FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark one)
(X)      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the fiscal year ended September 30, 1996
                                       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 0-11691 

                           ELEXSYS INTERNATIONAL, INC.
             -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                       95-3534864
 -------------------------------                       ------------------
 (State or other jurisdiction of                        (I.R.S. Employer
  incorporation or organization)                       Identification No.)

                     4405 Fortran Court, San Jose, CA 95134
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (408) 935-6300
               ---------------------------------------------------
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
                                                       None
Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $1.00 Par Value
                          -----------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                  Yes   X   No
                                      -----    -----
Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )

The  aggregate  market  value  of the  voting  stock of the  registrant  held by
non-affiliates  of the  registrant on December 17, 1996 based on the average bid
and asked prices of such stock on such date was $83,580,000.  As of December 17,
1996, there were 9,349,195 outstanding shares of common stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of registrant's  definitive proxy statement for its 1997 Annual Meeting
of Stockholders  (the "1997 Proxy Statement") are incorporated by reference into
Part  III as set  forth  herein.  Portions  of  registrant's  annual  report  to
stockholders for the year ended September 30, 1996 are incorporated by reference
into Part II as set forth herein. With the exception of those portions which are
expressly incorporated herein by reference, said 1997 Proxy Statement and annual
report are not deemed filed as part hereof.



<PAGE>




                                     PART I


         An investment in securities of Elexsys  International,  Inc. ("Elexsys"
or the  "Company")  involves  certain  risks.  In  evaluating  Elexsys  and  the
Company's business,  prospective  investors should give careful consideration to
the factors discussed below, in addition to the information  provided  elsewhere
in the  Annual  Report  on Form  10-K  and in  other  documents  filed  with the
Securities  and  Exchange  Commission.  Except  for the  historical  information
contained  in  this  document,   the  discussions  in  this  document   contains
forward-looking  statements  that involve  risks and  uncertainties.  The actual
future results of the Company could differ materially from these forward-looking
statements.   An  investor  should  carefully  evaluate  these   forward-looking
statements before making an investment in the securities of Elexsys.

ITEM 1. BUSINESS

General

         Elexsys International,  Inc., is a leading manufacturer of interconnect
products used in advanced electronic equipment. The Company manufactures complex
products in the mid-volume sector of the electronic  interconnect  industry. The
Company  offers to its customers  complete  original  design  capability for top
level assembly,  as Elexsys' products generally require greater  engineering and
manufacturing  expertise than mass-produced,  less complex products. The Company
manufactures  custom-designed,  press-fit  backpanels;  surface mount  backpanel
assemblies  and  subsystems  (known as a card cage)  complete  with an assembled
backpanel,  power supply, fan and cable attachments as well as multilayer,  high
density  printed  circuit  boards.  Elexsys  works  closely with its  customers,
beginning  with  the  early  stages  of  the   customer's   product  design  and
development.

         Elexsys  believes  its  capabilities  both  in  providing  value  added
manufacturing  services  and  manufacturing  multilayer,  high  density  printed
circuit boards (including complex blind and buried via product, described below)
advantageously  position  the  Company to serve high growth  original  equipment
manufacturers ("OEM") in the rapidly changing electronics markets.  Elexsys' OEM
customers include a diversified base of manufacturers in the telecommunications,
datacommunications, computer, industrial systems and medical systems segments of
the electronics industry, such as Northern Telecom, Tellabs, DSC Communications,
Digital  Equipment,  Tandem/UB  Networks,  Motorola Inc.,  Siemens Inc., Silicon
Graphics, Inc. and AT&T Corporation.

         Elexsys'  strategy is to continue to utilize its well  established high
technology printed circuit board  manufacturing and engineering  capabilities to
further expand into the rapidly growing outsourcing  market,  providing products
including complex press-fit  backpanels,  surface mount backpanel assemblies and
subsystems.  Key elements of this strategy include  providing its customers with
the highest levels of quality, superior service and leading edge technology.

         The Company  was  originally  incorporated  in  California  in 1980 and
reincorporated in Delaware in 1987.

         On May 3, 1996, the Company  acquired  substantially  all the assets of
Anetec Technologies, Inc., a company serving the small prototype and engineering
marketplace  located in Fremont,  California  for $4.4 million,  including  $1.4
million in cash,  a promissory  note in the  principal  amount of $1.0  million,
assumption of a capital obligation of approximately  $400,000 and 110,000 shares
of the Company's  common stock valued at approximately  $1.6 million.  The total
purchase price of approximately $4.4 million was allocated between machinery and
equipment  of  approximately  $2.4 million and  goodwill of  approximately  $2.0
million.

         On April 28, 1995, the Company acquired substantially all the assets of
Technet  Electronics,  Limited, a manufacturer of printed circuit boards located
in  Peterborough,  England,  for  approximately  $3,300,000,  which consisted of
$560,000 of cash and  assumption of  liabilities  of  approximately  $2,740,000,
including Technet's current lines of credit.



<PAGE>



Electronic Interconnect Industry Overview


         Backpanels:  According to Fleck  Research,  an industry  data  research
firm, the North American  backpanel market was  approximately  $732.2 million in
1995 (the most recent year for which such information is available), an increase
of 11.4% over 1994.  This market may change if OEMs who currently  have in house
("captive")  operations decide to outsource their backpanel  production,  as has
been the trend with printed circuit boards. According to this research firm, the
European backpanel market is approximately $378.8 million.

         Value Added  Contract  Manufacturing:  According to the  Institute  for
Interconnecting  and Packaging  Electronic  Circuits ("IPC"),  the United States
value added contract  manufacturing  market,  defined as printed circuit boards,
backpanel  assemblies,  printed  circuit  board  assembly  and  subsystems,  was
approximately  $11.2  billion in 1995 and is growing at a rate of  approximately
20% per  year.  Based on  industry  data,  the  Company  believes  that OEMs are
increasingly  relying  upon  independent  manufacturers  of complex,  electronic
interconnect products, such as Elexsys, rather than on captive production.  Some
original equipment  manufacturers  (OEMs) have  discontinued,  sold or curtailed
domestic,  captive,  printed  circuit board or backpanel  production  since 1990
including  AT&T Corp.,  Data  General  Corporation,  General  Electric  Company,
Hewlett-Packard  Company,  Northern Telecom Limited,  Raytheon  Company,  Unisys
Corporation and Xerox  Corporation.  Elexsys' strategy will be to concentrate on
the market  niche of  backpanel  assemblies,  subsystems,  and  printed  circuit
boards.

         Multilayer, high density printed circuit boards including complex blind
and buried via products: According to the IPC, the United States printed circuit
board  market was  approximately  $6.5 billion in 1995 (the most recent year for
which such information is available).  Approximately $5.5 billion of this market
was available to independent manufacturers such as Elexsys. IPC's data indicates
that this  market  grew  approximately  10% in 1995.  Multilayer,  high  density
printed circuit boards, the fastest growing segment, accounted for approximately
66% of the 1995 market.  IPC also  estimates  that the percentage of the printed
circuit   board  market   available  to   independent   printed   circuit  board
manufacturers  such as Elexsys,  has increased  from 66% to 85% since 1991.  The
European  printed  circuit  board market is  approximately  $4.5 billion and the
multilayer segment of the European market is approximately $2.1 billion.

Other  factors  which  Elexsys  believes  will  lead  OEMs to  utilize  contract
manufacturers include:

Design  Expertise:  The customer  benefits  from custom design  capabilities  of
contract  manufacturers.  For example,  Elexsys works with the customer from the
conceptual,   design  stage,   to  the  prototype   stage  and  through  to  the
pre-production  and production  phases,  to achieve a product design that can be
manufactured economically at or near the commencement of the production runs.

Reduced Capital Investment Requirements: As electronic products have become more
technologically  advanced,  the  manufacturing  process has become  increasingly
sophisticated and automated,  requiring a greater level of investment in capital
equipment.  By  outsourcing  certain  assemblies,  OEMs can reduce their overall
capital   equipment   requirements   while   maintaining   access  to   advanced
manufacturing facilities.

Focused  Resources:  In recent years,  the electronics  industry has experienced
greater  levels of competition  and rapid  technological  change,  and many OEMs
increasingly  are seeking to focus their  limited  resources on  activities  and
technologies  to provide  products that add the greatest value to their markets.
By  offering   printed  circuit  board   fabrication   and  assembly   services,
manufacturers  concentrating  on these special  services  allow OEMs to focus on
core  technologies  and activities  such as product  development,  marketing and
distribution.

Access to Leading Manufacturing Technology: Electronic interconnect products and
related  manufacturing  technology have become  increasingly  sophisticated  and
complex,  making it difficult for OEMs to maintain the  necessary  technological
expertise in process  development  and control.  OEMs are motivated to outsource
product in order to gain  access to the  manufacturer's  process  expertise  and
manufacturing capabilities.

Improved Inventory  Management and Purchasing Power:  Electronics  industry OEMs
are faced with increasing difficulties in planning, procuring and managing their
inventories   efficiently  due  to  frequent   design  changes,   short  product
life-cycles,  large  investments  in  electronic  components,   component  price
fluctuations   and  the  need  to  achieve   economies  of  scale  in  materials
procurement.   OEMs  can  reduce   production   costs  by  using  the   contract
manufacturer's volume procurement capabilities and inventory management skills.

<PAGE>



Business strategy


         In response to the foregoing  industry  trends,  Elexsys has structured
its  business  to supply  sophisticated  complex,  press-fit  and  surface-mount
backpanel   assemblies,   value   added   electronic   interconnect   assemblies
("subsystems")  including card cage, power supplies, fans, cables and harnesses,
and  high  technology   printed  circuit  boards.   Elexsys'  business  strategy
encompasses several elements:

Focus on quality:  The  Elexsys  team  strives to insure the  highest  levels of
quality  control in all  phases of its  operations,  as  quality is a  critical,
competitive  factor in the electronic  interconnect  market. The Company strives
for continuous  improvement of its processes and has adopted a number of quality
improvement and measurement techniques to improve its performance.  All Elexsys'
plants are ISO 9002 certified. Recently, the Company had a quality audit on some
of its  operations by Bell  Laboratories.  Early results of this audit  indicate
that we are in compliance with Bell Laboratories requirements.

Providing service oriented  manufacturing:  The Company  manufactures all of the
printed circuit boards used in its subsystems, motherboard assemblies and custom
designed backpanels in order to maintain control over costs,  quality and timely
delivery of its products.  This vertical  integration also allows the Company to
provide a broader  range of  assembly  services,  including  prototype  and high
technology products.

Maintain technology leadership:  Elexsys seeks to deliver advanced manufacturing
and test  engineering,  responsive  materials  management,  and  technologically
advanced,   flexible  and   service-oriented   manufacturing  for  the  complex,
leading-edge products of its OEM customers.

Target high value-added  electronic  interconnect  products:  Elexsys focuses on
leading  manufacturers  of advanced  electronic  equipment.  Such  manufacturers
generally require custom-designed,  more complex interconnect products and short
lead-time manufacturing services, such as quick-turn, multilayer printed circuit
boards, complex backpanels,  motherboard assemblies and subsystems.  By focusing
on such customer needs,  Elexsys has been able to increase  revenues and margins
and the Company believes it has differentiated  itself from many participants in
the electronic interconnect industry.

Pursue a "teamwork" approach with customers:  Elexsys seeks to establish "teams"
with its customers by involving  Elexsys engineers and staff in the early design
stages of its customers' product development,  and by providing quick-turnaround
manufacturing  services and  just-in-time,  kanban and  dock-to-stock  inventory
management  programs.  Through this  approach,  Elexsys  seeks to forge  lasting
customer  relationships across a number of products and through multiple product
generations.

Maintain a diversified  customer base:  Elexsys services a diversified  customer
base spread over a variety of growing industry segments.  Elexsys' customers are
in the telecommunications,  datacommunications, computer, industrial systems and
medical systems  segments of the electronics  industry.  During fiscal 1996, the
Company  manufactured  and sold  circuit  boards  and  backpanel  assemblies  to
approximately  385  customers  which are located  primarily in North America and
Europe.

During fiscal 1996, 1995 and 1994, export sales were approximately  $17,600,000,
$13,100,000,  $8,500,000 or 14 percent, 13 percent,  and 9 percent of net sales,
respectively.  In aggregate, Elexsys' ten largest customers accounted for 59% of
the Company's net sales.  During fiscal 1996, three customers,  Northern Telecom
Corporation, DSC, and Tellabs, Inc. accounted for 17 percent, 10 percent, and 10
percent of net sales, respectively. Northern Telecom and the Company have had an
established  relationship  since 1985.  The two  companies  have  entered into a
one-year  agreement  commencing  January 1,  1997,  pursuant  to which  Northern
Telecom has agreed to purchase a specified

amount of the Company's  circuit boards and backpanel  assemblies as long as the
Company satisfies certain  conditions,  including  conditions on the quality and
timely delivery of its products.  The agreement is renewable on an annual basis.
Elexsys' business may be subject to seasonal fluctuations of our customers.


<PAGE>



Products and services


         Elexsys produces custom designed  press-fit  backpanels,  surface mount
backpanels,  subsystems,  and multilayer high technology  printed circuit boards
that are used in the  manufacture  of  sophisticated  electronic  equipment.  In
fiscal 1996,  most of Elexsys' net sales were  attributable  to printed  circuit
boards (including  multilayers) and backpanels assemblies.  However, the Company
continues to see an increase in demand for subsystem assemblies, and the Company
expects this business to continue to grow.

         Custom  designed  backpanels are assemblies of stamped and plated pins,
plastic housings and other components on multilayer or two-sided printed circuit
boards.  Backpanels  are used in  electronic  systems  to  distribute  power and
ground, and to connect printed circuit boards which plug into the backpanel with
other printed circuit boards, power supplies,  and other circuit elements.  They
also  are  used  to  transfer  information  into  and  out  of  the  system.  As
semiconductor  speeds have  increased and design  requirements  have become more
stringent, backpanel complexity has increased significantly, often requiring the
use of large  multilayer  printed  circuit boards of six through 32 layers.  The
Company  manufactures  backpanels with up to 32 layers, .300 inches thick, and 2
feet by 3 feet in  size.  Elexsys  has  recently  added a  complete,  fine-pitch
surface mount technology  ("SMT") assembly  operation to its backpanel  assembly
capabilities,  satisfying the emerging  technology of a combination of press-fit
connectors and active components on the same platform.  SMT allows components to
be placed on both sides of the printed  circuit board,  thereby  permitting even
greater density.

         Multilayer  printed circuit boards consist of three or more layers of a
printed circuit board laminated  together and  interconnected  by plated-through
holes.  Printed  circuit boards consist of metallic  interconnecting  paths on a
non-conductive  material,  typically laminated epoxy glass. Holes drilled in the
laminated  and  plated-through  with  conductive  material  from one  surface to
another, called plated-through holes, are used to receive component leads and to
interconnect  the  circuit  layers.  On SMT  boards  electrical  components  are
soldered instead of being inserted into  through-holes.  "Buried vias" or "blind
vias" are very small  drilled  and plated  holes  which  join the  circuitry  on
adjacent  layers within the board,  but which do not connect the surfaces of the
board.  Multilayer boards increase packaging  density,  improve power and ground
distribution,  and permit the use of higher speed circuitry.  The development of
electronic  components with increased speed, higher performance and smaller size
has stimulated a demand for multilayer  printed circuit boards,  as they provide
increased reliability, density and complexity. Since even the most sophisticated
two-sided printed circuit boards cannot meet the requirements of today's circuit
designers for packaging density,  an increasing number of designs use multilayer
technology.

         Subsystems are power supplies and fans that are enclosed in card cages,
which are usually  fabricated  from steel or aluminum.  Elexsys has  developed a
highly sophisticated  mechanical design capability to provide its customers with
design services. This capability allows Elexsys to establish a close partnership
with its customers and gives Elexsys  visibility for potential  future  customer
requirements.

         Elexsys'  products  generally  tend to have a broad range of prices and
tend to be  manufactured  in relatively  small  quantities.  For printed circuit
boards,  prices are  dependent  on the size of the board,  the  complexity,  the
timing  of the  customer's  delivery  request  and  the  quantity  ordered.  For
backpanel  assemblies,  prices are dependent on the size of the  backpanel,  the
amount of components to be inserted and the quantity  ordered.  For  subsystems,
prices are  dependent on the material  content,  complexity  of assembly and the
quantity  ordered.  In general,  better  profit  margins have been obtained from
complex backpanel  assemblies,  subsystems and high density  multilayer  circuit
boards than from less advanced printed circuit boards and backpanel assemblies.

Manufacturing capabilities and services

         Elexsys seeks to establish a relationship with customers by formulating
a "team" approach and by providing high quality, responsive, flexible design and
manufacturing capabilities and services. Elexsys offers:

Advanced Manufacturing Equipment:  Elexsys' concentration on complex, electronic
interconnect  products has  necessitated  a  substantial  capital  investment in
advanced   equipment  and  the  continued   introduction  of  new  manufacturing
processes.  Elexsys has  established  an  engineering  capability  to select and
implement  the  latest  manufacturing  technology.  For  example,  the fine lead
spacing  or  "pitch"  in  SMT  requires  an  exacting   printed   circuit  board
manufacturing and assembly process. The Company uses numerically  controlled pin
installation  and  high  voltage  electrical  test  equipment  in its  backpanel
assembly manufacturing, and has developed a design and

<PAGE>



manufacturing  capability for controlled  impedance,  multilayer printed circuit
boards and backpanel  assemblies.  Elexsys' printed circuit board  manufacturing
operations require state-of-the-art equipment and processes.  Elexsys' equipment
portfolio  includes  a  computerized,  artwork  generation  system,  numerically
controlled  drillers and routers,  automatic  electroless  deposition lines, dry
film  photo-imaging  equipment,   automatic  gold  plating  lines,  computerized
electrical testers and automatic optical inspection readers.


Value Added Manufacturing:  Computer integrated  manufacturing  ("CIM") services
provided by Elexsys consist of developing  manufacturing  processes,  along with
tooling and test sequences for new products from product  designs  received from
its customers.  In addition,  Elexsys'  interconnect  products division provides
design and engineering services in the early stages of product development, thus
assuring that both mechanical and electrical  considerations are integrated into
a  subsystem  approach  to  achieve  a  manufacturable,  high  quality  and cost
effective product. Elexsys also evaluates customer designs for manufacturability
and, when appropriate,  recommends design changes to reduce  manufacturing costs
or lead  times or to  increase  manufacturing  yields as well as the  quality of
finished backpanel assemblies and mother boards.

Quick turnaround:  Elexsys' quick-turnaround  manufacturing capabilities enables
the Company to better  serve the needs of its  customers  for quick  response to
their  product  designs.  Shorter  customer  product life cycles and the need to
bring new products to market quickly have created a demand for small  quantities
of complex  multilayer  printed  circuit  boards  delivered in relatively  short
periods  of time,  typically  from three to ten days.  Sales of printed  circuit
boards produced in this manner  accounted for  approximately 8% of the Company's
printed  circuit  boards  sales  in  fiscal  1996.   After   engineering  of  an
interconnect  product is completed,  Elexsys has the  capability to  manufacture
prototype  or  pre-production  versions  of such  product on a  quick-turnaround
basis.  Elexsys  believes that the demand for engineering  and  quick-turnaround
prototype  and  pre-production  manufacturing  services  will  increase as OEMs'
products become more complex and as the customers'  product life cycles shorten.
The  Company's  continued  success  depends  upon its  ability to respond to the
evolving needs of customers in a timely manner.

Multilayer Printed Circuit Board Manufacturing:  Elexsys' ability to manufacture
printed circuit boards,  including  large,  complex  multilayer  printed circuit
boards  with  close   tolerances,   plated-through   hole  diameters  and  other
characteristics important to backpanel applications, is one of the major factors
that has  enabled  the  Company  to become an  important  supplier  of  complex,
technologically  advanced  backpanel  assemblies and multilayer  printed circuit
boards to the electronics industry.  The Company began manufacturing  multilayer
printed circuit boards in 1979 and in fiscal 1996 multilayer  sales  constituted
the majority of the Company's printed circuit board revenues.  Today, Elexsys is
capable of efficiently producing commercial quantities of printed circuit boards
with up to thirty-two layers and circuit track widths as narrow as four mils.

         The  manufacture  of complex  multilayer  interconnect  products  often
requires  the use of blind or buried  vias and  adherence  to strict  electrical
characteristics to maintain consistent, circuit transmission speeds (referred to
as "controlled impedance boards"). These technologies require adherence to rigid
lamination  and  etching  tolerances  and are  especially  critical  for printed
circuit  boards with ten or more layers.  The Company  specializes in multilayer
boards  requiring   controlled  impedance  and  has  developed  the  ability  to
manufacture large, thick multilayer  backpanel boards using Cyanate Ester BT and
GETEK(R) base materials for ultra, high-speed applications.  By concentrating on
the multilayer  segment of the printed  circuit  boards  market,  where quality,
technology  and  customer  service are more  important  than the market for less
complex boards, the Company believes it faces less direct competition.

         The  manufacture  of printed  circuit  boards  involves  several  steps
including  dry film imaging,  photoimageable  solder mask  processing,  computer
controlled  drilling and  routing,  automated  plating and process  controls and
achievement of controlled impedance.  Manufacture of printed circuit boards used
in backpanel assemblies requires specialized  expertise and equipment because of
the size of the  backpanel  relative  to other  printed  circuit  boards and the
closer-to-hole   diameter   tolerances  required  for  press-fit  pin  assembly.
Multilayer manufacturing involves the placement of multiple layers of electrical
circuitry  within a single,  printed  circuit boards or backpanel  expanding the
number of circuits and  components  that can be  contained  on the  interconnect
product.  The operating  speed of a system is increased by reducing the distance
that electrical signals must travel. To increase the density of the circuitry in
each layer,  OEMs reduced the width of the circuit  tracks,  placing them closer
together on the printed circuit board or backpanel. Interconnect products having
narrow, closely spaced circuit tracks are known as "fine line" products.


<PAGE>

Materials Procurement and Handling:  Materials procurement and handling services
provided by Elexsys include  planning,  purchasing and warehousing of electronic
components  and metal  housings used in  interconnect  products.  Elexsys uses a
variety of materials in the manufacture of its products,  including  copper clad
laminates,  dry film photo  resists,  connectors,  terminals  and pins.  Elexsys
participates  with  our  customers  on  various  types of  inventory  management
programs including, but not exclusive of, "dock to stock" and "just in time".

ISO 9002  Registration:  As of  September  30,  1996,  all plants  have ISO 9002
certification.  ISO 9002  certification,  a worldwide  standard for quality,  is
based  on  successful  implementation  of  quality  assurance  requirements  and
requires annual compliance audits conducted by an independent  quality assessor.
The current ISO 9002 certification for most plants expires November 30, 1997.

Raw materials

         Elexsys'  policy  is to  maintain  more  than one  supply  source  when
practical,  however,  assembly  components for major OEM contracts are sometimes
obtained  from a single  source.  However,  Elexsys  believes  it  could  obtain
assembly  components  from another source at competitive  prices.  The Company's
requirements for laminate and glass materials could be adversely affected if the
supplier  experienced  shortages or  availability of certain raw materials which
has occurred from time to time in the past. While not material in the past, such
shortages,  if they persisted long enough,  could have a material adverse effect
on the Company's business.

Competition

         The market for printed  circuit  boards,  backpanels  and subsystems is
very competitive.  Competition is principally  based on price,  product quality,
technical capabilities and the ability to deliver product on schedule.  Both the
price of and the demand for most products are  sensitive to economic  conditions
and certain segments of the electronics industry have experienced and may in the
future experience reduced demand for their products.

         The technology  used in the  manufacture of  double-side  boards,  most
multilayer  boards,  backpanel  press-fit  assembly,   surface  mount  backpanel
assemblies,  and subsystems is widely available and there are  approximately 700
manufacturers  of  these  products.  The  Company  believes  only  a  few  dozen
manufacturers  of boards  and  subsystems  in the United  States  are  presently
producing  high  technology,   multilayer  printed  circuit  boards,   backpanel
assemblies and subsystems in commercial quantities. Elexsys' competitors include
both producers  which  primarily sell to others and OEMs that produce boards for
their  own use.  Many of these  firms  are  larger  than  the  Company  and have
significantly  greater  financial,  marketing and other resources.  Recently,  a
leveraged  buy-out firm acquired three major,  printed circuit board  companies.
The impact on future  results is unknown  at this  time;  however,  the  Company
expects  that  pricing of circuit  boards may be  impacted  negatively  by these
acquisitions.

         The  Company  believes  the  trend  of  outsourcing   manufacturing  of
backpanels and subsystem  assemblies by OEMs will continue.  However, the market
is very competitive  with more printed circuit board operations  establishing or
acquiring  facilities to manufacture  backpanels and subsystem  assemblies.  The
Company believes its engineering and manufacturing  expertise will be sufficient
to counteract current competition.

Risk Factors

         An  investment  in securities of Elexsys  involves  certain  risks.  In
evaluating Elexsys and the Company's business, prospective investors should give
careful  consideration  to the  factors  discussed  below.,  in  addition to the
information  provided  elsewhere in the Annual  Report on Form 10-K and in other
documents  filed with the  Securities  and Exchange  Commission.  Except for the
historical  information  contained in this  document,  the  discussions  in this
document   contains   forward-looking   statements   that   involve   risks  and
uncertainties.  The actual future results of the Company could differ materially
from these  forward-looking  statements.  An investor should carefully  evaluate
these  forward-looking  statements before making an investment in the securities
of Elexsys.


<PAGE>





         Some  of  Elexsys'  customers  have  their  own  captive  manufacturing
operations which produce some of their  requirements for printed circuit boards,
backpanels  and  subsystems  manufactured  by  the  Company.  There  is a  risk,
particularly  during times of lower  demand when  manufacturing  facilities  are
operating at less than full capacity,  that some of Elexsys' customers will make
greater use of their own  facilities  rather  than  purchase  from the  Company.
During  times of lower  demand,  the Company may not be price  competitive  with
captive operations,  among other reasons, because of the substantial fixed costs
already borne by Elexsys' customers with respect to such operations.

         There are risks that other  customers will develop their own "in-house"
capabilities,  that additional  competitors  will acquire the ability to compete
against the products and services offered by the Company, and that foreign firms
will increase  their share of the United  States  market.  Additionally,  future
technological  advances in electronics  could render the printed circuit boards,
backpanels  or  subsystems  manufactured  by  Elexsys  less  significant  to the
electronics industry.

         The Company's  customers  generally order product by purchase order and
not by long term supply  contracts  that  irrevocably  commit the  customers  to
purchases over long periods. A customer could shift production to another vendor
or itself  without  extensive  advance  notice to Elexsys.  Thus,  the loss of a
significant  customer  could  result  in  Elexsys  not being  able to  identify,
qualify, and commence production for new customers in sufficient time to avoid a
reduction in revenue or  profitability.  Generally,  to establish a relationship
with a new customer requires an extensive and lengthy  qualification process and
there are no assurances the production  volumes with the new customer will match
or exceed production volumes with the lost customer. Indeed, no assurance can be
had that Elexsys would even be able to identify new customers at all.

         If any of the adverse events  described in this section or elsewhere in
this  Form  10-K  occurred,  the  results  of  operations  of  Elexsys  could be
materially adversely affected.

Compliance with Environmental Requirements

         The Company's manufacturing processes utilize substantial quantities of
chemicals as well as substantial  quantities of water. The Company is subject to
and believes it is in  substantial  compliance  with federal,  state,  and local
environmental  laws and  regulations  regarding  air,  water,  and land use, the
generation,  use, storage,  and disposal of hazardous  materials and wastes, and
the  operation  and  closure  of  manufacturing  facilities  at which  hazardous
materials are used or hazardous wastes are generated. The Company has had no new
environmental matters in the current fiscal year.

         With respect to previously  reported  matters,  the Company is aware of
contamination  of soil and ground water  (principally by metals and solvents) at
two of its former facilities in Northern California. At both of these facilities
the soil has been  remediated  and the  properties  have been  returned to their
owners.  One of the  facilities  is adjacent to an existing  State of California
administered  Superfund  site;  as a result,  it could  become part of a related
State of California administered regional ground water investigation,  although,
the Company does not believe that it bears any  responsibility  for that matter.
At another former facility in Southern California, the Company conducted limited
ground water sampling in connection with potential sale of the property, and low
concentrations  of  solvents  were  detected.   Notification  was  made  to  the
appropriate  agencies. At this time, it is not possible to determine whether any
response actions will need to be taken; and accordingly,  the likely future cost
to the Company is not yet reasonably estimable.

         The  Company is further  aware of soil and ground  water  contamination
(principally  by metals and solvents) at two currently used  facilities,  one in
Northern California and one in Southern  California.  At its Northern California
facility,  the  Company  is  indemnified  by the former  property  owner who has
acknowledged his obligation.  At its Southern California facility, the Company's
preliminary  estimate of remedial  costs,  expected to be incurred  over five to
seven years, ranges from approximately $880,000 to $1,480,000 (including between
approximately  $300,000 and $400,000  estimated  capital  expenditures for waste
treatment  equipment  acquisitions  and  installation  costs).  At its  Northern
California facility, the Company has implemented and has been in compliance with
recently   reduced   discharge  limits  for  industrial  waste  water  discharge
containing heavy metals.


<PAGE>





         As of September  30, 1996,  the Company  believes it has  appropriately
recorded all known costs related to environmental matters, including the minimum
amounts where the estimated costs are within a range, and are primarily  accrued
in other  current  liabilities.  However,  actual future  environmental  related
expenditures are subject to numerous  uncertainties,  including the discovery of
additional  environmental concerns,  further development of cost estimates,  new
and changing  environmental  law and  requirements,  or new  interpretations  of
existing  laws and  requirements.  Accordingly,  there can be no assurance  that
future environmental  related expenditures will not exceed the Company's current
estimates or that they will not have a materially adverse effect.

Employees

         At  September  30,  1996,  the Company had 1,190  full-time  employees,
including 1,068 involved in manufacturing,  quality control, product development
and testing. The remainder are in sales, marketing, administration and executive
positions.  None of Elexsys'  employees  is covered by a  collective  bargaining
agreement. The Company considers its relations with its employees to be good.

Executive Officers of the Registrant

         The executive  officers of the Company as of November 30, 1996,  are as
follows:

Name                       Age                 Position with the Company
----                       ---                 ---------------------------
Milan Mandaric             58                  Chairman of the Board and
                                               Chief Executive Officer

W. F. "Barry" Hegarty      45                  President and
                                               Chief Operating Officer

Michael S. Shimada         46                  Vice President, Finance,
                                               Chief Financial Officer and
                                               Secretary

Michael J. Giggey          38                  Vice President of Sales
                                               and Marketing

         Mr. Mandaric was appointed  Chairman of the Board on June 30, 1994. Mr.
Mandaric  became  Chief  Executive  Officer  October 3,  1994.  Prior to joining
Elexsys,  Mr.  Mandaric  founded Lika  Corporation,  a  manufacturer  of circuit
boards,  in the  early  1970's  and  served  as its CEO  until its sale to Tandy
Corporation in 1980. He later founded  Sanmina  Corporation,  a manufacturer  of
high technology multilayer printed circuit boards and backpanels,  and served as
its President and Chairman  through July 1989 and as a director  until  February
1994. He also served as Chairman of Senses  International,  Inc., a designer and
manufacturer of wireless security systems, from July 1989 to May 1995.

         Mr. Hegarty joined the Company in 1995 as Chief  Operating  Officer and
was  appointed  President  of the  Company  in  January  1996.  Prior to joining
Elexsys,  Mr.  Hegarty  was Vice  President  of Sales and  Marketing  at Sanmina
Corporation  from 1987 to 1995.  From 1979 to 1987,  Mr. Hegarty was employed at
Kollmorgen  Corporation.  He was  National  Sales  Manager and  Product  General
Manager for the Additive  Products  Division in New York from 1983 to 1987,  and
Senior Finance Manager for the Industrial Drives Division in Europe from 1979 to
1983.

         Mr.  Shimada  served as  Controller  of the  Company  from July 1983 to
January 1990; as Vice President, Finance from January 1990 to December 1993; and
as Chief  Financial  Officer from  February  1993 to December  1993. In December
1993, Mr. Shimada resigned from the Company. In March 1994, Mr. Shimada returned
to the  Company as Vice  President,  Finance  and Chief  Financial  Officer.  In
October 1994, Mr. Shimada was appointed Secretary of the Company.

<PAGE>


         Mr.  Giggey has been Vice  President  of Sales for the  United  States,
Canada and Europe since January 1996. He joined Elexsys in November 1985 and has
held a number of  positions,  including  Vice  President of  Backpanel  Assembly
Sales,  Regional Sales Manager and National  Account  Manager.  Previously,  Mr.
Giggey worked for Hadco, where he held various sales positions.

Proprietary Techniques

         The Company has developed expertise and techniques which it uses in the
manufacture of circuit boards, backpanels and subsystems. Generally, the Company
relies on common law trade secret protection and on  confidentiality  agreements
with its employees to protect its expertise and techniques. The Company owns but
one patent  and  believes  that  patents  have not  historically  constituted  a
significant form of intellectual property right in its industry.

Backlog

         At  September  30,  1996,  the Company  had a backlog of  approximately
$28,267,000  as compared to  approximately  $26,414,000  at September  30, 1995.
Backlog is  comprised of orders  believed to be firm for  products  which have a
firm scheduled shipment date during the next twelve months. However, some orders
in the backlog may be canceled  under  certain  conditions.  The majority of the
backlog is scheduled to be shipped within 120 days.

Subsequent events

         On November 26, 1996,  the Company  completed a transaction to purchase
the property in Nashua, New Hampshire for approximately  $2,350,000.  The square
footage of the property is  approximately  70,000  square feet.  The Company has
received tentative approval for a tax exempt private activity bond financing, at
a substantially  lower interest rate, from the State of New Hampshire to finance
this transaction.

         On December 6, 1996,  the Company  reached an agreement,  in principal,
with Sanwa Bank for a line of credit of $20 million  consisting of a $13 million
working  capital  and a $7 million  term loan line of credit.  The  Company  has
informed the previous lender that it is terminating the current line of credit.

         On December 7, 1996,  Peter Jonas and Roland  Matthews both resigned as
Directors,  effective at the end of their current term. Both terms expire at the
1997 shareholder's meeting scheduled for January 29, 1997.


ITEM 2. PROPERTIES.

         Elexsys currently leases or owns eight production  facilities,  a sales
office in Raleigh,  North Carolina,  and an information systems facility located
in Irvine, California. The Company believes that its present facilities are well
suited to its current operations and are in good repair.


<PAGE>

<TABLE>

         The following table lists the production facilities of the Company:
<CAPTION>
                                                                     Owned                          Lease
                                  No. of          Square            Leased          Lease           Renewal
Location                          Locations        Feet             or Both         Expiration      Option
-------------------------------   ------------    ------------    -------------   -------------   -----------
<S>                                         <C>        <C>           <C>              <C>            <C>
Irvine, California                          1          50,000        Leased           1999            No
Chatsworth, California (1)                  1          31,000        Owned
Mountain View, California                   1          50,000        Leased           1999           Yes
San Jose, California                        1          75,000        Leased           2003           Yes
Plano, Texas                                1          31,000        Leased           2002           Yes
Peterborough, England                       1          31,000        Leased           1998           Yes
Santa Ana, California (1)                   1          30,000        Owned
Nashua, New Hampshire                       1          70,000        Owned
Fremont, California                         1          30,000        Leased           1997           Yes

<FN>
(1) This table includes  facilities which were closed during previous years. The
facility in Chatsworth  currently  has a tenant who is currently  paying rent to
the  Company.  The facility in Santa Ana is  currently  vacant.  The facility in
Chatsworth and the facility in Santa Ana are currently held for sale.
</FN>
</TABLE>


ITEM 3. LEGAL PROCEEDINGS.

         On  November  8,  1995,  a  former  executive  of the  Company  filed a
complaint in the Superior Court of California,  County of Santa Clara,  alleging
negligent  misrepresentation  concerning  certain  aspects  of  the  plaintiff's
severance agreement  arrangement with the Company. The amount of damages claimed
is approximately  $800,000, plus unspecified punitive damages. The complaint has
been dismissed.


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

         None during the fiscal quarter ended September 30, 1996.


                                     PART II

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

         The  information  appearing  under the caption  "Price  Range of Common
Stock"  which  appears  on  page  28  of  the  registrant's   Annual  Report  to
Stockholders  for the fiscal year ended  September  30,  1996 (the "1996  Annual
Report"), is hereby incorporated by reference.

ITEM 6. SELECTED FINANCIAL DATA

         The information  appearing under the caption "Selected  Financial Data"
which appears on page 13 of the 1996 Annual Report,  is hereby  incorporated  by
reference.

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

         The information  appearing under the caption  "Management's  Discussion
and Analysis of Financial  Condition and Results of Operations" which appears on
pages 8  through  12 of the  1996  Annual  Report,  is  hereby  incorporated  by
reference.


<PAGE>


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The  information  appearing  on pages 14 through 28 of the 1996  Annual
Report, is hereby incorporated by reference.

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

         None

                                    Part III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         There is  hereby  incorporated  herein  by  reference  the  information
appearing  under the captions  "Election of  Directors",  "Board  Committees and
Meetings" and "Compliance  with the Reporting  Requirements of Section 16(a)" of
the 1997  Proxy  Statement.  Information  regarding  executive  officers  of the
Company is  included  in Item 1 of Part I hereof  under the  caption  "Executive
Officers of the Registrant" and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

         There is  hereby  incorporated  herein  by  reference  the  information
appearing  under  the  captions   "Executive   Compensation"   and  "Performance
Measurement Comparison" of the 1997 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         There is  hereby  incorporated  herein  by  reference  the  information
appearing under the caption "Security Ownership of Certain Beneficial Owners and
Management" of the 1997 Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         There is  hereby  incorporated  herein  by  reference  the  information
appearing under the caption "Certain Transactions" of the 1997 Proxy Statement.


<PAGE>



                                     PART IV

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

(a) Financial Statements, Financial Statement Schedules, and Exhibits

          1.       Independent auditors' report
                   The  following  financial   statements  are  incorporated  by
                   reference under Item 8. above:  
                   -Consolidated  balance  sheets as of  September  30, 1996 and
                   1995;
                   -Consolidated  statements of operations for each of the three
                   years in the period ended September 30, 1996;
                   -Consolidated  statements of stockholders' equity for each of
                   the three years in the period ended September 30, 1996;
                   -Consolidated  statements of cash flows for each of the three
                   years in the period ended September 30, 1996;

          2.       Financial  statement  schedules:  Schedule  II-Valuation  and
                   Qualifying  Accounts and Reserves.  
                   All other  schedules have been omitted since the  information
                   therein is not required to be included herein, is not present
                   in amounts sufficient to require submission,  or the required
                   information  is  included  in  the   consolidated   financial
                   statements including the notes thereto.

         3.       Exhibits

  Exhibit
  Number         Description of Exhibit
  --------       ----------------------
     3.1*        Amended  and  Restated  Certificate  of  Incorporation  of  the
                 Company  (filed  as  Exhibit  3.1  to the  Form  10-Q  for  the
                 quarterly period ended July 1, 1995).

     3.2*        Amended and  Restated  Bylaws by the Company  (filed as Exhibit
                 3.2 to the Form 10-Q for the  quarterly  period  ended  July 1,
                 1995).

     4.1*        Specimen Common Stock  Certificate of the Registrant  (filed as
                 Exhibit 4.1 to the  Registration  Statement  on Form S-2 of the
                 Registrant, Registration No. 33-11754 (the "Form S-2")).

     4.2*        Form of Indenture,  dated as of February 15, 1987,  and Form of
                 Specimen  of 5 1/2%  Convertible  Subordinated  Debentures  due
                 March 1, 2012 (filed as Exhibit 4.2 to the Form S-2).

     4.3*        Registration Rights Agreement,  dated as of May 11, 1987 (filed
                 as  Exhibit  4 to  the  Current  Report  on  Form  8-K  of  the
                 Registrant, dated May 11, 1987).

    10.1*        Lease,  dated August 13,  1968,  between  Birtcher  Pacific and
                 Pritec  Corporation  (formerly  known as  "Diceon  Electronics,
                 Inc.") (Filed as Exhibit 10.1 to the Registration  Statement on
                 Form S-1 of the Registrant, Registration No. 2-86316 (the "Form
                 S-1")).

    10.2*        Lease,  dated February 1, 1984,  between  Toussaint Limited and
                 Diceon  Electronics,  Inc., a California  corporation  ("Diceon
                 California")  (filed as Exhibit  10-2 to the  Annual  Report on
                 Form 10-K of the  Registrant  for the year ended  September 30,
                 1989 (the "1989 Form 10-K")).

    10.3*        Option Agreement and Limited Right of First Offer,  dated as of
                 February  1, 1984 by and between  Toussaint  Limited and Diceon
                 California (filed as Exhibit 10.3 to the 1989 Form 10-K).

<PAGE>

    10.4*        Lease, dated November 28, 1986, between Kollmorgen  Corporation
                 and Elexsys California (filed as Exhibit 10.6 to the Form S-2).

    10.5*+       Employee Stock Option Plan (1983) (filed as Exhibit 10.9 to the
                 Form S-1).

    10.6*+       First  Amendment to Employee Stock Option Plan (1983) (filed as
                 Exhibit 10.9.1 to the Form S-1).

    10.7*+       Second Amendment to Employee Stock Option Plan (1983) (filed as
                 Exhibit 10.8 to the 1990 Form 10-K).

    10.8*+       Third  Amendment to Employee Stock Option Plan (1983) (filed as
                 Exhibit  10.10  to  the  Annual  Report  on  Form  10-K  of the
                 Registrant  for the year ended  September  30,  1988 (the "1988
                 Form 10-K")).

    10.9*+       Fourth Amendment to Employee Stock Option Plan (1983) (filed as
                 Exhibit 10.10 to the 1990 Form 10-K).

    10.10*+      Fifth  Amendment to Employee Stock Option Plan (1983) (filed as
                 Exhibit 10.12 to the 1992 Form 10-K).

    10.11*+      Sixth  Amendment to Employee Stock Option Plan (1983) (filed as
                 Exhibit 10.12 to the 1992 Form 10-K).

    10.12*+      Form of  Incentive  Stock  Option  Agreement  (filed as Exhibit
                 10.12 to the 1988 Form 10-K).

    10.13*+      Non-Qualified  Stock Option Plan (1984) (filed as Exhibit 10.12
                 to the 1990 Form 10-K).

    10.14*+      First  Amendment  to  Non-Qualified  Stock  Option  Plan (1984)
                 (filed as Exhibit 10.13 to the 1990 Form 10-K).

    10.15*+      Second  Amendment  to  Non-Qualified  Stock  Option Plan (1984)
                 (filed as Exhibit 10.14 to the 1991 Form 10-K).

    10.16*+      Third  Amendment  to  Non-Qualified  Stock  Option  Plan (1984)
                 (filed as Exhibit 10.17 to the 1992 Form 10-K).

    10.17*+      Form of Non-Qualified  Stock Option Agreement (filed as Exhibit
                 10.15 to the 1988 Form 10-K).

    10.18*+      Profit  Sharing  Bonus Plan  (incorporated  by reference to the
                 section captioned "Executive Compensation and Other Information
                 - Bonus Plan"  included in the  Registrant's  Definitive  Proxy
                 Statement, dated November 27, 1991).

    10.19*+      Form of  Indemnification  Agreement  (filed as Exhibit 10.14 to
                 the Form S-2).

    10.20*+      Non-Qualified Stock Option Agreement,  dated November 17, 1989,
                 between Sherwin L. Samuels and the Registrant (filed as Exhibit
                 10.21 to the 1988 Form 10-K).

    10.21*+      Form of Executive Compensation Agreement between Registrant and
                 salaried  officers or key employees  (filed as Exhibit 10.22 to
                 the 1988 Form 10-K).

    10.22*+      Non-Qualified Stock Option Agreement,  dated November 15, 1990,
                 between Sherwin L. Samuels and the Registrant (filed as Exhibit
                 10.22 to the 1990 Form 10-K).

    10.23*       Purchase and Sale  Agreement,  dated  November 28, 1989, by and
                 among Symtron Corp., NTI, and John Davila (filed as Exhibit 2.1
                 to the  Current  Report  on Form 8-K of the  Registrant,  dated
                 December 12, 1989 (the "1989 Current Report")).
<PAGE>

    10.24*       Lease for 1625  Plymouth  Avenue,  Mountain  View,  California,
                 dated  November 28, 1989,  by and among Pritec  Corporation,  a
                 California  corporation  ("Lessee"),  and John Davila and Liane
                 Davila  individually and as Co-Trustees of the Davila Revocable
                 Living Trust, dated March 13, 1989 (collectively, the "Lessor")
                 (filed as Exhibit 2.2 to the 1989 Current Report).

    10.25*       Lease  for 2400  Michelson  Drive,  Irvine,  California,  dated
                 October 10, 1991,  by and among  Elexsys  International,  Inc.,
                 formerly Diceon Electronics,  Inc., and Fujita Corporation, USA
                 (filed as Exhibit 10.26 to the 1991 Form 10-K).

    10.26*       Lease  for 2500  Michelson  Drive,  Irvine,  California,  dated
                 November 1, 1987, by and among Elexsys International,  Inc. and
                 Consolidated  American Properties IV (filed as Exhibit 10.28 to
                 the 1993 Form 10-K).

    10.27*       First  Amendment  to Lease for 2500  Michelson  Drive,  Irvine,
                 California,   dated   October   1992,   by  and  among  Elexsys
                 International,  Inc.  ("Lessee"),  and The Josephine Troy Trust
                 and The  Hausman  Family  Trust  (collectively,  the  "Lessor")
                 (successor to  Consolidated  American  Properties IV) (filed as
                 Exhibit 10.29 to the 1993 Form 10-K).

    10.28*       Lease for 2400 Michelson Drive, Irvine, California, dated April
                 12, 1993, by and among Elexsys  International,  Inc. and Fujita
                 California Partners II (filed as Exhibit 10.31 to the 1993 Form
                 10-K).

    10.29*+      Severance  Arrangements   (incorporated  by  reference  to  the
                 section captioned "Compensation and Other Information" included
                 in the Registrant's Definitive Proxy Statement,  dated December
                 15, 1993.

    10.30*+      Severance Arrangement by and among Elexsys International,  Inc.
                 and certain key executives as set forth in Exhibit 10.32 (filed
                 as Exhibit 10.33 to the 1993 Form 10-K).

    10.31*+      Non-Qualified  Stock  Option  Agreement,  dated  as of March 9,
                 1993, by and between C. Stephen  Mansfield  and the  Registrant
                 (filed as Exhibit 10.34 to the 1993 Form 10-K).

    10.32*       Securities  Exchange  Agreement  dated as of June 7,  1994,  as
                 amended by First  Amendment to  Securities  Exchange  Agreement
                 dated as of June 30, 1994,  between Mr. Milan  Mandaric and the
                 Registrant,  Inc. (filed as Exhibits 5-1 and 5-2 to the Current
                 Report on Form 8-K dated June 30, 1994).

    10.33*       Loan and Security  Agreement  dated December 17, 1993,  between
                 Foothill Capital Corporation, a California corporation, and the
                 Registrant  (filed  as  Exhibit  10-1 to the Form  10-Q for the
                 quarterly period ended January 1, 1994).

    10.34*+      1994  Incentive  Stock Option Plan and  Incentive  Stock Option
                 Agreement  dated  April 14,  1994  (filed as  Exhibits  4.1 and
                 Exhibits 4.2 to Form S-8 dated May 18, 1994).

    10.35*+      Non-Qualified  Stock  Option  Agreement,  dated  as of July 14,
                 1994, by and between Charles Handley and the Registrant  (filed
                 as Exhibit 10.38 to the 1994 Form 10-K).

    10.36*       Lease for 1188 Bordeaux  Drive,  Sunnyvale,  California,  dated
                 October 24, 1994, by and among Symtron  Corporation and Redtree
                 Properties,  LP (filed as Exhibit 10.1 to the Form 10-Q for the
                 quarterly period ended December 31, 1994).

    10.37*       Lease for 2609  Technology  Drive,  Plano,  Texas 75074,  dated
                 March 1995  between  Elexsys  International,  Inc. and Property
                 Reserve,  Inc.  (filed as Exhibit 10.2 to the Form 10-Q for the
                 quarterly period ended April 1, 1995).

    10.38*       Asset Purchase  Agreement  dated April 28, 1995 between Elexsys
                 International,  Inc. and Technet Ltd, UK (filed as Exhibit 10.3
                 to the Form 10-Q for the quarterly period ended April 1, 1995).
<PAGE>

    10.39*       Securities  Exchange  Agreement  dated  as of March  29,  1995,
                 between Mr. Milan Mandaric and the  Registrant,  Inc. (filed as
                 Exhibits 10-1 to the Current  Report on Form 8-K dated April 4,
                 1995).

    10.40+       1995 Stock Option Plan.

    10.41+       Form of Incentive  Stock Option  Agreement under the 1995 Stock
                 Option Plan.

    10.42+       Form of  Nonstatutory  Stock  Option  Agreement  under the 1995
                 Stock Option Plan.

    10.43+       Employee Stock Purchase Plan.

    10.44+       Non-Employee Directors' Stock Option Plan.

    10.45        Lease for 4405  Fortran  Court,  San Jose,  CA, dated March 11,
                 1996 between  Elexsys  International  and  SouthBay/Fortran,  a
                 California Limited Partnership.

    11           Computation of Earnings Per Common and Common  Equivalent Share
                 for the Fiscal Years Ended September 30, 1996, 1995, and 1994.

    13           Annual  Report  to  Stockholders  for  the  Fiscal  Year  Ended
                 September 30, 1996.

    21           List of subsidiaries of the Registrant.

    23           Consent of  Deloitte & Touche LLP dated  December  18,  1996 to
                 incorporation  by  reference  in  Registration  Statements  No.
                 33-21826,  No.  33-02384  and  No.  33-58033  on  Form  S-8 and
                 Registration Statement No. 33-22598 on Form S-3.

    27           Financial Data Schedule

(b)      Reports on Form 8-K
                None



--------------------------------------------------------------------------------
* Incorporated by reference.
+ Management or compensatory plan, contract or arrangement


<PAGE>


                                   SIGNATURES

         In accordance  with Section 13 or 15(d) of the Securities  Exchange Act
of 1934,  the  registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

ELEXSYS INTERNATIONAL, INC.
          (Registrant)


By: /s/ Milan Mandaric                                         December 23, 1996
--------------------------------------------------             -----------------
Milan Mandaric                                                 Date
Chairman of the Board and Chief Executive Officer


         In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following  persons on behalf of the  registrant  and in
the capacities and on the dates indicated.



/s/ Milan Mandaric                                             December 23, 1996
--------------------------------------------------             -----------------
Milan Mandaric                                                 Date
Chairman of the Board and Chief Executive Officer
  (Principal Executive Officer)


/s/ Peter S Jonas                                              December 23, 1996
--------------------------------------------------             -----------------
Peter S. Jonas                                                 Date
Director


/s/ Roland G. Matthews                                         December 23, 1996
--------------------------------------------------             -----------------
Roland G. Matthews                                             Date
Director



/s/ Alan Mendelson                                             December 23, 1996
--------------------------------------------------             -----------------
Alan Mendelson                                                 Date
Director


/s/ Brad Jeffries                                              December 23, 1996
--------------------------------------------------             -----------------
Bradford Jeffries                                              Date
Director


/s/ Roger W. Johnson                                           December 23, 1996
--------------------------------------------------             -----------------
Roger W. Johnson                                               Date
Director


 /s/ Michael Shimada                                           December 23, 1996
--------------------------------------------------             -----------------
Michael S. Shimada                                             Date
Vice President of Finance,
  Chief Financial Officer and
  Secretary  (Principal Financial
  and Accounting Officer)


<PAGE>


INDEPENDENT AUDITORS' REPORT



To Elexsys International, Inc.:


We have audited the consolidated  financial statements of Elexsys International,
Inc., formerly Diceon Electronics, Inc. and its subsidiaries as of September 30,
1996 and 1995, and for each of the three years in the period ended September 30,
1996,  and have issued our report  thereon dated October 18, 1996  (November 26,
1996  as to the  fifth  paragraph  of  note  14);  such  consolidated  financial
statements  and report are included in your 1996 Annual  Report to  Stockholders
and are incorporated herein by reference. Our audits also included the financial
statement  schedule of Elexsys  International,  Inc.,  listed in Item 14.  These
financial statement schedule is the responsibility of the Company's  management.
Our responsibility is to express an opinion based on our audits. In our opinion,
such a financial  statement  schedule,  when considered in relation to the basic
financial  statements  taken  as a  whole,  presents  fairly,  in  all  material
respects, the information set forth therein.



 Deloitte & Touche LLP (Sig)


Costa Mesa, California
October 18, 1996