<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 December 29, 1996

                                       OR

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

       For the transition period from               Commission File Number
               ______ to ______                             0-24934


                              PRI AUTOMATION, INC.
             (Exact name of registrant as specified in its charter)


         MASSACHUSETTS                                   04-2495703
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation)
 
     805 MIDDLESEX TURNPIKE                              01821-3986
         BILLERICA, MA                                   (Zip Code)
(Address of principal executive offices)

                 Registrant's telephone number:  (508) 670-4270

                               _________________

  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           .
                                               ---------    ----------          

  The number of shares outstanding of each of the issuer's classes of common
stock as of January 31, 1997:

                Class                         Number of Shares Outstanding
                -----                         ----------------------------
     Common Stock, $.01 par value                       7,362,645



                              Page 1 of 13 pages
                       Exhibit Index Located on Page 12

<PAGE>
 
                              PRI AUTOMATION, INC.

                                     INDEX

<TABLE> 
<CAPTION>   
                                                                                            PAGE NO.
                                                                                            --------
<S>                                                                                         <C>  
Part I.    Financial Information
           ---------------------

           Item 1.       Financial Statements
 
                         Condensed Consolidated Statements of Operations for
                         the Three Months Ended December 29, 1996 and
                         December 31, 1995                                                        3
 
                         Condensed Consolidated Balance Sheets as of
                         December 29, 1996 and September 30, 1996                                 4
 
                         Condensed Consolidated Statements of Cash Flows for
                         the Three Months Ended December 29, 1996 and
                         December 31, 1995                                                        5
 
                         Notes to Condensed Consolidated Financial Statements                     6
 
           Item 2.       Management's Discussion and Analysis of
                         Financial Condition and Results of Operations                          7-9
 
Part II.   Other Information
           -----------------

           Item 2.       Changes in Securities                                                  10

           Item 6.       Exhibits and Reports on Form 8-K                                       10
 
SIGNATURE                                                                                       11
 
           Exhibit Index                                                                        12
           Exhibit 11.1    Computation of Net Income Per Common Share                           13
</TABLE>

                                       2
<PAGE>
 
                         PART I.  FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS


                              PRI AUTOMATION, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
<TABLE>
<CAPTION>
 
                                                                                              THREE MONTHS ENDED
                                                                                              ------------------

                                                                                            DECEMBER 29,  DECEMBER 31,
                                                                                                1996         1995
                                                                                                ----         ----
                                                                                                   (Unaudited)
<S>                                                                                         <C>           <C> 
Net revenue.............................................................................       $37,228      $22,037
Cost of revenue.........................................................................        21,171       11,353
                                                                                               -------      -------
Gross profit............................................................................        16,057       10,684
 
Operating expenses:
 Research and development...............................................................         5,627        3,624
 Selling, general and administrative....................................................         4,889        3,490
                                                                                               -------      -------
 
Operating profit........................................................................         5,541        3,570
Other income, net.......................................................................           347          635
                                                                                               -------      -------
Income before income tax provision......................................................         5,888        4,205
 
Income tax provision....................................................................         2,002        1,014
                                                                                               -------      -------
 
Net income..............................................................................       $ 3,886      $ 3,191
                                                                                               =======      =======
 
Net income per common share:
 Primary................................................................................         $0.50        $0.42
 Assuming full dilution.................................................................         $0.50        $0.42
Weighted average number of common and
 common equivalent shares outstanding:
 Primary................................................................................         7,706        7,571
 Assuming full dilution.................................................................         7,762        7,612
 
</TABLE>



   The accompanying notes are an integral part of the condensed consolidated
                             financial statements.

                                       3
<PAGE>
 
                              PRI AUTOMATION, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (In thousands, except share data)

<TABLE> 
<CAPTION> 
                                              DECEMBER 29,  SEPTEMBER 30,
                                                  1996          1996
                                                  ----          ----
                                              (Unaudited)
<S>                                           <C>           <C> 
                                     ASSETS
CURRENT ASSETS:
 Cash and cash equivalents....................  $ 22,912      $ 28,487
 Marketable securities........................       400         7,582
 Trade accounts receivable, net...............    33,946        27,561
 Contracts in progress........................    27,314        21,824
 Inventories..................................    24,284        20,988
 Other current assets.........................     1,375         1,268
                                                --------      --------
  Total current assets........................   110,231       107,710
 Property and equipment, net..................     9,499         9,180
 Marketable securities........................     6,174         4,666
 Other assets.................................     2,196         2,230
                                                --------      --------
  Total assets................................  $128,100      $123,786
                                                ========      ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Accounts payable.............................  $ 16,716      $ 16,171
 Accrued expenses  and other liabilities......     8,510         9,188
 Billings in excess of revenues and customer
  advances....................................     1,373         1,505
                                                --------      --------
   Total current liabilities..................    26,599        26,864
 
Stockholders' equity:
 Common stock, $.01 par value; 12,000,000
  shares authorized; 7,349,163 and 7,285,460
  issued and outstanding at December 29, 1996
  and September 30, 1996, respectively........        73            73
 Additional paid-in capital...................    72,499        71,806
 Retained earnings............................    28,929        25,043
                                                --------      --------
   Total stockholders' equity.................   101,501        96,922
                                                --------      --------
   Total liabilities and stockholders' equity.  $128,100      $123,786
                                                ========      ========
 
</TABLE>



   The accompanying notes are an integral part of the condensed consolidated
                             financial statements.

                                       4
<PAGE>
 
                              PRI AUTOMATION, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
<TABLE>
<CAPTION>
 
                                                            THREE MONTHS ENDED
                                                            ------------------

                                                        DECEMBER 29,     DECEMBER 31,
                                                           1996             1995
                                                           ----             ----
                                                                (Unaudited)
<S>                                                     <C>              <C>
 
Net cash (used in) provided by operating activities...      $(10,819)       $ 3,604
                                                            --------        -------
 
Cash flows from investing activities:
 Purchases of property and equipment..................        (1,116)        (1,112)
 Proceeds from the sale of marketable securities......         5,959          2,264
 Proceeds from maturities of marketable securities....         2,890             --
 Purchase of marketable securities....................        (3,196)        (2,376)
                                                            --------        -------
Net cash provided by (used in) investing activities...         4,537         (1,224)
                                                            --------        -------
 
Cash flows from financing activities:
Proceeds from exercise of stock options...............           707            133
                                                            --------        -------
 
Net (decrease) increase in cash and cash equivalents..        (5,575)         2,513
Cash and cash equivalents at beginning of period......        28,487         38,005
                                                            --------        -------
 
Cash and cash equivalents at end of period............      $ 22,912        $40,518
                                                            ========        =======
 
</TABLE>



   The accompanying notes are an integral part of the condensed consolidated
                             financial statements.

                                       5
<PAGE>
 
                              PRI AUTOMATION, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


A.  BASIS OF PRESENTATION

  The condensed consolidated financial statements include the accounts of PRI
Automation, Inc. and its wholly-owned subsidiaries (collectively, the
"Company").  All significant inter-company transactions and balances have been
eliminated.

  While the financial information furnished is unaudited, the financial
statements included in this report reflect all adjustments (consisting only of
normal recurring adjustments) which the Company considers necessary for a fair
presentation of the results of operations for the interim periods covered and of
the financial condition of the Company at the date of the interim balance sheet.
The results for interim periods are not necessarily indicative of the results
for the entire year.  The condensed consolidated financial statements should be
read in connection with the audited consolidated financial statements of PRI
Automation, Inc. for the year ended September 30, 1996 included in its Form 10-
K, filed with the Securities and Exchange Commission.

  For interim reporting purposes, the Company closes its first three fiscal
quarters on the Sunday nearest the last day of December, March and June in each
year.  The Company's fiscal year ends on the last day of September.

B.  INVENTORIES

  Inventories consist of the following (in thousands):
 
                                                     DECEMBER 29,  SEPTEMBER 30,
                                                         1996          1996
                                                     ------------  -------------
  Raw materials....................................     $22,892        $19,892
  Work in process..................................       1,392          1,096
                                                        -------        -------
                                                        $24,284        $20,988
                                                        =======        =======
 
C.  ACCRUED EXPENSES AND OTHER LIABILITIES
 
  The significant components of accrued expenses and other liabilities consist
of the following (in thousands):
                                                     DECEMBER 29,  SEPTEMBER 30,
                                                        1996           1996
                                                     ------------  -------------
  Accrued expenses.................................    $ 2,247        $ 2,030
  Accrued compensation.............................      3,296          3,883
  Income taxes payable.............................      1,137          1,445
  Deferred income taxes............................      1,830          1,830
                                                       -------        -------
                                                       $ 8,510        $ 9,188
                                                       =======        =======
 

                                       6
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

   From time to time, information provided by the Company, statements made by
its employees or information included in its filings with the Securities and
Exchange Commission may contain statements which are not historical facts but
which are "forward-looking statements" which involve risks and uncertainties.
In particular, statements in "Management's Discussion  and Analysis of Financial
Condition and Results of Operations" relating to the Company's shipment level
and profitability, and the sufficiency of capital to meet working capital and
capital expenditures requirements may be forward-looking statements.  The words
"expect," "anticipate," "internal," "plan," "believe," "seek," "estimate" and
similar expressions also are intended to identify such forward-looking
statements.  This Report also contains other forward-looking statements.  Such
statements are not guarantees of future performance, and involve certain risks,
uncertainties  and assumptions that could cause the Company's future results to
differ materially from those expressed in any forward-looking statements made by
or on behalf of the Company.  Many of such factors are beyond the Company's
ability to control or predict.  Readers are accordingly cautioned not to place
undue reliance on forward-looking statements.   The Company disclaims any intent
or obligation to update publicly any forward-looking statements whether in
response to new information, future events or otherwise.  Important factors that
may cause the Company's actual results to differ from such forward-looking
statements include, but are not limited to, the factors discussed below.

   The Company's future results are subject to substantial risks and
uncertainties.  The Company's business and results of operations depend in
significant part upon capital expenditures of manufacturers of semiconductors,
which in turn depend upon the current and anticipated market demand for
semiconductors and products incorporating semiconductors.  Historically, the
semiconductor industry has been highly cyclical with recurring periods of over
supply, which often have had a severe effect on the semiconductor industry's
demand for capital expenditures, including systems manufactured and marketed by
the Company.  The Company believes that the markets for newer generations of
semiconductors will also be subject to similar fluctuations.  Also, the recent
high rate of technical innovation and resulting improvements in the performance
and price of semiconductor devices, which have driven much of the demand for the
Company's products, could slow, or encounter limits, in the future.  In
addition, any other factor adversely affecting the semiconductor industry or
particular segments within the semiconductor industry may adversely effect the
Company's business, financial condition and operating results.

   Additional risks and uncertainties include: competitive pressures on selling
prices; inventory management, including suppliers' ability to meet the Company's
needs in a timely manner; the timing and cancellation of customer orders;
changes in product mix; the Company's ability to introduce new products and
technologies on a timely basis; the Company's ability to increase its
manufacturing capacity to meet increased demand while maintaining satisfactory
levels of product quality, service levels, and timeliness of deliveries; rapid
technological change and  introduction of products and technologies by the
Company's competitors; market acceptance of the Company's and its competitors'
products; the level of orders received which can be shipped in a quarter; and
the timing of investments in engineering and development.  As a result of the
foregoing and other factors, the Company may experience material fluctuations in

                                       7
<PAGE>
 
future operating results on a quarterly or annual basis which could materially
and adversely affect its business, financial condition, operating results and
stock price.

RESULTS OF OPERATIONS

  Revenue:  Net revenue for the three months ended December 29, 1996 was $37.0
million, an increase of 68.2% over the corresponding period in fiscal 1996. The
increase resulted primarily from the Company's expansion into Europe and in the
Asia Pacific region and to a lesser extent from the increased market acceptance
of, and demand for, the Company's flexible factory automation systems, as a
result of semiconductor manufacturers' continuing upgrades and expansion of
existing fabrication facilities and construction of new facilities.  Net export
sales to customers for the three months ended December 29, 1996 were $17.4
million compared to $4.7 million for the corresponding period in fiscal 1996,
and accounted for 46.8% and 21.3% of net revenue, respectively.

  Gross profit:  The gross profit margin for the three months ended December 29,
1996 decreased to 43.1% as compared to 48.5% for the corresponding period in
fiscal 1996.  The decrease is primarily attributable to increased costs
associated with the support of global expansion and reduced prices to compete in
the Asia Pacific region.

  Research and development:  Research and development expenses for the three
months ended December 29, 1996 increased to $5.6 million, representing 15.1% of
net revenue, compared with research and development expenses of $3.6 million,
representing 16.4% of net revenue for the corresponding period in fiscal 1996.
The increase in dollar amount primarily reflects the continued increase in
personnel and materials expense in response to the increasing demand for new
products and new product enhancements. The decrease as a percentage of net
revenue is attributable to the fact that net revenue for the three months ended
December 29, 1996 grew more rapidly than research and development expenses.

  Selling, general and administrative:  Selling, general and administrative
expenses for the three months ended December 29, 1996 were $4.9 million,
representing 13.1% of net revenue, compared with selling, general and
administrative expenses of $3.5 million, representing 15.8% of net revenue for
the corresponding period in fiscal 1996. The increase in dollar amount primarily
reflects the increases in personnel, commissions and related expenses associated
with higher sales volume, expansion of the Company's marketing, market research
and communications programs, and increased sales and marketing efforts in
support of the Company's global expansion.  The decrease as a percentage of net
revenue is largely attributable to the fact that net revenue grew faster than
selling, general and administrative expenses.

  Other income, net:  Other income, net for the three months ended December 29,
1996 was $347,000 as compared to $635,000 for the corresponding period in fiscal
1996. Interest income for the three months ended December 29, 1996 was $346,000
as compared to $644,000 for the corresponding period in fiscal 1996. The
decrease is attributable to lower investment balances in the three month period
ended December 29, 1996 compared to the corresponding period in fiscal 1996.
Interest expense for the three months ended December 29, 1996 was $1,000 as
compared to $9,000 for the corresponding period in 1996.

  Income tax provision:  The effective tax rate for the three months ended
December 29, 1996 was 34.0% as compared to 24.1% for the corresponding period in
fiscal 1996.  The increase is largely attributable to a one-time benefit due to
the elimination of certain valuation allowances

                                       8
<PAGE>
 
placed against certain deferred tax assets. Excluding the effect of this one-
time benefit, the effective tax rate for the three months ended December 31,
1995 would have been 36.0%.

LIQUIDITY AND CAPITAL RESOURCES

  Since its inception, the Company has funded its operations primarily through
private equity financings, bank lines of credit, public stock offerings in
October 1994 and July 1995 and cash generated from operations.

  As of December 29, 1996 the Company had working capital of $83.6 million,
including cash and cash equivalents of $22.9 million and short-term marketable
securities of $400,000.

  Net cash used for operating activities for the three months ended December 29,
1996 was $10.8 million, compared to net cash provided by operating activities of
$3.6 million for the corresponding period in fiscal 1996. Net cash used for
operating activities for the three months ended December 29, 1996 was primarily
attributable to increases in trade accounts receivable of $6.4 million,
contracts in progress of $5.5 million and inventory of $3.3 million, offset
partially by net income of $3.9 million. The net cash provided by operating
activities for the three months ended December 31, 1995 was primarily
attributable to net income of $3.2 million, an increase in accounts payable of
$1.3 million and an increase in customer advances of $1.0 million, offset
partially by an increase of contracts in progress of $1.7 million.

  Net cash provided by investing activities for the three months ended December
29, 1996 was $4.5 million as compared to $1.2 million of net cash used  for the
corresponding period in fiscal 1996. The increase is due primarily to proceeds
from sales and maturities of marketable securities.

  Net cash provided by financing activities for the three months ended December
29, 1996 was $707,000 as compared to $133,000 for the corresponding period in
fiscal 1996.  Net cash provided by financing activities for the three months
ended December 29, 1996 and December 31, 1995 was attributable to the exercise
of stock options.

   At December 29, 1996, the Company had no borrowings under its working capital
line of credit from Fleet Bank of Massachusetts, N.A. (the "Bank"). The Company
still maintains the working capital line of credit, which enables the Company to
borrow or grant letters of credit on an unsecured basis up to the lesser of 80%
of eligible accounts receivable or $10,000,000 in revolving loans, with
outstanding borrowings under revolving loans bearing interest at the Bank's
prime lending rate. The ability of the Company to effect borrowings under such
lines of credit is conditioned upon, among other things, the Company's meeting
certain financial covenants, including covenants requiring the maintenance of
specific levels of quarterly and annual earnings, working capital, tangible net
worth, debt service coverage and liquidity. The Company may elect to convert
revolving loans into loans bearing interest at 1.5% above the Bank's cost of
funds. The working capital line of credit expires on March 1, 1998.

   The Company believes that existing cash and investment balances and funds
available under its existing lines of credit will be sufficient to meet the
Company's cash requirements to fund operations and expected capital expenditures
during the next twelve months.

                                       9
<PAGE>
 
                          PART II.  OTHER INFORMATION


Item 2.  Changes in Securities

         a)   None

         b)   None

         c)   The following information is furnished with  regard to all
         securities of the Company sold by the Company during the three months
         ended December 29, 1996, that were not registered under the Securities
         Act of 1933 (the "Securities Act") other than unregistered sales made
         in reliance under Regulation S:

                   On December 19, 1996, the Company issued and sold 2,625
              shares of its Common Stock to a director of the Company for an
              aggregate purchase price of $5,250 pursuant to the exercise of a
              nonqualified stock option previously granted to such director.
              This issuance was made in reliance upon the exemption from
              registration set forth in Section 4(2) of the Securities Act,
              relating to sales by an issuer not involving any public offering.


Item 6.  Exhibits and Reports on Form 8-K

         a) Exhibits

 EXHIBIT
 NUMBER                      DESCRIPTION
 ------                      -----------

  *3.4   Amended and Restated By-Laws of the Company
  *3.5   Restated Articles of Organization of the Company
  *4.1   Specimen Certificate for the Common Stock of the Company
  11.1   Computation of Net Income Per Common Share
_______________

  * Incorporated by reference to the similarly-numbered Exhibit to the
    Company's Registration Statement on Form S-1, File No. 33-81836, as declared
    effective by the Securities and Exchange Commission on October 13, 1994.

         b) Reports on Form 8-K

                   No reports on Form 8-K were filed during the three months
                   ended December 29, 1996.

                                       10
<PAGE>
 
                                   SIGNATURE


     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.



                                       PRI AUTOMATION, INC.



                                              /s/ John J. Schickling
Date:  February 12, 1997               By:__________________________________
                                                  John J. Schickling
                                              Duly Authorized Officer and
                                              Principal Financial Officer

                                       11
<PAGE>
 
                                 EXHIBIT INDEX

 EXHIBIT
 NUMBER                       DESCRIPTION                       PAGE
 ------                       -----------                       ----

   11.1       Computation of Net Income Per Common Share         13