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 June 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)


                 600 South Rockford Drive, Tempe, Arizona 85281
                 ----------------------------------------------
                 (Former address, if changed since last report)



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 July 31, 1997,  there were  6,371,580  shares of the  Registrant's  common
stock outstanding.
<PAGE>
                              CERPROBE CORPORATION


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

                                TABLE OF CONTENTS




                         PART I - FINANCIAL INFORMATION


                                                                            Page
                                                                            ----

Item  1.    Financial Statements:

            Condensed Consolidated Balance Sheets -
            June 30, 1997 and December 31, 1996................................3

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

            Condensed Consolidated Statements of Cash Flows -
            Six Months Ended June 30, 1997 and 1996............................5

            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  2.    Changes in Securities.............................................19

Item  4.    Submission of Matters to Vote of Security Holders.................19

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


Signatures  ..................................................................21
                                       2
<PAGE>
                              CERPROBE CORPORATION
                     Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                        June 30,         December 31,
                             ASSETS                                       1997               1996
                                                                      ------------      -------------
                                                                      (unauadited)
<S>                                                                   <C>               <C>         
Current assets:
     Cash and cash equivalents                                        $  1,482,445      $  5,564,557
     Accounts receivable, net of allowance of $218,278                                              
         in 1997 and $223,000 in 1996                                    9,718,798         5,564,203
     Inventories, net                                                    6,525,933         3,862,753
     Note receivable                                                          --             250,000
     Prepaid expenses                                                      230,344           377,003
     Income taxes receivable                                                  --             214,097
     Deferred tax asset                                                    220,676           202,476
                                                                      ------------      ------------
              Total current assets                                      18,178,196        16,035,089
                                                                                                    
Property, plant and equipment, net                                      13,769,965        11,446,291
Intangibles, net                                                         2,481,121         2,602,812
Other assets                                                             1,802,681         1,326,592
                                                                      ------------      ------------
              Total assets                                            $ 36,231,963      $ 31,410,784
                                                                      ============      ============
                                                                                                    
              LIABILITIES AND STOCKHOLDERS' EQUITY                                                  
                                                                                                    
Current liabilities:                                                                                
     Accounts payable                                                 $  4,532,211      $  2,739,064
     Accrued expenses                                                    3,124,388         1,600,120
     Demand note payable                                                 1,000,000         1,030,000
     Current portion of notes payable                                    2,135,585           128,180
     Current portion of capital leases                                     581,760           634,755
                                                                      ------------      ------------
              Total current liabilities                                 11,373,944         6,132,119
                                                                                                    
Notes payable, less current portion                                        452,312           278,645
Capital leases, less current portion                                     1,139,279         1,462,799
Other liabilities                                                          477,485           394,011
                                                                      ------------      ------------
              Total liabilities                                         13,443,020         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 $10,875 per share                              16                16
     Common stock, $.05 par value; authorized, 10,000,000                                           
       shares; issued and outstanding 6,353,047 shares at                                           
       June 30, 1997 and 6,027,714 at December 31, 1996                    317,652           301,386
     Additional paid-in capital                                         23,654,605        20,652,290
     Retained earnings (accumulated deficit)                            (1,199,634)        2,105,674
     Foreign currency translation adjustment                                16,304            70,993
                                                                      ------------      ------------
              Total stockholders' equity                                22,788,943        23,130,359
                                                                      ------------      ------------
                                                                                                    
              Total liabilities and stockholders' equity              $ 36,231,963      $ 31,410,784
                                                                      ============      ============
</TABLE>
     See accompanying notes to condensed consolidated financial statements.
                                       3
<PAGE>
                              CERPROBE CORPORATION
                 Condensed Consolidated Statement of Operations
<TABLE>
<CAPTION>
                                               Three Months Ended June 30,          Six Months Ended June 30,
                                             ------------------------------      ------------------------------
                                                 1997               1996              1997              1996
                                             ------------------------------      ------------------------------
<S>                                          <C>               <C>               <C>               <C>         
Net sales                                    $ 18,683,829      $  9,659,883      $ 34,582,921      $ 19,359,822
Costs of goods sold                            11,008,957         5,174,844        20,403,329        10,347,795
                                             ------------      ------------      ------------      ------------

          Gross margin                          7,674,872         4,485,039        14,179,592         9,012,027
                                             ------------      ------------      ------------      ------------

Expenses:
    Selling, general and administrative         4,954,862         2,666,893         9,127,311         5,274,831
    Engineering and product development           164,455           275,583           617,774           378,267
    Acquisition related costs                        --                --           6,164,156              --   
                                             ------------      ------------      ------------      ------------

          Total expenses                        5,119,317         2,942,476        15,909,241         5,653,098
                                             ------------      ------------      ------------      ------------

Operating income (loss)                         2,555,555         1,542,563        (1,729,649)        3,358,929
                                             ------------      ------------      ------------      ------------

Other income (expense):
    Interest income                                32,504           108,751            67,664           168,243
    Interest expense                             (162,242)          (57,601)         (296,853)         (116,457)
    Other income, net                              55,955            46,624           114,846            87,482
                                             ------------      ------------      ------------      ------------

          Total other income (expense)            (73,783)           97,774          (114,343)          139,268
                                             ------------      ------------      ------------      ------------

Income (loss) before income taxes and
    minority interest                           2,481,772         1,640,337        (1,843,992)        3,498,197

Minority interest share of (income) loss           41,554            36,927            28,985            62,288
                                             ------------      ------------      ------------      ------------

Income (loss) before income taxes               2,523,326         1,677,264        (1,815,007)        3,560,485

Provision for income taxes                       (934,000)         (816,000)       (1,490,300)       (1,693,000)
                                             ------------      ------------      ------------      ------------

Net income (loss)                            $  1,589,326      $    861,264      $ (3,305,307)     $  1,867,485
                                             ============      ============      ============      ============

Net income (loss) per common and common
     equivalent share:
     Primary                                 $       0.24      $       0.16      $      (0.52)     $       0.35
                                             ============      ============      ============      ============

     Weighted average number of common
       and common equivalent shares
       outstanding                              6,546,069         5,393,166         6,321,399         5,262,320
                                             ============      ============      ============      ============

     Fully diluted                           $       0.24      $       0.15      $      (0.52)     $       0.32
                                             ============      ============      ============      ============

     Weighted average number of common
       and common equivalent shares
       outstanding                              6,645,677         5,878,399         6,321,399         5,797,680
                                             ============      ============      ============      ============
</TABLE>
     See accompanying notes to condensed consolidated financial statements.
                                       4
<PAGE>
                              CERPROBE CORPORATION
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                    Six Months Ended June 30,
                                                                                                  ----------------------------
                                                                                                      1997             1996
                                                                                                  ----------------------------
<S>                                                                                               <C>              <C>        
Cash flows from operating activities:
     Net income (loss)                                                                            $(3,305,307)     $ 1,867,485
     Adjustments to reconcile net income (loss) to net cash provided by operating activities:
        Depreciation and amortization                                                               1,657,746          854,628
        Purchased research and development                                                          5,664,156             --
        Loss on sale of fixed assets                                                                      426             --
        Tax benefit from stock options excercised                                                        --            182,000
        Deferred income taxes                                                                          72,819          111,465
        Provision for losses on accounts receivable, net                                              (14,605)           2,000
        Provision for obsolete inventory, net                                                         167,132           31,000
        Compensation expense                                                                             --             51,398
        Income (loss) applicable to minority interest in consolidated subsidiaries                    (28,985)         (62,288)
     Changes in operating assets and liabilities, net of effects of acquisitions:
        Accounts receivable                                                                        (3,255,550)      (1,472,922)
        Inventories                                                                                   528,436         (630,129)
        Prepaid expenses                                                                              175,651          151,241
        Other assets                                                                                 (233,125)          36,366
        Income taxes receivable                                                                       539,904             --
        Accounts payable and accrued expenses                                                         820,689         (204,403)
        Accrued income taxes                                                                           60,329          272,762
        Other liabilities                                                                              48,240            6,996
                                                                                                  -----------      -----------
            Net cash provided by operating activities                                               2,897,956        1,197,599
                                                                                                  -----------      -----------
Cash flows from investing activities:
     Purchase of property, plant and equipment                                                     (3,195,310)      (2,091,021)
     Purchase of marketable securities                                                                   --         (2,279,188)
     Investment in CRPB Investors, L.L.C                                                                 (607)            --
     Investment in Upsys-Cerprobe, L.L.C                                                              (21,892)            --
     Supplemental acquisition costs for CompuRoute                                                    (80,102)            --
     Purchase of SVTR, net of cash acquired                                                        (2,565,697)            --
     Proceeds from sale of equipment                                                                   71,183             --
     Decrease in note receivable                                                                      250,000             --
                                                                                                  -----------      -----------
            Net cash used in investing activities                                                  (5,542,425)      (4,370,209)
                                                                                                  -----------      -----------
Cash flows from financing activities:
     Principal payments on notes payable and capital leases                                        (3,539,072)        (178,322)
     Net proceeds from note payable                                                                 2,001,788             --
     Net proceeds from issuance of convertible preferred stock                                           --          9,400,000
     Net proceeds from issuance of common stock                                                          --            528,574
     Net proceeds from stock options exercised                                                        154,332             --
                                                                                                  -----------      -----------
            Net cash provided by (used in) financing activities                                    (1,382,952)       9,750,252
                                                                                                  -----------      -----------
Effect of exchange rates on cash and cash equivalents                                                 (54,691)          26,913
                                                                                                  -----------      -----------
Net increase (decrease) in cash and cash equivalents                                               (4,082,112)       6,604,555
Cash and cash equivalents, beginning of period                                                      5,564,557          263,681
                                                                                                  -----------      -----------
Cash and cash equivalents, end of period                                                          $ 1,482,445      $ 6,868,236
                                                                                                  ===========      ===========
</TABLE>
     See accompanying notes to condensed consolidated financial statements.
                                       5
<PAGE>
                              CERPROBE CORPORATION
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<S>                                                                                               <C>              <C>        
Supplemental schedule of noncash investing and financing activities:
     Conversion of subordinated debentures to common stock                                        $       --       $   110,000
                                                                                                  -----------      -----------
     Conversion of preferred stock to common stock                                                $       --       $    64,000
                                                                                                  -----------      -----------
     Equipment acquired under capital leases and issuances of notes payable                       $     4,144      $        --
                                                                                                  -----------      -----------
                                                                                                                              
Supplemental disclosures of cash flow information:                                                                            
     Interest paid                                                                                $   296,853      $    93,833
                                                                                                  -----------      -----------
     Income taxes paid                                                                            $ 1,315,096      $ 1,128,016
                                                                                                  -----------      -----------
                                                                                                                   
Supplemental disclosures of noncash investing activities:
     The Company acquired Silicon Valley Test & Repair, Inc.
        for $5.7 million in the period ended March 31, 1997.  
        The purchase price was allocated to the assets acquired and liabilities assumed
        based on their fair values as indicated in notes to the consolidated financial
        statements. A summary of the acquisition is as follows:
     Purchase price                                                                               $ 5,715,263
     Less cash acquired                                                                              (285,316)
     Common stock issued                                                                           (2,864,250)
                                                                                                           --
                                                                                                  -----------
        Cash invested                                                                             $ 2,565,697
                                                                                                  ===========
</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 June
         30,  1997 and for the six months  ended June 30, 1997 and June 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 the
         Company   and   its   wholly-owned   subsidiaries:   CompuRoute,   Inc.
         ("CompuRoute"), Cerprobe Europe Limited, and Cerprobe Asia Holdings PTE
         LTD.  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  Cerprobe  Asia PTE LTD.  Cerprobe  Asia PTE LTD created
         wholly-owned  subsidiaries,  Cerprobe  Singapore  PTE LTD and  Cerprobe
         Taiwan Co. LTD, to operate full service sales and manufacturing plants.
         Singapore became  operational in April of 1996 and Taiwan in January of
         1997. All significant intercompany transactions have been eliminated in
         consolidation.

         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 as of June
         30,  1997 and for the six months  ended June 30,  1997  include  SVTR's
         activities since the date of acquisition.

         On June 2, 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 in
         Arizona for  distribution  by Cerprobe  throughout  the U.S.  and Asia.
         Cerprobe owns 55% of the joint venture and Upsys owns 45%.
                                       7
<PAGE>
         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 June 30, 1997 and for the six months ended
         June 30, 1997 include the activities of both organizations.


(2)      Inventories

         Inventories  consist of the following:


                                                     June 30,      December 31,
                                                       1997            1996
                                                  -------------   -------------
         Raw materials                            $   5,747,767   $   3,328,422 
         Work-in-process                              1,058,158         615,360
         Finished goods                                  98,010          47,971
         Reserve for obsolete inventory                (378,002)       (129,000)
                                                  -------------    ------------
         Total                                    $   6,525,933    $  3,862,753
                                                  =============    ============


(3)      Property, Plant and Equipment

         Property, plant and equipment consist of the following:


                                                     June 30,       December 31,
                                                       1997             1996    
                                                    -----------     ------------
         Land                                       $   364,017     $   359,253 
         Building                                     1,973,704       1,947,877 
         Manufacturing tools and equipment           10,551,767       8,789,140 
         Office furniture and equipment               1,697,900       1,063,547 
         Leasehold improvements                       1,770,813       1,112,576 
         Construction in progress                       567,727         483,591 
         Computer hardware and software               2,823,245       2,402,551 
         Accumulated depreciation and amortization   (5,979,208)     (4,712,244)
                                                    ------------    ------------
         Total                                      $13,769,965     $11,446,291 
                                                    ============    ============
                                                                    
(4)      Intangibles

         Goodwill from the  acquisition of Fresh Test Technology and CompuRoute,
         is $2,120,505 and $969,235, respectively.
                                       8

<PAGE>
(5)      Related Party Transactions

         Effective  May 1, 1991,  the Company  entered into an agreement  with a
         former  director and officer of the Company,  whereby this officer left
         the employ of the  Company  and agreed not to compete  with the Company
         for a two-year period. The agreement required the Company to pay $3,125
         per  month  from May 1, 1991  through  April  30,  1993 and to  provide
         certain other benefits to this individual.  This agreement was extended
         for an additional  year,  through April 30, 1994, and is presently on a
         month-to-month  basis.  Beginning July 1, 1997 the monthly payment will
         be reduced to $1,563 and the agreement  will  terminate on December 31,
         1997,  except for certain life insurance and health care benefits which
         will continue under the terms of the original agreement.

(6)      Commitments and Contingencies

         Lease Line of Credit

         In May of  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.

         Convertible Preferred Stock

         If the holders of all outstanding shares of convertible preferred stock
         had  elected  to  convert  their  shares  on June  30,  1997,  Cerprobe
         estimates  that  it  would  have  been  required  to pay  approximately
         $3,600,000 to have redeemed all shares of Convertible  Preferred  Stock
         that,  if  converted,  would have resulted in the issuance of more than
         800,000 shares of common stock.


         The Company has received a notice of conversion from the holders of the
         remaining issued and outstanding shares of Convertible Preferred Stock.
         The Company has sent notices of redemption  to such holders.  A dispute
         has  arisen  between  the  Company  and  such  holders   regarding  the
         redemption  price and  redemption  date with  respect to the  remaining
         issued and  outstanding  shares of  Convertible  Preferred  Stock.  The
         Company  does not believe that the amount in dispute is material to the
         financial condition of the Company.

         Upsys

         On June 2, 1997, Cerprobe Corporation 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,  managed by
         Cerprobe,  assembles  and  repairs  the  Cobra  Probe  in  Arizona  for
         distribution  by Cerprobe  throughout the U.S. and Asia.  Cerprobe owns
         55% of the joint  venture  and Upsys  owns 45%.  The joint  venture  is
         operational.
                                       9
<PAGE>
(7)      Acquisitions

         CompuRoute, Inc.

         On December 27, 1996, the Company acquired all of the outstanding stock
         of CompuRoute,  Inc., a manufacturer  of printed  circuit  boards,  for
         $7,037,797.  The purchase  price  consisted of  $4,437,797  in cash and
         400,000 shares of common stock.

         The  acquisition  has been  accounted  for by the  purchase  method  of
         accounting.  Accordingly,  the purchase price has been allocated to the
         assets acquired and the  liabilities  assumed based upon the fair value
         at the date of  acquisition.  The excess of the purchase price over the
         fair  value  of the net  assets  acquired  was  $969,235  and has  been
         recorded as goodwill, which is being amortized on a straight-line basis
         over eight years.  The results of operations of CompuRoute are included
         in the Company's financial statements since the date of acquisition.

         At acquisition,  the state of the research and development products was
         not yet at a technologically or commercially  viable stage. The Company
         did not believe  that the  research  and  development  products had any
         future  alternative use because if these products were not finished and
         brought to ultimate product completion, they would have no other value.
         Therefore,  consistent with generally accepted  accounting  principles,
         the Company  recorded a one-time  charge of  $4,584,000 on December 27,
         1996  for the full  value  of the  purchased  in-process  research  and
         development.

         Silicon Valley Test & Repair, 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.

         Under the terms of the acquisition, the Company has 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 are achieved by SVTR.

         The  acquisition  has been  accounted  for using the  purchase  method.
         Accordingly,  the purchase price has been allocated to assets  acquired
         and  liabilities  assumed based upon their estimated fair values at the
         date of acquisition.
                                       10
<PAGE>
         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
                                                                ============

         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.
                                       11
<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:
                                                        Six months ended
                                                             June 30,
                                                 -------------------------------
                                                       1997            1996
                                                 -------------------------------
                                                           (unaudited)

          Net sales                               $  34,636,301   $   34,075,886
          Net income                              $   2,218,781   $    2,598,523
          Primary net income per share            $         .35   $          .44
          Fully diluted net income per share      $         .35   $          .40



         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 or as a  projection  of
         future results.

(8)      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 $.25 and $.24 for the fiscal  three months ended June 30, 1997 and
         $(.52) and $(.52) for the six months ended June 30, 1997.
                                       12
<PAGE>
                              CERPROBE CORPORATION
                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

Introduction and General Development of Business

Cerprobe was incorporated in California in 1976 and  reincorporated  in Delaware
in May 1987.  The Company  designs,  manufactures,  markets,  and services  high
performance products and equipment for use in the testing of integrated circuits
("ICs") for the semiconductor industry.  Cerprobe's products and services enable
semiconductor  manufacturers to test the integrity of their ICs during the batch
fabrication  stage of the  manufacturing  process used in  manufacturing  ICs in
wafer form.

The Company has grown substantially over the last three years as the Company has
benefited from the substantial growth in the worldwide demand for ICs. Net sales
have  increased  from $14.3 million for 1994, to $26.1 million for 1995,  and to
$37.3 million for 1996.  Similarly,  the Company's net income has increased from
$1.2 million for 1994,  to $2.4  million for 1995,  and to $3.2 million for 1996
(before a one-time charge for purchased  in-process  research and development of
$4.6 million,  resulting in a net loss of $1.4  million).  This growth  resulted
primarily from internal product development and strategies. However, the Company
also  benefited  from its  acquisition  in April 1995 of Fresh  Test  Technology
Corporation, whose complementary products contributed approximately $4.0 million
to  1995  net  sales,   approximately   $7.0  million  to  1996  net  sales  and
approximately  $3.6  million to net sales for the first six  months of 1997.  To
further expand its semiconductor  test product and service  offerings,  Cerprobe
acquired  CompuRoute,  Inc.  ("CompuRoute"),  a company  engaged in the  design,
manufacture,  and  marketing  of  complex,  multilayer  printed  circuit  boards
("PCBs") primarily for use in semiconductor  testing  applications,  in December
1996  and  Silicon  Valley  Test  &  Repair,  Inc.  ("SVTR"),   a  company  that
refurbishes,   reconfigures,  and  services  wafer  probers,  in  January  1997.
Together,  these recent acquisitions  contributed  approximately $8.6 million to
net sales for the first six months of 1997.  Continuing this expansion,  on June
2, 1997,  the Company  entered into a joint  venture  with Upsys Reseau  Euresys
("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 for distribution by Cerprobe in the U.S. and Asia.

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 U.S.,  Europe, and
Asia.  The  Company  maintains  regional  full  service  facilities  in Arizona,
California, and Texas as well as sales offices in Oregon, Colorado, Florida, and
Massachusetts  to service the U.S.  market for its  products and  services.  The
Company  maintains a full  service  facility  in Scotland to serve the  European
market, and opened full service facilities in Singapore and Taiwan in April 1996
and January 1997, respectively,  to serve the Southeast Asia market. Each of the
Company's  facilities  is located in  proximity to  semiconductor  manufacturing
centers.
                                       13
<PAGE>
Results of Operations

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

Net sales for the three months ended June 30, 1997 were $18,683,829, an increase
of 93% over net sales of  $9,659,883  for the three  months ended June 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.

For the three months ended June 30, 1997,  the gross margin was  $7,674,872,  an
increase of 71% over the gross margin of $4,485,039 for the same period in 1996.
Gross margin as a percentage  of sales  decreased  from 46% for the three months
ended June 30,  1996 to 41% for the same period in 1997.  The  decrease in gross
margin,  as a percentage of sales,  is primarily a result of a change in product
mix due to the recent  acquisitions.  Approximately  25% 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  margins than the
Company's core products of probe cards and ATE interfaces.

Selling,  general and administrative expenses were $4,954,862,  or 27% of sales,
for the three  months ended June 30, 1997 as compared to  $2,666,893,  or 28% of
sales, for the same period in 1996, an increase of 86%. 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 facilities expansion. Of the increase, $1,370,223, or
60%, was attributable to CompuRoute, SVTR, and the Upsys-Cerprobe,  L.L.C. start
up.

Engineering and product development  expenses were $164,455 for the three months
ended June 30,  1997,  a decrease  of 40% over  $275,583  for the same period in
1996.  This  decrease  resulted  from the  offset  of  engineering  and  product
development costs by project funding receipts from Cerprobe's collaboration with
certain  customers and the  re-assignment  of personnel  and other  resources to
Upsys-Cerprobe,  L.L.C.  Cerprobe intends to replace these re-assigned resources
and continue to emphasize  engineering  and product  development in an effort to
anticipate and address technological advances in semiconductor testing.

Interest income was $32,504 for the three months ended June 30, 1997 as compared
to $108,751 for the same period in 1996.  The decrease was a result of utilizing
the net proceeds of the 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  expense  was  $162,242  for the three  months  ended June 30,  1997 as
compared  to $57,601  for the same  period in 1996,  an  increase  of 182%.  The
majority of the 1997  increase in interest  expense was due to the debt acquired
in the acquisition of CompuRoute and SVTR.

The minority  interest share of loss from  operations of $41,554,  for the three
months ended June 30, 1997,  represents  the Company's  joint venture  partners'
share (30%) of the income from Cerprobe Asia PTE LTD of $8,174 and the Company's
joint venture partner's share (45%) of the loss from  Upsys-Cerprobe,  L.L.C. of
$49,728.
                                       14
<PAGE>
The provision for income taxes was $934,000,  which  represents an effective tax
rate of 37% for the three  months ended June 30, 1997,  versus  $816,000,  which
represents an effective  rate of 49% for the same period in 1996.  The decreased
effective tax rate resulted from the benefit of CompuRoute's  net operating loss
carryforward of $140,000 and partial use of previous  nondeductible  losses from
foreign subsidiaries.

Net income for the three months ended June 30, 1997 was $1,589,326,  an increase
of  $728,062,  or 85%,  from the net income of  $861,264  for the same period in
1996.  This increase is due to the increase in sales  resulting from  Cerprobe's
two  recent  acquisitions,  higher  order  rates for  Cerprobe's  probe card and
interface   products,   and  increased  sales  from   Cerprobe's   international
operations.

Six Months Ended June 30, 1997 Compared to Six Months Ended June 30, 1996.

Net sales for the six months ended June 30, 1997 were  $34,582,921,  an increase
of 79% over net sales of  $19,359,822  for the six months  ended June 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.

For the six months ended June 30, 1997,  the gross  margin was  $14,179,592,  an
increase of 57% over the gross margin of $9,012,027 for the same period in 1996.
Gross  margin as a  percentage  of sales  decreased  from 47% for the six months
ended June 30,  1996 to 41% for the same period in 1997.  The  decrease in gross
margin,  as a percentage of sales,  is primarily a result of a change in product
mix due to the recent  acquisitions.  Approximately  25% 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  margins than the
Company's core products of probe cards and ATE interfaces.

Selling,  general and administrative expenses were $9,127,311,  or 26% of sales,
for the six months  ended June 30,  1997 as compared  to  $5,274,831,  or 27% of
sales,  for the same period in 1996.  The increase of $3,852,480 or 73% 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,  $2,316,723, or 60%, was attributable to CompuRoute,  SVTR, and
the joint venture with Upsys.

Engineering  and product  development  expenses were $617,774 for the six months
ended June 30,  1997,  an increase of 63% over  $378,267  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 costs totaled $6,164,156 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  $5,664,156.   The  current  state  of  the  research  and
                                       15
<PAGE>
development  products/processes  is 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  is  the
estimated cost to move SVTR's manufacturing operations to Arizona during 1997.

Interest  income was $67,664 for the six months  ended June 30, 1997 as compared
to $168,243 for the same period on 1996.  The decrease was a result of utilizing
the net proceeds of the  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 was $296,853 for the six months ended June 30, 1997 as compared
to $116,457  for the same period in 1996,  an increase of 155%.  The majority of
the 1997  increase  in  interest  expense  was due to the debt  acquired  in the
acquisition of CompuRoute and SVTR.

The  minority  interest  share of loss from  operations  of $28,985  for the six
months ended June 30, 1997,  represents  the Company's  joint venture  partners'
share  (30%)  of the  income  from  Cerprobe  Asia  PTE LTD of  $20,743  and the
Company's joint venture  partner's share (45%) of the loss from  Upsys-Cerprobe,
L.L.C. of $49,728.

The provision for income taxes was $1,490,300, which represents an effective tax
rate of 39%,  excluding the acquisition costs of $6,164,156,  for the six months
ended June 30, 1997,  versus  $1,693,000,  which represents an effective rate of
48% for 1996. The decreased  effective tax rate, as adjusted for 1997,  resulted
from the benefit of CompuRoute's net operating loss carryforward of $140,000 and
partial use of previous nondeductible losses from foreign subsidiaries.

Net loss for the six months  ended June 30, 1997 was  $3,305,307,  a decrease of
$5,172,792,  or 277%,  from the net income of $1,867,485  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 $5,664,156 from the
SVTR acquisition. Excluding the acquisition related expenses, net income for the
six months ended June 30, 1997 would have been  $2,658,849 or 8% of net sales as
compared to 10% of net sales for the six months ended June 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
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.  At June 30, 1997, cash and cash equivalents
were $1,482,445, compared to $5,564,557 at December 31, 1996.

Cerprobe generated $2,897,956 in cash flow from operating activities for the six
months ended June 30, 1997. Accounts receivable increased by $4,154,595, or 75%,
to  $9,718,798 at June 30, 
                                       16
<PAGE>
1997. Of this increase,  $884,440 resulted from the acquisition of SVTR with the
balance a result of increased sales.  Inventories increased $2,663,180,  or 69%,
over  December 31, 1996 to $6,525,933  at June 30, 1997.  The increase  resulted
primarily from the acquisition of SVTR.

Accounts  payable  and  accrued  expenses  increased  $3,317,415,   or  76%,  to
$7,656,599 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 $2,717,345
at June 30, 1997 from  $762,935 at December 31,  1996,  primarily as a result of
Cerprobe's  recent  acquisition  of SVTR.  Cerprobe  borrowed  approximately  $2
million 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.

Working  capital  decreased  $3,098,718,  or 31%, to $6,804,252 at June 30, 1997
from December 31, 1996.  The current ratio  decreased  from 2.6 to 1 at December
31, 1996 to 1.6 to 1 at June 30, 1997.  These  decreases  were due to the use of
the net proceeds from the private  placement of the Convertible  Preferred Stock
in the two recent  acquisitions.  The  acquisition  of CompuRoute  and SVTR used
$4,437,797 and $2,753,217, respectively.

Cerprobe  increased its investment in property,  plant, and equipment during the
six months  ended June 30,  1997 by  $2,323,674,  or 20%, to  $13,769,965.  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 Convertible Preferred Stock.

If the holders of all  outstanding  shares of  Convertible  Preferred  Stock had
elected to convert  their shares on June 30, 1997,  Cerprobe  estimates  that it
would have been  required to pay  approximately  $3,600,000 to have redeemed all
shares of Convertible Preferred Stock, that if converted, would have resulted in
the issuance of more than 800,000 shares of Cerprobe  common stock.  The Company
has received a notice of conversion from the holders of the remaining issued and
outstanding shares of Convertible  Preferred Stock. The Company has sent notices
of redemption to such holders. A dispute has arisen between the Company and such
holders  regarding the redemption  price and redemption date with respect to the
remaining  issued and outstanding  shares of Convertible  Preferred  Stock.  The
Company does not believe that the amount in dispute is material to the financial
condition of the Company.

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 June 30,  1997,  Cerprobe  had  approximately  $2,000,000
outstanding from LIBOR rate advances with an interest rate of 7.625%.
                                       17
<PAGE>
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 June 30,  1997,  no  advances  had  been  made  under  the
agreement.

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 borrowing from Cerprobe's
primary  lender,  by  lease  financing  arrangements,  or  by  sales  of  equity
securities.

"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 as filed with
the Securities and Exchange  Commission,  as well as those reasons identified in
the Company's 1997 press releases.
                                       18
<PAGE>
PART II - OTHER INFORMATION

Item 4      Submission of Matters to Vote of Security Holders

            a.  An annual  meeting of  stockholders  of the  Company was held on
                June 4, 1997.

            b.  The name of each director  elected at the meeting is as follows:
                Ross J.  Mangano,  C. Zane Close,  Kenneth W. Miller,  Donald F.
                Walter, and William A. Fresh.

            c.  The  matters  voted upon and the  results of the voting  were as
                follows:

                1.   The following five persons were elected as Directors at the
                     annual meeting pursuant to the following vote:
                                                  Vote For       Votes Withheld
                      Ross J. Mangano             5,440,171          101,260
                      C. Zane Close               5,440,896          100,535
                      Kenneth W. Miller           5,440,171          101,260
                      Donald F. Walter            5,250,071          291,360
                      William A. Fresh            5,432,771          103,660

                2.   Amendments to and  Restatement of the Company's 1995  Stock
                     Option Plan were approved at the annual meeting pursuant to
                     the following vote:
                      Votes for                   4,779,921
                      Votes Against                 609,426
                      Votes Abstaining               70,780
             
                3.   The appointment of KPMG Peat Marwick LLP as the independent
                     auditors of the Company was ratified at the annual  meeting
                     pursuant to the following vote:
                      Votes for                   5,501,451
                      Votes Against                  16,162
                      Votes Abstaining               22,818

Item 6      Exhibits and Reports on Form 8-K

             a.    Exhibits

                   10(aaa)    Master  Lease  Agreement  between  the Company and
                              Banc One Leasing Corporation, dated May 16, 1997.
                   10(bbb)    Lease  Agreement  between  Silicon Valley Test and
                              Repair,  Inc.  and Reynolds  Development  Company,
                              dated May 29, 1997.
                   10(ccc)    Amended and Restated Operating  Agreement,  by and
                              between the Company and Upsys,  dated February 12,
                              1997.
                   10(ddd)    Distribution     Agreement     by    and     among
                              Upsys-Cerprobe,  L.L.C.,  the Company,  and Upsys,
                              dated June 2, 1997.
                                       19
<PAGE>
                   10(eee)    Supply   Agreement   by  and  among  Upsys  Reseau
                              Euresys, Upsys-Cerprobe,  L.L.C., and the Company,
                              dated June 2, 1997.

                   10(ll)     1995  Stock  Option  Plan,   as  amended   through
                              February 18, 1997.

                   (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 June 30, 1997
                                       20
<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


July 31, 1997
                                       21