $12,873,703  for the
same period in 1996.  Gross profit as a percentage of sales decreased from 45.7%
for the nine  months  ended  September  30, 1996 to 41.1% for the same period in
1997.  The decrease in gross profit,  as a percentage  of sales,  is primarily a
result of a change in product mix due to the recent acquisitions.  Approximately
25.9% of net sales within the period were attributed to ATE test boards from the
Company's CompuRoute  subsidiary and wafer prober products and services from the
Company's SVTR subsidiary.  Both product lines currently have lower gross profit
than the Company's core products of probe cards and ATE interfaces.
                                       14
<PAGE>
Selling,  General  and  Administrative.   Selling,  general  and  administrative
expenses  were  $13,874,174,  or 25.5% of net sales,  for the nine months  ended
September  30, 1997 as compared to  $7,870,390,  or 27.9% of net sales,  for the
same period in 1996. The increase of $6,003,784,  or 76.3%,  resulted  primarily
from the two recent acquisitions,  the start up of the joint venture with Upsys,
and the  continued  domestic  and  international  facilities  expansion.  Of the
increase,  $3,745,466,  or 62.4%, was attributable to CompuRoute,  SVTR, and the
joint venture with Upsys.

Engineering  and  Product  Development.   Engineering  and  product  development
expenses  were  $1,030,679  for the nine months ended  September  30,  1997,  an
increase  of 42.3% over  $724,230  for the same  period in 1996.  This  increase
resulted from  Cerprobe's  recent  acquisitions  and from  Cerprobe's  continued
emphasis on engineering  and product  development in an effort to anticipate and
address technological advances in semiconductor testing.

Acquisition  Related  Expenses.  Acquisition  related costs totaled  $4,996,467,
including a recovery of $1,167,689,  and are related to the  acquisition of SVTR
on January 15, 1997. The acquisition was accounted for using the purchase method
of  accounting.  Accordingly,  the  purchase  price was  allocated to the assets
acquired and the liabilities assumed based upon their estimated fair values. The
value  of  the  purchased  research  and  development  in  connection  with  the
acquisition  was  $4,496,467.  The current state of the research and development
products/processes  was not yet at a  technologically  feasible or  commercially
viable  stage.  Cerprobe  does not believe  that the  research  and  development
products/processes  have any  future  alternative  use  because  if they are not
finished  and brought to  ultimate  product or process  completion  they have no
value.  Therefore,  consistent with generally  accepted  accounting  principles,
Cerprobe took a one-time charge for the full value of the purchased research and
development.  The remaining $500,000 of acquisition  related costs represent the
estimated cost to move SVTR's manufacturing operations to Arizona during 1997.

Interest Income. Interest income was $78,274 for the nine months ended September
30, 1997 as compared to $345,356 for the same period on 1996. The decrease was a
result of utilizing the net proceeds of the Series A Convertible Preferred Stock
offering in the CompuRoute and SVTR  acquisitions  in the fourth quarter of 1996
and in the first quarter of 1997, respectively.

Interest  Expense.  Interest  expense was  $466,905  for the nine  months  ended
September  30,  1997 as compared  to  $167,194  for the same period in 1996,  an
increase of 179.3%.  The majority of the 1997  increase in interest  expense was
due to the debt acquired in the acquisition of CompuRoute and SVTR.

Minority  Interest  Share of Income.  The minority  interest  share of loss from
operations of $96,379 for the nine months ended  September 30, 1997,  represents
the Company's joint venture  partners'  share (40.0%,  prior to August 18, 1997,
30.0%  thereafter)  of the income from  Cerprobe Asia PTE LTD of $68,447 and the
Company's joint venture partner's share (45.0%) of the loss from Upsys-Cerprobe,
L.L.C. of $164,826.

Provision for Income Taxes. The provision for income taxes was $2,739,112, which
represents an effective tax rate of 39.8%,  excluding the  acquisition  costs of
$4,996,467,  for the nine months ended  September 30, 1997,  versus  $2,162,000,
which represents an effective rate of 46.0%,  for 1996. The decreased  effective
tax rate, as adjusted for the nine months ended September 30,
                                       15
<PAGE>
1997, is due to the utilization of CompuRoute's net operating loss  carryforward
of  $140,000  and  partial use of  previous  nondeductible  losses from  foreign
subsidiaries.

Net Loss. Net loss for the nine months ended  September 30, 1997 was $(343,212),
a decrease of $2,874,096,  or 113.6%,  from the net income of $2,530,884 for the
same  period  in 1996.  This  decrease  is  primarily  due to the  recording  of
approximately  $500,000  of costs  associated  with  the  relocation  of  SVTR's
manufacturing  operations  and  the  write-off  of the  purchased  research  and
development of $4,496,467 from the SVTR  acquisition.  Excluding the acquisition
related expenses,  net income for the nine months ended September 30, 1997 would
have been $4,453,255, or 8.1% of net sales, as compared to 9.0% of net sales for
the nine months ended September 30, 1996.


Liquidity and Capital Resources

Cerprobe has financed its operations and capital requirements  primarily through
cash flow from operations,  equipment lease financing  arrangements and sales of
equity  securities.  In January 1996,  Cerprobe completed a private placement of
Series A Convertible  Preferred Stock,  which raised net proceeds of $9,400,000.
The net proceeds  have been used in domestic  and  international  expansion  and
acquisition of companies  and/or  technologies.  In September  1997, the Company
completed the Secondary Offering  which  raised net  proceeds  of  approximately
$30,710,000.  The proceeds  have been used to redeem the  remaining  outstanding
shares of Series A Convertible  Preferred Stock and repay existing Company debt.
The remainder will be used for general  corporate  purposes,  including  working
capital and for possible future acquisitions.  In addition,  on October 6, 1997,
the managing underwriters of the offering, Adams, Harkness & Hill, Inc. and Dain
Bosworth  Incorporated  exercised  their  over-allotment  option to  purchase an
additional  300,000 shares of the Company's  Common Stock at a purchase price of
$22 per share.  Approximately  $6,222,000  in net  proceeds  was received by the
Company from the exercise of the over-allotment. At September 30, 1997, cash and
cash equivalents were $24,443,687, compared to $5,564,557 at December 31, 1996.

Cerprobe  generated  $4,109,313 in cash flow from  operating  activities for the
nine  months  ended  September  30,  1997.  Accounts  receivable   increased  by
$5,888,675,  or 105.8%,  to $11,452,878 at September 30, 1997. Of this increase,
$884,440  resulted  from the  acquisition  of SVTR with the  balance a result of
increased sales.  Inventories increased $3,127,969,  or 81.0%, over December 31,
1996 to $6,990,722 at September 30, 1997. The increase  resulted  primarily from
the acquisition of SVTR.

Accounts  payable  and  accrued  expenses  increased  $4,313,834,  or 99.4%,  to
$8,653,018 at June 30, 1997. The increase  resulted from the acquisition of SVTR
and Cerprobe's continued expansion activities.

The current portions of notes payable and capital leases increased to $1,703,305
at September 30, 1997 from $762,935 at December 31, 1996,  primarily as a result
of  Cerprobe's  recent  acquisition  of SVTR.  Cerprobe  borrowed  approximately
$2,000,000 from its revolving line of credit during the second quarter to payoff
notes  payable  and  capital  lease  obligations  of  CompuRoute  and SVTR whose
obligation  interest  rates were  higher than  Cerprobe's  borrowing  rate.  The
                                       16
<PAGE>
$2,000,000 borrowed from the revolving line has been paid off with proceeds from
the Secondary Offering.

Working capital  increased  $23,525,725,  or 237.6%, to $33,428,695 at September
30, 1997 from December 31, 1996, primarily as a result of the Secondary Offering
which netted proceeds of approximately $30,710,000.  The current ratio increased
from 2.6 at December 31, 1996 to 4.2 at September  30, 1997.  This  increase was
due to the net proceeds from the Secondary Offering.

Cerprobe  increased its investment in property,  plant, and equipment during the
nine months ended  September 30, 1997 by $3,142,593,  or 27.5%,  to $14,588,884.
This  increase was  attributable  to the  acquisition  of SVTR and the Company's
efforts to expand  capacity  to meet  customer  demand for its  products.  These
capital  expenditures  were funded from cash flow from operations,  and proceeds
from the private placement of the Series A Convertible Preferred Stock.

In February 1997,  Cerprobe entered into a $10,000,000  unsecured revolving line
of credit,  which matures August 15, 1998, with its primary lender,  Wells Fargo
Bank.  Advances  under the  revolving  line may be made as prime rate  advances,
which accrue interest payable  monthly,  at the Bank's prime lending rate, or as
LIBOR rate  advances,  which bear  interest at 175 basis points in excess of the
LIBOR base rate. At September 30, 1997, there were no amounts  outstanding under
the unsecured revolving line of credit.

In May 1997,  Cerprobe  entered  into a $3,000,000  lease line of credit,  which
matures February 28, 1998, with Banc One Leasing  Corporation.  The maximum term
for each lease  schedule  will not exceed 60 months.  Pricing will be indexed to
like term treasuries plus 170 basis points.  The advances will be collateralized
by the underlying leased manufacturing equipment,  furniture, fixtures, software
and/or  hardware.  At September  30,  1997,  no advances had been made under the
agreement.

In  September  1997,  the Company  completed a Secondary  Offering of  2,000,000
shares of the  Company's  common  stock at a price of $22.00 per  share.  Of the
shares, 1,500,000 were sold by the Company and the remaining 500,000 shares were
sold by selling  stockholders.  The Company did not receive proceeds from shares
sold by selling  stockholders.  Accordingly,  $30,710,000  was  received  in net
proceeds from the transaction.

In addition,  on October 6, 1997,  the managing  underwriters  of the  offering,
Adams,  Harkness & Hill,  Inc. and Dain Bosworth  Incorporated  exercised  their
over-allotment  option to purchase an additional 300,000 shares of the Company's
Common  Stock at a price of  $22.00  per  share.  Approximately  $6,222,000  was
received by the Company from the exercise of the over-allotment.

The Company used a portion of the proceeds from the Secondary Offering to redeem
the remaining shares of Series A Convertible  Preferred Stock for $5,250,000 and
to  repay  certain  existing  Company  debt  of  approximately  $3,000,000.  The
remainder will be used for general corporate purposes, including working capital
and possible future acquisitions.

Cerprobe  believes that its working capital,  together with the loan commitments
described above and anticipated cash flow from operations, will provide adequate
sources to fund operations for at least the next 12 months. Cerprobe anticipates
that any additional  cash  requirements  for operations or capital  expenditures
will be financed through cash flow from operations, by 
                                       17
<PAGE>
borrowing from Cerprobe's primary lender, by lease financing arrangements, or by
sales of equity  securities.  There can be no assurance  that any such financing
will be available on acceptable terms and that any additional  equity financing,
of available, would not result in additional dilution to existing investors.

"Safe Harbor"  Statement Under the Private  Securities  Litigation Reform Act of
1995

Statements  in this section  regarding  the  Company's  prospects  for continued
growth and the  adequacy of sources of capital are  forward-looking  statements.
Words  such  as  "intends,"  "adequate,"  "believes,"  and  "anticipates,"  also
identify  forward-looking  statements.  Actual  results,  however,  could differ
materially  from those  anticipated for a number of reasons,  including  product
demand  and  development,  technological  advancements,  impact  of  competitive
products and pricing,  growth in targeted markets,  and other factors identified
under "Special Considerations" of the Company's 1996 Form 10-KSB and under "Risk
Factors" of the Company's  Secondary  Offering  prospectus  dated  September 24,
1997, both of which have been filed with the Securities and Exchange Commission.
Additional  risk factors are identified  from time to time in the Company's 1997
press releases.
                                       18
<PAGE>
PART II - OTHER INFORMATION

Item 6        Exhibits and Reports on Form 8-K

              a.      Exhibits

                      10(fff)      Agreement  dated  September  26, 1997, by and
                                   among the  Company,  EMI  Acquisition,  Inc.,
                                   Silicon  Valley  Test  &  Repair,   Inc.  and
                                   William and Carol Mayer.
                      (11)         Statement  regarding   computation   of   net
                                   earnings (loss) per share.
                      (27)         Financial Data Schedule.

              b.      No reports on  Form 8-K were filed  by the  Company during
                      the quarter ended September 30, 1997
                                       19
<PAGE>
Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant has caused this report to be signed on its behalf by the undersigning
thereunto duly authorized.

         
                                    CERPROBE CORPORATION




                                    /s/Randal L. Buness
                                    ---------------------------------------
                                       Randal L. Buness
                                       Vice President - Chief Financial Officer


November 11, 1997
                                       20