10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2005

Or

o Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                     to                    

Commission File Number 0-11685

Radyne Corporation

formerly Radyne Comstream, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	11-2569467
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3138 East Elwood Street, Phoenix, Arizona	85034
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number including area code: (602) 437-9620

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes R No £

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934.
Yes R No £

     The number of shares of the registrant’s common stock, which were outstanding as of the close of business on August 1, 2005 was 16,952,902.

Part I
FINANCIAL INFORMATION

Item 1. Financial Statements

Radyne Corporation

Condensed Consolidated Balance Sheets
(in thousands, except share data)

	June 30,			December 31,
	2005			2004
	Unaudited
Assets
Current assets:
Cash and cash equivalents	$	5,899		$	39,300
Accounts receivable — trade, net of allowance for doubtful accounts of $818 and $350, respectively		17,141			9,728
Inventories		18,937			8,132
Deferred tax assets		3,481			2,218
Prepaid expenses and other assets		1,073			846
Total current assets		46,531			60,224
Goodwill		28,879			—
Intangibles		7,276			—
Deferred tax assets, net		1,928			3,445
Property and equipment, net		3,923			1,593
Other assets		282			154
Total Assets	$	88,819		$	65,416
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	6,437		$	1,566
Accrued expenses		6,316			4,835
Customer advance payments		2,248			149
Bank loan		1,000			—
Income taxes payable		290			242
Total current liabilities		16,291			6,792
Bank loan, less current portion		4000			—
Long-term obligations		1,135			284
Accrued stock option compensation		141			146
Total liabilities		21,567			7,222
Stockholders’ equity:
Common stock; $.001 par value — authorized, 50,000,000 shares; issued and outstanding, 16,918,816 shares and 16,232,999 shares, respectively		17			16
Additional paid-in capital		59,983			54,414
Retained earnings		7,280			3,764
Other Comprehensive income (loss)		(28	)		—
Total stockholders’ equity		67,252			58,194
Total Liabilities and Stockholders’ Equity	$	88,819		$	65,416

See Notes to Condensed Consolidated Financial Statements

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Radyne Corporation

Condensed Consolidated Statements of Operations
Unaudited
(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Net sales	$	20,613		$	12,020		$	34,321		$	27,093
Cost of sales		10,973			5,971			17,556			13,064
Gross profit		9,640			6,049			16,765			14,029
Operating expenses:
Selling, general and administrative		4,715			3,462			8,392			6,872
Research and development		1,832			1,258			3,330			2,554
Total operating expenses		6,547			4,720			11,722			9,426
Earnings from operations		3,093			1,329			5,043			4,603
Other (income) expense:
Interest expense		54			3			80			5
Interest and other income		(238	)		(89	)		(488	)		(172	)
Earnings before income taxes		3,277			1,415			5,451			4,770
Income tax expense		1,202			92			1,935			312
Net earnings	$	2,075		$	1,323		$	3,516		$	4,458
Earnings per share:
Basic	$	0.12		$	0.08		$	0.21		$	0.27
Diluted	$	0.12		$	0.08		$	0.20		$	0.26
Weighted average number of common shares outstanding:
Basic		16,727			16,476			16,601			16,410
Diluted		17,410			17,211			17,337			17,430

See Notes to Condensed Consolidated Financial Statements

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Radyne Corporation

Condensed Consolidated Statements of Cash Flows
Unaudited
(in thousands)

	Six Months Ended June 30,
	2005			2004
Cash flows from operating activities:
Net earnings	$	3,516		$	4,458
Adjustments to reconcile net earnings to net cash provided by operating activities:
Leasehold impairment charge		—			135
Loss/(gain) on disposal of property and equipment		(21	)		63
Decrease in allowance for doubtful accounts		(6	)		(252	)
Deferred income taxes		1,611			—
Depreciation and amortization		623			696
Tax benefit from disqualifying dispositions		116			500
Accrued stock option compensation		(5	)		(24	)
Increase (decrease) in cash, excluding effects of acquisition, resulting from changes in:
Accounts receivable		(1,936	)		2,287
Inventories		(339	)		(1,747	)
Prepaids and other assets		18			(420	)
Accounts payable		(877	)		(517	)
Accrued expenses		(828	)		(30	)
Income taxes payable		(22	)		(61	)
Customer advance payments		277			(338	)
Net cash provided by operating activities		(2,139	)		4,750
Cash flows from investing activities:
Acquisition of Xicom, net of cash acquired		(43,346	)		—
Capital expenditures		(652	)		(475	)
Proceeds from sales of property and equipment		26			—
Net cash used in investing activities		(43,972	)		(475	)
Cash flows from financing activities:
Net borrowing from notes payable		5,000			—
Exercise of stock options		449			1,417
Exercise of redeemable warrants		2,718			—
Net proceeds from sales of common stock to employees		274			230
Stock issuance costs		(4	)		(6	)
Principal payments on capital lease obligations		(4	)		(11	)
Net cash provided by financing activities		8,433			1,630
Effects of exchange rate changes on cash and cash equivalents		(1	)		—
Net increase in cash and cash equivalents		(33,401	)		5,905
Cash and cash equivalents, beginning of year		39,300			30,130
Cash and cash equivalents, end of quarter	$	5,899		$	36,035
Supplemental disclosures of cash flow information:
Cash paid for interest	$	80		$	5
Cash paid for taxes	$	231		$	60
Non-cash investing activities:
Issuance of 219,708 shares of common stock in acquisition	$	2,018			—

See Notes to Condensed Consolidated Financial Statements

4

Radyne Corporation

Notes to Condensed Consolidated Financial Statements
(Information for June 30, 2005 and 2004 is Unaudited)

1) Basis of Presentation

The unaudited condensed consolidated financial statements of Radyne Corporation (the “Company”) for the three months ended June 30, 2005 and 2004 have been prepared in accordance with accounting principles generally accepted in the United States of America and the instructions to Form 10-Q and Article 10 of the Securities Exchange Commission (the “Commission”) Regulation S-X. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments necessary, all of which are of a normal recurring nature, to present fairly the Company’s financial position, results of operations and cash flows. Interim results are not necessarily indicative of results for a full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. A copy of the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are available through our website found at www.radn.com in the Investor Info section.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions based upon historical experience and various other factors and circumstances. The Company believes that its estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

Certain reclassifications have been made to the prior years condensed consolidated financial statements to conform to the current year presentation.

2) Employee Stock Options

The Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related interpretations in accounting for its employee stock options and to adopt the “disclosure only” alternative treatment under Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123). Under SFAS 123, deferred compensation is recorded for the fair value of the stock on the date of the option grant. The deferred compensation is amortized over the vesting period of the option.

The Company applies APB 25 in accounting for its employee stock options. Had the Company determined compensation cost based on the fair value at the grant date for its stock options under SFAS 123, the Company’s net earnings and earnings per share would have been reduced to the pro forma amounts indicated below:

	Three Months Ended June 30,
	2005			2004
	(in thousands, except per share data)
Net earnings:
As reported	$	2,075		$	1,323
Fair value of stock options, after taxes		(145	)		(299	)
Pro forma	$	1,930		$	1,024
Earnings per share:
Basic — as reported	$	0.12		$	0.08
Basic — pro forma	$	0.12		$	0.06
Diluted — as reported	$	0.12		$	0.08
Diluted — pro forma	$	0.11		$	0.06

	Six Months Ended June 30,
	2005			2004
	(in thousands, except per share data)
Net earnings:
As reported	$	3,516		$	4,458
Fair value of stock options, after taxes		(371	)		(622	)
Pro forma	$	3,145		$	3,836
Earnings per share:
Basic — as reported	$	0.21		$	0.27
Basic — pro forma	$	0.19		$	0.23
Diluted — as reported	$	0.20		$	0.26
Diluted — pro forma	$	0.18		$	0.22

The fair value of options granted was estimated on the date of grant with vesting periods ranging from one to three years using the Black-Scholes option-pricing model with the following weighted average assumptions used: no dividend yield, expected volatility of 59 percent - 80 percent, risk free interest rate of 3.5 percent — 4.25 percent and an expected life of four to five years. The per share weighted average fair value of stock options granted for the six months ended June 30,

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2005 and 2004 were $4.05 and $6.04, respectively, using the Black-Scholes option-pricing model and the assumptions listed above. The pretax value of the fair value of the stock options for the six months ended June 30, 2005 and 2004 was $576,000 and $579,000, respectively. The after tax amounts differ mainly due to the change in effective tax rates as further discussed in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

3) Earnings Per Share

A reconciliation of the numerators and the denominators of the basic and diluted per share computations and a description and amount of potentially dilutive securities follows:

	Three Months Ended June 30,
	(in thousands, except share and per share data)
	2005		2004
Numerator:
Net earnings	$	2,075	$	1,323
Denominator:
Weighted average common shares for basic earnings per share		16,727,408		16,475,517
Net effect of dilutive stock options and warrants		682,943		735,057
Weighted average common shares for diluted earnings per share		17,410,351		17,210,574
Basic earnings per share:
Net earnings per basic share	$	0.12	$	0.08
Diluted earnings per share:
Net earnings per diluted share	$	0.12	$	0.08
Options and warrants excluded from earnings per share due to anit-dilution:
Stock options with exercise price greater than the average market price		851		486
Common stock warrants with $8.75 exercise price		—		2,144

	Six Months Ended June 30,
	(in thousands, except share and per share data)
	2005		2004
Numerator:
Net earnings	$	3,516	$	4,458
Denominator:
Weighted average common shares for basic earnings per share		16,600,859		16,410,220
Net effect of dilutive stock options and warrants		735,764		1,019,523
Weighted average common shares for diluted earnings per share		17,336,623		17,429,743
Basic earnings per share:
Net earnings per basic share	$	0.21	$	0.27
Diluted earnings per share:
Net earnings per diluted share	$	0.20	$	0.26
Options and warrants excluded from earnings per share due to anit-dilution:
Stock options with exercise price greater than the average market price		551		389
Common stock warrants with $8.75 exercise price		—		2,144

4) Inventories

	June 30, 2005		December 31, 2004
	(in thousands)
Raw materials and components	$	13,141	$	5,659
Work-in-process		4,539		1,501
Finished goods		1,257		972
	$	18,937	$	8,132

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5) Property and Equipment

	June 30, 2005			December 31, 2004
	(in thousands)
Machinery and equipment	$	5,705		$	4,498
Furniture and fixtures		936			1,463
Leasehold improvements		624			491
Demonstration units		1,835			1,113
Computers and software		1,831			795
		10,931			8,360
Less accumulated depreciation and amortization		(7,008	)		(6,767	)
	$	3,923		$	1,593

6) Accrued Expenses

	June 30, 2005		December 31, 2004
	(in thousands)
Wages, vacation and related payroll taxes	$	2,551	$	2,351
Professional fees		511		354
Warranty reserve		1,903		955
Restructuring costs		—		67
Commissions		358		489
Deferred rent		404		50
Other		588		569
	$	6,316	$	4,835

7) Concentrations of Risk

The Company had one customer which comprised 14% of total accounts receivable at June 30, 2005 and to 10% at December 31, 2004. We had no customer that amounted to 10% of revenue for the six months ended June 30, 2005 and June 30, 2004.

8) Acquisition — Business Combination

On May 27, 2005, the Company completed its acquisition of Xicom Technology, Inc (“Xicom”). The Company paid $37.7 million in cash, $2.0 million in shares (219,708 shares) and assumed $5.0 million in debt. The shares were valued at $9.18 per share, based on the average market price of two days prior and after the definitive agreement date. The original merger agreement called for $39.0 million in cash but there were audit adjustments that amounted to $1.3 million which reduced the cash paid. The purchase price recorded was calculated as follows:

Xicom Purchase Price
(in thousands)

Issuance of stock	$	2,018
Acquisition costs		850
Cash		37,704
Assume debt		5,034
Total Purchase Price	$	45,606

The purchase price was allocated as reflected below:

Purchase Allocation
(in thousands)

Cash	$	242
Receivables		5,491
Other assets		108
Inventory		10,467
Prepaid expenses		271
Deferred tax benefit — current		1,357
Property and equipment		2,207
Deferred tax benefit - long term		(375	)
Accounts payable		(5,748	)
Accrued liabilities		(2,408	)
Long term obligations, less current		(432	)
Core technologies		4,920
Customer relationships		2,040
Covenant-not-to-compete		410
Customer advances		(1,823	)
Excess of purchase price — Goodwill	$	28,879

The following unaudited pro forma summary of condensed combined financial information presents the Company’s combined results of operations as if the acquisition of Xicom had occurred at the beginning of each period presented.

Six months ended June 30, 2005 and 2004
(in thousands, except per share data)

	2005		2004
Net sales	$	47,384	$	48,641
Operating expenses	$	15,509	$	15,280
Net income	$	2,669	$	3,755
Net income per share, basic	$	0.16	$	0.23
Net income per share, diluted	$	0.15	$	0.21

9) Segment Reporting

The Company has been organized into two operating segments, with the acquisition of Xicom: 1) satellite, microwave, television, and cable communications which represent Radyne and Tiernan brand products and 2) power amplifiers which are Xicom products. Each segment is organized and managed separately to make key decisions such as sales/marketing, product development and other key decisions. Ultimately, the chief operating decision maker evaluates and makes decisions, based on the financial information available, about these two segments. The chief operating decision maker for the Company is the CEO.

Below are the results of operations from these two operating segments which are not necessarily presented in conformity with generally accepted accounting principles. For further

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discussion on the results refer to Management’s Discussion and Analysis.

Three months ended June 30, 2005
(in thousands)

	Radyne			Xicom			Total
Net sales	$	15,657		$	4,956		$	20,613
Operating income		2,800			293			3,093
Interest (income)/expense		(168	)		(16	)		(184	)
Income before income tax	$	2,967		$	310		$	3,277
Depreciation and amortization	$	220		$	167		$	387

Six months ended June 30, 2005
(in thousands)

	Radyne			Xicom			Total
Net sales	$	29,365		$	4,956		$	34,321
Operating income		4,751			292			5,043
Interest (income)/expense		(392	)		(16	)		(408	)
Income before income tax	$	5,143		$	308		$	5,451
Depreciation and amortization	$	456		$	167		$	623
Total assets	$	75,975		$	12,844		$	88,819

10) Financial Instruments

On May 2, 2005 the Company entered into an interest rate swap hedge agreement to establish a fixed 5.61% interest rate on a $5 million term note for 18 months. During the remaining term of the note, the interest rate will revert to LIBOR plus 150 basis points. The net loss on the agreement was not material for the quarter ended June 30, 2005.

11) Foreign Currency Translation

Xicom Technology Europe, Ltd (“XTEL”), a Xicom subsidiary, is located in the United Kingdom and uses a local currency of British Pounds. Assets and liabilities are translated to U.S. dollars at the reporting period exchange rate, and the resulting gains and losses arising from the translation of net assets are recorded as other comprehensive income in equity on the Condensed Consolidated Balance Sheet. Elements of the consolidated statements of operations earnings are translated at average exchange rates in effect during the year and foreign currency transaction gains and losses are included in other expense/income, net in the Condensed Consolidated Statement of Operations.

12) Intangibles

The following intangible assets resulted from the acquisition of Xicom.

					Accumulated
	Amortization period		Cost		amortization		Net
Intangible assets subject to amortization:
Core Technologies		10	$	4,920	$	41	$	4,879
Customer Relationship		4		2,040		43		1,998
Covenant-not-to Compete		3		410		11		399
Goodwill				28,879		—		28,879
Total intangible assets and goodwill			$	36,249	$	95	$	36,155

Amortization expense for the quarter ended June 30, 2005 was $95,000. Amortization expense for the remainder of 2005 will be $569,000, 2006—$1.1 million, 2007—$1.1 million, 2008—$1.0 million, 2009—$747,000, and thereafter—$2.7 million

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

     The management’s discussion and analysis that follows is designed to provide information that will assist readers in understanding our unaudited condensed consolidated financial statements, changes in certain items in those statements during the quarter and from year to year and the primary factors that caused those changes and how certain accounting principles, policies and estimates affect our financial statements. The following discussion should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this document as well as the Company’s 2004 Annual Report on Form 10-K for the year ended December 31, 2004.

     Except for the historical information contained herein, the following discussion includes statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”) and the Company claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. These forward-looking statements are often characterized by the terms “may,” “believes,” “projects,” “expects,” or “anticipates,” and do not reflect historical facts. Forward-looking statements speak only as of the date the statement was made. The Company does not undertake and specifically declines any obligation to update any forward-looking statements. For other events they may affect the Company’s business please see Factors That May Affect Radyne’s Business and Future Results.

Overview

     On May 27, 2005, the Company completed its acquisition of Xicom. Xicom is a leading provider of satellite and microwave power amplifiers and other RF products. The combination of Xicom’s amplifier products and RF technologies with the Company’s line of satellite modems and communications equipment makes the Company a full line supplier of satellite electronic systems.

     On June 1, 2005, the Company changed its name from Radyne ComStream Inc. to Radyne Corporation.

     The Company operates primarily in North America and is headquartered in Phoenix, Arizona; with manufacturing facilities in Phoenix, Arizona; and Santa Clara and San Diego, California. Additionally, sales offices are located in Boca Raton, Florida, Singapore, Beijing, Jakarta, and the United Kingdom. The Company also contracts with representatives that provide sales and/or service centers in Rio de Janeiro, Bangalore, Shanghai and Moscow. With the addition of Xicom’s 136 employees, the Company now employs 304 throughout the USA, Europe and Asia.

     The Company designs, manufactures, sells, integrates and installs products, systems and software used for the transmission and reception of data and video over satellite, microwave and cable communication networks. The Phoenix facility designs and manufactures satellite and point-to-point modems and allied equipment under the Radyne name. The San Diego facility designs and manufactures audio and video encoders (HDTV and standard definition), satellite modems and Internet over satellite hardware through the Tiernan subsidiary. The Santa Clara facility, from newly acquired Xicom, designs and manufactures Solid State Power Amplifiers (SSPAs), Traveling Wave Tube Amplifiers (TWTAs), and Klystron Power Amplifiers (KPAs) and other RF products. Through its network of international offices and service centers, the Company serves customers in over 90 countries, including customers in the television broadcast industry, international telecommunications companies, Internet service providers, private communications networks, network and cable television and the United States government. The Company sells and distributes its products under the Radyne, Tiernan and Xicom brands.

     The following were some of the highlights and recent developments for the three months ended June 30, 2005:

• 71% increase in sales for the quarter. Sales amounted to $20.6 million for the second quarter 2005 versus $12.0 million second quarter 2004

• The Company records ninth consecutive profitable quarter

• Bookings (orders received) during the first six months of 2005 increased 68% over the equivalent period of 2004 ($22.3 million in 2005 compared to $13.3 million in 2004)

Additional information on these and other operating results are described in detail below.

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Results of Operations

The results of operations include the newly acquired Xicom’s financial statements as of 28^th of May, 2005.

     Sales. Net sales generally consist of sales of products, net of returns and allowances. The following tables summarize the year-over-year comparison of our revenue for the periods indicated:

	Three months ended June 30,
	(in thousands)
	2005		2004		Change		%
Sales	$	20,613	$	12,020	$	8,593		71	%

     For the three months ended June 30, 2005 as compared to three months ended June 30, 2004 our sales increased by 71%. The increase resulted from the addition of $5.0 million in sales from Xicom plus increased sales in the Company’s satellite modem and video broadcast products.

			Six months ended June 30,
			(in thousands)
	2005		2004		Change		%
Sales	$	34,321	$	27,093	$	7,228		27	%

     For the six months ended June 30, 2005 as compared to six months ended June 30, 2004 our sales increased by 27%. Increases in sales are attributable to continued growth of our new satellite modem and video broadcast products offset by a decrease in sales of our discontinued modems/switches. In addition, Xicom accounted for $5.0 million in additional sales during the first six months of 2005. Although continued receipt of new orders and seasonal patterns suggest that this sales growth may continue for the next two quarters, management remains cautious in its outlook for the remainder of the year.

     Cost of sales, gross profit and gross margin. Cost of sales generally consists of costs associated with components, outsourced manufacturing and in-house labor associated with assembly, testing, packaging, shipping, and quality assurance, depreciation of equipment and indirect manufacturing costs. Gross profit is the difference between net sales and cost of sales. Gross margin is gross profit stated as a percentage of net sales. The following tables summarize the year-over-year comparison of our cost of sales, gross profit and gross margin for the periods indicated:

	Three months ended June 30,
	(in thousands)
	2005			2004			Change			%
Cost of Sales	$	10,973		$	5,971		$	5,002			84	%
Gross Profit	$	9,640		$	6,049		$	3,591			59	%
Gross Margin %		47	%		50	%		-3	%		N/A

     Second quarter 2005 gross profit increased 59% compared to the same quarter of 2004. The increase was largely due to the increase in sales as discussed above. Cost of Sales increased at a higher rate than sales, resulting in a reduction in Gross Margin. The increase in Cost of Sales and related decline in Gross Margin resulted from the addition of Xicom sales. Power amplifiers do not typically enjoy the same level of gross margin as do the remainder of the Company’s product line.

	Six months ended June 30,
	(in thousands)
	2005			2004			Change			%
Cost of Sales	$	17,556		$	13,064		$	4,492			34	%
Gross Profit	$	16,765		$	14,029		$	2,736			20	%
Gross Margin %		49	%		52	%		-3	%		N/A

     For the first six months of 2005, compared to the first six months of 2004, Gross Profit increased 20%, Cost of Sales increased 34% while Gross Margin declined from 52% to 49%. These results reflect the increase in overall sales and the inclusion of Xicom’s sales at lower margins as discussed above. The reduction Gross Margin resulting from the new Xicom sales was somewhat offset by an increase in sales of satellite and broadcast products due to higher sales volumes and resultant broader application of manufacturing overheads. In future periods when Xicom’s sales are fully included, Management anticipates that consolidated gross margin will decline further.

     Selling, general and administrative. Sales and marketing expenses consist of salaries, commissions for marketing and support personnel, and travel. Executives and administrative expenses consist primarily of salaries and other personnel-related expenses of our finance, human resources, information systems, and other administrative personnel, as well as facilities, professional fees, depreciation and amortization and related expenses. The following tables summarize the year-over-year comparison of our selling, general and administrative expenses for the periods indicated:

	Three months ended June 30,
	(in thousands)
	2005			2004			Change			%
Selling, general & administrative	$	4,715		$	3,462		$	1,253			36	%
Percentage of sales		23	%		29	%		-6	%		N/A

     Selling, general and administrative expenses for the second quarter of 2005 increased 36% from the prior period of 2004. The increase resulted, in part, from increases in professional services expenses related to the Company’s ongoing Sarbanes-Oxley compliance program ($478,000), increases in sales commissions related to the overall growth in sales ($140,000), increases in allowances for doubtful accounts as a result of bad debt recovery in 2004 ($82,000), recruiting ($69,000) and the

10

addition of new expenses from Xicom ($636,000). This was partially offset by a reduction in expense from the Company’s withdrawal during 2004 from bidding for low margin system integration work ($152,000).

	Six months ended June 30,
	(in thousands)
	2005			2004			Change			%
Selling, general & administrative	$	8,392		$	6,872		$	1,520			22	%
Percentage of sales		24	%		25	%		-1	%		N/A

     Selling, general and administrative expenses for the first half of 2005 increased 22% from the prior period of 2004. As discussed above, the increase resulted, in part, from increases in professional services expenses related to the Company’s ongoing Sarbanes-Oxley compliance program ($689,000), increases in sales commissions ($324,000), recruiting ($96,000) and the addition of new expenses from Xicom ($636,000). This was partially offset by a reduction in expense from the Company’s withdrawal during 2004 from bidding for low margin system integration work ($225,000). Management believes that over the next three quarters, the Company will incur additional new expense to improve controls at Xicom and bring the subsidiary into Sarbanes-Oxley Section 404 compliance. As a percentage of sales, however, management believes that general and administrative expenses will remain lower than historic rates as the Company enjoys economies of scale resulting from the larger sales base that includes Xicom.

     Research and development. Research and development expenses consist primarily of salaries and personnel-related costs, development materials and other product development expenses. The following tables summarize the year-over-year comparison of our research and development expenses for the periods indicated:

	Three months ended June 30,
	(in thousands)
	2005			2004			Change			%
Research & development	$	1,832		$	1,258		$	574			46	%
Percentage of sales		9	%		10	%		-1	%		N/A

     Total research and development expenses increased 46% during the second quarter of 2005 compared to the comparable period of 2004. This resulted from additional new product development in 2005 ($239,000) and the addition of research and development expense from Xicom ($335,000).

	Six months ended June 30,
	(in thousands)
	2005			2004			Change			%
Research & development	$	3,330		$	2,554		$	776			30	%
Percentage of sales		10	%		9	%		1	%		N/A

     Total research and development expenses increased 30% during the first sixth months of 2005 compared to the comparable period of 2004. This resulted from additional new product development in 2005 ($507,000) and the addition of research and development expense from Xicom ($335,000). Management continues to believe that these new products support our strategy to invest in the Company’s future through research efforts that will result in new sales and returns to the Company well in excess of the current development expense.

     Income Taxes. Income tax expense consists of amounts recognized as payable to the federal government, states and foreign countries in which the Company does business.

	Three months ended June 30,
	(in thousands)
	2005			2004			Change			%
Income tax expense	$	1,202		$	92		$	1,110			1207	%
Percentage of sales		6	%		1	%		5	%		N/A

     During the second quarter of 2005 our income tax expense increased compared to the equivalent period in 2004, as a result of an increase in taxable income and increase in our effective tax rate from 6.5% to 36.7%. The increase in taxable income resulted from the combination of increased sales and other factors described above. The increase in the tax rate resulted from the Company’s decision, at the end of the third quarter of 2004, to reduce our valuation allowance recorded against our deferred tax assets, which resulted from the carryforward of losses from previous years. In the third quarter 2004, we determined that based on six consecutive quarters of profitable operations plus a forecast of continued profitability such valuation allowance was no longer required.

	Six months ended June 30,
	(in thousands)
	2005			2004			Change			%
Income tax expense	$	1,935		$	312		$	1,623			520	%
Percentage of sales		6	%		1	%		5	%		N/A

     During the first six months of 2005, our income tax expense increased compared to the equivalent period in 2004, as a result of an increase in our taxable income and an increase in our effective tax rate from 6.5% to 35.5%. The increase in taxable income resulted from the combination of increased sales and other factors described above. The increase in the tax rate resulted from the Company’s decision, at the end of the third quarter of 2004, to reduce our valuation allowance recorded against our deferred tax assets which resulted from the carryforward of losses from previous years. In the third

11

quarter 2004, we determined that based on six consecutive quarters of profitable operations plus a forecast of continued profitability such valuation allowance was no longer required.

     Management continues to believe that it is more likely than not the deferred tax assets will be realized through the generation of future taxable income. Ultimate realization of any or all of the deferred tax assets is not assured due to significant uncertainties associated with estimates of future taxable income during the carryforward periods and is subject to change depending on the tax laws in effect in the years in which the carryforwards are used. Management will continue to evaluate the recoverability of the deferred tax assets and will adjust the valuation allowance recorded against the deferred tax assets as required.

     Net Earnings. Net earnings is the result of reducing gross profit by selling, general and administrative, research and development, other income and expense (including interest), and income taxes. The following tables summarize our net earnings and the earnings available to each fully diluted share of common stock:

	Three months ended June 30,
	(in thousands)
	2005		2004		Change		%
Net earnings	$	2,075	$	1,323	$	752		57	%
Diluted EPS	$	0.12	$	0.08	$	0.04		50	%

     Net earnings increased to $0.12 per fully diluted share for the quarter ended June 30, 2005, compared to $0.08 per share for the second quarter of 2004. The increase in earnings resulted primarily from an increase in net sales and other factors described above offset by the increase in the Company’s tax rate from 6.5% to 36.7% as discussed above.

	Six months ended June 30,
	(in thousands)
	2005		2004		Change			%
Net earnings	$	3,516	$	4,458		($ 942	)		-21	%
Diluted EPS	$	0.20	$	0.26		($0.06	)		-23	%

     Net earnings decreased to $0.20 per fully diluted share for the six months ended June 30, 2005, compared to $0.26 per share for the second quarter of 2004. The decrease in earnings per share resulted primarily from the change in the Company’s tax rate from 6.5% to 36.7% as discussed above. Management believes that the full inclusion of Xicom sales and expenses will result in increased growth in net earnings for the remainder of 2005. This belief is further reinforced by the strength of our order backlog as described in the next section.

     Bookings and Backlog. Bookings consist of orders taken while backlog is the total of these orders not yet shipped at the end of the period. The following tables summarize the year-over-year comparison of our Bookings (orders taken) and Backlog (orders to be shipped in future periods) for the periods indicated:

	Three months ended June 30,
	(in thousands)
	2005		2004		Change		%
Bookings	$	22,277	$	13,257	$	9,020		68	%
Ending Backlog	$	29,811	$	5,787	$	24,024		415	%

     During the second quarter of 2005 compared to the second quarter of 2004, bookings increased 68%. The increase resulted from continued strong market reception of the Company’s new products and the addition of bookings from Xicom. Ending backlog increased primarily as a result of the addition of Xicom. We believe that this order backlog is consistent with our sales budgets for the remainder of the year.

	Six months ended June 30,
	(in thousands)
	2005		2004		Change		%
Bookings	$	35,786	$	24,587	$	11,199		46	%
Ending Backlog	$	29,811	$	5,787	$	24,024		415	%

     During the first six months of 2005, compared to the equivalent period of 2004, bookings increased 35%. The increase resulted from continued strong market reception of the Company’s new products and the addition of bookings from Xicom. Ending backlog increased primarily as a result of the addition of Xicom. We believe that this order backlog is consistent with our sales budgets for the remainder of the year.

Liquidity and Capital Resources

     The Company had cash and cash equivalents totaling $5.9 million at June 30, 2005 compared to $39.3 million at December 31, 2004, a decrease of $33.4 million. The primary factors in the decrease were the cash considerations paid in connection with the acquisition of Xicom and other investing activities ($44.0 million) offset by cash provided by financing activities of $8.4 million and cash provided by operating activities of $2.1 million.

Operating Activities:

     Net cash provided by operating activities for the first six months of 2005 was $2.1 million as compared to $4.8 million for the first six months of 2004. Net cash provided by operating activities primarily resulted from net earnings of $3.5 million, a increase in deferred income taxes of $1.6 million and depreciation of $623,000, offset by an increase in accounts receivable of $1.9 million, a decrease in accounts payable of $877,000 and a decrease in accrued expenses of $755,000.

Investing Activities:

     Net cash used in investing activities for the first six months of 2005 was $44.0 million as compared to $475,000 for the

12

first six months of 2004. The change was due to the acquisition of Xicom ($43.3 million) and capital expenditures of $652,000 offset by $26,000 of proceeds from disposal of assets.

Financing Activities:

     Net cash provided by financing activities for the first six months of 2005 was $8.4 million as compared to $1.6 million for the first six months of 2004. The increase resulted from borrowing $5.0 million, the exercise of stock options and warrants of $3.2 million, and sales of stock to employees ($274,000).

Liquidity Analysis

     The Company maintains a credit arrangement with a bank for up to $15.0 million, based upon 75% of eligible accounts receivable, as defined, plus cash. The amount of credit available to us under the credit agreement at June 30, 2005 was approximately $10.0 million. We paid approximately $50,000 for a facility fee and bank costs for a two year commitment on the arrangement, whether or not any amounts are actually drawn on the line of credit.

     The credit agreement expires on May 1, 2008 and limits or prohibits mergers, consolidations, acquisitions, transfers of assets, liens, loans and investments in other entities and limits the use of proceeds, acquisitions of assets, indebtedness and capital expenditures without the bank’s consent. To be eligible to draw funds under the line of credit, the credit agreement requires us to maintain specific levels of tangible net worth, earnings and other ratios. We were in compliance with all covenants at June 30, 2005. The overall credit agreement specifies an interest rate between LIBOR plus 150 basis points and prime rate minus 50 basis points depending on terms and other conditions.

     Under this credit facility, we borrowed $5.0 million in the form of a term note with three year maturity on May 2, 2005. These funds were used to provide working capital and to finance the acquisition of Xicom. We borrowed these funds and simultaneously entered into an interest rate swap hedge agreement. See Notes to Condensed Consolidated Financial Statements (FN 10 — Financial Derivatives) for further detail.

     Contractual Obligations

     For a description of the Company’s Contractual Obligations and Commitments for the next five years and thereafter, see Item 7 in the Company’s Annual Report on Form 10-K. As part of the acquisition of Xicom, the Company leases a facility in Santa Clara, California. The facility is 47,480 square feet costing approximately $97,000 a month over 84 months. The lease was executed in April, 2000.

     Additionally, the Company leases approximately 26,000 square feet in San Diego for approximately $21,000 per month over 65 months. The lease was effective in March 2005.

     Off Balance Sheet Arrangements

     The Company does not have any off balance sheet arrangements as defined by Regulation S-K 229.303(a)(4) promulgated under the Securities Exchange Act of 1934.

Recent Accounting Pronouncements

     In November 2004, the FASB issued Statement No. 151, Inventory Costs (SFAS 151). SFAS 151 requires that abnormal amounts of idle facility expense, freight, handling costs, and spoilage, be charged to expense in the period they are incurred rather than capitalized as a component of inventory costs. SFAS 151 is effective for inventory costs incurred in fiscal periods beginning after June 15, 2005. The adoption of this standard may result in higher expenses in periods where production levels are lower than normal ranges of production. We currently believe that the adoption of SFAS 151 will not have a material impact on our consolidated financial statements.

     In December 2004, FASB issued SFAS No. 123 (Revised 2004), Share-Based Payments (SFAS 123R). SFAS 123R requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award with the cost to be recognized over the period during which an employee is required to provide service in exchange for the award. On April 14, 2005, the Commission amended the compliance date for SFAS No. 123R to the beginning of the next fiscal year that begins after June 15, 2005. Accordingly, the Company will adopt this revised SFAS effective January 1, 2006. The Company is currently evaluating how it will adopt SFAS No. 123R and has not determined the method it will use to value equity-based payments. The impact of adoption SFAS 123R may be material to the Company’s results of operations.

Factors That May Affect Radyne’s Business and Future Results

     Forward-looking statements involve risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors that could affect our results and cause them to materially differ from those contained in the forward-looking statements include:

• our ability to successfully integrate acquisitions;

• adequacy of our inventory, receivables and other reserves;

• the effects that acts of international terrorism may have on our ability to ship products abroad;

• availability of future taxable income to be able to realize the deferred tax assets;

• loss of, and failure to replace, any significant customers;

• timing and success of new product introductions;

• new accounting rules

• product developments, introductions and pricing of competitors;

• timing of substantial customer orders;

13

• availability of qualified personnel;

• the impact of local, political and economic conditions and foreign exchange fluctuations on international sales;

• performance of suppliers and subcontractors;

• decreasing or stagnant market demand and industry and general economic or business conditions;

• availability, cost and terms of capital;

• our level of success in effectuating our strategic plan; and

• other “Risk Factors” set forth in Exhibit 99.1, which is an exhibit to the Annual Report on Form 10-K; and other factors that the Company is currently unable to identify or quantify, but may arise or become known in the future.

     We may make additional written or oral forward-looking statements from time to time in filings with the Securities and Exchange Commission or in public news releases. Such additional statements may include, but not be limited to, projections of revenues, income or loss, capital expenditures, acquisitions, plans for future operations, financing needs or plans, the impact of inflation and plans relating to our products or services, as well as assumptions relating to the foregoing.

     Statements in this Report on Form 10-Q, including those set forth in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may be considered “forward looking statements” within the meaning of Section 21E of the Securities Act of 1934.

     Forward-looking statements contained in this Report on Form 10-Q speak only as of the date of this Report on Form 10-Q or, in the case of any document incorporated by reference, the date of that document. We do not undertake, and we specifically disclaim any obligation, to publicly update or revise any forward-looking statement contained in this Report on Form 10-Q or in any document incorporated herein by reference to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     The Company is exposed to certain market risks in the ordinary course of our business. These risks result primarily from changes in interest rates. In addition, our international operations are subject to risks related to differing economic conditions, changes in political climate, differing tax structures and other regulations and restrictions.

     The Company is exposed to market risk on our financial instruments from changes in interest rates. As of June 30, 2005, a change in interest rates of 10% over a year’s period would not have a material impact on our interest earnings. On May 2, 2005, we entered into an interest swap hedging arrangement in order to fix the rate of interest on a term loan. The hedging arrangement has an 18-month term while the term loan has a 36-month term. On the expiration of the hedging agreement, the loan will revert to a variable interest rate as described above in Liquidity Analysis and Notes to Condensed Consolidated Financial Statements (FN 10 — Financial Derivatives).

Item 4. Controls and Procedures

     The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its periodic reports filed with the Commission is recorded, processed, summarized and reported, within the time periods specified in rules and forms of the Commission and that such information is accumulated and communicated to its management. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

     On May 27, 2005 the Company acquired Xicom. Certain disclosure controls and procedures within Xicom and the Company may need to be modified to maintain effectiveness in light of the additional activity related to the integration and operation of Xicom. Management will evaluate each modification as such integration activities are implemented.

     The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2005. Based upon such review, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) are effective. There were not any significant changes in internal controls or in other factors that could significantly affect these internal controls subsequent to the date of their most recent evaluation.

Part II

OTHER INFORMATION

Item 1. Legal Proceedings

     None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     There were 219,719 shares issued to the shareholders of Xicom common stock. These shares were valued at $9.186 each for a total value at issuance of $2,018,238.

Issuer Purchases of Equity Securities

     On June 4, 2004, the Board of Directors authorized management to purchase up to $10 million of the Company’s outstanding common stock. As of June 3, 2005, the Company purchased 402,600 shares under the program at a total cost of $2.8 million. This program expired on June 3, 2005 and was the only repurchase program outstanding in the second quarter. The following chart provides detailed information on the program:

14

							Maximum number
					Total number of		(or approximate
					shares purchased		dollar value) of
	Total number				as part of a		shares that may yet
	of shares		Average price		publicly announced		be purchased under
Period	purchased		paid per share		plan or program		the plan or program
Beginning dollar value available to repurchase shares as of June 4, 2004							$	10,000,000
Total 2004 Purchases		402,600	$	6.93		402,600	$	7,209,000
January 1-31, 2005		—				—	$	7,209,000
February 1-28, 2005		—				—	$	7,209,000
March 1-31, 2005		—				—	$	7,209,000
April 1-31, 2005		—				—	$	7,209,000
May 1-31, 2005		—				—	$	7,209,000
June 1-30, 2005		—				—	$	7,209,000
		402,600	$	6.93		402,600

Item 3. Defaults Upon Senior Securities

     None.

Item 4. Submission of Matters to a Vote of Security Holders

     On June 8, 2005, the Company held its 2005 Annual Meeting of Stockholders. At the Annual Meeting, the stockholders elected to the Board of Directors Lee Yip Loi, Dennis W. Elliott, Michael A. Smith, Robert C. Fitting, and C.J. Waylan.

     The following table sets forth the number of votes cast for and the number of votes withheld with respect to the election of the Directors:

	Votes For	Votes Withheld
Election of Directors:
Lee Yip Loi	11,157,003	1,759,767
Dennis W. Elliott	12,488,286	428,484
Robert C. Fitting	12,484,786	431,984
Michael A. Smith	12,488,308	428,462
C.J. Waylan	12,488,206	428,564

Item 5. Other Information

Board of Directors Appointment — Compensation Committee

     On May 20, 2005, the Board of Directors considered and unanimously determined that Yip Loi Lee’s membership on the Compensation Committee fits within the “exceptional and limited circumstances” exception provided in Marktplace Rule 4350(c)(3)(C) and his membership is required and is in the best interest of the Company and its shareholders. NASDAQ had informed the Company that it was not fully compliant with NASDAQ Marketplace Rule 4350(c)(3) because Yip Loi Lee, whom the Company had determined was not an independent director as defined in Marketplace Rule 4200, had been appointed to the Compensation Committee prior to the Board’s determination.

Item 6. Exhibits

     See Exhibit Index.

15

SIGNATURES

     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.

RADYNE CORPORATION
By:	/s/ Malcolm C. Persen
	Malcolm C. Persen, Vice President and Chief Financial Officer
	(Principal Financial Officer)

Dated: August 9, 2005

16

EXHIBIT INDEX

Exhibit No.	Exhibit
31.1*	Certification of the Principal Executive Officer Pursuant to Rule 13-14(a) Under the Securities Exchange Act of 1934
31.2*	Certification of the Principal Financial Officer Pursuant to Rule 13-14(a) Under the Securities Exchange Act of 1934
32**	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	filed herewith
**	furnished herewith

17

EX-31.1

Exhibit 31.1

Certification

I, Robert C. Fitting, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Radyne Corporation;
2.	Based on my knowledge, this 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 report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operation and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	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 know to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) 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’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2005

Robert C. Fitting, Chief Executive Officer
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification

I, Malcolm C. Persen, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Radyne Corporation;
2.	Based on my knowledge, this 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 report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operation and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	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 know to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) 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’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2005

 /s/ Malcolm C. Persen

Malcolm C. Persen, Chief Financial Officer
(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report of Radyne Corporation (the “Company”) on Form 10-Q for the quarter ended June 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company.

 /s/ Robert C. Fitting

Robert C. Fitting

Chief Executive Officer

August 9, 2005

 /s/ Malcolm C. Persen

Malcolm C. Persen

Chief Financial Officer

August 9, 2005