<PAGE>
 
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                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549
 
                                   FORM 10-K
 
  [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934
 
                     FOR FISCAL YEAR ENDED MARCH 30, 1997
 
                                      OR
 
  [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934
 
                        COMMISSION FILE NUMBER 0-21294
 
                               ASECO CORPORATION
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
              DELAWARE                                 04-2816806
   (STATE OR OTHER JURISDICTION OF                  (I.R.S. EMPLOYER
    INCORPORATION OR ORGANIZATION)                 IDENTIFICATION NO.)
 
           500 DONALD LYNCH BOULEVARD, MARLBORO, MASSACHUSETTS 01752
                   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
 
              REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
                                 508-481-8896
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                     None
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                         Common stock, $.01 par value
 
  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days . Yes  X  No
 
  Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of 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 voting stock held by non-affiliates of the
registrant was $46,818,217 as of May 30, 1997
 
                                   3,672,017
       (Number of shares of common stock outstanding as of May 30, 1997)
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
  Part III incorporates by reference certain information from the Registrant's
proxy statement for the annual meeting of stockholders to be held on August 6,
1997
 
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<PAGE>
 
                                    PART I
 
ITEM 1. BUSINESS
 
OVERVIEW
 
  Aseco designs, manufactures and markets test handlers used to automate the
testing of integrated circuits in surface mount packages. Surface mount
technology ("SMT") has been widely adopted as a package configuration for
integrated circuits used in a wide range of applications, including automotive
electronics, telecommunications equipment and personal computers, because it
permits the production of packaged integrated circuits ("IC devices") which
are smaller and/or more powerful than those using conventional packaging
technologies. Aseco provides high quality, versatile test handlers designed to
maximize the productivity of the significantly more costly testers with which
they operate. The Company's net sales have grown from fiscal 1986 through
fiscal 1997 at a compound annual growth rate of 30% and the Company has
operated profitably for each of the past thirty-eight consecutive quarters.
 
INDUSTRY BACKGROUND
 
  IC devices are tested by semiconductor manufacturers for quality and
electrical performance at the end of the manufacturing process and before
shipment to end users. In addition, volume purchasers of IC devices often test
IC devices during incoming inspection. Test handlers facilitate the fast,
automated and cost-effective testing of IC devices. The automated test process
requires two major pieces of equipment: a tester and a test handler. Testers
are specialized, computer-controlled electronic systems that perform the
electrical test of IC devices, including memory, logic, linear, microprocessor
and Application Specific Integrated Circuit (ASIC) devices. Test handlers are
electro-mechanical systems which are connected to and communicate with the
tester. IC devices are loaded into the test handler and are then stabilized at
a specified temperature to simulate operating extremes for the IC device. The
test handler then transports the IC device to a contactor, which provides an
electrical connection between the IC device and the tester and allows an
interchange of electrical signals between the tester and device under test so
the tester can evaluate the performance of the IC. Finally, the handler
segregates the devices as determined by the tester.
 
  Traditionally, IC devices were attached to one side of a printed circuit
board by means of pins, also referred to as leads, that were inserted into
pre-drilled holes and soldered to the electrical circuits on the board, a
technique known as "through-hole" mounting. SMT, an alternative technology,
involves soldering of IC devices directly to the surface of the board. This
technology has been increasingly adopted in response to the introduction of
more powerful IC devices with more leads and the demand for ever more
increasing miniaturization. SMT has several distinct advantages over through-
hole technology. First, because IC device leads are not inserted through the
board, IC device leads can be closer together allowing IC devices and the
boards they populate to be smaller. This reduction in IC device size also
enhances circuit processing speed and thus board and system performance.
Second, because IC device leads are not inserted through the board, boards can
be populated on both sides which further reduces overall required board size.
 
  The demand for test handlers is driven primarily by IC device production
levels and technological changes relating to the packaging of integrated
circuits. Because only the test handler has physical contact with the IC
devices, changes in integrated circuit packaging have minimal effect on tester
requirements but generally have a major effect on test handler requirements
and the demand for the test handlers.
 
  The test handler market is commonly segmented on the basis of the function
of the IC devices handled: test handlers which process memory IC devices, such
as Dynamic Random Access Memory devices (DRAM) and Static Random Access Memory
devices (SRAM), and test handlers which process non-memory IC devices, such as
digital, logic, linear, ASIC and microprocessor devices. Non-memory IC devices
generally have short test times, are often configured with leads on four
sides, come in a wide variety of package configurations and are produced in
relatively small lot sizes. Consequently, non-memory IC device test handlers
must be able to handle devices gently and transport them to and from the
contactor rapidly ("index time") and must be adaptable to
 
                                       1
<PAGE>
 
accommodate many different package types. Memory IC devices, by contrast,
generally have longer test times, have leads on just two sides, come in fewer
package configurations and are produced in larger lot sizes. The index time of
memory IC device test handlers is less important because of the long test
times of memory IC devices.
 
  Test handlers capable of facilitating the testing of multiple IC devices
simultaneously ("multi-site test handlers") have been developed to improve
test handler throughput of memory IC devices. Traditionally, multi-site test
handlers have not been used in connection with the testing of non-memory IC
devices. Recently, however, as non-memory IC devices have become more complex
and their test times have correspondingly increased, multi-site test handlers
have been used in connection with the testing of non-memory IC devices as
well. In addition, certain SRAM IC devices possess characteristics typical of
non-memory IC devices, such as shorter test time, leads on four sides and
wider variety of package configurations, therefore creating the demand in the
SRAM market for a multi-site test handler with fast index speed and gentle
handling capabilities.
 
  The majority of DRAM IC devices are manufactured in Japan and Korea while
the majority of non-memory IC devices are manufactured in the United States. A
significant number of SRAM IC devices are manufactured in the United States as
well as in Japan and Korea.
 
  To date, the Company's products have primarily addressed the non-memory
surface mount device portion of the test handler market.
 
TEST HANDLERS
 
  Test handlers are used to automate the electrical testing of IC devices. IC
devices are loaded into the handler from tubes, magazines or trays. They are
then transported to a temperature chamber within the test handler where they
are thermally conditioned at temperatures typically ranging from -55 to +155
Celsius to simulate operating extremes for the IC device. After the IC devices
are stabilized at a specified temperature, the test handler positions the IC
devices within a contactor, which provides an electrical connection between
the IC device and the tester and insulates the tester from the temperature
extremes inside the handler. Test routines can last from fractions of a second
to minutes depending on the type of IC device being tested and the purpose of
the test. After testing, the tester signals the test handler to sort the IC
devices into various categories for shipment, additional testing or disposal.
 
  There are four basic types of test handlers: gravity-feed systems, pick and
place systems, belt-conveyance systems and air-bearing systems. The
appropriate type of test handler is generally determined by the size and lead
configuration of the IC devices being tested. The gravity-feed system, the
oldest of the four test handler types, is the predominant test handler for
through-hole IC devices. As the name indicates, gravity-feed systems rely on
gravity to move IC devices through the test handler. This type of test handler
has the advantage of being able to process IC devices quickly, but has a
greater tendency to damage IC devices with leads on four sides. Damaged leads
can cause soldering defects when the IC devices are mounted on boards, which
in turn increases re-work and warranty costs. Pick and place systems, in
contrast, transport IC devices by means of robotic arms, which prevent the IC
devices from coming into contact with one another and reduce the chance of
lead damage. While pick and place systems are suitable for fragile IC devices
that are susceptible to lead damage such as the Quad Flat Pack (QFP), they
typically process IC devices more slowly than other types of test handlers.
Air-bearing systems, which transport IC devices on a bed of air in the
temperature chamber, permit high-speed processing while minimizing the
potential for lead damage characteristic of gravity-feed systems. Belt-
conveyance systems move large quantities of devices quickly into and out of
the system on belts without damaging fragile leads.
 
KEY TEST HANDLER FEATURES
 
  The primary function of the test handler is to automate the testing process
therefore increasing the productivity of the tester resulting in the accurate
testing of IC devices at the lowest per unit cost possible. Important test
handler features include:
 
                                       2
<PAGE>
 
  Gentle Handling. In order for the test handler user to maximize yield and
the quality of the IC devices it ships, it is imperative that the test handler
not damage the IC devices it processes. Due to their fragility, surface mount
IC device leads are especially susceptible to damage, and as IC devices with
higher lead counts and more fragile leads have become more prevalent, gentle
handling has become an increasingly important test handler feature. Aseco
currently offers test handlers with three IC device transport mediums--
gravity-feed, air-bearing and pick and place and in the fourth quarter of
fiscal 1997, shipped a beta test version of its newest belt-conveyance test
handler (see "Product Development"). The four transport mediums allow
customers to use the type of test handler most suitable for the IC device
being tested. In addition, Aseco test handlers are equipped with vacuum stops,
limited force contactors and other features to further minimize lead damage.
 
  Signal Integrity. Signal integrity is the ability of the test handler to
facilitate accurate transmission of electrical signals between the tester and
the IC device being tested. Poor transmission can lead to incorrect test
results. Aseco maximizes its performance in this area by equipping its test
handlers with Aseco's proprietary contactors which position the IC device
under test in close proximity to the tester which allows fast and accurate
signal transmission. If so desired by customers, other contactors can also be
used with Aseco equipment.
 
  Cold Operation. The ability of the test handler to operate for extended
periods of time at cold temperatures (typically -55 Celsius) without
interruption for defrosting is an especially important factor in the overall
productivity of the test handler. Aseco has developed considerable expertise
in thermal engineering and insulation technology which is reflected by the
fact that its test handlers are capable of operating for long periods over
multiple work shifts without interruption.
 
  Productivity. The productivity of a test handler is largely a function of
the rate at which it moves IC devices through the test handler ("throughput")
and the percentage of time the test handler is available for use ("uptime").
The throughput of Aseco's test handlers is enhanced by their use of forced air
to thermally condition IC devices. This produces an effect analogous to wind
chill and minimizes the time IC devices are required to stay in the
temperature chamber. The Company believes its handlers are able to achieve
high uptime because of their relatively simple design that reduces jam rates
and the frequency and duration of required maintenance. Maintenance time is
also reduced by the diagnostic software incorporated in each Aseco test
handler.
 
  Versatility. With the increase in the number of different IC device lead
configurations, an important feature of a test handler is its ability to
accommodate IC devices with different lead configurations. Through the use of
easy to install conversion kits, Aseco's test handlers are currently capable
of processing many different IC device configurations.
 
ASECO PRODUCTS
 
  Aseco offers a range of products to address the varying IC device test
handling requirements of its customers. The Company's test handlers share
certain common features including the ability to operate at cold, ambient and
hot temperatures and a menu-driven CRT user interface that displays test
handler performance and diagnostic information. All of the Company's current
products have been introduced since fiscal 1990, except for the S-130 which
was introduced in fiscal 1987. The Company's products are as follows:
 
MODEL S-130 TEST HANDLER
 
  The Company's principal product is currently its S-130 test handler, the
successor to the Company's original S-150 product. The S-130 is a versatile
air-bearing test handler, capable of handling a broad array of non-memory IC
device types. Through the use of conversion kits, the S-130 is currently able
to accommodate a wide variety of IC device configurations. The S-130 reaches
throughput rates of 2,400 devices per hour, and has the capability to operate
at temperatures between -55 and +150 Celsius. The versatility of the S-130 has
made it popular with suppliers of ASIC devices and others who need to test a
relatively small number of many different IC device package types.
 
 
                                       3
<PAGE>
 
MODEL S-133 TEST HANDLER
 
  The S-133 is a modified version of the S-130 test handler. It offers all the
features and capabilities of the S-130 plus the ability to position the device
for electrical testing of accelerometers while under physical shock. An
accelerometer is a device that activates when a large amount of force is
placed upon it and is used in such applications as car airbags.
 
MODEL S-170 TEST HANDLER
 
  The S-170 is a high-speed gravity-feed test handler capable of a throughput
rate of 6,000 IC devices per hour. This test handler is equipped with high
performance contactors and provides test handling at temperatures ranging from
-55 to +155 Celsius. Changing between different IC device package lead counts
is achieved by simple keypad entry on a menu-driven CRT display. The S-170 is
most appropriate for high volume testing of small surface mount IC devices
having short test times and leads on only two sides such as linear devices.
 
MODEL S-170C AND S-170D TEST HANDLERS
 
  The S-170C and S-170D are modified versions of the S-170 gravity feed test
handler. Each offers all the features and capabilities of the S-170 plus the
ability to handle a broader spectrum of the popular SOIC package types and,
accordingly, has a target market that is approximately twice as large as the
market for the original S-170 model. In addition, the S-170D offers plunge to
board capability that allows an electrical connection between the IC device
and a device under test ("dut") board eliminating the need for a contactor and
facilitating testing of IC devices with very short lead lengths.
 
MODEL TL-50 TEST HANDLER
 
  The TL-50 is a pick and place test handler, particularly suitable for
handling fragile lead IC devices such as the popular QFP package. The TL-50
has a throughput capacity of 1,200 devices per hour and operates at
temperatures ranging from -55 to +155 Celsius. Key features of the TL-50
include its simple design, which enhances uptime, and the ease with which it
can be converted to handle different package types plus automatic tray loading
and unloading.
 
MODEL S-200 TEST HANDLER
 
  The S-200 is the successor to the TL-50. It has the same functionality and
form factor as the TL-50. Its key distinguishing feature is its ability,
through the addition of an optional machine vision system, to provide in-line
lead inspection in addition to its normal electrical test handling capability.
 
MODEL S-450 TEST HANDLER
 
The S-450 is a versatile, high capacity, highly automated test handler
employing an air-bearing transport system. This product incorporates the best
features of Aseco's other test handlers, while incorporating additional
capabilities such as a touch screen user interface, multi-site testing, high
throughput and automated IC device loading and unloading. The S-450 meets the
demand for higher throughput at lower cost per IC device tested and in
addition to PLCC and SOIC(W) has the ability to accommodate new, larger IC
devices with high lead counts such as the Molded Carrier Ring (MCR).
 
  The multi-site test capability of the S-450 allows up to eight IC devices to
be tested simultaneously, thereby dramatically improving throughput. In
addition, this product is the Company's first offering to the SRAM portion of
the surface mount IC device test handler market. The Company believes that the
high throughput and gentle handling features of the S-450 make it particularly
suitable for SRAM devices that have more leads and shorter test times than
many other memory IC devices. The S-450 can be converted to handle numerous IC
device package types and, like the Company's other test handler models, allows
testing at hot, cold and ambient temperatures.
 
 
                                       4
<PAGE>
 
 Remanufacturing Services
 
  The Remanufacturing Services Group provides services such as machine
upgrades, reconditioning and reconfiguration for all of the Company's test
handler models.
 
CUSTOMERS
 
  An integral part of Aseco's overall strategy is to maintain close
relationships with its customers and to broaden its customer base. In fiscal
1997, approximately 90% of the Company's net sales represented repeat
business. In addition, since 1988 the Company has succeeded in adding new
names to its customer list each and every quarter.
 
  Customers for the Company's products are primarily semiconductor
manufacturers, but also include volume purchasers of IC devices and companies
engaged in the business of testing IC devices for others.
 
  As of March 30, 1997, the Company had sold 1,145 test handler systems to
approximately 130 customers in more than 160 worldwide locations. In fiscal
1997, one customer, Analog Devices, Inc., accounted for 17% of net sales.
 
SALES AND MARKETING
 
  The Company markets its products primarily through manufacturers'
representative organizations. As of March 30, 1997, the Company had ten United
States manufacturers' representatives and six international manufacturers'
representatives located in London, Munich, Seoul, Singapore, Sweden and
Taipei.
 
  The Company's sales organization coordinates the activities of the Company's
manufacturers' representatives and actively participates with them in selling
efforts. Aseco provides sales and technical support to its manufacturers'
representatives through the Company's sales and service offices in Marlboro,
Massachusetts, Santa Clara, California and Kuala Lumpur, Malaysia and Malta.
In the first quarter of fiscal 1998, the Company also established a sales and
service office in Singapore. The Company's marketing efforts include
participation in industry trade shows and production of product literature.
These efforts are designed to generate sales leads for the Company's
manufacturers' representatives.
 
  To date, the Company's international sales have been primarily to customers
located in the Asia Pacific region (excluding Japan) and Western Europe.
International sales accounted for approximately 52%, 42%, and 42% of the
Company's net sales in fiscal 1997, 1996 and 1995, respectively.
 
  All of the Company's international sales are invoiced in U.S. dollars and,
accordingly, have not historically been subject to fluctuating currency
exchange rates. The Company's international sales are subject to certain risks
common to many export activities, such as governmental regulations, export
license requirements and the risk of imposition of tariffs and other trade
barriers. As a result of the Company's acquisition of WED on May 23, 1997, in
England, a portion of the Company's international sales will be subject to
fluctuating currency exchange rates. (See "Fiscal 1997 Developments" at the
end of Part I)
 
BACKLOG
 
  The Company's backlog which consists of customer purchase orders which the
Company expects to fill within the next twelve months, was approximately
$2,995,000 as of March 30, 1997. Because all purchase orders are subject to
cancellation or delay by customers with limited or no penalty, the Company's
backlog is not necessarily indicative of future revenues or earnings. The
Company typically ships its test handlers within eight to ten weeks of receipt
of purchase order and its conversion kits and spare parts within a shorter
period.
 
CUSTOMER SERVICE
 
  The Company believes that strong customer service is important in achieving
its goal of high customer satisfaction. Aseco's customer service organization,
augmented by the Company's engineering personnel,
 
                                       5
<PAGE>
 
provides product training, telephone technical support, applications support,
maintenance and operations manuals and on-site service and repair. Such
services are provided from the Company's headquarters in Marlboro,
Massachusetts and from one other domestic and eight international field
service centers, each strategically located near customers to minimize
response time to customer service requests. Six of the eight international
field service centers are maintained by the Company's manufacturers'
representative organizations and two directly by the Company. In addition, in
the first quarter of fiscal 1998, the Company established a subsidiary in
Singapore to provide service and technical support directly to its customers.
 
  The Company warranties its products against defects in material and
workmanship for a period of up to one year. To date, the Company's warranty
claims have not been material. The Company believes its accrual for product
warranties at March 30, 1997 is adequate.
 
PRODUCT DEVELOPMENT
 
  The Company believes that its future success will depend in large part on
its ability to enhance and broaden, with the input of its customers, its
existing product line to meet the evolving needs of the test handler market.
To date, the Company has relied on internal development and a product
acquisition (the TL-50) to extend its product offering. The Company is
continually engaged in improving its current products and expanding the types
of IC devices its test handlers can accommodate. In addition, the Company is
currently focused on the continued development of enhancements and features
for its current test handler systems. As the test handler market continues to
develop, the software component of the Company's products plays an
increasingly important role. The Company currently develops all software in-
house and plans to expand its expertise in this area by hiring additional
personnel as needed.
 
  During the fourth quarter of fiscal 1997, the Company initiated beta testing
of its newest test handler that employs a belt-conveyance transport medium
addressing a wide range of IC applications with limited need for conversion
kits. Assuming the successful completion of beta testing, the Company plans to
begin shipments of this model in the second half of fiscal 1998.
 
MANUFACTURING AND SUPPLY
 
  The Company manufactures its products at its facility in Marlboro,
Massachusetts. The Company's manufacturing operations consist of procurement
and inspection of components and subassemblies, assembly and extensive testing
of finished products.
 
  A significant portion of the components and subassemblies of the Company's
products, including circuit boards, vacuum pumps, optical sensors,
refrigeration units and contactor elements, are manufactured by third parties
on a subcontract basis. Currently all components, subassemblies and parts used
in Aseco's products are available from multiple sources.
 
  Quality and reliability are emphasized in both the design and manufacture of
the Company's test handlers. All components and subassemblies are inspected
for mechanical and electrical defects. Fully assembled products are thoroughly
tested at all temperatures and with all the IC device packages to be
accommodated. They are also inspected for conformity to specifications of both
Aseco and the customer.
 
COMPETITION
 
  The test handler market is highly competitive. Aseco competes with a large
number of companies ranging from very small businesses to large companies,
many of which have substantially greater financial, manufacturing, marketing
and product development resources than the Company. Certain of these companies
manufacture and sell both testers and test handlers. The Company's test
handlers are compatible with all major testers, including those manufactured
by companies which sell both testers and test handlers. The large companies in
the overall surface mount IC device test handler market with which the Company
competes include Advantest and Cohu. In general, the particular companies with
which the Company competes vary with the Company's different markets, with no
one company dominating the overall test handler market. The companies with
which the Company competes most directly in the surface mount non-memory IC
device test handler market are companies such as Multitest, JLSI, Aetrium and
Micro Component Technology, Inc.
 
                                       6
<PAGE>
 
  The Company competes primarily on the basis of the speed, ease-of-use,
accuracy and other performance characteristics of its products, the breadth of
its product lines, the effectiveness of its sales and distribution channels
and its customer service.
 
INTELLECTUAL PROPERTY RIGHTS
 
  Aseco attempts to protect the proprietary aspects of its products with
patents, copyrights, trade secret laws and internal nondisclosure safeguards.
The Company has several patents covering certain features of the TL-50 and S-
200 and the contactor elements incorporated in certain of its other test
handlers. The source code for all software contained in the Company's products
is protected as a trade secret and as unpublished copyrighted work. In
addition, the Company has entered into nondisclosure and assignment of
invention agreements with each of its key employees. Despite these
restrictions, it may be possible for competitors or users to copy aspects of
the Company's products or to obtain information which the Company regards as a
trade secret.
 
  Because of the rapid pace of technological changes in the test handler
industry, the Company believes that patent, trade secret and copyright
protection are less significant to its competitive position than factors such
as the knowledge, ability and experience of the Company's personnel, new
product development, frequent product enhancements, name recognition and
ongoing reliable product maintenance and support.
 
  The Company believes that its products and trademarks and other proprietary
rights do not infringe the proprietary rights of third parties. There can be
no assurance, however, that third parties will not assert infringement claims
in the future.
 
EMPLOYEES
 
  As of March 30, 1997, Aseco had 129 regular employees and 15 contract
employees including 49 in manufacturing, 49 in engineering and product
development, 16 in general administration and finance, 27 in sales and
marketing and 3 in customer service. None of the Company's employees is
represented by a labor union or is subject to a collective bargaining
agreement. The Company has never experienced a work stoppage and believes that
its employee relations are excellent.
 
FISCAL 1997 DEVELOPMENTS
 
  In the fourth quarter of fiscal 1997, the Company initiated beta testing of
its newest test handler that employs a belt conveyance transport medium and
addresses a wide range of IC applications with limited need for conversion
kits. Assuming the successful completion of beta testing, the Company plans to
begin shipments of this model in the second half of fiscal 1998.
 
 
                                       7
<PAGE>
 
  In the first quarter of fiscal 1998, the Company established a new
subsidiary in Singapore to provide service and technical support to its
customer base in Southeast Asia. Personnel at this site will provide on-site
service and repair, product training and technical support services.
 
  On May 23, 1997 the Company acquired Western Equipment Developments
(Holdings) Ltd. ("WED"), based in Plymouth, England for approximately
$6,000,000 in cash. WED designs, manufactures and markets integrated circuit
wafer handling robot systems. These systems are used to load, sort and
transport wafers during both manual and automatic inspection as well as other
wafer processing steps in the semiconductor manufacturing process. WED will
allow Aseco to broaden its presence in the semiconductor automated handling
and processing equipment market while taking advantage of synergies such as
similar customer bases and distribution channels. WED has approximately 40
employees and generated net sales of approximately $5.0 million for its fiscal
year ended April 30, 1997. (See Footnote M to Consolidated Financial
Statements)
 
ITEM 2. PROPERTIES
 
  The Company's administrative, manufacturing and product development, and its
principal sales, marketing and field service office is located in Marlboro,
Massachusetts where the Company occupies approximately 61,000 square feet
under a lease that expires in May 2000.
 
  The Company also leases and occupies approximately 2,900 square feet of
space in Santa Clara, California under a lease that expires in fiscal 1998.
The Company uses this space for sales and field service support operations.
 
  The Company believes its facilities are adequate for all its reasonable
foreseeable requirements.
 
ITEM 3. LEGAL PROCEEDINGS
 
  None.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
  No matters were submitted to a vote of the Company's security holders during
the last quarter of the fiscal year ended March 30, 1997.
 
                     EXECUTIVE OFFICERS OF THE REGISTRANT
 
  The following table sets forth the executive officers of the Company, their
ages, present position and principal occupations held for at least the past
five years.
 
<TABLE>
<CAPTION>
NAME                        AGE                     POSITION
----                        ---                     --------
<S>                         <C> <C>
Carl S. Archer, Jr.........  59 President, Chief Executive Officer and Chairman
                                 of the Board
Sebastian J. Sicari........  45 Vice President, Finance and Administration,
                                 Chief Financial Officer, Treasurer and Director
C. Kenneth Gray............  48 Vice President, Sales & Marketing
Dennis A. Legal............  57 Vice President, Engineering
Theodore A. Aronis.........  59 Vice President, Manufacturing Operations
R. Bruce O'Connor..........  58 Vice President, Device Process Equipment
                                 Marketing
</TABLE>
 
  Mr. Archer has been President, Chief Executive Officer and a director of the
Company since November 1987.
 
  Mr. Sicari has been Vice President, Finance and Administration and Chief
Financial Officer of the Company since December 1985, has served as Treasurer
of the Company since July 1988 and has been a Director since 1993.
 
                                       8
<PAGE>
 
  Mr. Gray has been Vice President, Sales and Marketing since January 1990.
From October 1983 to January 1990, Mr. Gray was Manager of Sales and
Marketing, Eastern U.S. and Europe, of Micro Component Technology, Inc., a
manufacturer of automatic test equipment, including test handlers.
 
  Mr. Legal has been Vice President, Engineering since August 1996. From May
1986 to August 1996, Mr. Legal was the Division Engineering Manager of
Teradyne Automatic Test Equipment, a manufacturer of automatic test equipment,
including test handlers.
 
  Mr. Aronis has been Vice President, Manufacturing Operations since April
1997. From 1985 to 1997, Mr. Aronis was Vice President, Operations of
Xylogics, a manufacturer of communications equipment.
 
  Mr. O'Connor has been Vice President, Device Process Equipment Marketing
since April 1997. From 1994 to 1997, Mr. O'Connor led the Company's
development program for its newest test handler model. Prior to joining Aseco,
Mr. O'Connor was Executive Vice President at Symtek Systems, Inc. a
manufacturer of automatic test handlers.
 
  Executive officers of the Company are elected by the Board of Directors and
serve until their successors have been duly elected and qualified. There are
no family relationships among any of the executive officers or directors of
the Company.
 
                                    PART II
 
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
 
  Aseco Corporation's common stock is traded on the Nasdaq National Market
under the symbol "ASEC." The table below sets forth the high and low sale
prices of the common stock during the two most recent fiscal years:
 
<TABLE>
<CAPTION>
                                                                       1997
                                                                   -------------
     PERIOD                                                         HIGH   LOW
     ------                                                        ------ ------
     <S>                                                           <C>    <C>
     First Quarter................................................ $14.63 $ 9.50
     Second Quarter...............................................  11.50   8.25
     Third Quarter................................................  10.38   7.00
     Fourth Quarter...............................................  11.88   9.50
<CAPTION>
                                                                       1996
                                                                   -------------
     <S>                                                           <C>    <C>
     First Quarter................................................ $18.25 $ 9.38
     Second Quarter...............................................  22.00  15.75
     Third Quarter................................................  21.25  13.50
     Fourth Quarter...............................................  16.63  10.00
</TABLE>
 
  On May 30, 1997, the closing price of the Company's common stock was $12.75
per share. On such date there were 3,672,017 shares outstanding held of record
by 92 persons. This number does not include stockholders for whom shares are
held in a "nominee" or "street" name.
 
  The Company has not paid cash dividends on its common stock and does not
intend to do so in the foreseeable future. The Company's bank line of credit
prohibits the payment of cash dividends without the bank's consent.
 
 
                                       9
<PAGE>
 
ITEM 6. SELECTED FINANCIAL DATA
 
<TABLE>
<CAPTION>
                                                 YEAR ENDED
                               -----------------------------------------------
                               MARCH 30, MARCH 31, APRIL 2, APRIL 3, MARCH 28,
                                 1997      1996      1995     1994     1993
                               --------- --------- -------- -------- ---------
                                    (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                            <C>       <C>       <C>      <C>      <C>
STATEMENT OF INCOME DATA
Net sales.....................  $34,320   $41,569  $29,192  $20,264   $15,869
Income from operations........    2,623     6,397    3,987    2,445     1,635
Net income....................    2,288     4,406    3,088    1,980     1,060
Earnings per share............      .62      1.17      .85      .55       .47
BALANCE SHEET DATA
Total assets..................  $36,640   $36,681  $29,267  $23,792   $21,166
Long term capital lease obli-
 gations......................       29        42       53      --         73
Stockholders' equity..........   31,113    28,416   22,711   19,513    16,566
</TABLE>
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS
 
 Results of Operations--Fiscal 1997 versus Fiscal 1996
 
  Net sales for fiscal 1997 decreased 17% to $34.3 million from $41.6 million
in fiscal 1996. The decrease resulted primarily from a reduction in unit
shipments due to an industry wide slowdown in the semiconductor market during
fiscal 1997.
 
  International sales, which increased 2.5% during fiscal 1997 to $17.8
million from $17.4 million in fiscal 1996, represented approximately 52% of
net sales in fiscal 1997 versus 42% in fiscal 1996. Sales in the Pacific Rim
region were particularly strong, representing 83% of all international sales.
 
  Gross profit for fiscal 1997 was $16.2 million, or 47% of net sales,
compared to $20.4 million, or 49% of net sales, in fiscal 1996. The decrease
in gross profit as a percentage of net sales resulted from a reduction in
manufacturing overhead spending which was disproportionate with the reduction
in units produced during fiscal 1997. Although cost control measures,
including a reduction in workforce and discretionary spending constraints,
were made early in fiscal 1997, the savings realized were partially offset by
spending on operation infrastructure enhancements incurred to enable the
Company to respond effectively to production demands in the future.
 
  Research and development costs increased 10% to $5.2 million in fiscal 1997
from $4.7 million in fiscal 1996. As a percentage of net sales, research and
development costs were 15% and 11% in fiscal 1997 and fiscal 1996,
respectively. Research and development spending in fiscal 1997 focused
primarily on the development of a new test handler system design and the
enhancement of existing products through additional automation and product
versatility through additional conversion kits.
 
  Selling, general and administrative expenses for fiscal 1997 decreased
approximately 10% to $8.4 million from $9.3 million in fiscal 1996. As a
percentage of net sales, selling, general and administrative costs were 24%
and 22% during fiscal 1997 and 1996, respectively. The decrease in selling,
general and administrative expenses resulted primarily from a decrease in
sales commissions earned during the year. The decrease in commission expense
resulted from both the decrease in net sales and a decrease in commission
rates resulting from the Company's efforts to transition more customers to a
direct sales relationship. The decrease in selling, general and administrative
costs were partially offset by spending incurred to support the installation
of the Company's new business information system.
 
  As a result of the above, operating income for fiscal 1997 declined 59% to
$2.6 million from $6.4 million in fiscal 1996.
 
 
                                      10
<PAGE>
 
  Other income, net of $668,000 in fiscal 1997 and $549,000 in fiscal 1996 was
derived primarily from interest income earned on cash and cash equivalents.
 
  The Company's effective tax rate for fiscal 1997 was 30.5% compared to 36.6%
in fiscal 1996. The fiscal 1997 tax rate was lower than the fiscal 1996 rate
principally because of a higher percentage of net sales coming from
international markets and a greater R&D tax credit which resulted as the
Company accelerated its spending on certain qualified development expenses.
 
  Net income for fiscal 1997 decreased 48% to $2.3 million, or $.62 per share
with 3,717,000 weighted average shares outstanding, from $4.4 million, or
$1.17 per share with 3,776,000 weighted average shares outstanding, in fiscal
1996.
 
 Results of Operations--Fiscal 1996 versus Fiscal 1995
 
  Net sales for fiscal 1996 increased 42% to $41.6 million from $29.2 million
in fiscal 1995. During fiscal 1996, net sales of the Company's earlier
designed models (S-130) grew slightly over fiscal 1995 net sales levels while
net sales of the Company's more recently introduced machines (S-170, S-200 and
S-450), which generally have higher average selling prices, increased 94% from
fiscal 1995.
 
  International sales increased 42% during fiscal 1996 to $17.4 million from
$12.3 million in fiscal 1995, keeping pace with overall sales growth.
International sales represented approximately 42% of net sales in both fiscal
1996 and 1995. Sales in the Pacific Rim region were particularly strong with
74% of all export sales originating in the region.
 
  Gross profit for fiscal 1996 was $20.4 million, or 49% of net sales,
compared to $13.8 million, or 47% of net sales, in fiscal 1995. The increase
in gross profit as a percentage of net sales resulted from improved
manufacturing efficiencies generated by improved production flow and cost
savings generated by increased outsourcing and vendor management programs.
 
  Research and development costs increased 41% to $4.7 million in fiscal 1996
from $3.4 million in fiscal 1995 primarily due to the hiring of additional
engineering personnel in each of the Company's critical technical disciplines.
As a percentage of net sales, research and development costs remained
relatively consistent at 11% of net sales in fiscal 1996 and fiscal 1995.
Research and development spending in fiscal 1996 focused primarily on the
development of new test handler system designs and the enhancement of existing
products through additional automation and product versatility through
additional conversion kits.
 
  Selling, general and administrative expenses for fiscal 1996 increased 43%
to $9.3 million from $6.5 million in fiscal 1995, but remained constant at 22%
of net sales in both fiscal 1996 and 1995. The increase in selling, general
and administrative expenses resulted primarily from increased headcount
related expenses and travel expenses incurred to address the sales and service
demands of an expanded customer and installed equipment base throughout the
world. Additionally, the Company incurred higher costs of information
technology and administration necessary to support the Company's substantial
growth and increased headcount during fiscal 1996.
 
  As a result of the above, operating income for fiscal 1996 grew 60% to $6.4
million from $4.0 million in fiscal 1995.
 
  Other income, net of $549,000 in fiscal 1996 and $414,000 in fiscal 1995 was
derived primarily from interest income earned on cash and cash equivalents.
 
  The Company's effective tax rate for fiscal 1996 was 36.6% compared to 29.8%
in fiscal 1995. The fiscal 1995 tax rate was lower than the fiscal 1996 rate
principally because during the fourth quarter of fiscal 1995, the Company
successfully completed an Internal Revenue Service audit of its fiscal 1993
tax year. As a result, an
 
                                      11
<PAGE>
 
increased amount of credits became available for the Company to utilize in the
fourth quarter causing the fourth quarter 1995 tax rate to be 17%.
 
  Net income for fiscal 1996 increased 43% to $4.4 million, or $1.17 per share
with 3,776,000 weighted average shares outstanding, from $3.1 million, or $.85
per share with 3,616,000 weighted average shares outstanding, in fiscal 1995.
 
 Liquidity and Capital Resources
 
  The Company maintained a strong liquidity position in fiscal 1997, closing
fiscal 1997 with a cash balance of $14.1 million (See "Subsequent Events"
below). Additionally, the Company had an unsecured line of credit with a bank
in the amount of $5.0 million against which there were no borrowings in fiscal
1997.
 
  The Company generated approximately $1 million in cash from operating
activities during fiscal 1997. The primary working capital factors affecting
cash from operations were inventory levels, accounts receivable, and accounts
payable and accrued expenses. During fiscal 1997, inventory levels increased
by approximately $2.2 million to $9.2 million as the Company purchased
inventory during the first quarter of the year to fulfill build plans which
were subsequently revised downward as market conditions softened. Accounts
receivable decreased approximately $3.2 million, or 26%, because of the
decline in net sales for the fiscal year. Accounts payable and accrued
expenses decreased as a result of a decrease in material receipts in the
second half of fiscal 1997 compared to fiscal 1996, a decrease in sales
commissions earned and a decrease in amounts accrued for compensation benefits
and other performance based compensation.
 
  The Company used approximately $992,000 in cash during fiscal 1997 to fund
the acquisition of capital equipment and $243,000 to fund internal software
development costs.
 
  The Company generated cash from financing activities in fiscal 1997 of
approximately $192,000 primarily from employee stock purchases under the
Company's employee stock option and stock purchase plans.
 
  The Company believes that funds generated from operations, existing cash
balances and available borrowing capacity will be sufficient to meet the
Company's cash requirements at least through the end of fiscal 1998.
 
 Subsequent Events
 
  On May 23, 1997, the Company acquired 100% of the outstanding stock of
Western Equipment Developments (Holdings) Ltd. ("WED") in Plymouth, England
for approximately $6,000,000 in cash. WED designs, manufactures and markets
integrated circuit wafer handling robot systems used to load, sort and
transport wafers during inspection in the semiconductor manufacturing process.
The acquisition will be accounted for as a purchase and, accordingly, the
results of operations of the acquired business will be included in the
Company's consolidated financial statements commencing May 23, 1997. In
connection with the acquisition, the Company expects to allocate a portion of
the purchase price to in-process research and development resulting in a one-
time charge to operations of approximately $3.5-$4.3 million in the first
quarter of fiscal 1998 (see Note M to Consolidated Financial Statements--
Subsequent Events).
 
 Impact of Recently Issued Accounting Standards
 
  In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement No. 128 "Earnings per Share" which is required to be adopted for the
quarter ending December 28, 1997. At that time, the Company will be required
to change the method currently used to compute earnings per share and to
restate all prior periods. Under the new requirements for calculating primary
earnings per share, the dilutive effect of stock options will be excluded. The
impact is expected to result in an increase in primary earnings per share for
the first quarter ended June 29, 1997 and June 30, 1996 of approximately $.01
per share for each of these quarters. The impact of Statement 128 on the
calculation of fully diluted earnings per share for these quarters is not
expected to be material.
 
                                      12
<PAGE>
 
  The impact of inflation on the Company's business during the past three
fiscal years has not been significant.
 
 Cautionary Statement for Purposes of "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995
 
  The Company wishes to caution readers that the following important factors
and those important factors described elsewhere in other Securities and
Exchange Commission filings, in some cases, have affected, and in the future
could affect, the Company's actual consolidated quarterly or annual operating
results and could cause those actual consolidated quarterly or annual
operating results to differ materially from those expressed in any forward
looking statements made by, or on behalf of, the Company.
 
  Semiconductor Market Fluctuations--The semiconductor market has historically
been cyclical and subject to significant economic downturns at various times,
which often have a disproportionate effect on manufacturers of semiconductor
capital equipment. As a result, there can be no assurance that the Company
will not experience material fluctuations in future quarterly or annual
operating results as a result of such a market fluctuation. The semiconductor
industry in recent periods has experienced decreased demand, and it is
uncertain how long these conditions will continue.
 
  Variability in Quarterly Operating Results--During each quarter, the Company
customarily sells a limited number of systems, thus a change in the shipment
of a few systems in a quarter can have a significant impact on results of
operations for a particular quarter. To achieve sales objectives, the Company
must generally obtain orders for systems to be shipped in the same quarter in
which the order is obtained. Moreover, customers may cancel or reschedule
shipments with limited or no penalty, and production difficulties could delay
shipments. Accordingly, the Company's operating results are subject to
significant variability from quarter to quarter and could be adversely
affected for a particular quarter if shipments for that quarter were lower
than anticipated. Moreover, since the Company ships a significant quantity of
products at or near the end of each quarter, the magnitude of fluctuation is
not known until late in or at the end of any given quarter.
 
  New Product Introductions--The Company's success depends in part on its
continued ability to develop and market new products. There can be no
assurance that the Company will be able to develop and introduce new products
including, in particular, its newest belt-conveyance test handler, in a timely
manner or that such products, if developed, will achieve market acceptance.
Additionally there can be no assurance that the Company will be able to
manufacture such products at profitable levels or in sufficient quantities to
meet customer requirements. The inability of the Company to do any of the
foregoing could have a material adverse effect on the Company's operating
results.
 
  International Operations--In fiscal 1997, 52% of the Company's net sales
were derived from customers in international markets. The Company is therefore
subject to certain risks common to many export activities, such as
governmental regulations, export license requirements, air transportation
disruptions, freight rates and the risk of imposition of tariffs and other
trade barriers. All of the Company's international sales are invoiced in U.S.
dollars and, accordingly, have not historically been subject to fluctuating
currency exchange rates. In the future, the Company may decide to conduct its
international business denominated in foreign currency in which case there can
be no assurance that the Company would be able to protect its position by
hedging its exposure to currency exchange rate fluctuations.
 
  Competition--The markets for the Company's products are highly competitive.
The Company's competitors include a number of established companies that have
significantly greater financial, technical, manufacturing and marketing
resources than the Company. The Company also competes with a number of smaller
companies. There can be no assurance that the Company will be able to compete
successfully against current and future sources of competition or that the
competitive pressures faced by the Company will not adversely effect its
profitability or financial performance.
 
  Customer Concentrations--Although the Company has a growing customer base,
from time to time, an individual customer may account for 10% or more of the
Company's quarterly or annual net sales. During the
 
                                      13
<PAGE>
 
year ended March 30, 1997, one customer accounted for 17% of net sales. The
Company expects that such customer concentration of net sales will continue to
occur from time to time as customers place large quantity orders with the
Company. As a result, the loss of, or significant reduction in purchases by,
any such customer could have an adverse effect on the Company's annual or
quarterly financial results.
 
  Investments in Research & Development and Selling General & Administrative
Expenses--The Company is currently investing in specific time-sensitive
strategic programs related to both the research and development and selling,
general and administrative areas which the Company believes are critical to
its future ability to compete effectively in the market. As such the Company
plans to continue to invest in such programs at a planned rate and not to
reduce or limit the increase in such expenditures until such programs are
completed. As a result there can be no assurance that such expenditures will
not adversely affect the Company's quarterly or annual profitability or
financial performance.
 
  Reliance on Third Party Distribution Channels--The Company markets and sells
its products primarily through third-party manufacturers' representative
organizations which are not under the direct control of the Company. The
Company has limited internal sales personnel. A reduction in the sales efforts
by the Company's current manufacturers' representatives or a termination of
their relationships with the Company could adversely affect the Company's
operations and financial performance. There can be no assurance that the
Company will be able to retain its current manufacturers' representatives or
its distribution channels by selling directly through its sales employees or
enter into arrangements with new manufacturers' representatives.
 
  Dependence on Key Personnel--The Company's success depends to a significant
extent upon a number of senior management and technical personnel. These
persons are not bound by employment agreements. The loss of the services of a
number of these key persons could have a material adverse effect on the
Company. The Company's future success will depend in large part upon its
ability to attract and retain highly skilled technical, managerial and
marketing personnel. Competition for such personnel in the Company's industry
is intense. Although the Company has been successful to date in this endeavor,
there can be no assurance that the Company will continue to be successful in
attracting and retaining the personnel it requires to successfully develop new
and enhanced products and to continue to grow and operate profitably.
 
  Dependence on Proprietary Technology--The Company's success is dependent
upon proprietary software and hardware which the Company protects primarily
through patents and restrictions on access to its trade secrets. There can be
no assurance that the steps taken by the Company to protect its proprietary
rights will be adequate to prevent misappropriation of its technology or
independent development by others of similar technology. Although the Company
believes that its products and technology do not infringe any existing
proprietary rights of others, the use of patents to protect software and
hardware has increased and there can be no assurance that third parties will
not assert infringement claims against the Company in the future.
 
                                      14
<PAGE>
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
Consolidated Financial Statements included in Item 8:
 
<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
<S>                                                                        <C>
Report of Independent Auditors............................................  16
Consolidated Balance Sheets as of March 30, 1997 and March 31, 1996.......  17
Consolidated Statements of Income for the years ended March 30, 1997,
 March 31, 1996, and April 2, 1995........................................  18
Consolidated Statements of Changes in Stockholders' Equity for the years
 ended March 30, 1997, March 31, 1996 and April 2, 1995...................  19
Consolidated Statements of Cash Flows for the years ended March 30, 1997,
 March 31, 1996 and April 2, 1995.........................................  20
Notes to Consolidated Financial Statements................................  21
Supplementary Quarterly Financial Data (unaudited)........................  30
</TABLE>
 
 
                                       15
<PAGE>
 
                        REPORT OF INDEPENDENT AUDITORS
 
The Board of Directors and Stockholders Aseco Corporation
 
  We have audited the accompanying consolidated balance sheets of Aseco
Corporation as of March 30, 1997 and March 31, 1996, and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for each of the three years in the period ended March 30, 1997. Our
audits also included the financial statement schedule listed in the Index at
Item 14(a). These financial statements and schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
 
  We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
  In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Aseco Corporation at March 30, 1997 and March 31, 1996 and the consolidated
results of its operations and its cash flows for each of the three years in
the period ended March 30, 1997 in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.
 
                                          LOGO
Boston, Massachusetts
May 9, 1997, except for Note M as
to which the date is May 23, 1997
 
 
                                      16
<PAGE>
 
                               ASECO CORPORATION
 
                          CONSOLIDATED BALANCE SHEETS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                             MARCH 30, MARCH 31,
                                                               1997      1996
                                                             --------- ---------
<S>                                                          <C>       <C>
ASSETS
Current Assets
  Cash and cash equivalents................................   $14,082   $14,083
  Accounts receivable, less allowance for doubtful accounts
   of $407 in 1997 and $397 in 1996........................     9,153    12,346
  Inventories, net.........................................     9,238     7,059
  Prepaid expenses.........................................       273       212
  Deferred taxes...........................................     1,003       598
  Other current assets.....................................       138        54
                                                              -------   -------
    Total current assets...................................    33,887    34,352
Plant and equipment, less accumulated depreciation and
 amortization..............................................     2,227     2,011
Other assets...............................................       526       318
                                                              -------   -------
                                                              $36,640   $36,681
                                                              =======   =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Accounts payable.........................................   $ 2,091   $ 3,441
  Accrued expenses.........................................     2,608     3,923
  Income taxes payable.....................................       321       476
  Current portion of capital lease obligations.............        13        13
                                                              -------   -------
    Total current liabilities..............................     5,033     7,853
Deferred taxes payable.....................................       465       370
Long-term capital lease obligations........................        29        42
Stockholders' equity
Preferred stock, $.01 par value, 1,000,000 shares
 authorized, none issued and outstanding...................       --        --
Common stock, $.01 par value, 15,000,000 shares authorized,
 3,664,519 and 3,611,501 shares issued and outstanding in
 1997 and 1996, respectively...............................        37        36
Additional paid in capital.................................    17,642    17,234
Retained earnings..........................................    13,434    11,146
                                                              -------   -------
    Total stockholders' equity.............................    31,113    28,416
                                                              -------   -------
                                                              $36,640   $36,681
                                                              =======   =======
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       17
<PAGE>
 
                               ASECO CORPORATION
 
                       CONSOLIDATED STATEMENTS OF INCOME
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                       YEAR ENDED
                                            ----------------------------------
                                            MARCH 30,   MARCH 31,    APRIL 2,
                                               1997        1996        1995
                                            ----------  ----------  ----------
<S>                                         <C>         <C>         <C>
Net sales.................................. $   34,320  $   41,569  $   29,192
Cost of sales..............................     18,113      21,174      15,374
                                            ----------  ----------  ----------
  Gross profit.............................     16,207      20,395      13,818
  Research and development costs...........      5,227       4,748       3,356
  Selling, general and administrative
   expenses................................      8,357       9,250       6,475
                                            ----------  ----------  ----------
  Income from operations...................      2,623       6,397       3,987
Other income (expense):
  Interest income..........................        664         560         416
  Interest expense.........................         (7)        (14)         (3)
  Other, net...............................         11           3           1
                                            ----------  ----------  ----------
                                                   668         549         414
                                            ----------  ----------  ----------
Income before income taxes.................      3,291       6,946       4,401
Income tax expense.........................      1,003       2,540       1,313
                                            ----------  ----------  ----------
Net income................................. $    2,288  $    4,406  $    3,088
                                            ==========  ==========  ==========
Earnings per share......................... $      .62  $     1.17  $      .85
                                            ==========  ==========  ==========
  Weighted average common and common
   equivalent shares outstanding...........  3,717,000   3,776,000   3,616,000
                                            ==========  ==========  ==========
</TABLE>
 
 
                See notes to consolidated financial statements.
 
                                       18
<PAGE>
 
                               ASECO CORPORATION
 
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                       (IN THOUSANDS, EXCEPT SHARE DATA)
 
<TABLE>
<CAPTION>
                                     COMMON STOCK
                                    --------------- ADDITIONAL
                                               PAR   PAID-IN   RETAINED
                                     SHARES   VALUE  CAPITAL   EARNINGS  TOTAL
                                    --------- ----- ---------- -------- -------
<S>                                 <C>       <C>   <C>        <C>      <C>
Balance at April 3, 1994........... 3,412,497  $34   $15,827   $ 3,652  $19,513
  Issuance of shares under stock
   plans...........................    24,883   --       110       --       110
  Net income.......................       --    --       --      3,088    3,088
                                    ---------  ---   -------   -------  -------
Balance at April 2, 1995........... 3,437,380   34    15,937     6,740   22,711
  Issuance of shares under stock
   plans...........................   174,121    2       634       --       636
  Tax benefit from exercise of
   stock options...................       --    --       663       --       663
  Net income.......................       --    --       --      4,406    4,406
                                    ---------  ---   -------   -------  -------
Balance at March 31, 1996.......... 3,611,501   36    17,234    11,146   28,416
  Issuance of shares under stock
   plans...........................    53,018    1       344       --       345
  Tax benefit from exercise of
   stock options...................       --    --        64       --        64
  Net income.......................       --    --       --      2,288    2,288
                                    ---------  ---   -------   -------  -------
Balance at March 30, 1997.......... 3,664,519  $37   $17,642   $13,434  $31,113
                                    =========  ===   =======   =======  =======
</TABLE>
 
 
                See notes to consolidated financial statements.
 
                                       19
<PAGE>
 
                               ASECO CORPORATION
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                            YEAR ENDED
                                                   ----------------------------
                                                   MARCH 30, MARCH 31, APRIL 2,
                                                     1997      1996      1995
                                                   --------- --------- --------
<S>                                                <C>       <C>       <C>
Operating activities:
  Net income.....................................   $ 2,288   $ 4,406  $ 3,088
Adjustments to reconcile net income to net cash
 provided by operating activities:
  Depreciation...................................       776       558      378
  Amortization...................................       166       221      254
  Deferred taxes.................................      (310)        4     (277)
Changes in assets and liabilities:
  Accounts receivable............................     3,193    (3,371)  (3,599)
  Inventories, net...............................    (2,179)      626     (935)
  Prepaid expenses...............................       (61)       36      (83)
  Accounts payable and accrued expenses..........    (2,665)    1,808    1,965
  Income taxes payable...........................       (91)      544      438
  Other current assets...........................       (84)      171      188
  Other assets...................................         9       --       --
                                                    -------   -------  -------
    Total adjustments............................    (1,246)      597   (1,671)
                                                    -------   -------  -------
    Cash provided by operating activities........     1,042     5,003    1,417
Investing activities:
  Acquisition of machinery and equipment.........      (992)     (728)    (918)
  Increase in software development costs and
   other assets..................................      (243)     (117)    (211)
                                                    -------   -------  -------
    Cash used in investing activities............    (1,235)     (845)  (1,129)
Financing activities:
  Loan to officer................................      (140)      --       --
  Net proceeds from issuance of common stock.....       345       636      110
  Reductions of capital lease obligations........       (13)      (12)     (83)
                                                    -------   -------  -------
    Cash provided by financing activities........       192       624       27
                                                    -------   -------  -------
    Net increase (decrease) in cash and cash
     equivalents.................................        (1)    4,782      315
Cash and cash equivalents at the beginning of the
 year............................................    14,083     9,301    8,986
                                                    -------   -------  -------
Cash and cash equivalents at the end of the
 year............................................   $14,082   $14,083  $ 9,301
                                                    =======   =======  -------
Supplemental information:
  Noncash investing and financing activities:
    Capital lease obligations incurred...........       --        --   $    69
                                                                       =======
</TABLE>
 
                 See notes to consolidated financial statements
 
                                       20
<PAGE>
 
                               ASECO CORPORATION
 
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
     (ALL TABULAR AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
 
NOTE A--NATURE OF BUSINESS
 
  Aseco Corporation (the "Company") designs, manufactures and markets test
handlers used to automate the testing of surface mount integrated circuit
packages. The Company markets its products principally in North America, the
Asia Pacific region and Western Europe and sells its products principally to
integrated circuit manufacturers. (See Note M--Subsequent Events)
 
NOTE B--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Principles of Consolidation: The consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries. All
intercompany balances and transactions are eliminated.
 
  Use of Estimates: The preparation of consolidated financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. Actual results could
differ from those estimates.
 
  Cash and Cash Equivalents: The Company considers all highly liquid
investments with maturities of three months or less at the time of purchase to
be cash equivalents.
 
  The Company invests its excess cash in high quality commercial paper
($7,212,883 at March 30, 1997 and $6,997,521 at March 31, 1996) and money
market funds ($1,943,278 at March 30, 1997 and $1,714,706 at March 31, 1996),
all of which are cash equivalents as of March 30, 1997. Management determines
the appropriate classification of these investments at the time of purchase as
either held-to-maturity, available-for-sale or trading and re-evaluates such
designation at each balance sheet date. Given the short-term nature of the
Company's investments at March 30, 1997 and their availability for use in the
Company's current operations, these amounts are considered to be available-
for-sale. Available-for-sale securities are carried at fair market value and
unrealized gains or losses are reported as a separate component of
stockholders' equity. At March 30, 1997 and March 31, 1996, the cost of the
Company's investments in cash equivalents approximated their fair market
value.
 
  Inventories: Inventories are stated at the lower of cost or market, using
the first-in, first-out method to determine cost.
 
  Plant and Equipment: Plant and equipment are stated at cost. Depreciation is
provided using the straight line method over the estimated useful lives of the
applicable assets which is generally three to seven years. Leasehold
improvements and equipment under capital leases are being amortized over the
lives of the leases.
 
  The Company adopted Statement of Financial Accounting Standards (SFAS) No.
121, "Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of" effective as of the beginning of fiscal 1997. This adoption
had no material affect on the Company's financial statements.
 
  Warranty Costs: Estimated warranty costs are accrued upon shipment of
product.
 
  Revenue Recognition: Revenue is recognized generally upon shipment of
product, and when special contractual criteria apply, upon acceptance.
 
  Earnings Per Share: Earnings per share data are computed using the weighted
average number of shares of common stock and common stock equivalents during
each year. Common stock equivalents include options
 
                                      21
<PAGE>
 
                               ASECO CORPORATION
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
to purchase shares of common stock and are computed using the treasury stock
method. Fully diluted earnings per share do not differ materially from primary
earnings per share.
 
  In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement No. 128 "Earnings Per Share" which is required to be adopted for the
quarter ending December 28, 1997. At that time, the Company will be required
to change the method currently used to compute earnings per share and to
restate all prior periods. Under the new requirements for calculating primary
earnings per share, the dilutive effect of stock options will be excluded. The
impact is expected to result in an increase in primary earnings per share for
the first quarter ended June 29, 1997 and June 30, 1996 of approximately $.01
per share for each quarter. The impact of Statement 128 on the calculation of
fully diluted earnings per share for these quarters is not expected to be
material.
 
  Stock Based Compensation: The Company has elected to follow Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
(APB 25) and related Interpretations in accounting for its stock-based
compensation plans, rather than the alternative fair value accounting provided
for under Financial Accounting Standards Board Statement No. 123, "Accounting
for Stock-Based Compensation." Under ABP 25, for those options granted in
which the exercise price equals or exceeds the market price of the underlying
stock on the date of grant, no compensation expense is recognized.
 
NOTE C--INVENTORIES, NET
 
  Net inventories consisted of the following:
 
<TABLE>
<CAPTION>
                                                             MARCH 30, MARCH 31,
                                                               1997      1996
                                                             --------- ---------
     <S>                                                     <C>       <C>
     Raw materials..........................................  $4,996    $3,491
     Work in process........................................   1,612     2,218
     Finished goods.........................................   2,630     1,350
                                                              ------    ------
                                                              $9,238    $7,059
                                                              ======    ======
</TABLE>
 
NOTE D--PLANT AND EQUIPMENT
 
  Plant and equipment consisted of the following:
 
<TABLE>
<CAPTION>
                                                             MARCH 30, MARCH 31,
                                                               1997      1996
                                                             --------- ---------
     <S>                                                     <C>       <C>
     Machinery and equipment................................  $2,289    $2,082
     Office furniture and equipment.........................   2,203     1,446
     Property under capital lease...........................     578       578
     Leasehold improvements.................................     109        81
                                                              ------    ------
                                                               5,179     4,187
     Less accumulated depreciation and amortization ........   2,952     2,176
                                                              ------    ------
                                                              $2,227    $2,011
                                                              ======    ======
</TABLE>
 
NOTE E--INDEBTEDNESS
 
  The Company has a revolving credit facility with a bank which expires on
September 1, 1997. Under the facility, the Company may borrow up to $5,000,000
on an unsecured basis, conditioned upon meeting certain financial covenants,
including maintaining specified levels of quarterly and annual earnings,
tangible net worth
 
                                      22
<PAGE>
 
                               ASECO CORPORATION
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
and restrictions on dividend payments. Borrowings bear interest at the bank's
prime rate which was 8.5% at March 30, 1997. There were no borrowings
outstanding at March 30, 1997 and March 31, 1996.
 
  Cash payments of interest were approximately $7,000, $14,000, and $ 3,000
for the years ended March 30, 1997, March 31, 1996, April 2, 1995,
respectively.
 
NOTE F--LEASES
 
  The Company leases a building in Marlboro, Massachusetts for its corporate
and manufacturing activities and a sales office in Santa Clara, California.
The operating lease for the Massachusetts facility expires in the year 2000,
subject to the Company's option to extend the term for an additional three
year period. Rent expense for this lease is approximately $350,000 per year.
In addition, the lease is subject to escalation for increases in operating
expenses and real estate taxes. The Company also leases equipment under
capital and non-cancelable operating leases expiring through the year 2001.
 
  The following is a schedule of required minimum lease payments under capital
and operating leases at March 30, 1997:
 
<TABLE>
<CAPTION>
                                                               CAPITAL OPERATING
                                                               LEASES   LEASES
                                                               ------- ---------
     <S>                                                       <C>     <C>
     1998.....................................................    17       387
     1999.....................................................    17       405
     2000.....................................................    13       412
     2001.....................................................   --         34
                                                                ----    ------
     Total minimum lease payments.............................    47    $1,238
                                                                        ======
     Less amounts representing interest.......................    (5)
                                                                ----
     Present value of minimum lease payments..................  $ 42
                                                                ====
</TABLE>
 
  Total rent expense for the years ended March 30, 1997, March 31, 1996, and
April 2, 1995 was approximately $372,000, $450,000, and $459,000,
respectively.
 
NOTE G--STOCKHOLDERS' EQUITY
 
  The Board of Directors may, at its discretion, designate one or more series
of preferred stock and establish the voting, dividend, liquidation, and other
rights and preferences of the shares of each series, and provide for the
issuance of shares of any series. At March 30, 1997, no shares of preferred
stock were outstanding.
 
NOTE H--STOCK PLANS AND EMPLOYEE BENEFITS
 
  1986 Incentive Stock Plan: The Company's 1986 Incentive Stock Option Plan
(the "1986 Plan") provides for the issuance of up to an aggregate of 416,666
shares of common stock upon the exercise of incentive stock options granted to
employees of the Company. The exercise price of options granted under the 1986
Plan must be at least equal to the fair market value of the underlying shares
of common stock at the time of grant. Options are exercisable either in full
immediately, or in installments, as the Board of Directors may determine. No
additional options may be granted under this Plan.
 
  Non-Employee Director Stock Option Plan: The Company's 1993 Non-Employee
Director Stock Option Plan (the "Director Plan") provides for the grant of
non-qualified stock options to non-employee directors of
 
                                      23
<PAGE>
 
                               ASECO CORPORATION
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
the Company for the purchase of up to an aggregate of 165,000 shares of common
stock. Under the Director Plan, each non-employee director is entitled to
receive, when first elected to serve as a director, an option to purchase
15,000 shares. In addition, each non-employee director is entitled to receive
on April 30 of each year an option to purchase 2,500 shares. The exercise
price of the options is equal to the fair market value of the underlying
common stock on the date of grant. Options granted under the plan may only be
exercised with respect to vested shares. One-half of the shares subject to
such options vest on the first anniversary of the date of the grant and the
balance vest on the second anniversary of the grant.
 
  Omnibus Stock Plan: The Company's 1993 Omnibus Stock Plan ( the "Omnibus
Plan") is administered by the Compensation Committee of the Board of Directors
and provides for the issuance of up to 1,230,000 shares of common stock
pursuant to the exercise of options or in connection with awards or direct
purchases of stock. Options granted under the Omnibus Plan may be either
incentive stock options or non-qualified stock options. Incentive stock
options may only be granted under the Omnibus Plan to employees and officers
of the Company. Non-qualified stock options may be granted to, awards of stock
may be made to, and direct purchases of stock may be made by, employees,
officers, consultants or directors of the Company. The terms of the awards or
grants, including the number of shares, the duration and rate of exercise of
each option, the option price per share, and the determination of any
restrictions to be placed on the grants or awards, are determined by the
Compensation Committee of the Board of Directors.
 
  The following is a summary of activity with respect to the Company's stock
option plans:
 
<TABLE>
<CAPTION>
                                                                        WEIGHTED
                                                                        AVERAGE
                                                              OPTIONS   EXERCISE
                                                              --------  --------
   <S>                                                        <C>       <C>
   Outstanding at April 3, 1994..............................  432,400   $ 4.45
     Granted.................................................   29,000     7.17
     Exercised...............................................   (7,400)    1.46
     Canceled................................................  (11,100)    6.92
                                                              --------   ------
   Outstanding at April 2, 1995..............................  442,900     4.59
     Granted.................................................  477,000    17.76
     Exercised............................................... (157,400)    3.04
     Canceled................................................  (18,000)    7.17
                                                              --------   ------
   Outstanding at March 31, 1996.............................  744,500    13.30
     Granted.................................................  458,000    10.37
     Exercised...............................................  (33,400)    5.67
     Canceled................................................ (449,000)   17.72
                                                              --------   ------
   Outstanding at March 30, 1997.............................  720,100   $ 8.91
                                                              ========   ======
</TABLE>
 
  As of March 30, 1997, March 31, 1996 and April 2, 1995, there were
outstanding options exercisable for approximately 430,000, 393,000, and
224,000, respectively. As of March 30, 1997, shares available for future grant
were 90,000 shares in the Director Plan and 497,000 shares in the Omnibus
Plan. No additional shares were available for grant in the 1986 Plan.
 
  The range of exercises prices for options outstanding at March 30, 1997 was
$.29-$18.69. The range of exercise prices is wide due to the inclusion of
options granted at a lower fair market value in years preceding the Company's
initial public offering in March 1993.
 
  In fiscal 1997, 391,000 options outstanding under the Company's 1993 Omnibus
Stock Plan having an exercise price of $18.69 per share were cancelled and
290,250 new shares were issued at a price of $10.38 per
 
                                      24
<PAGE>
 
                               ASECO CORPORATION
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
share representing the fair value on the date of issuance. All other terms of
these options, including the vesting period associated with each option
remained the same.
 
  The following table summarizes information about options outstanding at
March 30, 1997:
 
<TABLE>
<CAPTION>
                                 WEIGHTED             WEIGHTED
      RANGE OF         OPTIONS   AVERAGE    OPTIONS   AVERAGE  WEIGHTED AVERAGE
   EXERCISE PRICES   OUTSTANDING  PRICE   EXERCISABLE  PRICE   CONTRACTUAL LIFE
   ---------------   ----------- -------- ----------- -------- ----------------
   <S>               <C>         <C>      <C>         <C>      <C>
    $  .29-$  .48        8,300    $  .46      8,300    $  .46      4 years
    $ 5.38-$ 9.88      309,600    $ 6.76    229,400    $ 5.75      8 years
    $10.38-$18.69      402,200    $10.97    192,300    $11.02      9 years
                       -------              -------
                       720,100              430,000
                       =======              =======
</TABLE>
 
  Employee Stock Purchase Plan: The Company's Employee Stock Purchase Plan
(the "Purchase Plan") is administered by the Board of Directors or by its
designee (the "Administrator") and entitles employees of the Company to
purchase shares of the Company's common stock through payroll deductions over
offering periods specified by the Administrator. Shares may be purchased at a
price equal to the lesser of 85% of the fair market value of the common stock
on the first day of the offering period, or 85% of the fair value of the
common stock on the last day of the offering period. A total of 100,000 shares
have been reserved for issuance under the Purchase Plan. During fiscal 1997
and 1996, a total of approximately 19,600 and 16,800 shares of common stock,
respectively, were issued under this plan. Shares available for future grant
were approximately 46,600 shares.
 
  Disclosure of pro forma information regarding net income and earnings per
share is required by FASB Statement No. 123 "Accounting for Stock-Based
Compensation", and has been determined as if the Company had accounted for its
employee stock plans under the fair value method of that Statement. The fair
value for these options was estimated at the date of grant using a Black-
Scholes option pricing model with the following weighted-average assumptions
for fiscal years 1997 and 1996, respectively: risk-free interest rates of
4.73% and 5.97%; dividend yields of 0% in both years; volatility factors of
the expected market price of the Company's common stock of .485 and .520; and
a weighted-average expected life of the options of 3 and 5 years.
 
  The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in
the subjective input assumptions can materially affect the fair value
estimate, in management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its employee stock
options.
 
  The weighted average grant date fair value of options granted during fiscal
1997 and 1996 was $4.12 and $9.21, respectively. The weighted average grant
date fair value of options associated with the Company's Employee Stock
Purchase Plan for fiscal 1997 and 1996 was $1.47 and $2.42, respectively.
 
                                      25
<PAGE>
 
                               ASECO CORPORATION
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The
Company's pro forma information follows:
 
<TABLE>
<CAPTION>
                                                             MARCH 30, MARCH 31,
                                                               1997      1996
                                                             --------- ---------
     <S>                                                     <C>       <C>
     Pro forma net income...................................  $1,633    $3,741
     Pro forma earnings per share...........................  $  .44    $  .99
</TABLE>
 
  Savings Plan: Under the Company's Savings Plan (the "401(k) Plan"), eligible
employees are permitted to make pre-tax contributions up to 15% of their
salary, subject to certain limitations imposed by Section 401(k) of the
Internal Revenue Code. In addition, employees may contribute up to 10% of
their salary to the 401(k) Plan on an after tax basis. The Company may, but is
not required to, contribute for the benefit of the employees of the Company an
amount determined each year by the Company. For the years ended March 30,
1997, March 31, 1996, and April 2, 1995 the Company contributed approximately
$110,000, $80,000 and $40,000, respectively to the 401(k) Plan.
 
  Stockholder Rights Plan: On August 15, 1996, the Board of Directors adopted
a Stockholder Rights Plan. Pursuant to the Stockholder Rights Plan, each share
of common stock has an associated right. Under certain circumstances, each
right entitles the holder to purchase from the Company one one-thousandth of a
share of junior preferred stock at an exercise price of $55.00 per one one-
thousandth of a share, subject to adjustment.
 
  The rights are not exercisable and cannot be transferred separately from the
common stock until ten days after a person acquires or obtains the right to
acquire 15% or more or makes a tender offer for 30% or more of the Company's
common stock. Upon exercise, each right will entitle the holder to purchase in
lieu of preferred stock, at the right exercise price, common stock having a
value of two times the exercise price of the right. In addition, if the
Company is either (i) acquired in a merger or other business combination in
which the Company is not the surviving entity, or (ii) sells or transfers 50%
or more of its assets or earning power to another party, each right will
entitle its holder to purchase, upon exercise, common stock of the acquiring
Company having a value equal to two times the exercise price of the right.
 
  The rights have certain anti-takeover effects, in that they would cause
substantial dilution to a person or group that attempts to acquire a
significant interest in the Company on terms not approved by the Board of
Directors. The rights expire on August 15, 2006 but may be redeemed by the
Company for $.01 per right at any time prior to the tenth day following a
person's acquisition of 15% or more of the Company's common stock. So long as
the rights are not separately transferable, the Company will issue one right
with each new share of common stock issued.
 
                                      26
<PAGE>
 
                               ASECO CORPORATION
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
NOTE I--INCOME TAXES
 
  Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax liabilities and assets as of March 30, 1997 and
March 31, 1996 are as follows:
 
<TABLE>
<CAPTION>
   1997                                             TOTAL   CURRENT  NON-CURRENT
   ----                                             ------  -------  -----------
   <S>                                              <C>     <C>      <C>
   Deferred tax liabilities:
     Tax over book depreciation.................... $ (308)             $(308)
     Capitalized software..........................   (157)              (157)
     Capital vs. operating lease...................    (98)    (98)
     Other.........................................    (35)    (35)
                                                    ------  ------      -----
   Total deferred tax liabilities..................   (598)   (133)      (465)
   Deferred tax assets:
     Asset valuation allowances....................  1,013   1,013
     Product warranty..............................     62      62
     Other.........................................     61      61
                                                    ------  ------
   Total deferred tax assets.......................  1,136   1,136
                                                    ------  ------      -----
   Net deferred tax assets (liabilities)........... $  538  $1,003      $(465)
                                                    ======  ======      =====
<CAPTION>
   1996                                             TOTAL   CURRENT  NON-CURRENT
   ----                                             ------  -------  -----------
   <S>                                              <C>     <C>      <C>
   Deferred tax liabilities:
     Tax over book depreciation.................... $ (247)             $(247)
     Capitalized software..........................   (123)              (123)
     Capital vs. operating lease...................    (97) $  (97)
     Other.........................................    (33)    (33)
                                                    ------  ------      -----
   Total deferred tax liabilities..................   (500)   (130)      (370)
   Deferred tax assets:
     Asset valuation allowances....................    555     555
     Product warranty..............................    113     113
     Other.........................................     60      60
                                                    ------  ------
   Total deferred tax assets.......................    728     728
                                                    ------  ------      -----
   Net deferred tax assets (liabilities)........... $  228  $  598      $(370)
                                                    ======  ======      =====
</TABLE>
 
 
                                      27
<PAGE>
 
                               ASECO CORPORATION
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  Significant components of the provision (benefit) for income taxes are as
follows:
 
<TABLE>
<CAPTION>
                                                             YEAR ENDED
                                                    ----------------------------
                                                    MARCH 30, MARCH 31, APRIL 2,
                                                      1997      1996      1995
                                                    --------- --------- --------
   <S>                                              <C>       <C>       <C>
   Current federal tax.............................  $1,211    $2,106    $1,416
   Current state tax...............................     102       438       174
   Deferred federal tax............................    (258)       (3)     (214)
   Deferred state tax .............................     (52)       (1)      (63)
                                                     ------    ------    ------
                                                     $1,003    $2,540    $1,313
                                                     ======    ======    ======
</TABLE>
 
  The reconciliation of income tax computed at the U.S. federal statutory rate
to income tax expense is as follows:
 
<TABLE>
<CAPTION>
                                                            YEAR ENDED
                                                   ----------------------------
                                                   MARCH 30, MARCH 31, APRIL 2,
                                                     1997      1996      1995
                                                   --------- --------- --------
   <S>                                             <C>       <C>       <C>
   Tax at U.S. statutory rates....................   34.0%     34.0%     34.0%
   State income taxes, net of federal benefit.....    3.1       4.6       4.4
   Foreign sales corporation......................   (3.7)     (2.7)     (2.4)
   Tax credits....................................   (4.9)     (1.1)     (6.3)
   Other, net.....................................    2.0       1.8        .1
                                                     ----      ----      ----
                                                     30.5%     36.6%     29.8%
                                                     ====      ====      ====
</TABLE>
 
  During the year ended March 30, 1997 the Company recorded a tax benefit of
approximately $64,000 related to the exercise of non-qualified stock options
which amounts have been credited to additional paid-in capital.
 
  Income taxes paid in the years ended March 30, 1997, March 31, 1996, and
April 2, 1995 were $1,404,000, $2,010,000, and $1,152,000, respectively.
 
NOTE J--ACCRUED EXPENSES
 
  Accrued expenses consist of the following:
 
<TABLE>
<CAPTION>
                                                             MARCH 30, MARCH 31,
                                                               1997      1996
                                                             --------- ---------
   <S>                                                       <C>       <C>
   Accrued commissions......................................  $1,467    $2,187
   Accrued compensation and benefits........................     595     1,088
   Other....................................................     546       648
                                                              ------    ------
                                                              $2,608    $3,923
                                                              ======    ======
</TABLE>
 
                                      28
<PAGE>
 
                               ASECO CORPORATION
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
NOTE K--SEGMENT, GEOGRAPHIC, CUSTOMER INFORMATION AND CONCENTRATION OF CREDIT
RISK
 
  The Company operates in one industry segment. Export sales from the United
States were approximately as follows:
 
<TABLE>
<CAPTION>
                                                             YEAR ENDED
                                                    ----------------------------
                                                    MARCH 30, MARCH 31, APRIL 2,
                                                      1997      1996      1995
                                                    --------- --------- --------
   <S>                                              <C>       <C>       <C>
   Pacific Rim.....................................  $14,785   $12,845  $10,026
   Europe..........................................    2,512     3,567    1,983
   Other...........................................      528       984      270
                                                     -------   -------  -------
                                                     $17,825   $17,396  $12,279
                                                     =======   =======  =======
</TABLE>
 
  The Company sells its products principally to integrated circuit
manufacturers. The Company performs periodic credit evaluations of its
customers' financial condition, and historically, credit losses have been
small. The Company's accounts receivable included balances owed by two
customers which represented 11% and 18% of total trade accounts receivable as
of March 30, 1997, and one customer which represented 18% of total trade
accounts receivable as of March 31, 1996.
 
  One customer accounted for 17% of net sales for the year ended March 30,
1997. One customer accounted for 12% of net sales for the year ended March 31,
1996. No single customer accounted for more than 10% of net sales in the year
ended April 2, 1995.
 
NOTE L--RELATED PARTY TRANSACTIONS
 
  On April 15, 1996, the Company loaned $140,000 to an executive officer who
is also a director of the Company. The loan bears interest at the rate of
5.33% per annum, compounded annually, and is due and payable in full on the
earlier of the termination of the executive officer's employment with the
Company or April 15, 1999. The loan is secured by shares of the Company's
common stock owned by the executive officer.
 
NOTE M--SUBSEQUENT EVENTS
 
  On May 23, 1997, the Company acquired 100% of the outstanding stock of
Western Equipment Developments (Holdings) Ltd. ("WED") in Plymouth, England
for approximately $6,000,000 in cash. WED designs, manufactures and markets
integrated circuit wafer handling robot systems used to load, sort and
transport wafers during inspection in the semiconductor manufacturing process.
The acquisition will be accounted for as a purchase and, accordingly, the
results of operations of the acquired business will be included in the
Company's consolidated financial statements commencing May 23, 1997. In
connection with the acquisition, the Company expects to allocate a portion of
the purchase price to in-process research and development resulting in a one-
time charge to operations of approximately $3.5-$4.3 million in the first
quarter of fiscal 1998. The following table summarizes the unaudited pro-forma
consolidated results of operations as if the acquisition had been made at the
beginning of each of the periods presented:
 
<TABLE>
<CAPTION>
                                                                 YEAR ENDED
                                                             -------------------
                                                             MARCH 30, MARCH 31,
                                                               1997      1996
                                                             --------- ---------
     <S>                                                     <C>       <C>
     Net sales..............................................  $39,303   $48,013
     Net income.............................................   (3,078)      196
     Earnings per share.....................................  $  (.83)  $   .05
</TABLE>
 
                                      29
<PAGE>
 
                               ASECO CORPORATION
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
NOTE N--SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED)
 
  The following is a summary of unaudited quarterly results for the fiscal
years ended March 30, 1997 and March 31, 1996.
 
<TABLE>
<CAPTION>
                            FIRST QUARTER SECOND QUARTER THIRD QUARTER FOURTH QUARTER
                            ------------- -------------- ------------- --------------
   <S>                      <C>           <C>            <C>           <C>
   FISCAL 1997
   Net sales...............    $11,001        $8,989        $ 6,722       $ 7,608
   Gross profit............      5,387         4,184          3,127         3,509
   Net income..............      1,275           538            234           241
   Earnings per share......    $   .34        $  .15        $   .06       $   .06
<CAPTION>
                            FIRST QUARTER SECOND QUARTER THIRD QUARTER FOURTH QUARTER
                            ------------- -------------- ------------- --------------
   <S>                      <C>           <C>            <C>           <C>
   FISCAL 1996
   Net sales...............    $ 9,136        $9,741        $10,998       $11,694
   Gross profit............      4,532         4,731          5,565         5,567
   Net income..............        926         1,053          1,165         1,262
   Earnings per share......    $   .25        $  .28        $   .31       $   .34
</TABLE>
 
                                       30
<PAGE>
 
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 information required by this item is included in the Company's Proxy
Statement to be filed in connection with the Company's 1997 Annual Meeting of
Stockholders to be held on August 6, 1997, under the section captioned
"Election of Directors" and is incorporated herein by reference thereto.
 
  The information required by this item with respect to executive officers of
the Company is set forth under the caption "Executive Officers of the
Registrant" in Part I of this Report on Form 10-K.
 
ITEM 11. EXECUTIVE COMPENSATION
 
  The information required by this item is included in the Company's Proxy
Statement to be filed in connection with the Company's 1997 Annual Meeting of
Stockholders to be held on August 6, 1997, under the section captioned
"Executive Officer Compensation" and is incorporated herein by reference
thereto.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
  The information required by this item is included in the Company's Proxy
Statement to be filed in connection with the Company's 1997 Annual Meeting of
Stockholders to be held on August 6, 1997, under the section captioned "Stock
Ownership of Directors, Nominees, Executive Officers and Principal
Stockholders" and is incorporated herein by reference thereto.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
 
  On April 15, 1996, the Company loaned $140,000 to Sebastian J. Sicari, a
director and executive officer of the Company. The loan bears interest at the
rate of 5.33% per annum, compounded annually, and is due and payable in full
on the earlier of the termination of Mr. Sicari's employment with the Company
or April 15, 1999. At March 30, 1997, principal and accrued interest on the
loan totaled $147,384. The loan is secured by shares of the Company's common
stock owned by Mr. Sicari.
 
                                      31
<PAGE>
 
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
  (a) 1. FINANCIAL STATEMENTS
 
  The following consolidated financial statements are included in Item 8:
 
      Consolidated Balance Sheets as of March 30, 1997 and March 31, 1996
 
      Consolidated Statements of Income for the years ended March 30, 1997,
    March 31, 1996, and April 2, 1995
 
      Consolidated Statements of Changes in Stockholders' Equity for the
    years ended March 30, 1997, March 31, 1996, and April 2, 1995
 
      Consolidated Statements of Cash Flows for the years ended March 30,
    1997, March 31, 1996, and April 2, 1995
 
  (a) 2. FINANCIAL STATEMENT SCHEDULES
 
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
     <S>                                                                    <C>
     Schedule II--Valuation and Qualifying Accounts........................ F-1
</TABLE>
 
  All other schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the consolidated
financial statements or the notes thereto.
 
  (a) 3. LISTING OF EXHIBITS
 
<TABLE>
<CAPTION>
 EXHIBIT NO. DESCRIPTION
 ----------- -----------
 <C>         <S>
   *3.2      Third Restated Certificate of Incorporation of the Company
    3.3      Amended and Restated By-laws of the Company, filed as Exhibit 4.2
             to the Registration Statement on Form S-8 (SEC File No. 333-18337)
             filed with the Commission on December 19, 1996 and incorporated
             herein by reference.
    4.2      Rights Agreement dated August 15, 1996 between the Company and
             State Street Bank & Trust Company as Rights Agent (including the
             exhibits thereto), incorporated by reference from the Company's
             Registration Statement on Form 8-A filed with the Commission on
             August 26, 1996.
    4.3      Amendment Number One to the Rights Agreement dated January 2, 1997
             between the Company and American Stock Transfer & Trust Company,
             filed as Exhibit 4.2 to the Company's Form 10-Q for the quarter
             ended December 29, 1996 and incorporated herein by reference.
  *10.1      1986 Incentive Stock Option Plan.
   10.2      1993 Non-Employee Director Stock Option Plan, as amended and
             restated as of October 18, 1996, filed herewith.
  *10.3      1993 Employee Stock Purchase Plan.
   10.4      1993 Omnibus Stock Plan, as amended and restated as of June 14,
             1996, filed as Exhibit 10.1 to the Registration Statement on Form
             S-8 (SEC File No. 333-18337) filed with the Commission on December
             19, 1996 and incorporated herein by reference.
  *10.5      Lease dated April 13, 1993, between the Company and CIGNA
             Investments, Inc.
  *10.7      Letter Agreement dated November 27, 1992, between the Company and
             Fleet Bank of Massachusetts, N.A.
   10.9      Amended Letter Agreement dated July 30, 1993, between the Company
             and Fleet Bank of Massachusetts, N.A., filed as an exhibit to the
             Company's Form 10-K for the fiscal year ended April 3, 1994 and
             incorporated herein by reference.
 **10.10     Severance agreement, dated December 30, 1996, between the Company
             and Carl S. Archer, Jr., filed herewith.
 **10.11     Severance agreement, dated December 30, 1996, between the Company
             and Sebastian J. Sicari, filed herewith.
</TABLE>
 
                                      32
<PAGE>
 
<TABLE>
<CAPTION>
 EXHIBIT NO. DESCRIPTION
 ----------- -----------
 <C>         <S>
 **10.12     Form of Key Employee Stock Option Agreement, filed as Exhibit
             10.12 to the Company's Form 10-K for the fiscal year ended April
             3, 1994 and incorporated herein by reference.
   10.13     Amended Letter Agreement dated August 30, 1996, between the
             Company and Fleet Bank of Massachusetts, N.A., filed as Exhibit
             10.13 to the Company's Form 10-Q for the quarter ended September
             29, 1996 and incorporated herein by reference.
   10.14     Promissory Note between the Company and Sebastian J. Sicari dated
             April 15, 1996 and filed as Exhibit 10.14 to the Company's Form
             10-Q for the quarter ended December 29, 1996 and incorporated
             herein by reference.
   10.15     Pledge Agreement between the Company and Sebastian J. Sicari dated
             April 15, 1996, filed as Exhibit 10.15 to the Company's Form 10-Q
             for the quarter ended December 29, 1996 and incorporated herein by
             reference.
 **10.16     Severance agreement, dated March 18, 1997, between C. Kenneth Gray
             and the Company, filed herewith.
 **10.17     Severance agreement, dated December 30, 1996, between Dennis A.
             Legal and the Company, filed herewith.
   21        Subsidiaries of the Company, filed herewith.
   23.1      Consent of Ernst & Young LLP, filed herewith.
   27        Financial Data Schedule, filed herewith.
</TABLE>
--------
 * Incorporated by reference to the same exhibit number to the Registration
   Statement on Form S-1 (SEC File No. 33-57644) filed with the Securities and
   Exchange Commission on January 29, 1993.
** Management contract or compensation plan or arrangement required to be
   filed as an exhibit pursuant to Item 14( c) of Form 10-K.
 
  (b) REPORTS ON FORM 8-K
 
  The Company filed no reports on Form 8-K with the Securities and Exchange
Commission during the fiscal quarter ended March 30, 1997.
 
 
                                      33
<PAGE>
 
                                  SIGNATURES
 
  PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
 
                                          Aseco Corporation
 
                                                  /s/ Carl S. Archer, Jr.
                                          By: _________________________________
                                             CARL S. ARCHER, JR. PRESIDENT AND
                                                  CHIEF EXECUTIVE OFFICER
 
June 27, 1997
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
 
              SIGNATURE                      TITLE(S)                DATE
 
       /s/ Carl S. Archer, Jr.         President, Chief         June 27, 1997
-------------------------------------   Executive Officer
         CARL S. ARCHER, JR.            and Director
                                        (Principal
                                        Executive Officer)
 
       /s/ Sebastian J. Sicari         Vice President,          June 27, 1997
-------------------------------------   Finance and
         SEBASTIAN J. SICARI            Administration,
                                        Chief Financial
                                        Officer, Treasurer
                                        and Director
                                        (Principal
                                        Financial and
                                        Accounting Officer)
 
       /s/ Dr. Sheldon Buckler         Director                 June 27, 1997
-------------------------------------
         DR. SHELDON BUCKLER
 
        /s/ Dr. Gerald Wilson          Director                 June 27, 1997
-------------------------------------
          DR. GERALD WILSON
 
       /s/ Dr. Sheldon Weinig          Director                 June 27, 1997
-------------------------------------
         DR. SHELDON WEINIG
 
                                      34
<PAGE>
 
SCHEDULE II
 
                               ASECO CORPORATION
 
                       VALUATION AND QUALIFYING ACCOUNTS
 
<TABLE>
<CAPTION>
                                 BALANCE AT  CHARGES TO
                                BEGINNING OF COSTS AND             BALANCE AT
   CLASSIFICATION                   YEAR      EXPENSES  DEDUCTIONS END OF YEAR
   --------------               ------------ ---------- ---------- -----------
<S>                             <C>          <C>        <C>        <C>
YEAR ENDED MARCH 30, 1997
Allowance for doubtful
 accounts......................   $397,000    $100,000   $90,000    $407,000
YEAR ENDED MARCH 31, 1996
Allowance for doubtful
 accounts......................   $133,000    $264,000       --     $397,000
YEAR ENDED APRIL 2, 1995
Allowance for doubtful
 accounts......................   $ 78,000    $ 55,000       --     $133,000
</TABLE>
 
                                       35