8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT
Amendment No. 1

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date Of Report (Date of earliest event reported): May 27, 2005

Radyne Corporation

(Exact name of registrant as specified in its charter)

Delaware	0-11685	11-2569467
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

3138 E. Elwood Street, Phoenix AZ	85034
(Address of principal executive offices)	(Zip Code)

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

Radyne ComStream, Inc.
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Exhibit 99.2

Exhibit 99.3

ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

On May 27, 2005, Radyne Corporation (“Company”) completed its acquisition of Xicom Technology, Inc. and subsidiaries (“Xicom”) for $37,703,700 in cash, 219,708 shares of stock, and the assumption of $5.0 million of debt for all of Xicom’s outstanding capital stock. This Amendment No. 1 on Form 8-K/A amends the Company’s Current Report on Form 8-K filed on May 31, 2005 to provide the financial information required by Item 9.01 of Form 8-K.

ITEM 9.01 FINANCIAL STATEMENTS

     (a) Financial Statements of Business Acquired.

     The following financial statements of Xicom required by this item are attached hereto as Exhibit 99.2 and are incorporated by reference herein:

(I)	INDEPENDENT AUDITORS’ REPORT
(II)	CONSOLIDATED BALANCE SHEETS AS OF OCTOBER 3, 2004 AND SEPTEMBER 28, 2003
(III)	CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002
(IV)	CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002
(V)	CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002
(VI)	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002
(VII)	UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF APRIL 3, 2005
(VIII)	UNAUDITED CONDENSED STATEMENTS OF OPERATIONS FOR THE SIXTH-MONTH PERIODS ENDED APRIL 3, 2005 AND APRIL 4, 2004
(IX)	UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX-MONTH PERIODS ENDED APRIL 3, 2005 AND APRIL 4, 2004
(X)	NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED APRIL 3, 2005 AND APRIL 4, 2004

     (b) Unaudited Pro Forma Financial Information.

     The following pro forma information of the Company reflecting the acquisition of Xicom required by this item is attached hereto as Exhibit 99.3 and is incorporated by reference herein:

(I)	INTRODUCTION — UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
(II)	UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2004
(III)	NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2004
(IV)	UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2005
(V)	NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2005

2

     (c) Exhibits.

     Exhibit No.

*99.1	Press Release Dated May 31, 2005.
99.2	Financial Statements of Xicom
99.3	Unaudited Pro Forma Statements of Income for the year ended December 31, 2005, and for the six months ended June 30, 2005.

* Filed as Exhibit 99.1 to Form 8-K filed May 31, 2005.

3

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 on Form 8-K/A 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

Date August 11, 2005

4

INDEX

FINANCIAL STATEMENTS OF BUSINESS ACQUIRED – EXHIBIT 99.2
INDEPENDENT AUDITORS’ REPORT	6
CONSOLIDATED BALANCE SHEETS AS OF OCTOBER 3, 2004 AND SEPTEMBER 28, 2003	7
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002	8
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002	9
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002	10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002	11
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF APRIL 3, 2005	21
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS FOR THE SIXTH MONTH PERIODS ENDED APRIL 3, 2005 AND APRIL 4, 2004	22
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX MONTH PERIODS ENDED APRIL 3, 2005 AND APRIL 4, 2004	23
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED APRIL 3, 2005 AND APRIL 4, 2004	24
UNAUDITED PRO FORMA FINANCIAL INFORMATION – EXHIBIT 99.3
INTRODUCTION – UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME	28
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2004	29
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2004	30
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2005	32
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2005	33

5

EX-99.2

EXHIBIT 99.2

Independent Auditors’ Report

The Board of Directors
Xicom Technology, Inc. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Xicom Technology, Inc. and subsidiaries (the Company) as of October 3, 2004 and September 28, 2003, and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss), and cash flows for each of the years ended October 3, 2004, September 28, 2003, and September 29, 2002. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Xicom Technology, Inc. and subsidiaries as of October 3, 2004 and September 28, 2003, and the results of their operations and their cash flows for each of the years ended October 3, 2004, September 28, 2003 and September 29, 2002, in conformity with accounting principles generally accepted in the United States of America.

/s/ KPMG LLP
Phoenix, Arizona
July 13, 2005

6

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets
October 3, 2004 and September 28, 2003

	October 3,		September 28,
	2004		2003
Assets
Current assets:
Cash and cash equivalents	$	493,607		573,279
Restricted cash		83,468		83,468
Accounts receivable, net of allowance for doubtful accounts of $529,246 and $437,757 at October 3, 2004 and September 28, 2003, respectively		6,256,453		6,154,425
Inventories		7,554,832		8,267,200
Prepaid expenses		35,582		237,128
Income tax receivable		219,826		249,285
Total current assets		14,643,768		15,564,785
Property and equipment, net		1,831,975		1,326,541
Deposits		106,828		106,828
Goodwill		54,130		54,130
	$	16,636,701		17,052,284
Liabilities and Stockholders’ Equity
Current liabilities:
Line of credit	$	4,091,293		4,226,293
Long-term debt		807,446		211,590
Notes payable to related party		472,532		472,532
Accounts payable		4,248,015		4,610,138
Customer deposits		823,909		848,683
Warranty reserve		1,328,374		1,819,647
Accrued liabilities		881,894		1,218,277
Total current liabilities		12,653,463		13,407,160
Long-term portion of deferred rent liability		154,821		210,311
Total liabilities		12,808,284		13,617,471
Commitments, contingencies and subsequent event (notes 10, 12, 13 and 15)
Stockholders’ equity:
Common stock — $.05 par value. Authorized 20,000,000 shares; issued and outstanding 10,060,000 shares		228,000		228,000
Additional paid-in capital		93,000		93,000
Accumulated other comprehensive income		52,249		13,642
Retained earnings		3,455,168		3,100,171
Total stockholders’ equity		3,828,417		3,434,813
	$	16,636,701		17,052,284

See accompanying notes to consolidated financial statements

7

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

Consolidated Statements of Operations
Fiscal years ended October 3, 2004, September 28, 2003 and September 29, 2002

	2004			2003			2002
Net sales	$	44,406,890			39,377,124			29,034,987
Cost of sales		35,440,680			32,225,072			23,245,527
Gross profit		10,966,210			7,152,052			5,789,460
Operating expenses:
Research and development expenses		4,590,092			3,220,568			2,990,880
Marketing expenses		1,138,166			852,794			987,673
General and administrative expenses		4,529,701			3,847,662			3,783,407
Total operating expenses		10,257,959			7,921,024			7,761,960
Earnings (loss) from operations		708,251			(768,972	)		(1,972,500	)
Other income (expense):
Interest income		1,242			3,197			15,468
Interest expense		(271,984	)		(243,616	)		(322,812	)
Casualty gain		—			114,809			—
Lawsuit settlement		(90,000	)		—			—
Miscellaneous		20,812			22,583			1,777
Total other income (expense)		(339,930	)		(103,027	)		(305,567	)
Earnings (loss) before income taxes		368,321			(871,999	)		(2,278,067	)
Income tax provision (benefit)		13,324			39,171			1,098,386
Net earnings (loss)	$	354,997			(911,170	)		(3,376,453	)

See accompanying notes to consolidated financial statements

8

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Loss)
Fiscal years ended October 3, 2004, September 28, 2003 and September 29, 2002

										Accumulated
					Additional					Other
	Common Stock				paid-in		Retained			Comprehensive			Stockholders’
	Shares		Amount		capital		Earnings			Income			Equity
Balance at September 30, 2001		10,000,000	$	225,000		—		7,387,794			(22,670	)		7,590,124
Issuance of 60,000 shares in connection with an acquisition		60,000		3,000		93,000		—			—			96,000
Net loss		—		—		—		(3,376,453	)		—			(3,376,453	)
Foreign Translation Adjustment		—		—		—		—			(1,630	)		(1,630	)
Comprehensive loss														(3,378,083	)
Balance at September 29, 2002		10,060,000		228,000		93,000		4,011,341			(24,300	)		4,308,041
Net loss		—		—		—		(911,170	)		—			(911,170	)
Foreign Translation Adjustment		—		—		—		—			37,942			37,942
Comprehensive loss														(873,228	)
Balance at September 28, 2003		10,060,000		228,000		93,000		3,100,171			13,642			3,434,813
Net income		—		—		—		354,997			—			354,997
Foreign Translation Adjustment		—		—		—		—			38,607			38,607
Comprehensive income														393,604
Balance at October 3, 2004		10,060,000	$	228,000		93,000		3,455,168			52,249			3,828,417

See accompanying notes to consolidated financial statements

9

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows
Fiscal years ended October 3, 2004, September 28, 2003 and September 29, 2002

	2004			2003			2002
Cash flows from operating activities:
Net earnings:	$	354,997			(911,170	)		(3,376,453	)
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization		675,127			480,531			353,434
Loss on disposition of assets		5,008			2,532			23,446
Provision for doubtful accounts		465,338			268,777			646,554
Deferred income taxes (benefit)		—			—			1,083,378
Changes in operating assets and liabilities:
Increase in restricted cash		—			(58,429	)		—
Decrease (increase) in receivables		(567,366	)		(122,962	)		2,238,886
Decrease in inventories		712,368			186,059			427,853
Decrease (increase) in prepaid expenses		201,546			(210,531	)		(51,597	)
Increase (decrease) in accounts payable		(362,123	)		1,036,622			(2,219,316	)
Increase (decrease) in income taxes receivable		29,459			(123,141	)		128,374
Increase (decrease) in customer deposits		(24,774	)		(1,550,606	)		1,926,495
Increase (decrease) in warranty reserve		(491,273	)		559,437			535,364
Increase (decrease) in accrued liabilities		(385,684	)		354,465			33,947
Net cash provided by (used in) operating activities		612,623			(88,416	)		1,750,365
Cash flows from investing activities:
Capital expenditures		(1,185,569	)		(527,862	)		(450,384	)
Decrease in certificate of deposit		—			—			(1,472	)
Net cash used in investing activities		(1,185,569	)		(527,862	)		(451,856	)
Cash flows from financing activities:
Borrowings under line of credit		300,000			4,226,293			—
Repayments of line of credit		(435,000	)		(3,898,800	)		(605,777	)
Proceeds from issuance of long-term debt		819,813			211,590			105,473
Repayments of long-term debt		(223,957	)		(237,491	)		(266,667	)
Net cash provided by (used in) financing activities		460,856			301,592			(766,971	)
Effect of exchange rate changes on cash		32,418			18,380			9,699
Net increase (decrease) in cash		(79,672	)		(296,306	)		541,237
Cash at beginning of year		573,279			869,585			328,348
Cash at end of year	$	493,607			573,279			869,585
Supplemental disclosure of cash flows information:
Cash paid during the year for:
Interest	$	287,266			236,909			334,933
Income taxes		105,996			180,583			38,664

See accompanying notes to consolidated financial statements

10

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002

(1)	Organization
	Xicom Technology, Inc. was incorporated on November 9, 1992 in the State of California. Xicom Technology, Inc. and its subsidiaries (“Xicom” or the “Company”) are applied-engineering organizations which manufacture a series of helix Traveling Wave Tube and Klystron Amplifiers that are designed for the satellite earth station industry. Xicom Traveling Wave Tube Amplifiers (TWTAs), Klystron Power Amplifiers (KPAs) and Solid State Power Amplifiers (SSPAs) are used in broadcast and broadband applications throughout the world where customers need to increase power and bandwidth. Xicom High Power Amplifiers (HPAs) provide power levels vital to satcom applications, both traditional broadcast, the DTH, SNG and flyaway markets, and emerging broadband, specifically the IP-over-Satellite market.
	Xicom’s corporate headquarters are in Santa Clara, California, with offices in Maryland and the United Kingdom. Xicom also has service centers and sales offices throughout the world.
	The Company operates on a 52/53 week fiscal year ending on the Sunday closest to September 30. The fiscal year ended October 3, 2004 contained 53 weeks of operation. The fiscal years ended September 28, 2003 and September 29, 2002 contained 52 weeks of operations.
(2)	Summary of Significant Accounting Policies

(a)	Use of Estimates
	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.
(b)	Principles of Consolidation
	The consolidated financial statements include Xicom Technology, Inc. and its wholly-owned subsidiaries, Xicom FSC, Inc. and Xicom Technology Europe Limited (XTEL). Significant intercompany accounts and transactions have been eliminated in the consolidation.
(c)	Cash and cash equivalents
	The Company considers all money market accounts with original maturities of 90 days or less to be cash equivalents.
	Restricted cash is a bond required by a customer contract until the end of the warranty period of the equipment sold.
(d)	Accounts Receivable
	Accounts receivable consist of trade receivables from customers. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The allowance is assessed on a regular basis by management and is based upon management’s periodic review of the collectibility of the receivables with respect to historical experience. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

11

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002

(e)	Revenue Recognition
	The Company recognizes revenue when products have been shipped to the customer, an agreement with the customer has been executed, transfer of title and acceptance has occurred, pricing is fixed and collectibility is probable. Revenue from services is recognized when the related services have been performed. The Company considers products and services as separate units of accounting under EITF 00-21, Revenue Arrangements with Multiple Deliverables, however the Company is unable to determine the relative fair value of the units of accounting revenue is deferred until all products and services have been delivered. The Company has customer deposits which are advance payments from their customers. Revenue from these customer deposits is recognized upon delivery of the product.
(f)	Inventories
	Inventories are valued at the lower of cost (first-in, first-out) or market. The Company writes down its inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based on assumptions about future demand and market conditions.
(g)	Property and Equipment
	Property and equipment are stated at cost. Depreciation and amortization are computed using the straight line and the double-declining balance method over the estimated useful lives of the assets, ranging from 3 to 10 years. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in operations. The cost of maintenance and repairs is charged to operations as incurred; significant renewals and betterments are capitalized.
(h)	Impairment of Long-Lived Assets
	In accordance with SFAS No. 144, long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.
(i)	Warranty Costs
	The Company provides limited warranties on certain of its products and systems for periods ranging from one to three years. Estimated warranty costs for potential product liability and warranty claims based on the Company’s claim experience are accrued as cost of sales at the time revenue is recognized. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its vendors, the Company’s warranty liability is affected by product failure rates and material usage and service delivery costs incurred in correcting product failures. Should actual product failure rates, material usage or service delivery costs differ from the Company’s estimates, revisions to the estimated warranty liability would be required.
(j)	Research and Development
	The cost of research and development is charged to expense as incurred.

12

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002

(k)	Advertising and Promotion
	The Company expenses the cost of advertising and promotion as incurred. Advertising and promotion expenses were $181,750 and $135,588 for fiscal 2004 and 2003, respectively, and are included in marketing expenses.
(l)	Income Taxes
	The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future income tax consequences attributed to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
	The Company evaluates the recoverability of the deferred tax assets and records a valuation allowance to reduce its deferred tax assets to an amount for which realization is more likely than not. Should the Company determine that it would be able to realize deferred tax assets in the future in excess of the net recorded amount, an adjustment to the valuation allowance for deferred tax assets would result in an income tax benefit in the period such determination was made.
(m)	Foreign Currency Translation
	Local currencies are considered the functional currencies for the Company’s operations outside the United States. Assets and liabilities are translated into U.S. dollars at the rate of exchange in effect at the balance sheet dates. Revenues and expenses are translated into U.S. dollars at the average monthly exchange rates prevailing during the years presented. Translation adjustments resulting from currency translation gains and losses are recognized in other comprehensive income as a separate component of stockholders’ equity.
(n)	Concentration of Credit Risk
	Financial instruments, which potentially subject the Company to concentrations of credit risk, are principally accounts receivable. The Company maintains ongoing credit evaluations of its customers and generally does not require collateral. The Company maintains allowances for doubtful accounts for the estimated losses resulting from the inability of its customers to make required payments and such losses have not exceeded management’s expectations. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Periodically during the year, the Company maintains cash in financial institutions in excess of the amounts insured by the federal government.
	The Company had sales to its top two customers totaling 29%, 38% and 21% for the years ended October 3, 2004, September 28, 2003 and September 29, 2002, respectively.
	The Company had outstanding accounts receivable to one customer totaling 11% and 15% at October 3, 2004 and September 28, 2003, respectively. The Company had outstanding accounts receivable to two customers comprising 27% at September 29, 2002.

13

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002

(o)	Fair Value of Financial Instruments
	The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. The carrying amounts of cash and equivalents, trade receivables, accounts payable and accrued liabilities approximate fair value because of the short maturity of these instruments. The carrying amount of the long-term debt approximates fair value because the interest rates are indexed by current market rates and other terms are similar to those currently payable.
(p)	Recently Issued Accounting Standards
	In December 2004, the FASB issued FASB Statement No. 151, Inventory Costs, which clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). Under this Statement, such items will be recognized as current-period charges. In addition, the Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. This Statement will be effective for the Company for inventory costs incurred on or after January 1, 2006. The Company does not believe the adoption of this statement will have a material impact on the financial statements.
	In December 2004, the FASB issued FASB Statement No. 153, Exchanges of Nonmonetary Assets, which eliminates an exception in APB 29 for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. This Statement will be effective for the Company for nonmonetary asset exchanges occurring on or after January 1, 2006. The Company does not believe the adoption of this statement will have a material impact on the financial statements.

(3) Inventories

	October 3,		September 28,
	2004		2003
Raw materials	$	5,240,969		5,454,605
Work-in-process		1,888,323		2,369,934
Consigned inventory		41,625		127,542
Finished goods		383,915		315,119
	$	7,554,832		8,267,200

14

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002

(4) Prepaid Expenses

	October 3,		September 28,
	2004		2003
Insurance	$	4,688		51,100
License fees		16,580		29,740
Property taxes		14,314		9,788
Vendor prepayments		—		146,500
	$	35,582		237,128

(5) Property and Equipment

	October 3,			September 28,
	2004			2003
Machinery and equipment	$	944,505			819,137
Computer equipment		811,361			818,736
Demonstration equipment		1,004,199			270,546
Tooling and test equipment		767,872			659,816
Office equipment		535,166			535,166
Vehicles		43,937			43,937
Leasehold improvements		618,929			605,248
		4,725,969			3,752,586
Less accumulated depreciation and amortization		(2,893,994	)		(2,426,045	)
	$	1,831,975			1,326,541

Depreciation and amortization were $675,127, $480,531 and $353,434 for fiscal 2004, 2003, and 2002, respectively.

15

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002

(6) Accrued Expenses

	October 3,		September 28,
	2004		2003
Accrued expenses consist of the following:
Payroll and payroll taxes	$	185,389		406,569
Compensated absences		454,813		438,506
Bonuses		92,716		—
Interest		1,404		16,686
Sales tax		9,095		1,540
Deferred rent		55,490		16,267
Other		82,987		338,709
	$	881,894		1,218,277

(7)	Line of Credit
	The Company has an available $5,000,000 line of credit secured by substantially all of the Company’s assets, of which $4,091,292 and $4,226,293 was outstanding at October 3, 2004 and September 28, 2003, respectively. Interest is payable at the bank’s base rate of interest plus 0.25% (5.00% at October 3, 2004). The agreement is in full force until terminated by either party. The note requires certain restrictive financial covenants to be met. The Company was not in compliance with the covenants at October 3, 2004 and September 28, 2003. All amounts outstanding under the line of credit were repaid by Radyne Corporation. on May 31, 2005 as part of their acquisition of the Company.
(8)	Long-term Debt

	October 3,		September 28,
	2004		2003
Comerica Bank:
Note payable due in monthly installments of $5,878 plus interest at base plus 0.75% (5% at October 3, 2004), secured by corporate assets, due October, 2006	$	141,060		211,590
Note payable due in monthly installments of $13,948 plus interest at base plus 0.75% (5% at October 3, 2004), secured by corporate assets, due October, 2006		348,698		—
Note payable due in monthly installments of $8,825 plus interest at base plus 0.50% (5% at October 3, 2004), secured by corporate assets, due March, 2008		317,688		—
	$	807,446		211,590

Long-term debt is subject to the same financial covenants governing the line of credit (note 7). Long-term debt has been classified as current in the accompanying balance sheet since the Company was in violation of the covenants. All amounts outstanding were repaid by Radyne Corporation. on May 31, 2005 as part of their acquisition of the Company.

16

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002

(9) Notes Payable to Related Parties

	October 3,		September 28,
	2004		2003
Note payable, interest only at 9% due monthly, unsecured, due on demand	$	222,532		222,532
Note payable, interest only at 9% due monthly, unsecured, due on demand		50,000		50,000
Note payable, interest only at 9.25% due monthly, unsecured, due on demand		100,000		100,000
Note payable, interest only at 9.25% due monthly, unsecured, due on demand		100,000		100,000
	$	472,532		472,532

	Interest expense paid on stockholder loans was $43,028 for 2004, 2003 and 2002. All amounts outstanding were repaid by Radyne Corporation. on May 31, 2005 as part of their acquisition of the Company.
(10)	Leases
	The Company is leasing its California facility under a non-cancelable operating lease expiring in April 2007 with an additional 5-year renewal option. Lease payments are based on a minimum monthly rent of $71,220 and increase each May by 4%. Rent expense has been recorded on a straight-line basis over the original term of the lease.
	In addition, one of the Company’s foreign subsidiaries is leasing its office space under a non-cancelable operating lease that will expire in September 2006.
	Future minimum rental payments under these non-cancelable operating leases are as follows:

Fiscal years ending:
October 2, 2005	$	1,019,804
October 1, 2006		1,060,596
September 30, 2007		540,696
	$	2,621,096

Rent expense was $1,060,310, $1,059,712 and $1,100,852 for 2004, 2003 and 2002, respectively.

17

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002

(11)	Income Taxes
	Income tax expense (benefit) amounted to $185,457, $(448,592), and $(932,614) for the years ended October 3, 2004, September 28, 2003, and September 29, 2002, respectively. Pretax income (loss) was earned for each year presented in the following jurisdictions:

	2004			2003			2002
Domestic	$	409,460			(1,012,142	)		(2,330,681	)
Foreign		(41,139	)		140,143			52,614
	$	368,321			(871,999	)		(2,278,067	)

The actual tax expense (benefit) for these periods differs from the Federal statutory tax expense for those periods as follows:

	2004			2003			2002
Computed Federal statutory tax expense (benefit)	$	125,229			(296,480	)		(774,543	)
Meals and entertainment		14,984			16,052			14,942
Foreign income tax at different rates		15,907			1,401			4,209
Increase to research and development credit		(40,264	)		(129,898	)		(152,579	)
State tax provision		26,246			(48,053	)		(113,371	)
State rate change		—			—			64,425
Inability to utilize net operating loss carryforwards		(172,133)			487,763			887,914
Change in the beginning of year valuation allowance		—			—			1,143,086
Other		43,355			8,386			24,303
Total	$	13,324			39,171			1,098,386

Components of income tax expense (benefit) for 2004, 2003, and 2002 follow:

	2004		2003		2002
Current:
State	$	1,600		1,600		1,600
Foreign		11,724		37,571		13,408
		13,324		39,171		15,008
Deferred (benefit):
Federal		—		—		762,085
State		—		—		321,293
		—		—		1,083,378
	$	13,324		39,171		1,098,386

18

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002

Deferred income taxes (benefit) are recognized for earnings and expense items that are reported in different years for financial reporting and income tax purposes. Deferred income tax assets and liabilities at October 3, 2004 and September 28, 2003 consisted of the following:

	October 3,			September 28,
	2004			2003
Allowance for doubtful accounts	$	134,061			155,763
Fixed assets		14,629			55,620
Accrued liabilities		177,294			170,937
Section 267 costs		4,325			—
Section 263A costs		20,245			25,996
Research and development credits		561,868			521,634
Writedown of slow-moving and obsolete inventory		329,164			401,198
Warranty reserve		517,832			720,861
Net operating loss carryforwards		586,849			466,391
Total deferred tax assets		2,346,267			2,518,400
Loss valuation allowance		(2,346,267	)		(2,518,400	)
Net deferred tax assets	$	—			—

	At October 3, 2004, the Company had a federal net operating loss carryforward of approximately $1,600,000. The carryforward is available to offset future taxable earnings and will begin to expire in 2022. The Company also had federal and state research credits of $234,000 and $328,000, respectively, which are available to offset future income taxes. Based on recent taxable losses, management has determined that it is not more likely than not that the Company will utilize the net deferred tax assets. At the time it is determined that the Company will meet the more likely than not criteria for utilizing deferred tax assets, the valuation allowance will be revised.
(12)	Employee Benefit Plan
	The Company has a 401(k) retirement savings plan in which all eligible employees may contribute. The Company contributions are 66.7% of the first six percent (6%) of employee salary deferral contributions. The amounts contributed by the Company were $262,671, $213,014, and $228,705 for 2004, 2003, and 2002, respectively.
	One of the foreign subsidiaries of the Company has a defined contribution arrangement for the benefit of its director and employees. The amounts contributed by the Company were $10,094, $11,402, and $8,304 for 2004, 2003, and 2002, respectively.
(13)	Contingencies
	The Company is involved in litigation and claims arising in the normal course of operations. In the opinion of management based on consultation with legal counsel, losses, if any, from this litigation are covered by insurance or are immaterial; therefore, no provision has been made in the accompanying consolidated financial statements for losses, if any, which might result from the ultimate outcome of these matters. A lawsuit was filed against the Company by a former temporary employee. The lawsuit was settled for $90,000 in 2004.

19

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 3, 2004, SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002

(14)	Casualty Gain
	In the fiscal year ended September 28, 2003, the Company received $114,809 from an insurance company for assets stolen in the fiscal year ended September 29, 2002. The insurance recoveries were reported as casualty gain in 2003, since the loss on stolen assets was reported in 2002.
(15)	Subsequent Event
	On May 27, 2005, Radyne Corporation. completed its acquisition of the Company for approximately $41 million of cash and stock. The transaction was approved by the Board of Directors of both companies.

20

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheet
April 3, 2005

	April 3,
	2005
Assets
Current assets:
Cash and cash equivalents	$	606,132
Restricted cash		83,468
Accounts receivable, net of allowance for doubtful accounts of $433,176 at April 3, 2005		6,226,071
Inventories		8,729,806
Prepaid expenses		80,473
Income tax receivable		217,951
Total current assets		15,943,901
Property and equipment, net		1,692,222
Deposits		107,678
Goodwill		54,130
	$	17,797,931
Liabilities and Stockholders’ Equity
Current liabilities:
Line of credit	$	3,880,292
Notes payable		717,241
Notes payable to related party		472,532
Accounts payable		4,539,107
Customer deposits		2,634,916
Warranty reserve		1,071,723
Accrued liabilities		757,282
Total current liabilities		14,073,093
Long-term portion of deferred rent liability		117,078
Total liabilities		14,190,171
Commitments, contingencies and subsequent event (Notes 8 and 9)
Stockholders’ equity:
Common stock — $.05 par value. Authorized 20,000,000 shares; issued and outstanding 10,060,000 shares		228,000
Additional paid-in capital		93,000
Accumulated other comprehensive income		77,442
Retained earnings		3,209,318
Total stockholders’ equity		3,607,760
	$	17,797,931

See accompanying notes to consolidated financial statements.

21

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
For the six months ended April 3, 2005 and April 4, 2004

	April 3,			April 4,
	2005			2004
Net sales	$	18,018,965			21,548,488
Cost of sales		13,829,145			15,773,078
Gross profit		4,189,820			5,775,410
Operating expenses:
Research and development expenses		1,502,381			2,836,007
Marketing expenses		688,463			546,103
General and administrative expenses		2,114,506			2,049,910
Total operating expenses		4,305,350			5,432,020
Earnings (loss) from operations		(115,530	)		343,390
Other income (expense):
Interest income		1,257			13,450
Interest expense		(132,858	)		(128,545	)
Miscellaneous		3,042			—
Total other income (expense)		(128,559	)		(115,095	)
Earnings (loss) before income taxes		(244,089	)		228,295
Income tax provision (benefit)		1,761			22,281
Net earnings (loss)		(245,850	)		206,014
Foreign currency translation adjustment		25,193			51,007
Comprehensive income (loss)	$	(220,657	)		257,021

See accompanying notes to consolidated financial statements.

22

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

For the six months ended April 3, 2005 and April 4, 2004

	April 3,			April 4,
	2005			2004
Cash flows from operating activities:
Net earnings (loss):	$	(245,850	)		206,014
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		388,359			327,008
Provision for doubtful accounts		294,191			312,250
Changes in operating assets and liabilities:
Increase in receivables		(250,857	)		(2,366,549	)
Increase in inventories		(1,160,179	)		(1,019,143	)
Decrease (increase) in prepaid expenses		(45,724	)		111,853
Increase in accounts payable		289,525			2,478,602
Increase in customer deposits		1,809,971			756,166
Decrease in warranty reserve		(256,651	)		(410,551	)
Decrease in accrued liabilities		(168,606	)		(655,610	)
Net cash provided by (used in) operating activities		654,179			(259,960	)
Cash flows from investing activities:
Capital expenditures		(247,268	)		(775,430	)
Net cash used in investing activities		(247,268	)		(775,430	)
Cash flows from financing activities:
Borrowings under line of credit		—			100,000
Repayments of lines of credit		(211,001	)		(40,000	)
Proceeds from issuance of long-term debt		28,748			683,611
Repayments of long-term debt		(118,953	)		(99,127	)
Net cash provided by (used in) financing activities		(301,206	)		644,484
Effect of exchange rate changes on cash		6,819			23,825
Net increase (decrease) in cash		112,524			(367,081	)
Cash at beginning of year		493,607			573,279
Cash at end of year	$	606,132			206,198

See accompanying notes to consolidated financial statements.

23

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 3, 2005 AND THE SIX MONTHS ENDED APRIL 3, 2005 AND APRIL 4, 2004

(1)	Organization
	Xicom Technology, Inc. was incorporated on November 9, 1992 in the State of California. Xicom Technology, Inc. and its subsidiaries (“Xicom” or the “Company”) are applied-engineering organizations which manufacture a series of helix Traveling Wave Tube and Klystron Amplifiers that are designed for the satellite earth station industry. Xicom Traveling Wave Tube Amplifiers (TWTAs), Klystron Power Amplifiers (KPAs) and Solid State Power Amplifiers (SSPAs) are used in broadcast and broadband applications throughout the world where customers need to increase power and bandwidth. Xicom High Power Amplifiers (HPAs) provide power levels vital to satcom applications, both traditional broadcast, the DTH, SNG and flyaway markets, and emerging broadband, specifically the IP-over-Satellite market.
	Xicom’s corporate headquarters are in Santa Clara, California, with offices in Maryland and the United Kingdom. Xicom also has service centers and sales offices throughout the world.
	The Company operates on a 52/53 week fiscal year ending on the Sunday closest to September 30.

24

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 3, 2005 AND THE SIX MONTHS ENDED APRIL 3, 2005 AND APRIL 4, 2004

(2) Inventories

	April 3,
	2005
Raw materials	$	6,037,491
Work-in-process		2,451,359
Consigned inventory		41,625
Finished goods		199,331
	$	8,729,806

(3) Property and Equipment

	April 3,
	2005
Machinery and equipment	$	1,033,743
Computer equipment		880,771
Demo equipment		983,351
Tooling and test equipment		789,196
Office equipment		454,008
Vehicles		43,937
Leasehold improvements		633,354
		4,818,360
Less accumulated depreciation and amortization		3,126,138
	$	1,692,222

Depreciation and amortization were $388,359 and $327,008 for the six months ended April 3, 2005 and April 4, 2004, respectively.

25

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 3, 2005 AND THE SIX MONTHS ENDED APRIL 3, 2005 AND APRIL 4, 2004

(4) Accrued Liabilities

	April 3,
	2005
Accrued liabilities consist of the following:
Payroll and payroll taxes	$	192,945
Compensated absences		458,035
Deferred rent		75,486
Other		30,816
	$	757,282

(5)	Line of Credit
	The Company has an available $5,000,000 line of credit secured by substantially all of the Company’s assets, of which $3,880,292 was outstanding at April 3, 2005. Interest is payable at the bank’s base rate of interest plus 0.25% (6% at April 3, 2005). The agreement is in full force until terminated by either party. The note requires certain restrictive covenants to be met relating to financial condition. All amounts outstanding under the line of credit were repaid by Radyne on May 31, 2005 as part of their acquisition of the Company.
(6)	Notes Payable

	April 3,
	2005
Comerica Bank:
Note payable due in monthly installments of $5,878 plus interest at base plus 0.75% (6.5% at April 3, 2005), secured by corporate assets, due October, 2006	$	111,672
Note payable due in monthly installments of $13,948 plus interest at base plus 0.75% (6.5% at April 3, 2005), secured by corporate assets, due October, 2006		265,010
Note payable due in monthly installments of $8,825 plus interest at base plus 0.50% (6.25% at April 3, 2005), secured by corporate assets, due March, 2008		340,559
	$	717,241

All amounts outstanding under the notes payable were repaid by Radyne on May 31, 2005 as part of their acquisition of the Company.

26

XICOM TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 3, 2005 AND THE SIX MONTHS ENDED APRIL 3, 2005 AND APRIL 4, 2004

(7) Notes Payable to Related Parties

	April 3,
	2005
Note payable, interest only at 9% due monthly, unsecured, due on demand	$	222,532
Note payable, interest only at 9% due monthly, unsecured, due on demand		50,000
Note payable, interest only at 9.25% due monthly, unsecured, due on demand		100,000
Note payable, interest only at 9.25% due monthly, unsecured, due on demand		100,000
	$	472,532

	Interest expense paid on stockholder loans was $21,514 for the six months ended April 3, 2005 and April 4, 2004. All amounts outstanding on the stockholder loans were repaid by Radyne on May 31, 2005 as part of their acquisition of the Company.
(8)	Contingencies
	The Company is involved in litigation and claims arising in the normal course of operations. In the opinion of management based on consultation with legal counsel, losses, if any, from this litigation are covered by insurance or are immaterial; therefore, no provision has been made in the accompanying consolidated financial statements for losses, if any, which might result from the ultimate outcome of these matters.
(9)	Subsequent Event
	On May 27, 2005, Radyne Corporation completed its acquisition of the Company for approximately $41 million of cash and stock. The transaction was approved by the Board of Directors of both companies.

27

EX-99.3

EXHIBIT 99.3

RADYNE CORPORATION AND XICOM TECHNOLOGY, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

INTRODUCTION

     The following unaudited pro forma condensed combined financial information is presented to illustrate the effects on our historical consolidated financial statements and the results of operations of the merger with Xicom Technology, Inc. and subsidiaries (“Xicom”). Pro forma historical amounts for the twelve months ended December 31, 2004 are derived from our audited 2004 consolidated financial statements and the audited consolidated financial statements for Xicom for their fiscal year ended October 3, 2004. Pro forma historical amounts for the six-months ended June 30, 2005 are derived from the unaudited Radyne condensed consolidated statement of income for the six months ended June 30, 2005, less the results of operations for Xicom for the period May 28, 2005 through June 30, 2005, which has been included in Radyne’s consolidated results for the period subsequent to acquisition, and the unaudited condensed consolidated statement of operations for Xicom for the six months ended April 3, 2005.

     The acquisition of Xicom has been accounted for using the purchase method of accounting under SFAS No. 141, “Business Combinations”, resulting in a new basis of accounting. Appraisals and other valuation studies were based on available information and various assumptions that we believe are reasonable. The actual allocation of consideration paid and the resulting effect on income from operations may differ from the pro forma amounts included herein.

     The unaudited pro forma condensed combined statements of income for the twelve months ended December 31, 2004 and for the six months ended June 30, 2005 assumes that the merger described above took place on January 1, 2004, the beginning of our 2004 fiscal year. This information is not necessarily indicative of our financial condition or results of operations had the merger been completed as of the dates indicated, nor should it be construed as representative of our future financial condition or results of operations.

     The unaudited pro forma condensed combined financial statements should be read in conjunction with our consolidated financial statements and related notes therein as filed with our Form 10-K for the year ended December 31, 2004.

     A pro forma combined balance sheet has not been provided in this Form 8-K/A because the Company has included a balance sheet meeting the requirements of Section 11-02 of Regulation S-X in the Company’s Form 10-Q filed August 10, 2005.

28

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

For the Most Recent Fiscal Year End

	Radyne Historical			Xicom Historical for
	for the 12 months			the 12 months
	ended December			ended October 3,			Pro Forma			Radyne
	31, 2004			2004			Adjustments			Pro Forma
	(In thousands, except per share data)
Sales	$	56,578		$	44,407		$	—		$	100,985
Cost of sales		26,435			33,441			—			59,876
Gross profit		30,143			10,966			—			41,109
Selling, general and administrative expenses		15,420			5,668			16	(1)
								1,139	(2)
								(372	) (3)
								578	(4)		22,449
Research and development expenses		5,330			4,590			—			9,920
Operating profit		9,393			708			(1,361	)		8,740
Interest expense		(29	)		(271	)		(9	) (5)		(309	)
Interest and other income (expense)		492			(69	)		(492	) (6)		(69	)
Earnings before income taxes		9,856			368			(1,862	)		8,363
Tax expense (benefit)		(3,644	)		13			(707	) (7)		(4,338	)
Net income	$	13,500		$	355		$	(1,154	)	$	12,701
Weighted average shares — Basic		16,357						220	(8)		16,577
Weighted average shares — Diluted		17,136						220	(8)		17,356
EPS — Basic	$	0.83								$	0.77
EPS — Diluted	$	0.79								$	0.73

The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.

29

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF
INCOME FOR THE YEAR ENDED DECEMBER 31, 2004

(1)	Reflects the increase to rent expense due to the elimination of the historical deferred rent liability as a result of purchase accounting. The deferred rent liability is created by the GAAP accounting for rent on a straight line basis. This liability reflects the difference between the income statement rent expense and cash rent paid over time. During the earlier years of a typical lease, deferred rent liability is increased when income statement rent expense exceeds cash rent paid. During the later years of a typical lease, deferred rent liability is decreased when income statement rent expense is less than cash rent paid.
(2)	Reflects the amortization of identified intangible assets over their economically useful lives. Appraisals and other valuation studies were based on available information and various assumptions that we believe are reasonable. The actual allocation of consideration paid and the resulting effect on income from operations may differ from the pro forma amounts included herein.
	The following table illustrates the estimated fair value, estimated useful life, and estimated amortization of the intangible assets acquired as a result of the merger.

			Years		Estimated
	Purchase		economic		annual
(dollars in thousands)	accounting		life		amortization
Core technologies	$	4,920		10	$	492
Customer relationships		2,040		4		510
Covenant ‘not-to-compete’		410		3		137
Total	$	7,370			$	1,139

(3)

Reflects a decrease in rent expense due to the amortization of an unfavorable contract related to the lease of the Santa Clara facility assumed in the acquisition. This liability is recorded in purchase accounting for GAAP and amortized over the remaining lease term to record rent on a straight-line basis. A discounted cash flow analysis was prepared to estimate the contract liability for this lease and quantified the disparity between contract rent and market rent over its remaining term of 2 years.

The following table illustrates the estimated unfavorable contract liability, remaining lease term, and the estimated reduction of rent expense:

					Annual
	Contract		Remaining		reduction of
(dollars in thousands)	liability		lease term		rent expense
Unfavorable lease commitment	$	804		2	$	372

⁽⁴⁾ Reflects the increase in depreciation expense as a result of the fair value increase in purchase accounting of property and equipment. The increase in fair value of $635 relates to assets with an estimated economic life ranging from 1 to 5 years.

30

⁽⁵⁾ The pro forma adjustment to interest expense is based on the amounts borrowed related to the acquisition and the rates in effect at the closing of the merger offset by the effect on interest expense of Xicom debt that was repaid as of the merger (dollars in thousands):

	Fiscal Year
	Ended
	December 31,
	2004
Interest expense on new credit line	$	280
Elimination of Xicom historical interest expense		(271	)
Pro forma adjustment to interest expense	$	9

	Interest expense on the new credit line assumes an interest rate of 5.61% applied to $5.0 million.
(6)	This adjustment represents a decrease in Radyne’s interest income of $492 resulting from the $39 million of cash used as purchase consideration.
(7)	Adjustment represents the related tax effects of pro forma adjustments. The effective tax rate was assumed to be 38%.
(8)	Issuance of shares calculated as $2 million divided by 5 day average share price measured from 2 trading days prior to signing the Definitive Agreement on March 2, 2005, through 2 trading days after the agreement date ($9.186/share).

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

For the Interim Six Month Period

	Radyne
	Historical for the			Xicom Historical for
	6 Months Ended			the 6 Months			Pro Forma			Radyne
	June 30, 2005			Ended April 3, 2005			Adjustments			Pro Forma
	(In thousands, except per share data)
Sales	$	29,365		$	18,019		$	—		$	47,384
Cost of sales		13,863			13,829			—			27,692
Gross profit		15,502			4,190			—			19,692
Selling, general and administrative expense		7,756			2,803			24	(1)
								569	(2)
								(216	) (3)
								54	(4)		10,990
Research and development expenses		2,995			1,502			—			4,497
Operating profit		4,751			(115	)		(431	)		4,205
Interest expense		(80	)		(133	)		(6	) (5)		(219	)
Interest and other income (expense)		472			4			(472	) (6)		4
Earnings before income taxes		5,143			(244	)		(910	)		3,989
Tax expense (benefit)		1,935			2			(346	) (7)		1,591
Net income	$	3,208		$	(246	)	$	(564	)	$	2,398
Weighted average shares — Basic		16,558						220	(8)		16,778
Weighted average shares — Diluted		17,294						220	(8)		17,514
EPS — Basic	$	0.19								$	0.14
EPS — Diluted	$	0.19								$	0.14

The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.

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NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF
INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2005

(1)	Reflects the increase to rent expense due to the elimination of the historical deferred rent liability as a result of purchase accounting. The deferred rent liability is created by the GAAP accounting for rent on a straight line basis. This liability reflects the difference between the income statement rent expense and cash rent paid over time. During the earlier years of a typical lease, deferred rent liability is increased when income statement rent expense exceeds cash rent paid. During the later years of a typical lease, deferred rent liability is decreased when income statement rent expense is less than cash rent paid.
(2)	Reflects the amortization of identified intangible assets over their economically useful lives. Appraisals and other valuation studies were based on available information and various assumptions that we believe are reasonable. The actual allocation of consideration paid and the resulting effect on income from operations may differ from the pro forma amounts included herein.
	The following table illustrates the estimated fair value, estimated useful life, and estimated amortization of the intangible assets acquired as a result of the merger.

			Years		Estimated
	Purchase		economic		amortization -
(dollars in thousands)	accounting		life		6 months.
Core technologies	$	4,920		10	$	246
Customer relationships		2,040		4		255
Covenant ‘not-to-compete’		410		3		68
Total	$	7,370			$	569

(3)

Reflects a decrease in rent expense due to the amortization of an unfavorable contract related to the lease of the Santa Clara facility assumed in the acquisition. This liability is recorded in purchase accounting for GAAP and amortized over the remaining lease term to record rent on a straight-line basis. A discounted cash flow analysis was prepared to estimate the contract liability for this lease and quantified the disparity between contract rent and market rent over its remaining term of 2 years.

The following table illustrates the estimated unfavorable contract liability, remaining lease term, and the estimated reduction of rent expense:

					Annual
	Contract		Remaining		reduction of
(dollars in thousands)	liability		lease term		rent expense
Unfavorable lease commitment	$	804		2	$	216

(4)	Reflects the increase in depreciation expense as a result of the fair value increase in purchase accounting of property and equipment. The increase in fair value of $635 relates to assets with an estimated economic life ranging from 1 to 5 years.
(5)	The pro forma adjustment to interest expense is based on the amounts borrowed related to the acquisition and the rates in effect at the closing of the merger offset by the effect on interest expense of Xicom debt that was repaid as of the merger (dollars in thousands):

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	Six months
	Ended
	June 30,
	2005
Interest Expense on a new credit line	$	139
Elimination of Xicom historical interest expense		(133	)
Pro forma adjustment to interest expense	$	6

	Interest expense on the new credit line assumes an interest rate of 5.61% applied to $5.0 million.
(6)	This adjustment represents a decrease in Radyne’s interest income of $472 resulting from the $39 million of cash used as purchase consideration.
(7)	Adjustment represents the related tax effects of pro forma adjustments. The effective tax rate was assumed to be 38%.
(8)	Issuance of shares calculated as $2 million divided by 5 day average share price measured from 2 trading days prior to signing the Definitive Agreement on March 2, 2005, through 2 trading days after the agreement date ($9.186/share).

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