-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 Jf0R6su2L0ZXF7EPy2Axhk5K84aDVYHT6POP2h9Lj0xLpL3eouyE117RcSEBtHwA
 i781QuYX3hwn0uqSreT69g==

<SEC-DOCUMENT>0001169232-04-005995.txt : 20041207
<SEC-HEADER>0001169232-04-005995.hdr.sgml : 20041207
<ACCEPTANCE-DATETIME>20041207090118
ACCESSION NUMBER:		0001169232-04-005995
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20041031
FILED AS OF DATE:		20041207
DATE AS OF CHANGE:		20041207

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			COMTECH TELECOMMUNICATIONS CORP /DE/
		CENTRAL INDEX KEY:			0000023197
		STANDARD INDUSTRIAL CLASSIFICATION:	RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663]
		IRS NUMBER:				112139466
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0731

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-07928
		FILM NUMBER:		041187476

	BUSINESS ADDRESS:	
		STREET 1:		105 BAYLIS RD
		CITY:			MELVILLE
		STATE:			NY
		ZIP:			11747
		BUSINESS PHONE:		6317778900

	MAIL ADDRESS:	
		STREET 1:		105 BAYLIS ROAD
		CITY:			MELVILLE
		STATE:			NY
		ZIP:			11747

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	COMTECH INC
		DATE OF NAME CHANGE:	19870503

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	COMTECH TELECOMMUNICATIONS CORP
		DATE OF NAME CHANGE:	19831215

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	COMTECH LABORATORIES INC
		DATE OF NAME CHANGE:	19780425
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d61518_10-q.htm
<DESCRIPTION>QUARTERLY REPORT
<TEXT>
<html>
<head>
<title></title>
</head>
<body>
<BR>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td align="center"><p><font color="#000000" size="2"><b> <font face="Times New Roman, Times, serif">UNITED STATES SECURITIES AND EXCHANGE COMMISSION<br>
    </font></b><font face="Times New Roman, Times, serif">Washington, D.C. 20549</font></font></p>
    </td>
  </tr>
  <tr>
    <td align="center"><font color="#000000">&nbsp;</font></td>
  </tr>
  <tr>
    <td align="center"><hr width="20%" size="1" noshade></td>
  </tr>
  <tr>
    <td align="center"><font color="#000000" size="2" face="Times New Roman, Times, serif"><b>FORM 10-Q</b></font></td>
  </tr>
  <tr>
    <td align="center"><hr width="20%" size="1" noshade></td>
  </tr>
  <tr>
    <td align="center"><font color="#000000">&nbsp;</font></td>
  </tr>
  <tr>
    <td> <font color="#000000" size="2" face="Times New Roman, Times, serif">(Mark One) </font></td>
  </tr>
  <tr>
    <td><font color="#000000">&nbsp;</font></td>
  </tr>
</table>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%"><font color="#000000" size="2" face="Times New Roman, Times, serif">|X|</font></td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"> Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 </font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr align="center">
    <td colspan="2"><font color="#000000" size="2" face="Times New Roman, Times, serif"><b> For the quarterly period ended October 31, 2004</b></font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">|_|</font></td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"> Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 </font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr align="center">
    <td colspan="2"><font color="#000000" size="2" face="Times New Roman, Times, serif"> Commission File Number: 0-7928 </font></td>
  </tr>
  <tr align="center">
    <td colspan="2"><font color="#000000">&nbsp;</font></td>
  </tr>
  <tr align="center">
    <td colspan="2"><font color="#000000"><img src="logo.gif" width="180" height="41"></font></td>
  </tr>
  <tr align="center">
    <td colspan="2"><font color="#000000">&nbsp;</font></td>
  </tr>
  <tr align="center">
    <td colspan="2"> <font color="#000000" size="2" face="Times New Roman, Times, serif">(Exact name of registrant as specified in its charter) </font></td>
  </tr>
  <tr align="center">
    <td colspan="2"><font color="#000000">&nbsp;</font></td>
  </tr>
</table>
<table width="600" cellpadding="0" cellspacing="0">
  <tr align="center" valign="bottom">
    <td width="55%"><font color="#000000" size="2" face="Times New Roman, Times, serif"><b> Delaware</b></font></td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font> </td>
    <td width="40%"><font color="#000000" size="2" face="Times New Roman, Times, serif"><b> 11-2139466</b></font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td><hr width="95%" size="1" noshade></td>
    <td><font color="#000000">&nbsp;</font></td>
    <td><hr width="90%" size="1" noshade></td>
  </tr>
  <tr align="center" valign="bottom">
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"> (State or other jurisdiction of incorporation /organization) </font></td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font> </td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"> (I.R.S. Employer Identification Number) </font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font> </td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font> </td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font> </td>
  </tr>
  <tr align="center" valign="bottom">
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"><b> 105 Baylis Road, Melville, New York</b></font></td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font> </td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"><b> 11747 </b></font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td><hr width="95%" size="1" noshade></td>
    <td><font color="#000000">&nbsp;</font></td>
    <td><hr width="90%" size="1" noshade></td>
  </tr>
  <tr align="center" valign="bottom">
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"> (Address of principal executive offices) </font></td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font> </td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"> (Zip Code) </font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font> </td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font> </td>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font> </td>
  </tr>
  <tr align="center" valign="bottom">
    <td colspan="4"> <font color="#000000" size="2" face="Times New Roman, Times, serif"><b> (631) 777-8900 </b></font> </td>
  </tr>
  <tr align="center" valign="bottom">
    <td colspan="4"><hr width="50%" size="1" noshade></td>
  </tr>
  <tr align="center" valign="bottom">
    <td colspan="4"> <font color="#000000" size="2" face="Times New Roman, Times, serif"> (Registrant&#146;s telephone number, including area code) </font> </td>
  </tr>
</table>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><p><font color="#000000" size="2" face="Times New Roman, Times, serif">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.<br>
    |X| Yes &nbsp;&nbsp;|_|&nbsp; No </font></p>
      <p><font color="#000000" size="2" face="Times New Roman, Times, serif">Indicate by check mark whether registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).<br>
      |X| Yes &nbsp;&nbsp;|_|&nbsp; No </font></p>
      <p align="center"><font color="#000000" size="2" face="Times New Roman, Times, serif">APPLICABLE ONLY TO CORPORATE ISSUERS: </font></p>
    <p><font color="#000000" size="2" face="Times New Roman, Times, serif">As of December 1, 2004, the number of outstanding shares of Common Stock, par value $.10 per share, of the registrant was 14,320,813 shares. </font></p></td>
  </tr>
</table>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR vAlign=top>
    <TD width="600"><BR>
               <HR color=gray noShade SIZE=5>
    </TD>
  </TR>
</TABLE>
<!-- ***************************************************************************-->
<!-- MARKER PAGE="sheet: 1; page: 1" -->
<br>
<table width="600" border="0" cellpadding="0" cellspacing="0">
<tr>
<td><p align="center"><I><font face="Times New Roman, Times, serif"><b> <font color="#000000" size="2">COMTECH TELECOMMUNICATIONS CORP.<br>
</font></b></font><font color="#000000" size="2" face="Times New Roman, Times, serif"><b>INDEX</b></font></I></p>
  </td>
</tr>
<tr>
  <td>&nbsp;</td>
</tr>
</table>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><font color="#000000">&nbsp;</font></td>
    <td align="center"><font color="#000000">&nbsp;</font></td>
    <td align="center" valign="bottom"><font color="#000000" size="1" face="Times New Roman, Times, serif"><strong>Page</strong></font></td>
  </tr>
  <tr>
    <td><font color="#000000">&nbsp;</font></td>
    <td><font color="#000000">&nbsp;</font></td>
    <td><hr size="1" noshade></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"><b>PART I. &nbsp;FINANCIAL INFORMATION </b></font></td>
    <td width="3%" align="left"><font color="#000000">&nbsp;</font></td>
    <td width="7%" align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 1. &nbsp;Financial Statements</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Balance Sheets &#150; October 31, 2004 (Unaudited)</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and July 31, 2004 </font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">2</font></td>
  </tr>
  <tr>
    <td><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Operations &#150; Three Months Ended October 31, 2004 </font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and 2003 (Unaudited) </font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">3</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Cash Flows &#150; Three Months Ended October 31, 2004 </font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and 2003 (Unaudited) </font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">4</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes to Consolidated Financial Statements </font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">5 - 10 </font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 2. &nbsp;Management&#146;s Discussion and Analysis of Financial Condition and </font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Results of Operations</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">10 - 16</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 3. &nbsp;Quantitative and Qualitative Disclosures about Market Risk </font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">16</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 4. &nbsp;Controls and Procedures </font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">16</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"><b>PART II. &nbsp;OTHER INFORMATION </b></font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 6. &nbsp;Exhibits </font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">16</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif"> Signature Page </font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">17</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font color="#000000" size="2" face="Times New Roman, Times, serif">Certifications </font></td>
    <td align="left"><font color="#000000">&nbsp;</font></td>
    <td align="left"><font color="#000000" size="2" face="Times New Roman, Times, serif">18 - 21 </font></td>
  </tr>
</table>


<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT face="TIMES NEW ROMAN, TIMES, SERIF" size=2>1</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  2; page:  2" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD>
<P align=center><FONT face="Times New Roman, Times, Serif" size=2><i>PART I<br>
FINANCIAL INFORMATION<br>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES<br>
CONSOLIDATED BALANCE SHEETS</i></FONT></P>
</TD></TR>
<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
    <td align="left"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Item 1.</FONT></td>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">October 31,<br>
      2004 </FONT>
    </TH>
    <TH><font color="#000000" size="1"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif"> July 31,<br>
      2004 </FONT>
    </TH>
    <TH><font color="#000000"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=left><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=center><font color="#000000" size="2" face="Times New Roman, Times, serif">Assets</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=center valign="top"><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif"><b>(Unaudited)</b></FONT></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Current assets:</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=3% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 182,080,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">163,292,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">2,103,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">4,054,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">30,940,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">43,002,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories, net</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">43,360,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">39,758,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">3,687,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,817,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax asset &#150; current</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">6,501,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">6,501,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=left><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">268,671,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">258,424,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Property, plant and equipment, net</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">15,164,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">14,652,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Goodwill</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">18,721,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">18,721,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Intangibles with definite lives, net</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">10,137,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">10,706,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Deferred financing costs, net</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">3,404,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">3,541,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Other assets, net</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">404,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">346,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=center>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=left><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 316,501,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">306,390,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE  SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=center>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=center bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Liabilities and Stockholders&#146; Equity</FONT></TD>
<TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Current liabilities:</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 12,283,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">9,566,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">19,394,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">20,515,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer advances and deposits</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">5,870,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">7,290,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred service revenue</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">13,751,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">13,716,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current installments of capital lease obligations</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">194,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">234,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest payable</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">525,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,073,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">7,936,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">4,812,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=left><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">59,953,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">57,206,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Convertible senior notes</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">105,000,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">105,000,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Capital lease obligations, less current installments</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">124,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">158,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Deferred tax liability &#150; non-current</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,628,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,628,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=left><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">166,705,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">163,992,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Stockholders&#146; equity:</FONT></TD>
<TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, par value $.10 per share; shares authorized and</FONT></TD>
  </TR>
  <TR VALIGN=Bottom >
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;unissued 2,000,000</FONT></TD>
    <TD ALIGN=RIGHT ><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT ><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT ><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD ALIGN=LEFT ><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp; &nbsp;&nbsp;Common stock, par value $.10 per share; authorized 30,000,000 shares;</FONT></TD>
 <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;issued 14,403,938 shares at October 31, 2004 and 14,371,335 shares</FONT></TD>
<TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom  bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;at July 31, 2004</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,440,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,437,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">110,754,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">110,435,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom  bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retained earnings</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">37,787,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">30,711,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">149,981,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">142,583,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;Less:</FONT></TD>
<TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury stock (140,625 shares)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(185,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(185,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
  </TR>
  <TR>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders&#146; equity</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">149,796,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">142,398,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders&#146; equity</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 316,501,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">306,390,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Commitments and contingencies</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD align="center" vAlign=top>
<FONT color="#000000" size=2 face="Times New Roman, Times, Serif">See accompanying notes to consolidated financial statements.</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT color="#000000" size=2 face="TIMES NEW ROMAN, TIMES, SERIF">2</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  3; page:  3" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD align="center">
<FONT face="Times New Roman, Times, Serif" size=2><i><font color="#000000">COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES<br>
</font></i></FONT><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><i>CONSOLIDATED STATEMENTS OF OPERATIONS<br>
</i>(Unaudited)</FONT></TD>
</TR>
<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
    <TH><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH COLSPAN=5><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">Three months ended<br>
      October 31, </FONT></th>
    <TH><font color="#000000" size="1"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=5><HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TH><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">2004</FONT></TH>
    <TH><font color="#000000" size="1"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">2003</FONT></TH>
    <TH><font color="#000000" size="1"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Net sales</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 56,122,000</FONT></TD>
    <TD WIDTH=3% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">56,296,000</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Cost of sales</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">29,001,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">35,316,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;Gross profit</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">27,121,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">20,980,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Expenses:</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;Selling, general and administrative</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">11,224,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">8,574,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;Research and development</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">4,896,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">3,541,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;Amortization of intangibles</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">569,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">500,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">16,689,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">12,615,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Operating income</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">10,432,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">8,365,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Other expense (income):</FONT></TD>
<TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;Interest expense</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">669,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">24,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;Interest income</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(643,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(105,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Income before provision for income taxes</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">10,406,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">8,446,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Provision for income taxes</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">3,330,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">2,703,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Net income</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 7,076,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">5,743,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Net income per share:</FONT></TD>
<TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;Basic</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 0.50</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.41</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;Diluted</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 0.46</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.37</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Weighted average number of common shares outstanding &#150; Basic</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">14,242,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">13,953,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Potential dilutive common shares</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,176,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,407,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Weighted average number of common and common equivalent shares</FONT></TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;outstanding assuming dilution &#150; Diluted</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">15,418,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">15,360,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD vAlign=top>
<P align=center><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">See accompanying notes to consolidated financial statements.</FONT></P></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT color="#000000" size=2 face="TIMES NEW ROMAN, TIMES, SERIF">3</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  4; page:  4" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD>
<P align=center><FONT face="Times New Roman, Times, Serif" size=2><i><font color="#000000">COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES<br>
</font></i></FONT><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><i>CONSOLIDATED STATEMENTS OF CASH FLOWS<br>
</i>(Unaudited)</FONT></P>
</TD>
</TR>
<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
    <TH><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH COLSPAN=5><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">Three months ended<br>
      October 31, </FONT>
        <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000" size="1"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TH><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">2004</FONT>
        <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000" size="1"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">2003</FONT>
        <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000" size="1"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Cash flows from operating activities:</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=3% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Net income</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 7,076,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">5,743,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by</FONT></TD>
<TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;operating activities:</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,814,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,562,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred financing costs</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">137,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for doubtful accounts</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">29,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">13,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for excess and obsolete inventories</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">421,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">589,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and liabilities:</FONT></TD>
<TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash securing letter of credit obligations</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,951,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">8,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">12,033,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(7,653,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(4,016,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(58,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(1,839,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(456,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(58,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">12,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">2,717,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,769,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(1,121,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(770,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer advances and deposits</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(1,420,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">25,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred service revenue</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">35,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">119,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest payable</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(548,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">3,124,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">669,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">20,335,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,572,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Cash flows from investing activities:</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property, plant and equipment</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(1,795,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(1,231,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(1,795,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(1,231,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Cash flows from financing activities:</FONT></TD>
<TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Principal payments on capital lease obligations</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(74,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(266,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT colspan="7"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from exercises of stock options, warrants and employee stock</FONT></TD>
  </TR>
  <TR VALIGN=Bottom  bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;purchase plan shares</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">322,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">912,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">248,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">646,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Net increase in cash and cash equivalents</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">18,788,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">987,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents at beginning of period</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">163,292,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">48,617,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents at end of period</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 182,080,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">49,604,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><I><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Supplemental cash flow disclosure:</FONT></I></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Cash paid during the period for:&nbsp;</FONT></TD>
<TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Interest</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 1,073,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">24,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Income taxes</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 206,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">2,034,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD vAlign=top>
<P align=center><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">See accompanying notes to consolidated financial statements.</FONT></P></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT color="#000000" size=2 face="TIMES NEW ROMAN, TIMES, SERIF">4</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  5; page:  5" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD>
<P align=center><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><i>COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES<br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</i>(Unaudited)</FONT></P></td>
</TR>

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
  <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(1)<I>&nbsp; </I></FONT></TD>
  <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><i>General</i></FONT></TD>
</TR>
<TR>
  <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=48><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The accompanying consolidated financial statements at and for the three months ended October 31, 2004
and 2003 are unaudited. In the opinion of management, the information furnished reflects all adjustments,
consisting only of normal recurring adjustments, necessary for a fair presentation of the results
for the unaudited interim periods. The results of operations for such periods are not necessarily
indicative of the results of operations to be expected for the full year.</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=48><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">These consolidated financial statements should be read in conjunction with the audited consolidated
financial statements of the Company for the fiscal year ended July 31, 2004 and the notes thereto
contained in the Company&#146;s Annual Report on Form 10-K, filed with the Securities and Exchange
Commission, and all of the Company&#146;s other filings with the Securities and Exchange Commission.</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
  <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(2)<I>&nbsp;</I></FONT></TD>
  <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>Reclassifications</I></FONT></TD>
</TR>
<TR>
  <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Certain reclassifications have been made to previously reported statements to conform to the Company&#146;s
current financial statement format.</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD colspan="2" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD width="48" vAlign=top>
<P><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(3)&nbsp;&nbsp;</FONT></P></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>Accounts Receivable</I></FONT></TD>
</TR>
<TR>
<TD colspan="2" vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
</TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
    <TH width="8%" align="left"><font color="#000000"></font></TH>
    <td align="left"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Accounts receivable consist of the following:</FONT></td>
    <TH COLSPAN=2 nowrap><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">October 31, 2004</FONT>        </TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=2 nowrap><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">July 31, 2004</FONT>        </TH>
    <TH><font color="#000000"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=RIGHT>&nbsp;</TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Accounts receivable from commercial customers</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 14,933,000</FONT></TD>
    <TD WIDTH=3% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">27,845,000</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Unbilled receivables (including retainages) on contracts-in-progress</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">4,968,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">6,684,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Amounts receivable from the U.S. government and its agencies</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">11,749,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">9,205,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">31,650,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">43,734,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Less allowance for doubtful accounts</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">710,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">732,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 30,940,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">43,002,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE  SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE  SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
  <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">There was $22,000 of retainage included in unbilled receivables at October 31, 2004. In the opinion
of management, substantially all of the unbilled balances will be billed and collected within one
year.</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">As of July 31, 2004, a North African country represented 34.4% of total net accounts receivable. </FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD colspan="2" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD width="48" align="left" vAlign=top>
<P><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(4)&nbsp;</FONT></P></TD>
<TD align="left" vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>Inventories</I></FONT></TD>
</TR>
<TR>
<TD colspan="2" vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
</TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
    <TH align="left">&nbsp;</TH>
    <td align="left"><font color="#000000" size=2 face="Times New Roman, Times, Serif"> Inventories consist of the following:</font></td>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">October 31, 2004</FONT>        </TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">July 31, 2004</FONT>        </TH>
    <TH><font color="#000000"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD WIDTH=8% ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Raw materials and components</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 25,343,000</FONT></TD>
    <TD WIDTH=3% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">22,502,000</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Work-in-process and finished goods</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">23,943,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">22,878,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD COLSPAN=2></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">49,286,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">45,380,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Less reserve for excess and obsolete inventories</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">5,926,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">5,622,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD COLSPAN=2></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;Inventories, net</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 43,360,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">39,758,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD COLSPAN=2></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
  <TD vAlign=top>&nbsp;</TD>
  <TD vAlign=top>&nbsp;</TD>
</TR>
<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Inventories directly related to long-term contracts were $10,943,000 and $8,550,000 at October 31,
2004 and July 31, 2004, respectively.</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT color="#000000" size=2 face="TIMES NEW ROMAN, TIMES, SERIF">5</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  6; page:  6" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">


<TR>
<TD>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(5)<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued Expenses</I></FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued
expenses consist of the following:</FONT></P></TD></TR>
<TR>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
</TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
    <TH>&nbsp;</TH>
    <TH><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">October 31, 2004</FONT>
    <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">July 31, 2004</FONT>
    <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD WIDTH=8% ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Accrued wages and benefits</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 6,154,000</FONT></TD>
    <TD WIDTH=3% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">9,972,000</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Accrued commissions</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">3,072,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">3,255,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Accrued warranty</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">5,115,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">4,990,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Accrued hurricane-related costs (See note 11)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">2,859,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Other</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">2,194,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">2,298,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT>&nbsp;</TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 19,394,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">20,515,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD COLSPAN=2 ALIGN=RIGHT>&nbsp;</TD>
    <TD></TD>
    <TD COLSPAN=2 ALIGN=RIGHT>&nbsp;</TD>
    <TD></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The Company provides standard warranty coverage for most of its products for a period of at least one
year from the date of shipment. The Company records a liability for estimated warranty expense based
on historical claims, product failure rates and other factors. Changes in the Company&#146;s product
warranty liability during the three months ended October 31, 2004 and 2003 were as follows:</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
    <TH><font color="#000000"></font></TH>
    <TH><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH COLSPAN=5><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">Three months ended<br>
      October 31, </FONT>
        <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TH><font color="#000000"></font></TH>
    <TH><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">2004</FONT>
        <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000" size="1"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">2003</FONT>
        <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD WIDTH=8% ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Balance at beginning of period</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 4,990,000</FONT></TD>
    <TD WIDTH=3% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">3,139,000</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Provision for warranty obligations</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">778,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">839,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Charges incurred</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(653,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(596,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Balance at end of period</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 5,115,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">3,382,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD vAlign=top>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <I>2.0% Convertible Senior Notes</I> &nbsp;&nbsp;&nbsp;&nbsp;</FONT></P></TD>
</TR>
<TR>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">On January 27, 2004, the Company issued $105,000,000 of its 2.0% convertible senior notes in a private
offering pursuant to Rule 144A of the Securities Act of 1933, as amended. The net proceeds from this
transaction were $101,179,000 after deducting the initial purchaser&#146;s discount and other transaction
costs.</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The notes bear interest at an annual rate of 2.0% and, during certain periods, the notes are convertible
into shares of the Company&#146;s common stock at an initial conversion price of $47.25 per share
(a conversion rate of 21.1640 shares per $1,000 original principal amount of notes), subject to adjustment
in certain circumstances. The notes may be converted if, during a conversion period on each of at
least 20 trading days, the closing sale price of the Company&#146;s common stock exceeds 120% of
the conversion price in effect. Upon conversion of the notes, in lieu of delivering common stock,
the Company may, in its discretion, deliver cash or a combination of cash and common stock. The Company
may, at its option, redeem some or all of the notes on or after February 4, 2009. Holders of the
notes will have the right to require the Company to repurchase some or all of the outstanding notes
on February 1, 2011, February 1, 2014 and February 1, 2019 and upon certain events, including a change
in control. If not redeemed by the Company or repaid pursuant to the holders&#146; right to require
repurchase, the notes mature on February 1, 2024.</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The 2.0% interest is payable in cash, semi-annually, through February 1, 2011. After such date, the
2.0% interest will be accreted into the principal amount of the notes. Also, commencing with the
six month period beginning February 1, 2009, if the average note price for the applicable trading
period equals 120% or more of the accreted principal amount of such notes, the Company will pay contingent
interest at an annual rate of 0.25%. </FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The notes are general unsecured obligations of the Company, ranking equally in right of payment with
all of its other existing and future unsecured senior indebtedness and senior in right of payment
to any of its future subordinated indebtedness. All of the Company&#146;s subsidiaries have issued
full and unconditional guarantees in favor of the holders of the Company&#146;s 2.0% convertible
senior notes, except for the subsidiary that, in May 2004, purchased certain assets and assumed certain
liabilities of Memotec, Inc. (the &#147;Memotec Subsidiary&#148;). The Memotec Subsidiary&#146;s
total assets, equity, net sales, income from continuing operations before income taxes and cash flows
from operating activities were 1.5%, 3.0%, 3.0%, 2.4% and 2.7%, respectively, of the corresponding
consolidated amounts for the three months ended October 31, 2004 and are expected to be less than
3% for the full year ending July 31, 2005. These full and unconditional guarantees are joint and
several. Other than supporting the operations of its subsidiaries, Comtech Telecommunications Corp.
(the &#147;Parent&#148;) has no independent assets or operations and there are currently no significant
restrictions on its ability, or the ability of the guarantors, to obtain funds from each other by dividend or loan. </FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT color="#000000" size=2 face="TIMES NEW ROMAN, TIMES, SERIF">6</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  7; page:  7" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD>
<P><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;&nbsp;(7)<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earnings Per Share</I></FONT></P></TD>
</TR>
<TR>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=48><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The Company calculates earnings per share (&#147;EPS&#148;) in accordance with Statement of Financial
Accounting Standards (&#147;SFAS&#148;) No. 128, &#147;Earnings per Share.&#148;&nbsp;Basic EPS is
computed based on the weighted average number of shares outstanding. Diluted EPS reflects the dilution
from potential common stock issuable pursuant to the exercise of stock options, warrants and convertible
senior notes, if dilutive, outstanding during each period. Stock options to purchase 110,500 and
2,000 shares for the three months ended October 31, 2004 and 2003, respectively, were not included
in the EPS calculation because their effect would have been anti-dilutive. </FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=48><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Since the conditions required for conversion of the Company&#146;s 2.0% convertible senior notes have
not been met, the Company did not assume conversion of the 2.0% convertible senior notes in calculating
diluted EPS for the three months ended October 31, 2004. As a result of changes
to the accounting for convertible securities as discussed in note 12, the Company will be required
to include the impact of the assumed conversion of the 2.0% convertible senior notes in calculating
diluted EPS commencing in the fiscal quarter ending January 31, 2005 and subsequent periods and will
restate prior period EPS for comparative purposes.</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD vAlign=top>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(8)&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <I>Stock-Based Compensation Plans</I></FONT></P></TD>
</TR>
<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The Company accounts for its stock option and employee stock purchase plans under the intrinsic value
method of Accounting Principles Board (&#147;APB&#148;) Opinion No. 25, &#147;Accounting for Stock
Issued to Employees,&#148; and as a result, no compensation cost has been recognized. Had compensation
cost for these plans been determined consistent with SFAS No. 123, the Company&#146;s net income
and income per share would have been reduced to the following pro forma amounts:</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
    <TH width="8%"><font color="#000000"></font></TH>
    <TH width="36%"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH COLSPAN=5><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">Three months ended<br>
      October 31, </FONT>
        <HR NOSHADE SIZE=1></TH>
    <TH>&nbsp;</TH>
  </TR>
  <TR VALIGN=Bottom>
    <TH><font color="#000000"></font></TH>
    <TH><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">2004</FONT>
        <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000" size="1"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">2003</FONT>
        <HR NOSHADE SIZE=1></TH>
    <TH>&nbsp;</TH>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Net income, as reported</FONT></TD>
    <TD WIDTH=22% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">7,076,000</FONT></TD>
    <TD WIDTH=4% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><font color="#000000">&nbsp;</font></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">5,743,000</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=LEFT><font color="#000000" size=2 face="Times New Roman, Times, Serif">Less:&nbsp;Total stock-based employee compensation</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=LEFT><font color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;expense determined under fair value based method</font></TD>
<TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;for all awards, net of related tax effects</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(543,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(343,000</FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Pro forma net income</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">6,533,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">5,400,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE  SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Net income per share:</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As reported</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Basic</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 0.50</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.41</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff">&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Diluted</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.46</FONT></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.37</FONT></TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro forma</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Basic</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 0.46</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.39</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff">&nbsp;</TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Diluted</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 0.42</FONT></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.35</FONT></TD>
    <TD ALIGN=LEFT>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
  <TD vAlign=top>&nbsp;</TD>
  <TD vAlign=top>&nbsp;</TD>
</TR>
<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The per share weighted average fair value of stock options granted during the three months ended October
31, 2004 and 2003 was $11.54 and $7.72, respectively, on the date of grant. These fair values were
determined using the Black Scholes option-pricing model with the following weighted average assumptions:&nbsp;2004
&#150; expected dividend yield of 0%, risk free interest rate of 3.66%, expected volatility of 65.66%,
and an expected life of 5 years; 2003 &#150; expected dividend yield of 0%, risk free interest rate
of 3.25%, expected volatility of 45.90%, and an expected life of 5 years. </FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD vAlign=top>
<P><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(9)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Segment and Principal Customer Information</I></FONT></P></TD>
</TR>
<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Reportable operating segments are determined based on the Company&#146;s management approach. The management
approach, as defined by SFAS No. 131, is based on the way that the chief operating decision-maker
organizes the segments within an enterprise for making operating decisions and assessing performance.
While the Company&#146;s results of operations are primarily reviewed on a consolidated basis, the
chief operating decision-maker also manages the enterprise in three segments:&nbsp;(i) telecommunications
transmission, (ii) RF microwave amplifiers and (iii) mobile data communications. Telecommunications
transmission products include analog and digital modems, frequency converters, power amplifiers,
satellite VSAT transceivers and antennas, voice gateways and over-the-horizon microwave communications
products and systems. RF microwave amplifier products include solid-state high-power amplifier products
and systems that use the microwave and radio frequency spectrums. Mobile data communications provide
satellite-based mobile tracking and messaging hardware and related services. Unallocated assets consist
principally of cash, deferred financing costs and deferred tax assets. Unallocated  </FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT face="TIMES NEW ROMAN, TIMES, SERIF" size=2>7</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  8; page:  8" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">expenses result from such corporate expenses as legal, accounting and executive. Interest expense associated
with the Company&#146;s 2.0% convertible senior notes is not allocated to the operating segments. Substantially all of the Company&#146;s long-lived assets are located in the U.S. </FONT></TD>
</TR></TABLE>
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Corporate management defines and reviews segment profitability based on the same allocation methodology
as presented in the segment data tables. Intersegment sales for the three months ended October 31,
2004 and 2003 by the telecommunications transmission segment to the RF microwave amplifiers segment
were $1,790,000 and $629,000, respectively. For the three months ended October 31, 2004 and 2003,
intersegment sales by the telecommunications transmission segment to the mobile data communications
segment were $2,627,000 and $1,573,000, respectively. Intersegment sales have been eliminated from
the tables below. </FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="760" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD align="center" vAlign=top>
<P><FONT face="Times New Roman, Times, Serif" size=2><B><font color="#000000">Three months ended<br>
</font></B></FONT><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B>October 31, 2004<br>
</B>(in thousands)</FONT></P>
</TD>
</TR>
<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=760>
  <TR VALIGN=Bottom>
    <TH><font color="#000000" size="1"></font></TH>
    <TH><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">Telecommunications<br>
      Transmission </FONT>

    </TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">RF Microwave<br>
      Amplifiers </FONT>
    </TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif"> Mobile Data<br>
      Communications </FONT>
    </TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">Unallocated</FONT>        </TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">Total</FONT>        </TH>
    <TH><font color="#000000"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD WIDTH=7% ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Net sales</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 37,502</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">8,940</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">9,680</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">56,122</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Operating income (expense)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">9,973</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,115</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,208</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(1,864</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">10,432</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Interest income</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">16</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">627</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">643</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Interest expense</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">3</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">4</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">662</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">669</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Depreciation and amortization</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,317</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">313</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">170</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">14</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,814</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Expenditures for long-lived</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;assets, including intangibles</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,130</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">153</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">494</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">18</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,795</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Total assets</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">84,400</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">22,350</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">23,787</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">185,964</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">316,501</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="760" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD align="center" vAlign=top>
<P><FONT face="Times New Roman, Times, Serif" size=2><B><font color="#000000">Three months ended<br>
</font></B></FONT><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B>October 31, 2003<br>
</B>(in thousands)</FONT></P>
</TD>
</TR>
<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=760>
  <TR VALIGN=Bottom>
    <TH><font color="#000000"></font></TH>
    <TH><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"></FONT></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">Telecommunications<br>
      Transmission </FONT>

    </TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">RF Microwave<br>
      Amplifiers </FONT>
    </TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif"> Mobile Data<br>
      Communications </FONT>
    </TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">Unallocated</FONT>        </TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, Serif">Total</FONT>        </TH>
    <TH><font color="#000000"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD WIDTH=7% ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Net sales</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 35,089</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">4,892</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">16,315</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">56,296</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Operating income (expense)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">7,205</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">186</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">2,529</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">(1,555</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">)</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">8,365</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Interest income</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">9</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>

    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">3</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">93</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">105</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Interest expense</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">18</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">6</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">24</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Depreciation and amortization</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,142</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">271</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">122</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">27</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,562</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Expenditures for long-lived</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;assets, including intangibles</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,089</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">40</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">102</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,231</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Total assets</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">72,726</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">20,241</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">23,988</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">55,501</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">172,456</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">For the three months ended October 31, 2004 and 2003, approximately 39.0% and 40.3%, respectively,
of the Company&#146;s consolidated net sales resulted from contracts with the U.S. government or
prime contractors to the U.S. government. Except for the U.S. government, no other customer represented
more than 10% of consolidated net sales for the three months ended October 31, 2004. For the three
months ended October 31, 2003, sales to one customer, a prime contractor, represented 20.1% of our
consolidated net sales. Direct and indirect sales to a North African country, including certain sales
to the prime contractor mentioned above, for the three months ended October 31, 2003 represented
16.9% of consolidated net sales.</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT color="#000000" size=2 face="TIMES NEW ROMAN, TIMES, SERIF">8</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  9; page:  9" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">International sales comprised 46.7% and 43.3% of consolidated net sales for the three months ended
October 31, 2004 and 2003, respectively. International sales include sales to domestic companies
for inclusion in products, which will be sold to international customers.</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD vAlign=top>
<P><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(10)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; <I>Intangible Assets</I></FONT></P></TD>
</TR>
<TR>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Intangibles with definite lives arising from acquisitions as of October 31, 2004 and July 31, 2004
are as follows:</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
    <TH><font color="#000000"></font></TH>
    <TH width="260"><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif"></FONT></TH>
    <TH COLSPAN=5><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">October 31, 2004</FONT>        </TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
    <TH COLSPAN=5><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">July 31, 2004</FONT>        </TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TH><font color="#000000"></font></TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=5><HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=5><HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TH><font color="#000000"></font></TH>
    <TH><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif"></FONT></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">Gross Carrying<br>
      Amount </FONT>

    </TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">Accumulated <br>
      Amortization </FONT>

    </TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">Gross Carrying<br>
      Amount </FONT>
    </TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
    <TH COLSPAN=2><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">Accumulated <br>
      Amortization </FONT>
    </TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD width="48" ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Existing technology</FONT></TD>
    <TD WIDTH=7 ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD WIDTH=91 ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 12,456,000</FONT></TD>
    <TD WIDTH=15 ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=7 ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=91 ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">6,429,000</FONT></TD>
    <TD WIDTH=15 ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=7 ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=91 ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">12,456,000</FONT></TD>
    <TD WIDTH=15 ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=7 ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=91 ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">5,992,000</FONT></TD>
    <TD WIDTH=15 ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Core technology</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">2,135,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">380,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">2,135,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">318,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Customer relationships</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">260,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">19,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">260,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">9,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Technology license</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">2,229,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">341,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">2,229,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">314,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Trade names</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">225,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">49,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">225,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">41,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Order backlog</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">188,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">138,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">188,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">113,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Total</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 17,493,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">7,356,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">17,493,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">6,787,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE  SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE  SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD COLSPAN=3></TD>
    <TD COLSPAN=3></TD>
    <TD COLSPAN=3></TD>
    <TD COLSPAN=3></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
  <TD vAlign=top>&nbsp;</TD>
  <TD vAlign=top>&nbsp;</TD>
</TR>
<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Amortization expense for the three months ended October 31, 2004 and 2003 was $569,000 and $500,000,
respectively. The estimated amortization expense for the twelve months ending October 31, 2005, 2006,
2007, 2008 and 2009 is $2,239,000, $2,189,000, $1,709,000, $817,000 and $771,000, respectively.</FONT></TD></TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD></TR>
<TR>
<TD vAlign=top width=48>&nbsp;</TD>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>Goodwill by reporting unit as of October 31, 2004 are as follows:</FONT></TD></TR>
<TR>
<TD vAlign=top></TD>
<TD vAlign=top>&nbsp;</TD></TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
    <TD WIDTH=8% ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Telecommunications transmission</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD WIDTH=12% ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 8,865,000</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">RF microwave amplifiers</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">8,422,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">Mobile data communications</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1,434,000</FONT></TD>
    <TD ALIGN=LEFT bgcolor="#e5ffff"><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 18,721,000</FONT></TD>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD vAlign=top>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;(11)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <I>Impact of Recent Hurricanes</I></FONT></P></TD>
</TR>
<TR>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">During the first quarter of fiscal 2005, two of the Company&#146;s leased facilities located in Florida
experienced hurricane damage to both leasehold improvements and personal property. As of October
31, 2004, the Company has received $1,000,000 in advances from its insurance carrier and has recorded
a $2,101,000 insurance recovery receivable which is included in the caption &#147;Prepaid expenses
and other current assets&#148; in the accompanying consolidated balance sheet. For the three months
ended October 31, 2004, the Company recorded approximately $400,000 of hurricane-related expenses, net of insurance
recoveries, in the caption &#147;Selling, general and administrative expenses&#148; in the accompanying
consolidated statement of operations. The Company is continuing its efforts to work with both the
insurance carrier and each landlord in assessing the final costs to repair and clean up each facility.
Other than minor disruptions, the hurricane damage and restoration efforts did not materially impact
the Company&#146;s ability to meet its customers&#146; demands or contractual commitments. </FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT face="TIMES NEW ROMAN, TIMES, SERIF" size=2>9</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  10; page:  10" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(12)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <I>Recent Accounting Pronouncement</I></FONT></P></TD>
</TR>
<TR>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=48><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">On September 30, 2004, the Emerging Issues Task Force (&#147;EITF&#148;) of the FASB reached a consensus
with respect to Issue No. 04-8, &#147;The Effect of Contingently Convertible Debt on Diluted Earnings
Per Share.&#148; The EITF&#146;s consensus states that shares of common stock contingently issuable
pursuant to contingent convertible securities must be included in diluted earnings per share computations
(if dilutive) regardless of whether their market price triggers (or other contingent features) have
been met. EITF No. 04-8 will be effective for the Company&#146;s second quarter ending January 31,
2005. Upon adoption, the Company will be required to include an additional 2,222,000 shares (relating
to the Company&#146;s convertible senior notes) using the &#147;if-converted&#148; method (under
which net income would also be adjusted to exclude the related interest expense) in its computation
of diluted earnings per share for the Company&#146;s fiscal year ending July 31, 2005 and subsequent
years and will require the Company to restate earnings per share for fiscal 2004 for comparative
purposes. No restatement of earnings per share prior to fiscal 2004 will be required since the convertible
senior notes were not outstanding during these periods. Our diluted earnings per share, as restated,
will be as follows:</FONT></TD>
</TR>
<TR>
<TD vAlign=top></TD>
<TD vAlign=top>&nbsp;</TD></TR></TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
    <TH><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif"></FONT></TH>
    <TH COLSPAN=11><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">For the three months ended, </FONT>
    <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
    <TH COLSPAN=2 rowspan="2" nowrap><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">For the fiscal <br>
      year ended <br>
      July 31, <br>
      2004 </FONT>
    <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000"></font></TH>
    <TH COLSPAN=2 rowspan="2" nowrap><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">For the three<br>
      months ended <br>
      October 31, <br>
      2004 </FONT>
    <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000"></font></TH>
  </TR>
  <TR VALIGN=Bottom>
    <TH><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif"></FONT></TH>
    <TH COLSPAN=2 nowrap><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">October 31,<br>
      2003 </FONT>
    <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
    <TH COLSPAN=2 nowrap><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">January 31,<br>
      2004 </FONT>
    <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
    <TH COLSPAN=2 nowrap><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">April 30,<br>
      2004 </FONT>
    <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
    <TH COLSPAN=2 nowrap><FONT color="#000000" SIZE=1 FACE="Times New Roman, Times, serif">July 31,<br>
      2004 </FONT>
    <HR NOSHADE SIZE=1></TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
    <TH><font color="#000000" size="1" face="Times New Roman, Times, serif"></font></TH>
  </TR>
  <TR VALIGN=Bottom bgcolor="#e5ffff">
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">As reported</FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif"> 0.37</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.34</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.31</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.40</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1.42</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD WIDTH=11% ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.46</FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">As restated</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">$</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.37</FONT></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.34</FONT></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.30</FONT></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.38</FONT></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">1.38</FONT></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD ALIGN=RIGHT><FONT color="#000000" SIZE=2 FACE="Times New Roman, Times, Serif">0.43</FONT></TD>
    <TD ALIGN=LEFT><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
  <TD colspan="3" vAlign=top>&nbsp;</TD>
</TR>
<TR>
<TD width="10%" vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">ITEM 2.</FONT></TD>
<TD align="center" vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION <br>
AND RESULTS OF OPERATIONS</I></FONT></TD>
<TD width="10%" align="center" vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
  <TD colspan="3" vAlign=top>&nbsp;</TD>
</TR>
<TR>
<TD colspan="3" vAlign=top>

<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>OVERVIEW</I></FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">We design, develop, produce and market innovative products, systems and services for advanced communications
solutions. We conduct our business through three complementary segments: telecommunications
transmission, mobile data communications and RF microwave amplifiers. We sell our products into markets
where we believe we have technological, engineering, systems design or other expertise that differentiate
our product offerings. We believe we are leaders in the market segments that we serve.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our telecommunications transmission segment, our largest business segment, provides specialized products
and systems for satellite, over-the-horizon microwave and wireless line-of-sight microwave telecommunications
systems. Our mobile data communications segment provides satellite-based mobile location, tracking
and messaging services and mobile satellite transceivers primarily for defense applications, including
logistics, support and battlefield command and control. Our RF microwave amplifier segment designs,
manufactures and markets solid-state, high power, broadband RF microwave amplifier products. </FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">A substantial portion of our sales may be derived from a limited number of relatively large customer
contracts, the timing of revenues from which cannot be predicted. Quarterly sales and operating results
may be significantly affected by one or more of such contracts. Accordingly, we can experience significant
fluctuations in sales and operating results from quarter to quarter and period-to-period comparisons
may not be indicative of future performance.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">We generally recognize income on contracts only when the products are shipped. However, when the performance
of a contract will extend beyond a 12-month period, revenue is recognized on the percentage-of-completion
method. Profits expected to be realized on contracts are based on total estimated sales value as
compared to total estimated costs at completion. These estimates are reviewed and revised periodically
throughout the lives of the contracts, and adjustments to profits resulting from such revisions are
made cumulative to the date of the change. Estimated losses on long-term contracts-in-progress are
recorded in the period in which such losses become known.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Since our contract with the U.S. Army for the Movement Tracking System is for an eight-year period, revenue recognition is based on the percentage-of-completion method. The gross margin is based on the estimated sales and expenses for the entire eight-year contract. The amount of revenue recognized has been limited to the amount of funded orders received </FONT></P>
</TD></TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT color="#000000" size=2 face="TIMES NEW ROMAN, TIMES, SERIF">10</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  11; page:  11" -->
<BR>

<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">from the U.S. Army. &nbsp;Currently, the portion of such orders representing prepaid service time revenue
is being deferred until the service time is used by the customer. Significant changes in the estimates
used to derive the gross profit margin can materially impact our operating results and financial
condition in future periods (see Critical Accounting Policies below for more information).</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our gross profit is affected by a variety of factors, including the mix of products, systems and services
sold, production efficiency, estimates of warranty expense, price competition and general economic
conditions.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Selling, general and administrative expenses consist primarily of salaries and benefits for marketing,
sales and administrative employees, advertising and trade show costs, professional fees and other
administrative costs.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our research and development expenses relate to both existing product enhancement and new product development.
A portion of our research and development effort is related to specific contracts and is recoverable
under those contracts because they are funded by the customers. Such customer-funded expenditures
are not included in research and development expenses for financial reporting purposes, but are reflected
in cost of sales.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">In May 2004, we acquired certain assets and assumed certain liabilities of Memotec, Inc. (&#147;Memotec&#148;),
a subsidiary of Kontron AG, and at the same time, purchased related inventory owned by Kontron Canada
Inc., for an aggregate purchase price of approximately $5.2 million in cash. The results of operations
in our telecommunications transmission segment for the three months ended October 31, 2004 include
the Memotec related business.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>CRITICAL ACCOUNTING POLICIES</I></FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">We consider certain accounting policies to be critical due to the estimation process involved in each.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Revenue Recognition on Long-Term Contracts.&nbsp;&nbsp; </I></B>As discussed above, when the performance of a contract will extend beyond a 12-month period, revenue
and related costs are recognized on the percentage-of-completion method of accounting. Revenue is
recognized based on the relationship of total costs incurred to total projected costs, or, alternatively,
based on output measures, such as units delivered. Profits expected to be realized on such contracts
are based on total estimated sales for the contract compared to total estimated costs, including
warranty costs, at completion of the contract. These estimates are reviewed and revised periodically
throughout the lives of the contracts, and adjustments to profits resulting from such revisions are
made cumulative to the date of the change. Estimated losses on long-term contracts are recorded in
the period in which the losses become known.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Some
of our largest contracts, including our contract with the U.S. Army for the Movement Tracking System,
are accounted for using the percentage-of-completion method. We have been engaged in the production
and delivery of goods and services on a continual basis under contractual arrangements for many years.
Historically, we have demonstrated an ability to accurately estimate revenues and expenses relating
to our long-term contracts. However, there exist inherent risks and uncertainties in estimating revenues
and expenses and progress toward completion, particularly on larger or longer-term contracts. If
we do not accurately estimate the total sales, related costs and progress towards completion on such
contracts, the estimated gross margins may be significantly impacted or losses may need to be recognized
in future periods. Any such resulting changes in margins or contract losses could be material to
our results of operations and financial position.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">In addition, most government contracts have termination for convenience clauses that provide the customer
with the right to terminate the contract at any time. Such terminations could impact the assumptions
regarding total contract revenues and expenses utilized in recognizing profit under the percentage-of-completion
method of accounting. Changes to these assumptions could materially impact our results of operations
and financial position. Historically, we have not experienced material terminations of our long-term
contracts.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">We also address customer acceptance provisions in assessing our ability to perform our contractual
obligations under long-term contracts. Our inability to perform on our long-term contracts could
materially impact our results of operations and financial position. Historically, we have been able
to perform on our long-term contracts.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Impairment of Intangible Assets</I></B><B>. </B>&nbsp;&nbsp;As of October 31, 2004, our company&#146;s net intangible assets, including goodwill, aggregated $28.9
million. In assessing the recoverability of goodwill and other intangibles, we must make various
assumptions regarding estimated future cash flows and other factors in determining the fair values
of the respective assets. If these estimates or their related assumptions change in the future, we
may be required to record impairment charges for these assets in future periods. Any such resulting
impairment charges could be material to our results of operations.</FONT></P></TD></TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT color="#000000" size=2 face="TIMES NEW ROMAN, TIMES, SERIF">11</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  12; page:  12" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Provisions for Excess and Obsolete Inventory. </I></B>&nbsp;&nbsp;We regularly review inventory quantities on hand and record a provision for excess and obsolete inventory
based on historical and future usage trends. Several factors may influence the sale and use of our
inventories, including decisions to exit a product line, technological change and new product development.
These factors could result in a change in the amount of excess and obsolete inventory on hand. Additionally,
our estimates of future product demand may prove to be inaccurate, in which case we may have understated
or overstated the provision required for excess and obsolete inventory. In the future, if we determine
that our inventory was overvalued, we would be required to recognize such costs in our financial
statements at the time of such determination. Any such charges could be material to our results of
operations and financial position. </FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Allowance for Doubtful Accounts. </I></B>&nbsp;&nbsp;We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer
payment history and current creditworthiness, as determined by our review of our customers&#146; current credit information. Generally, we will require cash in advance or payment secured by irrevocable
letters of credit before an order is accepted from an international customer that we do not do business
with regularly. In addition, we seek to obtain insurance for certain international customers. We
continuously monitor collections and payments from our customers and maintain an allowance for doubtful
accounts based upon our historical experience and any specific customer collection issues that we
have identified. While such credit losses have historically been within our expectations and the
allowances established, we cannot guarantee that we will continue to experience the same credit loss
rates that we have in the past. Measurement of such losses requires consideration of historical loss
experience, including the need to adjust for current conditions, and judgments about the probable
effects of relevant observable data, including present economic conditions such as delinquency rates
and financial health of specific customers. Changes to the estimated allowance for doubtful accounts
could be material to our results of operations and financial position.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED OCTOBER 31, 2004 AND OCTOBER 31,
2003</I></FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Net Sales.</I></B> &nbsp;&nbsp;Consolidated net sales were $56.1 million for the three months ended October 31, 2004
as compared to consolidated net sales of $56.3 million for the three months ended October 31, 2003.
Our results for the three months ended October 31, 2004 reflect growth in net sales in both the telecommunications
transmission and RF microwave amplifier segments offset by lower net sales in the mobile data communications
segment. As further discussed below, we expect quarterly consolidated net sales for the remainder
of fiscal 2005 to be higher than the first quarter of fiscal 2005. </FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Net sales in our telecommunications transmission segment were $37.5 million for the three months ended
October 31, 2004, as compared to net sales of $35.1 million for the three months ended October 31,
2003, an increase of $2.4 million, or 6.8%. The growth in this segment resulted primarily from a
significant increase in demand for our satellite earth station products, offset in part by previously
anticipated lower sales of over-the-horizon microwave systems as two large contracts in this segment
draw nearer to completion. In addition, sales relating to the Memotec business, which we acquired
in May 2004, were $1.6 million for the quarter ended October 31, 2004. We expect the $77.0 million
over-the-horizon microwave system contract that we received in September 2004 to result in increased
sales in this product line for the remainder of fiscal 2005. Our telecommunications transmission
segment represented 66.8% and 62.3% of consolidated net sales for the three months ended October
31, 2004 and 2003, respectively.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Net sales in our mobile data communications segment were $9.7 million for the three months ended October
31, 2004, as compared to net sales of $16.3 million for the three months ended October 31, 2003,
a decrease of $6.6 million, or 40.5%. The decrease in this segment&#146;s net sales resulted primarily
from the timing of the receipt and fulfillment of funded orders during the first quarter of fiscal
2005. As a result of the anticipated fulfillment of recently received orders as well as anticipated
new orders from the U.S. Army, we expect increased sales in our mobile data communications segment
for the remainder of fiscal 2005. Our mobile data communications segment represented 17.3% and 29.0%
of consolidated net sales for the three months ended October 31, 2004 and 2003, respectively.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Net sales in our RF microwave amplifier segment were $8.9 million for the three months ended October
31, 2004, as compared to net sales of $4.9 million for the three months ended October 31, 2003, an
increase of $4.0 million, or 81.6%. The improvement in this segment&#146;s net sales resulted primarily
from increased demand for our defense related products. Our RF microwave amplifier segment represented
15.9% and 8.7% of consolidated net sales for the three months ended October 31, 2004 and 2003, respectively.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">International sales (including sales to domestic companies for inclusion in products which are sold
to international customers) represented 46.7% and 43.3% of consolidated net sales for the three months
ended October 31, 2004 and 2003, respectively. Domestic commercial sales represented 14.3% and 16.4%
of consolidated net sales for the three months ended October 31, 2004 and 2003, respectively. Sales
to the U.S. government (including sales to prime contractors to the </FONT></P></TD></TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT face="TIMES NEW ROMAN, TIMES, SERIF" size=2>12</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  13; page:  13" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">U.S. government) represented 39.0% and 40.3% of consolidated net sales for the three months ended October
31, 2004 and 2003, respectively.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Sales to one customer, a prime contractor, represented 20.1% of consolidated net sales for the three
months ended October 31, 2003. Direct and indirect sales to a North African country (including certain
sales to the prime contractor mentioned above) during the three months ended October 31, 2004 and
2003 represented 8.6% and 16.9% of consolidated net sales, respectively.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Gross Profit. &nbsp;</I></B> Gross profit was $27.1 million and $21.0 million for the three months ended October 31, 2004 and 2003,
respectively, representing an increase of $6.1 million. The increase in gross profit was attributable
to the increase in our gross margin percentage, which increased from 37.3% for the three months ended
October 31, 2003 to 48.3% for the three months ended October 31, 2004.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The substantial increase in the gross margin, as a percentage of consolidated net sales, was primarily
due to (i) the higher proportion of our consolidated net sales being in the telecommunications transmission
segment, which typically realize higher margins than sales in our other two segments, (ii) increased
operating efficiencies (including the cumulative adjustment discussed below), and (iii) a more favorable
product mix, particularly in our telecommunications transmission and mobile data communications segments.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">As part of our ongoing operations, we periodically review and adjust total estimated contract revenues
and costs on long-term contracts. In the first quarter of fiscal 2005, we increased the estimated
margins at completion on two large over-the-horizon microwave system contracts in the telecommunications
transmission segment as they draw nearer to completion. These adjustments, which are included in
the results of operations for the three months ended October 31, 2004, resulted in an aggregate $2.4
million cumulative increase to the gross profits recognized on these contracts in prior periods.
Further adjustments to the estimated gross margins are possible in future periods as these contracts
are completed.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Included in cost of sales for the three months ended October 31, 2004 and 2003 are provisions for excess
and obsolete inventory of $0.4 million and $0.6 million, respectively. As discussed under &#147;Critical
Accounting Policies &#150; Provisions for Excess and Obsolete Inventory,&#148; we regularly review
our inventory and record a provision for excess and obsolete inventory based on historical usage
assumptions. </FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Selling, General and Administrative Expenses. </I></B>&nbsp;&nbsp;Selling, general and administrative expenses were $11.2 million and $8.6 million for the three months
ended October 31, 2004 and 2003, respectively, representing an increase of $2.6 million, or 30.2%.
As a percentage of consolidated net sales, selling, general and administrative expenses were 20.0%
and 15.3% for the three months ended October 31, 2004 and 2003, respectively. The increase was primarily
due to incremental compensation costs, expenses associated with the Memotec business that was acquired
in May 2004, costs associated with compliance with recent corporate governance regulations and the
initiation of commercial marketing efforts in our mobile data communications segment. In addition,
we recorded $0.4 million of expenses, net of insurance recoveries, related to hurricane damage recently
sustained at two of our leased facilities located in Florida. We expect selling, general and administrative
expenses, as a percentage of consolidated net sales, to decline during the remainder of the year
due to the anticipated increase in sales, as discussed above. </FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Research and Development Expenses. </I></B>&nbsp;&nbsp;Research and development expenses were $4.9 million and $3.5 million for the three months ended October
31, 2004 and 2003, respectively. Approximately $4.2 million and $3.3 million of such amounts, respectively,
related to our telecommunications transmission segment. As an investment for the future, we are continually
enhancing our existing products and developing new products and technologies. Whenever possible,
we seek customer funding for research and development to adapt our products to specialized customer
requirements. During the three months ended October 31, 2004 and 2003, customers reimbursed us $0.8
million, in each period, which is not reflected in the reported research and development expenses,
but is included in consolidated net sales with the related costs included in cost of sales.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Amortization of Intangibles. </I></B>&nbsp;&nbsp;Amortization of intangibles for the three months ended October 31, 2004 and 2003 was $0.6 million and
$0.5 million, respectively. The amortization relates to intangibles with definite lives which we
acquired in connection with various acquisitions. The increase was attributable to the Memotec acquisition
in May 2004. </FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Operating Income. &nbsp;</I></B> Operating income for the three months ended October 31, 2004 and 2003 was $10.4 million and $8.4 million,
respectively. The $2.0 million increase was the result of the higher gross profit, discussed above,
partially offset by higher operating expenses.</FONT></P></TD></TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT color="#000000" size=2 face="TIMES NEW ROMAN, TIMES, SERIF">13</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  14; page:  14" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Operating income in our telecommunications transmission segment increased to $10.0 million for the
three months ended October 31, 2004 from $7.2 million for the three months ended October 31, 2003
as a result of increased operating efficiencies and overhead absorption, as well as the impact ($2.0
million on operating income) of the cumulative gross margin adjustment discussed above under &#147;<I>Gross Profit</I>&#148;, partially offset by increased operating expenses, including research and development. Our mobile
data communications segment generated operating income of $1.2 million for the three months ended
October 31, 2004 compared to $2.5 million for the three months ended October 31, 2003 due primarily
to the decrease in net sales in this segment. Operating income in our RF microwave amplifier segment
increased to $1.1 million for the three months ended October 31, 2004 from $0.2 million for the three
months ended October 31, 2003 primarily as a result of the significant increase in net sales. Unallocated
operating expenses increased to $1.9 million for the three months ended October 31, 2004 from $1.6
million for the three months ended October 31, 2003 due primarily to increased costs in connection
with recent corporate governance regulations and compensation expense.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Interest Expense. &nbsp;</I></B> Interest expense increased from $24,000 for the three months ended October 31, 2003 to $0.7 million
for the three months ended October 31, 2004. Interest expense for the three months ended October
31, 2004 primarily represents interest expense associated with our 2.0% convertible senior notes
issued in January 2004.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Interest Income. &nbsp;</I></B> Interest income for the three months ended October 31, 2004 was $0.6 million, as compared to $0.1
million for three months ended October 31, 2003. The $0.5 million increase was due primarily to a
higher average cash position resulting from the proceeds received from the issuance of our 2.0% convertible
senior notes in January 2004, as well as from an increase in interest rates.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B><I>Provision for Income Taxes. </I></B>&nbsp;&nbsp;The provision for income taxes was $3.3 million and $2.7 million for the three months ended October
31, 2004 and 2003, respectively, as a result of the significant increase in pre-tax profit. The effective
tax rate was 32.0% in both periods.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>LIQUIDITY AND CAPITAL RESOURCES </I></FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our unrestricted cash and cash equivalents increased to $182.1 million at October 31, 2004 from $163.3
million at July 31, 2004. </FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Net cash provided by operating activities was $20.3 million for the three months ended October 31,
2004. Such amount reflects (i) net income of $7.1 million plus the impact of depreciation and amortization
and the provisions for doubtful accounts and inventory reserves aggregating $2.4 million and (ii)
changes in working capital balances, most notably a significant decrease in accounts receivable of
$12.0 million. The decrease in accounts receivable is the result of the timing of cash receipts associated
with two of our large over-the-horizon microwave system contracts as they draw nearer to completion. </FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Net cash used in investing activities for the three months ended October 31, 2004 was $1.8 million,
representing capital expenditures. In the first quarter of fiscal 2005, our mobile data communications
segment substantially completed the move to its new facility in Germantown, Maryland, including the
construction of a state-of-the-art network operations center. </FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Net cash provided by financing activities was $0.2 million, due primarily to the proceeds from stock
option exercises and employee stock purchase plan shares aggregating $0.3 million. These amounts
were offset by principal payments on capital lease obligations of $0.1 million.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>FINANCING ARRANGEMENT</I></FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">On January 27, 2004, we issued $105.0 million of our 2.0% convertible senior notes in a private offering
pursuant to Rule 144A of the Securities Act of 1933, as amended. The net proceeds from this transaction
were $101.2 million after deducting the initial purchaser&#146;s discount and other transaction costs.
For further information concerning this financing, see &#147;Notes to Consolidated Financial Statements
&#150; Note (6) <I>2.0% Convertible Senior Notes.&#148;</I></FONT></P>
</TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT color="#000000" size=2 face="TIMES NEW ROMAN, TIMES, SERIF">14</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  15; page:  15" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>COMMITMENTS</I></FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">In the normal course of business, we routinely enter into binding and non-binding purchase obligations
primarily covering anticipated purchases of inventory and equipment, and from time to time, technology
licenses. We do not expect that these commitments as of October 31, 2004 will materially adversely
affect our liquidity.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">At October 31, 2004, we had contractual cash obligations to repay our 2.0% convertible senior notes,
capital lease and operating lease obligations (including satellite lease expenditures relating to
our mobile data communications segment contracts). Payments due under these long-term obligations
are as follows:</FONT></P></TD></TR>
<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR></TABLE>
<TABLE cellSpacing=0 cellPadding=0 width=600 border=0>
  <TR vAlign=bottom>
    <TD><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"></FONT></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD colSpan=10 align="center"><b><FONT color="#000000" size=1 face="Times New Roman, Times, Serif">Obligations due by fiscal year (in thousands) </FONT></b></TD>
    <TD align="center"><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR vAlign=bottom>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD colSpan=10 align="center"><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR vAlign=bottom>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" align="center"><b><FONT color="#000000" size=1 face="Times New Roman, Times, Serif">Total</FONT></b></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><b><FONT color="#000000" size=1 face="Times New Roman, Times, Serif">Remainder <br>
      of <br>
      2005</font></b></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><b><FONT color="#000000" size=1 face="Times New Roman, Times, Serif">2006<br>
      and <br>
      2007</FONT></b></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><b><FONT color="#000000" size=1 face="Times New Roman, Times, Serif">2008 <br>
      and<br>
      2009</FONT></b></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><b><FONT color="#000000" size=1 face="Times New Roman, Times, Serif">After <br>
      2009</FONT></b></TD>
    <TD width="2%" align="center"><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR vAlign=bottom>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" align="center"><hr size="1" noshade></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><hr size="1" noshade></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><hr size="1" noshade></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><hr size="1" noshade></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><hr size="1" noshade></TD>
    <TD align="center"><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR vAlign=bottom bgcolor="#e5ffff">
    <TD><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">2.0% convertible senior notes</FONT></TD>
    <TD width="1%"><font color="#000000">&nbsp;</font></TD>
    <TD width="1%" align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">$</FONT></TD>
    <TD width="10%" align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">105,000,000</FONT></TD>
    <TD width="3%" align=right><font color="#000000">&nbsp;</font></TD>
    <TD width="10%" align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD width="3%" align=right><font color="#000000">&nbsp;</font></TD>
    <TD width="10%" align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD width="3%" align=right><font color="#000000">&nbsp;</font></TD>
    <TD width="10%" align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD width="3%" align=right><font color="#000000">&nbsp;</font></TD>
    <TD width="10%" align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">105,000,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR vAlign=bottom>
    <TD><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Capital lease obligations</FONT></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">318,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">160,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">158,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#151;</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR vAlign=bottom bgcolor="#e5ffff">
    <TD><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Operating lease commitments</FONT></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">10,318,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">3,554,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">3,773,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">1,750,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">1,241,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR vAlign=bottom>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" align="center"><hr size="1" noshade></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><hr size="1" noshade></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><hr size="1" noshade></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><hr size="1" noshade></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><hr size="1" noshade></TD>
    <TD align="center"><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR vAlign=bottom>
    <TD><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Total contractual cash obligations</FONT></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="right"><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">$</FONT></TD>
    <TD align="right"><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"> 115,636,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">3,714,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">3,931,000</FONT></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">1,750,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
    <TD align=right><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">106,241,000</FONT></TD>
    <TD align=right><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR vAlign=bottom>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" align="center"><hr size="2" noshade></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><hr size="2" noshade></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><hr size="2" noshade></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><hr size="2" noshade></TD>
    <TD><font color="#000000">&nbsp;</font></TD>
    <TD align="center"><hr size="2" noshade></TD>
    <TD align="center"><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD vAlign=top>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">We have entered into standby letter of credit agreements with financial institutions relating to the
guarantee of our future performance on certain contracts. At October 31, 2004, the balance of these
agreements was $2.2 million. Cash we have pledged against such agreements aggregating $2.1 million
has been classified as restricted cash in the consolidated balance sheet as of October 31, 2004. </FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">We believe that our cash and cash equivalents will be sufficient to meet our operating cash requirements
for at least the foreseeable future. In the event that we identify a significant acquisition that
requires additional cash, we would seek to borrow funds or raise additional equity capital.</FONT></P>
<P><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>FORWARD-LOOKING STATEMENTS</I></FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Certain information in this Quarterly Report on Form 10-Q contains forward-looking statements, including
but not limited to, information relating to the future performance and financial condition of the
Company, the plans and objectives of the Company&#146;s management and the Company&#146;s assumptions
regarding such performance and plans that are forward-looking in nature and involve certain significant
risks and uncertainties. Actual results could differ materially from such forward-looking information.
The Company&#146;s filings with the Securities and Exchange Commission identify many of such risks
and uncertainties, which include the following: </FONT></P></TD></TR>
<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our operating results being difficult to forecast and subject to volatility;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our inability to maintain our government business;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our inability to keep pace with technological changes;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our dependence on international sales;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The impact of a domestic and foreign economic slow-down and reduction in telecommunications equipment
and systems spending on the demand for our products, systems and services;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our mobile data communications business being in an early stage;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our backlog being subject to cancellation or modification;</FONT></TD>
</TR>
<TR>
<TD vAlign=top></TD>
<TD vAlign=top></TD>
<TD vAlign=top>&nbsp;</TD></TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our dependence on component availability, subcontractor availability and performance by key suppliers;
</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our fixed price contracts being subject to risk;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The impact of adverse regulatory changes on our ability to sell products, systems and services;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The impact of prevailing economic and political conditions on our businesses;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Whether we can successfully integrate and assimilate the operations of acquired businesses;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The impact of the loss of key technical or management personnel;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The highly competitive nature of our markets;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our inability to protect our proprietary technology;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our operations being subject to environmental regulation;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The impact of recently enacted and proposed changes in securities laws and regulations on our costs;</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The impact of terrorist attacks and threats, and government responses thereto, and threats of war on
our businesses; </FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT color="#000000" size=2 face="TIMES NEW ROMAN, TIMES, SERIF">15</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  16; page:  16" -->
<BR>

<TABLE width="600" border="0" cellPadding="0" cellSpacing="0">
  <TR>
    <TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our inability to satisfy our debt obligations, including the recently issued convertible senior notes;</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The inability to effectuate a change in control of the Company due to provisions of its certificate of incorporation and by-laws, stockholders&#146; rights plan and Delaware law;</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our stock price being volatile; and</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top width=18><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&#149;</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our current intention not to declare or pay any cash dividends.</FONT></TD>
  </TR>
</TABLE>
<br>

<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Item 3<B>. &nbsp;&nbsp;&nbsp;&nbsp;</B> <I>Quantitative and Qualitative Disclosures about Market Risk</I></FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The Company&#146;s earnings and cash flows are subject to fluctuations due to changes in interest rates
primarily from its investment of available cash balances. Under its current policies, the Company
does not use interest rate derivative instruments to manage exposure to interest rate changes. If
the interest rate the Company receives on its investment of available cash balances were to change
by 10%, the effect would be immaterial.</FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Our 2.0% convertible senior notes bear a fixed rate of interest. As such, our earnings and cash flows
are not sensitive to changes in interest rates on our long-term debt. </FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Item 4. &nbsp;&nbsp;&nbsp; <I>Controls and Procedures</I></FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation of the effectiveness
of the design and operation of the Company&#146;s disclosure controls and procedures was carried
out by the Company under the supervision and with the participation of the Company&#146;s management,
including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that the Company&#146;s disclosure
controls and procedures have been designed and are being operated in a manner that provides reasonable
assurance that the information required to be disclosed by the Company in reports filed under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within
the time periods specified in the SEC&#146;s rules and forms. A system of controls, no matter how
well designed and operated, cannot provide absolute assurance that the objectives of the system of
controls are met, and no evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within a company have been detected. There have been no changes in
the Company&#146;s internal controls over financial reporting that occurred during the most recent
fiscal quarter that have materially affected, or are reasonably likely to materially affect, the
Company&#146;s internal controls over financial reporting.</FONT></P>
<P align=center><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>PART II</I><br>
    <I>OTHER INFORMATION</I></FONT></P>
</TD></TR>
<TR>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
  <TD width="8%" vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Item 6. </font></TD>
  <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>Exhibits</I></font></TD>
</TR>
<TR>
  <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
  <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(a)</font></TD>
  <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Exhibits</font></TD>
</TR>
<TR>
  <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Exhibit 31.1 &#150; Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Exhibit 31.2 &#150; Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Exhibit 32.1 &#150; Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Sarbanes-Oxley Act of 2002</FONT></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
</TR>
<TR>
<TD vAlign=top><font color="#000000">&nbsp;</font></TD>
<TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Exhibit 32.2 &#150; Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Sarbanes-Oxley Act of 2002</FONT></TD>
</TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD vAlign=top></TD></TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT face="TIMES NEW ROMAN, TIMES, SERIF" size=2>16</FONT></P>
<HR color=gray noShade SIZE=5>
<BR></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet:  17; page:  17" -->
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD>
<P align=center><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><I>SIGNATURES</I></FONT></P>
<P align=left><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.</FONT></P>
<P align=center><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">COMTECH TELECOMMUNICATIONS CORP.<br>
(Registrant)</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD align="right" vAlign=top>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD width=45% vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Date:&nbsp;&nbsp;December 7, 2004</font></TD>
    <TD align="right" vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">By:</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">/s/ Fred Kornberg</font></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD align="right" vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" vAlign=top><FONT color="#000000" size="2" face="Times New Roman, Times, serif">&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top width=45%><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=366><font color="#000000">&nbsp;</font></TD>
    <TD width="2%" vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD width="50%" vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;Fred Kornberg</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top width=45%><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=366><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;Chairman of the Board</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top width=45%><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=366><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;Chief Executive Officer and President</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top width=45%><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=366><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;(Principal Executive Officer)</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD width=45% vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Date:&nbsp;&nbsp;December 7, 2004</font></TD>
    <TD align="right" vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">By:</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">/s/ Robert G. Rouse</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD align="right" vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD colspan="2" vAlign=top><FONT color="#000000" size="2" face="Times New Roman, Times, serif">&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top width=45%><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=366><font color="#000000">&nbsp;</font></TD>
    <TD width="2%" vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD width="50%" vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;Robert G. Rouse</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top width=45%><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=366><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;Executive Vice President and</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top width=45%><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=366><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;Chief Financial Officer</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top width=45%><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=366><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;(Principal Financial and Accounting Officer)</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR>
<TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>
<TR>
<TD vAlign=top></TD></TR></TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">

<TR vAlign=top>
<TD width="600"><BR>
<P align=center><FONT color="#000000" size=2 face="TIMES NEW ROMAN, TIMES, SERIF">17</FONT></P>
<HR color=gray noShade SIZE=5>
</TD></TR></TABLE>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>2
<FILENAME>logo.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 logo.gif
M1TE&.#EAM``I`,0``*^OKU66O];6UOO[^X^/CV5E94A(2"<G)^'AX:K+WA(2
M$O3T](BUT2=YK>OT]=CH\<'9Y^OKZ_CX^/+Y^O?V]_#P\9^?GWU]?<C(R.+P
M];R\O/[^_@("`@$!`0```/___R'Y!```````+`````"T`"D```7_X">.9&F>
MY::J:.N^<"S/=&W?(A4AB(`)B$AE0R+BCLBD<CE;#4H1#(!0."@4G*SB8"@0
M-!&3D4DNF\_%P>;YD6`*!H5G3J_7%8:+X+.6C-&`@8(Q:T01`'%T61Y9'!V-
MC74'!!1K:H.8F9E$`X@<=HV/CHRAD!X=%Q*7FJRM9A47<HY9'8\==HJ0N@45
M?*Z_P#<"!7.FHW-;!@8'!Y^DLZ=SJ<'4U2EJ1``'SY&,>!8:0#L"&A<'MZ&V
M"A9M?$]$:[Y&V"LK']@GJJI\*JM%+`/8C&#!3P0+@O7@W9-0\-H]@H,";J!`
M0)8N#WCT"#01H>(S=!X.""C4[X\[)P,8_XI@X\]@P(`J)>9;J;*(KY4)2Z14
M08$>OC0/30):L^#"J5F1#EA8\`$"@P!0`S!(4/.#AF:Z/A60:$1"!!\"F,(K
M]))DRY,25*E)N7%$P`\4_*0IY&??F@H^PD689^GE6Q+T]F%Z8D%4*$8%(F1(
MP.!IU,<,(.P#X`S4GC88""S;PJP`!H;8*%Q0IJP``A,P-9,N@(BT:])47K^V
MP*+"&V97MK`.\P0!G"ZG2408K0R#)@S;+BH@L,$!@P8-HC8.`+UZ`@<;)%`I
MP+U[@3T:"LC!A?'[2@3;%!DOP5##^#F3R"OR*-\#NP'AWX,RL)[R'`-,D2#`
M>`H$-T@$!A03R?\Z35$7W6,.5@==``\(-4($XD5C1RWP:2""`)]$PLY-(E20
M8"VU=%$'AW3$IZ%EP\EQRX:C'."A47,48((&'!K0BR`J7."(81PP"$&$4C7V
ME(02,E!2/VHL0$PT''"AC!5SW"+2!Q8XL\@%?,@E0I=#?G)!%58@Q<P!W!W%
MV9I<^,:(-VQRE]XB/A+C")AKJ4#`G%MA@APCM2Q2P$2.0355`HQ!*&$`$/#S
MT@<5Z/F)`188V%%RCX!IU)"W&/`."Q$DMX@'`/2```$U:L`#`@DRDFD/`M0J
M)YX`_/A!1[)(<^)R.-U3P(P$#&:I*!T<@,$&STV8Y)),,AE`!B^IA2/_1A>$
M45`VO0*88#<']#(IF;-TH,!Z'WP:$AL5I'?N/200((H"V:ZTBC96X':*`A[&
M,\`"=P(@Z'OJL`-!=<\R"FVTU3$P03]<+F*C087<0Y@"6EJ0'C/(&!>/`,G%
M$:JV)D:CHPH`C.=C"2E_PN`]E;RE`JT(?&JNMB-@,)ZRF'QZF`$4?)``PHLJ
MS+"S4CU<"7K>L*,6&R0Q79[*.'(P(EQ3YC&>CA_*T@%S(EPP(R\1E%WVMU^[
MP]8[)ABE)0!PQUV`,P<8"`@%)T;"@<`;#(VPHM-!%>VS%;S%:JA!RW00"]N8
MBY4'!70I#;PI,P(`,8\42X0&"JZW@:6Y76%`_T67\G;)011/E'>11>8&#="#
M@*S@)P?PUJRT2DXW>&,.K#0E!V"J4%5![7J#A9DZ_\<'@O^5C%&_7-)1H`BE
MGC(C'5U\:2\_8^"#`,:GTH'.V"2B4?DC=!30TP9'[IY[A!,VEL##N\9JM=HI
MM$=@,X]84+P'`/H`JS#R@XTA`!XXZL#*/I`\\L`A&IH+RD*X1X3DA0@790+3
M(.@3B>`U96'QR]WM0IB`MTB-`\6:U#\&8"DL/>\#L:J;["`7L5#)0T\>N``+
M+!`--G5!&8B84['\@!"2C.!\]+J`$I4XK%OPJWQG&*`IF+.&#("P`5,1(?R4
M!`$62`T5OA`3"5J&$?\#+$(!>YB2C3"G`(&YC89$D,"W[#."-UY@`0N0P`)Z
M$BO(V<,(%8L7GH8'`.F=QD)DD.+UMM('IT"K:(PRVK.FXH"W4&!*(3G-7TAP
ME3GE`7VUBUX9L8"*`>!M3AZ4VKF(X#Q4E4](;UOA!Q9@`0(0P`(6,.,M@B>7
M`5P+=AN4D8;"%8\(*(PZ"8"`,I<)`<8D,Y(9L!@1)'<INY5(8W,2"0X+T!YH
M_"<,3/O$?:RBLB%\()QH-,&`>NBA$OBF,LMHQ#A+A$,=GL4,YSM5&X/BG.F(
M,'>,X2)#ZE$R44SB!PC(C!FS^9DYCFB=I-@G`R%AG"?(2RLC<(\CZ&7+CA+_
M8#BD*$\XR&&.HP"PD^9:%CU*Y@B^#<\,LA,%]DZS@"<L(*#_S&D":@JE)PS*
MI)RIS'^,`["CM)-YA@K01<UE($MYD%6?N%Z+!.`\+UW!2SE"@$:K-(2*H=-C
M$4';*$+5B[0,(`-.H0Z$1)B`PB5$(ITDU(J04:\!?`\^(S&EGE*Z$$P:0%O,
M>Z$(?B?5YIUSH;2X('P(T(L_8?0E06N@`32)R$0Z`T4<,HU!/N"<J#",`14Z
M"2#9,(SQ2)4+[61(Y0`8(`$6`TP,6<`<`\5``XJ@J$/"Q<EF65)<L&D/*OA=
M"C<[0,BM!1,QM1XM0J*1C3P`IU.))@IJ`H_,<*<+_Q>PP&5(@("X;?><<--`
M:ZWBW1%40`-P0Y<$T*L!],:MO-P%P)FX0X!4E4`*`'"5.N&+"2)(T10MZL(M
M<4E@`@.@P`A.,"[A5LL!,QC!^6WO>\,KX?>VM\)QN[![,ZSA#D\XP@RF\(0U
M_&$*8Z##'0Y"AP5`@1.W5\4:P,``3JQB#"Q@<1+`7#?JP^,>DX=%/JZ/8>94
M&:%B,$OAPVJ6T+'<N<[(2^@KLI)/U8%:2O4"#415(2%7/`M0IG;'90A+C7P4
M9`7YS&CFL>NN>KPK."X+6#J>WF@AYR)AA)18<)T6+ABZ65S!&QO%V%5'<:X3
MD0*7SN#7GW(X(`YD!H#]$/\CAK)$HQD1*2N8SK2F-YV5%*F&.`DZP&A$31PE
MTJL`Q($#<:P$!S:1^@H$X()JE'&FY93F3%G(0Q50O8PS85<\M!/`MUQ6#H;J
MR<M%&D8.!\*)E&"(S$@&<IJGO:)-AT1>%]#,`UDCZBID3S->UD`>\DN`T:A:
M`]H^$S/T4!K@H7H2!H`;?86D`#3E0==3\((%@`U`V4E,V)YDVKG^I*P$9<J6
M"/#)+'-IY$+1`K,0C[C$)T[QBH=J6+;,@SDB1VLX<,?<M13P=MZ-ZE2/>K[*
MJ'>=?K-O+Q"CWG92X@_-O:8L%,`](:W;;.]:-V+PQPH6,#?7Y$&]?>N'VDA'
M^AG7\V6%+<B!8WC0`IM=%^?6T>ZJ=W891K8AZ"(U`QEQYKK5[SR'6]K!,^^Y
M@`8N5;R;FTN^NG;+9F^+@:"W&DYXS[O>]\[WOOO][X`/O.`'OZ:ZXQT<RT`M
MOBX`JTE<Y:_[SNY`@@61B>Q1`A2(2UHVS_G.>_[SH`^]YS-?@<SO,?-QH<`>
M\8AYU;<>CWA4_>E5+_O6VS[S>KP\ZEV?>M.G7O>TA_T>U]"3U*>$`A5("^I/
HG\>4%(XM/4&!$^QAC1=LI+(P:(OT;0+%N<L`D7)I-DO&TI"5A```.S\_
`
end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>d61518_ex31-1.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<html>
<head>
<title></title>
</head>
<body>
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="right" vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><B>Exhibit 31.1</B></FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><P align=center><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><B>CERTIFICATIONS PURSUANT TO SECTION 302</B></FONT></P>
        <P align=center><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><B>OF THE SARBANES-OXLEY ACT OF 2002</B></FONT></P>
        <P><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>I, Fred Kornberg, certify that:</FONT></P></TD>
  </TR>
  <TR>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>1.<FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;</font></font></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>I have reviewed this quarterly report on Form 10-Q of Comtech Telecommunications Corp.;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width=24><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>2.<FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT></FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT>Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width=24><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>3.<FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT></FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT>Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width=24><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>4.<FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT></FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT>The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top width=24></TD>
    <TD vAlign=top width=24><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>(a)<FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT></FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width=24></TD>
    <TD vAlign=top width=24><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>(b)<FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT></FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT>Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width=24></TD>
    <TD vAlign=top width=24><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>(c)<FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT></FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT>Disclosed in this quarterly report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top width=24><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>5.<FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT></FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT>The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top width=24></TD>
    <TD vAlign=top width=24><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>(a)<FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT></FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width=24></TD>
    <TD vAlign=top width=24><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>(b)<FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT></FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><FONT color="#000000"face="Times New Roman, Times, Serif" size=2></FONT>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>Date:&nbsp;&nbsp;December 7, 2004</font></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>/s/ Fred Kornberg</font></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top><font color="#000000" size="2" face="Times New Roman, Times, serif">&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD width="50%" vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;Fred Kornberg</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;Chairman of the Board</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;Chief Executive Officer and President</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR vAlign=top>
    <TD width="600"><BR>
        <P align=center><FONT color="#000000"face="TIMES NEW ROMAN, TIMES, SERIF" size=2>18</FONT></P>
        <HR color=gray noShade SIZE=5>
        <BR></TD>
  </TR>
</TABLE>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>4
<FILENAME>d61518_ex31-2.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<html>
<head>
<title></title>
</head>
<body>
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="right" vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B>Exhibit 31.2</B></FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><P align=center><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B>CERTIFICATIONS PURSUANT TO SECTION 302</B></FONT></P>
        <P align=center><FONT color="#000000" size=2 face="Times New Roman, Times, Serif"><B>OF THE SARBANES-OXLEY ACT OF 2002</B></FONT></P>
        <P><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">I, Robert G. Rouse, certify that:</FONT></P></TD>
  </TR>
  <TR>
    <TD vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top><font color="#000000" size=2 face="Times New Roman, Times, Serif">1.&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000" size=2 face="Times New Roman, Times, Serif">I have reviewed this quarterly report on Form 10-Q of Comtech Telecommunications Corp.;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">2.</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; </FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">3.</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">4.</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top width=24><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(a)</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top width=24><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(b)</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top width=24><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(c)</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Disclosed in this quarterly report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">5.</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top width=24><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(a)</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top width=24><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top width=24><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">(b)</FONT></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000" size=2 face="Times New Roman, Times, Serif">Date:&nbsp;&nbsp;December 7, 2004</font></TD>
    <TD width="50%" vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">/s/ Robert G. Rouse</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000" size="2" face="Times New Roman, Times, serif">&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;Robert G. Rouse</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><FONT color="#000000" size=2 face="Times New Roman, Times, Serif">&nbsp;Executive Vice President and Chief Financial Officer</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
    <TD vAlign=top><font color="#000000">&nbsp;</font></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR vAlign=top>
    <TD width="600"><BR>
        <P align=center><FONT face="TIMES NEW ROMAN, TIMES, SERIF" size=2>19</FONT></P>
        <HR color=gray noShade SIZE=5>
        <BR></TD>
  </TR>
</TABLE>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>5
<FILENAME>d61518_ex32-1.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<html>
<head>
<title></title>
</head>

<body>
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="right" vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><B>Exhibit 32.1</B></FONT></TD>
  </TR>
  <TR>
    <TD align="right" vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD><P align=center><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><B>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO<BR>
        SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</B></FONT></P>
        <P align=left><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>In connection with the Quarterly Report of Comtech Telecommunications Corp. (the &#147;Company&#148;) on Form 10-Q for the period ended October 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), I, Fred Kornberg, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. &#167; 1350, as adopted pursuant to &#167; 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:</FONT></P></TD>
  </TR>
  <TR>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top width=15><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>1.</FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>The Report fully complies with requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width=15><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>2.</FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>Date:&nbsp;&nbsp;December 7, 2004</font></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>/s/ Fred Kornberg</font></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top><font color="#000000" size="2" face="Times New Roman, Times, serif">&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD width="50%" vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;Fred Kornberg</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;Chairman of the Board</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;Chief Executive Officer and President</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR vAlign=top>
    <TD width="600"><BR>
        <P align=center><FONT color="#000000"face="TIMES NEW ROMAN, TIMES, SERIF" size=2>20</FONT></P>
        <HR color=gray noShade SIZE=5>
        <BR></TD>
  </TR>
</TABLE>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>6
<FILENAME>d61518_ex32-2.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<html>
<head>
<title></title>
</head>

<body>
<BR>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="right" vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><B>Exhibit 32.2</B></FONT></TD>
  </TR>
  <TR>
    <TD align="right" vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD><P align=center><FONT color="#000000"face="Times New Roman, Times, Serif" size=2><B>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO<BR>
        SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</B></FONT></P>
        <P align=left><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>In connection with the Quarterly Report of Comtech Telecommunications Corp. (the &#147;Company&#148;) on Form 10-Q for the period ended October 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), I, Robert G. Rouse, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. &#167; 1350, as adopted pursuant to &#167; 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:</FONT></P></TD>
  </TR>
  <TR>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top width=15><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>1.</FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>The Report fully complies with requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width=15><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>2.</FONT></TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.</FONT></TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>Date:&nbsp;&nbsp;December 7, 2004</font></TD>
    <TD width="50%" vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>/s/ Robert G. Rouse</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top><font color="#000000" size="2" face="Times New Roman, Times, serif">&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</font></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;Robert G. Rouse</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top><FONT color="#000000"face="Times New Roman, Times, Serif" size=2>&nbsp;Executive Vice President and Chief Financial Officer</FONT></TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR vAlign=top>
    <TD width="600"><BR>
        <P align=center><FONT color="#000000"face="TIMES NEW ROMAN, TIMES, SERIF" size=2>21</FONT></P>
        <HR color=gray noShade SIZE=5>
        <BR></TD>
  </TR>
</TABLE>
</body>
</html>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
