<PAGE>   1
 
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-K
 
                            ------------------------
 
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
 
                      THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL PERIOD ENDED MARCH 31, 1997
                         COMMISSION FILE NUMBER 1-12912
 
                            ------------------------
 
                         CENTENNIAL TECHNOLOGIES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
                            ------------------------
 
<TABLE>
<S>                                           <C>
                   DELAWARE                                     04-2978400
         (STATE OR OTHER JURISDICTION                        (I.R.S. EMPLOYER
      OF INCORPORATION OR ORGANIZATION)                   IDENTIFICATION NUMBER)
 
   7 LOPEZ ROAD, WILMINGTON, MASSACHUSETTS                        01887
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                     (ZIP CODE)
</TABLE>
 
                                 (508) 988-8848
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
 
                            ------------------------
 
     Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or
15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months
and (2) has been subject to such filing requirements for the past 90
days.  Yes [ ]     No [X]
 
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [ ]
 
     The aggregate market value of the voting stock held by non-affiliates of
the registrant on July 10, 1997 was $35,357,012. The fair market value of the
Company's Common Stock on July 10, 1997 was $2.00 per share, based on
information reported by certain internet-based bulletin board services
purporting to monitor trading activities. The Company is unable to verify the
accuracy or completeness of such information.
 
     As of July 10, 1997 there were 18,386,902 shares of Common Stock, $.01 par
value per share (the "Common Stock"), of the registrant outstanding.
 
This filing is complete except that an opinion of the Company's independent
accountants is not included herein.
 
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<PAGE>   2
 
                                     PART I
 
CAUTIONARY STATEMENTS
 
     Except for historical information contained herein, the discussions
contained in this document include forward-looking statements. By way of
example, the discussions include statements regarding possible price
competition, expansion into new markets, future sales mix, future supply of raw
materials, gross margins, the Company's customer base, future developments
involving certain investments, and future availability of financing. Such
statements involve a number of risks and uncertainties, including, but not
limited to, those (i) discussed below, (ii) discussed under the heading "Risk
Factors", and (iii) identified from time to time in the Company's filings with
the Securities and Exchange Commission. These risks and uncertainties could
cause actual results to differ materially from those projected. Readers are
cautioned not to place undue reliance on these forward-looking statements. The
Company assumes no obligation to update these forward-looking statements to
reflect events or circumstances after the date hereof.
 
     The Company's independent accountants, Coopers & Lybrand L.L.P., ("Coopers
& Lybrand") is considering whether certain potential claims against Coopers &
Lybrand compromise its independence so as to render it unable to deliver its
opinion with respect to the Company's financial statements. The Company is
currently unable to determine when this concern will be resolved. If Coopers &
Lybrand determines that it cannot provide its opinion on the Company's financial
statements, the Company will be obliged to retain other independent accountants,
in which case its delivery of audited financial statements may be delayed for a
substantial period and, as a result of the examination of such financial
statements by successor independent accountants, there may be material changes
to such financial statements.
 
ITEM 1.  BUSINESS
 
     For purposes of this Annual Report on Form 10-K, all references to "fiscal
1997" mean the fiscal year consisting of the nine-month period of Centennial
Technologies, Inc. and Subsidiaries ("Centennial" or the "Company") ending March
31, 1997. All references to "fiscal 1996", "fiscal 1995" and "fiscal 1994" mean
the Company's twelve month fiscal year ended June 30, 1996, June 30, 1995 and
June 30, 1994, respectively.
 
RECENT DEVELOPMENTS
 
     The operations and prospects of the Company have been and are expected to
continue to be significantly affected by the recent developments described
below.
 
  Management Changes
 
     On February 10, 1997, after receipt of information regarding various
financial and accounting irregularities in the Company's prior reported
financial results, the Board fired the Company's former Chief Executive Officer,
Emanuel Pinez, and relieved the Company's former Chief Financial Officer, James
M. Murphy, of his duties. On February 17, 1997, the Company hired Interim Chief
Executive Officer Lawrence J. Ramaekers and Interim Chief Financial Officer
Eugene M. Bullis.
 
  Legal Proceedings
 
     Class Action Litigation.  Since the Company's announcement following the
Board meeting described above that it was undertaking an inquiry into the
accuracy of its prior reported financial results, and that preliminary
information had raised significant questions as to whether reported results
contained material misstatements, approximately 35 purported class action
lawsuits have been filed in the United States District Court for the District of
Massachusetts against the Company, its directors, certain of its officers, its
independent accountants, Coopers & Lybrand, and others, asserting claims under
Federal securities laws and related state law claims. See "Item 3 -- Legal
Proceedings."
 
                                        2
<PAGE>   3
 
     In addition, several shareholder derivative lawsuits have been filed by
purported holders of the Company's common stock seeking recovery for certain
alleged breach of fiduciary duties, alleged gross negligence, alleged breach of
contract and alleged insider trading by members of the Company's Board of
Directors between August 21, 1996 and February 10, 1997. See "Item 3 -- Legal
Proceedings."
 
     Department of Justice.  On February 20, 1997, the Company received a
subpoena from the United States Department of Justice ("DOJ") to produce
documents in connection with a grand jury investigation regarding various
irregularities in the Company's previous press releases and financial
statements. The DOJ also requested certain information regarding some of the
Company's former officers, certain stock transactions by the Company's former
Chief Executive Officer, and correspondence with the Company's auditors. The
Company has not been notified by the DOJ that it is a target or subject of this
investigation.
 
     New York Stock Exchange Proceedings.  On February 21, 1997, the New York
Stock Exchange ("NYSE") announced that trading in the Company's Common Stock
would be suspended before the opening of trading on March 3, 1997, and that
following suspension, the NYSE would apply to the Securities and Exchange
Commission ("SEC") to de-list the issue. On March 10, 1997, the NYSE confirmed
that trading in the Company's Common Stock was suspended prior to the opening of
the market on March 3, 1997. On April 10, 1997, the NYSE, pursuant to Section
12(d) of the Securities Exchange Act of 1934 (the "1934 Act") and Rule 12d2-2
promulgated thereunder, applied to the SEC to strike from listing and
registration on the NYSE at the opening of the market on April 25, 1997 the
Company's Common Stock because, in the opinion of the NYSE, the Company's Common
Stock was no longer suitable for continued listing and trading on the NYSE. By
its order dated April 24, 1997, the SEC granted the NYSE application for removal
of the Company's Common Stock from listing, which became effective at the
opening of trading on April 25, 1997.
 
     The Company's Common Stock is not currently listed on any organized stock
exchange.
 
     SEC Investigation.  In mid-February 1997, the Company was notified that the
Boston District Office of the SEC was conducting an investigation of the
Company. The SEC has requested that the Company provide the SEC with certain
documents concerning the Company's public reports and financial statements. The
SEC indicated that its inquiry should not be construed as an indication by the
SEC or its staff that any violations have occurred, or as a reflection upon the
merits of the securities involved or upon any person who effected transactions
in such securities. The Company is cooperating with the SEC in connection with
this investigation and its outcome cannot yet be determined.
 
RESTATEMENT OF FINANCIAL STATEMENTS
 
     On February 10, 1997, the Company's Board of Directors reviewed information
which raised significant questions as to whether previously reported financial
results contained material misstatements. A special committee consisting of
outside members of the Company's Board of Directors, with the assistance of
outside counsel and the Company's independent accountants, conducted an
investigation regarding the financial statements and business affairs of the
Company. On June 12, 1997, the Company announced that it had completed the
financial review. Such financial review remains subject to completion of the
audit by and the opinion of the Company's independent accountants. Although the
Company does not anticipate any material changes, there is no assurance that
such material changes will not occur if the Company appoints new independent
accountants.
 
     Cumulative adjustments to the Company's previously reported results of
operations through December 31, 1996 consist of reductions of sales totaling
$21.2 million; increases to cost of sales associated with inventory adjustments
totaling $8.8 million; and write-offs of investments in and advances to several
companies totaling $15.8 million. Additional increases in costs and expenses
include adjustments to plant and equipment, miscellaneous assets, investment in
Century Electronics Manufacturing, Inc., accrued liabilities and warranty
reserves for a net aggregate amount of $2.4 million. Netted against these
adjustments is an aggregate amount of $8.1 million in reductions to income
taxes, representing reversals of previously reported tax provisions.
 
                                        3
<PAGE>   4
 
     The following table sets forth the summary of restatement adjustments (in
thousands):
 
<TABLE>
<CAPTION>
                                                    SIX MONTHS
                                                      ENDED          FISCAL YEAR ENDED JUNE 30,
                                                     DEC. 31,      -------------------------------
                                                       1996         1996        1995        1994
                                                    ----------     -------     -------     -------
<S>                                                 <C>            <C>         <C>         <C>
Adjustments attributable to Centennial
  Technologies, Inc.:
 
Reversal of invalid sales transactions............   $ (5,283)     $(3,714)    $(3,455)    $  (413)
Reversal of bill and hold sales transactions......     (6,432)          --          --          --
Reclassification of purchasing agency
  arrangement.....................................       (968)        (585)         --          --
Additional accounts receivable adjustments........       (239)        (136)         (9)         --
                                                     --------      -------     -------     -------
Total adjustments to sales........................    (12,922)      (4,435)     (3,464)       (413)
Corrections to inventory pricing and physical
  counts..........................................     (1,336)      (2,202)     (4,560)     (1,410)
Restoration of inventory related to bill and hold
  sales transactions..............................      3,435           --          --          --
Additional provisions for inventory
  obsolescence....................................       (925)      (1,351)        (78)       (381)
Reversal of certain additions to capital
  equipment, net of related depreciation, which
  were not bona fide..............................        (72)      (2,266)       (223)       (177)
Provision for losses on investment activities.....    (10,811)      (1,496)         --          --
Pre-acquisition advances to subsidiary............     (2,385)      (1,101)         --          --
Other adjustments-net.............................       (568)         399       1,043        (211)
Reversal of provisions for income taxes...........      3,788        3,268         556         455
                                                     --------      -------     -------     -------
Total adjustments to net income (loss)............    (21,796)     $(9,184)    $(6,726)    $(2,137)
                                                                   =======     =======     =======
Adjustments attributable to Century Electronics
  Manufacturing, Inc..............................       (358)
                                                     --------
Total adjustments to net income (loss)............   $(22,154)
                                                     ========
</TABLE>
 
     As outlined in the criminal indictment of Centennial's former Chief
Executive Officer, the Company's sales figures were inflated in previous
periods. This inflation was achieved by various means, including shipping empty
PC card housings; billing customers for non-existent products; using the
delivery of non-product materials to generate shipping documents, which were
then used to create fictitious invoices; and the payment of these invoices with
funds apparently provided by the Company's former Chief Executive Officer.
 
     Reported revenue figures have also been corrected to exclude bill and hold
transactions which did not meet revenue recognition criteria for the periods in
which they were recorded, and to reclassify transactions related to a purchasing
agency contract with an affiliated company.
 
     Adjustments to the Company's physical inventory balances are attributable
to prior manipulation of physical counts, the inclusion of empty PC card
housings in the Company's finished goods balances, various pricing errors and
manipulations, and the Company's prior failure to reflect adequately actual
inventory usage information in providing for reserves for inventory
obsolescence.
 
     The Company has also reduced or written off the carrying value of several
of its investments in and advances to related technology companies. With regard
to the Company's advances to its recently acquired subsidiaries, Intelligent
Truck Project, Inc. and Fleet.Net, Inc., the Company has recorded a charge of
$3.5 million, equal to advances to these companies between April 1996 and
December 31, 1996 previously characterized as prepaid technology license fees,
as costs and expenses in the periods in which those advances were made. The
Company has also recorded valuation reserves and related accruals amounting to
$5.8 million related to several of its loans to and/or investments in technology
companies. In addition, the Company has reached agreements to settle claims
related to its investments in Infos International, Inc. and P.G. Technologies,
Inc. and has recorded a full write-off of its investments in these entities of
$6.0 million and $0.5 million, respectively.
 
                                        4
<PAGE>   5
 
GENERAL
 
     The Company was incorporated in 1994 in Delaware as the successor by merger
to C. Centennial, Inc., a Massachusetts corporation. The Company's principal
executive officers are located at 7 Lopez Road, Wilmington, Massachusetts, and
its telephone number is (508) 988-8848.
 
     The Company designs, manufactures and markets an extensive line of PC
card-based solutions to OEMs. The Company primarily focuses on applications for
the following four industries: Communications (routers, wireless telephones, and
local area networks); Transportation (fleet data recording, navigation, vehicle
diagnostics); Mobile Computing (hand-held data collection terminals, notebook
computers, personal digital assistants); and Medical (blood gas analysis
systems, defibrillators, hand-held glucometers). The Company has sold its
products and services to over 250 OEMs, including 3Com Corporation ("3Com"), Bay
Networks, Inc. ("Bay Networks"), Lucent Technologies, Inc. ("Lucent
Technologies"), Philips Electronics N.V. ("Philips"), and Trimble Navigation
Limited ("Trimble Navigation").
 
     The Company began operations in 1987 to develop and commercialize font
cartridges for laser printers. In 1992, the Company began designing,
manufacturing and marketing memory cards, including cards which conformed to the
specifications agreed upon by the PCMCIA and became known as "PC cards."
 
  Industry Overview
 
     In recent years, digital computing and processing have expanded beyond the
boundaries of desktop computer systems to include a broader array of electronic
systems, such as mobile communication systems, network switches, medical
devices, navigation systems, cellular telephones, portable computers, digital
cameras and portable data collection terminals. PC cards, with characteristics
such as high shock and vibration tolerance, low power consumption, small size
and higher access speed, better meet the requirements of these emerging
applications than do traditional hard drive and floppy disk storage solutions.
The Company believes that demand for PC cards will increase from increased
adoption of PCMCIA standards by electronic equipment manufacturers, the
inclusion of PC card slots on next generation electronic devices and the
development of PC cards offering new applications. In addition, the Company
believes that the recent introduction of Microsoft Corporation's new hand-held
computer operating system, Windows CE, may stimulate demand for certain
hand-held computers and personal digital assistants ("PDAs") that use PC cards
for storage and other applications.
 
  Products
 
     The Company's PC cards may contain memory chips (such as flash, static
random access memory ("SRAM") or one time programmable ("OTP") memory) for
storage capacity, input/output chips for transmitting and receiving data, and
memory chips with programmed software and other devices for specific
applications. Application-specific PC cards are generally designed by the
Company in cooperation with an OEM for a specific industry or commercial
application. The following are some of the applications in which the Company's
PC cards are used:
 
                                PC CARD PRODUCTS
 
           TARGET INDUSTRY                        APPLICATIONS
 
Communications.............     PC cards are used for storage in certain
                                wireless telephones and other personal
                                communication devices such as screen phones. PC
                                cards are also used in other communication
                                devices, such as PBX switches and network
                                routers. The Company also markets network
                                interface cards, which are used to connect
                                computing devices to local and wide area
                                networks.
 
Transportation.............     The Company markets PC cards for navigation
                                systems, such as Global Positioning Satellite
                                ("GPS") equipment used in rental cars,
 
                                        5
<PAGE>   6
 
                                fleet vehicles, emergency and rescue vehicles,
                                airplanes, ships and military vehicles. GPS
                                systems interpret signals from a dedicated
                                network of satellites that circle the earth,
                                providing data on the position, direction,
                                altitude and speed of an object. The Company
                                also develops PC cards used to interact with
                                on-board information systems embedded in air,
                                marine and land based vehicles.
 
Mobile Computing and
  Office Automation........     PC cards with memory chips are used for storage
                                capacity in portable consumer electronics
                                devices, such as notebooks, handheld computers
                                and PDAs, and in office automation products,
                                such as laser printers, facsimile machines and
                                desktop computers. PC cards are also used for
                                data acquisition and data conversion for serial
                                interfaces and in mixed signal converters, such
                                as the Company's multimedia PC card, which
                                allows conversion of analog video signals to
                                digital format in digital cameras. These cards
                                may be used to display images recorded by a
                                digital camera on a personal computer. Other
                                data acquisition and conversion cards are used
                                by field personnel to gather information, which
                                can then be transmitted and downloaded to
                                computing devices in remote offices.
 
Medical....................     The Company sells PC cards for use in medical
                                monitoring and diagnostic equipment.
                                Applications include blood gas analysis systems,
                                defibrillators and hand-held glucometers. PC
                                cards are used for recording patient data and
                                storing system program information.
 
     The Company provides other non-PC card products based on flash memory
technology. Flash memory requires no power to retain data and is electronically
programmable and re-programmable, characteristics that are not present together
in other memory chips. Based on these advantages and recent decreases in the
cost of flash memory, the Company believes the use of flash memory will become
more prevalent in industrial and commercial equipment. Management believes that
the introduction of flash SIMMS (defined below) and miniature cards will
complement the Company's PC card product offerings and provide the Company's OEM
customers with alternative solutions to address data acquisition and processing
needs.
 
     Small form factor flash cards are removable flash memory devices that fit
into small electronic devices, such as compact digital cameras, through slots
that are smaller than those designed for PC cards. Small form factor flash cards
increase memory capacity and functionality and are similar to PC cards in that
they are made with existing flash memory technology in a modified mechanical
package with modified electrical connections. The Company offers three types of
small form factor flash cards:
 
     - The CompactFlash (a trademark of SanDisk Corporation) is based on the
       standard endorsed by the CompactFlash Association, an industry
       organization established to promote uniform standards for compact flash
       cards, of which the Company is a member. The CompactFlash uses a design
       that relies on an on-board microcontroller.
 
     - The MiniatureCard (a trademark of Intel Corporation ("Intel")) is based
       upon a design promoted by Intel. The MiniatureCard uses a linear design,
       as opposed to the design of the CompactFlash, and requires no on-board
       microcontroller.
 
     - The Half Card is based upon a proprietary design developed by the Company
       utilizing linear flash technology and requires no on-board
       microcontroller or PCMCIA interface logic devices.
 
     Flash Single In-line Memory Modules ("SIMMs") are a type of compact circuit
board assembly consisting of flash memory devices and related circuitry.
Electronic systems increasingly employ SIMMs as building blocks in system
design. SIMMs allow OEMs to configure a system with a variety of different
levels of memory, thus enabling OEMs to address cost-effectively multiple price
points or applications with a single base system that is easily upgradable.
 
                                        6
<PAGE>   7
 
     PC Card Systems The Company believes that systems incorporating multiple PC
cards can offer compact, cost-effective and easily upgradable solutions for OEMs
in connection with specific industry applications. In October 1996, the Company
announced the development of the NOMAD System (Nationwide On-Board Mobile Access
to Data), an integrated PC card system designed for the transportation industry.
Although hardware prototypes of the NOMAD System have been built, no
full-function prototype system has yet been developed, and no systems have yet
been sold. There are a number of significant risks related to the successful
commercial development of the NOMAD System. See "Risk Factors -- Risks
Associated with Commercialization of the NOMAD System."
 
  Business Strategy
 
     The Company's goal is to become a leading worldwide provider of PC
card-based solutions to OEMs in the communications, transportation, mobile
computing and medical industries. Key elements of the Company's business
strategy include the following:
 
     Offer Comprehensive PC Card-Based Solutions.  The Company offers an
extensive PC card product line as well as related value-added services, such as
(i) in-house design expertise, (ii) flexible manufacturing, including the
ability to make short production runs with minimum down time, (iii) private
labeling, (iv) programming and testing capabilities, (v) rapid order turnaround,
and (vi) just-in-time delivery programs. By offering comprehensive solutions for
OEM PC card requirements, from design to shipment, the Company believes it has a
competitive advantage in the PC card market.
 
     Focus on OEM Customers.  The Company markets its products and services to
OEMs that sell products for applications within the Company's target industries.
The Company believes that it can achieve higher gross margins and customer
loyalty by serving the OEM market rather than consumer markets due to the OEM
market's requirements for value-added services, such as design expertise,
programming and prototype development. In addition, the Company believes that
serving OEMs gives it exposure to new technologies and emerging applications,
which helps the Company respond to technological advances and anticipate changes
in market conditions.
 
     Provide Flexible, High Quality Manufacturing Solutions.  The Company has
periodically upgraded and automated its manufacturing facilities to expand
production capacity. By manufacturing its PC cards in-house, the Company can
offer more flexible production schedules to accommodate OEMs that require the
delivery of a number of different products within a short time frame. The
Company's PC card manufacturing facility in Wilmington, Massachusetts is a
certified ISO 9001 manufacturer. ISO certification is based on numerous aspects
of the Company's business, including manufacturing, purchasing, human resources,
engineering and research.
 
  Sales and Marketing
 
     The Company targets industrial and commercial applications for PC cards
primarily in the communications, transportation, mobile computing and medical
industries. The Company markets its products primarily through 17 direct sales
people. The Company's sales staff operates primarily from the Company's main
office in Wilmington, Massachusetts. Field sales representatives operate from
in-home offices. The Company recently closed foreign sales branches in Montreal,
Canada and St. Albans, England.
 
     The Company generally markets its products and capabilities to engineering
and purchasing departments of OEMs. The Company's sales staff and engineers work
with OEM engineers to design and engineer PC cards to OEM requirements, which
often leads to the Company providing custom-designed PC cards for specific
applications. The Company believes its interaction with OEM customers provides
exposure to emerging technologies and applications, facilitating a proactive
approach to product design. The Company's sales to its OEM customers are
generally made pursuant to purchase orders rather than long-term sales
agreements. The Company has sold its products and services to more than 250
OEMs, including 3Com, Bay Networks, Lucent Technologies, Philips, and Trimble
Navigation. The Company also pursues sales to the U.S. government, primarily for
PC cards used in navigation applications, and to corporate end-users.
 
                                        7
<PAGE>   8
 
     During fiscal 1997, Bay Networks and Philips accounted for approximately
32% and 22%, respectively, of the Company's sales. During fiscal 1996, Bay
Networks and Philips accounted for approximately 16% and 12%, respectively, of
the Company's sales. No one customer or group of customers accounted for more
than 10% of the Company's total sales during fiscal 1995. During fiscal 1997,
1996 and 1995, approximately 8%, 12% and 23% of the Company's sales were outside
of the United States. See "Risk Factors -- Dependence on Major Customers;
Concentration of Credit Risk" and " -- Risks of International Operations."
 
  Engineering and Product Development
 
     The Company directs its engineering and design efforts towards products for
which the Company believes there is a growing and profitable market. In
particular, the Company seeks to meet the requirements of its OEM customers for
products aimed at emerging applications in the communications, transportation,
mobile computing and medical industries by applying the latest available
technology and the PC card design and engineering know-how gained from the
Company's focus on these markets. The Company provides engineering and design
support to many of its OEM customers in order to help integrate the Company's
products into OEM equipment. OEMs often require PC cards for new applications
within the Company's target markets. The Company has developed a library of
several hundred designs through its work with OEMs. By working with these OEMs,
the Company is exposed to new market opportunities for the Company's PC
card-based solutions and contract manufacturing services.
 
  Employees
 
     As of March 31, 1997, the Company had 151 full-time employees, of whom five
were executive officers, 16 were involved in sales and marketing functions, 30
were involved with engineering and product development, 21 were involved with
administration, and 79 were involved in manufacturing.
 
     On July 3, 1997, the Company carried out a reduction-in-force of one
engineering employee, three administrative employees and 24 production
employees.
 
     None of the Company's employees are represented by a labor union, and the
Company is not aware of any activities seeking such organization. The Company
considers its relationships with its employees to be satisfactory.
 
  Investment in Contract Manufacturing Operations
 
     During fiscal 1997, the Company completed three separate business
acquisitions of contract manufacturing activities. On July 10, 1996, the Company
acquired a majority equity position in Design Circuits, Inc. ("DCI") for
approximately $3.2 million in cash, 250,000 shares of the Company's Common Stock
and assumption of certain liabilities.
 
     In October 1996, the Company and the minority shareholders in DCI exchanged
their DCI shares for shares of capital stock in a newly formed entity, Century
Electronics Manufacturing, Inc. ("Century").
 
     Pursuant to a joint venture agreement executed in May, 1996, the Company
invested $1.3 million during fiscal 1997 as its initial capital into its 51%
owned contract manufacturing joint venture in Thailand. The Company's joint
venture partner's initial capital contribution was $3.7 million.
 
     On November 5, 1996, Century purchased Triax Technology Group Limited
("Triax"), a provider of contract manufacturing services located in the United
Kingdom for approximately $4.2 million in cash and approximately 2.2 million
shares of common stock of Century. The Company also contributed 25,000 shares of
Centennial Common Stock as a finder's fee. At the conclusion of the Triax
transaction, Triax and DCI were wholly-owned subsidiaries of Century, and
Centennial owned approximately 67% of Century.
 
     On March 14, 1997, Century entered into an agreement in principal with the
Company, whereby Century agreed to redeem a portion of its shares in exchange
for $1.3 million in cash and a $6.0 million subordinated debenture, reducing the
Company's equity ownership position to 45%. The debentures bear interest at a
rate of 6% and mature in ten years. Under certain conditions, the debentures
will be convertible into the capital stock
 
                                        8
<PAGE>   9
 
of an entity with which Century may merge. In addition, the Company agreed to
contribute to Century its interest in the Thailand joint venture. Century also
agreed to repay an 8.5% note payable to Centennial in the amount of $4.1 million
and to take the necessary steps to remove all outstanding guarantees of
third-party indebtedness.
 
     On June 30, 1997, the aforementioned transaction was completed. In order to
remove certain guarantees of equipment subleased to DCI, Centennial executed
lease buyouts amounting to $2.4 million and sold the underlying equipment to
Century for $0.5 million in cash and a $1.9 million 9% promissory note due
December 1998. See Note 8 of Notes to Unaudited Consolidated Financial
Statements.
 
ITEM 2.  PROPERTIES
 
     The Company maintains its principal executive offices and manufacturing
operations in a 34,000 square foot leased facility in Wilmington, Massachusetts.
The Company currently pays rent in the amount of approximately $17,000 per
month, pursuant to a lease that expires on April 30, 2002. The lease contains an
option to renew for an additional five-year period. The lease provides for
annual rent increases of 4% and provides that the Company will pay to its
landlord as additional rent its pro rata share of certain operational and
maintenance costs at the facility during the term of the lease.
 
     As of March 31, 1997, the Company maintained sales offices in Los Angeles,
California; Santa Clara, California; and Munich, Germany. The Company intends to
close these offices and conduct business with its field sales representatives
using local in-home offices.
 
     The Company believes that its facilities are adequate for its current needs
and that adequate facilities for expansion, if required, are available at
competitive rates.
 
ITEM 3.  LEGAL PROCEEDINGS
 
CLASS ACTION LITIGATION
 
     Since the Company's announcement on February 11, 1997 that it was
undertaking an inquiry into the accuracy of its prior reported financial
results, and that preliminary information had raised questions as to whether
reported results contained material misstatements, approximately 35 purported
class action lawsuits have been filed in or transferred to the United States
District Court for the District of Massachusetts. These complaints assert claims
against the Company under Section 10(b) of the 1934 Act and Rule 10b-5
promulgated thereunder, and related state law claims of fraud, deceit and
negligent misrepresentation. The complaints also assert claims against some or
all of the Company's Board of Directors, and some complaints assert claims
against certain of the Company's nondirector officers, under Section 20(a) of
the 1934 Act, as well as the same state law claims asserted against the Company.
The Company's independent accountants, Coopers & Lybrand, the Company's lead
underwriter for its March 1996 subsequent public offering, Needham & Company,
Inc., and a financial advisory subscription company, Cabot Heritage Corporation,
have also been named in some of the suits. These class action lawsuits were
purportedly brought by and on behalf of purchasers of the Company's Common Stock
between the Company's initial public offering on April 12, 1994 and February 10,
1997 (the "Centennial Securities Litigation"). See Note 17 of Notes to Unaudited
Consolidated Financial Statements.
 
     On February 20, 1997, the Company received a subpoena from the DOJ to
produce documents in connection with a grand jury investigation regarding
various irregularities in the Company's previous press releases and financial
statements. The DOJ also requested certain information regarding some of the
Company's former officers, certain stock transactions by the Company's former
Chief Executive Officer, and correspondence with the Company's auditors. The
Company has not been notified by the DOJ that it is a target or subject of this
investigation.
 
     On and after February 26, 1997, four complaints were filed in the United
States District Court for the District of Massachusetts by plaintiffs purporting
to represent classes of shareholders who purchased the Company's Common Stock on
February 25, 1997. The Complaint also names the Company's Interim Chief
 
                                        9
<PAGE>   10
 
Executive Officer, Lawrence J. Ramaekers, and alleges violations of Sections
10(b) and 20(a) of the 1934 Act (the "February 25 Securities Litigation").
 
     In mid-February 1997, the Company was notified that the Boston District
Office of the SEC was conducting an investigation of the Company. The SEC has
requested that the Company provide the SEC with certain documents concerning the
Company's public reports and financial statements. The SEC indicated that its
inquiry should not be construed as an indication by the SEC or its staff that
any violations have occurred, or as a reflection upon the merits of the
securities involved or upon any person who effected transactions in such
securities. The Company is cooperating with the SEC in connection with this
investigation, the outcome of which cannot yet be determined.
 
     On and after March 26, 1997, several complaints were filed in the United
States District Court for the District of Massachusetts by plaintiffs purporting
to represent classes of shareholders who purchased stock of WebSecure, Inc.
("WebSecure") between December 5, 1996 and February 27, 1997 (the "WebSecure
Complaints"). The WebSecure Complaints assert claims against WebSecure, certain
officers, directors and underwriters of WebSecure, and the Company. Claims
against the Company include alleged violations of Sections 11 and 15 of the
Securities Act of 1933 (the "1933 Act") (the "WebSecure Securities Litigation").
See Note 17 of Notes to Unaudited Consolidated Financial Statements.
 
     In addition, several shareholder derivative lawsuits have been filed by
purported holders of the Company's common stock seeking recovery for certain
alleged breach of fiduciary duties and alleged gross negligence by members of
the Company's Board of Directors between August 21, 1996 and February 10, 1997
(the "Derivative Litigation"). See Note 17 of Notes to Unaudited Consolidated
Financial Statements.
 
     On June 18, 1997, the Company announced that it had reached an agreement in
principle to settle the Centennial Securities Litigation, the February 25
Securities Litigation and the Derivative Litigation. This agreement in principle
contemplates that the Company and certain of its officers and directors would be
released from liability arising from the allegations included in these suits. In
return, the Company would agree to pay to the plaintiffs in the Centennial
Securities Litigation and the February 25 Securities Litigation the proceeds, if
any, of any recovery from the Company's directors and officers liability
insurance policies, and an additional $1,475,000 in cash. The Company would also
agree to issue to these plaintiffs 37% of the Company's Common Stock. The
Company also expects to adopt certain agreed upon corporate governance policies
and procedures. The plaintiffs would retain their claims against the Company's
former Chief Executive Officer, Emanuel Pinez, and the Company's former Chief
Financial Officer, James M. Murphy.
 
     The plaintiffs in the February 25 Securities Litigation have not yet
reached an agreement with the Company's Interim Chief Executive Officer,
Lawrence J. Ramaekers, regarding their alleged claims against him. These
plaintiffs have agreed in principle to release the Company from any direct
liability related to those alleged claims. In the agreement under which Mr.
Ramaekers is providing services to the Company, the Company agreed to provide
Mr. Ramaekers with the same indemnification as is applicable to other officers
of the Company pursuant to the Company's By-Laws. The Company has agreed to
indemnify, hold harmless, and defend Mr. Ramaekers from and against certain
claims arising out of his engagement with the Company.
 
     On June 19, 1997, the Company announced that it had reached an agreement in
principle to settle the WebSecure Securities Litigation. The agreement in
principle contemplates that the Company and certain of its officers and
directors would be released from any and all liability arising from the
allegations included in the WebSecure Securities Litigation in return for the
issuance to the WebSecure Securities Litigation class of 345,000 shares of the
Company's Common Stock and the payment to the class of up to $50,000 for notice
and administrative costs.
 
     As of March 31, 1997, the Company has recorded a provision for the
potential settlement of the Centennial Securities Litigation of $20.0 million,
representing the cash portion of the potential settlement, together with an
amount equal to 37% of the estimated market capitalization of the Company. The
cash portion ($1,475,000) of the potential settlement is included in accounts
payable and accrued expenses and the Common Stock portion ($18,525,000) is
included in additional paid-in capital.
 
                                       10
<PAGE>   11
 
     A number of material terms remain to be negotiated regarding the Centennial
Securities Litigation, the February 25 Securities Litigation, the Derivative
Litigation, and the WebSecure Securities Litigation. A binding commitment to the
terms described above, as well as resolution of other currently unresolved
material terms, must await the execution of final settlement agreements.
Furthermore, any settlement agreement must be submitted to the Court for review
and approval and, thereafter, presented to class members for consideration. If a
sufficiently large number of class members opt not to participate in the
settlement agreement, the agreement may be withdrawn. No assurance can be given
that the parties will be able to reach such final settlement agreements, that
any such agreements, if reached, will be approved by the Court, or that, if such
approval is obtained, that a material number of class members will not decline
to participate in the settlement.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     During the third (and final) quarter of fiscal 1997, the Company did not
submit any matter to a vote of its security holders, through a solicitation of
proxies or otherwise.
 
                                    PART II
 
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
     The Company's Common Stock was traded on the American Stock Exchange
("AMEX") from April 12, 1994 through November 25, 1996. The Common Stock was
traded on the NYSE from November 26, 1996 until the opening of the market on
March 3, 1997, at which time the Common Stock was suspended from trading on
NYSE. See "Item 3 -- Legal Proceedings". Since March 3, 1997, the Common Stock
has not been traded on an organized stock exchange.
 
     The Company's publicly-traded redeemable common stock purchase warrants
(the "Redeemable Warrants") were traded on AMEX from April 12, 1994 through
December 7, 1995, at which time substantially all of the Redeemable Warrants had
been exercised.
 
     For the periods indicated, the following table sets forth the range of high
and low sale prices for the Common Stock and the Redeemable Warrants (as
reported by AMEX and NYSE to March 3, 1997 with respect to the Company's Common
Stock). All high and low sale prices for the Common Stock have been adjusted to
reflect a three-for-two stock split effected on August 30, 1995 and a
two-for-one stock split effected on November 18, 1996. All sale prices have been
rounded to the nearest one-sixteenth.
 
COMMON STOCK
 
<TABLE>
<CAPTION>
                                                                            HIGH          LOW
                                                                            -----        -----
    <S>                                                                     <C>          <C>
    FISCAL 1996
    July 1, 1995 through September 30, 1995...............................     9 5/16       6 11/16
    October 1, 1995 through December 31, 1995.............................    10 3/8        6 1/4
    January 1, 1996 through March 31, 1996................................    11            8 9/16
    April 1, 1996 through June 30, 1996...................................    15 7/16       8 5/16
    FISCAL 1997
    July 1, 1996 through September 30, 1996...............................    21 7/16      12 7/16
    October 1, 1996 through December 31, 1996.............................    58 1/4       21 7/8
    January 1, 1997 to March 3, 1997......................................    50            1 5/8
    March 4, 1997 to March 31, 1997(1)....................................     4 1/4        1 3/4
</TABLE>
 
REDEEMABLE WARRANTS
 
<TABLE>
<CAPTION>
                                                                            HIGH          LOW
                                                                            -----        -----
    <S>                                                                     <C>          <C>
    FISCAL 1996
    July 1, 1995 through September 30, 1995...............................    10 1/2        6 13/16
    October 1, 1995 through December 7, 1995..............................    11 1/2        5 7/8
</TABLE>
 
---------------
 
(1) Based on information reported by certain internet-based bulletin board
    services purporting to monitor trading activities. The Company is unable to
    verify the accuracy or completeness of such information.
 
                                       11
<PAGE>   12
 
ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA
 
     The selected unaudited consolidated financial data set forth below should
be read in conjunction with the Company's consolidated financial statements and
related notes and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included elsewhere herein. Such unaudited
consolidated financial data remain subject to completion of the audit by and the
opinion of the Company's independent accountants. Although the Company does not
anticipate any material changes, there is no assurance that such material
changes will not occur if the Company appoints new independent accountants. The
selected consolidated financial data as of June 30, 1993 and for the year ended
June 30, 1993 have been derived from financial statements not included herein.
 
UNAUDITED CONSOLIDATED INCOME STATEMENT DATA (in thousands of dollars, except
per share data):
 
<TABLE>
<CAPTION>
                                 NINE MONTHS ENDED
                                     MARCH 31,                         FISCAL YEAR ENDED JUNE 30,
                             -------------------------     ---------------------------------------------------
                                1997           1996           1996           1995           1994         1993
                             ----------     ----------     ----------     ----------     ----------     ------
                             (RESTATED)     (RESTATED)     (RESTATED)     (RESTATED)     (RESTATED)
<S>                          <C>            <C>            <C>            <C>            <C>            <C>
Sales......................   $ 28,263       $ 21,768       $ 33,412       $  8,982       $  7,801      $6,301
Costs and expenses:
  Cost of goods sold.......     24,453         21,018         29,778         11,575          6,508       3,419
  Engineering costs........      1,061          1,126          1,434            753            567         444
  Selling, general and
     administrative........      7,318          2,705          3,803          2,442          2,083       1,566
  Loss on investment
     activities............     14,096             69          2,662             --             --          --
  Special investigation
     costs.................      3,673
  Provision for settlement
     of shareholder
     litigation............     20,000             --             --             --             --          --
  Net interest expense.....        391            174             17             64            486         112
                              --------       --------       --------       --------       --------      ------
Total costs and expenses...     70,992         25,092         37,694         14,834          9,644       5,541
                              --------       --------       --------       --------       --------      ------
Income (loss) before income
  taxes and equity in
  earnings of affiliate....    (42,729)        (3,324)        (4,282)        (5,852)        (1,843)        760
Equity in earnings
  of affiliate.............         67             --             --             --             --          --
                              --------       --------       --------       --------       --------      ------
Income (loss) before income
  taxes....................    (42,662)        (3,324)        (4,282)        (5,852)        (1,843)        760
Provision (benefit) for
  income taxes.............                                                                   (171)        318
                              --------       --------       --------       --------       --------      ------
Net income (loss)..........   $(42,662)      $ (3,324)      $ (4,282)      $ (5,852)      $ (1,672)     $  442
                              ========       ========       ========       ========       ========      ======
Net income (loss) per
  share....................   $  (2.46)      $   (.26)      $   (.31)      $   (.63)      $   (.19)     $  .07
Weighted average shares
  outstanding..............     17,367         12,678         13,632          9,363          9,027       6,000
</TABLE>
 
UNAUDITED CONSOLIDATED BALANCE SHEET DATA (in thousands of dollars):
 
<TABLE>
<CAPTION>
                                                                            JUNE 30,
                                         MARCH 31,     ---------------------------------------------------
                                           1997           1996           1995           1994         1993
                                         ---------     ----------     ----------     ----------     ------
                                                       (RESTATED)     (RESTATED)     (RESTATED)
<S>                                      <C>           <C>            <C>            <C>            <C>
Current assets.........................   $27,213       $ 37,017        $8,237         $4,265       $3,221
Total assets...........................    51,198         41,132         9,550          5,203        4,095
Current liabilities....................    22,644          8,856         5,121            889        3,027
Working capital........................     4,569         28,161         3,116          3,406          194
Stockholders' equity...................    28,554         31,909         4,267          4,315        1,044
</TABLE>
 
                                       12
<PAGE>   13
 
RESTATEMENT OF FINANCIAL STATEMENTS
 
     On February 11, 1997, the Company announced that it had commenced a special
investigation into certain apparent financial and management irregularities and
that its previously published financial statements and related financial
disclosures could no longer be relied upon. On June 12, 1997, the Company
announced the completion of the financial review associated with the special
investigation, including condensed restated financial information, as well as
the financial results for the periods ended March 31, 1997. The Company had
previously changed its fiscal year end to March 31, in order to accelerate the
receipt of certain tax refunds and in order to complete audited financial
statements for the entire periods under review as quickly as possible. The
accompanying financial statements give effect to the adjustments arising from
the financial review. Such financial review remains subject to completion of the
audit by and the opinion of the Company's independent accountants. Although the
Company does not anticipate any material changes, there is no assurance that
such material changes will not occur if the Company's independent accountants
withdraw and the Company appoints new independent accountants.
 
     Cumulative adjustments to the Company's previously reported results of
operations through December 31, 1996 consist of reductions of sales totaling
$21.2 million; increases to cost of sales associated with inventory adjustments
totaling $8.8 million; and write-offs of investments in and advances to several
companies totaling $15.8 million. Additional increases in costs and expenses
include adjustments to plant and equipment, miscellaneous assets, investment in
Century, accrued liabilities and warranty reserves for a net aggregate amount of
$2.4 million. Netted against these adjustments is an aggregate amount of $8.1
million in reductions to income taxes, representing reversals of previously
reported tax provisions.
 
     The following table sets forth the effects of these adjustments on the
Company's financial position and results of operations (in thousands except per
share data):
 
<TABLE>
<CAPTION>
                                                    SIX MONTHS         FISCAL YEAR ENDED JUNE 30,
                                                       ENDED         -------------------------------
                                                   DEC. 31, 1996      1996        1995        1994
                                                   -------------     -------     -------     -------
<S>                                                <C>               <C>         <C>         <C>
Sales:
  As previously reported.........................    $  30,192       $37,848     $12,445     $ 8,213
  As adjusted....................................       17,370        33,412       8,982       7,801
Cost of goods sold:
  As previously reported.........................       17,978        23,636       6,833       4,523
  As adjusted....................................       15,582        29,778      11,575       6,508
Net income (loss):
  As previously reported.........................        5,805         4,902         874         464
  As adjusted....................................      (16,221)       (4,282)     (5,852)     (1,672)
Net income (loss) per share:
  As previously reported.........................          .33           .34         .08         .07
  As adjusted....................................         (.94)         (.31)       (.63)       (.19)
Total assets:
  As previously reported.........................       89,952        55,782      18,199       7,553
  As adjusted....................................       58,320        41,132       9,550       5,203
Total stockholders' equity:
  As previously reported.........................       70,874        46,045      12,445       6,419
  As adjusted....................................       36,611        31,909       4,267       4,315
</TABLE>
 
                                       13
<PAGE>   14
 
     The following table sets forth the summary of restatement adjustments (in
thousands):
 
<TABLE>
<CAPTION>
                                                    SIX MONTHS
                                                      ENDED          FISCAL YEAR ENDED JUNE 30,
                                                     DEC. 31,      -------------------------------
                                                       1996         1996        1995        1994
                                                    ----------     -------     -------     -------
<S>                                                 <C>            <C>         <C>         <C>
Adjustments attributable to Centennial
  Technologies, Inc.:
Reversal of invalid sales transactions............   $ (5,283)     $(3,714)    $(3,455)    $  (413)
Reversal of bill and hold sales transactions......     (6,432)          --          --          --
Reclassification of purchasing agency
  arrangement.....................................       (968)        (585)         --          --
Additional accounts receivable adjustments........       (239)        (136)         (9)         --
                                                     --------      -------     -------     -------
Total adjustments to sales........................    (12,922)      (4,435)     (3,464)       (413)
Corrections to inventory pricing and physical
  counts..........................................     (1,336)      (2,202)     (4,560)     (1,410)
Restoration of inventory related to bill and hold
  sales transactions..............................      3,435           --          --          --
Additional provisions for inventory
  obsolescence....................................       (925)      (1,351)        (78)       (381)
Reversal of certain additions to capital
  equipment, net of related depreciation, which
  were not bona fide..............................        (72)      (2,266)       (223)       (177)
Provision for losses on investment activities.....    (10,811)      (1,496)         --          --
Pre-acquisition advances to subsidiary............     (2,385)      (1,101)         --          --
Other adjustments, net............................       (568)         399       1,043        (211)
Reversal of provisions for income taxes...........      3,788        3,268         556         455
                                                     --------      -------     -------     -------
Total adjustments to net income (loss)............    (21,796)     $(9,184)    $(6,726)    $(2,137)
                                                                   =======     =======     =======
Adjustments attributable to Century Electronics
  Manufacturing, Inc..............................       (358)
                                                     --------
Total adjustments to net income (loss)............   $(22,154)
                                                     ========
</TABLE>
 
     As outlined in the criminal indictment of Centennial's former Chief
Executive Officer, the Company's sales figures were previously inflated. This
inflation was achieved by various means, including shipping empty PC card
housings; billing customers for non-existent products; using the delivery of
non-product materials to generate shipping documents, which were then used to
create fictitious invoices; and the payment of these invoices with funds
apparently provided by the Company's former Chief Executive Officer.
 
     Reported revenue figures have also been corrected to exclude bill and hold
transactions which did not meet revenue recognition criteria for the periods in
which they were recorded, and to reclassify transactions related to a purchasing
agency contract with an affiliated company.
 
     Adjustments to the Company's physical inventory balances are attributable
to prior manipulation of physical counts, the inclusion of empty PC card
housings in the Company's finished goods balances, various pricing errors and
manipulations, and the Company's prior failure to reflect adequately actual
inventory usage information in providing reserves for inventory obsolescence.
 
     The Company has also reduced or written off the carrying value of several
of its investments in and advances to related technology companies. With regard
to the Company's advances to its recently acquired subsidiaries, Intelligent
Truck Project, Inc. and Fleet.Net, Inc., the Company has recorded a charge of
$3.5 million, equal to advances to these companies between April 1996 and
December 31, 1996 previously characterized as prepaid technology license fees,
as costs and expenses in the periods in which those advances were made. The
Company has also recorded valuation reserves and related accruals amounting to
$5.8 million related to several of its loans to and/or investments in technology
companies. In addition, the Company has reached agreements to settle claims
related to its investments in Infos International, Inc. and P.G. Technologies,
Inc. and has recorded a full write-off of its investments in these entities of
$6.0 million and $0.5 million, respectively.
 
                                       14
<PAGE>   15
 
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS
 
     Except for historical information contained herein, the discussions
contained in this document include forward-looking statements. By way of
example, the discussions include statements regarding possible price
competition, expansion into new markets, future sales mix, future supply of raw
materials, gross margins, the Company's customer base, future developments
involving certain investments, and future availability of financing. Such
statements involve a number of risks and uncertainties, including, but not
limited to, those (i) discussed below, (ii) discussed under the heading "Risk
Factors", and (iii) identified from time to time in the Company's filings with
the Securities and Exchange Commission. These risks and uncertainties could
cause actual results to differ materially from those projected. Readers are
cautioned not to place undue reliance on these forward-looking statements. The
Company assumes no obligation to update these forward-looking statements to
reflect events or circumstances after the date hereof.
 
     The Company's independent accountants, Coopers & Lybrand is considering
whether certain potential claims against Coopers & Lybrand compromise its
independence so as to render it unable to deliver its opinion with respect to
the Company's financial statements. The Company is currently unable to determine
when this concern will be resolved. If Coopers & Lybrand determines that it
cannot provide its opinion on the Company's financial statements, the Company
will be obliged to retain other independent accountants, in which case its
delivery of audited financial statements may be delayed for a substantial period
and, as a result of the examination of such financial statements by successor
independent accountants, there may be material changes to such financial
statements.
 
INTRODUCTION
 
     On February 11, 1997 the Company announced that it had commenced a special
investigation into certain apparent financial and management irregularities and
that its previously published financial statements and related financial
disclosures could no longer be relied upon. On June 12, 1997, the Company
announced the completion of the financial review associated with the special
investigation, including condensed restated financial information, as well as
the financial results for the periods ended March 31, 1997. The Company had
previously changed its fiscal year end to March 31, in order to accelerate the
receipt of certain tax refunds and in order to complete audited financial
statements for the entire periods under review as quickly as possible. The
accompanying financial statements give effect to the adjustments arising from
the financial review. Such financial review remains subject to completion of the
audit by and the opinion of the Company's independent accountants. Although the
Company does not anticipate any material changes, there is no assurance that
such material changes will not occur if the Company appoints new independent
accountants.
 
     During the nine month period ended March 31, 1997, the Company completed
three separate business acquisitions of contract manufacturing activities and
formed an entity, Century Electronics Manufacturing, Inc. of which Centennial
held a 67% equity ownership position for the purpose of conducting this
business. On March 14, 1997, the Company agreed to reduce its equity ownership
position to 45% in a transaction which was completed June 30, 1997. Accordingly
the accompanying financial statements include the results of operations of
Century from the dates of acquisition on the equity method of accounting.
 
OVERVIEW
 
     The Company designs, manufacturers and markets an extensive line of PC
cards used primarily by OEMs in industrial and commercial applications. The
Company's PC cards provide added functionality to devices containing
microprocessors by supplying increased storage capacity, communications
capabilities and programmed software for specialized applications.
 
     The Company was incorporated and began operation in 1987 to develop and
commercialize font cartridges for laser printers. Beginning in 1992, when the
Company began designing, manufacturing and marketing PC cards, the Company
gradually deemphasized the marketing and sales of font cartridges in order to
focus on the rapidly growing PC card market. As the Company effected this shift
in focus, the Company's sales increased from $7.8 million in fiscal 1994 to
$28.3 million in the nine month period ended March 31, 1997.
 
                                       15
<PAGE>   16
 
     The Company had incurred losses during each of these periods. See "Results
of Operations" appearing hereinafter for further discussion of losses.
 
     During fiscal 1996, the Company began a strategy of making investments,
financed through a combination of cash and common stock, in technology companies
for the expressed purpose of market development for its PC card business as well
as investment gain. Management has decided to focus its financial resources on
its core business, and to suspend new investment activities. The Company has
written down its portfolio of investments based on an individual assessment of
their future viability.
 
     On December 13, 1996, the Company completed merger agreements with
Intelligent Truck Project, Inc., Fleet.Net, Inc., and Smart Traveler Plazas,
Inc. (collectively, "ITP/Fleet.Net"), agreeing to exchange 792,960 shares of
Centennial Common Stock for all the outstanding common stock of the acquired
businesses. Subsequent to the Company's announcement of financial
irregularities, the principal shareholder of ITP/Fleet.Net filed suit, alleging,
among other things, breach of representations and warranties regarding the
Company's prior reported financial results. On March 4, 1997, the Company and
the principal shareholder of ITP/Fleet.Net entered into a memorandum of
understanding pursuant to which the parties would unwind the merger agreements.
The parties were unable to reach mutually satisfactory terms to complete the
unwinding and on May 15, 1997, agreed to complete the merger and exchange mutual
releases of certain claims. Based on the material uncertainties surrounding the
value of consideration on the original merger date, which uncertainties were not
resolved until the execution of a settlement and mutual release agreement, the
Company has recorded the merger and corresponding issuance of Common Stock as of
May 15, 1997. Advances to ITP/Fleet.Net made during fiscal 1996 and the nine
months ended March 31, 1997, certain of which were previously characterized as
advance payments for technology license arrangements, have been included in loss
on investment activities in the periods the advances were made.
 
     The following table sets forth certain statements of operations data as a
percentage of sales for the periods presented:
 
<TABLE>
<CAPTION>
                                                      NINE MONTHS         FISCAL YEAR ENDED JUNE
                                                    ENDED MARCH 31,                 30,
                                                    ----------------     -------------------------
                                                     1997      1996      1996      1995      1994
                                                    ------     -----     -----     -----     -----
<S>                                                 <C>        <C>       <C>       <C>       <C>
Sales.............................................   100.0%    100.0%    100.0%    100.0%    100.0%
Costs and expenses:
  Cost of goods sold..............................    86.5      96.6      89.1     128.9      83.5
  Engineering costs...............................     3.8       5.2       4.3       8.3       7.3
  Selling, general and administrative expenses....    25.9      12.4      11.4      27.2      26.7
  Loss on investment activities...................    49.9        .3       8.0      --        --
  Special investigation costs.....................    13.0      --        --        --        --
  Provision for settlement of shareholder
     litigation...................................    70.8      --        --        --        --
  Net interest expense............................     1.4        .8        .1        .8       6.2
                                                    ------     -----     -----     -----     -----
Loss before income taxes and equity in earnings of
  affiliate.......................................  (151.2)    (15.3)    (12.9)    (65.2)    (23.7)
Equity in earnings of affiliate...................      .3      --        --        --        --
                                                    ------     -----     -----     -----     -----
Loss before income taxes..........................  (150.9)    (15.3)    (12.9)    (65.2)    (23.7)
Provision (benefit) for income taxes..............    --        --        --        --        (2.2)
                                                    ------     -----     -----     -----     -----
Net loss..........................................  (150.9)%   (15.3)%   (12.9)%   (65.2)%   (21.5)%
                                                    ======     =====     =====     =====     =====
</TABLE>
 
                                       16
<PAGE>   17
 
     The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements and Notes thereto.
 
RESULTS OF OPERATIONS
 
NINE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996
 
     Sales.  Sales increased 30% to approximately $28.3 million in the 1997
period compared to $21.8 million in the 1996 period, primarily as a result of
increased volume of sales of PC cards. Such increase resulted primarily from
expansion of the PC card market, increased sales and marketing efforts by the
Company and the broadening of the Company's product line.
 
     Sales outside of the United States represented 8% of sales in the 1997
period compared to 12% of sales in the 1996 period.
 
     Sales to one of the Company's customers represented 22% of total sales in
the 1997 period and 12% of sales in the 1996 period. The Company expects a
significant decline in orders from this customer due to the completion of the
program under which the product was originally shipped. In addition, the Company
is in dispute with the customer regarding certain unshipped orders which have
not been included in sales.
 
     Another significant customer represented 32% of total sales in the 1997
period and 16% of total sales in the 1996 period. If these customers were to
reduce significantly the amount of business they conduct with the Company, it
could have a material adverse effect on the Company's business, financial
condition and results of operations. No other customer or group of related
customers accounted for more than 10% of the Company's sales.
 
     Costs of Goods Sold.  Cost of goods sold increased 16% to $24.5 million for
the 1997 period compared to $21.0 million for the 1996 period. Gross margins
were 13.5% for the 1997 period compared to 3.5% for the 1996 period. Costs of
goods sold include provisions for inventory obsolescence of $925,000 in the 1997
period and $1,351,000 in the 1996 period, representing 3.3% of sales in the 1997
period and 6.2% in the 1996 period, reflecting a strategy of building inventory
in anticipation of customer orders, a portion of which did not materialize. The
decline in obsolescence as a percentage of sales reflects, in part, a change in
the practice in February 1997, which change significantly decreased the amount
of inventory purchased in advance of receipt of customer orders. The Company's
gross margins have also been impacted by declining memory chip prices, which
reduced PC card selling prices in certain situations where the Company had
already purchased memory chips at higher prices.
 
     During the 1997 and 1996 periods, the Company recorded sales of $5.3
million and $3.7 million, respectively, which were subsequently deemed to be
invalid and reversed in the process of restating the Company's financial
statements. These transactions had the effect of overstating the Company's gross
margins and contributed to inappropriate pricing decisions and selling
practices.
 
     Engineering Costs.  Engineering costs were $1.1 million in both periods.
 
     Selling, General and Administrative Expense.  Selling, general and
administrative expenses increased to $7.3 million in the 1997 period compared to
$2.7 million in the comparable 1996 period. Sales compensation and related
travel costs for domestic operations increased from $872,000 to $1,604,000,
reflecting increased investment in sales personnel. Legal, accounting and other
professional fees were approximately $1.8 million in the 1997 period compared to
$90,000 in the 1996 period, reflecting increased costs associated with Company's
investment activities as well as costs associated with a public offering for
convertible debentures which was cancelled in December 1996.
 
     Depreciation expense increased to $702,000 in the 1997 period compared to
$346,000 in the 1996 period, reflecting increased capital equipment expenditures
to increase production capacity and improve productivity.
 
     The Company's Canadian and United Kingdom sales subsidiaries incurred
$590,000 of selling, general and administrative expenses in the 1997 period
compared to $464,000 in the 1996 period. These operations
 
                                       17
<PAGE>   18
 
were both shut down in April 1997 and support for all international sales
activities was consolidated at the Company's headquarters.
 
     During the 1997 period, the Company revised its method of allocating
overhead costs to cost of goods sold, which revision reduced the allocation for
this period by approximately $360,000.
 
     Loss on Investment Activities.  Loss on investment activities consists of
write-downs, valuation adjustments and accruals for losses on disposition of a
series of investments made during the 1997 and 1996 periods. The following table
describes the elements and the amounts reflected in this category (in
thousands):
 
<TABLE>
        <S>                                                                  <C>
        Costs incurred in connection with ITP/Fleet.Net....................  $ 3,729
        Provision for loss on investment in Infos International............    6,024
        Provision for loss on investment in Industrial Imaging.............    2,283
        Provision for loss on investment in WebSecure......................    1,765
        Less gain on sale of investment in WebSecure.......................   (1,200)
        Amortization of goodwill and equity in losses of ViA...............      585
        Other losses.......................................................      910
                                                                             -------
                                                                             $14,096
                                                                             =======
</TABLE>
 
  ITP/ Fleet.Net
 
     On December 13, 1996, the Company completed merger agreements regarding
ITP/Fleet.Net agreeing to exchange 792,960 shares of Common Stock of the Company
for all of the outstanding common stock of the acquired businesses. Subsequent
to the Company's February announcement of financial irregularities, the
principal shareholder of ITP/Fleet.Net filed suit, alleging, among other things,
breach of representations and warranties regarding the Company's prior reported
financial statements. On March 4, 1997, the Company and the principal
shareholder of ITP/Fleet.Net entered into a memorandum of understanding pursuant
to which the companies would unwind the merger agreement. The parties were
unable to reach mutually satisfactory terms to complete the unwinding and on May
15, 1997 agreed to complete the merger and exchange mutual releases of certain
claims. Based on the material uncertainties surrounding the value of
consideration on the original merger date, which uncertainties were not resolved
until the execution of the Settlement and Mutual Release, the Company has
recorded the merger and corresponding issuance of Common Stock as of May 15,
1997. Advances to ITP/Fleet.Net made during fiscal 1996 and fiscal 1997, certain
of which were previously characterized as advance payments for technology
license arrangements, have been included in loss on investment activities in the
periods the advances were made. The merger will be recorded using purchase
accounting, and the excess of the purchase price over the fair value of assets
acquired (approximately $3.0 million) will be written off as of May 15, 1997,
the settlement agreement date, because of the uncertainties related to the
future operations of ITP/Fleet.Net.
 
  Infos International, Inc.
 
     During fiscal 1997, the Company acquired a 38% interest in Infos
International, Inc., a supplier of intelligent hand held data collection
equipment for route and shop floor accounting. The purchase price amounted to
approximately $3.0 million in cash and 230,000 shares of Centennial Common Stock
having a market value of $3.9 million at date of acquisition. On May 14, 1997,
the Company and shareholders of Infos reached an agreement in principal whereby
the Company would return its shares of Infos in exchange for shares of Common
Stock issued and a three-year warrant to acquire shares of Infos equal to up to
15% of the then outstanding common stock of Infos with certain limitations. The
parties have also agreed to exchange mutual releases of any claims arising from
the original acquisition agreement. Since Infos is a privately-held company,
there is no available market information in order to ascribe value to the
warrants, and current financial information is not presently available.
Accordingly, the full amount of the investment cost ($7.0 million) has been
written off. The recorded loss of $(6.0) million reflects the use by Infos of
$1.0 million of the original cash proceeds to repay an obligation of that amount
due to Centennial from an Infos subsidiary,
 
                                       18
<PAGE>   19
 
Information Capture Corporation ("ICC"). This obligation originally arose in
fiscal 1995, prior to Infos acquiring ICC, in connection with a sales
transaction that was determined in the Company's financial review not to be bona
fide. The effect of the adjustment is to reflect $1.0 million of the investment
cost as a reduction of sales and net income in fiscal 1995 and the remainder as
loss on investment activities in fiscal 1997.
 
  Industrial Imaging, Inc.
 
     For $730,000 in cash and the conversion of $200,000 of notes, the Company
purchased a minority interest in a corporation now known as Industrial Imaging,
Inc. which designs, manufactures and markets automated optical vision and
individual imaging systems for inspection and identification of defects in
printed circuit boards. In addition, effective April 1, 1996 and expiring June
30, 1997, the Company agreed to provide procurement services and purchase
material using the Company's credit arrangements for a service fee of $200,000.
The Company completed purchases aggregating $1.4 million on behalf of the
investee and initially reflected by the Company as sales with the equivalent
amount of cost of goods sold. Such sales have been reversed in connection with
the Company's financial review. During fiscal 1997, the Company determined that
the investee was unable to repay the Company for the material purchased, and
also determined that the value of the equity investment was permanently
impaired. The Company has agreed to convert its account receivable into common
stock of the investee and has recorded a valuation reserve equal to the carrying
value of the investment.
 
  WebSecure, Inc.
 
     During fiscal 1996 the Company purchased for $569,000 a minority interest
in WebSecure, Inc., a corporation which provides Internet services. The former
president and a shareholder of WebSecure was a Director of the Company from
February 1994 through November 1995. In connection with WebSecure's initial
public offering, the Company realized a gain of $1.2 million from the sale of a
portion of its investment. The remaining investment, having a cost of $560,000,
has been fully reserved on the basis that its value appears to have been
permanently impaired. In addition, the Company has deferred recognition of the
gain pending final resolution of certain litigation described in Note 17 of
Notes to Unaudited Consolidated Financial Statements.
 
  ViA, Inc.
 
     In December 1996, the Company acquired a 12% interest in ViA, Inc. a
privately held technology company that designs, develops, and markets miniature
communication and computing products. Due to the significance of the Company's
investment to ViA's total capitalization and on the basis of the complementary
nature of the companies' products and related development plans, Centennial is
accounting for this investment using the equity method, and is amortizing the
purchase price in excess of its interest in the investee's underlying net
assets, which excess amounted to $5.0 million, over 60 months. The Company has
recorded this amortization, as well as its share of the investee's losses since
the date of the investment, for an aggregate amount of $585,000, as loss on
investment activities.
 
  Other Investments
 
     During fiscal 1997 and 1996, the Company made investments aggregating
$860,000 in development stage businesses that have not yet reached commercial
viability. Such investments have been fully reserved as of March 31, 1997 net of
certain offsets included in accounts payable and accrued expenses.
 
                                       19
<PAGE>   20
 
     Special Investigation Costs.  The following table describes the elements
and the amounts reflected in this category for fiscal 1997 (in thousands):
 
<TABLE>
        <S>                                                                   <C>
        Fees for services provided by the Company's independent
          accountants.......................................................  $  933
        Fees for services provided by the Company's Special Litigation Legal
          Counsel...........................................................     942
        Fees for services provided by the Company's Interim Chief Executive
          Officer and Interim Chief Financial Officer.......................   1,195
        Fees for services provided by Counsel to the Special Committee of
          the Board of Directors............................................     541
        Other...............................................................      62
                                                                              ------
                                                                              $3,673
                                                                              ======
</TABLE>
 
     As of March 31, 1997, $1.6 million of these fees have been paid and $2.0
million are included in accounts payable and accrued expenses. Such accruals
include estimates of fees in connection with the completion of the special
investigation, certain refinancing activities, and costs of legal defense
associated with shareholder litigation.
 
     Provision for Settlement of Shareholder Litigation.  As of March 31, 1997,
the Company has recorded a provision for the potential settlement of the
Centennial Securities Litigation of $20.0 million, representing the cash portion
of the potential settlement, together with an amount equal to 37% of the
estimated market capitalization of the Company. The cash portion ($1,475,000) of
the potential settlement is included in accounts payable and accrued expenses
and the Common Stock portion ($18,525,000) is included in additional paid-in
capital.
 
     Net Interest Expense.  Net interest expense increased from $174,000 in
fiscal 1996 to $391,000 in fiscal 1997, reflecting an increased level of
borrowing under the Company's revolving credit agreement.
 
     Equity Interest in Earnings of Affiliate.  The equity interest in earnings
of affiliate reflects the Company's net interest in earnings of Century.
 
YEARS ENDED JUNE 30, 1996 AND 1995
 
     Sales.  Sales increased 272% to approximately $33.4 million in fiscal 1996
from approximately $9.0 million in fiscal 1995, primarily as a result of
increased volume of sales of PC cards. Sales of PC cards as a percentage of
total sales increased to approximately 98% in fiscal 1996 from approximately 81%
in fiscal 1995. The growth in the Company's PC card sales resulted primarily
from expansion of the PC card market generally, increased sales and marketing
efforts by the Company and the broadening of the Company's PC card product line.
The increase in the Company's PC card sales was partially offset by a decrease
in sales of font cartridges. This decrease was attributed to weakening demand
for font cartridges as laser printer fonts are increasingly being delivered
through PC cards rather than font cartridges, and the gradual shift in the
Company's focus commenced in 1992, away from font cartridges and toward the PC
card market. See "Risk Factors -- Product Concentration."
 
     Cost of Goods Sold.  Cost of goods sold increased 157% resulting in gross
margin of $3.6 million in 1996 compared to negative gross margin of $2.6 million
in fiscal 1995. As a percentage of sales, gross margin was 10.9% in fiscal 1996
and (28.9)% in fiscal 1995. Gross margins reflect inventory adjustments
associated with the financial review of $3.6 million in fiscal 1996 and $4.6
million in fiscal 1995, based on roll-back analyses of adjusted sales activity
and review of available physical inventory records for recurring errors
misstating quantities and pricing, as well as provisions for inventory
obsolescence.
 
     During fiscal 1996 and fiscal 1995, the Company recorded sales of $3.7
million and $3.5 million, respectively, which were subsequently deemed to be
invalid and reversed in the process of restating the Company's financial
statements. These transactions had the effect of overstating the Company's gross
margins and contributed to inappropriate pricing decisions and selling
practices.
 
                                       20
<PAGE>   21
 
     Engineering Costs.  Engineering costs increased 91% to approximately $1.4
million in fiscal 1996 from approximately $753,000 in fiscal 1995 as a result of
increased engineering resources required by the Company's increased emphasis on
the PC Card marketplace. As a percentage of sales, research and development
expenses were 4% in fiscal 1996 as compared to 8% in fiscal 1995 due primarily
to the higher sales level.
 
     Selling, General and Administrative Expenses.  Selling, general and
administrative expenses increased 56% to approximately $3.8 million in fiscal
1996 from approximately $2.4 million in fiscal 1995. The increase was due to
expanded sales and marketing efforts, to increased depreciation expense
resulting primarily from the acquisition of additional manufacturing equipment
and to the cost associated with additional personnel. As a percentage of sales,
selling, general and administrative expenses decreased to 11% in fiscal 1996
from 27% in fiscal 1995 due primarily to higher sales levels.
 
     Loss on Investment Activities.  Loss on investment activities consists of
write-downs, valuation adjustments and accruals for losses on disposition of a
series of investments. The following table describes the elements and the
amounts reflected in this category for the year ended June 30, 1996 (in
thousands):
 
<TABLE>
        <S>                                                                   <C>
        Costs incurred in connection with ITP/Fleet.Net.....................  $1,101
        Loss on investment in Advent Technology Management, Inc.............   1,000
        Loss on investment in P.G. Technologies, Inc........................     396
        Other...............................................................     165
                                                                              ------
                                                                              $2,662
                                                                              ======
</TABLE>
 
     The costs incurred in connection with ITP/Fleet.Net are pre-acquisition
advances for marketing and prototype development in connection with the NOMAD
program.
 
     During fiscal 1996, the Company purchased a minority interest in Advent
Technology Management, Inc., a holding company of various technology-related
corporations for $250,000, and loaned to the investee an additional $1.0
million. The Company believes that the initial investment objectives were not
bona fide, and that the value of this investment has been permanently impaired.
Accordingly, these investments have been reflected in loss on investment
activities in fiscal 1996, excluding $250,000 that was repaid by the investee in
January 1997.
 
     During fiscal 1996, the Company purchased a minority interest in P.G.
Technologies, Inc., a corporation that develops, manufactures and markets
products for vehicle and fleet management, for $396,500. In addition, the
Company loaned $100,000 to the investee. The carrying cost of this investment
and loan was written off in fiscal 1996 and the shares were returned to the
investee in May 1997 pursuant to a settlement and mutual release agreement.
 
     Net Interest Expense.  Net interest expense was approximately $17,000 in
fiscal 1996 compared to $64,000 in fiscal 1995. Interest expense increased by
approximately $296,000 due to increased borrowing under the Company's credit
arrangements. This increase was offset by a rise in interest income of
approximately $343,000 due to the investment of excess cash.
 
YEARS ENDED JUNE 30, 1995 AND 1994
 
     Sales.  Sales increased 15% to approximately $9.0 million in fiscal 1995
from approximately $7.8 million in fiscal 1994, primarily as a result of
increased volume of sales of PC cards. Sales of PC cards as a percentage of
total sales increased to approximately 81% in fiscal 1995 from approximately 61%
in fiscal 1994. Sales of PC cards increased, primarily due to expansion of the
PC card market generally, increased sales and marketing efforts by the Company
and the broadening of the Company's PC card product line. The increase in the
Company's PC card sales was partially offset by a decrease in sales of font
cartridges. The decrease was attributable to weakening demand for font
cartridges as laser printer fonts were increasingly being delivered through PC
cards rather than font cartridges, and the shift in the Company's focus away
from font cartridges and toward the PC card market commenced in 1992.
 
                                       21
<PAGE>   22
 
     Cost of Goods Sold.  Cost of goods sold increased 78% to approximately
$11.6 million in fiscal 1995 from approximately $6.5 million in fiscal 1994.
Gross margins were $(2.6) million, or (29)%, compared to $1.3 million, or 17% of
sales, in 1994. Gross margins reflect inventory adjustments associated with the
financial review of $4.6 million in fiscal 1995 and $1.8 million in fiscal 1994,
based on roll-back analyses of adjusted sales activity and review of available
physical inventory records for recurring errors misstating quantities and
pricing, as well as provisions for inventory obsolescence not previously
provided. During fiscal 1995 and 1994, the Company recorded sales of $3.5
million and $0.4 million, respectively, which were subsequently deemed to be
invalid and reversed in the process of restating the Company's financial
statement. These transactions had the effect of overstating the Company's gross
margins and contributed to inappropriate pricing decisions and selling
practices.
 
     Engineering Expenses.  Engineering expenses increased 33% to approximately
$753,000 in fiscal 1995 from approximately $567,000 in fiscal 1994. As a
percentage of sales, research and development expenses were 8% in fiscal 1995 as
compared to 7% in fiscal 1994.
 
     Selling, General and Administrative Expenses.  Selling, general and
administrative expenses increased 17% to approximately $2.4 million in fiscal
1995, from approximately $2.1 million in fiscal 1994. The increase was due to a
rise in the Company's workforce, expanded sales and marketing efforts and
greater depreciation expense resulting from the acquisition of additional
manufacturing equipment. As a percentage of sales, selling, general and
administrative expenses were 27% in fiscal 1995 and fiscal 1994.
 
     Net Interest Expense.  Net interest expense decreased to approximately
$64,000 in fiscal 1995 from approximately $486,000 in fiscal 1994, primarily due
to reduced borrowings and, to a lesser extent, lower interest rates.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     Since its inception, the Company has financed its operating activities
primarily from public and private offerings of equity securities and loans from
financial institutions and others.
 
  1998 Liquidity Outlook
 
     The Company has experienced significant losses from operations and has
taken measures to reduce those losses, including reducing various expenses and
implementing new cost controls. If cost savings are not achieved or revenues are
not increased, or bank financing were not available, it would significantly
impair the ability of the Company to continue as a going concern. The Company
believes that its present cash balances, anticipated financing from Congress
Financial, and anticipated future cash flows will be sufficient to fund future
operations. However, the Company can make no assurances that measures taken to
date or to be taken in the future will be sufficient to stem losses or that
future financing will be available to the Company or, if available, on terms
that will be satisfactory to the Company.
 
  Operating Activities
 
     At March 31, 1997, working capital declined to approximately $4.6 million,
compared to working capital of $28.2 million at June 30, 1996, due principally
to operating losses and cash used in investing activities. In fiscal 1997, the
Company experienced cash flow used in operations of approximately $(8.8)
million, compared to cash flow used in operations of $(15.5) million for the
comparable period in fiscal 1996. Days of sales outstanding in accounts
receivable amounted to 46 days at March 31, 1997 compared to 81 days at March
31, 1996, reflecting improved collection activities. The Company's inventories
represent approximately 12 weeks of manufacturing output at March 31, 1997,
compared to 12 weeks at March 31, 1996. Management has implemented new
procurement practices reflecting increased emphasis on reducing inventory
levels.
 
     As a result of the adjustments made to the Company's financial statements
in connection with its financial review, previous provisions for income taxes
have been reversed and the associated payments of approximately $7.4 million are
classified as recoverable income taxes at March 31, 1997. Approximately $6.1
 
                                       22
<PAGE>   23
 
million of these tax refunds were received as of June 30, 1997, and
substantially all of the remaining refunds are expected to be received by the
end of August 1997.
 
     The Company's access to trade credit from its vendors has been subject to
increased scrutiny by its vendors and more limited terms since its announcement
of financial irregularities in February 1997. While certain suppliers have
imposed "collection on delivery" terms, the Company's principal suppliers have
continued to extend credit. If such suppliers were to discontinue or materially
limit existing credit terms, the Company could be placed in the position where
it would be unable to continue operations.
 
  Investing Transactions
 
     Capital expenditures amounted to $2.1 million in fiscal 1997, $1.3 million
in fiscal 1996 and $1.5 million in fiscal 1995. Such expenditures have been
financed, in part, through leasing arrangements amounting to $250,000, $702,000,
and $691,000, respectively. As of March 31, 1997, the Company had remaining
obligations of $671,000 on these equipment financing leases, which are in
default due to cross-default provisions between a master lease agreement and a
revolving credit agreement to which the Company is a party, both of which are
with the same bank lender. The Company intends to repay these leases using
proceeds from a new term loan facility. See "--Proposal from Congress Financial
Corp."
 
     The Company has no commitments for future capital equipment expenditures.
Included in accounts payable and accrued expenses are invoices for capital
equipment amounting to $528,000, which the Company expects to finance, in part,
through a new capital acquisition facility. See "--Proposal from Congress
Financial Corp."
 
     During fiscal 1996, the Company began a strategy of making investments,
financed through a combination of cash and common stock, in technology companies
for the expressed purpose of market development for its PC card business as well
as investment gain. The Company's management has decided to focus its resources
on its core business and to suspend new investment activities. The Company has
written down its portfolio of investments based on an individual assessment of
their future viability.
 
  Financing Transactions
 
     In November 1996, the Company renewed and amended its revolving line of
credit with a bank, pursuant to which the Company could borrow up to specified
limits based on the Company's eligible receivables and inventory, including
eligible receivables and inventory of Design Circuits, Inc. ("DCI"). See
" -- Investment in Century Electronics Manufacturing, Inc." Borrowings on the
DCI borrowing base were made by the Company and subject to a DCI guarantee. All
borrowings were collateralized by substantially all of the assets of the
Company. The agreement required the Company to comply with certain covenants
relating to the Company's net worth and indebtedness, among other things. On
February 14, 1997, the Company received a notice of default, and on March 18,
1997, entered into a forbearance agreement whereby the bank agreed to continue
to extend credit under certain conditions. In addition, on March 18, 1997,
certain advances from the Company to DCI were converted to an 8.5% promissory
note amounting to approximately $4.1 million. The forbearance agreement has been
subsequently extended to July 31, 1997. The defaulted credit agreement bears
interest at the bank's prime interest rate. The forbearance agreement sets the
interest rate at 9.5%. The Company is currently negotiating financing
arrangement with a new lender. See "--Proposal from Congress Financial Corp."
and Note 10 of Notes to Unaudited Consolidated Financial Statements. Although
the Company believes it will successfully accomplish the refinancing, the
proposal letter contains conditions to refinancing, and if the refinancing were
not effected, the Company would be obliged to seek alternative sources of
financing. There can be no assurance that such alternative sources of financing
will be available or, if they are available, that the terms of such alternative
financing would be acceptable to the Company. Failure of the Company to secure
bank credit would significantly impair the ability of the Company to continue as
a going concern.
 
                                       23
<PAGE>   24
 
  Investment in Century Electronics Manufacturing, Inc.
 
     During fiscal 1997, the Company completed three separate business
acquisitions of contract manufacturing activities. On July 10, 1996, the Company
acquired a majority equity position in Design Circuits, Inc. ("DCI") for
approximately $3.2 million in cash, 250,000 shares of the Company's Common Stock
and assumption of certain liabilities.
 
     In October 1996, the Company and the minority shareholders in DCI exchanged
their DCI shares for shares of capital stock in a newly formed entity, Century
Electronics Manufacturing, Inc. ("Century").
 
     Pursuant to a joint venture agreement executed in May, 1996, the Company
invested $1.3 million during fiscal 1997 as its initial capital into its 51%
owned contract manufacturing joint venture in Thailand. The Company's joint
venture partner's initial capital contribution was $3.7 million.
 
     On November 5, 1996, Century purchased Triax Technology Group Limited
("Triax"), a provider of contract manufacturing services located in the United
Kingdom for approximately $4.2 million in cash, and approximately 2.2 million
shares of common stock of Century. The Company also contributed 25,000 shares of
Centennial Common Stock as a finder's fee. At the conclusion of the Triax
transaction, Triax and DCI were wholly-owned subsidiaries of Century, and
Centennial owned approximately 67% of Century.
 
     On March 14, 1997, Century entered into an agreement in principal with the
Company, whereby Century agreed to redeem a portion of its shares in exchange
for $1.3 million in cash and a $6.0 million subordinated debenture, reducing the
Company's equity ownership position to 45%. The debentures bear interest at a
rate of 6% and mature in ten years. Under certain conditions, the debentures
will be convertible into the capital stock of an entity with which Century may
merge. In addition, the Company agreed to contribute to Century its interest in
the Thailand joint venture. Century also agreed to repay an 8.5% note payable to
Centennial in the amount of $4.1 million and to take the necessary steps to
remove all outstanding guarantees of third-party indebtedness.
 
     On June 30, 1997, the aforementioned transaction was completed. In order to
remove certain guarantees of equipment subleased to DCI, Centennial executed
lease buyouts amounting to $2.4 million and sold the underlying equipment to
Century for $0.5 million in cash and a $1.9 million 9% promissory note due
December 1998. See Note 8 of Notes to Unaudited Consolidated Financial
Statements.
 
  Status of Existing Revolving Credit Agreement
 
     As a result of receipts of certain tax refunds, the cash proceeds of the
June 30, 1997 Century refinancing transaction, and improved inventory management
and accounts receivable collection programs, the Company has reduced borrowings
under its defaulted Revolving Credit Agreement to approximately $1.2 million as
of June 30, 1997, while also reducing trade accounts payable to $3.9 million as
compared to $4.8 million at March 31, 1997.
 
  Proposal From Congress Financial Corp.
 
     On May 7, 1997, the Company received a non-binding proposal from Congress
Financial Corp. ("Congress Financial"), a commercial credit institution, for a
revolving credit facility and term loan facility.
 
     On July 18, 1997, the Company received a commitment letter from Congress
Financial, subject to satisfaction of certain conditions and completion of
documentation, for a revolving credit facility and term loan facility of up to
$4.1 million and $0.9 million, respectively, and a $2.0 million capital
equipment acquisition facility, based on certain limitations and covenants.
Allowable borrowings would be based on available accounts receivable and the
cost of equipment, and would be secured by all of the Company's assets. The
Company expects to complete negotiations on the new borrowing facility before
the expiration of the forbearance agreement relating to its existing credit
facility. Although the Company believes it will successfully accomplish the
refinancing, the commitment letter contains conditions to refinancing, and if
the refinancing were not effected, the Company would be obliged to seek
alternative sources of financing. There can be no assurance that such
alternative sources of financing will be available or, if they are available,
that the
 
                                       24
<PAGE>   25
 
terms of such alternative financing would be acceptable to the Company. Failure
of the Company to secure bank credit would significantly impair the ability of
the Company to continue as a going concern.
 
  Contingencies
 
     The Company is a defendant in numerous lawsuits alleging violations of
securities and other laws in connection with the Company's prior reported
financial results and certain other related matters. See "Item 3 -- Legal
Proceedings." The Company is currently negotiating the settlement of these
suits, and believes that such lawsuits will be settled substantially in
accordance with the description contained in "Item 3 -- Legal Proceedings." The
Company believes that such settlements will not have a material adverse impact
on its liquidity. As of March 31, 1997, the Company has recorded a provision for
the potential settlement of the Centennial Securities Litigation of $20.0
million, representing the cash portion of the potential settlement, together
with an amount equal to 37% of the estimated market capitalization of the
Company. The cash portion ($1,475,000) of the potential settlement is included
in accounts payable and accrued expenses and the Common Stock portion
($18,525,000) is included in additional paid-in capital. However, there can be
no assurance that the Company will be successful in negotiating the settlements
described in Item 3, or that the claims against Lawrence J. Ramaekers, the
Company's interim Chief Executive Officer, in connection with the February 25
Securities Litigation, as to which the Company may have indemnification
obligations will be settled, and such inability to settle pending litigation
could have a material adverse affect on the Company's liquidity, business,
financial condition and results of operations.
 
     Advent Technology Management, Inc. ("ATM") has purported to exercise an
alleged option to acquire one million shares of the Company's Common Stock in
exchange for certain shares of common stock of WebSecure, Inc. (the
"Securities") which were in the possession of the Company and which ATM asserts
to be the property of ATM. ATM has presented documents to the Company purporting
to show the acknowledgement of Emanuel Pinez as then Chairman and Chief
Executive Officer of the Company to an arrangement whereby the Company was
holding the Securities for the account of ATM and whereby ATM was given the
option to exchange the Securities for 409,600 shares of the Company's Common
Stock, and purporting to show the acknowledgement of James M. Murphy as then
Chief Financial Officer of the Company that the Securities were held for the
account of ATM. The records of the Company do not indicate that the alleged
arrangement was ever disclosed to the Company's Board of Directors or recorded
in its financial records. To the contrary, the Securities were at all times
reflected in the financial records of the Company as the property of the Company
and were in part sold by the Company. The Company does not believe that the
arrangement was valid or that the alleged option is enforceable.
 
IMPACT OF INFLATION
 
     The Company believes that the impact of inflation on its operations is not
significant.
 
SEASONALITY
 
     The Company generally does not experience seasonality with respect to the
sale of its products; however, the Company has experienced reduced sales to
certain customers in European countries during the months of July and August.
 
DIVIDENDS
 
     The Company has never paid cash dividends. The Company currently intends to
retain all future earnings, if any, for use in its business and does not
anticipate paying any cash dividends in the foreseeable future. In addition, the
Company's credit agreement with its bank prohibits the payment of cash dividends
without the bank's consent.
 
RISK FACTORS
 
     Losses in Prior Periods; Liquidity and Financing Risks.  The Company has
experienced significant losses from operations during fiscal 1994, fiscal 1995,
fiscal 1996 and fiscal 1997. The Company has taken measures
 
                                       25
<PAGE>   26
 
since the firing of its former Chief Executive Officer in February 1997 to
reduce those losses, including appointing a turnaround specialist, reducing
various expenses and implementing new cost controls. If cost savings are not
achieved or revenues are not increased, the operating plan for the Company could
include further cost reductions. If cost savings are not achieved, revenues are
not increased or bank financing were not available, it would significantly
impair the ability of the Company to continue as a going concern. The Company
believes that its present cash balances, anticipated financing from Congress
Financial, and anticipated future cash flows will be sufficient to fund future
operations. Although the Company has received a commitment letter from Congress
Financial regarding the proposed refinancing, and believes that the refinancing
with Congress Financial will be consummated, the refinancing is subject to
certain conditions. The Company can make no assurances that measures taken to
date or to be taken in the future will be sufficient to stem losses or that
future financing will be available to the Company or, if available, on terms
that will be satisfactory to the Company.
 
     Dependence on Major Customers; Concentration of Credit Risk.  Bay Networks
and a subsidiary of Philips accounted for approximately 32% and 22%,
respectively, of the Company's sales for fiscal 1997. Bay Networks and Philips
accounted for 16% and 12%, respectively, of the Company's sales for the fiscal
1996. The loss of, or a significant curtailment of purchases by either of these
customers, or any other significant customer of the Company, could have a
material adverse effect on the Company's business, financial condition and
results of operations. Substantially all of the Company's sales to Philips have
been in connection with Philips' sales of screen phones to a single customer.
Except for certain orders presently in dispute, the Company has fulfilled all
purchase orders with Philips, and the Company believes that it will not receive
additional orders from Philips pursuant to the screen phone program. The
industries served by the Company are characterized by frequent mergers,
consolidations, acquisitions, corporate restructuring and changes in management,
and the Company has from time to time experienced reductions in purchase orders
from customers as a result of such events. There can be no assurance that such
events involving customers of the Company will not result in a significant
reduction in the level of sales by the Company to such customers or the
termination of the Company's relationship with such customers. In addition, the
percentage of the Company's sales to individual customers may fluctuate from
period to period. Customer orders can be canceled and volume levels can be
changed or delayed. The timely replacement of canceled, delayed, or reduced
orders with new customers cannot be assured. These risks are exacerbated because
a majority of the Company's sales are to customers in the electronics industry,
which is subject to rapid technological change and product obsolescence. The
electronics industry is also subject to economic cycles and has in the past
experienced, and is likely in the future to experience, fluctuations in demand.
The Company anticipates that a significant portion of its sales will continue
for the foreseeable future to be concentrated in a small number of customers in
the electronics industry.
 
     Need to Respond to Rapid Technological Change; Historical Single Product
Concentration.  The markets for the Company's products are characterized by
rapid technological change, evolving industry standards and rapid product
obsolescence. Rapid technological development substantially shortens product
life cycles, and the Company's growth and future success will depend upon its
ability, on a timely basis, to develop and introduce new products, to enhance
existing products and to adapt products for various industrial applications and
equipment platforms, as well as upon customer acceptance of these products,
enhancements and adaptations. The Company, having more limited resources than
many of its competitors, focuses its development efforts at any given time to a
relatively narrow scope of development projects. There can be no assurance that
the Company will select the correct projects for development or that the
Company's development efforts will be successful. In addition, no assurance can
be given that the Company will not experience difficulties that could delay or
prevent the successful development, introduction or marketing of new products,
that new products and product enhancements will meet the requirements of the
marketplace and achieve market acceptance, or that the Company's current or
future products will conform to applicable industry standards. Any inability of
the Company to introduce on a timely basis new products or enhancements that
contribute to profitable sales would have a material adverse effect on the
Company's business, financial condition and results of operations.
 
                                       26
<PAGE>   27
 
     PC cards and related services constitutes approximately 100%, 98% and 86%
of the Company's sales for fiscal 1997, 1996 and 1995, respectively. The market
for PC cards is still developing and there can be no assurance that computing
and electronic equipment that utilize PC cards will not be modified to render
the Company's PC cards obsolete or otherwise have the effect of reducing demand
for the Company's PC cards. In addition, the Company faces intense competition
from competitors that have greater financial, marketing and technological
resources than the Company, which competition may reduce demand for the
Company's PC cards. Decreased demand for the Company's PC cards as a result of
technological change, competition or other factors would have a material adverse
effect on the Company's business, financial condition and results of operations.
 
     Competition.  Each of the markets in which the Company competes is
intensely competitive. The Company competes with manufacturers of PC cards and
related products, including SanDisk Corporation and Smart Modular Technologies,
Inc., as well as with electronic component manufacturers who also manufacture PC
cards, including Advanced Micro Devices, Inc., Epson America, Inc., Intel
Corporation and Mitsubishi Electric Corporation. In connection with its NOMAD
System, the Company may choose to compete with products from QUALCOMM
Incorporated ("QUALCOMM"), Rockwell International Corporation ("Rockwell"),
CADEC Systems, Inc. ("CADEC") and HighwayMaster Communications, Inc.
("HighwayMaster"). QUALCOMM and HighwayMaster offer a bundled system comprised
of equipment, applications software and communications services to truck fleet
operators. Others, such as CADEC and Rockwell, offer bundled equipment and
software. Centennial's NOMAD System product is intended to become a standard
platform for sale to VARs and systems integrators developing their own on-board
applications. Though Centennial does not anticipate competing with the above
companies, they may become competitors if they choose to sell their equipment
unbundled from their applications software and communications services. Certain
of these competitors also supply the Company with raw materials, including
electronic components, which are occasionally subject to industrywide
allocation. These competitors may have the ability to manufacture products at
lower costs than the Company as a result of their higher levels of integration.
In addition, many of the Company's competitors or potential competitors have
greater name recognition, a larger installed base of customers, more extensive
engineering, manufacturing, marketing, distribution and support capabilities and
greater financial, technological and personnel resources than the Company. The
Company expects competition to increase in the future from existing competitors
and from other companies that may enter the Company's existing or future markets
with similar or alternative products that may be less costly or provide
additional features. The Company believes that its ability to compete
successfully depends on a number of factors, including product quality and
performance, order turnaround, the provision of competitive design capabilities,
timely response to advances in technology, adequate manufacturing capacity,
production efficiency, timing of new product introductions by the Company, its
customers and its competitors, the number and nature of the Company's
competitors in a given market, price and general market and economic conditions.
In addition, market conditions may lead to intensified price competition for the
Company's products and services, resulting in lower prices and gross margins,
which could materially and adversely affect the Company's business, financial
condition and results of operations. There can be no assurance that the Company
will compete successfully in the future.
 
     Fluctuations in Quarterly Results.  The Company's results of operations may
be subject to quarterly fluctuations due to a number of factors, including the
timing of receipt and delivery of significant orders for the Company's products,
competitive pricing pressures, increases in raw material costs, costs associated
with the expansion of operations, changes in customer and product mix,
production difficulties, quality of the Company's products, write-downs or
writeoffs of investments in other companies, exchange rate fluctuations and
market acceptance of new or enhanced versions of the Company's products, as well
as other factors, some of which are beyond the Company's control. Additionally,
as is the case with many high technology companies, a significant portion of the
Company's orders and shipments typically occurs in the last few weeks of a
quarter. As a result, revenues for a quarter are not predictable, and the
Company's revenues may shift from one quarter to the next, having a significant
effect on reported results.
 
     The trading price of the Company's Common Stock may fluctuate widely in
response to, among other things, quarter-to-quarter operating results, industry
conditions, awards of orders to the Company or its
 
                                       27
<PAGE>   28
 
competitors, new product or product development announcements by the Company or
its competitors and changes in earnings estimates by analysts. There can be no
assurance that the Company's future performance will meet the expectations of
analysts or investors. In addition, the volatility of the stock markets may
cause wide fluctuations in trading prices of securities of high technology
companies.
 
     Raw Material Shortages and Dependence on Single Source Suppliers.  The
Company has from time to time experienced shortages in the supply of computer
memory chips and other electronic components used to manufacture PC cards. The
Company expects that such supply shortages may continue, particularly with
respect to computer memory chips and other electronic components used in
products targeted at high-growth market segments. Occasionally, certain memory
chips important to the Company's products are on industry-wide allocation by
suppliers. Any such shortages could have a material adverse effect on the
Company's business, financial condition and results of operations.
 
     The Company purchases certain key components from single source vendors for
which alternative sources are not currently available. The Company does not
maintain long-term supply agreements with any of its vendors. The inability to
develop alternative sources for these single source components or to obtain
sufficient quantities of components could result in delays or reductions in
product shipments, or higher prices for these components, or both, any of which
could materially and adversely affect the Company's business, financial
condition and results of operations. No assurance can be given that one or more
of the Company's vendors will not reduce supplies to the Company.
 
     Risks Associated with Commercialization of the NOMAD System.  The Company
announced the development of the NOMAD System in October 1996. The Company has
only recently begun initial marketing efforts related to the NOMAD System, no
full-function prototype of the system has been developed, and no products have
yet been sold. There can be no assurance that field testing, marketing and
deployment of this system, or the development of a system prototype, will be
completed or successful. In addition, the Company can provide no assurance that
it will choose to or be able to provide the financial resources necessary to
complete a product prototype or to bring the product to market. The success of
the NOMAD System is also dependent upon numerous factors which are beyond the
control of the Company, including the continued interest of the U.S. government
and the transportation industry in the system, the successful deployment of
related technologies, marketplace acceptance of the system and other factors. In
addition, there can be no assurance that competitors of the Company will not
develop competing or alternate technologies that may be preferred by the
Company's potential customers or that evolving industry or government standards
will not render the NOMAD System obsolete. In addition, the development and
marketing of the NOMAD System will require the investment of substantial
resources by the Company, and no assurance can be given that such investment
will be recovered.
 
     Dependence on Key Personnel.  The Company's success depends to a
significant degree upon the efforts and abilities of members of its senior
management and other key personnel, including technical personnel. The loss of
any of these individuals could have a material adverse effect on the Company's
business, financial condition and results of operations. The Company's business
also depends upon its ability to continue to attract and retain senior managers
and skilled technical employees. The Company is currently conducting an
executive search for a permanent Chief Executive Officer and Chief Financial
Officer. Failure to attract and retain such senior personnel could materially
and adversely affect the Company's business, financial condition and results of
operations.
 
     Need to Maintain Quality Control Standards and Deliver Products on a Timely
Basis.  Many of the Company's products and services must meet exacting OEM
specifications. As a result, the Company must adopt and adhere to stringent
quality control standards for its products and manufacturing processes. There
can be no assurance that the quality of the Company's products and services will
meet customer requirements in the future. If quality problems occur, the Company
could experience increased costs, rescheduling or cancellations of orders and
shipments, delays in collecting accounts receivable, increases in product
returns and reductions in new purchase orders, any of which could have a
material adverse effect on the Company's business, financial condition and
results of operations.
 
                                       28
<PAGE>   29
 
     The Company believes its ability to deliver product orders rapidly
represents an important competitive advantage. However, there can be no
assurance that future delays or interruptions in production caused by problems
with product quality, supply shortages, facilities expansion, equipment failure,
the subcontracting of a portion of production, availability of trade credit,
human error or other factors, some of which may be beyond the control of the
Company, will not result in the failure to meet delivery schedules. Any such
failure could harm the Company's reputation in the marketplace and have a
material adverse effect on the Company's business, financial condition and
results of operations.
 
     Protection of Proprietary Information.  The Company's products require
technical know-how to engineer and manufacture. To the extent proprietary
technology is involved, the Company relies on trade secrets that it seeks to
protect, in part, through confidentiality agreements with certain employees,
consultants and other parties. There can be no assurance that these agreements
will not be breached, that the Company will have adequate remedies for any
breach, or that the Company's trade secrets will not otherwise become known to,
or independently developed by, existing or potential competitors of the Company.
The Company generally does not seek to protect its proprietary information
through patents or registered trademarks, although it may seek to do so in the
future. There can be no assurance that the Company's products will not infringe
on patents held by others. The Company may be involved from time to time in
litigation to determine the enforceability, scope and validity of its rights.
Litigation could result in substantial cost to the Company and could divert the
attention and time of the Company's management and technical personnel from the
operations of the Company.
 
     The Company currently licenses certain proprietary and patented technology
from third parties. There can be no assurance that the Company will be able to
continue to license such technology, that such licenses will be or remain
exclusive or that any patented technology licensed by the Company will provide
meaningful protection from competitors. In the event that a competitor's
products were to infringe on patents licensed by the Company, it would be costly
for the Company to enforce its rights in an infringement action and such an
action would divert funds and management resources from the Company's
operations.
 
     Risks of Acquisitions and Investments in Other Companies.  The Company has
terminated its earlier program of acquiring interests in companies and related
technologies, and has written-off or provided valuation reserves for many such
investments. However, the Company may determine that it is in the best interests
to acquire or invest in other companies in the future. There can be no assurance
that the companies in which the Company has invested or may invest will develop
successful products or technologies beneficial to the Company or that such
investments will be economically justified. In addition, if companies in which
the Company has invested are not successful, the Company would be required to
write-off or write-down further such investments, which would result in the
Company recognizing an expense in the period in which such adjustment occurs.
 
     Risks of International Operations.  During the nine months ended March 31,
1997 and the fiscal year ended June 30, 1996, the Company derived approximately
8% and 12%, respectively, of its sales from outside the United States. The
Company's international operations subject the Company to the risks of doing
business abroad, including currency fluctuations, export duties, import controls
and trade barriers, restrictions on the transfer of funds, greater difficulty in
accounts receivable collection, burdens of complying with a wide variety of
foreign laws and, in certain parts of the world, political instability.
 
     Environmental Compliance.  The Company is subject to a variety of
environmental regulations relating to the use, storage and disposal of hazardous
chemicals used during its manufacturing processes. Any failure by the Company to
comply with present and future regulations could subject the Company to
significant liabilities. In addition, such regulations could restrict the
Company's ability to expand its facilities or could require the Company to
acquire costly equipment or to incur other significant expenses in order to
comply with environmental regulations.
 
                                       29
<PAGE>   30
 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
                          CONSOLIDATED BALANCE SHEETS
                  (AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                                   JUNE 30,
                                                             MARCH 31,     -------------------------
                                                               1997           1996           1995
                                                             ---------     ----------     ----------
                                                                           (RESTATED)     (RESTATED)
<S>                                                          <C>           <C>            <C>
                                               ASSETS
Current assets:
  Cash and cash equivalents................................  $      57      $  6,182       $    970
  Available-for-sale securities............................         --         4,932             --
  Trade accounts receivable................................      6,263        11,635          2,933
          Less allowances..................................       (692)         (375)          (131)
                                                             ---------      --------       --------
                                                                 5,571        11,260          2,802
  Accounts receivable from affiliates......................        676
  Recoverable income taxes.................................      7,356         3,142            775
  Inventories..............................................      7,794         8,248          2,181
  Notes receivable from affiliate..........................      4,129            --             --
  Other notes receivable...................................         --         1,809            768
  Other current assets.....................................      1,630         1,444            741
                                                             ---------      --------       --------
Total current assets.......................................     27,213        37,017          8,237
Equipment and leasehold improvements.......................      4,023         2,609          1,149
  Less accumulated depreciation and amortization...........       (936)         (576)          (226)
                                                             ---------      --------       --------
                                                                 3,087         2,033            923
Investments................................................      5,089         1,783             --
Other assets...............................................        566           299            390
Investment in affiliate....................................     15,243            --             --
                                                             ---------      --------       --------
Total assets...............................................  $  51,198      $ 41,132       $  9,550
                                                             =========      ========       ========
                                LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Revolving credit notes...................................  $  10,090      $  4,684       $  1,153
  Obligations under capital leases.........................        671           336            103
  Accounts payable and accrued expenses....................     11,883         3,836          3,865
                                                             ---------      --------       --------
Total current liabilities..................................     22,644         8,856          5,121
Long-term obligations under capital leases.................         --           367            162
Contingencies (Note 17)....................................
Stockholders' equity:
  Preferred Stock, $.01 par value; 1,000,000 shares
     authorized, none issued...............................         --            --             --
  Common Stock, $.01 par value; 50,000,000 shares
     authorized, 17,745,000 issued and outstanding at March
     31, 1997, 16,632,000 shares at June 30, 1996 and
     11,182,000 shares at June 30, 1995....................        177           165            110
Additional paid-in capital.................................     82,240        42,712         10,843
Accumulated deficit........................................    (53,630)      (10,968)        (6,686)
Foreign currency translation of equity investment..........       (233)           --             --
                                                             ---------      --------       --------
Total stockholders' equity.................................     28,554        31,909          4,267
                                                             ---------      --------       --------
Total liabilities and stockholders' equity.................  $  51,198      $ 41,132       $  9,550
                                                             =========      ========       ========
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       30
<PAGE>   31
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                  (AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                        NINE MONTHS ENDED
                                            MARCH 31,                    FISCAL YEAR ENDED JUNE 30,
                                     ------------------------     ----------------------------------------
                                       1997          1996            1996           1995           1994
                                     --------     -----------     ----------     ----------     ----------
                                                  (RESTATED)      (RESTATED)     (RESTATED)     (RESTATED)
<S>                                  <C>          <C>             <C>            <C>            <C>
Sales..............................  $ 28,263       $21,768        $ 33,412       $  8,982       $  7,801
Costs and expenses:
  Cost of goods sold...............    24,453        21,018          29,778         11,575          6,508
  Engineering costs................     1,061         1,126           1,434            753            567
  Selling, general and
     administrative expenses.......     7,318         2,705           3,803          2,442          2,083
  Loss on investment activities....    14,096            69           2,662             --             --
  Special investigation costs......     3,673            --              --             --             --
  Provision for settlement of
     shareholder litigation........    20,000            --              --             --             --
  Net interest expense.............       391           174              17             64            486
                                     --------       -------         -------        -------        -------
       Total costs and expenses....    70,992        25,092          37,694         14,834          9,644
                                     --------       -------         -------        -------        -------
Loss before income tax credit and
  equity in earnings of
  affiliate........................   (42,729)       (3,324)         (4,282)        (5,852)        (1,843)
Equity in earnings of affiliate....        67            --              --             --             --
                                     --------       -------         -------        -------        -------
Loss before income tax credit......   (42,662)       (3,324)         (4,282)        (5,852)        (1,843)
Income tax credit..................        --            --              --             --           (171)
                                     --------       -------         -------        -------        -------
       Net loss....................  $(42,662)      $(3,324)       $ (4,282)      $ (5,852)      $ (1,672)
                                     ========       =======         =======        =======        =======
Net loss per share.................  $  (2.46)      $  (.26)       $   (.31)      $   (.63)      $   (.19)
Weighted average shares
  outstanding......................    17,367        12,678          13,632          9,363          9,027
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       31
<PAGE>   32
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
        FOR THE YEARS ENDED JUNE 30, 1994, 1995 AND 1996 (EACH RESTATED)
                    AND THE NINE MONTHS ENDED MARCH 31, 1997
                             (AMOUNTS IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                               RETAINED
                                                COMMON STOCK     ADDITIONAL    EARNINGS       FOREIGN         TOTAL
                                               ---------------    PAID-IN     (ACCUMULATED   CURRENCY     STOCKHOLDERS'
                                               SHARES   AMOUNT    CAPITAL      DEFICIT)     TRANSLATION      EQUITY
                                               ------   ------   ----------   -----------   -----------   -------------
<S>                                            <C>      <C>      <C>          <C>           <C>           <C>
Balance at June 30, 1993......................  6,027   $  60     $    146     $     838                    $   1,044
Contributed capital in connection with bridge
  financing...................................                         248                                        248
Proceeds from certain related party
  transactions (Note 15)......................                          31                                         31
Proceeds from public offering, net of issuance
  costs of $943...............................  3,000      30        4,634                                      4,664
Net loss......................................                                    (1,672)                      (1,672)
                                               ------   -----     --------     ---------       -----        ---------
Balance at June 30, 1994......................  9,027      90        5,059          (834)                       4,315
Proceeds from certain related party
  transactions (Note 15)......................                         653                                        653
Exercise of options...........................     79                  149                                        149
Exercise of warrants..........................   1626      16        3,793                                       3809
Compensation from option grants...............                          53                                         53
Private placement.............................    450       4        1,136                                      1,140
Net loss......................................                                    (5,852)                      (5,852)
                                               ------   -----     --------     ---------       -----        ---------
Balance at June 30, 1995...................... 11,182     110       10,843        (6,686)                       4,267
Proceeds from certain related party
  transactions (Note 15)......................                       3,091                                      3,091
Exercise of options...........................    382       4          695                                        699
Exercise of warrants..........................  2,217      22        5,172                                      5,194
Compensation from option grants...............                          20                                         20
Proceeds from public offering, net of issuance
  costs of $2,730.............................  2,850      29       22,891                                     22,920
Net loss......................................                                    (4,282)                      (4,282)
                                               ------   -----     --------     ---------       -----        ---------
Balance at June 30, 1996...................... 16,631     165       42,712       (10,968)                      31,909
Proceeds from certain related party
  transactions (Note 15)......................                       2,254                                      2,254
Exercise of options...........................    281       3        3,539                                      3,542
Exercise of warrants..........................    172       2          516                                        518
Compensation from option grants...............                          34                                         34
Issuance of Common Stock in connection with
  acquisition of affiliates...................    275       3        4,822                                      4,825
Issuance of Common Stock in connection with
  investments.................................    386       4        9,838                                      9,842
Foreign currency translation of equity
  investment..................................                                                 $(233)            (233)
Estimated fair market value of shares to be
  issued in connection with shareholder
  litigation..................................                      18,525                                     18,525
Net loss......................................                                   (42,662)                     (42,662)
                                               ------   -----     --------     ---------       -----        ---------
Balance at March 31, 1997..................... 17,745   $ 177     $ 82,240     $ (53,630)      $(233)       $  28,554
                                               ======   =====     ========     =========       =====        =========
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       32
<PAGE>   33
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (AMOUNTS IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                   NINE MONTHS ENDED
                                                                       MARCH 31,                 FISCAL YEAR ENDED JUNE 30,
                                                                -----------------------    --------------------------------------
                                                                  1997         1996           1996          1995          1994
                                                                --------   ------------    ----------    ----------    ----------
                                                                            (RESTATED)     (RESTATED)    (RESTATED)    (RESTATED)
<S>                                                             <C>        <C>             <C>           <C>           <C>
Cash flows from operating activities:
  Net loss....................................................  $(42,662)    $ (3,324)      $ (4,282)     $ (5,852)     $ (1,672)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
  Provision for settlement of shareholder litigation..........    20,000       --             --            --            --
  Depreciation and amortization...............................       831          346            471           281           176
  Equity in earnings of affiliate.............................       (67)
  Provision for loss on accounts receivable...................       400          309            425           171            49
  Provision for losses on sale of equipment...................       318
  Provision for loss on note receivable.......................       100          271            871        --            --
  Provision for loss on investments...........................     8,027       --                690        --            --
  Discount on bridge financing................................     --          --             --            --               248
  Other non-cash items........................................        34          (49)            19            53            55
  Change in operating assets and liabilities:
    Accounts receivable.......................................     5,289       (5,427)        (8,883)       (1,693)         (599)
    Accounts receivable from affiliate........................      (676)
    Inventories...............................................       454       (5,000)        (6,067)         (600)          676
    Notes receivable..........................................     1,509       (1,406)        (2,040)         (841)       --
    Notes receivable from affiliate...........................    (4,129)      --             --            --            --
    Recoverable income taxes..................................    (4,214)         166         (2,366)         (604)         (171)
    Other assets..............................................      (582)        (217)          (807)         (487)           (5)
    Accounts payable and accrued expenses.....................     6,572       (1,125)            (9)        3,072          (817)
    Income taxes payable......................................     --          --                (20)          (96)         (341)
                                                                --------     --------       --------      --------      --------
        Net cash used in operating activities.................    (8,796)     (15,456)       (21,998)       (6,596)       (2,401)
Cash flows from investing activities:
  Capital expenditures........................................    (2,074)      (1,276)        (1,459)         (583)         (332)
  Purchase of available-for-sale securities...................   (27,250)      --             (8,914)       --            --
  Proceeds from sale of available-for-sale securities.........    32,182       --              3,981        --            --
  Purchase of investments.....................................    (1,291)        (762)        (2,272)       --            --
  Acquisition of affiliates...................................   (10,351)      --             --            --            --
                                                                --------     --------       --------      --------      --------
        Net cash used in investing activities.................    (8,784)      (2,038)        (8,664)         (583)         (332)
Cash flows from financing activities:
  Net borrowings under line of credit.........................     5,406       (1,153)         3,531         1,153           (54)
  Proceeds from equipment lease financing.....................       250          702            691           320        --
  Payments on equipment lease financing.......................      (282)        (175)          (252)          (56)       --
  Proceeds from exercise of stock options.....................     3,542          697            699           149        --
  Proceeds from exercise of warrants..........................       518        5,079          5,194         3,809        --
  Net proceeds from public offerings of Common Stock..........                 21,699         22,920                       4,662
  Net proceeds from private placement.........................                                               1,140        --
  Proceeds from certain related party transactions............     2,254         1,956         3,091           653            31
  Proceeds from bridge financing..............................     --          --             --            --               550
  Repayment of bridge financing...............................     --          --             --            --              (550)
  Payments on notes payable...................................     --          --             --            --              (925)
  Foreign currency translation of equity investment...........      (233)      --             --            --            --
                                                                --------     --------       --------      --------      --------
        Net cash provided by financing activities.............    11,455       28,805         35,874         7,168         3,714
                                                                --------     --------       --------      --------      --------
Net increase (decrease) in cash and cash equivalents..........    (6,125)      11,311          5,212           (11)          981
Cash and cash equivalents at beginning of period..............     6,182          970            970           981        --
                                                                --------     --------       --------      --------      --------
Cash and cash equivalents at end of period....................  $     57     $ 12,281       $  6,182      $    970      $    981
                                                                ========     ========       ========      ========      ========
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest..................................................  $    535     $    273       $    342      $     71      $    156
                                                                ========     ========       ========      ========      ========
    Income taxes..............................................  $  4,151     $    598       $  2,601      $    716      $    286
                                                                ========     ========       ========      ========      ========
    Non-cash transactions:
      During fiscal 1997, the Company issued Common Stock in
      connection with the acquisition of affiliates and in
      connection with the purchase of investments having a
      fair market value at the dates of issuance of $4,825 and
      $9,842, respectively.
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       33
<PAGE>   34
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
1.  BASIS OF PRESENTATION AND CHANGE IN FISCAL YEAR
 
  Basis of Presentation
 
     The consolidated financial statements of Centennial Technologies, Inc. (the
"Company") include the accounts of the Company and all wholly owned
subsidiaries. Investments in companies in which ownership interests range from
20 to 50 percent and the Company exercises significant influence over operating
and financial policies are accounted for using the equity method. The Company's
investment in Century Electronics Manufacturing, Inc. ("Century"), of which it
had a 67% equity ownership position at March 31, 1997, has been accounted for
using the equity method because the Company had a plan of disposition of a
portion of the investment in place prior to March 31, 1997 and the transaction
closed on June 30, 1997. Due to the significance of the Company's investment in
the investee's capitalization and on the basis of the complementary nature of
the Company's products and related development plans, the Company is accounting
for its 12% investment in ViA, Inc. using the equity method. See Note 9. Other
investments are accounted for using the cost method. All significant
intercompany balances and transactions have been eliminated. Certain
reclassifications have been made to prior years' consolidated financial
statements to conform to the fiscal 1997 presentation.
 
     The accompanying financial statements have been prepared on the basis of a
going concern, which contemplates the realization of assets and settlement of
liabilities in the normal course. The Company has experienced significant losses
from operations and has taken measures to reduce those losses, including
reducing various expenses and implementing new cost controls. If cost savings
are not achieved or revenues are not increased, or bank financing were not
available, it would significantly impair the ability of the Company to continue
as a going concern.
 
     The Company is a defendant in certain litigation, as more fully described
in Note 17. No assurance can be given that the settlement of litigation will
result in an outcome which would not significantly impair the ability of the
Company to continue as a going concern.
 
  Change in Fiscal Year
 
     On March 24, 1997 the Company's Board of Directors voted to change the
fiscal year end from June 30 to March 31. See Note 2. All references to fiscal
1997 in the accompanying financial statements relate to the nine months ended
March 31, 1997. References to fiscal 1996, 1995 and 1994 relate to the
respective years ended June 30.
 
2.  RESTATEMENT OF FINANCIAL STATEMENTS
 
     On February 11, 1997, the Company announced that it had commenced a special
investigation into certain apparent financial and management irregularities and
that its previously published financial statements and related financial
disclosures could no longer be relied upon. On June 12, 1997, the Company
announced the completion of the financial review associated with the special
investigation, including condensed restated financial information, as well as
the financial results for the periods ended March 31, 1997. The Company had
previously changed its fiscal year end to March 31, in order to accelerate the
receipt of certain tax refunds and in order to complete audited financial
statements for the entire periods under review as quickly as possible. The
accompanying financial statements give effect to the adjustments arising from
the special investigation.
 
     Cumulative adjustments to the Company's previously reported results of
operations through December 31, 1996 consist of reductions of sales totaling
$21.2 million; increases to cost of sales associated with inventory adjustments
totaling $8.8 million; and write-offs of investments in and advances to several
companies totaling $15.8 million. Additional increases in costs and expenses
include adjustments to plant and equipment, miscellaneous assets, investment in
Century, accrued liabilities and warranty reserves for a net
 
                                       34
<PAGE>   35
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
aggregate amount of $2.4 million. Netted against these adjustments is an
aggregate amount of $8.1 million in reductions to income taxes, representing
reversals of previously reported tax provisions.
 
     The following table sets forth the effects of these adjustments on the
Company's financial position and results of operations (in thousands except per
share data):
 
<TABLE>
<CAPTION>
                                                    SIX MONTHS
                                                      ENDED          FISCAL YEAR ENDED JUNE 30,
                                                     DEC. 31,      -------------------------------
                                                       1996         1996        1995        1994
                                                    ----------     -------     -------     -------
<S>                                                 <C>            <C>         <C>         <C>
Sales:
  As previously reported..........................   $ 30,192      $37,848     $12,445     $ 8,213
  As adjusted.....................................     17,370       33,412       8,982       7,801
Cost of goods sold:
  As previously reported..........................     17,978       23,636       6,833       4,523
  As adjusted.....................................     15,582       29,778      11,575       6,508
Net income (loss):
  As previously reported..........................      5,805        4,902         874         464
  As adjusted.....................................    (16,221)      (4,282)     (5,852)     (1,672)
Net income (loss) per share:
  As previously reported..........................        .33          .34         .08         .07
  As adjusted.....................................       (.94)        (.31)       (.63)       (.19)
Total assets:
  As previously reported..........................     89,952       55,782      18,199       7,553
  As adjusted.....................................     58,320       41,132       9,550       5,203
Total stockholders' equity:
  As previously reported..........................     70,874       46,045      12,445       6,419
  As adjusted.....................................     36,611       31,909       4,267       4,315
</TABLE>
 
                                       35
<PAGE>   36
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     The following table sets forth the summary of restatement adjustments (in
thousands):
 
<TABLE>
<CAPTION>
                                                    SIX MONTHS
                                                      ENDED          FISCAL YEAR ENDED JUNE 30,
                                                     DEC. 31,      -------------------------------
                                                       1996         1996        1995        1994
                                                    ----------     -------     -------     -------
<S>                                                 <C>            <C>         <C>         <C>
Adjustments attributable to Centennial
  Technologies, Inc.:
Reversal of invalid sales transactions............   $ (5,283)     $(3,714)    $(3,455)    $  (413)
Reversal of bill and hold sales transactions......     (6,432)          --          --          --
Reclassification of purchasing agency
  arrangement.....................................       (968)        (585)         --          --
Additional accounts receivable adjustments........       (239)        (136)         (9)         --
                                                     --------      -------     -------     -------
Total adjustments to sales........................    (12,922)      (4,435)     (3,464)       (413)
Corrections to inventory pricing and physical
  counts..........................................     (1,336)      (2,202)     (4,560)     (1,410)
Restoration of inventory related to bill and hold
  sales transactions..............................      3,435           --          --          --
Additional provisions for inventory
  obsolescence....................................       (925)      (1,351)        (78)       (381)
Reversal of certain additions to capital
  equipment, net of related depreciation, which
  were not bona fide..............................        (72)      (2,266)       (223)       (177)
Provision for losses on investment activities.....    (10,811)      (1,496)         --          --
Pre-acquisition advances to subsidiary............     (2,385)      (1,101)         --          --
Other adjustments, net............................       (568)         399       1,043        (211)
Reversal of provisions for income taxes...........      3,788        3,268         556         455
                                                     --------      -------     -------     -------
Total adjustments to net income (loss)............    (21,796)     $(9,184)    $(6,726)    $(2,137)
                                                                   =======     =======     =======
Adjustments attributable to Century Electronics
  Manufacturing, Inc..............................       (358)
                                                     --------
Total adjustments to net income (loss)............   $(22,154)
                                                     ========
</TABLE>
 
     As outlined in the criminal indictment of Centennial's former Chief
Executive Officer, the Company's sales figures were inflated in previous
periods. This inflation was achieved by various means, including shipping empty
PC card housings; billing customers for non-existent products; using the
delivery of non-product materials to generate shipping documents, which were
then used to create fictitious invoices; and the payment of these invoices with
funds apparently provided by the Company's former Chief Executive Officer.
 
     Reported revenue figures have also been corrected to exclude bill and hold
transactions which did not meet revenue recognition criteria for the periods in
which they were recorded, and to reclassify transactions related to a purchasing
agency contract with an affiliated company.
 
     Adjustments to the Company's physical inventory balances are attributable
to prior manipulation of physical counts, the inclusion of empty PC card
housings in the Company's finished goods balances, various pricing errors and
manipulations, and the Company's prior failure to adequately reflect actual
usage information in providing reserves for inventory obsolescence.
 
     The Company has also reduced or written off the carrying value of several
of its investments in and advances to related technology companies. With regard
to the Company's advances to its recently acquired subsidiaries, Intelligent
Truck Project, Inc. and Fleet.Net, Inc., the Company has recorded a charge of
$3.5 million, equal to advances to these companies between April 1996 and
December 31, 1996 previously characterized as prepaid technology license fees,
as costs and expenses in the periods in which those advances were made. The
Company has also recorded valuation reserves and related accruals amounting to
$5.8 million related to several of its loans to and/or investments in technology
companies. In addition, the Company has
 
                                       36
<PAGE>   37
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
reached agreements to settle claims related to its investments in Infos
International, Inc. and P.G. Technologies, Inc. and has recorded a full
write-off of its investments in these entities of $6.0 million and $0.5 million,
respectively.
 
3.  SUMMARY OF OTHER SIGNIFICANT ACCOUNTING POLICIES
 
  Industry Segment
 
     The Company operates in a single industry segment: the design and
manufacture of high-technology memory chip based products used in industrial and
commercial applications.
 
  Revenue Recognition
 
     Revenue from product sales is recognized at time of shipment.
 
  Warranty Costs
 
     The Company offers a limited warranty, ranging from one to two years, on
materials and workmanship for certain of its products. Costs relating to product
warranty are generally accrued at time of shipment. In addition, on sales to
certain wholesalers, the Company offers a stock rotation policy under which the
Company accepts returns on certain merchandise within two months of shipping for
merchandise or credit toward future orders, and accepts returns after two months
but within six months of shipping for merchandise credit minus a 15% restocking
charge. The Company has not experienced material costs associated with its
warranty and restocking policy.
 
  Research and Development Costs
 
     Expenditures relating to the development of new products and processes,
including significant improvements and refinements to existing products, are
expensed as incurred.
 
  Cash and Cash Equivalents
 
     The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. The Company
has no requirements for compensating balances.
 
  Concentration of Credit Risk
 
     Financial instruments, which potentially subject the Company to
concentration of credit risk, consist principally of trade receivables. If any
of the Company's major customers fail to pay the Company on a timely basis, it
could have a material adverse effect on the Company's business, financial
condition and results of operations.
 
     For fiscal 1997, two customers accounted for approximately 54% of the
Company's sales. At March 31, 1997, these customers accounted for approximately
$3.0 million, or 54% of the Company's net accounts receivable balance.
 
     For fiscal 1996, two customers accounted for approximately 28% of the
Company's sales. At June 30, 1996, these two customers accounted for
approximately $4.7 million, or 42% of the Company's net accounts receivable
balance.
 
     For the nine months ended March 31, 1996, two customers accounted for
approximately 25% of the Company's sales. At March 31, 1996, these customers
accounted for approximately $1.8 million, or 23% of the Company's accounts
receivable balance.
 
                                       37
<PAGE>   38
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     No one customer or group of related customers accounts for more than 10% of
the Company's sales in fiscal 1995 and 1994.
 
     Approximately 8%, 12%, 19% and 22% of the Company's sales in fiscal 1997,
1996, 1995 and 1994, respectively, were outside the United States, primarily in
several Western European countries, Israel and Canada. No one area comprised
more than 10% of the Company's sales.
 
     A substantial portion of the Company's assets are associated with Century
Electronics Manufacturing, Inc., ("Century"). See Note 8. Any material adverse
change in the business of Century could have a material adverse effect on the
Company's business, financial condition and results of operations.
 
  Fair Value of Financial Instruments
 
     For certain of the Company's financial instruments, including cash and cash
equivalents, available-for-sale securities, accounts receivable, notes
receivable, accounts payable and other accrued expenses, the carrying amounts
approximate fair value due to their short maturities. Long-term notes
receivable, investments and notes payable are carried at amounts that
approximate fair value.
 
  Inventories
 
     Inventories are stated on a first-in, first-out basis at the lower of cost
or market.
 
  Equipment and Leasehold Improvements
 
     Equipment is stated at cost. Major renewals and improvements are
capitalized while repair and maintenance charges are expensed when incurred.
Depreciation is provided over the estimated useful life of the respective
assets, ranging from three to ten years, on a straight-line basis. Leasehold
improvements are amortized over the lesser of the term of the lease or the
estimated useful life of the related assets. When assets are sold or retired,
their cost and related accumulated depreciation are removed from the accounts.
Any gain or loss is included in the determination of net income.
 
  Income Taxes
 
     The Company accounts for income taxes by the liability method. Under the
liability method, deferred taxes are determined based on the difference between
the financial statement and tax bases of assets and liabilities using enacted
tax rates in effect in the years in which the differences are expected to
reverse.
 
  Earnings Per Share
 
     Primary earnings per share data are based on outstanding Common Stock and
Common Stock assumed to be outstanding to reflect the dilutive effects of stock
options and warrants using the treasury stock method. Since all periods
presented in these financial statements reflect losses, such common stock
equivalents have been excluded, as they are anti-dilutive.
 
  Stock Split
 
     The Company effected a two-for-one stock split of its outstanding shares of
Common Stock in the form of a stock dividend in November 1996. All references in
the accompanying consolidated financial statements to number of shares, weighted
average number of shares outstanding and related prices, per share amounts, and
stock plan data reflect this split on a retroactive basis.
 
                                       38
<PAGE>   39
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
  Pervasiveness of Estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
     During fiscal 1996, the Company began a strategy of making investments,
financed through a combination of cash and common stock, in technology companies
for the expressed purpose of market development for its PC card business as well
as investment gain. Management has decided to focus its financial resources on
its core business, and to suspend new investment activities. The Company has
written down its portfolio of investments based on an individual assessment of
their future viability.
 
4.  AVAILABLE-FOR-SALE SECURITIES
 
     The Company, in accordance with Statement of Financial Accounting Standards
No. 115, classifies its securities as available-for-sale and are stated at
amortized cost plus accrued interest, which approximate fair market value. Gross
unrealized losses on the securities available-for-sale are not reported as a
separate component of stockholders' equity due to their immateriality. Dividend
and interest income, including amortization of premium and discount arising at
acquisition, are included in income. Available-for-sale securities are
classified as current assets, as they are held to fund current operations.
Available-for-sale securities at June 30, 1996 consist of mortgage
backed-securities with an amortized cost and fair market cost of $4.9 million.
There were no available-for-sale securities at March 31, 1997 or at June 30,
1995. Gross realized gains and losses are immaterial to the Company's operating
results.
 
5. INVENTORIES
 
     Inventories consisted of (in thousands):
 
<TABLE>
<CAPTION>
                                                              MARCH 31,      JUNE 30,       JUNE 30,
                                                                1997           1996           1995
                                                              ---------     ----------     ----------
                                                                            (RESTATED)     (RESTATED)
<S>                                                           <C>           <C>            <C>
Raw material, primarily electronic components...............   $ 3,995        $4,967         $1,143
Work in process.............................................     1,387           882            460
Finished goods..............................................     2,412         2,399            578
                                                               -------        ------         ------
                                                               $ 7,794        $8,248         $2,181
                                                               =======        ======         ======
</TABLE>
 
     The Company maintains levels of inventories that it believes are necessary
based upon assumptions concerning its growth, mix of sales and availability of
raw materials. Changes in those underlying assumptions could affect management's
estimates of inventory valuation.
 
6.  NOTES RECEIVABLE
 
     During fiscal 1996, the Company advanced funds to affiliated and
unaffiliated companies, which generally develop technologies complimentary to
that of the Company. At June 30, 1996, the notes receivable balance due from
these companies was approximately $2,680,000. At June 30, 1996, the Company had
a $871,000 reserve against the outstanding note receivable balance. During
fiscal 1997, loans for $2,295,000 were made, loans of $3,689,000 were repaid,
$115,000 was written off and $200,000 was converted into the common stock of the
investee. During fiscal 1997, the Company provided for an additional $100,000
reserve, such that all notes receivable are fully reserved.
 
                                       39
<PAGE>   40
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
7.  EQUIPMENT AND LEASEHOLD IMPROVEMENTS
 
     Equipment and leasehold improvements consisted of the following (in
thousands):
 
<TABLE>
<CAPTION>
                                                                                    JUNE 30,
                                                                            -------------------------
                                                              MARCH 31,
                                                                1997           1996           1995
                                                              ---------     ----------     ----------
                                                                            (RESTATED)     (RESTATED)
<S>                                                           <C>           <C>            <C>
Equipment...................................................   $ 2,809        $1,401         $  747
Equipment under capital leases..............................     1,214         1,012            320
Leasehold improvements......................................        --           196             82
                                                               -------        ------         ------
                                                                 4,023         2,609          1,149
Accumulated depreciation and amortization...................       936           576            227
                                                               -------        ------         ------
                                                               $ 3,087        $2,033         $  923
                                                               =======        ======         ======
</TABLE>
 
     During fiscal 1997, the Company wrote off $80,000 of net book value of
leasehold improvements in connection with its move to new facilities.
 
     Depreciation expense for fiscal 1997, 1996, 1995 and 1994 was approximately
$702,000, $348,000, $152,000, and $59,000, respectively. Depreciation expense
for the nine months ended March 31, 1996 was approximately $240,000.
 
8.  INVESTMENT IN CENTURY ELECTRONICS MANUFACTURING, INC.
 
     During fiscal 1997, the Company completed three separate business
acquisitions of contract manufacturing activities. On July 10, 1996, the Company
acquired a majority equity position in Design Circuits, Inc. ("DCI") for
approximately $3.2 million in cash, 250,000 shares of the Company's Common Stock
and assumption of certain liabilities.
 
     In October 1996, the Company and the minority shareholders in DCI exchanged
their DCI shares for shares of capital stock in a newly formed entity, Century
Electronics Manufacturing, Inc. ("Century").
 
     Pursuant to a joint venture agreement executed in May, 1996, the Company
invested $1.3 million during fiscal 1997 as its initial capital into its 51%
owned contract manufacturing joint venture in Thailand. The Company's joint
venture partner's initial capital contribution was $3.7 million.
 
     On November 5, 1996, Century purchased Triax Technology Group Limited
("Triax"), a provider of contract manufacturing services located in the United
Kingdom for approximately $4.2 million in cash and approximately 2.2 million
shares of common stock of Century. The Company also contributed 25,000 shares of
Centennial Common Stock as a finder's fee. At the conclusion of the Triax
transaction, Triax and DCI were wholly-owned subsidiaries of Century, and
Centennial owned approximately 67% of Century.
 
     On March 14, 1997, Century entered into an agreement in principal with the
Company, whereby Century agreed to redeem a portion of its shares in exchange
for $1.3 million in cash and a $6.0 million subordinated debenture, reducing the
Company's equity ownership position to 45%. The debentures bear interest at a
rate of 6% and mature in ten years. Under certain conditions, the debentures
will be convertible into the capital stock of an entity with which Century may
merge. In addition, the Company agreed to contribute to Century its interest in
the Thailand joint venture. Century also agreed to repay an 8.5% note payable to
Centennial in the amount of $4.1 million and to take the necessary steps to
remove all outstanding guarantees of third-party indebtedness.
 
     On June 30, 1997, the aforementioned transaction was completed. In order to
remove certain guarantees of equipment subleased to DCI, Centennial executed
lease buyouts amounting to $2.4 million and sold the
 
                                       40
<PAGE>   41
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
underlying equipment to Century for $0.5 million in cash and a $1.9 million 9%
promissory note due December 1998. See Note 8 of Notes to Unaudited Consolidated
Financial Statements.
 
     The following table presents summary financial information for Century (in
thousands):
 
<TABLE>
<CAPTION>
                                     BALANCE SHEET DATA
                                       MARCH 31, 1997
        <S>                                                                  <C>
        Current assets.....................................................  $36,043
        Goodwill...........................................................   14,044
        Total assets.......................................................   62,550
        Current liabilities................................................   32,295
        Working capital....................................................    3,748
        Stockholders' equity...............................................   22,035
</TABLE>
 
<TABLE>
<CAPTION>
                                STATEMENT OF OPERATIONS DATA
                        FROM DATES OF ACQUISITION TO MARCH 31, 1997
        <S>                                                                  <C>
        Sales..............................................................  $44,346
        Gross margin.......................................................    3,908
        Net income.........................................................      224
</TABLE>
 
     The Company had sales to Century of $120,000 during the period. Century is
amortizing goodwill over a 10-year period.
 
9.  OTHER INVESTMENTS
 
  ViA, Inc.
 
     In December 1996, the Company issued 156,000 unregistered shares of its
Common Stock in exchange for a 12% interest in ViA, Inc. a privately held
technology company that designs, develops, and markets miniature communication
and computing products. Due to the significance of the Company's investment to
ViA's total capitalization and on the basis of the complementary nature of the
companies' products and related development plans, Centennial is accounting for
this investment using the equity method, and is amortizing the purchase price in
excess of its interest in the investee's underlying net assets, which excess
amounted to $5.0 million, over 60 months. The Company has recorded this
amortization, as well as its share of the investee's losses since the date of
the investment, for an aggregate amount of $585,000 as loss on investment
activities.
 
  Intelligent Truck Project, Inc., Fleet.Net, Inc. and Smart Traveler Plazas,
Inc.
 
     On December 13, 1996, the Company completed merger agreements with
Intelligent Truck Project, Inc., Fleet.Net, Inc. and Smart Traveler Plazas, Inc.
(collectively, "ITP/Fleet.Net") agreeing to exchange 792,960 shares of Common
Stock of the Company for all of the outstanding common stock of the acquired
businesses. Subsequent to the Company's February announcement of financial
irregularities, the principal shareholder of ITP/Fleet.Net filed suit, alleging,
among other things, breach of representations and warranties as to the financial
statements of Centennial. On March 4, 1997, the Company and the principal
shareholder of ITP/Fleet.Net entered into a memorandum of understanding pursuant
to which the companies would unwind the merger agreements. The parties were
unable to reach mutually satisfactory terms to complete the unwinding and on May
15, 1997 agreed to complete the merger and exchange mutual releases of certain
claims. Based on the material uncertainties surrounding the value of
consideration on the original merger date, which uncertainties were not resolved
until the execution of a settlement and mutual release agreement, the Company
has recorded the merger and corresponding issuance of Common Stock as of May 15,
1997. Advances to ITP/Fleet.Net made during fiscal 1996 and fiscal 1997, certain
of which were previously
 
                                       41
<PAGE>   42
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
characterized as advance payments for technology license arrangements, have been
included in loss on investment activities in the periods the advances were made.
The merger will be recorded using purchase accounting, and the excess
(approximately $3.0 million) of the purchase price over the fair value of assets
acquired will be written off as of the agreement date (May 15, 1997) because of
the uncertainties related to the future operations of ITP/Fleet.Net.
 
  Infos International, Inc.
 
     During fiscal 1997, the Company acquired a 38% interest in Infos
International, Inc., a supplier of intelligent hand held data collection
equipment for route and shop floor accounting. The purchase price amounted to
approximately $3.0 million in cash and 230,000 shares of Centennial Common Stock
having a fair market value of $3.9 million at date of acquisition. On May 14,
1997, the Company and shareholders of Infos reached an agreement in principal
whereby the Company would return its shares of Infos in exchange for the shares
of Centennial Common Stock issued and a three year warrant to acquire shares of
Infos equal to up to 15% of the then outstanding common stock of Infos with
certain limitations. The parties have also agreed to exchange mutual releases of
any claims arising from the original acquisition agreement. Since Infos is a
privately-held company, there is no available market information in order to
ascribe value to the warrants, and current financial information is not
presently available. Accordingly, the full amount of the investment cost ($7.0
million) has been written off. The recorded loss of $6.0 million reflects the
use by Infos of $1.0 million of the original cash proceeds to repay an
obligation of that amount due to Centennial from an Infos subsidiary,
Information Capture Corporation ("ICC"). This obligation originally arose in
fiscal 1995, prior to Infos acquiring ICC, in connection with a sales
transaction that was determined in the Company's special investigation not to be
bona fide. The effect of the adjustment is to reflect $1.0 million of the
investment cost as a reduction of sales and net income in fiscal 1995 and the
remainder as loss on investment activities in fiscal 1997.
 
  Industrial Imaging, Inc.
 
     The Company purchased for $730,000 in cash and conversion of $200,000 of
notes a minority interest in a corporation now known as Industrial Imaging, Inc.
which designs, manufactures and markets automated optical vision and individual
imaging systems for inspection and identification of defects in printed circuit
boards. In addition, effective April 1, 1996 and expiring June 30, 1997, the
Company agreed to provide procurement services and buy material using the
Company's credit arrangements for a service fee of $200,000. Purchases
aggregating $1.4 million were made on behalf of the investee and were initially
reflected by the Company as sales with an equivalent amount of cost of goods
sold. Such sales have been reversed in connection with the Company's financial
review. During fiscal 1997, the Company determined that the investee was unable
to repay the Company for the material purchased, and also determined that the
value of the equity investment was permanently impaired. The Company has agreed
to convert its accounts receivable into common stock of the investee and has
recorded a valuation reserve equal to the carrying value of the investment.
 
  WebSecure, Inc.
 
     During fiscal 1996 the Company purchased for $569,000 a minority interest
in WebSecure, Inc., a corporation which provides Internet services. The former
president and a shareholder of WebSecure was a Director of the Company from
February 1994 through November 1995. In connection with WebSecure's initial
public offering, the Company realized a gain of $1.2 million from the sale of a
portion of its investment. The remaining investment, having a cost of $560,000,
has been fully reserved on the basis that its value appears to have been
permanently impaired. In addition, the Company has deferred recognition of the
gain pending final resolution of certain litigation described in Note 17.
 
                                       42
<PAGE>   43
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
  Other Investments
 
     During fiscal 1996, the Company purchased for $250,000 a minority interest
in a corporation which designs, manufactures and markets small form factor
computer hard drives. This technology, when and if implemented, could be used to
increase the speed and processing capabilities of PC Cards. During fiscal 1997,
the Company increased its investment by $164,000. This investment is accounted
for using the cost method.
 
     During fiscal 1997 and 1996, the Company made investments aggregating
$860,000 in development stage businesses that have not yet reached commercial
viability. Such investments have been fully reserved as of March 31, 1997, net
of certain offsets included in accounts payable and accrued expenses.
 
     During fiscal 1996, the Company purchased for $250,000 a minority interest
in a holding company of various technology-related corporations and loaned to
the investee an additional $1.0 million. The Company believes that the initial
investment objectives were not bona fide, and that the investment has been
permanently impaired. Accordingly, these investments have been reflected in loss
on investment activities in fiscal 1996, excluding $250,000 that was repaid by
the investee in January 1997.
 
     During fiscal 1996, the Company purchased a minority interest for $396,500
in a corporation that develops, manufactures and markets products for vehicle
and fleet management. In addition, the Company loaned $100,000 to the investee.
The carrying cost of this investment and loan was written off in fiscal 1996 and
the shares were returned to the investee in May 1997 pursuant to a settlement
and mutual release agreement.
 
     During fiscal 1994, the Company exchanged 27,000 shares of the Company's
Common Stock for all the outstanding shares of a company located in the United
Kingdom. The acquisition was accounted for as a pooling of interests.
 
10.  DEBT
 
  Note Payable
 
     The Company has a revolving line of credit agreement with a bank that
limits borrowings to a percentage of receivables and inventories and contains
certain covenants relating to the Company's net worth and indebtedness, among
others. This credit agreement is collateralized by substantially all the assets
of the Company. On February 14, 1997, the Company received a notice of default
and on March 18, 1997 entered into a forbearance agreement whereby the bank
agreed to continue to extend credit under certain conditions. The forbearance
agreement has been subsequently extended to July 31, 1997. The defaulted credit
agreement bears interest at the bank's prime interest rate (8.25% and 9.0% at
June 30, 1996 and 1995, respectively). The forbearance agreement sets the
interest rate at 9.5%. The Company is currently negotiating financing
arrangements with a new lender. See Note 18. At March 31, 1997, June 30, 1996
and 1995, the Company had utilized approximately $10.1 million, $4.7 million and
$1.2 million, respectively, under these credit agreements.
 
  Proposal from Congress Financial Corp.
 
     On May 7, 1997, the Company received a non-binding proposal from Congress
Financial Corp. ("Congress Financial"), a commercial credit institution, for a
revolving credit facility and term loan facility.
 
     On July 18, 1997, the Company received a commitment letter from Congress
Financial, subject to satisfaction of certain conditions and completion of
documentation, for a revolving credit facility and term loan facility of up to
$4.1 million and $0.9 million, respectively, and a $2.0 million capital
equipment acquisition facility, based on certain limitations and covenants.
Allowable borrowings would be based on available accounts receivable and the
cost of equipment, and would be secured by all of the Company's assets. The
Company expects to complete negotiations on the new borrowing facility before
the expiration of the
 
                                       43
<PAGE>   44
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
forbearance agreement relating to its existing credit facility. Although the
Company believes it will successfully accomplish the refinancing, the commitment
letter contains conditions to refinancing, and if the refinancing were not
effected, the Company would be obliged to seek alternative sources of financing.
There can be no assurance that such alternative sources of financing will be
available.
 
  Capital Leases
 
     The Company leases certain equipment under three year lease financing
agreements with the bank that is currently providing the Company with its line
of credit. These lease arrangements have been accounted for as financing
transactions. The subject equipment is recorded as an asset for financial
statement purposes, and is being depreciated accordingly. These equipment leases
were included in the aforementioned notice of default and forbearance agreement
and, accordingly, have been classified as current liabilities at March 31, 1997.
 
     The Company leases its facilities under operating leases with renewal
options, which expire at various dates through 2001. Under certain leases, the
Company is obligated to pay its pro-rata share of operational and maintenance
costs.
 
     At March 31, 1997, the minimum annual rental commitments under
non-cancelable lease obligations are as follows (in thousands):
 
<TABLE>
<CAPTION>
                                                                          CAPITAL   OPERATING
                                                                          LEASES     LEASES
                                                                          -------   ---------
    <S>                                                                   <C>       <C>
    Year ending March 31,
    1998................................................................   $ 671     $   427
    1999................................................................      --         242
    2000................................................................      --         231
    2001................................................................      --         233
    2002................................................................      --         238
                                                                           -----     -------
    Total minimum lease payments........................................   $ 671     $ 1,371
                                                                           =====     =======
</TABLE>
 
     Rental expense under operating leases totaled approximately $312,000,
$396,000, $330,000 and $229,000 in fiscal 1997, 1996, 1995 and 1994,
respectively. Rental expense for the nine months ended March 31, 1996 was
$285,000.
 
11.  INCOME TAXES
 
     The loss before income taxes consisted of the following (in thousands):
 
<TABLE>
<CAPTION>
                                                     NINE MONTHS
                                                        ENDED
                                                      MARCH 31,        YEAR ENDED JUNE 30,
                                                     -----------   ---------------------------
                                                        1997        1996      1995      1994
                                                     -----------   -------   -------   -------
    <S>                                              <C>           <C>       <C>       <C>
    U.S............................................   $ (42,104)   $(4,052)  $(5,668)  $(1,695)
    Foreign........................................        (558)      (230)     (184)       23
                                                      ---------    -------   -------   -------
                                                      $ (42,662)   $(4,282)  $(5,852)  $(1,672)
                                                      =========    =======   =======   =======
</TABLE>
 
                                       44
<PAGE>   45
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     The provision for income taxes differs from the amount computed by applying
the statutory federal income tax rate to loss before income taxes as follows:
 
<TABLE>
<CAPTION>
                                                     NINE MONTHS
                                                        ENDED
                                                      MARCH 31,         YEAR ENDED JUNE 30,
                                                     -----------     -------------------------
                                                        1997         1996      1995      1994
                                                     -----------     -----     -----     -----
    <S>                                              <C>             <C>       <C>       <C>
    Tax benefit at U.S. statutory rates............     (34.0)%      (34.0)%   (34.0)%   (34.0)%
    State taxes net of federal benefit.............      (6.1)        (6.1)     (6.1)     (6.1)
    Change in valuation allowance..................      39.8         57.2      40.1      30.9
    Valuation allowance related to stock options...        --        (18.1)       --        --
    Other..........................................       0.3          1.0        --        --
                                                        -----        -----     -----     -----
                                                           --%          --%       --%     (9.2)%
                                                        =====        =====     =====     =====
</TABLE>
 
     The components of deferred income taxes are as follows (in thousands):
 
<TABLE>
<CAPTION>
                                                                               JUNE 30,
                                                              MARCH 31,   -------------------
                                                                1997        1996       1995
                                                              ---------   --------   --------
    <S>                                                       <C>         <C>        <C>
    Allowance for doubtful accounts.........................  $      95   $     92   $     49
    Notes receivable reserve................................        391        351      --
    Inventory reserve and capitalization....................      1,065        982        144
    Investment reserve......................................      5,235        503      --
    Accrued expenses........................................        139         42          6
    Equipment, net..........................................        276        209          4
    Net operating losses....................................     15,497      3,438      2,901
                                                              ---------   --------   --------
                                                                 22,698      5,617      3,104
    Less valuation allowance................................    (22,698)    (5,617)    (3,104)
                                                              ---------   --------   --------
    Net deferred taxes......................................  $      --   $     --   $     --
                                                              =========   ========   ========
</TABLE>
 
     Management of the Company has evaluated the positive and negative evidence
bearing upon the realizability of its deferred tax assets, which are comprised
principally of net operating losses and reserves. Management has considered the
Company's history of losses and concluded that there is insufficient evidence
that it is more likely than not that the Company will generate future taxable
income prior to the expiration of these net operating losses in 2010.
Accordingly, the deferred tax assets have been fully reserved.
 
     At March 31, 1997, the Company had federal net operating loss carryforwards
of approximately $17.7 million available to offset future taxable income
expiring in 2010 through 2012. Approximately $2.1 million of the Company's net
operating loss is attributable to the exercise of stock options which, when
utilized, will be credited to additional paid-in capital. Additionally, the
Company has a net operating loss of approximately $1.2 million available to
offset future taxable income in foreign jurisdictions.
 
                                       45
<PAGE>   46
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
12.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 
     Accounts payable and accrued expenses consist of the following (in
thousands):
 
<TABLE>
<CAPTION>
                                                                                  JUNE 30,
                                                                 MARCH 31,   -------------------
                                                                   1997        1996       1995
                                                                 ---------   --------   --------
    <S>                                                          <C>         <C>        <C>
    Trade accounts payable.....................................   $ 4,766     $2,865     $3,303
    Deferred gain on sale of securities........................     1,200      --         --
    Accrued special investigation costs........................     2,033      --         --
    Cash portion of settlement of shareholder litigation.......     1,475      --         --
    Other accrued expenses.....................................     2,409        811        562
                                                                  -------     ------     ------
              Total accounts payable and accrued expenses......   $11,883     $3,676     $3,865
                                                                  =======     ======     ======
</TABLE>
 
     Accrued special investigation costs represent professional and legal fees
in connection with the completion of the Company's special investigation,
certain refinancing activities, and legal fees associated with the pending
shareholder litigation. See Note 17.
 
13.  STOCKHOLDERS' EQUITY
 
     In April 1994, the Company completed the initial public offering of
3,000,000 shares of its Common Stock and warrants to purchase 2,000,000 shares
of redeemable Common Stock (the "Redeemable Warrants"). The offering resulted in
the proceeds to the Company of approximately $4,664,000. Each Redeemable Warrant
enabled the holder to purchase three shares of Common Stock for $3.60 per share.
In connection with the Company's initial public offering, the Company issued
warrants to the representative of the underwriters (the "Representative's
Warrants") to purchase 600,000 shares of Common Stock for the offering at an
average price of $3.075 per share.
 
     The Redeemable Warrants were redeemable by the Company, in whole or in
part, at $.10 per Redeemable Warrant, provided that the closing price of the
Common Stock as quoted on the American Stock Exchange equaled or exceeded $3.00
per share for 10 consecutive trading days. If any Redeemable Warrant called for
redemption were not exercised, it would have ceased to be exercisable and the
holder would have only been entitled to the redemption price of the Redeemable
Warrant.
 
     In fiscal 1995, Redeemable Warrants to purchase 1,436,176 shares of the
Company's Common Stock were exercised, resulting in net proceeds to the Company
of approximately $3.2 million. In fiscal 1996, Redeemable Warrants to purchase
2,013,794 shares of the Company's Common Stock were exercised, resulting in net
proceeds to the Company of approximately $4.6 million. At June 30, 1996, none of
the Redeemable Warrants were outstanding.
 
     In fiscal 1995, Representative's Warrants to purchase 189,900 shares of the
Company's Common Stock were exercised, resulting in net proceeds to the Company
of approximately $569,000. In fiscal 1996, Representative's Warrants to purchase
203,100 shares of the Company's Common Stock were exercised, resulting in net
proceeds to the Company of approximately $603,000. In fiscal 1997,
Representative's Warrants to purchase 172,000 shares of the Company's Common
Stock were exercised, resulting is net proceeds to the Company of approximately
$518,000. At March 31, 1997, none of the Representative's Warrants were
outstanding.
 
     In fiscal 1995, the Company sold 450,000 shares of Common Stock at $2.92
per share to unaffiliated third parties, resulting in net proceeds to the
Company of approximately $1,140,000.
 
     In March 19, 1996, the Company conducted a public offering of 1,350,000
shares of its Common Stock resulting in net proceeds to the Company of
approximately $20.9 million. In April 1996, the underwriters
 
                                       46
<PAGE>   47
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
exercised their option to purchase 75,000 shares of Common Stock to cover
over-allotments, resulting in net proceeds to the Company of approximately $1.2
million.
 
14.  STOCK OPTION PLANS
 
     Under the Company's 1994 Stock Option Plan (the "Plan"), incentive and
non-qualified stock options may be granted to employees, officers, directors and
consultants of the Company. The Company initially reserved 750,000 shares of
Common Stock for issuance under the Plan. During fiscal 1997, the amount
reserved for issuance was increased to 1,500,000 shares. The Board of Directors
intends to seek approval at the earliest opportunity to increase the number of
shares of Common Stock authorized for issuance under the Plan to 3,000,000
shares to give effect to the two-for-one stock split effected in November 1996.
These options generally vest over a three-year period and expire after 10 years.
 
     On December 6, 1994, the Company's stockholders adopted a formula stock
option plan (the "Formula Plan"), which is designed to provide certain
incentives to non-employee directors. Under the Formula Plan, options will be
granted pursuant to a formula that determines the timing, pricing and amount of
the option awards using objective criteria. The Company has reserved 180,000
shares of Common Stock for issuance under the Formula Plan. The exercise price
of the options granted to a non-employee director upon election as a director
was 85% of the fair market value of the shares of Common Stock on the date of
the grant. During fiscal 1997, the Formula Plan was amended to provide that
options are granted at fair market value. These options vest and are exercisable
on the date of grant and expire after 10 years. All other options granted under
the Formula Plan vest and are exercisable one year from the date of the grant.
During fiscal 1995, pursuant to the Formula Plan, non-employee directors were
granted options aggregating 105,000 shares of Common Stock of the Company at
prices ranging from $2.33 to $5.95 per share. During fiscal 1996, non-employee
directors were granted options to purchase 18,000 shares of the Company's Common
Stock at prices ranging from $7.52 to $8.07 per share. During fiscal 1997,
non-employee directors were granted options to purchase 21,000 shares at prices
ranging from $12.89 to $29.38.
 
     In addition, during fiscal 1997, the Company granted options to acquire
850,000 shares outside of the Company's stock option plans, exercisable at
$20.53 or $24.66 per share, of which 700,000 options were granted to four
directors (two of whom are no longer directors) and the balance to employees of
the Company; the vesting period for these options range from one-third
immediately upon grant to three years, and the options expire in ten years.
 
     In October 1995, the FASB issued SFAS 123, "Accounting for Stock-Based
Compensation." SFAS 123 is effective for periods beginning after December 15,
1995. SFAS 123 requires that companies either recognize compensation expense for
grants of stock, stock options, and other equity instruments based on fair
value, or provide pro forma disclosure of net income and earnings per share in
the notes to the financial statements. The Company adopted the disclosure
provisions of SFAS 123 in fiscal 97 and has applied APB Opinion 25 and related
Interpretations in accounting for its plans. Compensation costs of $34,000,
$20,000 and $53,000 has been recognized for the nine months ended March 31,
1997, fiscal 96 and fiscal 95, respectively. No compensation cost was recognized
for the nine months ended March 31, 1996. Had compensation cost for the
Company's stock-based compensation plans been determined based on the fair value
at the grant dates as calculated in accordance with SFAS 123, the Company's net
loss and net loss per share for the nine months ended March 31, 1997 and for
fiscal 1996 would have been increased to the pro forma amounts indicated below:
 
<TABLE>
<CAPTION>
                                                    1997                                 1996
                                       ------------------------------       ------------------------------
                                          NET LOSS                             NET LOSS
                                          -------           NET LOSS           -------           NET LOSS
                                       (IN THOUSANDS)       PER SHARE       (IN THOUSANDS)       PER SHARE
                                       --------------       ---------       --------------       ---------
<S>                                    <C>                  <C>             <C>                  <C>
As Reported..........................     $(42,662)          $ (2.46)          $ (4,282)           $(.31)
Pro forma............................     $(48,591)          $ (2.80)          $ (5,014)           $(.37)
</TABLE>
 
                                       47
<PAGE>   48
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     The fair value of each stock option is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions: an expected life of 5 years, expected volatility of 55.0%, no
dividends and a risk-free interest rate of 6.2% and 5.9% for the nine months
ended March 31, 1997 and fiscal 1996, respectively.
 
     A summary of the status of the Company's stock option plans as of December
31, 1996, 1995 and 1994 and changes during the years ending on those dates is
presented below:
 
<TABLE>
<CAPTION>
                                          1997                        1996                      1995
                                -------------------------   ------------------------   -----------------------
                                            AVERAGE PRICE              AVERAGE PRICE             AVERAGE PRICE
                                 NUMBER       PER SHARE      NUMBER      PER SHARE     NUMBER      PER SHARE
                                ---------   -------------   --------   -------------   -------   -------------
<S>                             <C>         <C>             <C>        <C>             <C>       <C>
Options outstanding at
  beginning of period.........    986,200                    848,800                         0
Granted.......................  1,075,100      $ 21.78       659,800       $7.77       981,900       $1.91
Exercised.....................   (281,100)     $ 12.60      (382,400)      $1.85       (79,500)      $1.92
Cancelled.....................       (600)       $2.77      (140,000)      $3.85       (53,600)      $1.75
                                ---------       ------      --------       -----       -------       -----
Outstanding at period end.....  1,779,600      $ 14.26       986,200       $5.59       848,800       $1.92
Options exercisable at March
  31, 1997....................    569,330                    152,500                   155,000
Fair value of options granted
  during the year.............                 $ 11.79                     $4.21
</TABLE>
 
     The following table summarizes information about stock options outstanding
at March 31, 1997:
 
<TABLE>
<CAPTION>
                                     OPTIONS OUTSTANDING
                    -----------------------------------------------------
                                    WEIGHTED-AVERAGE                                OPTIONS EXERCISABLE
                                       REMAINING                              --------------------------------
   RANGE OF           NUMBER          CONTRACTUAL        WEIGHTED-AVERAGE       NUMBER        WEIGHTED-AVERAGE
EXERCISE PRICES     OUTSTANDING           LIFE            EXERCISE PRICE      EXERCISABLE      EXERCISE PRICE
---------------     -----------     ----------------     ----------------     -----------     ----------------
<S>                 <C>             <C>                  <C>                  <C>             <C>
 $   1.75-$2.77        253,300          7.5 years             $ 1.83            127,500            $ 1.87
 $  6.40-$13.88        605,400            9 years             $ 8.21            322,478            $ 7.85
 $ 20.50-$29.38        920,900         9.25 years             $21.67            119,352            $20.98
 $  1.75-$29.38      1,779,600         8.75 years             $14.26            569,330            $ 9.26
</TABLE>
 
     Subsequent to March 31, 1997, the exercise price of options granted on
October 1, 1996 to purchase approximately 488,000 shares of Common Stock were
repriced from $20.53 to $2.30, and the vesting period for exercise of such
options was extended.
 
15.  RELATED PARTY TRANSACTIONS
 
     During fiscal 1997, 1996, 1995 and 1994, the Company rendered invoices for
non-existent products to certain businesses which appear to have been under the
control or influence of Centennial's former Chief Executive Officer. These sale
transactions have been reversed in connection with the restatement of the
Company's financial statements. See Note 2. In certain instances, these invoices
were paid with funds that appear to have originated from the former Chief
Executive Officer. The proceeds to the Company related to these transactions,
which amounted to $2,254,000 in fiscal 1997, $3,091,000 in fiscal 1996, $653,000
in fiscal 1995 and $31,000 in fiscal 1994, have been reflected in the
accompanying financial statements as additional paid-in-capital.
 
     During fiscal 1996, the Company advanced approximately $514,000 to five
executive officers of the Company. At June 30, 1996, the balance due from these
executives was approximately $202,000. These demand loans bear interest at 9%
per annum and have been classified as other current assets in the accompanying
consolidated financial statements. In August 1996, notes aggregating $170,000
plus interest were repaid. In June 1997, the Company agreed to forgive the
remaining $32,000.
 
                                       48
<PAGE>   49
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
16.  SAVINGS PLAN
 
     In fiscal 1994, the Company established a 401(k) Savings Plan under which
substantially all U.S. employees may voluntarily defer a portion of their
compensation and the Company may elect to match a portion of the employee
deferral. The Company has made no contributions to this plan.
 
17.  CONTINGENCIES
 
     Class Action Litigation.  Since the Company's announcement on February 11,
1997 that it was undertaking an inquiry into the accuracy of its prior reported
financial results, and that preliminary information had raised questions as to
whether reported results contained material misstatements, approximately 35
purported class action lawsuits have been filed in or transferred to the United
States District Court for the District of Massachusetts. These complaints assert
claims against the Company under Section 10(b) of the Securities Exchange Act of
1934 (the "1934 Act") and Rule 10b-5 promulgated thereunder, and related state
law claims of fraud, deceit and negligent misrepresentation. The complaints also
assert claims against some or all of the Company's Board of Directors, and some
complaints assert claims against certain of the Company's nondirector officers,
under Section 20(a) of the 1934 Act, as well as the same state law claims
asserted against the Company. The Company's independent accountants, Coopers &
Lybrand, L.L.P. ("Coopers & Lybrand"), the Company's lead underwriter for its
March 1996 subsequent public offering, Needham & Company, Inc., and a financial
advisory subscription company, Cabot Heritage Corporation, have also been named
in some of the suits. These class action lawsuits were purportedly brought by
and on behalf of purchasers of the Company's Common Stock between the Company's
initial public offering on April 12, 1994 and February 10, 1997 (the "Centennial
Securities Litigation").
 
     On February 20, 1997, the Company received a subpoena from the United
States Department of Justice ("DOJ") to produce documents in connection with a
grand jury investigation regarding various irregularities in the Company's
previous press releases and financial statements. The DOJ also requested certain
information regarding some of the Company's former officers, certain stock
transactions by the Company's former Chief Executive Officer, and correspondence
with the Company's auditors. The Company has not been notified by the DOJ that
it is a target or subject of this investigation.
 
     On and after February 26, 1997, four Complaints were filed in the United
States District Court for the District of Massachusetts by plaintiffs purporting
to represent classes of shareholders who purchased the Company's Common Stock on
February 25, 1997. The Complaint also names the Company's Interim Chief
Executive Officer, Lawrence J. Ramaekers, and alleges violations of Sections
10(b) and 20(a) of the 1934 Act (the "February 25 Securities Litigation").
 
     In mid-February 1997, the Company was notified that the Boston District
Office of the SEC was conducting an investigation of the Company. The SEC has
requested that the Company provide the SEC with certain documents concerning the
Company's public reports and financial statements. The SEC indicated that its
inquiry should not be construed as an indication by the SEC or its staff that
any violations have occurred, or as a reflection upon the merits of the
securities involved or upon any person who effected transactions in such
securities. The Company is cooperating with the SEC in connection with this
investigation, the outcome of which cannot yet be determined.
 
     On and after March 26, 1997, several complaints were filed in the United
States District Court for the District of Massachusetts by plaintiffs purporting
to represent classes of shareholders who purchased stock of WebSecure, Inc.
("WebSecure") between December 5, 1996 and February 27, 1997 (the "WebSecure
Complaints"). The WebSecure Complaints assert claims against WebSecure, certain
officers, directors and underwriters of WebSecure, and the Company. Claims
against the Company include alleged violations of Sections 11 and 15 of the
Securities Act of 1933 (the "1933 Act") (the "WebSecure Securities Litigation").
 
                                       49
<PAGE>   50
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     In addition, several shareholder derivative lawsuits have been filed by
purported holders of the Company's common stock seeking recovery for certain
alleged breach of fiduciary duties, alleged gross negligence alleged breach of
contract and alleged insider trading by members of the Company's Board of
Directors between August 21, 1996 and February 10, 1997 (the "Derivative
Litigation").
 
     On June 18, 1997, the Company announced that it had reached an agreement in
principle to settle the Centennial Securities Litigation, the February 25
Securities Litigation and the Derivative Litigation. This agreement in principle
contemplates that the Company and certain of its officers and directors would be
released from liability arising from the allegations included in these suits. In
return, the Company would agree to pay to the plaintiffs in the Centennial
Securities Litigation and the February 25 Securities Litigation the proceeds, if
any, of any recovery from the Company's directors and officers liability
insurance policies, and an additional $1.45 million in cash. The Company would
also agree to issue to these plaintiffs 37% of the Company's Common Stock. The
Company also expects to adopt certain agreed upon corporate governance policies
and procedures. The plaintiffs would retain their claims against the Company's
former Chief Executive Officer, Emanuel Pinez, and the Company's former Chief
Financial Officer, James M. Murphy.
 
     The plaintiffs in the February 25 Securities Litigation have not yet
reached an agreement with the Company's Interim Chief Executive Officer,
Lawrence J. Ramaekers, regarding their alleged claims against him. These
plaintiffs have agreed in principle to release the Company from any direct
liability related to those alleged claims. In the agreement under which Mr.
Ramaekers is providing services to the Company, the Company agreed to provide
Mr. Ramaekers with the same indemnification as is applicable to other officers
of the Company pursuant to the Company's By-Laws. The Company has agreed to
indemnify, hold harmless, and defend Mr. Ramaekers from and against certain
claims arising out of his engagement with the Company.
 
     On June 19, 1997, the Company announced that it had reached an agreement in
principle to settle the WebSecure Securities Litigation. The agreement in
principle contemplates that the Company and certain of its officers and
directors would be released from any and all liability arising from the
allegations included in the WebSecure Securities Litigation in return for the
issuance to the WebSecure Securities Litigation class of 345,000 shares of the
Company's Common Stock and the payment to the class of up to $50,000 for notice
and administrative costs.
 
     As of March 31, 1997, the Company has recorded a provision for the
potential settlement of the Centennial Securities Litigation of $20.0 million,
representing the cash portion of the potential settlement, together with an
amount equal to 37% of the estimated market capitalization of the Company. The
cash portion ($1,475,000) of the potential settlement is included in accounts
payable and accrued expenses and the Common Stock portion ($18,525,000) is
included in additional paid-in capital.
 
     A number of material terms remain to be negotiated regarding the Centennial
Securities Litigation, the February 25 Securities Litigation, the Derivative
Litigation, and the WebSecure Securities Litigation. A binding commitment to the
terms described above, as well as resolution of other currently unresolved
material terms, must await the execution of final settlement agreements.
Furthermore, any settlement agreement must be submitted to the Court for review
and approval and, thereafter, presented to class members for consideration. If a
sufficiently large number of class members opt not to participate in the
settlement agreement, the agreement may be withdrawn. No assurance can be given
that the parties will be able to reach such final settlement agreements, that
any such agreements, if reached, will be approved by tff he Court, or that, if
such approval is obtained, that a material number of class members will not
decline to participate in the settlement.
 
     Advent Technology Management, Inc. ("ATM") has purported to exercise an
alleged option to acquire one million shares of the Company's Common Stock in
exchange for certain shares of common stock of WebSecure, Inc. (the
"Securities") which were in the possession of the Company and which ATM asserts
to be the property of ATM. ATM has presented documents to the Company purporting
to show the acknowledgement of Emanuel Pinez as then Chairman and Chief
Executive Officer of the Company to an
 
                                       50
<PAGE>   51
 
                         CENTENNIAL TECHNOLOGIES, INC.
 
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
arrangement whereby the Company was holding the Securities for the account of
ATM and whereby ATM was given the option to exchange the Securities for 409,600
shares of the Company's Common Stock, and purporting to show the acknowledgement
of James M. Murphy as then Chief Financial Officer of the Company that the
Securities were held for the account of ATM. The records of the Company do not
indicate that the alleged arrangement was ever disclosed to the Company's Board
of Directors or recorded in its financial records. To the contrary, the
Securities were at all times reflected in the financial records of the Company
as the property of the Company and were in part sold by the Company. The Company
does not believe that the arrangement was valid or that the alleged option is
enforceable.
 
                                       51
<PAGE>   52
 
                         CENTENNIAL TECHNOLOGIES, INC.
                       VALUATION AND QUALIFYING ACCOUNTS
       FOR THE NINE MONTHS ENDED MARCH 31, 1997 AND FISCAL 1996 AND 1995
                                  (UNAUDITED)
 
                                                                     SCHEDULE II
 
<TABLE>
<CAPTION>
                                           BALANCE AT    CHARGED TO   CHARGED TO
                                          BEGINNING OF   COSTS AND      OTHER                   BALANCE AT END
              DESCRIPTION                    PERIOD       EXPENSES     ACCOUNTS    DEDUCTIONS     OF PERIOD
----------------------------------------  ------------   ----------   ----------   ----------   --------------
<S>                                       <C>            <C>          <C>          <C>          <C>
Accounts receivable allowance
  Nine months ended March 31, 1997......      $375         $  400                     $ 83          $  692
                       Fiscal 1996......       131            425                      181             375
                       Fiscal 1995......       100            171                      140             131
Notes receivable reserve
  Nine months ended March 31, 1997......      $871         $  100                                   $  971
                       Fiscal 1996......         0            871                                      871
                       Fiscal 1995......         0              0                                        0
Investment reserve
  Nine months ended March 31, 1997......      $646         $8,023                                   $8,669
                       Fiscal 1996......         0            646                                      646
                       Fiscal 1995......         0              0                                        0
</TABLE>
 
                                       52
<PAGE>   53
 
                    CENTURY ELECTRONICS MANUFACTURING, INC.
 
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 1997
                  (AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
 
<TABLE>
<S>                                                                                  <C>
ASSETS
Current assets:
  Cash and cash equivalents........................................................  $   413
  Restricted cash..................................................................    3,790
  Accounts receivable, net of allowances of $32....................................   13,279
  Inventories......................................................................   16,966
  Other current assets.............................................................    1,595
                                                                                     -------
Total current assets...............................................................   36,043
Property, plant and equipment, less accumulated depreciation of $527...............   12,446
Goodwill...........................................................................   14,044
Other assets.......................................................................       17
                                                                                     -------
Total assets.......................................................................  $62,550
                                                                                     =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Notes payable and bank overdraft facility........................................  $ 1,015
  Notes payable to affiliate.......................................................    4,129
  Obligations under capital leases.................................................    1,879
  Accounts payable and accrued expenses............................................   24,156
  Accounts payable to affiliate....................................................      676
  Income taxes payable.............................................................      440
                                                                                     -------
  Total current liabilities........................................................   32,295
Mortgage notes payable.............................................................    1,871
Long-term obligations under capital leases.........................................    2,679
Minority interest..................................................................    3,670
Stockholders' equity:
  Common Stock, $.01 par value; 20,000,000 shares Authorized, 11,568,963 shares
     issued and outstanding........................................................      116
Additional paid-in capital.........................................................   22,042
Retained earnings..................................................................      224
Foreign currency translation.......................................................     (347)
                                                                                     -------
Total stockholders' equity.........................................................   22,035
                                                                                     -------
Total liabilities and stockholders' equity.........................................  $62,550
                                                                                     =======
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       53
<PAGE>   54
 
                    CENTURY ELECTRONICS MANUFACTURING, INC.
 
                      CONSOLIDATED STATEMENT OF OPERATIONS
                    FOR THE NINE MONTHS ENDED MARCH 31, 1997
                  (AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
 
<TABLE>
<S>                                                                                  <C>
Sales..............................................................................  $44,346
Cost of goods sold.................................................................   40,438
                                                                                     -------
          Gross margin.............................................................    3,908
Selling, general and administrative expenses.......................................    3,140
                                                                                     -------
          Operating profit.........................................................      768
Net interest expense...............................................................      110
                                                                                     -------
Income before income taxes and minority interest in loss of subsidiary.............      658
Interest in loss of subsidiary attributable minority owner.........................       80
                                                                                     -------
Income before income taxes.........................................................      738
Provision for income taxes.........................................................      514
                                                                                     -------
Net income.........................................................................  $   224
                                                                                     =======
Net income per share...............................................................  $   .02
Weighted average shares outstanding................................................    9,178
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       54
<PAGE>   55
 
                     CENTURY ELECTRONIC MANUFACTURING, INC.
                       STATEMENT OF STOCKHOLDERS' EQUITY
                    FOR THE NINE MONTHS ENDED MARCH 31, 1997
                             (AMOUNTS IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                           COMMON STOCK
                          ---------------   ADDITIONAL PAID-IN   RETAINED   FOREIGN CURRENCY   TOTAL STOCKHOLDERS'
                          SHARES   AMOUNT        CAPITAL         EARNINGS     TRANSLATION            EQUITY
                          ------   ------   ------------------   --------   ----------------   -------------------
<S>                       <C>      <C>      <C>                  <C>        <C>                <C>
Shares issued in
  connection with
  acquisition of
  subsidiaries..........  11,569    $116         $ 22,042                                            $22,158
Foreign currency
  translation...........                                                         $ (347)                (347)
Net income..............                                           $224                                  224
                          ------    ----          -------          ----           -----              -------
                          11,569    $116         $ 22,042          $224          $ (347)             $22,035
                          ======    ====          =======          ====           =====              =======
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       55
<PAGE>   56
 
                    CENTURY ELECTRONICS MANUFACTURING, INC.
 
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                        NINE MONTHS ENDED MARCH 31, 1997
                             (AMOUNTS IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<S>                                                                                 <C>
Cash flows from operating activities:
  Net income......................................................................  $    224
  Adjustments to reconcile net loss to net cash used for operating activities:
  Depreciation and amortization...................................................     2,212
  Minority interest...............................................................        80
  Other non-cash items............................................................      (140)
  Change in operating assets and liabilities:
     Accounts receivable..........................................................    (3,800)
     Inventories..................................................................    (6,102)
     Other assets.................................................................      (670)
     Accounts payable and accrued expenses........................................     4,079
     Income taxes payable.........................................................       440
     Accounts payable to affiliate................................................       676
                                                                                    --------
          Net cash used in operating activities...................................    (3,001)
Cash flows from investing activities:
  Capital expenditures............................................................    (5,157)
  Funds designated for plant expansion............................................    (3,790)
  Funds contributed by joint venture affiliate....................................     3,750
  Acquisition of businesses, less cash acquired...................................    (6,471)
                                                                                    --------
          Net cash used in investing activities...................................   (11,668)
Cash flows from financing activities:
  Net borrowings under bank overdraft facilities..................................       392
  Proceeds from equipment lease financing.........................................     3,648
  Payments on equipment lease financing...........................................    (1,114)
  Net proceeds from issuance of shares to affiliate...............................     8,374
  Proceeds from notes payable to affiliate........................................     4,129
  Foreign currency translation....................................................      (347)
                                                                                    --------
          Net cash provided by financing activities...............................    15,082
                                                                                    --------
Net increase in cash..............................................................       413
Cash and cash equivalents at beginning of period..................................        --
                                                                                    --------
Cash and cash equivalents at end of period........................................  $    413
                                                                                    ========
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
     Interest.....................................................................  $    190
                                                                                    ========
     Income taxes.................................................................  $     --
                                                                                    ========
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       56
<PAGE>   57
 
                    CENTURY ELECTRONICS MANUFACTURING, INC.
 
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Basis of Presentation
 
     Century Electronics Manufacturing, Inc. ("Century" or the "Company") was
formed during fiscal 1997 by Centennial Technologies, Inc. ("Centennial").
 
     The consolidated financial statements of the Company include the accounts
of the Company and all wholly-owned subsidiaries. On March 14, 1997, Centennial
agreed to contribute its interest in its Thailand joint venture to Century and,
accordingly, the accompanying financial statements retroactively include the
accounts of Thailand on a combined basis. All significant intercompany balances
and transactions have been eliminated.
 
  Industry Segment
 
     The Company operates in a single industry segment: contract manufacturing
of high-technology electronics products.
 
  Revenue Recognition
 
     Revenue from product sales is recognized at time of shipment.
 
  Cash and Cash Equivalents
 
     The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. The Company
has no requirements for compensating balances.
 
  Restricted Cash
 
     The Company classifies cash held in Thailand by its Thailand joint venture
as cash designated for use by the joint venture and, therefore, as restricted
cash.
 
  Concentration of Credit Risk
 
     Financial instruments, which potentially subject the Company to
concentration of credit risk, consist principally of trade receivables. If any
of the Company's major customers fail to pay the Company on a timely basis, it
could have a material adverse effect on the Company's financial conditions and
results of operations.
 
     During the periods presented from date of acquisition, two customers
accounted for approximately 81% of the Company's sales. At March 31, 1997, these
customers accounted for approximately $8.7 million, or 65% of the Company's
accounts receivable balance.
 
     Approximately 48% of the Company's sales were outside the United States,
primarily in several Western European countries and Israel.
 
  Fair Value of Financial Instruments
 
     For certain of the Company's financial instruments, including cash and cash
equivalents, accounts receivable, accounts payable and other accrued expenses,
the carrying amounts approximate fair value due to their short maturities. Notes
payable are carried at amounts that approximate fair value.
 
  Inventories
 
     Inventories are stated on a first-in, first-out (FIFO) basis at the lower
of cost or market.
 
                                       57
<PAGE>   58
 
                    CENTURY ELECTRONICS MANUFACTURING, INC.
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
  Property, Plant and Equipment
 
     Property, plant and equipment is stated at cost. Major renewals and
improvements are capitalized while repair and maintenance charges are expensed
when incurred. Depreciation is provided over the estimated useful life of the
respective assets, ranging from three to ten years, on a straight-line basis.
Leasehold improvements are amortized over the lesser of the term of the lease or
the estimated useful life of the related assets. When assets are sold or
retired, their cost and related accumulated depreciation are removed from the
accounts. Any gain or loss is included in the determination of net income.
 
  Goodwill
 
     Goodwill arising from the excess of the purchase price over the fair market
value of tangible assets acquired is being amortized over ten years. It is the
Company's policy to evaluate periodically the carrying value of its intangible
assets and adjustments are made if necessary.
 
  Income Taxes
 
     The Company accounts for income taxes by the liability method. Under the
liability method, deferred taxes are determined based on the difference between
the financial statement and tax bases of assets and liabilities using enacted
tax rates in effect in the years in which the differences are expected to
reverse.
 
  Earnings Per Share
 
     Primary earnings per share data are based on the average number of
outstanding shares of Common Stock.
 
  Pervasiveness of Estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
B.  BUSINESS ACQUISITIONS
 
  Design Circuits, Inc.
 
     On July 10, 1996, Centennial acquired a majority interest in Design
Circuits, Inc. ("DCI"), a contract manufacturing business which provides
customized, integrated manufacturing services to original equipment
manufacturers, for approximately $3.2 million in cash, 250,000 shares of
Centennial common stock and the assumption of certain liabilities. The
acquisition was accounted for using the purchase method of accounting. The
purchase price was allocated to tangible assets, based on their fair market
values, and to goodwill.
 
     The Company allocated the purchase price as follows (in thousands):
 
<TABLE>
          <S>                                                               <C>
          Current assets..................................................  $ 5,262
          Equipment.......................................................    1,665
          Other noncurrent assets.........................................       22
          Goodwill........................................................    9,425
          Liabilities assumed.............................................   (4,403)
                                                                            -------
                                                                            $11,971
                                                                            =======
</TABLE>
 
     In addition, approximately $2.5 million was recorded by Centennial as
minority interest for the proportionate share of equity held by DCI minority
shareholders.
 
                                       58
<PAGE>   59
 
                    CENTURY ELECTRONICS MANUFACTURING, INC.
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     In October 1996, Centennial and the minority shareholders of DCI exchanged
their DCI shares for shares of the Company's common stock. The minority
shareholders of DCI received 1,542,828 shares of the Company's common stock in
exchange for their shares of DCI.
 
  Triax Technology Group Limited
 
     On November 5, 1996, the Company acquired Triax Technology Group Limited
("Triax"), a contract manufacturing business located in the United Kingdom for
approximately $4.2 million in cash, 2,239,500 shares of its common stock, and
the assumption of certain liabilities. Centennial also contributed 25,000 shares
of its common stock as a finder's fee. The Company accounted for the transaction
using the purchase method of accounting. The purchase price was allocated to
tangible assets, based on their fair market values, and to goodwill.
 
     The Company allocated the purchase price as follows (in thousands):
 
<TABLE>
          <S>                                                              <C>
          Current assets.................................................  $ 16,779
          Property, plant and equipment..................................     6,152
          Other noncurrent assets........................................       505
          Goodwill.......................................................     6,299
          Liabilities assumed............................................   (20,193)
                                                                           --------
                                                                           $  9,542
                                                                           ========
</TABLE>
 
     In addition, approximately $3.1 million was recorded by Centennial as
minority interest for the proportionate share of equity held by Triax minority
shareholders. Furthermore, Centennial recorded an increase in minority interest
of $1.5 million, which reflected the former DCI minority shareholders'
proportionate interest in the Triax transaction.
 
  Thailand Joint Venture
 
     Pursuant to a joint venture agreement entered into in May, 1996, Centennial
invested $1,250,000 during fiscal 1997 as its initial capital contribution into
its 51% owned contract manufacturing joint venture in Thailand. Centennial's
joint venture partner's initial capital contribution was $3,750,000.
 
  Pro Forma Financial Data
 
     Presented below are pro forma financial data for fiscal 1997 and the year
ended June 30, 1996 reflecting the impact of the acquisitions on the Company's
financial results as if they had occurred as of the beginning of the respective
period (in 000's except for per share data):
 
<TABLE>
<CAPTION>
                                                                    1997      1996
                                                                   -------   -------
          <S>                                                      <C>       <C>
          Sales..................................................  $54,719   $34,517
          Net income (loss)......................................      240    (2,395)
          Net income per share (loss)............................      .02      (.21)
</TABLE>
 
C.  REFINANCING TRANSACTION WITH CENTENNIAL TECHNOLOGIES, INC.
 
     On March 14, 1997, the Company entered into an agreement in principal with
Centennial to redeem a portion of its Century shares in exchange for $1.25
million in cash and a $6.0 million subordinated debenture, reducing Centennial's
equity ownership position to 45%. The debenture bears interest at 6% per annum
and matures in 10 years. Under certain conditions, the debenture will be
convertible into common stock of an entity with which Century may merge. In
addition, Centennial agreed to contribute to Century its interest in the
Thailand joint venture. Century also agreed to repay its 8.5% note payable to
Centennial in the amount
 
                                       59
<PAGE>   60
 
                    CENTURY ELECTRONICS MANUFACTURING, INC.
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
of $4.1 million and to take the necessary steps to remove all outstanding
guarantees of third-party indebtedness.
 
     On June 30, 1997, the aforementioned transaction was completed. In order to
remove certain guarantees of equipment subleased to DCI, Centennial executed
lease buyouts amounting to $2.4 million and sold the underlying equipment to
Century for $0.5 million in cash and a $1.9 million promissory note due December
1998 bearing interest at 9% per annum.
 
D.  INVENTORIES
 
     Inventories consisted of the following (in thousands):
 
<TABLE>
<CAPTION>
                                                                          MARCH 31,
                                                                            1997
                                                                          ---------
          <S>                                                             <C>
          Raw material, primarily electronic components.................   $12,177
          Work in process...............................................     4,789
          Finished goods................................................     --
                                                                           -------
                                                                           $16,966
                                                                           =======
</TABLE>
 
E.  PROPERTY, PLANT AND EQUIPMENT
 
<TABLE>
<CAPTION>
                                                                          MARCH 31,
                                                                            1997
                                                                          ---------
          <S>                                                             <C>
          Equipment.....................................................   $ 3,609
          Equipment under capital leases................................     6,030
          Leasehold improvements........................................       688
                                                                           -------
          Land and building.............................................     2,646
                                                                           -------
                                                                            12,973
          Accumulated depreciation and amortization.....................       527
                                                                           -------
                                                                           $12,446
                                                                           =======
</TABLE>
 
     Depreciation expense for fiscal 1997 was approximately $527,000.
 
F.  DEBT
 
  Mortgage
 
     The Company has a $1,871,000 mortgage secured by land and building and
certain endowment insurance policies. The mortgage bears interest at 12% and is
repayable in September 2007 in a balloon payment.
 
  Capital Leases
 
     The Company leases certain equipment under lease financing agreements.
These lease arrangements have been accounted for as financing transactions. The
subject equipment is recorded as an asset for financial statement purposes, and
is being depreciated accordingly.
 
                                       60
<PAGE>   61
 
                    CENTURY ELECTRONICS MANUFACTURING, INC.
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     At March 31, 1997, the minimum annual rental commitments under
non-cancelable lease obligations are as follows (in thousands):
 
<TABLE>
<CAPTION>
                                                                      CAPITAL    OPERATING
                                                                       LEASES      LEASES
                                                                      --------   ----------
     <S>                                                              <C>        <C>
     Year ending March 31,
       1998.........................................................   $2,174       $143
       1999.........................................................    2,123
       2000.........................................................      780
                                                                       ------       ----
     Total minimum lease payments...................................    5,077       $143
                                                                                    ====
     Less amounts representing interest.............................     (519)
                                                                       ------
     Present value of future minimum lease payments.................    4,558
     Less current portion...........................................   (1,879)
                                                                       ------
                                                                       $2,679
                                                                       ======
</TABLE>
 
     Rental expense under operating leases totaled approximately $184,000 in
fiscal 1997.
 
G.  INCOME TAXES
 
     Income before income taxes consisted of the following (in thousands):
 
<TABLE>
          <S>                                                                <C>
          U.S..............................................................  $ (280)
          Foreign..........................................................   1,018
                                                                             ------
                                                                             $  738
                                                                             ======
</TABLE>
 
     The provision for income taxes consisted of the following (in thousands):
 
<TABLE>
          <S>                                                                 <C>
          Federal...........................................................  $ 60
          State.............................................................    14
          Foreign...........................................................   440
                                                                              ----
                                                                              $514
                                                                              ====
</TABLE>
 
     The provision for income taxes differs from the amount computed by applying
the statutory federal income tax rate to income before taxes as follows:
 
<TABLE>
          <S>                                                                 <C>
          Federal tax expense at statutory rate.............................   34.0%
          State income taxes, net of federal benefit........................    1.3
          Non-deductible expenses...........................................   46.8
          Difference in tax rates of foreign jurisdictions..................   16.3
          Valuation allowance and other.....................................  (28.8)
                                                                              -----
                                                                               69.6%
                                                                              =====
</TABLE>
 
     As of March 31, 1997, the Company had a Federal net operating loss ("NOL")
carryforward of approximately $5,218,000, which will expire at various dates
through 2012. The NOL relates to an acquired business, and occurred prior to
such acquisition. Accordingly, realization of the NOL, if any, will be first
applied as a reduction of goodwill.
 
                                       61
<PAGE>   62
 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
 
     Not applicable.
 
                                    PART III
 
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The Directors of the Company are elected annually and hold office until the
next Annual Meeting of Stockholders and until their successors have been elected
and qualified.
 
     The following table sets forth the Directors of the Company, the age of
each Director, the year each Directors was elected as a Director, and the
positions and offices currently held by each Director with the Company. For
information about the ownership of the Company's Common Stock held by each
Director, see "Item 12 -- Security Ownership of Certain Beneficial Owners and
Management."
 
<TABLE>
<CAPTION>
                                 YEAR NOMINEE
                                 FIRST BECAME
         NAME            AGE       DIRECTOR           POSITION AND OFFICES WITH THE COMPANY
-----------------------  ---     ------------     ----------------------------------------------
<S>                      <C>     <C>              <C>
John J. McDonald.......  38          1995         President, Vice President of Sales and
                                                  Marketing and Director
John J. Shields........  58          1996         Vice Chairman of the Board of Directors
J.P. Luc Beaubien......  42          1994         Director
William M. Kinch.......  65          1995         Director
Emanuel Pinez..........  59          1987         Director
William J. Shea........  49          1996         Director
</TABLE>
 
BACKGROUND
 
     The following is a brief summary of the background of each Director of the
Company:
 
     John J. McDonald, President, Vice President of Sales and Marketing, and
Director.  Mr. McDonald has served as President of the Company since August
1996, as Vice President of Sales and Marketing since June 1992, and as a
Director since November 1995. From 1989 to 1992, Mr. McDonald served as a sales
representative and interim sales manager for Bell Microproducts, Inc., a
publicly traded distributor of electronic components to original equipment
manufacturers ("OEMs"). Mr. McDonald holds a Bachelor of Science degree in
Business Administration in Marketing from American International College.
 
     John J. Shields, Vice Chairman and Director.  Mr. Shields has served as a
Director of the Company since April 1996 and as Vice Chairman of the Board of
Directors of the Company since August 1996. From 1993 to present, Mr. Shields
has served as President and Chief Executive Officer of King's Point Holdings,
Inc., a company principally engaged in venture capital, technical consulting and
cranberry cultivation. From 1990 to 1993, Mr. Shields served as President and
Chief Executive Officer of Computervision Corporation, a publicly traded company
that provides computer-aided design solutions for complex mechanical and
electrical systems, Mr. Shields currently serves as a Director of Ionics, Inc.,
a publicly traded company principally engaged in water purification. Mr. Shields
is a graduate of the School of Industrial Management of Worcester Polytechnic
Institute, a graduate of the Program in Management Development of the Harvard
University Graduate School of Business Administration, and received an Honorary
Ph.D. from Worcester Polytechnic Institute.
 
     J.P. Luc Beaubien, Director.  Mr. Beaubien has served as a Director of the
Company since January 1994. Since 1987, Mr. Beaubien has worked as a Principal
for the Boston Agent, a Boston-based venture consulting firm. From September
1992 to July 1996, Mr. Beaubien also served as Chairman of the Board and Chief
Financial Officer of Broadband Networks, Inc., a manufacturer of analog fiber
optic equipment. From August 1994 to January 1996, Mr. Beaubien was also a
general partner of Zero Stage Capital V Limited Partnership, a venture capital
firm. Mr. Beaubien holds a Bachelor of Electrical Engineering degree from
 
                                       62
<PAGE>   63
 
McGill University and a Master's of Science degree in Business Administration
from the Sloan School of Management at the Massachusetts Institute of
Technology.
 
     William M. Kinch, Director.  Mr. Kinch has served as a director of the
Company since July 1995. He is the founder and President of Kinch Associates,
Inc., an international trade and consulting firm. From July 1989 to August 1996,
Mr. Kinch served as Chairman of the Board of Directors of Inoac USA, Inc., a
trading and investment subsidiary of a Japanese company. He also served as
Chairman of the Board of Directors of Woodbridge Inoac, Inc., an affiliated
manufacturer of auto parts. Mr. Kinch holds a Bachelor of Science degree in
Civil Engineering and a Master's degree in Business Administration from
Northeastern University.
 
     Emanuel Pinez, Director.  Mr. Pinez has served as a director of the Company
since 1987. From 1994 to February 1997, Mr. Pinez served as Chief Executive
Officer, Secretary and Chairman of the Board of Directors of the Company until
the Board of Directors terminated Mr. Pinez's employment on February 10, 1997.
Mr. Pinez was previously employed by Camwill, S.A., a Swiss corporation, which,
according to Mr. Pinez, contracted out Mr. Pinez's management services to
corporate clients, including the Company. Mr. Pinez is currently under
indictment by the Office of the U.S. Attorney for the District of Massachusetts.
 
     William J. Shea, Director.  Mr. Shea has served as a director of the
Company since August 1996. Mr. Shea resigned as Vice Chairman, Chief Financial
Officer and Treasurer of BankBoston Corporation in July 1997. Prior to joining
BankBoston in January 1993, Mr. Shea served in various capacities for the public
accounting firm of Coopers & Lybrand L.L.P. during the preceding 19 years, most
recently as Vice Chairman and Senior Partner. Mr. Shea serves as a Director of
Geerlings & Wade, a publicly traded wine distribution company. He holds a
Bachelor of Arts and Master's degree in Economics from Northeastern University.
 
EXECUTIVE OFFICERS AND MANAGEMENT OF THE COMPANY
 
The executive officers and management of the Company, their ages and positions
held in the Company, are as follows:
 
<TABLE>
<CAPTION>
              NAME             AGE                          POSITION
    -------------------------  ---     --------------------------------------------------
    <S>                        <C>     <C>
    Lawrence J. Ramaekers....  59      Interim Chief Executive Officer
    John J. McDonald.........  38      President and Vice President of Sales and
                                       Marketing
    Eugene M. Bullis.........  52      Interim Chief Financial Officer
    Donald R. Peck...........  39      Treasurer
    David E. Merry, Jr. .....  34      Vice President of Engineering
</TABLE>
 
     Executive officers are elected by and serve at the pleasure of the Board of
Directors. The following is a brief summary of the background of each executive
officer of the Company, with the exception of Mr. McDonald, whose background is
summarized above:
 
     Lawrence J. Ramaekers, Interim Chief Executive Officer.  Mr. Ramaekers has
served as the Company's Interim Chief Executive Officer since February 1997. Mr.
Ramaekers is a Principal in Jay Alix & Associates, a consulting firm
specializing in turnaround situations and crisis management. In connection with
Mr. Ramaekers' activities on behalf of Jay Alix & Associates, Mr. Ramaekers is
asked to assist in rehabilitating distressed businesses. From 1990 to 1992, Mr.
Ramaekers performed the function of chief operating officer of Cardinal
Industries, Inc. ("Cardinal"), an operator of mobile home facilities, during
which time certain affiliates of Cardinal filed for protection from creditors
under bankruptcy laws.
 
     Eugene M. Bullis, Interim Chief Financial Officer.  Mr. Bullis has served
as the Company's Interim Chief Financial Officer since February 1997. Mr. Bullis
is associated with Jay Alix & Associates in connection with his services on
behalf of the Company. During the five years prior to February 1997, Mr. Bullis
has operated as an independent financial consultant and interim executive,
performing services for various clients, including, primarily, Eastman Kodak
Company and NYNEX Corporation.
 
     Donald R. Peck, Treasurer.  Mr. Peck has served as the Company's Treasurer
and also as its General Counsel since September 1996. From September 1986 to
August 1996, Mr. Peck was an attorney at the law
 
                                       63
<PAGE>   64
 
firm of Nutter, McClennen & Fish, L.L.P. He holds a Bachelor of Science degree
in Business Administration from the University of Rhode Island and a Juris
Doctor degree from Cornell Law School.
 
     David E. Merry, Jr., Vice President of Engineering.  Mr. Merry has served
as the Company's Vice President of Engineering since February 1997. From
February 1996 to February 1997, Mr. Merry served as Test and Applications
Engineering Manager at the Company. From May 1994 to February 1996, Mr. Merry
held a series of technical positions at Wyle Electronics, a distributor of
electronic components. Prior to joining Wyle, Mr. Merry served as Test and
Applications Manager for Logue, McDonald, a manufacturer of automated test
equipment. Mr. Merry holds a Bachelor of Science degree in Electronic
Engineering from the Ohio Institute of Technology.
 
     Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
executive officers and Directors, and persons who beneficially own more than 10%
of the Company's common stock, to file initial reports of ownership of Form 3
and reports of changes in ownership on Form 4 with the Securities and Exchange
Commission (the "Commission") and any national securities exchange on which the
Company's securities are registered. Executive officers, Directors and greater
than 10% beneficial owners are required by the Commission's regulations to
furnish the Company with copies of all Section 16(a) forms they file.
 
     Based solely on a review of the copies of such forms furnished to the
Company and written representations from the executive officers and Directors,
the Company believes that all Section 16(a) filing requirements applicable to
its executive officers, Directors and greater than 10% beneficial owners were
complied with for fiscal 1997, other than (i) the failure to file a Form 4 to
report the grant to John J. Shields of an option to purchase 50,000 shares of
Common Stock in October 1996, which Form 4 was filed in March 1997; and (ii) the
failure to file a Form 4 to report the grant to John J. McDonald of an option to
purchase 217,500 shares of Common Stock in October 1996, which Form 4 was filed
in March 1997.
 
ITEM 11.  EXECUTIVE COMPENSATION
 
     The following table sets forth the compensation paid to Mr. Ramaekers, the
Company's Interim Chief Executive Officer, and Mr. Pinez, the Company's former
Chief Executive Officer, with respect to services rendered to the Company during
the fiscal 1997, fiscal 1996 and fiscal 1995 and the other executive officers
who earned in excess of $100,000 in salary and bonus during fiscal 1997 (the
"Named Executive Officers"):
 
                           SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                                                        ANNUAL COMPENSATION
                                                                     --------------------------
                 NAME AND PRINCIPAL POSITION               YEARS      SALARY (5)        BONUS
    -----------------------------------------------------  -----     -------------     --------
    <S>                                                    <C>       <C>               <C>
    Lawrence J. Ramaekers................................   1997       $ 155,396            --
      Interim Chief Executive Officer(1)                    1996              --            --
                                                            1995              --            --
    Emanuel Pinez........................................   1997         150,000            --
      Former Chief Executive Officer(2)                     1996         154,038            --
                                                            1995         123,066       $15,000
    John J. McDonald.....................................   1997         111,569            --
      President and Vice President of Sales and
         Marketing(3)                                       1996         117,981        23,220
                                                            1995         110,000            --
    James M. Murphy......................................   1997          99,500            --
      Former Chief Financial Officer(4)                     1996         105,961            --
                                                            1995         100,000            --
    Eugene M. Bullis.....................................   1997         170,280            --
      Interim Chief Financial Officer(1)                    1996              --            --
                                                            1995              --            --
</TABLE>
 
                                       64
<PAGE>   65
 
---------------
(1) The Company pays the compensation of Mr. Ramaekers, the Interim Chief
    Executive Officer of the Company, and Eugene M. Bullis, the Interim Chief
    Financial Officer of the Company, to Jay Alix & Associates which employs Mr.
    Ramaekers and contracts with Mr. Bullis, and contracts out their management
    services to corporations, including the Company. In addition, the Company
    has agreed to grant Jay Alix & Associates an option to purchase up to
    200,000 shares of its Common Stock at a strike price set at the lowest
    average price for any 30-day period during the six month period immediately
    following the resumption in trading of the Company's Common Stock.
 
(2) In February 1997, the Company's Board of Directors terminated Mr. Pinez as
    Chief Executive Officer of the Company. Mr. Pinez received an annual car
    allowance from the Company of approximately $1,159, $2,408 and $1,400 in
    fiscal 1997, fiscal 1996 and fiscal 1995, respectively. On October 24, 1996,
    the Company granted Mr. Pinez a stock option to purchase 360,000 shares of
    Common Stock at an exercise price of $24.66 per share. One-third of the
    stock option vested and became exercisable immediately, and the other
    two-thirds was to vest and become exercisable ratably annually over the
    following two years. Mr. Pinez exercised his vested option to purchase
    120,000 shares at $24.66 per share on December 19, 1996. The remaining stock
    options have not been exercised and have now lapsed following Mr. Pinez's
    termination.
 
(3) Mr. McDonald received an annual car allowance from the Company of
    approximately $5,400, $7,200 and $7,200 in fiscal 1997, fiscal 1996 and
    fiscal 1995. On October 1, 1996, the Company granted Mr. McDonald a stock
    option to purchase 217,500 shares of Common Stock at an exercise price of
    $20.53 per share. One-third of the stock option vested and became
    exercisable immediately, and the other two thirds will vest and become
    exercisable ratably annually over the next two years. On April 19, 1996, the
    Company granted Mr. McDonald two separate options to purchase, in the
    aggregate, an additional 100,000 shares of Common Stock at an exercise price
    of $8.74 per share that are exercisable until April 18, 2000. These options
    have and will vest and became and will become exercisable over three years
    beginning April 19, 1997. On October 11, 1995, the Company granted Mr.
    McDonald a stock option to purchase 100,000 shares of Common Stock at an
    exercise price of $6.41 per share that is exercisable until October 10,
    1999. These options became fully vested and exercisable on October 11, 1996.
 
(4) In February 1997, the Company's Board of Directors relieved Mr. Murphy of
    his duties as Chief Financial Officer. In March 1997, the Company's Board of
    Directors terminated Mr. Murphy's employment with the Company. On October 1,
    1996, the Company granted Mr. Murphy a stock option to purchase 72,500
    shares of Common Stock at an exercise price of $20.53 per share. One-third
    of the stock option vested and became exercisable immediately, and the other
    two thirds was to vest and become exercisable ratably annually over the next
    two years. These stock options have now lapsed following Mr. Murphy's
    termination. On October 11, 1995, the Company granted Mr. Murphy a stock
    option to purchase 40,000 shares of Common Stock at an exercise price of
    $6.41 per share. These stock options have also lapsed following Mr. Murphy's
    termination.
 
(5) The amounts for fiscal 1997 reflect the nine months ended March 31, 1997.
 
                                       65
<PAGE>   66
 
                          OPTION GRANTS IN FISCAL 1997
 
<TABLE>
<CAPTION>
                                                INDIVIDUAL GRANTS                          POTENTIAL REALIZABLE
                            ----------------------------------------------------------       VALUE AT ASSUMED
                            NUMBER OF                                                     ANNUAL RATES OF STOCK
                            SECURITIES       % OF TOTAL                                   PRICE APPRECIATION FOR
                            UNDERLYING   OPTIONS GRANTED TO   EXERCISE OR                     OPTION TERM(1)
                             OPTIONS        EMPLOYEES IN      BASE PRICE    EXPIRATION   ------------------------
           NAME             GRANTED(2)    FISCAL PERIOD(3)      ($/SH)         DATE          5%           10%
--------------------------  ----------   ------------------   -----------   ----------   -----------  -----------
<S>                         <C>          <C>                  <C>           <C>          <C>          <C>
Lawrence J. Ramaekers.....          0            N/A                N/A           N/A            N/A          N/A
Emanuel Pinez(4)..........    360,000           34.2%            24.655       5/11/97        Expired      Expired
John J. McDonald(5).......    217,500           20.6%             20.53       9/30/05     $2,808,190   $7,116,498
James M. Murphy(6)........     72,500            6.9%             20.53       6/14/97        Expired      Expired
Eugene M. Bullis..........          0            N/A                N/A           N/A            N/A          N/A
</TABLE>
 
---------------
(1) Amounts reported in these columns represent hypothetical amounts that may be
    realized upon exercise of the options immediately prior to the expiration of
    their term assuming the specified compounded rates of appreciation on the
    Company's Common Stock over the term of the options as prescribed by the
    Securities and Exchange Commission and do not reflect the Company's estimate
    of future stock price growth.
 
(2) The Company intends to register the shares of Common Stock underlying its
    1994 Stock Option Plan (the "Plan") and 1994 Formula Stock Option Plan (the
    "Formula Plan").
 
(3) In fiscal 1997, options to purchase up to 1,054,100 shares of Common Stock
    were granted under the Plan to Company employees, including executive
    officers, and options to purchase 21,000 shares of Common Stock were granted
    under the Formula Plan to non-employee directors. In fiscal 1997, 124,000
    were exercised and 600 were canceled.
 
(4) The option was granted on October 24, 1996 with options to purchase 120,000
    shares of Common Stock becoming vested and exercisable immediately, and with
    additional 120,000 options becoming vested and exercisable on each of
    October 24, 1997 and 1998. Mr. Pinez exercised his vested option to purchase
    120,000 shares of Common Stock on December 19, 1996. The remainder of the
    option was forfeited in May 1997, 90 days following the Company's
    termination of Mr. Pinez.
 
(5) The option was granted on October 1, 1996 with options to purchase 72,500
    shares of Common Stock becoming vested and exercisable immediately, and with
    an additional 72,500 options becoming vested and exercisable on each of
    October 1, 1997 and 1998. Subsequent to March 31, 1997, the exercise price
    of the option was adjusted to $2.30, and the vesting period was extended,
    with options to purchase 72,500 becoming vested and exercisable on October
    1, 1997, and with an additional 72,500 options become vested and exercisable
    on each of October 1, 1998 and 1999.
 
(6) The option was granted on October 1, 1996 with options to purchase 24,166
    shares of Common Stock becoming vested and exercisable immediately, and with
    an additional 24,166 and 24,167 options becoming vested and exercisable on
    October 1, 1997 and 1998, respectively. This option was forfeited in June
    1997, 90 days following the Company's termination of Mr. Murphy.
 
                                       66
<PAGE>   67
 
 AGGREGATED OPTIONS EXERCISED IN FISCAL 1997 AND FISCAL YEAR END OPTION VALUES
 
<TABLE>
<CAPTION>
                                                                       NUMBER OF
                                                                       SECURITIES            VALUE OF
                                                                       UNDERLYING          UNEXERCISED
                                                                      UNEXERCISED          IN-THE-MONEY
                                                                     OPTIONS AT FY-         OPTIONS(1)
                                 SHARES ACQUIRED       VALUE        END EXERCISABLE/       EXERCISABLE/
             NAME                  ON EXERCISE        REALIZED       UNEXERCISABLE        UNEXERCISABLE
-------------------------------  ---------------     ----------     ----------------     ----------------
<S>                              <C>                 <C>            <C>                  <C>
Lawrence J. Ramaekers..........            0         $        0                  0/0       $       0/$0
Emanuel Pinez..................      120,000          2,478,900            0/240,000                0/0
John J. McDonald...............            0                  0      174,300/245,900        3,150/1,575
James M. Murphy................            0                  0       142,499/75,001          183,750/0
Eugene M. Bullis...............            0                  0                  0/0                0/0
</TABLE>
 
---------------
(1) In-the-money options are those options for which the fair market value of
    the underlying share of Common Stock is greater than the exercise price of
    the option. The fair market value of the Company's Common Stock underlying
    the options as of March 31, 1997 was $3.50 per share, based on information
    reported by certain internet-based bulletin board services purporting to
    monitor trading activities. The Company is unable to verify the accuracy or
    completeness of such information.
 
COMPENSATION OF DIRECTORS DURING FISCAL 1997
 
     From April 12, 1994, the date of the Company's initial public offering,
until July 1996, each non-employee director has been compensated $1,000 per year
for a full year of service and $250 for each Board of Directors meeting
attended. Since 1996, each non-employee director has been compensated at a rate
of $500 for each Board of Directors meeting attended. J.P. Luc Beaubien, William
M. Kinch, William J. Shea and John J. Shields, non-employee directors of the
Company, each received $6,000, $6,000, $4,250 and $4,500 respectively, from the
Company as compensation for their services to the Company as a director during
fiscal 1997. James M. Murphy received $500 for his attendance at a Board of
Directors meeting between the time the Company terminated his employment and the
date he resigned from the Board of Directors. On August 1, 1996, William J. Shea
received a non-qualified option to purchase up to 15,000 shares of Common Stock
at a price of $12.89 per share exercisable at any time between November 1, 1997
and November 6, 2001. On October 1, 1996, John J. Shields received a
non-qualified option to purchase up to 50,000 shares of Common Stock at a price
of $20.53 per share, of which 16,666 shares became vested and exercisable
immediately, and 16,666 and 16,667 shares will become vested and exercisable on
October 1, 1997 and 1998, respectively. Mr. Shields may exercise these options
upon vesting through September 30, 2005. On November 7, 1996, J.P. Luc Beaubien
and William M. Kinch each received a non-qualified option to purchase up to
3,000 shares of Common Stock at a price of $29.38 per share exercisable at any
time between November 1, 1997 and November 6, 2001.
 
     J.P. Luc Beaubien received $46,971 in consulting fees in connection with
services rendered to the Company during fiscal 1997. William M. Kinch received
$68,000 in consulting fees and $39,847 in expense reimbursements during fiscal
1997. See Item 13 -- "Certain Relationships and Transactions."
 
                                       67
<PAGE>   68
 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The following table sets forth as of June 30, 1997, the number and
percentage ownership of the Company's Common Stock by (i) all persons known by
the Company to be the beneficial owner of more than five percent (5%) of the
outstanding Common Stock, (ii) each Named Executive Officer (as defined herein)
and Director, and (iii) all Directors and executive officers of the Company as a
group.
 
<TABLE>
<CAPTION>
                                                              NUMBER OF SHARES
                                                                BENEFICIALLY       PERCENTAGE OF
            NAME AND ADDRESS OF BENEFICIAL OWNER(1)               OWNED(2)             CLASS
    --------------------------------------------------------  ----------------     -------------
    <S>                                                       <C>                  <C>
    Lawrence J. Ramaekers...................................            --                --
    John J. McDonald........................................       252,680               1.4%
    Eugene M. Bullis........................................            --                --
    Donald R. Peck(3).......................................           555                 *
    David E. Merry, Jr......................................            --                --
    J.P. Luc Beaubien.......................................        22,100                 *
    John J. Shields.........................................        31,666                 *
    William M. Kinch(4).....................................        21,960                 *
    Emanuel Pinez(5)........................................       338,735               1.8%
    William J. Shea(6)......................................        40,700                 *
    All directors and executive officers as a group (10
      persons)..............................................       708,396               3.9%
</TABLE>
 
---------------
  * Less than 1%.
 
(1) The address for all of these individuals, with the exception of Emanuel
    Pinez, is Centennial Technologies, Inc., 7 Lopez Road, Wilmington,
    Massachusetts 01887. The address for Emanuel Pinez is c/o Thomas R. Kiley,
    Esq., Cosgrove, Eisenberg & Kiley, P.C., One International Place, Boston,
    Massachusetts 02110.
 
(2) Pursuant to the rules of the Commission, shares of Common Stock which an
    individual or group has a right to acquire within 60 days pursuant to the
    exercise of options or warrants are deemed to be outstanding for the purpose
    of computing the percentage ownership of such individual or group, but are
    not deemed to be outstanding for the purpose of computing the percentage
    ownership of any other person shown in the table.
 
(3) Includes 555 shares held in trust for the benefit of Mr. Peck's children;
    Mr. Peck is neither a trustee nor a beneficiary of such trust.
 
(4) Includes 5,300 shares held jointly by Mr. Kinch and his wife, and 460 shares
    held by Mr. Kinch's wife.
 
(5) The Company is unable to ascertain whether Mr. Pinez has any beneficial
    ownership of any additional shares of Common Stock. The shares listed here
    are those indicated in the records of the Company's stock transfer agent in
    the name of "Emanuel Pinez."
 
(6) Includes 25,200 shares held by Mr. Shea's wife, and 500 shares held by Mr.
    Shea's son.
 
ITEM 13.  CERTAIN RELATIONSHIPS AND TRANSACTIONS
 
     During fiscal 1995, the Company loaned John J. McDonald, President of the
Company, a total of $31,500. As of July 15, 1997, this entire loan remained
outstanding. However, Mr. McDonald and the Company have reached an agreement
whereby this loan will be forgiven should Mr. McDonald remain employed by the
Company after August 31, 1997.
 
     William J. Shea, who has served as a Director of the Company since August
1996, resigned in July 1997 as the Vice-Chairman, Chief Financial Officer and
Treasurer of BankBoston Corporation ("BankBoston"). In November 1995, the
Company renewed its revolving line of credit with BankBoston, pursuant to which
the Company could borrow up to the lesser of (i) $7.5 million, or (ii) an amount
based on the Company's eligible accounts receivable and inventory. In November
1996, the Company increased its revolving and term facilities with BankBoston,
pursuant to which the Company could borrow up to (i) $25 million, or (ii) an
amount based on the Company's eligible accounts receivable and inventory. These
credit agreements are collateralized by substantially all of the assets of the
Company. In addition, the Company is required to comply with certain
 
                                       68
<PAGE>   69
 
covenants relating to the Company's net worth and indebtedness, among others. In
February 1997, BankBoston issued a notice of default with regard to the
Company's borrowings under the credit facilities. From February 1997 through
June 1997, BankBoston and the Company executed three forbearance agreements by
which BankBoston agreed not to proceed on exercising its rights with regard to
its collateral. See "Item 7 -- Liquidity and Capital Resources."
 
  Transactions with William M. Kinch
 
     The Company has contracted with Kinch Associates, Inc. of which William M.
Kinch, a director of the Company, is a principal, for consulting services,
principally in the areas of manufacturing development and procurement
activities. During fiscal 1997, the Company paid Kinch Associates $68,000 for
services provided by Mr. Kinch and $39,847 for expense reimbursements.
 
  Transactions with J.P. Luc Beaubien
 
     The Company has contracted with the Boston Agent, of which J.P. Luc
Beaubien, a director of the Company, is a principal, for consulting services,
principally in the ares of investment activities. During fiscal 1997, the
Company paid the Boston Agent $46,971 for services provided by Mr. Beaubien.
 
  Transactions with WebSecure, Inc.
 
     As of March 31, 1997, the Company held a minority interest in WebSecure,
Inc., a provider of Internet services ("WebSecure"). John J. Shields, Vice
Chairman of the Board of Directors of the Company, served as Chairman of the
Board of Directors of WebSecure from April 1996 to November 1996.
 
     In November 1995, the Company purchased 350,000 shares of common stock of
WebSecure for $10,000. In November 1995, the Company guaranteed the payment
obligations of WebSecure under a lease for offices of WebSecure, and in
September 1996, guaranteed the payment obligations of WebSecure under a lease
for capital equipment. The aggregate rental payments under both leases totaled
approximately $950,000 as of September 10, 1996. The Company has not made any
payments in connection with these guarantees. On April 8, 1996, the Company
purchased 139,750 shares of common stock of WebSecure for $559,000 in connection
with a private placement of WebSecure in which WebSecure raised $2,000,000.
 
     In April 1996, WebSecure granted a non-qualified stock option to John J.
Shields to purchase 100,000 shares of WebSecure's common stock at an exercise
price of $4.00 per share, exercisable between April 30, 1997 and April 29, 2000.
Such option was forfeited when Mr. Shields terminated his relationship with
WebSecure in November 1996.
 
     During fiscal 1996, the Company from time to time made loans to WebSecure,
which loans bear interest at the rate of 9% per annum and are due on demand.
These loans were repaid out of a portion of the proceeds of the initial public
offering of WebSecure, and the aforementioned guarantees were terminated.
 
     In connection with WebSecure's initial public offering, the Company
realized a gain of $1.2 million from the sale of a portion of its investment.
The remaining investment, having a cost of $560,000, has been fully reserved on
the Company's financial statements. In addition, the Company has deferred
recognition of the gain pending final resolution of certain litigation described
in Note 17 of Notes to Unaudited Consolidated Financial Statements.
 
  Transactions with Triple I Corporation (Currently Industrial Imaging, Inc.)
 
     As of March 31, 1997, the Company held a minority interest in Triple I
Corporation, a then privately-held manufacturer of optical equipment ("Triple
I"). Emanuel Pinez, the former Chief Executive Officer, Secretary and Chairman
of the Board of Directors of the Company, served as a director of Triple I from
February to August 1996. Mr. A. Uri Levy, who served as President of the Company
from February 1995 to August 1996, as Chief Operating Officer of the Company
from September 1994 to August 1996, and as a director of the Company from
December 1994 to August 1996, served as a Director of Triple I.
 
                                       69
<PAGE>   70
 
     As of June 30, 1996, the Company owned 700,000 shares of the common stock
of Triple I. During fiscal 1996, the Company purchased a total of 500,000 shares
of common stock of Triple 1 for $500,000. In addition, on June 17, 1996, the
Company purchased 200,000 shares of common stock of Triple I in consideration of
the cancellation of a $200,000 promissory note from Triple I, described below.
 
     In November 1995, the Company loaned $95,000 to Triple I, which was
evidenced by a promissory note that bore interest at the rate of 10% per annum
and matured on May 14, 1997. This promissory note was repaid in full on February
8, 1996. In connection with this loan, Triple I issued to the Company warrants
to purchase 95,000 shares of common stock of Triple I, exercisable until
November 13, 1998.
 
     In March 1996, the Company entered into an agreement with Triple I whereby,
in consideration of a lump sum payment of $200,000 to the Company, the Company
agreed to purchase certain components for Triple I, subject to fully
reimbursement from Triple I of the cost of the components within ten days
following the sale by Triple I of the products containing the components
purchased by the Company. The term of the agreement runs through June 30, 1997.
Cumulative purchases under this arrangement amounted to $1.4 million.
 
     In May 1996, the Company loaned $200,000 to Triple I, which was evidenced
by a promissory note that bore interest at the rate of 10% per annum and matured
on May 17, 1997. This promissory note was canceled on June 17, 1996 in
consideration of the issuance of 200,000 shares of common stock of Triple I to
the Company.
 
     During fiscal 1997, Triple I defaulted on certain of its payment
obligations and the Company determined that Triple I was unable to repay the
Company for the material purchased, and also determined that the value of the
equity investment was permanently impaired. On May 20, 1997, the Company agreed
to convert its accounts receivable into common stock of Industrial Imaging, and
has recorded a valuation reserve equal to the carrying value of the investment
as of March 31, 1997.
 
  Transactions with Infos International, Inc.
 
     During fiscal 1997, the Company acquired a 38% interest in Infos
International, Inc., a supplier of intelligent hand held data collection
equipment for route and shop floor accounting. The President of Infos, Thomas J.
Kinch, is the brother of William M. Kinch, a director of the Company. The
purchase price amounted to approximately $3.0 million in cash and 230,000 shares
of Centennial Common Stock having a market value of $3.9 million at date of
acquisition. On May 14, 1997, the Company and shareholders of Infos reached an
agreement in principal whereby the Company would return its shares of Infos in
exchange for the shares of Centennial Common Stock issued and a three-year
warrant to acquire shares of Infos equal to up to 15% of the then outstanding
common stock of Infos with certain limitations. The parties have also agreed to
exchange mutual releases of any claims arising from the original acquisition
agreement. Since Infos is a privately-held company, there is no available market
information in order to ascribe value to the warrants, and current financial
information is not presently available. Accordingly, the full amount of the
investment cost $7.0 million has been written off. The recorded loss of $6.0
million reflects the use by Infos of $1.0 million of the original cash proceeds
to repay an obligation of that amount due to Centennial from an Infos
subsidiary, Information Capture Corporation ("ICC"). This obligation originally
arose in fiscal 1995, prior to Infos' acquisition of ICC, in connection with a
sales transaction that was determined in the Company's financial review not to
be bona fide. The effect of the adjustment is to reflect $1.0 million of the
investment cost as a reduction of sales and net income in fiscal 1995, and the
remainder as loss on investment activities in fiscal 1997.
 
     Infos has contracted with Century Electronics Manufacturing, Inc., an
affiliate of the Company, for contract manufacturing services in connection with
Infos' products. Century has made payments to Infos suppliers in connection with
initial inventory stocking and test equipment in the amount of $329,000 and has
accounts receivable for product shipments of approximately $321,000 at March 31,
1997, representing invoices for all products shipped during fiscal 1997.
 
                                       70
<PAGE>   71
 
ITEM 14.  EXHIBITS, LIST AND REPORTS ON FORM 8-K
 
     (a)(1) Financial Statements. The financial statements required to be filed
            by Item 8 are as follows:
 
<TABLE>
<CAPTION>
                            CENTENNIAL TECHNOLOGIES, INC:                               PAGE
                                                                                        ----
<S>                                                                                     <C>
     Consolidated Balance Sheets as of March 31, 1997 and June 30, 1996 (Unaudited)...    30
     Consolidated Statements of Operations for the nine month fiscal periods ended
      March 31, 1997 and 1996 and for the twelve month fiscal years ended June 30,
      1996, 1995 and 1994 (Unaudited).................................................    31
     Consolidated Statements of Stockholders' Equity for the nine month fiscal period
      ended
       March 31, 1997 and for the twelve month fiscal years ended June 30, 1996, 1995
      and 1994 (Unaudited)............................................................    32
     Consolidated Statements of Cash Flows for the nine month fiscal periods ended
       March 31, 1997 and 1996 and for the twelve month fiscal years ended June 30,
      1996, 1995 and 1994 (Unaudited).................................................    33
     Notes to (Unaudited) Consolidated Financial Statements...........................    34
CENTURY ELECTRONICS MANUFACTURING, INC.
     Consolidated Balance Sheet as of March 31, 1997 (Unaudited)......................    53
     Consolidated Statement of Operations for the nine month fiscal periods ended
       March 31, 1997 (Unaudited).....................................................    54
     Consolidated Statement of Stockholders' Equity for the nine month fiscal period
      ended
       March 31, 1997 (Unaudited).....................................................    55
     Consolidated Statement of Cash Flows for the nine month fiscal period ended March
      31, 1997 (Unaudited)............................................................    56
     Notes to (Unaudited) Consolidated Financial Statements...........................    57
</TABLE>
 
     (a)(2) Financial Statement Schedules. The financial statement schedule
            required to be filed herewith is included in Item 8 of this report.
 
     (a)(3) Exhibits.
 
<TABLE>
<CAPTION>
 ITEM
 NO.                                     DESCRIPTION                                  LOCATION
------      ---------------------------------------------------------------------  ---------------
                                                                                      SEE NOTE:
<S>    <C>  <C>                                                                    <C>
 3.1   --   Certificate of Amendment to the Certificate of Incorporation.........        (2)
 3.2   --   By-Laws..............................................................        (6)
 3.3   --   Shareholder Voting Agreement between Centennial Technologies, Inc.        
            and the Shareholders who are a party thereto, dated November 27,            Filed
            1996.................................................................      herewith
 4.1   --   Specimen Stock Certificate...........................................        (6)
 4.2   --   Form of Warrant Agreement between the Company and American Securities
            Transfer, Incorporated (includes Specimen Warrant Certificate).......        (6)
10.1   --   Revolving Credit and Security Agreement between the Company and The
            First National Bank of Boston, dated September 14, 1994..............        (4)
10.2   --   $3,000,000 Revolving Credit Note, dated September 14, 1994, by NCT in
            favor of The First National Bank of Boston for the benefit of the
            Company..............................................................        (4)
10.3   --   Unlimited Guaranty, dated September 14, 1994, by NCT in favor of The
            First National Bank of Boston for the benefit of the Company.........        (4)
10.4   --   Affiliate Subordination Agreement, dated September 14, 1994, executed
            in favor of The First National Bank of Boston by the Company, NCT and
            Emanuel Pinez........................................................        (4)
10.5   --   Amendment No. 1 dated as of November 8, 1995 to the Revolving Credit
            and Security Agreement between the Company and The First National
            Bank of Boston.......................................................        (1)
</TABLE>
 
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<PAGE>   72
 
<TABLE>
<CAPTION>
 ITEM
 NO.                                     DESCRIPTION                                  LOCATION
------      ---------------------------------------------------------------------  ---------------
                                                                                      SEE NOTE:
<S>    <C>  <C>                                                                    <C>
10.6   --   Forbearance Agreement and Amendment by and between The First National
            Bank of Boston, BancBoston Leasing Inc., Centennial Technologies,
            Inc., NCT, Inc., Century Electronics Manufacturing, Inc. and Design         Filed
            Circuits, Inc., dated as of March 18, 1997...........................     herewith
10.7   --   Lease Agreement between the Company and 37 Manning Road Limited
            Partnership, dated November 6, 1992 and amended on November 29,
            1992.................................................................        (6)
10.8   --   Lease Agreement between the Company and 4 Point Interiors, dated June
            28, 1993 ("California Lease")........................................        (6)
10.9   --   Amendment to the California Lease, dated June 25, 1993...............        (6)
10.10  --   Form of the Company's Domestic Distributor Agreement between the
            Company and its domestic distributors................................        (6)
10.11  --   Form of the Company's Agreement with its Manufacturer's
            Representatives......................................................        (6)
10.12  --   Purchase Agreement between Triple I Corporation and Centennial              Filed
            Technologies, Inc., dated March 31, 1996.............................     herewith
10.13  --   Investment and Stockholders Agreement by and between Centennial             Filed
            Technologies, Inc. and ViA, Inc., dated November 27, 1996............     herewith
10.14  --   1994 Stock Option Plan, as amended...................................        (2)
10.15  --   1994 Formula Stock Option Plan, as amended...........................        (2)
10.16  --   Indemnification Agreement dated April 11, 1994 between Emanuel Pinez
            and the Company......................................................        (6)
10.17  --   Employment Agreement between the Company and John J. McDonald, dated
            October 20, 1995.....................................................        (1)
10.18  --   Key Employee Agreement between Centennial Technologies, Inc. and            Filed
            Donald R. Peck, dated February 1, 1997...............................     herewith
10.19  --   Agreement to Provide Interim Management and Consulting Services
            between Centennial Technologies, Inc. and Jay Alix & Associates,            Filed
            dated February 17, 1997..............................................     herewith
                                                                                        Filed
21     --   List of the Company's subsidiaries...................................     herewith
</TABLE>
 
     (1) Incorporated by reference to the similarly numbered exhibit to the
Company's Form S-3 Registration Statement (No. 333-1008) declared effective by
the Securities and Exchange Commission (the "Commission") on March 19, 1996.
 
     (2) Incorporated by reference to the similarly numbered exhibit to the
Company's Annual Report on Form 10-KSB filed with the Commission on October 13,
1995.
 
     (3) Incorporated by reference to the similarly numbered exhibit to the
Company's Post-Effective Amendment No. 2 to its Form SB-2 Registration Statement
(No. 33-74862-NY) filed with the Commission on February 1, 1995.
 
     (4) Incorporated by reference to the similarly numbered exhibit to the
Company's Post-Effective Amendment No. 1 to its Form SB-2 Registration Statement
(No. 33-74862-NY) originally filed with the Commission on December 22, 1994.
 
     (5) Incorporated by reference to the similarly numbered exhibit to the
Company's Annual Report on Form 10-KSB filed with the Commission on September
25, 1994.
 
     (6) Incorporated by reference to the similarly numbered exhibit to the
Company's Form SB-2 Registration Statement (No. 33-74862-NY) declared effective
by the Commission on April 12, 1994.
 
                                       72
<PAGE>   73
 
     (b) Reports on Form 8-K. The following reports on Form 8-K were filed by
the Company during the last quarter of the period covered by this report.
 
     (1) A report on Form 8-K was filed on January 2, 1997, reporting on the
acquisition of Intelligent Truck Project, Inc., Fleet.Net, Inc. and Smart
Traveler Plazas, Inc.
 
     (2) A report on Form 8-K was filed on February 19, 1997, reporting that the
filing of the Form 10-Q for the Company's second fiscal quarter ended December
31, 1996 would be delayed, in light of the investigation seeking to verify the
financial information of the Company.
 
                                       73
<PAGE>   74
 
                                   SIGNATURES
 
     IN ACCORDANCE WITH SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, THE REGISTRANT CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
 
                                          CENTENNIAL TECHNOLOGIES, INC.
 
Dated: July 22, 1997                      By:   /s/ LAWRENCE J. RAMAEKERS
                                            ------------------------------------
                                                   Lawrence J. Ramaekers
                                              Interim Chief Executive Officer
 
     IN ACCORDANCE WITH THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATE INDICATED.
 
<TABLE>
<CAPTION>
                  NAME                                    CAPACITY                      DATE
----------------------------------------    ------------------------------------   --------------
 
<C>                                         <S>                                    <C>
 
       /s/ LAWRENCE J. RAMAEKERS            Interim Chief Executive Officer        July 22, 1997
----------------------------------------
         Lawrence J. Ramaekers
 
          /s/ JOHN J. SHIELDS               Vice Chairman of the Board             July 22, 1997
----------------------------------------
            John J. Shields
 
          /s/ JOHN J. MCDONALD              President and Director                 July 22, 1997
----------------------------------------
            John J. McDonald
 
         /s/ J.P. LUC BEAUBIEN              Director                               July 22, 1997
----------------------------------------
           J.P. Luc Beaubien
 
          /s/ WILLIAM M. KINCH              Director                               July 22, 1997
----------------------------------------
            William M. Kinch
 
          /s/ WILLIAM J. SHEA               Director                               July 22, 1997
----------------------------------------
            William J. Shea
 
          /s/ EUGENE M. BULLIS              Interim Chief Financial Officer        July 22, 1997
----------------------------------------      (Principal financial and
            Eugene M. Bullis                  accounting officer)
</TABLE>
 
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