Report of Third Quarter and Nine Months Results;
Restructuring Charge Planned and Stock Repurchase Program Reaffirmed

   Third quarter 1998 sales of $5,121,000 increased 2.7% over sales in the third quarter of the prior year of $4,984,000. Net income decreased $102,000 or 29.1% to $248,000 for the third quarter of 1998 compared to 1997. Diluted net income per share was $.14, a decrease of $.05 or 26.3%, compared to the diluted per share amount of $.19 reported for the third quarter of the prior year on a similar number of weighted average diluted common shares outstanding in both years.

For the first nine months of 1998 sales of $16,487,000 increased 15.7% over prior year nine-month sales of $14,245,000. Net income increased 7.8% to $1,084,000 compared to $1,006,000 reported in the first nine months of 1997, and diluted net income per share increased to $.59, up 3.5% compared to diluted net income per share of $.57 reported in the first nine months of the prior year.

The diluted weighted average number of common shares outstanding increased by 63,000 shares or 3.6% for the first nine months compared to the first nine months of the prior year. The increase resulted from common stock issued during the second half of 1997 and first half of 1998 from the exercise of stock options and the sale of common stock from its treasury.

Technology reinvestment exceeding $700,000 continues at a record pace, more than doubling from last year. Multi-Mix^TM Microtechnology, a proprietary 3-dimensional microwave packaging technology, has recently been described in important electronics industry trade publication articles and is featured on the cover of the November issue of Microwave Journal, a leading RF/microwave industry publication. Customer response to our new products has been extremely positive.

Multi-Mix® is a unique packaging technology that provides for the integration of a variety of different types of functionality by combining several components creating an MMFM^TM (Micro Multi-Function Module), that provides customers with what they want, which is a "total integrated packaging solution". It is based on a platform strategy that provides predesigned modules that combine the benefits of standard and custom design. This new technology leads naturally to structures that are compact, providing for smaller size and lighter weight, which are desirable features for satellite and other wireless applications. During this development process, we have emphasized the need for technology innovation, process excellence and market focus. This successful effort provides us with an enabling technology that meets and exceeds customer requirements.

Multi-Mix® adds tremendous capability and dimension for our key account customers. Beyond our traditional components business we are successfully involved with subassembly and

subsystem applications. This allows us to provide per-unit value many times our historic average. Multi-Mix® is creating a new business model establishing diversification into high growth commercial market segments.

Within our core product technology, we have been notified by the US Patent Office that our patent application for a 15 GHz bi-phase modulator has been allowed and that we will be receiving a patent for that design. This proprietary design, nicknamed the "flatliner" for its outstanding performance, has application in space and Ku band frequency applications.

The Company entered the fourth quarter of 1998 with a backlog of $6.4 million, a decrease of $3.7 million or 37% from the same time last year. Major satellite and defense customers continued to defer purchases as a result of delays in certain programs. Management of the Company believes that many of the satellite constellation programs that have been delayed may resume and translate into orders during the remainder of 1998 and continue positively into 1999. Customer requests for design work are on the increase and are currently under development utilizing the Company’s proprietary Multi-Mix® Microtechnology. This technology provides greater per unit content and enables the Company’s entry into new markets for increased order opportunities.

   Because of the current weakness in orders, the Company is preparing to layoff approximately 15% of its workforce and to offer early retirement packages to certain employees during the fourth quarter of 1998. The Company plans to report a restructuring charge in the fourth quarter of 1998 of approximately $200,000 and potentially upwards before taxes for the reduction in workforce and voluntary early retirements. The saving in costs for future fiscal years from this restructuring should approximate at least $800,000 annually, depending upon the number of employees accepting early retirement. The Company further estimates that sales will decline for the fourth quarter of 1998, as a result of the decline in backlog for the previous quarters, and it expects to report an operating loss before the restructuring charge. This restructuring will allow for greater focus and emphasis on the growth segments of our business. Management is taking appropriate action to right-size the business given current market conditions.

Thank you for your continued support and confidence.

Mason N. Carter
Chairman and CEO

November 11, 1998

Note: Certain statements in this news release are forward-looking statements based on current management expectations and are subject to risks and uncertainties. Factors that could cause future results to differ from these expectations include general economic and industry conditions, competitive products and pricing pressures, risks relating to governmental regulatory actions in communications and defense programs, and inventory risks due to technological innovation. Additional factors to which the Company’s performance is subject are described in the Company’s reports filed from time to time with the Securities and Exchange Commission.

Quarter Ended

Nine Months Ended

October 3
1998

September 27
1997

October 3
1998

September 27
1997

$5,120,946

$4,983,793

$16,487,212

$14,245,236

2,268,970

2,249,174

7,385,657

6,534,427

1,674,779

1,546,417

5,032,992

4,650,250

282,264

162,015

745,665

344,233

348,803

564,015

1,673,191

1,610,861

101,000

214,000

589,000

605,000

$ 247,803

$ 350,015

$ 1,084,191

$ 1,005,861

$.14

* $.19

$.59

* $.57

1,805,997

* 1,807,449

1,831,076

* 1,767,878

1998

1997

$ 2,185,199
-      
4,731,302
3,341,741
     1,256,857

$ 974,390
1,336,014
3,426,988
4,290,007
    1,151,123

11,515,099

10,688,187