<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549
                                   __________

                                   FORM 10-Q

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

                  For the Quarterly Period 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:  0-25560

                            ACT Manufacturing, Inc.
                            -----------------------
             (Exact name of registrant as specified in its charter)

        Massachusetts                                 04-2777507
(State or other jurisdiction of                 (IRS Employer ID NO.)
incorporation or organization)   
                                 
       108 Forest Avenue                                01749
      Hudson, Massachusetts                             -----
      ---------------------                          (Zip Code)
      (Address of principal       
        executive offices)    
                        

Registrant's telephone number, including area code:  (508) 562-1200
                                                     --------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.


              Common Stock                      9,049,746 Shares
             --------------             ------------------------------
                (Class)                 (Outstanding on August 8, 1997)
           
                                        
<PAGE>
 
                            ACT Manufacturing, Inc.

                               INDEX TO FORM 10-Q

 
 
PART I.  FINANCIAL INFORMATION

ITEM 1 - Financial Statements:
----------------------------------------
 
Condensed Consolidated Statements of Income for the three and six months ended
June 30, 1997 and 1996.
 
Condensed Consolidated Balance Sheets as of June 30, 1997 and December 31, 1996.
 
Condensed Consolidated Statements of Cash Flows for the six months ended
June 30, 1997 and 1996.
 
Notes to Financial Statements.

ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
-------------

PART II.  OTHER INFORMATION
 
ITEM 2 - Changes in Securities
------------------------------

ITEM 4 - Submission of Matters to a Vote of Security-Holders
------------------------------------------------------------

ITEM 6 - Exhibits and Reports on Form  8-K
------------------------------------------
 
Signatures
 
Exhibit Index
 
Exhibit 3
 
Exhibit 10
 
Exhibit 11
 
Exhibit 27
 
<PAGE>
 
PART I.  FINANCIAL INFORMATION

                            ACT MANUFACTURING, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 (unaudited - in thousands, except share data)

<TABLE>
<CAPTION>
                                        THREE MONTHS ENDED JUNE 30,
                                        --------------------------    
                                             1997        1996
                                          ----------  ----------
 
<S>                                       <C>         <C>
Net sales                                 $   72,364  $   52,155
Cost of goods sold                            62,868      45,627
                                          ----------  ----------
Gross profit                                   9,496       6,528
 
Selling, general and administrative 
expenses                                       2,922       2,396
                                          ----------  ----------
Operating income                               6,574       4,132
 
Interest and other expense, net                  522         377
                                          ----------  ----------
Income before provision for income taxes       6,052       3,755
 
Provision for income taxes                     2,421       1,502
                                          ----------  ----------
Net income                                $    3,631  $    2,253
                                          ==========  ==========
 
Net income per common share (Note 4)            $.39        $.25
Weighted average shares outstanding        9,349,251   9,010,984
 
 
                                        SIX MONTHS ENDED JUNE 30,
                                        -------------------------
                                            1997          1996
                                         ----------    ----------
 
Net sales                                 $  142,613  $   92,671
Cost of goods sold                           124,076      81,375
                                          ----------  ----------
Gross profit                                  18,537      11,296
 
Selling, general and administrative 
expenses                                       5,813       4,466
                                          ----------  ----------
Operating income                              12,724       6,830
 
Interest and other expense, net                1,070         372
                                          ----------  ----------
Income before provision for income taxes      11,654       6,458
 
Provision for income taxes                     4,661       2,583
                                          ----------  ----------
Net income                                $    6,993  $    3,875
                                          ==========  ==========
 
Net income per common share (Note 4)            $.75        $.43
Weighted average shares outstanding        9,317,872   8,967,163
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
 
                            ACT MANUFACTURING, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)


<TABLE> 
<CAPTION> 
                                          UNAUDITED
                                        JUNE 30, 1997   DECEMBER 31, 1996
                                        -------------   -----------------
<S>                                       <C>           <C>
               ASSETS
 
CURRENT ASSETS:
   Cash and cash equivalents               $  5,231         $  5,054
   Accounts receivable trade, net            49,732           41,475
   Inventories (Note 3)                      49,303           53,994
   Deferred taxes                             1,409            1,487
   Prepaid expenses and other assets            883              489
                                           --------         --------
       Total current assets                 106,558          102,499

PROPERTY AND EQUIPMENT-Net                    7,543            4,635
                                                        
OTHER ASSETS (Note 2)                         6,601              461
                                           --------         --------
                                                        
TOTAL                                      $120,702         $107,595
                                           ========         ========
                                                        
         LIABILITIES AND                                
       STOCKHOLDERS' EQUITY                             

CURRENT LIABILITIES:
   Note payable - bank                     $  1,937         $      -
   Current portion of long-term debt            438               38
   Accounts payable                          30,099           26,154
   Accrued expenses                           4,793            5,216
                                           --------         --------
        Total current liabilities            37,267           31,408
                                           --------         --------
                                                        
LONG-TERM DEBT - Less current portion        23,646           29,055
 (Note 5)                                  --------         --------
                                                        
STOCKHOLDERS' EQUITY:
   Common stock (Note 6)                         90               88
   Additional paid-in capital                38,862           33,201
   Retained earnings                         20,837           13,843
                                           --------         --------
       Total stockholders' equity            59,789           47,132
                                           --------         --------
                                                        
TOTAL                                      $120,702         $107,595
                                           ========         ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
 
                            ACT MANUFACTURING, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (unaudited, in thousands)
<TABLE>
<CAPTION>
 
                                                             SIX MONTHS ENDED JUNE 30,
                                                            ---------------------------
                                                                1997           1996
                                                            -------------  ------------
<S>                                                         <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income..............................................     $   6,993      $  3,875
                                                               ---------      --------
  Adjustments to reconcile net income to net cash
    provided by (used for) operating activities:
      Deferred taxes......................................            78             -
      Depreciation and amortization.......................           730           487
      Increase (decrease) in cash from:
        Accounts receivable - trade.......................        (5,439)      (17,322)
        Inventory.........................................         6,515       (18,432)
        Prepaid expenses and other assets.................           (90)         (130)
        Accounts payable..................................         1,886        10,499
        Accrued expenses..................................        (1,804)          886
                                                               ---------      --------
 
Total adjustments.........................................         1,876       (24,012)
                                                               ---------      --------
 
Net cash provided by (used for) operating activities......         8,869       (20,137)
                                                               ---------      --------
 
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment.....................          (901)       (1,278)
  Purchases of businesses, net of cash acquired (Note 2)..        (1,150)            -
  Increase in other assets................................          (228)         (107)
                                                               ---------      --------
 
Net cash used for investing activities....................        (2,279)       (1,385)
                                                               ---------      --------
 
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings under line-of-credit agreements..............       118,351        44,167
  Repayments under line-of-credit agreements..............      (125,136)      (25,817)
  Repayments of long-term debt............................           (42)          (58)
  Net proceeds from sale of stock.........................           414           238
                                                               ---------      --------
 
Net cash provided by (used for) financing activities......        (6,413)       18,530
                                                               ---------      --------
 
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS..........................................           177        (2,992)
 
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR..............         5,054         7,097
                                                               ---------      --------
 
CASH AND CASH EQUIVALENTS, END OF PERIOD..................     $   5,231      $  4,105
                                                               =========      ========
 
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
 
                            ACT MANUFACTURING, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.  SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------

The unaudited interim condensed consolidated financial statements furnished
herein reflect all adjustments, which in the opinion of management are of a
normal recurring nature, necessary to fairly state the Company's financial
position, cash flows and the results of operations for the periods presented and
have been prepared on a basis substantially consistent with the audited
financial statements.

The results of operations for the interim periods are not necessarily indicative
of the results of operations to be expected for the fiscal year.  These interim
condensed consolidated financial statements should be read in conjunction with
the Company's Annual Report on Form 10-K for the period ending December 31, 1996
filed with the Securities and Exchange Commission.


2.  ACQUISITIONS
----------------

Effective June 9, 1997, the Company acquired substantially all of the assets and
liabilities of Electronic Systems International ("ESI") located in Norcross,
Georgia. ESI is a leading contract electronics manufacturer to customers
throughout the southeastern United States. Under the terms of the agreement, the
Company acquired assets and liabilities of ESI in exchange for 190,546 shares of
the Company's common stock plus acquisition costs. The per share market value of
the Company's common stock on the date of the purchase was $27.50.

Effective June 10, 1997, the Company acquired all of the outstanding stock of
SignMax Limited ("SignMax"), a cable and harness manufacturing company based in
Dublin, Ireland. Under the terms of the purchase agreement, substantially all of
the outstanding common shares of SignMax were acquired for cash of $1,000,000
plus acquisition costs.

The transactions were accounted for as purchases in accordance with APB Opinion
No.16  "Business Combinations."  The preliminary allocation of purchase price
for these transactions has resulted in goodwill of approximately $5,945,000
including $5,070,000 attributed to the excess of purchase price over net assets
and $875,000 ($725,000 accrued) of acquisition costs, including costs of 
consolidation of operations and professional fees.  The Company attributes
the goodwill to the expected ability to expand sales in these new geographic
markets, utilizing the acquired existing business infrastructure, and geographic
market presence as a basis for expansion. Goodwill will be amortized over a
period of fifteen years using the straight-line method of amortization. The
operating results of the acquired businesses from the dates of purchase are
included in and had an insignificant effect on the Company's Consolidated
Statements of Income for the three and six month periods ended June 30, 1997.
Pro forma information has not been provided as the operations of the acquired
businesses are not material to the consolidated results of operations or
financial position of the Company.
<PAGE>
 
3.  INVENTORIES
    -----------

Inventories consisted of the following at:
<TABLE>
<CAPTION>
 
   (in thousands)  June 30, 1997  December 31, 1996
                   -------------  -----------------
<S>                <C>            <C>
 
Raw material             $31,605            $37,698
Work in process           16,914             15,853
Finished goods               784                443
                         -------            -------
 
Total                    $49,303            $53,994
                         =======            =======
 
</TABLE>
4.  EARNINGS PER SHARE
----------------------

Net income per common share is based on the weighted average number of common
and  common equivalent shares outstanding during the period.  Common equivalent
shares are attributable to stock options and are calculated using the treasury
stock method.

In March 1997, the Financial Accounting Standards Board released Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share," which the
Company will adopt in the fourth quarter of 1997.  Had SFAS No. 128 been
effective for the periods ended June 30, 1997 and 1996, reported earnings per
share on a pro forma basis would have been as follows:
<TABLE>
<CAPTION>
 
                Three Months Ended June 30,  Six Months Ended June 30,
                ---------------------------  -------------------------
                   1997         1996             1997           1996
                   ----         ----             ----           ----
<S>             <C>        <C>                 <C>          <C> 
                                                           
     Basic      $ .41          $ .26               $ .79       $ .44
     Diluted      .39            .25                 .75         .43
 
</TABLE>

5.  LONG-TERM DEBT
------------------

During the second quarter of 1997 the Company amended its line of credit
agreement, effective March 31, 1997, increasing the limit on borrowings up to
$50.0 million and extending the termination date until April, 2000.  Including a
$2.3 million line-of credit facility added through acquisition during the
quarter, on a consolidated basis the Company had secured revolving credit
facilities of $52.3 million at June 30, 1997, of which $23.7 million was
utilized and $20.3 million was available for use.


6.  COMMON STOCK
----------------

On May 20, 1997 the Company's stockholders approved an increase in the number of
authorized shares of common stock from 20 million to 30 million.
<PAGE>
 
ITEM 2.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the accompanying financial
statements for the periods specified and the associated notes.  Further
reference should be made to the Company's Annual Report on Form 10-K for the
period ending December 31, 1996.


OVERVIEW
--------

The Company provides value-added, electronic manufacturing services for original
equipment manufacturers ("OEM'S") in the networking, computer,
telecommunications, medical and industrial equipment markets. The Company
targets high-mix, moderate volume production of the complex, leading-edge
commercial market applications of emerging and established OEM customers, which
generally require technologically-advanced and flexible manufacturing as well as
a higher degree of value-added services. The Company supplies OEMs with complex
printed circuit board ("PCB") assemblies primarily utilizing advanced surface
mount technology ("SMT"), mechanical and molded cable and harness assemblies,
electro-mechanical sub-assemblies, total system assembly and integration. As an
integral part of its service to OEM customers, the Company provides advanced
manufacturing and test engineering, flexible materials management, and
comprehensive test services, as well as product repair, packaging, order
fulfillment and distribution services.

During the second quarter of 1997 the Company acquired businesses operating in
Norcross, Georgia and Dublin, Ireland, as described in Note 2 to the Financial
Statements.  The operating results of the acquired businesses from the dates of
purchase are included in and had an insignificant effect on the Company's
Consolidated Statements of Income for the three and six month periods ended June
30, 1997.

The Company manufactures at six leased facilities having an aggregate of 257,000
square feet. Four of the facilities are located in Massachusetts. In
the fourth quarter of 1997 the Company expects to occupy and begin manufacturing
in a 45,000 square foot addition to its Hudson, Massachusetts facilities. In the
second quarter of 1997 the Company acquired operations with leased facilities in
Norcross, Georgia and Dublin, Ireland. In early 1998 the Company expects to
occupy and begin manufacturing in a new 45,000 square foot leased facility in
Dublin, Ireland and consolidate operations from the existing Dublin facility
into the new plant.

As of June 30, 1997 the Company had 1,042 employees, up from 799 employees at
December 31, 1996 and including 215 added in the second quarter of 1997 through
acquisitions.


RESULTS OF  OPERATIONS - THREE MONTHS ENDED JUNE 30, 1997 AND 1996
------------------------------------------------------------------

Net sales increased 39% to $72.4 million for the three month period ended June
30, 1997 from $52.2 million for the same period in 1996.  The increase was
attributable principally to increased volume in PCB assembly sales to new and
existing customers.  

<PAGE>
 
Gross profit increased 45% to $9.5 million for the three months ended June 30,
1997 compared with $6.5 million for the same period in 1996.  Gross margin
increased to 13.1% for the three months ended June 30, 1997 from 12.5% for the
same period in 1996, as the Company's product mix remained stable and the
benefits of manufacturing efficiency improvements were realized.

Selling, general and administrative (SG&A) expenses increased 22% to $2.9
million, or 4.0% of net sales, for the three months ended June 30, 1997 compared
with $2.4 million, or 4.6% of net sales, for the three months ended June 30,
1996.  The decrease in SG&A expenses as a percentage of net sales for the second
quarter of 1997 compared with the same period in 1996 reflects the effects of
continued growth in the Company's business which has allowed for higher
utilization of fixed costs, as well as an increased proportion of sales being
made directly by the Company.

Operating income increased 59% to $6.6 million, or 9.1% of net sales, for the
three months ended June 30, 1997 compared with $4.1 million, or 7.9% of net
sales, for the same period in 1996 as a result of the above factors.

Interest and other expense was $0.5 million for the three months ended June 30,
1997 compared with $0.4 million for the same period in 1996.  Interest and other
expense consisted principally of interest charges on debt.


RESULTS OF  OPERATIONS - SIX MONTHS ENDED JUNE 30, 1997 AND 1996
----------------------------------------------------------------

Net sales increased 54% to $142.6 million for the six month period ended 
June 30, 1997 from $92.7 million for the same period in 1996.  The increase was
attributable principally to increased volume in PCB assembly sales to new and
existing customers, offset by lower sales to 3Com Corporation. Sales to 3Com 
Corporation are expected to be insignificant for the remainder of 1997.

Gross profit increased 64% to $18.5 million for the six months ended June 30,
1997 compared with $11.3 million for the same period in 1996.  Gross margin
increased to 13.0% for the six months ended June 30, 1997 from 12.2% for the
same period in 1996, as the Company's product mix remained stable and the
benefits of manufacturing efficiency improvements were realized.

Selling, general and administrative (SG&A) expenses increased 30% to $5.8
million, or 4.1% of net sales, for the six months ended June 30, 1997 compared
with $4.5 million, or 4.8% of net sales, for the six months ended June 30, 1996.
The decrease in SG&A expenses as a percentage of net sales for the first half of
1997 compared with the same period in 1996 reflects the effects of continued
growth in the Company's business which has allowed for higher utilization of
fixed costs, as well as an increased proportion of sales being made directly by
the Company.

Operating income increased 86% to $12.7 million, or 8.9% of net sales, for the
six months ended June 30, 1997 compared with $6.8 million, or 7.4% of net sales,
for the same period in 1996 as a result of the above factors.

Interest and other expense was $1.1 million for the six months ended June 30,
1997 compared with $0.4 million for the same period in 1996.  The increase in
net expense resulted principally from additional borrowings on the Company's
line of credit to support working capital requirements.
<PAGE>
 
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
----------------------------------------------------

The Company had working capital of $69.3 million at June 30, 1997 compared with
$71.1 million at December 31, 1996.  Operating activities generated $8.9 million
of cash for the first six months of 1997 compared with $20.1 million of cash
usage for the same period in 1996.  Use of cash in the first six months of 1996 
supported the Company's high level of growth in 1996. Cash used for property,
equipment and acquisition related investing activities was $2.3 million for the
first six months of 1997 compared with $1.4 million for the same period in 1996.

While the Company assumed approximately $3.3 million in debt obligations through
acquisitions during the second quarter of 1997, the Company's total debt and
notes payable have decreased by approximately $3.1 million since December 31,
1996 as a result of net repayments on the Company's line of credit.

During the second quarter of 1997 the Company amended its line of credit
agreement, effective March 31, 1997, increasing the limit on borrowings up to
$50.0 million, subject to availability, and extending the termination date to
April, 2000. Including a $2.3 million line of credit facility added through
acquisition during the second quarter of 1997, on a consolidated basis the
Company had secured revolving credit facilities of $52.3 million at June 30,
1997, of which $23.7 million was utilized and $20.3 million was available for
use. In addition, at June 30, 1997 the Company's equipment lease line of $20.0
million had $9.2 million available for use and $10.8 million utilized for
outstanding commitments.

The Company's need for, cost of and access to funds are dependent in the long-
term on future operating results as well as conditions external to the Company.
The Company believes that its current sources of and access to capital are
adequate to support operations for the next twelve months.


NEWLY ISSUED ACCOUNTING STANDARDS
---------------------------------

In March 1997, the Financial Accounting Standards Board released Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share," which will
be effective during the fourth quarter of 1997. SFAS No. 128 will require the
Company to restate all previously reported earnings per share information to
conform with the new pronouncement's requirements.  See Notes to Consolidated 
Financial Statements for pro forma information.


CAUTIONARY STATEMENTS
---------------------


The Private Securities Litigation Reform Act of 1995 (the "Act") contains
certain safe harbors regarding forward-looking statements.  From time to time,
information provided by the Company or statements made by its employees may
contain "forward-looking" information which involve risks and uncertainties. Any
statements in this report that are not statements of historical fact are
forward-looking statements (including, but not limited to, statements concerning
the characteristics and growth of the Company's

<PAGE>
 
market and customers, the Company's objectives and plans for future operations,
and the Company's expected liquidity and capital resources). The following
cautionary statements should be considered carefully in evaluating the Company
and its business. The factors discussed in these cautionary statements, among
other factors, could cause actual results to differ materially from those
contained in the forward-looking statements made in this Report and presented
elsewhere by management from time to time. These cautionary statements are being
made pursuant to the provisions of the Act and with the intention of obtaining
the benefits of the safe harbor provisions of the Act.

Customer and Market Concentration and Dependence on Electronics Industry

For the six months ended June 30, 1997, the Company's five largest customers
accounted for approximately 77% of the Company's net sales. Sales to Bay
Networks, Inc. at 27% of total net sales compared with 13% for 1996, Ascend
Communications, Inc. (as successor to Cascade Communications, Inc.) at 15% of
total net sales compared with 20% for 1996, EMC Corporation at 12% of total net
sales compared with 7% for 1996, Motorola Corporation at 12% of total net sales
compared with 13% for 1996 and 3Com Corporation at 12% of total net sales
compared with 17% for 1996. Sales to 3Com Corporation are expected to be
insignificant for the remainder of 1997. As sales to individual customers
fluctuate from period to period the Company's results will depend on the extent
to which these fluctuations are offsetting. Also, the Company's results will
depend to a significant extent on the success achieved by its OEM customers in
marketing their products and the Company's ability to diversify its customer
base in order to reduce its reliance on its major customers. There can be no
assurance that the Company's principal customers will continue to purchase
products and services from the Company at current levels, if at all. The loss of
one or more major customers, a significant reduction in purchases from such
customers, discontinuance of products manufactured by the Company, or
developments adverse to the Company's customers or their products could
have a material adverse effect on the Company's financial condition and results
of operations. For example, the Company experienced a reduction in net sales
from the second to the third quarters of 1995 as a result of a significant
reduction in orders from its then principal customer, Chipcom Corporation, which
was subsequently acquired by 3Com Corporation. While 3Com Corporation remained 
an active customer of the Company through the second quarter of 1997, 3Com
Corporation has altered its outsourcing strategy and net sales to 3Com
Corporation by the Company are expected to be insignificant for the remainder of
1997. In addition, while the Company has not experienced any difficulty in being
paid by its major customers in recent years, the Company could be adversely
affected if a major customer were unable or unwilling to pay for products and
services on a timely basis or at all.

The Company's customer base has historically been concentrated in a limited
number of segments within the electronics industry. These industry segments, and
the electronics industry as a whole, are subject to high competition, rapid
technological changes, significant fluctuation in product demand, relatively
short product life-cycles, and consequent product obsolescence. Developments
adverse to such industry segments could have a negative effect on the Company.
The industry segments served by the Company are also subject to economic cycles
and have in the past experienced, and are likely in the future to experience,
recessionary periods. A recessionary period or other event leading to excess
capacity or downturn affecting the electronics industry generally or one or more
of the industry segments served by the Company would likely result in
intensified price competition, reduced gross margins and a decrease in net sales
versus the Company's operating expectations, all of which could have a material
adverse effect on the Company's business, financial condition and results of
operations.

Variability of Customer Requirements; Nature and Extent of Customer Commitments
on Orders

The level and timing of orders placed by the Company's OEM customers vary due to
customer attempts to manage inventory, changes in the OEM's manufacturing
strategy and variation in demand for customer products due to, among other
things, introduction of new products, product life cycles, competitive
conditions or industry or general economic conditions. The Company generally
does not obtain long-term purchase orders or commitments but instead works with
its customers to anticipate the future volume of orders. Based on such
anticipated future volumes, the Company makes significant commitments regarding
the levels of business that it will seek and accept, the timing of production
schedules and the levels and utilization of personnel and other resources. From
time to time, the Company will purchase components without a customer commitment
to pay for them. A variety of conditions, both specific to the individual
customer and generally affecting the customer's industry, may cause customers to
cancel, reduce or delay orders that were either previously made or anticipated.
Generally, customers may cancel, reduce or delay purchase orders and commitments
without penalty. Significant or numerous cancellations, reductions or delays in
orders by a customer or group of customers could have a material adverse effect
on the Company's business, financial condition and results of operations.

<PAGE>
 
Fluctuations in Operating Results

The Company's quarterly operating results have varied and may continue to
fluctuate significantly from period to period, including on a quarterly basis.
The variability of the level and timing of orders from, and shipments to, major
customers may result in significant periodic and quarterly fluctuations in the
Company's results of operations. A substantial portion of net sales in a given
quarter may depend on obtaining and fulfilling orders for assemblies to be
manufactured and shipped in the same quarter in which those orders are
received. In addition to the variability resulting from the short-term nature of
its customers' commitments, other factors have contributed, and may in the
future contribute, to such fluctuations. These factors include, among other
things, customers' announcement and introduction of new products or new
generations of products, evolutions in the life cycles of customers' products,
timing of expenditures in anticipation of future orders, effectiveness in
managing manufacturing processes, changes in cost and availability of labor and
components, efficiencies achieved by the Company in managing inventory and fixed
assets, a shift in the Company's product and service mix which results in
fluctuating margins, capacity utilization, inventory obsolescence, currency
exchange rate movements, acquisitions and related charges and expenses,
competition in the electronic manufacturing services market, trends in the
electronic industry and changes or anticipated changes in economic conditions.
An interruption in manufacturing resulting from shortages of parts or equipment,
fire, earthquake or other natural disaster, equipment failure or otherwise
could have a material adverse effect on the Company's business, financial
condition and results of operations. Because the Company's operating expenses
are based on anticipated revenue levels and a high percentage of the Company's
operating expenses are relatively fixed, any unanticipated shortfall in revenue
in a quarter may have an adverse impact on the Company's business, financial
condition and results of operations for that quarter. Results of operations in
any period should not be considered indicative of the results to be expected for
any future period.

As a result of the foregoing or other factors, it is possible that in some
future period the Company's results of operations may fail to meet the
expectations of securities analysts or investors, and the price of the Company's
Common Stock would then be materially adversely affected.

Competition

The electronics manufacturing services industry is a highly competitive
industry. The Company competes against numerous U.S. and foreign contract
manufacturers. The Company also faces competition from a number of local and
regional contract manufacturers. In addition, current and prospective customers
continually evaluate the merits of manufacturing products internally. Certain of
the Company's competitors have substantially greater manufacturing, financial,
systems and marketing resources than the Company. In addition, these competitors
may have the ability to respond more quickly to new or emerging technologies,
may adapt more quickly to changes in customer requirements and may devote
greater resources to the development, promotion and sale of their services than
the Company. The Company may be operating at a cost disadvantage compared to
manufacturers who have greater direct buying power from component suppliers or
who have lower cost structures. The Company's basic technology is generally not
resources or international operations may enter the market. Increased
competition could result in price reductions, reduced margins or loss of market
share, any of which could have a material adverse effect on the Company's
business, financial condition and results of operations. The Company believes
that the principal competitive factors in the segments of the contract
manufacturing industry in which it operates are technology, service,
manufacturing capability, quality, geographic location, price, reliability,
timeliness in delivering finished products and flexibility in adapting to
customers needs. There can be no assurance that competition from existing or
potential competitors will not have a material adverse effect on the Company's
results of operations.

<PAGE>
 
Management of Growth

The Company has grown rapidly in recent years and continues to expand its
operations, all of which has placed, and will continue to place, a significant
strain on the Company's management, operations, technical, financial, systems
and other resources. The Company's ability to manage its growth will require it
to continue to invest in its operational, financial and management information
systems, as well as to develop further the management skills of its managers and
supervisors and to retain, motivate and effectively manage its employees. If the
Company's management is unable to manage growth effectively, the quality of the
Company's services and products, its ability to retain key personnel and its
results of operations could be materially and adversely affected. Competition
for personnel is intense, and there can be no assurance that the Company will be
able to attract, assimilate or retain additional highly qualified employees in
the future, especially engineering personnel. The failure to hire and retain
such personnel could have a material adverse effect on the Company's business,
financial condition and results of operations.

Dependence Upon Key Personnel and Skilled Employees

The Company's continued success has been largely dependent upon the skills and
efforts of John A. Pino, its President and Chief Executive Officer, and other
key executive and managerial, sales and technical employees. None of the senior
management or other key employees of the Company is subject to any employment
contract and the Company does not maintain any key-man life insurance on any of
its key executives. The loss of services of any of its officers or other key
personnel could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, continued growth and
development of the Company will require that, despite significant competition,
it attract, motivate and retain additional skilled and experienced managerial,
sales and technical personnel. There can be no assurance that the Company will
be able to attract, motivate and retain personnel with the skills and experience
needed to successfully manage the Company's business and operations.

Availability of Key Components

The Company and many of its customers rely on a single or limited number of
third-party suppliers for many components used in the assembly process.
Shortages of certain electronic components have occurred from time to time. In
addition, due to the Company's utilization of just-in-time inventory techniques,
the timely availability of many components to the Company is dependent on the
Company's ability to continuously develop accurate forecasts of customer volume
requirements. Component shortages could result in manufacturing and shipping
delays or increased component prices which could have a material adverse effect
on the Company's business, financial condition and results of operations. The
Company has historically been able to enter into advantageous arrangements from
time to time for the supply of certain limited availability components. To the
extent that the Company is unable to source key components for the reasons cited
above or otherwise, the Company's results of operations could be materially
adversely affected.

Technological Change and Process Development

The market for the Company's manufacturing services is characterized by rapidly
changing technology and continuing process development. The continued success of
the Company's business will depend in large part upon its ability to maintain
and enhance its technological capabilities, develop and market manufacturing
services which meet changing customer needs and successfully anticipate or
respond to technological changes in manufacturing processes on a cost-effective
and timely basis. Although management believes that the Company's operations
utilize the assembly and testing technologies and equipment currently required
by the Company's customers, there can be no assurance that the Company's process
development efforts will be successful or that the emergence of new
technologies, industry standards or customer requirements will not render the
Company's technology, equipment or processes obsolete or uncompetitive. In
addition, to the extent that the Company determines that new assembly and
testing technologies and equipment are required to remain competitive, the
acquisition and implementation of such technologies and equipment may require
significant expense or capital investment by the Company.

Risks of International Operations

The Company has recently acquired operations in Dublin, Ireland and is currently
expanding its Dublin operations. In addition, the Company may expand into other
geographic regions. The Company is affected by economic and political conditions
in the countries in which it does business, including fluctuations in the value
of currency, duties, possible employee turnover, labor unrest, less developed
infrastructure, longer payment cycles, greater difficulty in collecting accounts
receivable and the burdens and costs of compliance with a variety of foreign
laws. Changes in policy by the U.S. or foreign governments resulting in, among
other things, increased duties, increased regulatory requirements, higher
taxation, currency conversion limitations, restrictions on the transfer of funds
or limitations on imports or exports could also have a material adverse effect
on the Company. The Company could also be adversely affected if the current
policies encouraging foreign investment or foreign trade by its host countries
were to be reversed.

<PAGE>

Expanding Facilities and Manufacturing Capacity

      The Company believes its long-term competitive position depends in part on
its ability to increase manufacturing capacity. The Company may obtain such
additional capacity through acquisitions or expansion of its current facilities.
The Company is currently expanding its Hudson, Massachusetts facilities by
45,000 square feet and expects to relocate its Dublin, Ireland operations to a
new 45,000 square foot facility currently under construction. The acquisition
and expansion of facilities will require substantial additional capital, and
there can be no assurance that such capital will be available from cash
generated by current operations. Further, there can be no assurance that the
Company will be able to acquire sufficient capacity or successfully integrate
and manage such additional facilities. In addition, the Company's expansion of
its manufacturing capacity has significantly increased and will continue to
significantly increase its fixed costs, and the future profitability of the
Company will depend on its ability to utilize its manufacturing capacity in an
effective manner. The failure to obtain sufficient capacity or to successfully
integrate and manage additional manufacturing facilities could adversely impact
the Company's relationships with its customers and materially adversely affect
the Company's business, financial condition and results of operations.

Acquisitions and Geographical Expansion

In June 1997, the Company acquired substantially all of the assets of Electronic
Systems International located in Norcross, Georgia. The acquired company
provides electronics manufacturing services, primarily consisting of PCB
assemblies and systems assemblies to customers based primarily in the
southeastern United States. In addition, also in June 1997, the Company
completed the acquisition of SignMax Limited, located in Dublin, Ireland.
SignMax Limited is a contract manufacturer of cable and harness assemblies. The
Company has limited experience in integrating acquired companies into its
operations, in expanding the scope of operations of acquired businesses, and in
operating in the southeastern United States or overseas. Therefore, there can be
no assurance that the Company will operate the acquired businesses profitably
during the next year or in the future.

The Company may expand into other geographical areas within the United States
and internationally by acquiring contract manufacturing businesses or by
establishing new manufacturing operations in such areas. The Company may compete
for acquisition and expansion opportunities with entities having significantly
greater resources than the Company. Any such transactions may result in
potentially dilutive issuance of equity securities, the incurrence of debt and
amortization expenses related to goodwill and other intangible assets, and other
costs and expenses, all of which could materially adversely affect the Company's
financial results following such a transaction. Such transactions also involve
numerous business risks, including difficulties in the assimilation of the
operations, technologies and products of the acquired companies, the diversion
of management's attention from other business concerns and the potential loss of
key employees from the combined company. Therefore, there can be no assurance
that the key employees and businesses of acquired companies will be successfully
integrated with the Company, that any acquired business will contribute
significantly to the Company's sales or earnings, or that sales and earnings of
the Company will not be adversely affected by the integration process or
other factors.

Environmental Compliance

The Company is subject to a variety of environmental regulations relating to the
use, storage, discharge and disposal of hazardous chemicals used during its
manufacturing process. A failure by the Company to comply with present and
future regulations could subject it to future liabilities or the suspension of
production. Such regulations could also restrict the Company's ability to expand
its facilities or could require the Company to acquire costly equipment or to
incur other significant expenses to comply with environmental regulations.
<PAGE>
 
Possible Volatility of Stock Price

     The Company's Common Stock has experienced significant price and volume 
volatility historically, and such volatility is expected to occur in the future.
In addition, there has been significant volatility in the market price of 
securities of technology companies generally. Factors such as announcements of 
significant customer orders, customer additions or subtractions, developments
affecting major customers or their products, announcements or activities of 
competitors, changes in securities analysts' recommendations or general 
conditions and developments in the electronics manufacturing service industry 
and in the electronics industry as a whole, as well as quarterly variations in 
the Company's results of operations and market conditions in the industry, may 
cause the market price of the Company's Common Stock to fluctuate significantly.
In addition, the public stock markets have historically experienced extreme 
price and trading volume volatility. This volatility has significantly affected 
the market prices of securities of many technology companies for reasons 
frequently unrelated to the operating performance of the specific companies. 
These broad market fluctuations may adversely affect the market price of the 
Company's Common Stock.
<PAGE>
 
PART II.  OTHER INFORMATION

ITEM 2.   CHANGES IN SECURITIES
          ---------------------

(c) On June 9, 1997, the Company issued 190,546 shares of its common stock
    to ESI Acquisition Corporation in connection with the acquisition of
    substantially all of the assets of Electronic Systems International, a
    division of ESI Acquisition Corporation. No underwriters were involved in
    the foregoing sale which was made in reliance upon an exemption from the
    registration provisions of the Securities Act of 1933, as amended, set forth
    in Section 4(2) thereof relative to sales by an issuer not involving any
    public offering or the rules and regulations thereunder. These shares of
    common stock were subsequently registered by ACT pursuant to a Registration
    Statement on Form S-3 (Registration No. 333-29479).


ITEM 4.  Submission of Matters to a Vote of Security-Holders
         ---------------------------------------------------

The annual meeting of stockholders was held on May 20, 1997.  Four proposals
were submitted to stockholders as described in the Company's proxy statement
dated May 1, 1997.  The following is a brief description of the matters voted
upon, the number of votes cast for and against each proposal, and the number of
abstentions.

1.   To elect one Class II Director to serve on the Company's Board of Directors
     for a three-year term or until his successor has been duly elected and
     qualified.
 
          Nominee:                          John A. Pino
          Votes for Nominee:                 8,093,017
          Votes Withheld From Nominee:          63,976

2.   To approve an amendment to the Company's 1995 Stock Plan to increase the
     number of shares reserved for issuance thereunder by 750,000 to 1,250,000.
 
          Votes for:                         7,199,188
          Votes Against:                       134,659
          Abstain:                               9,303

3.   To amend the Company's Second Restated Articles of Organization increasing
     the number of authorized shares of common stock, $.01 par value, of the
     Company, from 20,000,000 to 30,000,000.

           Votes for:                        7,685,399
           Votes Against:                      463,655
           Abstain:                              7,939

4.   To ratify the selection of the firm Deloitte & Touche, LLP as independent
     auditors for the fiscal year ending December 31, 1997.
 
           Votes for:                        8,150,297
           Votes Against:                          210
           Abstain:                              6,486
<PAGE>
 
ITEM 6.   Exhibits and Reports on Form 8-K
          --------------------------------

(a)       Exhibits:

     3.   Articles of Amendment to the Second Restated Articles of Organization
          of the Company, dated June 12, 1997.

     10.  Eighth Amendment dated June 5, 1997 to the Amended and Restated Loan
          and Security Agreement by and among BankBoston, N.A., State Street
          Bank & Trust Company, Citizens Bank of Massachusetts and ACT
          Manufacturing, Inc.

     11.  Weighted Shares Used in Computation of Earnings per Share

     27.  Financial Data Schedule

(b)  Report on Form 8-K.

     The Company filed a current report on Form 8-K dated June 17, 1997
     reporting the acquisition of substantially all of the assets of Electronic
     Systems International.
<PAGE>
 
                                   SIGNATURES

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


                                    ACT MANUFACTURING, INC.



                                    /s/  Douglass C. Greenlaw
                                    ------------------------------------
August 14, 1997                      Douglass C. Greenlaw
                                    Vice President of Finance and
                                    Administration and Chief Financial Officer
                                    (Principal Financial and Accounting Officer)
<PAGE>
 
                                 EXHIBIT INDEX


Exhibit No.
-----------

3.   Articles of Amendment to the Second Restated Articles of Organization of
     the Company, dated June 12, 1997.

10.  Eighth Amendment dated June 5, 1997 to the Amended and Restated Loan and
     Security Agreement by and among BankBoston, N.A., State Street Bank & Trust
     Company, Citizens Bank of Massachusetts and ACT Manufacturing, Inc.

11.  Weighted Shares Used in Computation of Earnings per Share

27.  Financial Data Schedule