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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 10-Q

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(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 23, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 FOR
THE TRANSITION PERIOD FROM ______ TO ________.

COMMISSION FILE NUMBER: 1-12912

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CENTENNIAL TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 04-2978400
- --------------------------------- ----------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)

7 LOPEZ ROAD, WILMINGTON, MASSACHUSETTS 01887
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

(978) 988-8848
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(Registrant's telephone number, including area code)

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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 periods 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 [ ]

As of February 1, 2001, there were 3,321,539 shares of Common Stock, $0.01
par value per share (the "Common Stock"), of the registrant outstanding.

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CENTENNIAL TECHNOLOGIES, INC.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION (unaudited) Page Number

Item 1. Financial Statements 3

Consolidated Condensed Balance Sheets at 3
December 23, 2000 and March 25, 2000

Consolidated Condensed Statements of Income for the three 4
and nine months ended December 23, 2000 and
December 25, 1999

Consolidated Condensed Statements of Cash Flows for the 5
nine months ended December 23, 2000 and
December 25, 1999

Notes to Consolidated Condensed Financial Statements 6

Item 2. Management's Discussion and Analysis of Financial 11
Condition and Results of Operations

Item 3. Quantitative and Qualitative Disclosure or Market Risk 18

PART II. OTHER INFORMATION

Item 1. Legal Proceedings 18
Item 2. Changes in Securities and Use of Proceeds 20
Item 3. Defaults upon Senior Securities 20
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 21

SIGNATURES 22

PART I
ITEM 1. FINANCIAL STATEMENTS

CENTENNIAL TECHNOLOGIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands, except per share amounts)

December 23, March 25,
2000 2000
---- ----
(unaudited)

ASSETS
Current assets:
Cash and cash equivalents.................................................... $ 9,102 $ 5,780
Trade accounts receivable, net............................................... 7,768 3,838
Inventories.................................................................. 18,147 14,574
Other current assets......................................................... 498 720
---------- ---------
Total current assets.............................................................. 35,515 24,912

Equipment and leasehold improvements.............................................. 5,396 4,821
Less accumulated depreciation and amortization.................................... (2,580) (2,131)
----------- ----------
2,816 2,690
Investments....................................................................... 248 1,948
Intangibles, net.................................................................. 403 469
Other assets...................................................................... 459 354
---------- ---------

Total assets...................................................................... $ 39,441 $ 30,373
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses........................................ $ 10,412 $ 9,436
Note payable to related party................................................ - 4,000
Obligations under capital leases, current portion............................ 311 215
---------- ---------
Total current liabilities......................................................... 10,723 13,651

Long-term obligations under capital leases........................................ 956 827

Contingencies (Note 8)

Stockholders' equity:
Preferred Stock, $0.01 par value; 1,000 shares authorized, 60 shares issued
and outstanding at December 23, 2000 and March 25, 2000................. 1 1
Common Stock, $0.01 par value; 50,000 shares authorized, 3,264 and
3,186 issued and outstanding at December 23, 2000 and
March 25, 2000, respectively............................................ 33 32
Additional paid-in capital................................................... 86,304 85,937
Accumulated deficit.......................................................... (58,544) (70,044)
Accumulated other comprehensive loss......................................... (32) (31)
----------- ----------
Total stockholders' equity........................................................ 27,762 15,895
------------ ---------

Total liabilities and stockholders' equity........................................ $ 39,441 $ 30,373
========== =========

See accompanying notes.

CENTENNIAL TECHNOLOGIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)

Three months ended Nine months ended
------------------ -----------------
December 23, December 25, December 23, December 25,
2000 1999 2000 1999
---- ---- ---- ----

Sales:
PC cards and related products............................ $ 20,243 $ 8,567 $ 49,621 $ 22,881
Electronic components.................................... 785 - 8,768 -
--------- --------- --------- ---------
Net sales........................................... 21,028 8,567 58,389 22,881

Cost of goods sold ........................................... 12,633 5,209 34,712 14,902
--------- --------- --------- ---------
Gross profit........................................ 8,395 3,358 23,677 7,979

Operating expenses:
Research and development................................. 455 448 1,646 1,069
Selling, general and administrative...................... 3,200 1,631 8,026 5,326
--------- --------- --------- ---------
Operating income.................................... 4,740 1,279 14,005 1,584

Gain (loss) on disposal of equipment.......................... (1) - 52 (345)
Revision of an estimate of a litigation settlement............ - - - 940
Net interest income (expense)................................. 48 80 (23) 230
Other income (loss)........................................... (1,700) - (1,700) 39
--------- --------- --------- ---------
Income before income taxes.......................... 3,087 1,359 12,334 2,448

Provision for income taxes.................................... 287 23 834 43
--------- --------- --------- ---------

Net income.......................................... $ 2,800 $ 1,336 $ 11,500 $ 2,405
========= ========= ========= =========

Net income per share - basic.................................. $ 0.86 $ 0.42 $ 3.55 $ 0.76
Net income per share - diluted................................ $ 0.58 $ 0.42 $ 2.52 $ 0.75
Weighted average shares outstanding - basic................... 3,269 3,204 3,240 3,177
Weighted average shares outstanding - diluted................. 4,810 3,217 4,555 3,229

See accompanying notes.

CENTENNIAL TECHNOLOGIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

Nine months ended
------------------------------
December 23, December 25,
2000 1999
---- ----

Cash flows from operating activities:
Net income................................................. $ 11,500 $ 2,405
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.............................. 946 827
(Gain) loss on disposal of equipment....................... (54) 345
Provision for loss on accounts receivable.................. 5 75
Provision for (recovery of) loss on inventory.............. 575 (145)
Revision of an estimate of a litigation settlement......... - (940)
Provision for loss on investments.......................... 1,700 -
Changes in operating assets and liabilities:
Accounts receivable................................... (3,935) (734)
Inventories........................................... (4,148) (1,614)
Other assets.......................................... 117 (172)
Accounts payable and accrued expenses................. 976 709
---------- ----------
Net cash provided by operating activities........ 7,682 756

Cash flows from investing activities:
Capital expenditures....................................... (533) (307)
Additional consideration for acquired business............. ( 72) -
Disposal of capital equipment.............................. 76 -
Proceeds from sale of securities held to maturity.......... - 3,144
Investments in third parties............................... - (248)
Purchase of short-term investments......................... - ( 2,898)
---------- ----------
Net cash used in investing activities............. (529) (309)

Cash flows from financing activities:
Payments on note payable to related party.................. (4,000) -
Payments from fractional shares resulting from split....... - (40)
Payments on equipment lease financing...................... (198) (128)
Proceeds from exercise of stock options.................... 316 -
Proceeds from employee stock purchase plan................. 52 7
---------- ----------
Net cash used in financing activities.............. (3,830) (161)
---------- ----------
Effect of exchange rate changes on cash.................... (1) (15)
---------- ----------
Net decrease in cash and cash equivalents....................... 3,322 271
Cash and cash equivalents at beginning of period................ 5,780 4,922
---------- ----------

Cash and cash equivalents at end of period................... $ 9,102 $ 5,193
========== ==========

Supplemental disclosure of cash flow information:
Acquisition of equipment through capital lease transaction $ 423 $ 1,180
========== ==========

See accompanying notes.

CENTENNIAL TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - UNAUDITED

1. BASIS OF PRESENTATION

BASIS OF PRESENTATION

The accompanying unaudited consolidated condensed financial statements of
Centennial Technologies, Inc. ("Centennial;" also at times referred to as "we",
"our" or "us") include the accounts of Centennial and all wholly owned
subsidiaries. Investments in companies in which ownership interests range from
20 to 50 percent and Centennial exercises significant influence over operating
and financial policies are accounted for using the equity method. Other
investments are accounted for using the cost method. All significant
intercompany balances and transactions have been eliminated.

The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all
financial information and disclosures required by accounting principles
generally accepted in the United States for complete financial statements. In
our opinion, these financial statements include all adjustments (consisting only
of normal recurring accruals) necessary for a fair presentation of the results
of operations for the interim periods reported and of our financial condition as
of the date of the interim balance sheet. The results of operations for interim
periods are not necessarily indicative of the results to be expected for the
full year.

These financial statements should be read in conjunction with our
consolidated financial statements and related notes included in our Annual
Report on Form 10-K for the fiscal year ended March 25, 2000 along with any
other filings with the Securities and Exchange Commission since March 25, 2000.

FISCAL YEAR

Our fiscal year began on March 26, 2000. Each fiscal quarter ends on the
Saturday of the thirteenth week following the beginning of the quarter, except
for the fourth quarter, which ends on the last Saturday of March.

CASH EQUIVALENTS

Cash equivalents include highly liquid temporary cash investments having
maturities of three months or less at date of acquisition.

COMPREHENSIVE INCOME

Comprehensive income was $2,799,000 and $1,339,000 for the three months
ended December 23, 2000 and December 25, 1999, respectively, and was $11,499,000
and $2,390,000 for the nine months ended December 23, 2000 and December 25,
1999, respectively. Comprehensive income is comprised of net income and
cumulative translation adjustments.

SEGMENTS OF BUSINESS ENTERPRISE

We primarily operate in a single industry segment: the design and
manufacture of high technology memory chip based products used in industrial and
commercial applications.

ACCOUNTING PRONOUNCEMENTS

In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin 101, "REVENUE RECOGNITION IN FINANCIAL STATEMENTS"
("SAB 101"), which provides guidance related to revenue recognition based on
interpretations and practices followed by the SEC. SAB 101 is effective the
fourth quarter of fiscal 2001 and requires companies to report any changes in
revenue recognition as a cumulative change in accounting principle at the time
of implementation in accordance with APB Opinion No. 20, "ACCOUNTING CHANGES."
Based upon our preliminary analysis to date, we do not expect the adoption of
SAB 101 to have a material impact on our financial position or results of
operations.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "ACCOUNTING DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES," which is required to be adopted in fiscal
years beginning after June 15, 2000. Based upon our preliminary analysis to

CENTENNIAL TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - UNAUDITED

date, we do not anticipate that the adoption of SFAS No. 133 will have a
significant effect on Centennial's results of operations for financial position.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

2. CONCENTRATION OF CREDIT RISK

Financial instruments, which potentially subject us to concentration of
credit risk, consist principally of cash and cash equivalents and trade
receivables. At December 23, 2000, substantially all of our cash and cash
equivalents were held by one financial institution. We primarily sell and grant
credit to domestic and foreign original equipment manufacturers and
distributors. We extend credit based on an evaluation of the customer's
financial condition and generally do not require collateral. We monitor our
exposure for credit losses and maintain allowances for anticipated losses. At
December 23, 2000 and March 25, 2000, the allowance for doubtful accounts was
$200,000.

For the three months ended December 23, 2000, Solectron Corporation and
Cisco Systems represented 18% and 11%, respectively, of our sales of PC cards
and related products. For the nine months ended December 23, 2000, Solectron
Corporation represented 12% of our sales of PC cards and related products. For
the three months ended December 25, 1999, Solectron Corporation represented 13%
and Lucent Technologies 12% of our sales of PC cards and related products. For
the nine months ended December 25, 1999, Solectron Corporation and Lucent
Technologies each accounted for 10% of our sales of PC cards and related
products. Nortel Networks engages several contract manufacturers to complete the
final assembly of a majority of its products for which we have historically
supplied PC cards. Our combined sales of PC cards and related products to Nortel
Networks and these contract manufacturers for the three and nine months ended
December 23, 2000 were 27% and 22%, respectively. For the three and nine months
ended December 25, 1999, sales of PC cards and related products to Nortel
Networks and these contract manufacturers were 22% and 20%, respectively.
Centennial had accounts receivable from Solectron Corporation of $1,555,000 as
of December 23, 2000. A relatively small number of customers account for a
significant percentage of our sales. If any of these customers were to reduce
significantly the amount of business they conduct with us, our revenue could
decrease which could have a material adverse effect on our business, financial
condition and results of operations. In late 1999, Solectron Corporation merged
with one of our competitors, SMART Modular Technologies, which could result in a
decrease of sales. No other customers represented more than 10% of our sales of
PC cards and related products for the three and nine months ended December 23,
2000 and December 25, 1999.

Approximately 17% and 20% of our sales of PC cards and related products for
the three and nine months ended December 23, 2000, respectively, were outside
the United States, primarily in several Western European countries, Israel and
Canada. For the three and nine months ended December 25, 1999, approximately 20%
and 18%, respectively, of our sales were outside the United States. No one
country, other than the United States, comprised more than 10% of our sales for
each of the three and nine months ended December 23, 2000 and December 25, 1999.

3. EARNINGS PER SHARE

We compute net income per share in accordance with SFAS No. 128, "Earnings
Per Share." Basic net income per share excludes any dilutive effect of options,
warrants and convertible securities (which in our case are primarily stock
options and the Series B Convertible Preferred Stock). Diluted net income per
share includes all potentially dilutive securities using the treasury stock
method unless the effect of such potentially dilutive securities is
anti-dilutive.

CENTENNIAL TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - UNAUDITED

The following table sets forth the unaudited computation of income per
share (in thousands, except per share amounts):

Three months ended Nine months ended
December 23, December 25, December 23, December 25,
2000 1999 2000 1999
---- ---- ---- ----

Basic Income Per Share
Numerator:
Net income $ 2,800 $ 1,336 $ 11,500 $ 2,405
Denominator:
Common shares outstanding 3,269 3,204 3,240 3,177
--------- --------- --------- ---------
Basic income per share $ 0.86 $ 0.42 $ 3.55 $ 0.76
========= ========= ========= =========

Diluted Income Per Share
Numerator:
Net income $ 2,800 $ 1,336 $ 11,500 $ 2,405
Denominator:
Common shares outstanding 3,269 3,204 3,240 3,177
Effect of stock options and convertible securities 1,541 13 1,315 52
--------- --------- --------- ---------
Shares used in computing diluted earnings
per share 4,810 3,217 4,555 3,229
--------- --------- --------- ---------
Diluted income per share $ 0.58 $ 0.42 $ 2.52 $ 0.75
========= ========= ========= =========

4. INVENTORIES

Inventories consisted of (in thousands):

December 23, March 25,
2000 2000
---- ----

Raw material, primarily electronic components.... $ 13,963 $ 7,989
Work in process.................................. 3,202 454
Finished goods................................... 982 6,131
--------- ---------
$ 18,147 $ 14,574
========= ==========

We maintain levels of inventories that we believe are necessary based upon
assumptions concerning our growth, mix of sales, availability and pricing of raw
materials. Changes in those underlying assumptions could affect our estimates of
inventory valuation.

5. INVESTMENT IN CENTURY ELECTRONICS MANUFACTURING, INC.

Since October 1996, we have held an interest in Century Electronics
Manufacturing, Inc. ("Century"), a contract manufacturer. On January 9, 2001,
Century filed voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code. In the quarter ended December 23, 2000, Centennial
recorded an adjustment to its investment in Century resulting in a $1,700,000
charge to other income since management believes this investment has suffered a
decline, which is other-than-temporary. This reduced our carrying value of this
Century investment to $0.

6. DEBT

On June 2, 2000, we entered into a credit agreement with a bank for a
revolving credit facility of $4.0 million. This arrangement contains certain
limitations and covenants; the most restrictive of which is a covenant regarding
the maintenance of our liquidity, as defined in the credit agreement. Available
borrowings are based upon a percentage of accounts receivable. The credit
facility is secured by substantially all of our assets. We have had no
borrowings under this credit facility. This credit agreement expires on July 31,
2002.

CENTENNIAL TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - UNAUDITED

In the third quarter of fiscal 2001, we entered into a four-year capital
lease for new manufacturing equipment with a monthly payment of approximately
$10,000.

7. RELATED PARTY TRANSACTIONS

Beginning in March 2000, we began purchasing a significant portion of our
raw materials, mostly memory chips, directly from Intel Corporation, which holds
all of our issued and outstanding preferred stock, which currently is
convertible into 600,000 shares of common stock. Purchases directly from Intel
Corporation for the nine months ended December 23, 2000 were $18.0 million of
which $2.2 million is included in accounts payable as of December 23, 2000.
Included in other assets is $68,000 in loans made to our President and Chief
Executive Officer in the quarter ended December 23, 2000. These loans are due
and payable on December 31, 2001, and bear interest at the rate of 6.45%.

During the nine months ended December 23, 2000, Centennial had sales, in
the normal course of business, of $276,000 to Elan Digital Systems Limited
("Elan"), a company in which Centennial holds an investment accounted for under
the cost method, all of which is in accounts receivable at December 23, 2000.
Furthermore, Centennial made purchases directly from Elan during the nine months
ended December 23, 2000 of $217,000 of which $38,000 is included in accounts
payable at December 23, 2000.

8. CONTINGENCIES

LEGAL PROCEEDINGS

We are party from time to time to legal proceedings arising out of the
normal course of our business. We do not believe that any such legal
proceedings, either individually or in the aggregate, will have a material
adverse effect on our business, financial condition or results of operations. In
addition, we have been or are parties to other litigation as summarized below.

CLASS ACTION LITIGATION

We have been party to various class action lawsuits which were commenced
principally during the fiscal years ended March 31, 1997 and 1998. A substantial
number of the participants in these class action lawsuits participated in
settlements with us that became effective during the year ended March 31,1999.
The following discusses the history of these class action lawsuits, together
with the settlements that were entered into principally in the year ended March
31, 1999.

Since our announcement on February 11, 1997 that we were undertaking an
inquiry into the accuracy of our prior reported financial results, and that
preliminary information had raised questions as to whether reported results
contained material misstatements, approximately 40 purported class action
lawsuits were filed in or transferred to the United States District Court for
the District of Massachusetts. These complaints asserted claims against us and
our Board of Directors, officers and former independent accountants, among
others, under certain federal and state laws. These class action lawsuits were
purportedly brought by and on behalf of purchasers of our Common Stock (i)
between our initial public offering on April 12, 1994 and February 10, 1997 or
(ii) on February 25, 1997.

On February 9, 1998, these class action lawsuits were consolidated (the
"Consolidated Litigation"), and the lead counsel representing the plaintiffs in
the Consolidated Litigation filed a Stipulation of Settlement (the "Settlement
Agreement"), whereby we and certain of our officers and directors would be
released from liability arising from the allegations included in the
Consolidated Litigation. In return, we paid the plaintiffs in the Consolidated
Litigation $1.475 million in cash and issued to these plaintiffs' 854,300 shares
or 37% of our Common Stock. We also adopted certain corporate governance
policies and procedures. The Settlement Agreement became effective on July 20,
1998. All shares issued in connection with the Consolidated Litigation are
included in the weighted average shares outstanding calculation from July 20,
1998 forward.

CENTENNIAL TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - UNAUDITED

between cash and common stock of the $20 million provision for settlement of all
such shareholder litigation recorded during the year ended March 31, 1997
related to the Class Action Litigation. Accordingly, we reclassified certain
amounts in the year ended March 25, 2000 from the original settlement reserve to
accrued liabilities, representing the Additional Settlement Agreement described
above and a remaining estimate of the probable costs to be incurred in
connection with the remaining parties not a party to the Settlement Agreement or
the Additional Settlement Agreement.

SECURITIES AND EXCHANGE COMMISSION INVESTIGATION

In February 1997, we were notified that the Boston District Office of the
Securities and Exchange Commission ("SEC") was conducting an investigation of
us. We cooperated fully with the SEC and on September 26, 2000 we entered into
an administrative proceeding fully resolving the issues arising from the conduct
of former members of our senior management and the restatement of certain
financial statements.

WEBSECURE LITIGATION

On and after March 26, 1997, several complaints were filed against
WebSecure, certain officers, directors and underwriters of WebSecure, and us in
the United States District Court for the District of Massachusetts by plaintiffs
purporting to represent classes of shareholders who purchased stock of
WebSecure, Inc. ("WebSecure") between December 5, 1996 and February 27, 1997.
The claims against us included alleged violations of Sections 11 and 15 of the
Securities Act of 1933 (the "WebSecure Securities Litigation"). In fiscal 1997,
we established a reserve of $1.2 million in connection with the expected
settlement of this litigation.

In the year ended March 25, 2000, we settled the WebSecure Securities
Litigation in return for the issuance of 43,125 shares of our Common Stock, of
which 14,375 shares had been issued as of June 24, 2000 and 28,750 shares were
issued on January 8, 2001, and the payment of $50,000 for notice and
administrative costs. In the year ended March 25, 2000, we revised our estimate
of the expected cost to resolve this matter based on the final settlement
amounts, which resulted in income of $940,000. All shares to be issued in
connection with this settlement are included in our weighted average shares
outstanding calculation from September 17, 1999 forward.

OTHER

In May 12, 2000, we received a complaint from Mr. Dennis M. O'Connor
alleging that he is owed approximately $485,000 in connection with legal
services provided by O'Connor, Broude & Aronson prior to May 12, 1997. Because
of the early stage of this litigation, we are not able to make an assessment as
to its likely outcome.

On July 13, 2000, we received a complaint from Mr. Thomas L. DePetrillo
alleging that he was owed approximately $1,000,000 in connection with securities
that Mr. DePetrillo claims were not delivered on a timely basis. This lawsuit
included allegations substantially identical to those asserted by Mr. DePetrillo
in a lawsuit filed against us in July 1998. In October 2000, we settled the
complaint from Mr. DePetrillo in return for a cash payment of $375,000.

On February 2, 2001, we were notified of a complaint filed against us by Onyx,
Inc. ("Onyx"). Onyx served as one of our exclusive sales representatives for
certain products in five New England states during the mid-1990's. Onyx alleges
that we failed to provide it with an appropriate accounting of commissions due
it and failed to pay all commissions due. Because of the early stage of this
litigation, we are unable to make any assessment as to its likely outcome.

9. SUBSEQUENT EVENT

MERGER AGREEMENT

CENTENNIAL TECHNOLOGIES, INC.

our outstanding stock options to be assumed by Solectron in connection with the
transaction. Based upon the average closing price of Solectron common stock
during the week prior to the agreement, net of the proceeds from the exercise of
stock options, the net purchase price of the transaction will be approximately
$108 million. Using our capitalization at January 22, 2001 and assuming
conversion of our outstanding series B convertible preferred stock, the exchange
ratio for the transaction is expected to be approximately 0.536 shares of common
stock of Solectron for each share of our common stock. The transaction will be
accounted for as a purchase and is expected to close during the second quarter
of calendar year 2001. The completion of the transaction is subject to
governmental approvals, including antitrust clearance, approval of the
transaction by our stockholders and other customary closing conditions.

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

CAUTIONARY STATEMENT

Except for historical information contained herein, the discussions in this
document contain forward-looking statements within the meaning of the federal
securities laws. These forward-looking statements include statements regarding
anticipated revenues and expenses, price competition and erosion, expansion into
new markets, future sales mix, future supply of raw materials, gross margins,
raw materials inventory procurement practices, Centennial's customer base,
future developments involving certain investments, future availability of
financing and our potential merger with Solectron Corporation. Forward-looking
statements involve a number of risks and uncertainties, including, but not
limited to, those (i) discussed below, (ii) discussed under the heading "Factors
That May Affect Future Results", and (iii) identified from time to time in our
periodic filings with the SEC under the Securities Exchange Act of 1934, as
amended, including, specifically, our annual report on Form 10-K for the year
ended March 25, 2000 and our quarterly reports on Form 10-Q since March 25, 2000
and our 8-K filed on January 26, 2001 relating to the agreement and plan of
merger with Solectron Corporation. These risks and uncertainties could cause
actual results to differ materially from these forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements. We assume no obligation to update these forward-looking statements
to reflect events or changes in circumstances after the date hereof.

OVERVIEW

GENERAL

We primarily focus on design, manufacturing and marketing of PC cards used
for industrial and commercial applications. Our main customers are Original
Equipment Manufacturers (OEMs) and Value Added Resellers (VARs). Our PC cards
provide added functionality to devices containing microprocessors by supplying
increased storage capacity, communications capabilities and programmed software
for specialized applications.

On November 30, 2000, after receiving approval for listing, Centennial
commenced trading on the Nasdaq National Market under the trading symbol CENL.

On January 22, 2001, we entered into an Agreement and Plan of Merger and
Reorganization with Solectron Corporation ("Solectron"). Under the terms of the
agreement, Solectron will issue or reserve for issuance upon the exercise of
assumed stock options approximately 2.96 million shares of Solectron common
stock in exchange for all of our fully diluted equity, including all of our
outstanding stock options to be assumed by Solectron in connection with the
transaction. Based upon the average closing price of Solectron common stock
during the week prior to the agreement, net of the proceeds from the exercise of
stock options, the net purchase price of the transaction will be approximately
$108 million. Using our capitalization at January 22, 2001 and assuming
conversion of our outstanding series B convertible preferred stock, the exchange
ratio for the transaction is expected to be approximately 0.536 shares of common
stock for each share of our common stock. The transaction will be accounted for
as a purchase and is expected to close during the second quarter of calendar
year 2001. The completion of the transaction is subject to governmental
approvals, including antitrust clearance, approval of the transaction by our
stockholders and other customary closing conditions.

The following discussion and analysis should be read in conjunction with
the unaudited consolidated condensed financial statements and notes thereto
included elsewhere in this Quarterly Report on Form 10-Q and in conjunction with
our Annual Report on Form 10-K for the fiscal year ended March 25, 2000, along
with any other filing made with the SEC since March 25, 2000 under the
Securities and Exchange Act of 1934, as amended.

RESULTS OF OPERATIONS

The following table sets forth certain consolidated condensed statements of
income data of Centennial expressed as a percentage of net sales:

Three months ended Nine months ended
------------------ -----------------
December 23, December 25, December 23, December 25,
2000 1999 2000 1999
---- ---- ---- ----

Net sales......................................... 100.0% 100.0% 100.0% 100.0%
Cost of goods sold................................ 60.1 60.8 59.5 65.1
---------- ---------- ---------- ----------
Gross profit............................ 39.9 39.2 40.5 34.9

Operating expenses:
Research and development..................... 2.2 5.2 2.8 4.7
Selling, general and administrative.......... 15.2 19.0 13.7 23.3
---------- ---------- ---------- ----------
Operating income ....................... 22.5 15.0 24.0 6.9

Net interest income .............................. 0.2 0.9 - 1.0
Other income, net................................. (8.0) - (2.9) 2.8
---------- ---------- ---------- ----------
Income before taxes..................... 14.7 15.9 21.1 10.7

Provision for income taxes....................... 1.4 0.3 1.4 0.2
---------- ---------- ---------- ----------
Net income.............................. 13.3% 15.6% 19.7% 10.5%
========== ========== ========== ==========

NET SALES

Net sales increased 145% to $21.0 million in the third quarter of fiscal
2001 ended December 23, 2000 compared to $8.6 million for the same period a year
ago. This increase in sales was primarily due to an 81% increase in the average
selling price of our products sold in the third quarter of fiscal 2001 as
compared to the third quarter of fiscal 2000, combined with a 34% increase in
the volume of PC cards sold during the same period and $0.8 million of sales of
electronic components, while there were no sales of electronic components in the
prior year. Our December 1999 acquisition of the flash memory card business of
Intel Corporation combined with the addition of new customers and higher volumes
with some existing customers contributed to the increase in the volume of PC
cards sold during the third quarter of fiscal 2001. Increasing component costs,
combined with a relative increase in the product mix toward more expensive
products, contributed to the increase in the average selling price of our
products. Net sales increased 155% to $58.4 million for the nine months ended
December 23, 2000 compared to $22.9 million for the nine months ended December
25, 1999. For the nine months ended December 23, 2000, there were also
approximately $8.8 million of sales of electronic components included in net
sales that resulted in a gross profit of approximately $4.4 million. There were
no sales of electronic components in the prior year. In certain parts of the
Management's Discussion and Analysis Section, we will supplementally discuss
sales of PC cards and related products, as we believe this to be more meaningful
than total sales because total sales includes sales of electronic components
which is not the focus of our business and may not reoccur.

Over the past few quarters, we believe some of our competitors have had
difficulty obtaining certain components and our success in obtaining such
components has given us a competitive advantage. We believe these competitors
are now able to more readily purchase such components, which may increase
competitive pressures and may have an adverse effect on our revenues and gross
margins, which could have a material adverse effect on our business, financial
condition and results of operations.

Corporation represented 12% of our sales of PC cards and related products. For
the three months ended December 25, 1999, Solectron Corporation represented 13%
and Lucent technologies 12% of our sales of PC cards and related products. For
the nine months ended December 25,1999, Solectron Corporation and Lucent
Technologies each accounted for 10% of our sales of PC cards and related
products. Nortel Networks engages several contract manufacturers to complete the
final assembly of a majority of its products for which we have historically
supplied PC cards. Our combined sales of PC cards and related products to Nortel
Networks and these contract manufacturers for the three and nine months ended
December 23, 2000 were 27% and 22%, respectively. For the three and nine months
ended December 25, 1999, sales of PC cards and related products to Nortel
Networks and these contract manufacturers were 22% and 20%, respectively.
Solectron Corporation merged with one of our competitors, SMART Modular
Technologies, which could result in a decrease of sales. No other customers
represented more than 10% of our sales of PC cards and related products for the
three and nine-month periods ended December 23, 2000 and December 25, 1999.
Centennial had accounts receivable from Solectron Corporation of $1,555,000 as
of December 23, 2000. A relatively small number of customers account for a
significant percentage of our sales. If any of these customers were to reduce
significantly the amount of business they conduct with us, our revenue could
decrease which could have a material adverse effect on our business, financial
condition and results of operations.

On December 29, 1999, we acquired the flash memory card business of Intel
Corporation. This acquisition was accounted for as a purchase combination in the
fourth quarter of fiscal 2000. For the quarter ended December 23, 2000, we
recorded a $0.1 million payable to Intel Corporation as additional consideration
which was also recorded as an intangible asset based on orders received and
scheduled for shipment during the measurement period.

GROSS PROFIT

Gross profit from the sale of PC cards and related products increased 142%
to $8.1 million or 40% of sales for the three months ended December 23, 2000
compared to $3.4 million or 39% of sales for the same period a year ago. Gross
profit from the sales of PC cards and related products increased 142% to $19.3
million or 39% of related sales for the first nine months of fiscal 2001
compared to $8.0 million or 35% of sales for the same period a year ago. The
increase in gross profit is attributable to the increase in revenues driven by
higher average selling prices and increased volume. The higher gross margin
rates are primarily due to increased efficiencies related to the higher revenue
levels combined with a relative increase in the product mix of sales toward
higher margin products and higher average selling prices for our products. For
the nine months ended December 23, 2000, there were also approximately $8.8
million of sales of electronic components that resulted in a gross profit on a
proforma basis of approximately $4.4 million. There were no sales of electronic
components in the prior year. Sales of electronic components is not the focus of
our business; however we may have some sales of electronic components in the
future, although we may not assure you as to the nature, timing or amount of
sales of electronic components, if any.

RESEARCH AND DEVELOPMENT

Our research and development expenditures were $0.5 million for the
quarter ended December 23, 2000 compared to $0.4 million for the same period a
year ago. For the first nine months of fiscal 2001, research and development
costs increased 54% to $1.6 million from $1.1 million in the same period of
fiscal 2000. The higher research and development costs are generally due to
higher engineering material expenditures combined with an increased percentage
of employees (both new and existing) focused on research and development
projects.

SELLING, GENERAL AND ADMINISTRATIVE

Selling, general and administrative expenses were $3.2 million for the
quarter ended December 23, 2000 compared to $1.6 million in the same period a
year ago. Selling, general and administrative expenses were $8.0 million for the
nine months of fiscal 2001, compared to $5.3 million in the same period of
fiscal 2000. The increase in selling, general and administrative expenses for
the three and nine months ended December 23, 2000, as compared to the same
periods a year ago, is primarily due to an increase in personnel-related costs
and due to significant bonuses earned by senior management and approved by the
Board of Directors. We expect to incur significant professional and advisory
fees in connection with our efforts to merge with Solectron Corporation.

OTHER INCOME

Net interest income for the three months ended December 23, 2000 was
$48,000, compared to net interest income of $80,000 for the three months ended
December 25, 1999. Net interest expense was $23,000 for the nine months ended
December 23, 2000 and net interest income was $230,000 for the nine months ended
December 25, 1999. The change to net interest expense (income) is due to
interest expense on the $4.0 million note payable to Intel Corporation combined
with less interest income due to reduced cash balances. The note was repaid in
full in September 2000.

INCOME TAXES

We estimate that the effective tax rate for fiscal 2001 will be
approximately 6%, an increase from approximately 2% in fiscal 2000. The increase
is attributable to higher profitability and the anticipated utilization of our
remaining state net operating loss carryforwards.

EARNINGS PER SHARE

In December 1999, we issued preferred stock to Intel Corporation related to
the acquisition of its flash memory card business. As a result of this
transaction, diluted weighted average outstanding shares increased by 600,000
shares for the three and nine months ended December 23, 2000 as compared to the
same periods ended December 25, 1999. Additionally, the effect of stock options
increased diluted weighted average outstanding shares by approximately 900,000
for the three months ended December 23, 2000 as compared to December 25, 1999
and 700,000 for the nine months ended for the same periods.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, we have financed our operating activities primarily from
public and private offerings of equity securities, loans from financial
institutions and positive cash flows from operations. At December 23, 2000, we
had cash and cash equivalents of $9.1 million. We believe that the existing cash
and cash equivalents, together with cash flow from operations and available
financing arrangements, including our revolving credit line, will be sufficient
to meet our current anticipated working capital and capital expenditure
requirements for the foreseeable future.

OPERATING ACTIVITIES

During the first nine months of fiscal 2001, working capital increased $13.5
million to $24.8 million at December 23, 2000, compared to working capital of
$11.3 million at March 25, 2000. This increase is due principally to the net
income of $11.5 million in the nine months ended December 23, 2000.

INVESTING TRANSACTIONS

Net capital expenditures amounted to $533,000 for the nine months ended
December 23, 2000 compared to $307,000 for the nine months ended December 25,
1999.

FINANCING TRANSACTIONS

In the third quarter of fiscal 2001, we entered into a four-year capital
lease for new manufacturing equipment with a monthly payment of approximately
$10,000.

INVESTMENT IN CENTURY ELECTRONICS MANUFACTURING, INC.

Since October 1996, we have held an interest in Century Electronics
Manufacturing, Inc. ("Century"), a contract manufacturer. On January 9, 2001,
Century filed voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code. In the quarter ended December 23, 2000, Centennial
recorded an adjustment to its investment in Century resulting in a $1,700,000
charge to other income since management believes that this investment has
suffered a decline, which is other-than-temporary. This reduced our carrying
value of this Century investment to $0.

FACTORS THAT MAY AFFECT FUTURE RESULTS

From time to time, information we provided or statements made by our
employees may contain forward-looking information. Our actual results may differ
materially from those projections or suggestions made in such forward-looking
information as a result of various potential risks and uncertainties including,
but not limited to, the factors discussed below. We assume no obligation to
update these forward-looking statements to reflect events or changes in
circumstances after the date hereof.

CHANGES IN OUR ASSUMPTIONS CONCERNING OUR GROWTH, MIX OF SALES AND AVAILABILITY
AND PRICING OF RAW MATERIALS COULD ADVERSELY AFFECT OUR ESTIMATES OF INVENTORY
VALUATION.

We maintain levels of inventories that we believe are appropriate based
upon assumptions concerning our growth, mix of sales, and availability and
pricing of raw materials. Changes in those underlying assumptions could cause us
to have too much, too little or an improper mix of inventory. This could
increase our costs, decrease our revenues and have a material adverse effect on
our business, financial condition and results of operations.

We purchase some key components from single source vendors for which
alternative sources are not currently available. Furthermore, we do not maintain
long-term supply agreements with our vendors. The inability to develop
alternative sources for these single source components or to obtain sufficient
quantities of components could result in delays or reductions in product
shipments, or higher prices for these components, or both, any of which could
materially and adversely affect our business, financial condition and results of
operations. We cannot assure you that one or more of our vendors will not reduce
supplies to us.

WE DEPEND ON A SMALL NUMBER OF LARGE CUSTOMERS TO PURCHASE OUR PRODUCTS, THE
LOSS OF ONE OR MORE OF WHICH COULD ADVERSELY IMPACT OUR RESULTS.

For the three months ended December 23, 2000, Solectron Corporation and
Cisco Systems represented 17% and 11%, respectively, of our sales of PC cards
and related products. For the nine months ended December 23, 2000, Solectron
Corporation represented 12% of our sales of PC cards and related products. For
the three months ended December 25, 1999, Solectron Corporation represented 13%
of our sales of PC cards and related products. For the nine months ended
December 25,1999, Solectron Corporation and Lucent Technologies each accounted
for 10% of our sales of PC cards and related products. Nortel Networks engages
several contract manufacturers to complete the final assembly of a majority of
its products for which we have historically supplied PC cards. Our combined
sales of PC cards and related products to Nortel Networks and these contract
manufacturers for the three and nine months ended December 23, 2000 were 27% and
22%, respectively. For the three and nine months ended December 25, 1999, sales
of PC cards and related products to Nortel Networks and these contract
manufacturers were 22% and 20%, respectively. No other customers represented
more than 10% of our sales of PC cards and related products for the three and
nine-month periods ended December 23, 2000 and December 25, 1999. Centennial had
accounts receivable from Solectron Corporation of $1,555,000 as of December 23,
2000. A relatively small number of customers account for a significant
percentage of our sales. If any of these customers were to reduce significantly
the amount of business they conduct with us, our revenue could decrease which
could have a material adverse effect on our business, financial condition and
results of operations. In late 1999, Solectron Corporation merged with one of
our competitors, SMART Modular Technologies, which could result in a decrease of
sales.

We generally enter into individual purchase orders with our customers and
have no firm long-term volume commitments from any of our major customers. We
have experienced fluctuations in order levels from period to period and expect
that we will continue to experience such fluctuations in the future. Our
business, financial condition and results of operations depend in a significant
part on our ability to obtain orders from existing and new customers, as well as
on the financial condition and success of these customers. Therefore, any
adverse factors affecting any of our customers or their customers could have a
material adverse effect on our business, financial condition and results of
operations. Frequent mergers, consolidations, acquisitions, corporate

restructurings and changes in management characterize the industries served by
us. From time to time, we have experienced reductions in purchase orders from
customers as a result of such events. We cannot assure you that such events
involving our customers will not result in a significant reduction in the level
of our sales to such customers or the termination of our relationship with such
customers. In addition, the percentage of our sales to individual customers can
and does fluctuate from period to period. Customer orders can be canceled and
volume levels can be changed or delayed.

A majority of our sales are to customers in the electronics industries,
which is subject to rapid technological change and product obsolescence. The
electronics industry is also subject to economic cycles and has experienced, and
is likely to experience, fluctuations in demand. Economic reports suggest that a
weakening of the economy in general and of the electronics industries and
telecommunications in particular is occurring. As a result, we have experienced
an increase in the cancellation of actual and proposed orders. This may
negatively impact our revenue levels. In addition, an industry-wide decline in
sales is likely to result in more aggressive pricing pressures, which may reduce
our gross margin rates. We anticipate that a significant portion of our sales
for the foreseeable future will continue to be concentrated in a small number of
customers in the electronics industry.

INTENSE COMPETITION COULD REDUCE OUR MARKET SHARE AND HARM OUR FINANCIAL
PERFORMANCE.

The market in which we compete is intensely competitive. We compete with
manufacturers of PC cards and related products, including M-Systems Flash Disk
Pioneers Ltd., SanDisk Corporation, Simple Technologies, SMART Modular
Technologies, Inc. (a subsidiary of Solectron Corporation), Viking Components,
Inc. and White Electronic Designs Corporation as well as with electronic
component manufacturers who also manufacture PC cards, including Hitachi
Semiconductor, Inc., Mitsubishi Electric Corporation and Sharp Electronics
Corporation. Certain of these competitors supply us with raw materials,
including electronic components, which are occasionally, subject to
industry-wide allocation and were during the nine months ended December 23,
2000. These competitors may have the ability to obtain or manufacture products
at lower costs than we can. In addition, many of our competitors or potential
competitors have greater name recognition, larger installed bases of customers,
more extensive engineering, manufacturing, marketing, distribution and support
capabilities and greater financial, technological and personnel resources than
we do. We expect competition to increase in the future from existing competitors
and from other companies that may enter our existing or future markets with
similar or alternative products that may be less costly or provide additional
features.

We believe that our ability to compete successfully depends on a number of
factors, including the following:

o product quality and performance o order turnaround
o provision of competitive design capabilities o timely response to advances in technology
o timing of new product introductions by o production efficiency
us, our customers and competitors o number and nature of our competitors
o price in a given market
o ability to obtain raw materials o general market and economic conditions

Over the past few quarters, we believe some of our competitors have had
difficulty obtaining certain components and our success in obtaining such
components has given us a competitive advantage. We now believe these
competitors are able to more readily purchase such components, which may
increase competitive pressures and may have an adverse effect on our revenues
and gross margins, which could have a material adverse effect on our business,
financial condition and results of operations.

In addition, market conditions may lead to intensified price competition
for our products and services, which could materially and adversely affect our
business, financial condition and results of operations. There can be no
assurance that we will compete successfully in the future.

WE HAVE HISTORICALLY RELIED ON ONE PRODUCT LINE AND REDUCED DEMAND FOR THIS
PRODUCT LINE WOULD HARM OUR FINANCIAL PERFORMANCE AND FINANCIAL CONDITION.

PC cards and related services constituted the vast majority of our sales
over the past few years. The market for PC cards is continually evolving and we
cannot assure you that computing and electronic equipment that utilizes PC cards
will not be modified to render our PC cards obsolete or otherwise have the
effect of reducing demand for our PC cards. In addition, we face intense
competition from competitors that have greater financial, marketing and
technological resources than we have. This competition may reduce demand for our

PC cards. Decreased demand for the our PC cards as a result of technological
change, competition or other factors would have a material adverse effect on our
business, financial condition and results of operations.

REDUCTIONS IN OUR AVERAGE SALES PRICE AS A RESULT OF PRICING COMPETITION OR
CHANGES IN OUR PRODUCT MIX MAY REDUCE OUR GROSS MARGIN AND HARM OUR OVERALL
FINANCIAL PERFORMANCE.

Although we have recently experienced an increase in our average sales
prices, we have in the past experienced, and may in the future experience,
declining average sales prices for our products. The markets in which we compete
are characterized by intense competition. Therefore, we expect to experience
increasing pricing pressures from our customers in future periods, which may
result in declines in average sales prices for our products. We believe that we
must continue to achieve manufacturing cost reductions, develop new products
that incorporate customized features and increase our volume of PC card sales in
order to offset the effect of possible declining average sales prices. If we are
not able to achieve such cost reductions, develop new customized products or
increase our unit sales volumes, our business, financial condition and results
of operations could be materially adversely impacted. In addition, a relative
increase in the mix of our business towards lower margin, non-custom PC cards or
other products could have a material adverse effect on our business.

OUR MARKET PRICE MAY BE NEGATIVELY IMPACTED IF OUR MERGER WITH SOLECTRON
CORPORATION IS NOT CONCLUDED.

On January 22, 2001, we entered into a merger agreement with Solectron
Corporation. Consequently, we believe our stock price has begun to take into
account the likelihood of the merger being concluded. Failure to consummate this
merger may have a significant negative impact on the market price of our common
stock. While we are working to complete the merger prior to or during the second
quarter of calendar year 2001, the consummation of the merger is subject to
governmental approvals, including antitrust clearance, approval of the
transaction by our stockholders and other customary closing conditions, many of
which are beyond our control.

OUR QUARTERLY RESULTS MAY FLUCTUATE SIGNIFICANTLY AS A RESULT OF A VARIETY OF
FACTORS WHICH MAY NEGATIVELY IMPACT THE MARKET PRICE OF OUR COMMON STOCK.

Our quarterly and annual operating results have fluctuated significantly in
the past and we expect that they will continue to fluctuate in the future. This
fluctuation is a result of a variety of factors, including the following:

o timing of receipt and delivery of o competitive pricing pressures
significant orders for our products o changes in raw material costs
o changes in customer and product mix o production difficulties
o quality of our products o write-downs of investments in other companies
o exchange rate fluctuations o market acceptance of new or enhanced versions
o litigation settlements and revisions of of products
estimates in connection with legal matters o raw material shortages

Other factors, some of which are beyond our control, may also cause
fluctuations in our results of operations. We have short lead times from
customers, and accordingly do not have a significant backlog. Additionally, as
is the case with many high technology companies, a significant portion of our
orders and shipments often occur towards the end of a quarter. As a result,
revenues for a quarter are not predictable, and our revenues may shift from one
quarter to the next, having a significant effect on reported results.

OUR TRADING PRICE MAY FLUCTUATE SIGNIFICANTLY, WHICH MAY NEGATIVELY IMPACT OUR
STOCKHOLDERS' ABILITY TO OBTAIN LIQUIDITY AT ACCEPTABLE LEVELS, IF AT ALL.

The trading price of our common stock may fluctuate widely in response to,
among other things, the following:

o quarter-to-quarter operating results o industry conditions
o awards of orders to us.. o new product or product development
or our competitors..... line-up announcements by us or our competitors
o changes in earnings estimates by analysts o the perceived likelihood of
consummating the merger with Solectron

We cannot assure you that our future performance will meet the expectations
of analysts or investors. In addition, the volatility of the stock markets may
cause wide fluctuations in trading prices of securities of high technology
companies.

The trading volumes of our stock have historically been low. The exercise
and sale of stock options or the conversion and sale of the preferred stock may
have a negative impact on our trading price.

THE LOSS OF OUR SENIOR MANAGEMENT OR OTHER KEY PERSONNEL COULD ADVERSELY AFFECT
OUR BUSINESS.

Our success depends to a significant degree upon the efforts and abilities
of members of our senior management and other key personnel, including technical
personnel. The loss of any of these individuals could have a material adverse
effect on our business, financial condition and results of operations. Our
business also depends upon our ability to continue to attract and retain senior
managers and skilled technical employees. Failure to attract and retain such
personnel could materially and adversely affect our business, financial
condition and results of operations.

FAILURE TO DEVELOP ENHANCEMENTS TO OUR PRODUCTS, NEW APPLICATIONS AND FEATURES
THAT RESPOND TO THE CHANGING NEEDS OF OUR CUSTOMERS, RAPID TECHNOLOGICAL CHANGE
AND ADVANCES INTRODUCED BY OUR COMPETITORS WILL IMPAIR OUR ABILITY TO INCREASE
OUR MARKET SHARE AND EXPAND OUR BUSINESS.

Rapid technological change, evolving industry standards and rapid product
obsolescence characterize the markets for our products. Rapid technological
development substantially shortens product life cycles, and our growth and
future success will depend upon our ability, on a timely basis, to develop and
introduce new products, to enhance existing products and to adapt products for
various industrial applications and equipment platforms. In addition, even after
customer acceptance of these products, we will need to be able to promptly
implement enhancements and adaptations in response to the these forces. We have
limited resources compared to our competitors and focus our development efforts
at any given time to a relatively narrow scope of development projects. We
cannot assure you that we will select the correct projects for development or
that our development efforts will be successful. In addition, no assurance can
be given that we will not experience difficulties that could delay or prevent
the successful development, introduction or marketing of new products, that new
products and product enhancements will meet the requirements of the marketplace
and achieve market acceptance, or that our current or future products will
conform to applicable industry standards. If we are unable to introduce new
products or enhancements on a timely basis, our business, financial condition
and results of operations could be adversely affected.

WE MAY BE UNABLE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS, WHICH COULD
SIGNIFICANTLY HARM OUR ABILITY TO GAIN MARKET SHARE AND INCREASE OUR REVENUES.

Our products require technical know-how to engineer and manufacture. To the
extent proprietary technology is involved, we rely upon trade secrets that we
seek to protect, in part, through confidentiality agreements with certain
employees, consultants and other parties. We historically have not sought to
protect our proprietary information through patents or registered trademarks.
There can be no assurance that our products will not infringe on patents held by
others. We may be involved from time-to-time in litigation to determine the
enforceability, scope and validity of our rights. Litigation could result in
substantial cost to us and could divert the attention and time of our management
and technical personnel from our operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our financial instruments consist principally of cash and cash equivalents,
accounts receivable, accounts payable and other accrued expenses. We believe
that all of the carrying amounts approximate fair value.

PART II- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

CLASS ACTION LITIGATION

We have been party to various class action lawsuits which were commenced
principally during the fiscal years ended March 31, 1997 and 1998. A substantial
number of the participants in these class action lawsuits participated in
settlements with us that became effective during the year ended March 31, 1999.
The following discusses the history of these class action lawsuits, together
with the settlements that were entered into principally in the year ended March
31, 1999.

A number of class members elected not to participate in the Settlement
Agreement described above. In September 1999, we reached an agreement with a
number of these parties. In return, we paid $500,000 in cash to settle these
claims (the "Additional Settlement Agreement"). For the remaining parties who
did not participate in the Settlement Agreement or the Additional Settlement
Agreement, we believe that the applicable Federal statue of limitations has
likely expired and that we do not have material exposure to these parties.
During the year ended March 25, 2000, we revised our estimate of the allocation
between cash and common stock of the $20 million provision for settlement of all
such shareholder litigation recorded during the year ended March 31, 1997
related to the Class Action Litigation. Accordingly, we reclassified certain
amounts in the year ended March 25, 2000 from the original settlement reserve to
accrued liabilities, representing the Additional Settlement Agreement described
above and a remaining estimate of the probable costs to be incurred in
connection with the remaining parties not a party to the Settlement Agreement or
the Additional Settlement Agreement.

SECURITIES AND EXCHANGE COMMISSION INVESTIGATION

WEBSECURE LITIGATION

In the year ended March 25, 2000, we settled the WebSecure Securities
Litigation in return for the issuance of 43,125 shares of our Common Stock, of
which 14,375 shares had been issued as of June 24, 2000, and 28,750 shares were
issued on January 8, 2001, and the payment of $50,000 for notice and
administrative costs. In the year ended March 25, 2000, we revised our estimate
of the expected cost to resolve this matter based on the final settlement
amounts, which resulted in income of $940,000. All shares to be issued in
connection with this settlement are included in the weighted average shares
outstanding calculation from September 17, 1999 forward.

OTHER

On May 12, 2000, we received a complaint from Mr. Dennis M. O'Connor
alleging that he is owed approximately $485,000 in connection with legal
services provided by O'Connor, Broude & Aronson prior to May 12, 1997. Because
of the early stage of this litigation, we are not able to make an assessment as
to its likely outcome.

On February 2, 2001, we were notified of a complaint filed against us by Onyx,
Inc ("Onyx"). Onyx served as one of our exclusive sales representatives for
certain products in five New England states during the mid-1990's. Onyx alleges
that we failed to provide it with an appropriate accounting of commissions due
it and failed to pay all commissions due. Because of the early stage of this
litigation, we are unable to make any assessment as to its likely outcome.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Not Applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable

ITEM 5. OTHER INFORMATION

SOLECTRON MERGER AGREEMENT

NASDAQ LISTING

On November 30, 2000, after receiving approval for listing, Centennial commenced
trading on the Nasdaq National Market under the trading symbol CENL.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits. The exhibits listed on the Exhibit Index filed as a part of this
Quarterly Report on Form 10-Q are incorporated herein by reference.

(b) Reports on Form 8-K. During the quarter ended December 23, 2000,
Centennial filed no reports on Form 8-K.

ITEM
NO. DESCRIPTION

2.1 Agreement and Plan of Merger and Reorganization by and among Solectron
Corporation, Centers Acquisition Corporation and Centennial
Technologies, Inc., dated as of January 22, 2001. (1)

10 Lease Agreement by and between Centennial Technologies, Inc. and Global
Vantage Ltd. dated September 29, 2000.

27 Financial Data Schedule

(1) Incorporated by reference to Centennial's Report on Form 8-K filed
with the Securities and Exchange Commission on January 26, 2001.

SIGNATURES

IN ACCORDANCE WITH SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, THE REGISTRANT CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

CENTENNIAL TECHNOLOGIES, INC.

Dated: February 6, 2001 By: /s/ L. Michael Hone
-------------------------------------
L. Michael Hone
President and Chief Executive Officer

Dated: February 6, 2001 By: /s/ Richard J. Pulsifer
-------------------------------------
Richard J. Pulsifer
Vice President, Chief Financial
Officer and Secretary