<PAGE>

===============================================================================

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


                                    FORM 10-Q

(MARK ONE)

/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934.

                 For the quarterly period ended April 1, 2001

                                       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: 001-15883

                         MANUFACTURERS' SERVICES LIMITED
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                                <C>

               DELAWARE                                 04-3258036
    (STATE OR OTHER JURISDICTION OF                  (I.R.S. EMPLOYER
     INCORPORATION OR ORGANIZATION)                 IDENTIFICATION NO.)
</TABLE>

                            ------------------------

            300 BAKER AVENUE, SUITE 106, CONCORD, MASSACHUSETTS 01742
                                 (978) 287-5630
               (ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER,
        INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

                            ------------------------

                                 NOT APPLICABLE.
         (Former Name, Former Address and Former Fiscal Year, if Changed
                               Since Last Report)

                            ------------------------

Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities 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 / /

     At May 14, 2001, there were 33,537,201 shares of Common Stock, $0.001 par
value, outstanding.


<PAGE>


                         MANUFACTURERS' SERVICES LIMITED
                                      INDEX

<TABLE>
<CAPTION>

                                                                            Page
                                                                            ----
<S>                                                                     <C>

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
        Condensed Consolidated Balance Sheets - April 1, 2001
          (Unaudited) and December 31, 2000............................    3
        Condensed Consolidated Statements of Operations (Unaudited)
          - Three Months Ended April 1, 2001 and April 2, 2000.........    4
        Condensed Consolidated Statements of Cash Flows (Unaudited)
          - Three Months Ended April 2, 2001 and April 2, 2000.........    5
        Notes to Condensed Consolidated Financial Statements...........    6
Item 2. Management's Discussion and Analysis of Financial Condition
          and Results of Operations....................................    9
Item 3. Quantitative and Qualitative Disclosure about Market Risk......    13

          Signatures...................................................    20
</TABLE>


                                       2
<PAGE>


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                         MANUFACTURERS' SERVICES LIMITED
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>

                                                                                        April 1,   December 31,
                                                                                      ------------  ----------
                                                                                          2001         2000
                                                                                       (UNAUDITED)
<S>                                                                                 <C>           <C>

                                     ASSETS

Current assets:
   Cash and cash equivalents                                                          $    26,899   $   10,388
   Accounts receivable, less allowance for doubtful accounts of $1,969
      and $2,239 at April 1, 2001 and December 31, 2000, respectively                     320,824      359,978
   Inventories                                                                            315,171      363,485
   Prepaid expenses and other current assets                                               52,702       36,060
                                                                                      ------------  ----------
      Total current assets                                                                715,596      769,911

Property and equipment, net                                                                94,042       93,649
Goodwill and other intangibles                                                             43,636       44,535
Other assets                                                                               22,832       25,422
                                                                                      ------------  ----------
      Total assets                                                                    $   876,106   $  933,517
                                                                                      ============  ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
   Current portion of long-term debt and capital lease obligations                    $     6,814   $    7,737
   Accounts payable                                                                       411,013      474,579
   Accrued expenses and other current liabilities                                          43,553       53,170
                                                                                      ------------  ----------
      Total current liablities                                                            461,380      535,486

   Long-term debt and capital lease obligations                                           198,528      181,344
   Other liabilities                                                                        1,485        1,239
                                                                                      ------------  ----------
      Total liabilities                                                                   661,393      718,069
                                                                                      ------------  ----------
Commitments and contingencies (Note 3)

Stockholders' equity
   Preferred stock, $0.001 par value, 3,000,000 shares authorized; no shares
      issued and outstanding                                                                    -            -
   Common stock, $0.001 par value; 150,000,000 shares authorized;
      33,537,179 and 33,346,735 shares issued and outstanding at April 1, 2001
      and December 31, 2000, respectively                                                      34           33
   Additional paid in capital                                                             263,153      262,024
   Accumulated deficit                                                                    (33,314)     (34,396)
   Accumulated other comprehensive loss                                                   (15,160)     (12,213)
                                                                                      ------------  ----------
      Total stockholders' equity                                                          214,713      215,448
                                                                                      ------------  ----------
      Total liabilities and stockholders' equity                                      $   876,106   $  933,517
                                                                                      ============  ==========
</TABLE>

          See accompanying notes to the interim condensed consolidated
                              financial statements.


                                       3
<PAGE>


                       MANUFACTURERS' SERVICES LIMITED
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS -- UNAUDITED
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>

                                                                                                      Three months ended
                                                                                             -------------------------------------
                                                                                               April 1, 2001       April 2, 2000
                                                                                             ------------------ ------------------
<S>                                                                                        <C>                  <C>

Net sales                                                                                       $   528,708         $   332,820
Cost of goods sold                                                                                  494,572             316,505
                                                                                             ------------------ ------------------
Gross profit                                                                                         34,136              16,315

Operating expenses:
   Selling, general and administrative                                                               23,929              16,702
   Restructuring                                                                                      2,791                 -
   Legal settlement                                                                                     -                 6,000
                                                                                             ------------------ ------------------

Operating income (loss)                                                                               7,416              (6,387)
Interest expense, net                                                                                (5,724)             (3,476)
Foreign exchange gain (loss)                                                                            (37)               (673)
                                                                                             ------------------ ------------------

Income (loss) before provision for income taxes                                                       1,655             (10,536)
Provision for income taxes                                                                              573                 287
                                                                                             ------------------ ------------------
Net income (loss)                                                                               $     1,082         $   (10,823)
                                                                                             ================== ==================
Net income (loss) applicable to common stock                                                    $     1,082         $   (12,954)
                                                                                             ================== ==================

Basic income (loss) per share:
   Net income (loss)                                                                            $      0.03         $     (0.66)
   Weighted average shares outstanding                                                           33,442,036          19,673,082

Diluted income (loss) per share:
   Net income (loss)                                                                            $      0.03         $     (0.66)
   Weighted average shares outstanding                                                           33,673,887          19,673,082
</TABLE>


          See accompanying notes to the interim condensed consolidated
                              financial statements.


                                       4
<PAGE>


                        MANUFACTURERS' SERVICES LIMITED
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS -- UNAUDITED
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                          THREE MONTHS ENDED
                                                                     ---------------------------

                                                                      April 1,         April 2,
                                                                        2001             2000
<S>                                                                <C>              <C>

CASH FLOWS RELATING TO OPERATING ACTIVITIES:
   Net income (loss)                                                  $   1,082      $ (10,823)
   Adjustments to reconcile net income to net cash provided by
     (used in) operating activities:
     Depreciation and amortization                                        9,332          6,084
     Amortization of capitalized finance fees                               632            282
     Additions to allowance for doubtful accounts                           520            (91)
     Non cash charge for equity awards                                      185          3,987
     Foreign exchange loss                                                  419            614
     Deferred taxes                                                        (132)             -
     Litigation settled by shareholder                                        -          1,000
   Changes in operating assets and liabilities:
     Accounts receivable                                                 36,432        (43,241)
     Inventories                                                         43,555        (10,686)
     Prepaid expenses and other assets                                  (15,620)         3,564
     Accounts payable                                                   (58,038)        31,392
     Accrued expenses and other liabilities                              (8,655)        (2,796)
                                                                    ------------  -------------
Net cash provided by (used in) operating activities                       9,712        (20,714)
                                                                    ------------  -------------

CASH FLOWS RELATING TO INVESTING ACTIVITIES:
   Purchase of intangible assets                                         (1,393)             -
   Proceeds from sale of fixed assets                                        99             43
   Purchases of property and equipment                                   (8,149)        (6,222)
   Cost of internal use software                                           (530)        (2,627)
                                                                    ------------  -------------
Net cash used in investing activities                                    (9,973)        (8,806)
                                                                    ------------  -------------

CASH FLOWS RELATING TO FINANCING ACTIVITIES:
   Proceeds from long-term debt                                               -         25,000
   Net proceeds from (payments on) revolving line-of-credit              18,735         (4,000)
   Repayments of long-term debt and capital lease obligations            (1,932)        (1,596)
   Debt issuance and amendment costs                                        (34)          (540)
   Proceeds from exercise of stock options                                   67            455
   Proceeds from employee stock purchase plan                             1,063              -
   Dividend payments on preferred stock                                       -         (1,750)
                                                                    ------------  -------------
Net cash provided by financing activities                                17,899         17,569
                                                                    ------------  -------------
Effect of foreign exchange rates on cash                                 (1,127)          (495)
                                                                    ------------  -------------
Net increase (decrease) in cash                                          16,511        (12,446)
Cash and cash equivalents at beginning of period                      $  10,388      $  24,182
                                                                    ------------  -------------
Cash and cash equivalents at end of period                            $  26,899      $  11,736
                                                                    ============  =============
</TABLE>


          See accompanying notes to the interim condensed consolidated
                              financial statements.


                                       5
<PAGE>


                         MANUFACTURERS' SERVICES LIMITED
    NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
                        (IN THOUSANDS, EXCEPT SHARE DATA)


1. BASIS OF PRESENTATION

         The accompanying consolidated financial statements of Manufacturers'
Services Limited (the "Company") are unaudited, and certain information and
footnote disclosure related thereto normally included in financial statements
prepared in accordance with generally accepted accounting principles has been
omitted in accordance with Rule 10-01 of Regulation S-X. Accordingly, these
statements should be read in conjunction with the audited financial
statements and notes thereto for the year ended December 31, 2000 included in
the Company's Annual Report on Form 10-K. In the opinion of management, the
accompanying unaudited consolidated financial statements were prepared
following the same policies and procedures used in the preparation of the
audited financial statements and reflect all adjustments (consisting of
normal recurring adjustments) considered necessary to present fairly the
financial position and results of operations of the Company. The results of
operations for the interim periods are not necessarily indicative of the
results for the entire fiscal year.

RECLASSIFICATIONS

         Certain amounts in prior year financial statements have been
reclassified to conform to the current year presentation.

2. INVENTORY

         Inventories are comprised of the following:

<TABLE>
<CAPTION>

                                                April 1,  December 31,
                                                  2001        2000
                                              ----------- ----------
<S>                                         <C>          <C>

Raw materials and purchased inventory           $265,947    $310,175
Work-in-process                                   44,106      48,162
Finished goods                                     5,118       5,148
                                                --------    --------
                                                $315,171    $363,485
                                                ========    ========
</TABLE>

3. CONTINGENCIES

ACCOUNTS RECEIVABLE

         During the quarter ended April 1, 2001, the Company reserved for
approximately $550 of receivables and inventory related to a customer that
filed for Chapter 11 protection under the United States Bankruptcy Code. As
of December 31, 2000, the Company had a reserve of approximately $2,300
related to these assets, which included $785 of outstanding receivables and
$2,067 of inventory purchased specifically for the customer. A reserve has
been provided for all assets related to the customer as of April 1, 2001. The
assets unreserved at December 31, 2000 were reserved for during the quarter
ended April 1, 2001 due to the customer's Chapter 11 filing during the
quarter ended April 1, 2001, and the inability to sell related inventory due
to excess inventories pervasive throughout the electronics industry.

DEFERRED REVENUE

         In June 2000, the Company received a payment of $14,592 in
connection with a supply agreement with a customer. The agreement includes a
provision whereby the Company will either retain or repay a portion of this
amount each quarter, through the fourth quarter of 2001, dependent upon sales
levels achieved in each quarter. This $14,592 was recorded as deferred
revenue, and is being amortized as the Company either recognizes the revenue
or repays amounts to the customer. At April 1, 2001, the remaining deferred
revenue balance of approximately $6,500 was included in accrued expenses.
During the quarter ended April 1, 2001, approximately $2,800 was repaid to
the customer based on sales levels achieved.

4. ACQUISITIONS

ASSET ACQUISITIONS

         In January 2001, the Company acquired certain assets from
Oce-Industries used in the production of complex printer systems for $5,883
in cash and assumed liabilities. These assets consisted of a manufacturing
facility, other fixed assets and an intangible asset. The transaction was
accounted for as a purchase of assets, and the purchase price was allocated
to the assets acquired based on the relative fair values of the tangible and
intangible assets at the date of acquisition. In connection with the asset
acquisition, the Company entered into a three-year supply agreement to
manufacture complex printer systems for Oce-Industries.

                                       6
<PAGE>

                         MANUFACTURERS' SERVICES LIMITED
    NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
                        (IN THOUSANDS, EXCEPT SHARE DATA)

5. BUSINESS SEGMENT INFORMATION

         The Company's operations comprise a single line of business, providing
electronics design and manufacturing services. Information about the Company's
operations in different geographic regions is presented in the table below:

<TABLE>
<CAPTION>

                                                       Three Months Ended
                                                   -------------------------
                                                      April 1,     April 2,
                                                       2001          2000
                                                   -----------   -----------
<S>                                              <C>            <C>

Net sales
  United States -- Corporate                       $        --       $    --
                -- Operations                          390,760       233,551
  Europe                                               108,805        63,759
  Asia                                                  29,143        35,510
                                                   -----------   -----------
                                                   $   528,708   $   332,820
                                                   ===========   ===========
Operating income (loss)
  United States -- Corporate                       $    (8,033)  $  (15,798)
                -- Operations                           16,764        6,415
  Europe                                                 3,421        2,184
  Asia                                                  (4,736)         812
                                                   -----------   -----------
                                                   $     7,416   $   (6,387)
                                                   ===========   ===========

<CAPTION>

                                                     April 1,    December 31,
                                                       2001          2000
                                                   ------------  -----------
<S>                                              <C>            <C>

Identifiable Assets
  United States -- Corporate                       $    12,237   $   13,395
                -- Operations                          604,339      662,559
  Europe                                               180,652      173,426
  Asia                                                  78,878       84,137
                                                   -----------   ----------
                                                   $   876,106   $  933,517
                                                   ===========   ==========
</TABLE>

6. EARNINGS PER SHARE

         The following table illustrates the reconciliation of the numerator and
denominator of basic and diluted income (loss) per share as required by SFAS
128:

<TABLE>
<CAPTION>

                                                                           Three Months Ended
                                                                         ----------------------
                                                                           April 1,   April 2,
                                                                             2001       2000
                                                                         -----------  ---------
<S>                                                                    <C>          <C>

Numerator--basic and diluted earnings per share:
  Income(loss)                                                           $     1,082  $(10,823)
  Dividends on senior redeemable
   preferred stock                                                                --    (1,783)
  Accretion of senior redeemable
   preferred stock and call premium                                               --      (348)
                                                                         -----------  ---------
  Income (loss) available to common stockholders                         $     1,082  $(12,954)
                                                                         ===========  =========
Denominator:
  Basic income (loss) per share--
   weighted average shares outstanding                                    33,442,036 19,673,082
  Effect of dilutive securities--
   stock options and warrants                                                231,851         --
                                                                         -----------  ---------
  Diluted income (loss) per share--
   weighted average shares outstanding                                    33,673,887 19,673,082
                                                                         =========== ==========

  Basic income (loss) per share                                          $     0.03   $  (0.66)
  Diluted income (loss) per share                                        $     0.03   $  (0.66)
</TABLE>


                                       7
<PAGE>

                         MANUFACTURERS' SERVICES LIMITED
    NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
                        (IN THOUSANDS, EXCEPT SHARE DATA)

         For the three months ended April 1, 2001, 3,227,826 anti-dilutive
options and warrants have been excluded from the calculation of EPS as the
exercise price was greater than the estimated fair market price of the common
shares. For the three months ended April 2, 2000, 3,810,253 anti-dilutive
options and warrants have been excluded from the calculation of EPS as the
Company had a net loss available to common stockholders for the period.

7. COMPREHENSIVE INCOME (LOSS)

         The following table illustrates the components of comprehensive income
(loss) as required by SFAS 130:

<TABLE>
<CAPTION>

                                                                           Three Months Ended
                                                                        -----------------------
                                                                          April 1,     April 2,
                                                                            2001        2000
                                                                         ---------  -----------
<S>                                                                   <C>          <C>

Net income (loss)                                                        $   1,082  $  (10,823)
Other comprehensive income (loss)
  Foreign currency translation adjustments                                  (2,947)     (2,240)
  Unrealized gain (loss) on securities held
    for sale                                                                    --          68
                                                                          ---------  ----------
Comprehensive income (loss)                                              $  (1,865) $  (12,995)
                                                                          =========  ==========
</TABLE>

8. RESTRUCTURING

         In the first quarter of 2001, management approved a plan to
restructure certain of the Company's Asian operations. The total charge
recorded for this plan was $2,791, which was comprised of lease termination
costs of $1,788 and severance of $1,003 related to personnel reductions of
approximately 333 managerial and manufacturing employees. A corresponding
liability was recorded in accrued expenses and other current liabilities, of
which $464 in severance benefits was paid during the quarter ended April 1,
2001, representing terminations related to the restructuring plan that
occurred during the quarter. The restructuring plan is expected to be
substantially complete by the end of the second quarter of 2001.

                                       8
<PAGE>


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

OVERVIEW

         We are a leading global provider of advanced electronics manufacturing
services to original equipment manufacturers (OEMs). We have established a
global network of manufacturing facilities in the world's major electronics
markets--North America, Europe and Asia. We have developed relationships with
leading OEMs in rapidly growing industries such as wired and wireless
communications, networking and storage equipment, computer systems and
peripherals, industrial equipment and commercial avionics. We offer our
customers an outsourcing solution that represents a lower total cost of
ownership than that provided by their internal operations through efficient
management of our business and aggressive management of our asset base. We seek
to differentiate ourselves by providing exceptional customer service and by
broadly and deeply integrating our services into our customers' OEM operations.
We provide integrated supply chain solutions that address all stages of the
product life cycle, including engineering and design, new product introduction,
materials procurement and management, printed circuit board assembly, product
assembly and system integration, testing, logistics and distribution, and
after-market support. We believe that this comprehensive range of services
promotes our growth by attracting new customers and capturing additional
outsourcing opportunities within our existing customer base.

         Since our founding in 1994, we have experienced substantial growth
driven primarily by acquisitions of existing OEM manufacturing facilities and by
the increasing number of OEMs who are outsourcing their manufacturing
requirements. We intend to continue to actively pursue strategic acquisitions
and to benefit from this increasing trend by OEMs to outsource over the next
several years.

         We work closely with our customers to anticipate and forecast their
future volume of orders and delivery dates. We derive most of our net sales
under purchase orders from our customers. We recognize sales, net of product
return and warranty costs, typically at the time of product shipment or as
services are rendered. Our cost of goods sold includes the cost of electronic
components and materials, labor costs and manufacturing overhead. The
procurement of raw materials and components requires us to commit significant
working capital to our operations and to manage the purchasing, receiving,
inspection and stocking of these items. Our typical customer contract contains
provisions which specify that we may recover from the customer inventory costs
and material acquisition costs for raw material which becomes excess or obsolete
due to customer reschedules, cancellations or product changes.

         Our operating results are affected by the level of capacity
utilization in our manufacturing facilities, indirect labor costs and
selling, general and administrative expenses. Gross margins and operating
income generally improve during periods of high-volume and high-capacity
utilization in our manufacturing facilities and decline during periods of
low-volume and low-capacity utilization. However, certain of our customer
contracts contain guaranteed minimum commitments, requiring the customer to
either purchase certain contractual minimum quantities or pay for amounts in
deficit of the minimum purchase commitment. Such contracts may partially
offset the negative impact of low-capacity utilization on gross margins and
operating income.

         As a result of the current economic uncertainty and slowdown in the
economy generally, several of our customers and competitors have announced
layoffs and have indicated that revenues and earnings in future periods may be
less than previously expected. Such a slowdown in economic growth could have a
negative impact on our future financial performance.

         Our business strategy includes the continued expansion of our global
manufacturing network. Currently, approximately 90% of our net sales worldwide
are denominated in US dollars, while our labor and utility costs in facilities
outside of the United States are denominated in local currencies. Foreign
currency gains and losses are the result of transacting business in a currency
that is different from the functional currency of our operating entity and the
movements in those


                                       9
<PAGE>

currencies between the time a transaction is recorded for financial reporting
purposes and the time payment is made or received. We currently use forward
foreign exchange contracts on a limited basis to minimize our foreign currency
risk but not for trading purposes. We expect to continue to utilize forward
foreign exchange contracts only to the extent that these contracts minimize
exposure and reduce risk from exchange rate fluctuations on specific underlying
transactions that create foreign currency exchange rate risk for us. Any
increase or decrease in our use of derivative financial instruments will likely
be as a result of these contracts.

RECENT ACQUISITIONS

         A significant portion of our growth has come from recent acquisitions,
which have strengthened existing customer relationships, added new customers and
increased our range of service offerings.

         In January 2001, we acquired selected fixed assets and intangible
assets from Oce-Industries, an existing customer and a leading
Netherlands-based OEM, for $5.9 million in cash and assumed liabilities. As
part of the transaction, we acquired a 130,000 square foot manufacturing
facility in Guerande, France. In connection with this acquisition, we entered
into a three-year supply agreement to manufacture complex printer systems for
Oce-Industries. We also retained the facility employees. The acquisition of
the Guerande facility expanded our relationship with Oce-Industries and
provided us with our operations in France.

         In September 2000, we acquired selected inventory, fixed assets and
intangible assets from 3Com, an existing customer, for $79.1 million. The
purchase price consisted of $60.1 million in cash, financed with a term loan
under our bank credit facility, and 1,551,220 shares of our Common Stock. As
part of this transaction, we leased a 404,000 square foot manufacturing facility
located in Mt. Prospect, Illinois, near Chicago. In connection with this
acquisition, we entered into a two-year supply agreement with 3Com to produce
digital subscriber line (DSL) and cable modems, carrier systems products and
digital cameras. We also retained the facility employees. In addition to
expanding our relationship with 3Com, this acquisition enhanced our new product
introduction, product assembly and systems integration and testing capabilities.

         In June 2000, we acquired Qualitronics, Inc., an electronics prototype
manufacturing firm, for an aggregate purchase price of $11.5 million, consisting
of $4.0 million in cash and 472,479 shares of our Common Stock. The cash portion
of the purchase price was financed with proceeds from our initial public
offering. The acquisition significantly enhanced our prototype and low-volume
manufacturing capabilities in North America. These capabilities complemented our
existing engineering and design and new product introduction services and
enhanced our ability to establish relationships with OEMs in a broad range of
industries through involvement in earlier stages of their product development
cycles.

RESTUCTURING

         Generally, we enter into business acquisitions or asset acquisitions
and related supply agreements with the intention of improving the existing
manufacturing operations, reducing costs and improving operating margins. To
accomplish this, we typically assess the manufacturing processes and employee
base and restructure the operations.

         During the quarter ended April 1, 2001, we approved a plan to
restructure our operations in Asia, including moving some of our Asian
operations to China. The total restructuring charge recorded for this plan
was $2.8 million, which was comprised of lease termination costs of $1.8
million and severance of $1.0 million related to personnel reductions of
approximately 333 managerial and manufacturing employees. As of April 1,
2001, we had paid out $0.5 million in severance benefits. We expect the
restructuring plan to be substantially completed by the end of the second
quarter of 2001, and the expected savings from the implementation of this
plan are estimated to be approximately $2.0 million annually. We expect to
begin realizing the majority of these expense savings in the second half of
the year ending December 31, 2001, and these savings will be reflected in
cost of goods sold in our reported results of operations.

         We intend to implement a plan during the second quarter of 2001 to
restructure certain operations in the United States, Spain and Ireland. We
expect the total cost associated with this plan will be approximately $10 to $15
million. The costs for this plan will be primarily comprised of asset writedowns
based on management's intention of disposing of certain manufacturing assets and
severance costs related to a reduction of manufacturing and managerial
employees.


                                       10
<PAGE>

RESULTS OF OPERATIONS

         The following table sets forth specified operating data, in dollars
and as a percentage of net sales, for the periods indicated:

<TABLE>
<CAPTION>

                                                                           Three Months Ending
                                                                   -----------------------------------
                                                                     April 1, 2001      April 2, 2000
                                                                   ----------------- -----------------
                                                                           (Dollars in thousands)
<S>                                                               <C>                <C>

Net sales                                                           $528,708  100.0% $  332,820  100.0%
Cost of goods sold                                                   494,572   93.5     316,505   95.1
                                                                    -------- ------- ---------- ------
Gross profit                                                          34,136    6.5      16,315    4.9
Selling, general and
  administrative(a)                                                   23,929    4.5      16,702    5.0
Restructuring                                                          2,791    0.6          --     --
Litigation settlement (b)                                                 --     --       6,000    1.8
                                                                    -------- ------- ---------- ------
Operating income (loss)                                                7,416    1.4      (6,387)  (1.9)
Interest expense, net                                                 (5,724)  (1.1)     (3,476)  (1.1)
Foreign exchange gain (loss)                                             (37)  (0.0)       (673)  (0.2)
                                                                    -------- ------- ---------- ------
Income (loss) before provision
  for income taxes                                                     1,655    0.3     (10,536)  (3.2)
Provision for income taxes                                               573    0.1         287    0.1
                                                                    -------- ------- ---------- ------
Net income (loss)                                                   $  1,082    0.2% $  (10,823)  (3.3)%
                                                                    ======== ======= ========== ======
</TABLE>

-----------------------------

(a)      Includes $185 and $3,987 of non-cash charges related to stock-based
         compensation in the three months ended April 1, 2001 and April 2, 2000,
         respectively.

(b)      Represents the settlement of a legal claim arising from a potential
         acquisition that was not consummated.


FISCAL QUARTER ENDED APRIL 1, 2001 COMPARED TO FISCAL QUARTER ENDED APRIL 2,
2000

NET SALES

         Net sales for the quarter ended April 1, 2001 increased $195.9 million,
or 58.9%, to $528.7 million from $332.8 million for the quarter ended April 2,
2000. Net sales for the quarter ended April 1, 2001 included $119.3 million
attributable to our Mt. Prospect and Guerande facilities, which were acquired in
October 2000 and January 2001, respectively. Other increases include $60.6
million from five existing customers, $30.1 million from new customers since
April 2, 2000 and $5.7 million in additional sales from engineering design
services. These increases were partially offset by volume reductions in two
customers' programs of $21.5 million, resulting from competitive pressures in
those customers' industries.

GROSS PROFIT

         Gross profit increased to 6.5% of net sales for the quarter ended
April 1, 2001 from 4.9% of net sales for the quarter ended April 2, 2000.
This increase resulted from the positive effects of our Mt. Prospect and
Guerande facilities, which had a mix of customer programs with higher average
margins as compared to our other sites, due in part to customer contracts
with guaranteed minimum purchase commitments, and increased revenues from
engineering design services. These increases were partially offset by the
decrease in utilization of our manufacturing capacity, primarily related to
our Asian facilities, which began restructuring operations during the quarter
ended April 1, 2001.

SELLING, GENERAL AND ADMINISTRATIVE

         Selling, general and administrative expense for the quarter ended April
1, 2001 increased to $23.9 million, or 4.5% of net sales, from $16.7 million, or
5.0% of net sales, for the quarter ended April 2, 2000. This increase related to
the asset and business acquisitions that occurred since the first quarter of
2000, including amortization of intangible assets ($0.6 million) and expenses
related to human resources, accounting and information systems necessary to
support the facilities ($3.2 million). Additional increases include consulting
fees associated with integrating acquired sites ($1.4 million), additions to the
allowance for doubtful accounts ($0.5 million) and staffing increases at all of
our sites to support growth in customer programs. These increases were partially
offset by a reduction in stock-based compensation due to a $3.8 million charge
recognized in the quarter ended April 2, 2000 related to stock granted to senior
management.


                                       11
<PAGE>

LEGAL SETTLEMENT

         In April 2000, we agreed to settle a claim for damages brought against
us arising from a potential acquisition that was not consummated. As a result,
we recorded a $6.0 million charge in the three months ended April 2, 2000.

INTEREST EXPENSE, NET

         Net interest expense increased to $5.7 million for the quarter ended
April 1, 2001 from $3.5 million for the quarter ended April 2, 2000, reflecting
higher average borrowings, partially offset by the impact of decreasing interest
rates.

FOREIGN EXCHANGE GAINS/LOSSES

         There were no significant foreign exchange gains or losses for the
three months ended April 1, 2001. Foreign exchange losses for the three months
ended April 2, 2000 were $0.7 million, of which approximately $0.5 million were
related to the strengthening of the US dollar in relation to the Spanish peseta
in connection with a US dollar denominated loan for our Valencia facility.

PROVISION FOR INCOME TAXES

         Provision for income taxes was $0.6 million for the quarter ended April
1, 2001 and $0.3 million for the quarter ended April 2, 2000. Our tax provisions
in both quarters resulted from the mix of profits and losses experienced by us
across the jurisdictions within which we operate. For the quarter ended April 1,
2001, losses in Asia provided us with no income tax benefit while profits in
Spain and France required us to record tax provisions. There is no tax provision
on profits in the United States due to the benefit of net operating loss
carryforwards, against which a full valuation allowance had previously been
provided.

LIQUIDITY AND CAPITAL RESOURCES

         At April 1, 2001, we had cash and cash equivalents of $26.9 million,
total bank and other debt of $205.3 million and $65.5 million of unused
borrowing capacity under our revolving bank credit facility. During the quarter
ended April 1, 2001, our operations were funded primarily with borrowings under
our bank credit facility and cash generated from operations.

         Net cash provided by operating activities of $9.7 million for the
three months ended April 1, 2001 resulted from net income of $1.1 million, a
decrease in operating assets of $64.4 million, and depreciation and
amortization of $9.3 million offset by a decrease in operating liabilities of
$66.7 million. The decrease in operating assets included a $47.0 million
reduction in inventory attributable to the sale of excess inventory under the
provisions of our customer contracts. Of the $47.0 million of excess
inventory sales recorded during the quarter, $22.9 million remaining to be
collected were recorded in prepaid expenses and other current assets at April
1, 2001. Net cash used in operating activities of $20.7 million for the
quarter ended April 2, 2000 resulted from a net loss of $10.8 million and an
increase in operating assets of $50.4 million offset by an increase of
operating liabilities of $28.6 million, depreciation and amortization of $6.1
million and other non-cash items aggregating $5.8 million. Other non-cash
items include non-cash charges for equity awards of $4.0 million and other
non-cash charges of $1.0 million associated with the obligations of
Donaldson, Lufkin & Jenrette Securities Corporation under a litigation
settlement agreement with Lockheed Martin Corporation. The increase in
depreciation and amortization for the quarter ended April 1, 2001 compared to
the quarter ended April 2, 2000 reflects the impact of asset and business
acquisitions since April 2, 2000 as well as an overall increase in the
depreciable asset base due to investments in manufacturing equipment and
internal use software.

         Net cash used in investing activities for the quarter ended April 1,
2001 was $10.0 million, consisting of $8.1 million of net capital expenditures,
$0.5 million of internal use software, and $1.4 million for the acquisition of
intangible assets related to our Guerande facility. Capital expenditures include
$3.9 million related to the purchase of our Guerande facility and computer
software for our Mt. Prospect facility. Net cash used in investing activities
for the quarter ended April 2, 2000 was $8.8 million, consisting of $6.2 million
of capital expenditures and $2.6 million of internal use software. Capital
expenditures consisted of production equipment for our Valencia and Salt Lake
City facilities and computer hardware and software in Salt Lake City.

         Net cash provided by financing activities for the quarter ended April
1, 2001 was $17.9 million, consisting of net borrowings under our bank credit
facility of $16.8 million and proceeds from the issuance of stock under our
employee stock purchase plan of $1.1 million. Net cash provided by financing
activities for the quarter ended April 2,


                                       12
<PAGE>

2000 was $17.6 million, consisting of net borrowings of $19.4 million under our
bank credit facility and $1.8 million of dividends paid on our senior preferred
stock.

         We believe our current level of working capital, cash expected to be
generated from operations, leasing capabilities and amounts available under
our existing revolving credit facility will be adequate to meet our
anticipated future operating expenses, capital expenditures and debt
obligations for at least the next twelve months. Our liquidity needs beyond
the next twelve months will not be materially different from current needs
except for the financing requirements of future acquisitions, if any, and for
future internal growth.

FORWARD LOOKING STATEMENTS

         This Form 10-Q includes forward-looking statements. Some of the
forward-looking statements can be identified by the use of forward-looking words
such as "believes," "expects," "may," "will," "should," "seeks,"
"approximately," "intends," "plans," "estimates" or "anticipates" or the
negative of those words or other comparable terminology. Forward-looking
statements involve risks and uncertainties. A number of important factors could
cause actual results to differ materially from those in the forward-looking
statements. These factors include systems failures, technological changes,
volatility of securities markets, government regulations and economic conditions
and competition in the areas in which we conduct our operations. For a
discussion of factors that could cause actual results to differ, please see the
discussion under "Risk Factors" included below in this Form 10-Q. The
forward-looking statements made in this Form 10-Q represent our views only as
of the date of this Report, and we disclaim any duty to update these
statements, even if subsequent events cause our views to change.

                                  RISK FACTORS

          YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING
AN INVESTMENT DECISION. ADDITIONAL RISKS NOT PRESENTLY KNOWN TO US OR THAT WE
CURRENTLY DEEM IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS. ANY OF THESE RISKS COULD
HAVE A MATERIAL AND NEGATIVE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION OR
RESULTS OF OPERATIONS.

BECAUSE A SIGNIFICANT PORTION OF OUR SALES CURRENTLY COMES FROM A SMALL
NUMBER OF CUSTOMERS, ANY DECREASE IN SALES FROM THESE CUSTOMERS COULD HARM
OUR OPERATING RESULTS.

          We depend on a small number of customers for a large portion of our
business. Our ten largest customers accounted for approximately 86% of net sales
in the quarter ended April 1, 2001 and approximately 88% of net sales for fiscal
2000. Changes in our customers' orders have, in the past, had a significant
impact on our operating results. If a major customer significantly reduces the
amount of business it does with us, there would be an adverse impact on our
operating results.

          We expect to continue to depend on sales to our major customers.
Because it is not always possible to replace lost business on a timely basis, it
is likely that our operating results would be adversely affected if one or more
of our major customers were to cancel, delay or reduce a large amount of
business with us in the future. Our customer agreements typically permit the
customer to terminate the agreement on three to six month's notice. Were a
customer to terminate its agreement with us, it is likely that our operating
results would be adversely affected.

          In addition, we generate significant accounts receivable in connection
with providing services to our major customers. If one or more of our customers
were to become insolvent or otherwise be unable to pay for our services, our
operating results and financial condition could be adversely affected.

WE HAVE MADE SEVERAL RECENT STRATEGIC ACQUISITIONS OF MANUFACTURING FACILITIES
AND BUSINESSES AND MAY MAKE MORE ACQUISITIONS IN THE FUTURE, AND THE FAILURE TO
SUCCESSFULLY INTEGRATE ACQUIRED FACILITIES AND BUSINESSES MAY ADVERSELY AFFECT
OUR FINANCIAL PERFORMANCE.

          We have made several significant acquisitions since the beginning of
fiscal 1999, and selectively pursuing strategic acquisitions remains an
important part of our overall business strategy. However, any acquisitions we
make could result in:

         -  difficulty integrating our operations, technologies, financial
            controls and information systems, products and services with those
            of the acquired facility;

         -  difficulty in managing and operating geographically dispersed
            businesses, including some located in foreign countries;

         -  diversion of our capital and our management's attention away from
            other business issues;

         -  an increase in our expenses and our working capital requirements;

         -  potential loss of key employees and customers of facilities or
            businesses we acquire; and

         -  financial risks, such as:

              -  potential liabilities of the facilities and businesses we
                 acquire;

              -  our need to incur additional indebtedness; and

              -  dilution if we issue additional equity securities.

                                       13

<PAGE>

         We may not successfully integrate any operations, technologies,
systems, products or services that we acquire, and we cannot assure you that any
of our recent or future acquisitions will be successful. If any of our recent or
future acquisitions are not successful, it is likely that our financial
performance will be adversely affected.

OUR GROWTH MAY BE LIMITED AND OUR COMPETITIVE POSITION MAY BE HARMED IF WE ARE
UNABLE TO IDENTIFY, FINANCE AND COMPLETE FUTURE ACQUISITIONS.

         We expect to selectively pursue strategic acquisitions as part of our
overall business strategy. Competition for acquiring attractive facilities and
businesses in our industry is substantial. In executing this part of our
business strategy, we may experience difficulty in identifying suitable
acquisition candidates or in completing selected transactions. In addition, our
existing bank credit facilities limit our ability to acquire the assets or
businesses of other companies. If we are able to identify acquisition
candidates, such acquisitions may be financed with substantial debt or with
potentially dilutive issuances of equity securities. Our ability to successfully
complete acquisitions in the future will depend upon several factors, including
the continued availability of financing. We cannot assure you that financing for
acquisitions will be available on terms acceptable to us, if at all.

THE INCURRENCE OF INDEBTEDNESS COULD HARM OUR OPERATING RESULTS AND FINANCIAL
CONDITION.

         Our growth and acquisition strategy could require us to incur
substantial amounts of indebtedness. As of April 1, 2001, our total debt was
$205.3 million and our interest expense for the quarter then ended was $5.7
million. In addition, we may incur additional indebtedness in the future. Our
future level of indebtedness could have adverse consequences for our business,
including:

         -  vulnerability to the effects of poor economic and industry
            conditions affecting our business;

         -  dedication of a substantial portion of our cash flow from operations
            to repayment of debt, limiting the availability of cash for working
            capital, capital expenditures or acquisitions which may be
            attractive to us;

         -  reduced flexibility in planning for, or reacting to, changes in our
            business and industry, due to the debt repayment obligations and
            restrictive covenants contained in our debt instruments; and

         -  failure to comply with the financial covenants under the agreements
            governing our indebtedness relating to matters such as interest
            coverage, leverage, consolidated EBITDA and net worth resulting in
            an event of default, which if not cured or waived, could cause
            substantially all of our indebtedness to become immediately due and
            payable.

         We have financial instruments that are subject to interest rate risk,
principally debt obligations under our bank credit facility. An increase in the
base rates upon which our interest rates are determined could have an adverse
effect on our operating results and financial condition.

COMPETITION FROM EXISTING OR NEW COMPANIES IN THE EMS INDUSTRY COULD CAUSE US TO
EXPERIENCE DOWNWARD PRESSURE ON PRICES, FEWER CUSTOMER ORDERS, REDUCED MARGINS,
THE INABILITY TO TAKE ADVANTAGE OF NEW BUSINESS OPPORTUNITIES AND THE LOSS OF
MARKET SHARE.

         We operate in a highly competitive industry. We compete against many
domestic and foreign companies, some of which have substantially greater
manufacturing, financial, research and development and marketing resources than
we do. Some of our competitors have broader geographic breadth and range of
services than we do. In addition, some of our competitors may have more
developed relationships with our existing customers than we do. We also face
competition from the manufacturing operations of our current and potential
customers, who continually evaluate the benefits of internal manufacturing
versus outsourcing. As more OEMs dispose of their manufacturing assets and
increase the outsourcing of their products, we will face

                                       14
<PAGE>

increasing competitive pressures to grow our business in order to maintain
our competitive position.

LONG-TERM CONTRACTS ARE NOT TYPICAL IN OUR INDUSTRY, AND REDUCTIONS,
CANCELLATIONS OR DELAYS IN CUSTOMER ORDERS WOULD ADVERSELY AFFECT OUR OPERATING
RESULTS.

         As is typical in the EMS industry, we do not usually obtain long-term
purchase orders or commitments from our customers. Instead, we work closely with
our customers to develop non-binding forecasts of the future volume of orders.
Customers may cancel their orders, change production quantities from forecasted
volumes or delay production for a number of reasons beyond our control.
Significant or numerous cancellations, reductions or delays in orders by our
customers would reduce our net sales. In addition, because many of our costs are
fixed, a reduction in net sales could have a disproportionate adverse effect on
our operating results. From time to time we make capital investments in
anticipation of future business opportunities. There can be no assurance that we
will receive the anticipated business. If we are unable to obtain the
anticipated business, our operating results and financial condition may be
harmed.

WE DEPEND ON OUR SUPPLIERS, SOME OF WHICH ARE THE SOLE SOURCE FOR OUR
COMPONENTS, AND OUR PRODUCTION WOULD BE SUBSTANTIALLY CURTAILED IF THESE
SUPPLIERS ARE NOT ABLE TO MEET OUR DEMANDS AND ALTERNATIVE SOURCES ARE NOT
AVAILABLE.

         We order raw materials and components to complete our customers'
orders, and some of these raw materials and components are ordered from
sole-source suppliers. Although we work with our customers and suppliers to
minimize the impact of shortages in raw materials and components, we sometimes
experience short-term adverse effects due to price fluctuations and delayed
shipments. In the past, there have been industry-wide shortages of electronic
components, particularly memory and logic devices. If a significant shortage of
raw materials or components were to occur, we may have to delay shipments, and
our operating results would be adversely affected. In some cases, supply
shortages of particular components will substantially curtail production of
products using these components. While most of our significant customer
contracts permit quarterly or other periodic reviews of pricing based on
decreases and increases in the prices of raw materials and components, we are
not always able to pass on price increases to our customers. Accordingly, some
raw material and component price increases could adversely affect our operating
results. We also depend on a small number of suppliers for many of the other raw
materials and components that we use in our business. If we were unable to
continue to purchase these raw materials and components from our suppliers, our
operating results would be adversely affected. Because many of our costs are
fixed, our margins depend on our volume of output at our facilities and a
reduction in volume will adversely affect our margins

IF WE ARE LEFT WITH EXCESS INVENTORY, OUR OPERATING RESULTS WILL BE ADVERSELY
AFFECTED.

         We typically purchase components and manufacture products in
anticipation of customer orders based on customer forecasts. For a variety of
reasons, such as decreased end-user demand for the products we are
manufacturing, our customers may not purchase all of the products we have
manufactured or for which we have purchased components. In such event, we would
attempt to recoup our materials and manufacturing costs by means such as
returning components to our vendors, disposing of excess inventory through other
channels or requiring our OEM customers to purchase or otherwise compensate us
for such excess inventory. Some of our significant customer agreements do not
give use the ability to require our OEM customers to do so. To the extent we are
unsuccessful in recouping our material and manufacturing costs, not only would
our net sales be adversely affected, but our operating results would be
disproportionately adversely affected. Moreover, carrying excess inventory would
reduce the working capital we have available to continue to operate and grow our
business.

UNCERTAINTIES AND ADVERSE TRENDS AFFECTING THE ELECTRONICS INDUSTRY OR ANY OF
OUR MAJOR CUSTOMERS MAY ADVERSELY AFFECT OUR OPERATING RESULTS.

         Our business depends on the electronics industry, which is subject to
rapid technological change, short product life cycles and pricing and margin
pressure.

                                       15

<PAGE>

In addition, the electronics industry has historically been cyclical and
subject to significant downturns characterized by diminished product demand,
rapid declines in average selling prices and production over-capacity. When
these factors adversely affect our customers, we may suffer similar effects.
Our customers' markets are also subject to economic cycles and are likely to
experience recessionary periods in the future. The economic conditions
affecting the electronics industry, in general, or any of our major
customers, in particular, may adversely affect our operating results.

BECAUSE WE HAVE SIGNIFICANT OPERATIONS OVERSEAS, OUR OPERATING RESULTS COULD BE
HARMED BY ECONOMIC, POLITICAL, REGULATORY AND OTHER FACTORS EXISTING IN FOREIGN
COUNTRIES IN WHICH WE OPERATE.

         We have substantial manufacturing operations in Europe and Asia. Our
international operations are subject to inherent risks, which may adversely
affect us, including:

         -  political and economic instability in countries where we have
            manufacturing facilities, particularly in Asia where we conduct a
            significant portion of our business;

         -  fluctuations in the value of foreign currencies;

         -  high levels of inflation, historically the case in a number of
            countries in Asia where we do business;

         -  changes in labor conditions and difficulties in staffing and
            managing our foreign operations;

         -  greater difficulty in collecting our accounts receivable and longer
            payment cycles;

         -  burdens and costs of our compliance with a variety of foreign laws;

         -  increases in the duties and taxes we pay;

         -  imposition of restrictions on currency conversion or the transfer of
            funds; and

         -  expropriation of private enterprises.

OUR QUARTERLY OPERATING RESULTS ARE SUBJECT TO FLUCTUATIONS AND SEASONALITY AND
IF WE FAIL TO MEET THE EXPECTATIONS OF SECURITIES ANALYSTS OR INVESTORS THE
PRICE OF OUR SECURITIES MAY DECREASE.

         Our annual and quarterly results may vary significantly depending on
various factors, many of which are beyond our control, and may not meet the
expectations of securities analysts or investors. If this occurs, the price of
our common stock would likely decline. These factors include:

         -  variations in the timing and volume of customer orders relative to
            our manufacturing capacity;

         -  introduction and market acceptance of our customers' new products;

         -  changes in demand for our customers' existing products;

         -  the timing of our expenditures in anticipation of future orders;

         -  effectiveness in managing our manufacturing processes;

         -  changes in competitive and economic conditions generally or in our
            customers' markets;

         -  the timing of, and the price we pay for, acquisitions and related
            integration costs;

                                       16

<PAGE>

         -  changes in the cost or availability of components or skilled labor;
            and

         -  foreign currency exposure.

         As is the case with many technology companies, we typically ship a
significant portion of our products in the last few weeks of a quarter. As a
result, any delay in anticipated sales is likely to result in the deferral of
the associated revenue beyond the end of a particular quarter, which would have
a significant effect on our operating results for that quarter. In addition,
most of our operating expenses do not vary directly with net sales and are
difficult to adjust in the short term. As a result, if net sales for a
particular quarter were below our expectations, we could not proportionately
reduce operating expenses for that quarter, and, therefore, that revenue
shortfall would have a disproportionate adverse effect on our operating results
for that quarter.

LOSS OF ANY OF OUR KEY PERSONNEL COULD HURT OUR BUSINESS BECAUSE OF THEIR
EXPERIENCE IN THE EMS INDUSTRY AND THEIR TECHNOLOGICAL EXPERTISE.

         We operate in the highly competitive EMS industry and depend on the
services of our key senior executives and our technological experts. The loss of
the services of one or several of our key employees or an inability to attract,
train and retain qualified and skilled employees, specifically engineering,
operations and sales personnel, could result in the loss of customers or
otherwise inhibit our ability to operate and grow our business successfully. In
addition, our ability to successfully integrate acquired facilities or
businesses depends, in part, on our ability to retain and motivate key
management and employees hired by us in connection with the acquisition.

IF WE ARE UNABLE TO MAINTAIN OUR TECHNOLOGICAL EXPERTISE IN DESIGN AND
MANUFACTURING PROCESSES WE WILL NOT BE ABLE TO SUCCESSFULLY COMPETE.

         We believe that our future success will depend upon our ability to
develop and provide design and manufacturing services that meet the changing
needs of our customers. This requires that we successfully anticipate and
respond to technological changes in design and manufacturing processes in a
cost-effective and timely manner. As a result, we continually evaluate the
advantages and feasibility of new product design and manufacturing processes. We
cannot, however, assure you that our process development efforts will be
successful.

WE ARE SUBJECT TO A VARIETY OF ENVIRONMENTAL LAWS THAT EXPOSE US TO POTENTIAL
FINANCIAL LIABILITY.

         Our operations are regulated under a number of federal, state and
foreign environmental and safety laws and regulations that govern, among other
things, the discharge of hazardous materials into the air and water as well as
the handling, storage and disposal of these materials. These laws and
regulations include the Clean Air Act, the Clean Water Act, the Resource,
Conservation and Recovery Act, and the Comprehensive Environmental Response,
Compensation and Liability Act, as well as analogous state and foreign laws.
Compliance with these environmental laws is a major consideration for us because
we use hazardous materials in our manufacturing process. In addition, because we
are a generator of hazardous wastes, we, along with any other person who
arranges for the disposal of our wastes, may be subject to financial exposure
for costs associated with an investigation and any remediation of sites at which
we have arranged for the disposal of hazardous wastes if these sites become
contaminated, even if we fully comply with applicable environmental laws. In the
event of a violation of environmental laws, we could be held liable for damages
And for the costs of remedial actions and could also be subject to revocation of
our effluent discharge permits. Any revocation could require us to cease or
limit production at one or more of our facilities, thereby negatively impacting
our revenues and results of operations. Environmental laws could also become
more stringent over time, imposing greater compliance costs and increasing risks
and penalties associated with any violation, which also could negatively impact
our operating results.

OUR CONTROLLING STOCKHOLDERS AND SOME OF OUR DIRECTORS MAY HAVE INTERESTS THAT
DIFFER FROM YOURS.

                                       17

<PAGE>

         Credit Suisse First Boston, through certain of its affiliates, owns
approximately 49% of our outstanding common stock and, as a result, has
significant control over our business, policies and affairs, including,
effectively, the power to appoint new management, prevent or cause a change
of control and approve any action requiring the approval of the holders of
our common stock, such as adopting amendments to our certificate of
incorporation and approving mergers or sales of all or substantially all of
our assets. In addition, under the terms of a stockholders agreement between
us, certain other parties and those affiliates of Credit Suisse First Boston,
those affiliates have the right to elect a majority of our directors if they
own 50% or more of our outstanding common stock. Circumstances may occur in
which the interests of these stockholders could be in conflict with your
interests.

PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW MAY DELAY, DETER OR PREVENT
SOMEONE FROM ACQUIRING US, WHICH COULD DECREASE THE VALUE OF OUR COMMON STOCK.

         Provisions in our charter and bylaws may have the effect of delaying,
deterring or preventing a change of control or changes in our management that
investors might consider favorable unless approved by our stockholders and
directors affiliated with Credit Suisse First Boston. Those provisions serve to
limit the circumstances in which a premium may be paid for our common stock in
proposed transactions or where a proxy contest for control of our board may be
initiated. If a change of control or change in management is delayed, deterred
or prevented, the market price of our common stock could suffer.


                                       18

<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

         There have been no material changes in our market risk during the
quarter ended April 1, 2001. Market risk information is contained under the
caption "Quantitative and Qualitative Disclosure Relating to Market Risks" in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2000.


                                       19
<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:


                                       MANUFACTURERS' SERVICES LIMITED
                                       (Registrant)

                                       Date: May 15, 2001

                                       By:  /s/ Albert A. Notini
                                          -------------------------------
                                                Albert A. Notini
                                          Executive Vice President and
                                            Chief Financial Officer
                                         (Principal Financial Officer)



                                       By:  /s/ Richard J. Gaynor
                                          -------------------------------
                                                Richard J. Gaynor
                                               Vice President and
                                              Corporate Controller
                                         (Principal Accounting Officer)




                                       20