Radyne Corporation

Condensed Consolidated Balance Sheets

Unaudited

(in thousands, except share data)

	March 31, 2006			December 31, 2005
Assets
Current assets:
Cash and cash equivalents	$	21,643		$	16,928
Accounts receivable—trade, net of allowance for doubtful accounts of $500 and $804, respectively		18,203			20,337
Inventories		22,085			18,057
Deferred tax assets		2,836			3,010
Prepaid expenses and other assets		862			864
Total current assets		65,629			59,196
Goodwill		30,557			30,333
Intangibles		6,421			6,706
Property and equipment, net		4,014			4,098
Other assets		264			295
Total Assets	$	106,885		$	100,628
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	6,408		$	5,054
Accrued expenses		7,610			9,045
Customer advance payments		2,955			2,319
Current portion of long-term debt		1,000			1,000
Income taxes payable		105			609
Total current liabilities		18,078			18,027
Long-term debt, less current portion		3,500			3,750
Deferred tax liability		625			752
Deferred rent		278			413
Accrued stock option compensation		6			46
Total liabilities		22,487			22,988
Stockholders’ equity:
Common stock; $.001 par value—authorized, 50,000,000 shares; issued and outstanding, 17,749,444 shares and 17,334,467 shares, respectively		18			17
Additional paid-in capital		67,544			63,171
Retained earnings		16,844			14,450
Other comprehensive income		(8	)		2
Total stockholders’ equity		84,398			77,640
Total Liabilities and Stockholders’ Equity	$	106,885		$	100,628

Radyne Corporation

Condensed Consolidated Statement of Operations

Unaudited

(in thousands, except per share data)

	Three Months Ended March 31,
	2006			2005
Net sales	$	31,194		$	13,709
Cost of sales		18,304			6,583
Gross profit		12,890			7,126
Operating expenses:
Selling, general and administrative		6,529			3,677
Research and development		2,724			1,498
Total operating expenses		9,253			5,175
Earnings from operations		3,637			1,951
Other (income) expense:
Interest expense		77			26
Interest and other income		(217	)		(251	)
Earnings before income taxes		3,777			2,176
Income tax expense		1,381			732
Net earnings	$	2,396		$	1,444
Earnings per share:
Basic	$	0.14		$	0.09
Diluted	$	0.13		$	0.08
Weighted average number of common shares outstanding:
Basic		17,557			16,473
Diluted		18,654			17,258

Radyne Corporation

Condensed Consolidated Statements of Cash Flows

Unaudited

(in thousands)

	Three Months Ended March 31,
	2006			2005
Cash flows from operating activities:
Net earnings	$	2,396		$	1,444
Adjustments to reconcile net earnings to net cash provided by operating activities:
Gain on disposal of property and equipment		(148	)		(12	)
Decrease in allowance for doubtful accounts		182			22
Deferred income taxes		48			598
Depreciation and amortization		894			235
Tax benefit from disqualifying dispositions		546			—
Amortization of stock compensation		563			—
Increase (decrease) in cash, excluding effects of acquisition, resulting from changes in:
Accounts receivable		1,952			1,124
Inventories		(4,028	)		(508	)
Prepaids and other assets		27			(302	)
Accounts payable		1,131			233
Accrued expenses		(1,569	)		(1,738	)
Income taxes payable		(504	)		(35	)
Customer advance payments		635			496
Accrued stock bonus		(40	)		—
Net cash provided by operating activities		2,085			1,557
Cash flows from investing activities:
Capital expenditures		(554	)		(321	)
Proceeds from sales of property and equipment		179			14
Net cash used in investing activities		(375	)		(307	)
Cash flows from financing activities:
Payment of notes payable		(250	)		—
Exercise of stock options		2,484			340
Exercise of redeemable warrants		—			2,717
Tax benefit from disqualifying dispositions		781			69
Principal payments on capital lease obligations		—			(2	)
Net cash provided by financing activities		3,015			3,124
Effects of exchange rate changes on cash and cash equivalents		(10	)		—
Net increase in cash and cash equivalents		4,715			4,374
Cash and cash equivalents, beginning of year		16,928			39,300
Cash and cash equivalents, end of quarter	$	21,643		$	43,674
Supplemental disclosures of cash flow information:
Cash paid for interest	$	77		$	6
Cash paid for taxes	$	510		$	101