<PAGE>

================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-K/A
(MARK ONE)
   (X)           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                     FOR THE FISCAL YEAR ENDED JUNE 30, 1999

                                       OR

   ( )         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 1-9125

                        AMERICAN TECHNICAL CERAMICS CORP.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

               DELAWARE                                11-2113382
     (STATE OR OTHER JURISDICTION                   (I.R.S. EMPLOYER
   OF INCORPORATION OR ORGANIZATION)                IDENTIFICATION NO.)

17 STEPAR PLACE, HUNTINGTON STATION, NY                   11746
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                (ZIP CODE)


        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:(516) 622-4700
           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:


         TITLE OF EACH CLASS           NAME OF EACH EXCHANGE ON WHICH REGISTERED
         -------------------           -----------------------------------------
    COMMON STOCK, PAR VALUE $.01                 AMERICAN STOCK EXCHANGE

        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

         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  X   NO
                                   -----   ----
         INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED,
TO THE BEST OF THE REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K. [X]

         ON SEPTEMBER 7, 1999, THE AGGREGATE MARKET VALUE OF THE REGISTRANT'S
COMMON STOCK (BASED UPON THE CLOSING SALES PRICE OF THE REGISTRANT'S COMMON
STOCK ON THE AMERICAN STOCK EXCHANGE ON SUCH DATE) HELD BY NONAFFILIATES OF THE
REGISTRANT WAS APPROXIMATELY $ 24,455,000. (FOR PURPOSES OF THIS REPORT, ALL
OFFICERS AND DIRECTORS HAVE BEEN CLASSIFIED AS AFFILIATES, WHICH CLASSIFICATION
SHALL NOT BE CONSTRUED AS AN ADMISSION OF THE AFFILIATE STATUS OF ANY SUCH
PERSON.)

         ON SEPTEMBER 7, 1999, THE REGISTRANT HAD OUTSTANDING 3,826,034 SHARES
OF COMMON STOCK.

         DOCUMENTS INCORPORATED BY REFERENCE: PORTIONS OF THE REGISTRANT'S PROXY
STATEMENT RELATING TO ITS ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER
19, 1999 ARE INCORPORATED INTO PART III OF THIS REPORT BY REFERENCE.


================================================================================

<PAGE>


ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



           AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
               INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                     Page Number

    Independent Auditors' Report ..................................   F-1

    Consolidated Balance Sheets as of June 30, 1999 and 1998 ......   F-2

    Consolidated Statements of Earnings
       Years Ended June 30, 1999, 1998 and 1997 ...................   F-3

    Consolidated Statements of Stockholders' Equity
       Years Ended June 30, 1999, 1998 and 1997 ...................   F-4

    Consolidated Statements of Cash Flows
       Years Ended June 30, 1999, 1998 and 1997 ...................   F-5

    Notes to Consolidated Financial Statements ....................   F-6





                                       F


<PAGE>

                          Independent Auditors' Report
                          ----------------------------


The Board of Directors and Stockholders
American Technical Ceramics Corp.:

We have audited the accompanying consolidated balance sheets of American
Technical Ceramics Corp. and subsidiaries (the Company) as of June 30, 1999 and
1998, and the related consolidated statements of earnings, stockholders' equity
and cash flows for each of the years in the three-year period ended June 30,
1999. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. 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 American Technical
Ceramics Corp. and subsidiaries as of June 30, 1999 and 1998, and the results of
their operations and their cash flows for each of the years in the three-year
period ended June 30, 1999, in conformity with generally accepted accounting
principles.






Melville, New York
August 24, 1999






                                      F-1
<PAGE>



               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                      ASSETS                                              JUNE 30, 1999         JUNE 30, 1998
                                                                          --------------        -------------
<S>                                                                     <C>                  <C>
CURRENT ASSETS
   Cash (including cash equivalents of approximately $786,000
      and $681,000, respectively)                                           $  2,898,000         $  2,069,000
   Investments                                                                 3,129,000            6,307,000
   Accounts receivable, net                                                    5,274,000            4,420,000
   Inventories                                                                12,436,000           10,884,000
   Deferred income taxes                                                         539,000              373,000
   Other                                                                         344,000              281,000
                                                                          --------------         ------------
                 TOTAL CURRENT ASSETS                                         24,620,000           24,334,000
                                                                          --------------         ------------

PROPERTY, PLANT AND EQUIPMENT
   Land                                                                          738,000              738,000
   Buildings                                                                   7,506,000            7,422,000
   Leasehold improvements                                                      3,124,000            2,744,000
   Machinery and equipment                                                    26,361,000           23,813,000
   Furniture, fixtures and other                                               2,341,000            1,839,000
                                                                          --------------         ------------
                                                                              40,070,000           36,556,000
   Less:   Accumulated depreciation                                           21,279,000           18,853,000
                                                                          --------------         ------------
                                                                              18,791,000           17,703,000
                                                                          --------------         ------------
OTHER ASSETS                                                                     211,000              292,000
                                                                          --------------         ------------
                 TOTAL ASSETS                                               $ 43,622,000         $ 42,329,000
                                                                          ==============         ============
         LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Current portion of long-term debt                                        $    542,000         $    917,000
   Accounts payable                                                            1,315,000            1,357,000
   Accrued expenses                                                            2,877,000            3,284,000
   Income taxes payable                                                          726,000              657,000
                                                                          --------------         ------------
                 TOTAL CURRENT LIABILITIES                                     5,460,000            6,215,000
                                                                          --------------         ------------
Long-term debt                                                                 3,691,000            3,338,000
Deferred income taxes                                                          2,086,000            1,703,000
                                                                          --------------         ------------
                 TOTAL LIABILITIES                                            11,237,000           11,256,000
                                                                          --------------         ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Common Stock -- $.01 par value; authorized 20,000,000
      shares; issued 4,067,979 shares                                             41,000               41,000
   Capital in excess of par value                                              6,944,000            6,601,000
   Retained earnings                                                          27,011,000           24,882,000
   Accumulated comprehensive income:
      Unrealized gain on investments available-for-sale, net                       2,000              183,000
      Cumulative foreign currency translation adjustment                         (98,000)              (9,000)
                                                                          --------------         ------------
                                                                                 (96,000)             174,000
                                                                          --------------         ------------
    Less:   Treasury stock, at cost (242,445 and
               165,301 shares, respectively)                                   1,515,000              611,000
            Deferred compensation                                                  --                  14,000
                                                                          --------------         ------------
                 TOTAL STOCKHOLDERS' EQUITY                                   32,385,000           31,073,000
                                                                          --------------         ------------

                                                                            $ 43,622,000         $ 42,329,000
                                                                          ==============         ============
</TABLE>

See accompanying notes to consolidated financial statements


                                      F-2


<PAGE>


               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                      YEARS ENDED JUNE 30, 1999, 1998, 1997

<TABLE>
<CAPTION>
                                                          1999           1998            1997
                                                          ----           ----            ----
<S>                                                 <C>             <C>             <C>
Net sales                                            $ 37,565,000    $ 40,399,000    $ 36,529,000
Cost of sales                                          23,642,000      23,367,000      22,269,000
                                                     ------------    ------------    ------------

     Gross profit                                      13,923,000      17,032,000      14,260,000
                                                     ------------    ------------    ------------

Selling, general and administrative expenses            8,806,000       8,720,000       7,249,000
Research and development expenses                       1,981,000       1,813,000       1,433,000

                                                     ------------    ------------    ------------
     Operating expenses                                10,787,000      10,533,000       8,682,000
                                                     ------------    ------------    ------------


                                                     ------------    ------------    ------------
     Income from operations                             3,136,000       6,499,000       5,578,000
                                                     ------------    ------------    ------------

Other expense (income):
     Interest expense                                     420,000         428,000         493,000
     Interest income                                     (309,000)       (483,000)       (259,000)
     Other                                               (251,000)        (12,000)          6,000

                                                     ------------    ------------    ------------
                                                         (140,000)        (67,000)        240,000
                                                     ------------    ------------    ------------

     Income before provision for income taxes           3,276,000       6,566,000       5,338,000

Provision for income taxes                              1,147,000       2,364,000       1,909,000


                                                     ------------    ------------    ------------
     Net income                                      $  2,129,000    $  4,202,000    $  3,429,000
                                                     ============    ============    ============

Basic net income per common share                    $       0.56    $       1.08    $       0.88

Diluted net income per common share                  $       0.56    $       1.05    $       0.87

                                                     ------------    ------------    ------------
Basic weighted average common shares outstanding        3,829,000       3,897,000       3,887,000
                                                     ============    ============    ============


                                                     ------------    ------------    ------------
Diluted weighted average common shares outstanding      3,829,000       4,009,000       3,920,000
                                                     ============    ============    ============
</TABLE>

See accompanying notes to consolidated financial statements


                                      F-3


<PAGE>

               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    YEARS ENDED JUNE 30, 1999, 1998, AND 1997

<TABLE>
<CAPTION>
                                                           |                         Capital in
                                             Comprehensive |     Common Stock       Excess of Par    Retained
                                             Income/(Loss) |  Shares     Amount         Value        Earnings
                                             ------------- |  ------     ------         -----        --------
                                             --------------|-----------------------------------------------------
BALANCE AT JUNE 30, 1996                                   |4,067,501  $ 41,000   $ 6,439,000      $17,251,000
                                                           |
<S>                                          <C>           |<C>       <C>        <C>                <C>
Net income                                    $ 3,429,000  |   ---        ---          ---           3,429,000
                                                           |
Purchase of treasury stock                        ---      |   ---        ---          ---              ---
                                                           |
Deferred compensation                             ---      |   ---        ---          92,000           ---
                                                           |
Stock award compensation expense                  ---      |   ---        ---          ---              ---
                                                           |
Exercise of stock options                         ---      |      478     ---           2,000           ---
Other comprehensive income, net of tax:                    |
   Unrealized gains on investments                         |
   available-for-sale, net of                              |
   reclassification adjustment                     53,000  |   ---        ---          ---              ---
                                                           |
   Foreign currency translation adjustment         68,000  |   ---        ---          ---              ---
                                             --------------|
Other comprehensive income, net of tax            121,000  |   ---        ---          ---              ---
                                             --------------|
Comprehensive income                          $ 3,550,000  |
                                             ==============|-----------------------------------------------------
BALANCE AT JUNE 30, 1997                                   |4,067,979   $ 41,000  $ 6,533,000      $20,680,000
                                                           |
Net income                                    $ 4,202,000  |   ---        ---          ---           4,202,000
                                                           |
Purchase of treasury stock                        ---      |   ---        ---          ---              ---
                                                           |
Issuance of shares for deferred compensation      ---      |   ---        ---          65,000           ---
                                                           |
Stock award compensation expense                  ---      |   ---        ---          ---              ---
                                                           |
Exercise of stock options                         ---      |   ---        ---           3,000           ---
Other comprehensive income, net of tax:                    |
   Unrealized gains on investments                         |
   available-for-sale, net of                              |
   reclassification adjustment                    118,000  |   ---        ---          ---              ---
                                                           |
   Foreign currency translation adjustment          2,000  |   ---        ---          ---              ---
                                             --------------|
Other comprehensive income, net of tax            120,000  |   ---        ---          ---              ---
                                             --------------|
Comprehensive income                          $ 4,322,000  |
                                             ==============|-----------------------------------------------------
BALANCE AT JUNE 30, 1998                                   |4,067,979   $ 41,000  $ 6,601,000      $24,882,000
                                                           |
Net income                                    $ 2,129,000  |   ---        ---          ---           2,129,000
                                                           |
Purchase of treasury stock                        ---      |   ---        ---          ---              ---
                                                           |
Issuance of shares for compensation               ---      |   ---        ---         130,000           ---
                                                           |
Stock award compensation expense                  ---      |   ---        ---         162,000           ---
                                                           |
Issuance of shares for inventory purchase         ---      |   ---        ---          51,000           ---
Other comprehensive income, net of tax:                    |
   Unrealized losses on investments                        |
   available-for-sale, net of                              |
   reclassification adjustment                   (181,000) |   ---        ---          ---              ---
                                                           |
   Foreign currency translation adjustment        (89,000) |   ---        ---          ---              ---
                                             --------------|
Other comprehensive income, net of tax           (270,000) |   ---        ---          ---              ---
                                             --------------|
Comprehensive income                          $ 1,859,000  |
                                             ==============|-----------------------------------------------------
BALANCE AT JUNE 30, 1999                                   |4,067,979   $ 41,000  $ 6,944,000      $27,011,000
                                                           |-----------------------------------------------------
</TABLE>


                                   continued

                                      F-4
<PAGE>

               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              YEARS ENDED JUNE 30, 1999, 1998, AND 1997 (CONTINUED)

<TABLE>
<CAPTION>
                                                Accumulated
                                               Comprehensive                       Deferred
                                                   Income       Treasury Stock   Compensation      Total
                                                   ------       --------------   ------------      -----
                                               ----------------------------------------------------------------
<S>                                           <C>               <C>              <C>             <C>
BALANCE AT JUNE 30, 1996                          ($67,000)        ($572,000)           ---       $ 23,092,000

Net income                                          ---               ---               ---          3,429,000

Purchase of treasury stock                          ---              (63,000)           ---            (63,000)

Deferred compensation                               ---               36,000          (241,000)       (113,000)

Stock award compensation expense                    ---               ---              135,000         135,000

Exercise of stock options                           ---               ---               ---              2,000
Other comprehensive income, net of tax:
   Unrealized gains on investments
   available-for-sale, net of
   reclassification adjustment                      ---               ---               ---             ---

   Foreign currency translation adjustment          ---               ---               ---             ---

Other comprehensive income, net of tax             121,000            ---               ---            121,000

Comprehensive income
                                               ----------------------------------------------------------------
BALANCE AT JUNE 30, 1997                       $    54,000         ($599,000)         (106,000)    $26,603,000

Net income                                          ---               ---               ---          4,202,000

Purchase of treasury stock                          ---              (41,000)           ---            (41,000)

Issuance of shares for deferred compensation        ---               28,000            ---             93,000

Stock award compensation expense                    ---               ---               92,000          92,000

Exercise of stock options                           ---                1,000            ---              4,000
Other comprehensive income, net of tax:
   Unrealized gains on investments
   available-for-sale, net of
   reclassification adjustment                      ---               ---               ---             ---

   Foreign currency translation adjustment          ---               ---               ---             ---

Other comprehensive income, net of tax             120,000            ---               ---            120,000

Comprehensive income
                                               ----------------------------------------------------------------
BALANCE AT JUNE 30, 1998                       $   174,000         ($611,000)         ($14,000)    $31,073,000

Net income                                          ---               ---               ---          2,129,000

Purchase of treasury stock                          ---           (1,198,000)           ---         (1,198,000)

Issuance of shares for compensation                 ---               84,000            ---            214,000

Stock award compensation expense                    ---              161,000            14,000         337,000

Issuance of shares for inventory purchase           ---               49,000            ---            100,000
Other comprehensive income, net of tax:
   Unrealized losses on investments
   available-for-sale, net of
   reclassification adjustment                      ---               ---               ---             ---

   Foreign currency translation adjustment          ---               ---               ---             ---

Other comprehensive income, net of tax            (270,000)           ---               ---           (270,000)

Comprehensive income
                                               ----------------------------------------------------------------
BALANCE AT JUNE 30, 1999                          ($96,000)      ($1,515,000)           ---        $32,385,000
                                               ----------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements




                                      F-4


<PAGE>


<TABLE>
                                     AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          YEARS ENDED JUNE 30, 1999, 1998 AND 1997

<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES:                                   1999                 1998                  1997
                                                                    ------------         -----------           -----------

<S>                                                                <C>                  <C>                   <C>
  Net income                                                        $ 2,129,000          $ 4,202,000           $ 3,429,000
  Adjustments to reconcile net income to net cash
     provided by operating activities:
       Depreciation and amortization                                  2,542,000            2,064,000             1,918,000
       (Gain) loss on disposal of fixed assets                          (10,000)             (16,000)                3,000
       Stock award compensation expense                                 337,000               92,000               135,000
       Provision for deferred income taxes                              318,000              205,000               522,000
       Provision for doubtful accounts receivable                       ---                   50,000                35,000
       Realized gain on sale of investments                            (257,000)              ---                   ---
  Changes in operating assets and liabilities:
       Accounts receivable, net                                        (854,000)              50,000               395,000
       Inventories                                                   (1,452,000)          (1,857,000)               59,000
       Other assets, net                                                 18,000              181,000              (135,000)
       Accounts payable, accrued expenses
         and income taxes payable                                      (166,000)           1,087,000               (78,000)
                                                                    ------------         -----------           -----------
  Net cash provided by operating activities                           2,605,000            6,058,000             6,283,000
                                                                    ------------         -----------           -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Capital expenditures                                          (3,570,000)          (4,085,000)           (2,029,000)
       Purchase of investments                                         (203,000)          (2,659,000)           (2,494,000)
       Proceeds from sale of investments                              3,356,000               ---                   ---
       Proceeds from sale of fixed assets                                55,000               50,000                 3,000

                                                                    ------------         -----------           -----------
  Net cash provided by (used in) investing activities                  (362,000)          (6,694,000)           (4,520,000)
                                                                    ------------         -----------           -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Repayment of long-term debt                                     (923,000)            (760,000)             (876,000)
       Payments to acquire treasury stock                            (1,198,000)             (41,000)              (63,000)
       Proceeds from exercise of stock options                          ---                    4,000                 2,000
       Proceeds from issuance of long-term debt                         796,000               ---                   ---

                                                                    ------------         -----------           -----------
  Net cash used in financing activities                              (1,325,000)            (797,000)             (937,000)
                                                                    ------------         -----------           -----------

       Effect of exchange rate changes on cash                          (89,000)               2,000                13,000
                                                                    ------------         -----------           -----------

       Net increase (decrease) in cash and cash equivalents             829,000           (1,431,000)              839,000

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                          2,069,000            3,500,000             2,661,000

                                                                    ------------         -----------           -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                              $ 2,898,000          $ 2,069,000           $ 3,500,000
                                                                    ============         ===========           ===========
</TABLE>

See accompanying notes to consolidated financial statements




                                      F-5
<PAGE>


               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

              DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

     American Technical Ceramics Corp. and its wholly-owned subsidiaries (the
"Company") are engaged in the design, development, manufacture and sale of
ceramic multilayer capacitors for commercial and military purposes in the United
States and for export, primarily to Western Europe, Canada and the Far East.
During fiscal years 1999, 1998 and 1997, there were no customers which accounted
for 10% or more of consolidated revenues. In the fiscal years ended June 30,
1999, 1998 and 1997, approximately 7%, 10%, and 13% respectively, of the
Company's net sales were to United States military and aerospace contractors.
The Company operates in one industry segment - the electronic components
industry.

              BASIS OF PRESENTATION

     The accompanying consolidated financial statements include the accounts of
American Technical Ceramics Corp. and its wholly-owned subsidiaries. All
significant intercompany balances and transactions have been eliminated in
consolidation.

     Certain reclassifications have been made to prior year amounts to conform
to the current year presentation.

              REVENUE RECOGNITION

     Revenue is recognized as products are shipped.

              CASH EQUIVALENTS

     The Company considers all highly liquid debt instruments with a maturity of
three months or less when purchased to be cash equivalents, including money
market accounts and certificates of deposit.

              INVESTMENTS

     The Company classifies its investments in debt and equity securities as
available-for-sale. Accordingly, these investments are reported at fair value
with unrealized holding gains and losses excluded from earnings and reported as
a separate component of stockholders' equity, net of tax. Classification of
investments is determined at acquisition and reassessed at each reporting date.
Realized gains and losses are included in the determination of net earnings at
the time of sale and are derived using the specific identification method for
determining cost of securities sold.

              INVENTORIES

     Inventories are stated at the lower of aggregate cost (first-in, first-out)
or market.



                                      F-6
<PAGE>



              COMPREHENSIVE INCOME

     Effective July 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130 Reporting Comprehensive Income ("SFAS No. 130").
SFAS No. 130 presents standards for reporting and display of comprehensive
income and its components in a full set of general-purpose financial statements.
The components of the change in the net unrealized (losses)/gains on investments
available-for-sale, net of tax for the fiscal years ended June 30, 1999, 1998
and 1997 are as follows:

<TABLE>
<CAPTION>
                                                                          Year Ended June 30,
                                                                1999               1998              1997
                                                          -------------------------------------------------------
<S>                                                        <C>                <C>                <C>
    Unrealized holding (losses)/gains
               arising during the period, net               $  (14,000)        $  118,000         $   53,000

    Less: reclassification adjustment for
                    gains included in net income, net         (167,000)           --                  --

                                                          -------------------------------------------------------
    Change in net unrealized (losses)/gains on
       investments available-for-sale                       $ (181,000)        $  118,000         $   53,000
                                                          =======================================================
</TABLE>


                  LONG-LIVED ASSETS

     Property, plant and equipment are stated at cost. Depreciation and
amortization are provided primarily using the straight-line method over the
estimated useful lives of the related assets as follows:


 Buildings                                                              30 years
 Leasehold improvements            Lesser of the remaining lease term or 5 years
 Machinery and equipment                                           3 to 10 years
 Furniture, fixtures and other                                      3 to 8 years


         The Company reviews its long-lived assets (property, plant and
equipment, and related intangible assets that arose from business combinations
accounted for under the purchase method) for impairment whenever events or
circumstances indicate that the carrying amount of an asset may not be
recoverable. If the sum of the expected cash flows, undiscounted and without
interest, is less than the carrying amount of the asset, an impairment loss is
recognized as the amount by which the carrying amount of the asset exceeds its
fair value.

              INCOME TAXES

     Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the 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 realized 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.



                                      F-7
<PAGE>


              FOREIGN CURRENCY TRANSLATION

     The Company translates the financial statements of its foreign subsidiary
(located in England) by applying the current exchange rate as of the balance
sheet date to the assets and liabilities of the subsidiary and a weighted
average rate to such subsidiary's results of operations. The resulting
translation adjustment is recorded as a component of stockholders' equity.

              STOCK-BASED COMPENSATION

     The Company applies Accounting Principles Board Opinion No. 25 Accounting
for Stock Issued to Employees in accounting for employee stock-based
compensation and makes pro-forma disclosures of net income and net income per
share as if the fair value method under Statement of Financial Accounting
Standards No. 123 Accounting for Stock Based Compensation had been applied.

              EARNINGS PER SHARE:

     The Company applies Statement of Financial Accounting Standards No. 128
Earnings Per Share in computing and presenting basic and diluted earnings per
share ("EPS"). Basic EPS is computed by dividing income available to common
shareholders (which for the Company equals its net income) by the weighted
average number of common shares outstanding and dilutive EPS adds the dilutive
effect of stock options and other common stock equivalents. A reconciliation
between numerators and denominators of the basic and diluted earnings per share
is as follows:

<TABLE>
<CAPTION>
                     YEAR ENDED JUNE 30, 1999            YEAR ENDED JUNE 30, 1998            YEAR ENDED JUNE 30, 1997
                     ------------------------            ------------------------            ------------------------
                                            PER-                                 PER-                                PER-
                  INCOME        SHARES     SHARE      INCOME         SHARES     SHARE      INCOME        SHARES     SHARE
                (NUMERATOR)  (DENOMINATOR) AMOUNT   (NUMERATOR)   (DENOMINATOR) AMOUNT   (NUMERATOR)  (DENOMINATOR) AMOUNT
                -----------  ------------- ------   -----------   ------------- ------   -----------  ------------- ------
<S>             <C>         <C>            <C>       <C>           <C>           <C>     <C>           <C>           <C>
Basic EPS        $2,129,000  3,829,000      $.56      $4,202,000    3,897,000     $1.08   $3,429,000    3,897,000     $.88
                                            ====                                  =====                               ====

Effect of Dilutive
    Securities:

  Stock Options     --           --          --          --           109,000      --         --            7,000      --

  Stock Awards      --           --          --          --             3,000      --         --           16,000      --
                -----------------------------------------------------------------------------------------------------------

Diluted EPS      $2,129,000    3,829,000    $.56      $4,202,000    4,009,000     $1.05   $3,429,000    3,920,000     $.87
                ===========================================================================================================
</TABLE>


                  IMPACT OF NEW ACCOUNTING STANDARDS


     In fiscal year 2001, the Company will be required to adopt SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. The Company
has not yet completed its evaluation of the impact of this statement on its
financial statements.


                  ACCOUNTING ESTIMATES

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make 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 and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.




                                      F-8
<PAGE>

              SUPPLEMENTAL CASH FLOW INFORMATION


     During fiscal year 1999, significant non-cash activities included (i) the
purchase of approximately $100,000 of inventory from an officer of the Company
in exchange for 12,700 shares of common stock issued from treasury, (ii) the
issuance of 20,454 shares of treasury stock to pay approximately $214,000 in
accrued compensation, (iii) the purchase of property, plant and equipment
through an increase in capital lease obligations of approximately $105,000 and
(iv) the issuance of 47,750 shares of treasury stock to pay $337,000 in stock
awards.


NOTE  2.      INVESTMENTS

     Investments consist of the following:


<TABLE>
<CAPTION>
                                                                    Gross                 Gross
                                                                  Unrealized            Unrealized
 June 30, 1999                                  Cost                Gains                 Losses              Fair Value
 -------------                            ----------------     -----------------     -----------------     -----------------
<S>                                        <C>                   <C>                   <C>                   <C>
 U.S. Government obligations                $ 3,125,000           $  28,000             $  24,000             $ 3,129,000
                                          ----------------     -----------------     -----------------     -----------------

                                                                    Gross                 Gross
                                                                  Unrealized            Unrealized
 June 30, 1998                                  Cost                Gains                 Losses              Fair Value
 -------------                            ----------------     -----------------     -----------------     -----------------
 Mutual funds                               $   269,000           $  25,000             $    --               $   294,000
 Equity securities                              310,000             177,000                 2,000                 485,000
 U.S. Government obligations                  5,442,000              92,000                 6,000               5,528,000
                                          ----------------     -----------------     -----------------     -----------------
                                            $ 6,021,000           $ 294,000             $   8,000             $ 6,307,000
                                          ----------------     -----------------     -----------------     -----------------
</TABLE>


     Gross realized gains of approximately $257,000 are included in other income
for fiscal year 1999. There were no gross realized gains or losses in fiscal
years 1998 and 1997.

     The Company's investments in U. S. Government obligations at June 30, 1999
contractually mature as follows:

                                         COST          FAIR VALUE
                                         ----          ----------
    Within one year                  $   701,000        $   703,000
    Between one and five years         1,402,000          1,414,000
    Between five and ten years         1,022,000          1,012,000
                                     ------------     --------------
                                     $ 3,125,000        $ 3,129,000
                                     ------------     --------------

NOTE  3.      INVENTORIES

     Inventories consist of the following:

                                   June 30, 1999      June 30, 1998
                                   -------------      -------------
    Raw materials                   $  5,874,000       $  4,142,000
    Work in process                    3,551,000          2,216,000
    Finished goods                     3,011,000          4,526,000
                                   --------------     --------------
                                    $ 12,436,000       $ 10,884,000
                                   --------------     --------------




                                      F-9
<PAGE>


NOTE  4.      LONG-TERM DEBT

     Long-term debt consists of the following:

                                        June 30, 1999      June 30, 1998
                                        -------------      -------------

    Notes payable to banks                $ 1,183,000        $ 1,155,000
    Obligations under capital leases        3,050,000          3,100,000
                                        --------------     --------------
                                            4,233,000          4,255,000
    Less: Current portion                     542,000            917,000
                                        --------------     --------------
         Long-term debt                   $ 3,691,000        $ 3,338,000
                                        --------------     --------------

     Interest payments during fiscal years 1999, 1998 and 1997 approximated
interest expense for those years.

              NOTES PAYABLE TO BANKS

     Notes payable to banks at June 30, 1999 consists of:

        (i) an unsecured term loan with a remaining balance of $95,000 payable
        in equal monthly installments of principal of approximately $32,000
        through September 1999, plus accrued interest at the bank's prime rate
        (7.75% at June 30, 1999). The loan is subject to certain financial
        covenants which require, among other things, a minimum level of
        tangible net worth;

        (ii) two term loans, with a remaining principal balance aggregating
        $292,000, secured by capital equipment with an approximate net book
        value of $1,100,000 at June 30, 1999. The remaining balance of the
        loans are payable in equal monthly principal installments of
        approximately $37,000 through February 2000, and bear interest at
        8.85%. Both loans are subject to certain financial covenants which
        require, among other things, the maintenance of certain financial
        ratios; and


        (iii) a $3,500,000 equipment line of credit secured by capital equipment
        with NationsBank, NA. As of June 30, 1999, $796,000 has been borrowed
        against the line of credit. The line bears interest at 2% above the
        three month rate for U.S. Dollar deposits on the London Interbank
        Market. The outstanding principal under the equipment line-of-credit
        will be rolled over every six months into a self amortizing term note
        of not less than four nor more than seven years. Borrowing under the
        line will be subject to compliance with certain financial covenants,
        including maintenance of asset and liability percentage ratios.


     The Company also has $2,000,000 available under a revolving line-of-credit
with a bank. The line contains certain financial covenants and a facility fee of
1/4% of the average unused amount. As of June 30, 1999, the Company had no
borrowings outstanding under this line.

     As of June 30, 1999, the Company was in compliance with all financial
covenants of its notes payable to banks.




                                      F-10
<PAGE>

     The following table presents aggregate annual maturities of notes payable
to banks after fiscal year 1999:

                        2000       $   387,000
                        2001           796,000
                                   ------------
                                   $ 1,183,000
                                   ------------

     OBLIGATIONS UNDER CAPITAL LEASES

     The Company leases a manufacturing facility located in Jacksonville,
Florida from a partnership controlled by the Company's President and Chief
Executive Officer and principal stockholder under a capital lease. The leased
facility has an aggregate cost of $3,666,000 and a net book value of $2,233,000
at June 30, 1999. The lease is for a period of 30 years and was capitalized
using an interest rate of 10.5%. The lease provides for base rent of
approximately $461,000 payable in twelve monthly installments of approximately
$38,000 for the fiscal year ending June 30, 1999. The lease further provides for
annual increases in total annual rent for years beginning after May 1, 1999,
based on the increase in the CPI since May 1, 1998, applied to base rent. The
annual increase for fiscal year 2000 results in monthly payments of
approximately $39,000 per month.

     The Company leases computer equipment from an unrelated party. At June 30,
1999, the equipment had an original cost of $83,000 and a net book value of
$3,000. The lease is for a period of five years beginning October 1994 and was
capitalized using an interest rate of 10%. The remaining balance will be paid in
equal monthly installments through September 1999.

     The following sets forth the future minimum lease payments (excluding
rental adjustments) under these capital leases by fiscal year and the present
value of the minimum lease payments as of June 30, 1999:

               2000                                       $   466,000
               2001                                           461,000
               2002                                           461,000
               2003                                           461,000
               2004                                           461,000
               2005 and thereafter                          2,883,000
                                                          ------------
               Total minimum lease payments                 5,193,000
               Less: Amount representing interest           2,143,000
                                                          ------------
               Present value at June 30, 1999               3,050,000
               Less: Current portion                          155,000
                                                          ------------
                                                          $ 2,895,000
                                                          ------------




                                      F-11
<PAGE>


NOTE  5.      INCOME TAXES

     The provision for income taxes consists of the following:

                                              Years Ended June 30,
                                              --------------------
                                    1999             1998              1997
                                    ----             ----              ----
    CURRENT:
        Federal                  $   645,000     $ 1,875,000       $ 1,110,000
        State                        103,000         116,000            85,000
        Foreign                       81,000         168,000           192,000
                                -------------    --------------    -------------
           Total Current             829,000       2,159,000         1,387,000
                                -------------    --------------    -------------

    DEFERRED:
        Federal                      272,000         178,000           462,000
        State                         46,000          27,000            60,000
                                -------------    --------------    -------------
            Total Deferred           318,000         205,000           522,000
                                -------------    --------------    -------------
                                 $ 1,147,000     $ 2,364,000       $ 1,909,000
                                -------------    --------------    -------------

     The following table reconciles the Federal statutory rate to the Company's
effective tax rate:

                                                     Years Ended June 30,
                                                     --------------------
                                                 1999        1998        1997
                                                 ----        ----        ----
   Tax provision computed at statutory rate      34.0%       34.0%       34.0%
   State tax, net of Federal tax effect           3.0         1.4         1.8
   FSC benefit                                   (1.3)       (1.0)       (1.0)
   Tax credits and other, net                    (0.7)        1.6         1.0
                                                --------   ---------   --------
                                                 35.0%       36.0%       35.8%
                                                ========   =========   ========

     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at June 30,
1999 and 1998, are presented below.

<TABLE>
<CAPTION>
                                                                                               1999                     1998
                                                                                               ----                     ----
<S>                                                                                       <C>                    <C>
Deferred tax assets:
   Allowance for doubtful accounts receivable and sales returns                           $    137,000           $    140,000
      Inventories, principally due to additional costs inventoried for tax purposes
           pursuant to the Tax Reform Act of 1986                                              178,000                142,000
   Accrued expenses                                                                            257,000                225,000
                                                                                         ---------------         -------------
      Total deferred tax assets                                                                572,000                507,000
                                                                                         ---------------         -------------

Deferred tax liabilities:
   Plant and equipment, principally due to differences
         in depreciation and capital leases                                                 (2,086,000)            (1,703,000)
    Unrealized appreciation on investments available-for-sale                                   (1,000)              (102,000)
    Other                                                                                      (32,000)               (32,000)
                                                                                         ---------------         -------------
        Total deferred tax liabilities                                                      (2,119,000)            (1,837,000)
                                                                                         ---------------         -------------
             Net deferred tax liability                                                   $ (1,547,000)          $ (1,330,000)
                                                                                         ===============         =============
</TABLE>


                                      F-12
<PAGE>



     In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, expected future taxable income
and tax planning strategies in making this assessment. Based upon the level of
historical taxable income, expected future taxable income over the periods which
the deferred tax assets are deductible, and reversals of deferred tax
liabilities, management believes (although there can be no assurance) that it is
more likely than not the Company will realize the benefits of these deductible
differences. Income taxes paid were approximately $648,000, $1,982,000, and
$1,735,000 for fiscal years 1999, 1998 and 1997, respectively.


NOTE  6.   COMMON STOCK AND STOCK-BASED COMPENSATION

     On April 1, 1997, the Board of Directors approved the American Technical
Ceramics Corp. 1997 Stock Option Plan (the "1997 Option Plan") pursuant to which
the Company may grant options to purchase up to 400,000 shares of the Company's
common stock. Options granted under the 1997 Option Plan may be either incentive
or non-qualified stock options. The term of each incentive stock option shall
not exceed ten years from the date of grant (five years for grants to employees
who own 10% or more of the voting power of the Company's common stock), and
options may vest in accordance with a vesting schedule established by the plan
administrator. The 1997 Option Plan will terminate on March 31, 2007.

     On April 1, 1997, the Board of Directors granted incentive stock options
under the 1997 Option Plan to purchase 266,000 shares of common stock at an
exercise price of $8.25 per share. On July 29, 1998, the Board of Directors
granted incentive stock options under the 1997 Option Plan to purchase 61,000
shares of Common Stock at an exercise price of $8.125 per share and 4,000 shares
of Common Stock at an exercise price of $8.988 per share. On November 20, 1998,
the Board of Directors granted incentive stock options under the 1997 Option
Plan to purchase 18,000 shares of Common Stock at an exercise price of $8.00 per
share and 2,000 shares of Common Stock at an exercise price of $8.80 per share.
These options may be exercised for a period of ten years from the date of grant
and vest 25% per year during the first four years of their term. No disposition
of shares acquired pursuant to the exercise of these options may be made by the
optionees within two years following the date that the option is granted, nor
within one year after the exercise of the option, without the written consent of
the Company. Since the Company measures compensation cost under Opinion No. 25,
the Company has not recognized compensation cost for these options as the
exercise price was equal to the fair market value of the stock at the date of
grant. No options were granted during fiscal year 1998.

     The average per-share value of stock options granted during fiscal years
1999 and 1997 was $3.75 and $3.61, respectively, as determined by the
Black-Scholes option pricing model (assuming a risk-free interest rate of 5.15%,
and 7.09%, respectively, expected life of five years, expected volatility of 45%
and 37%, respectively, and no dividends).



                                      F-13
<PAGE>



           The Company's stock option activity for fiscal years 1999, 1998, and
1997 is as follows:

<TABLE>
<CAPTION>
                                                1999                          1998                         1997
                                   ------------------------------ ----------------------------- ----------------------------
                                                     Weighted                     Weighted                      Weighted
                                                     Average                       Average                      Average
                                       Amount         Price          Amount         Price          Amount        Price
                                                      -----                         -----                        -----
<S>                                  <C>           <C>            <C>            <C>            <C>            <C>
 Outstanding, beginning of year        248,500       $  8.25        266,000        $  8.25            478       $  5.50
 Granted                                85,000          8.15             -             -          266,000          8.25
 Canceled                              (19,000)         8.21        (17,000)          8.25            -             -
 Exercised                                -               -            (500)          8.25           (478)         5.50
                                   ----------------               --------------                --------------
 Outstanding, end of year              314,500       $  8.24        248,500        $  8.25        266,000       $  8.25
                                   ================               ==============                ==============
</TABLE>

     At June 30, 1999, 118,000 options are exercisable.

     In fiscal year 1997, the Company agreed to award 34,000 shares of its
common stock to an employee as part of his employment agreement. The shares were
earned over a 24 month period. The market value of the shares awarded was
recorded as deferred compensation, and was amortized to compensation expense
over the 24 month period that the shares were earned. During fiscal years 1999,
1998 and 1997, 2,852, 10,417 and 18,000 shares were released from treasury stock
to the employee under the agreement, respectively. In fiscal years 1999 and
1998, such amount is net of 148 and 2,583 common shares, respectively, for tax
withholdings. The fair value of the withheld shares, amounting to $1,000, and
$41,000, respectively, was recorded as an addition to treasury stock for fiscal
years 1999 and 1998, respectively. Compensation expense related to these stock
awards was $14,000, $92,000, and $135,000 for fiscal years 1999, 1998 and 1997,
respectively.

     In fiscal year 1999, the Company awarded 47,750 shares of its common stock
to employees for services rendered. This award resulted in compensation expense
of $323,000, measured by the market value of the shares on the date of grant.
Treasury shares have been utilized for all stock awards and, accordingly,
treasury stock has been reduced for the cost of the shares on a specific
identification basis, first-in first-out.

     On a pro-forma basis, net income and basic net income per share would have
been $1,855,000, $3,976,000 and $3,390,000 and $.48, $1.02 and $.87,
respectively, for fiscal years 1999, 1998 and 1997, respectively, had the
Company measured compensation cost using the fair value method of SFAS No. 123.
The full impact of calculating compensation cost for stock options under SFAS
No. 123 is not reflected in the pro-forma amounts because compensation cost is
calculated over the option vesting periods and compensation costs for options
granted prior to July 1995 are not considered.


     In June 1990, the Registrant announced its first stock purchase program
pursuant to which it was authorized to purchase up to $1,000,000 of its common
stock. In September 1998, the Board of Directors authorized the purchase of up
to an additional $1,000,000 of the Registrant's common stock under a second
stock purchase program. As of March 31, 1999, the Registrant had expended the
entire amount available under both programs and had purchased an aggregate of
475,000 shares. No shares were purchased under this program in fiscal year 1998.
In fiscal years 1999 and 1997 160,900 and 10,700 shares, respectively, were
acquired for $1,197,000 and $63,000, respectively.




                                      F-14
<PAGE>


NOTE 7.       COMMITMENTS

              OPERATING LEASES

         The Company has a related party operating lease for a rented facility
which, as amended, expires December 31, 2001. Rent expense under this related
party operating lease was approximately $484,000, $462,000 and $452,000 for the
fiscal years ended June 30, 1999, 1998, and 1997, respectively. Under this lease
future minimum rent payments will be approximately $489,000 per year.

     Rent expense to unrelated parties was approximately $10,000, $13,000 and
$12,000 for the fiscal years ended June 30, 1999, 1998 and 1997, respectively.

              EMPLOYMENT AGREEMENTS

      The Company has an employment agreement with its President, which provides
for annual base compensation of $297,000 as well as additional annual
compensation equal to 5% of net income before such bonus and income taxes. The
agreement expires March 1 of each year but is renewed automatically for an
additional one year in the absence of written notice to the contrary by either
party at least 120 days prior to the March 1st renewal date. In addition, if
there is a change in control of the Company or the President's employment is
terminated by the Company before the expiration of the agreement other than for
cause (as defined in the agreement), the President is entitled to the greater of
(a) all compensation due under the remaining term of the agreement, or (b) a
payment equal to three times his average annual compensation (including any
incentives) over the last five years. In September 1998, the Company amended the
employment agreement effective for the fiscal year ending June 30, 1998 to allow
the Company, at its option, to pay the additional annual compensation in stock,
cash or a combination thereof. Such compensation for fiscal 1998 was paid by the
issuance of 20,454 treasury shares in fiscal 1999.

     In September 1996, the Company entered into a three year employment
agreement with another executive officer. The agreement provides for annual base
compensation of $165,000, additional annual compensation equal to .5% of pretax
profits, and an award of 34,000 shares of the Company's common stock, (see Note
6). If after three years of employment, the officer is terminated by the
Company, he is entitled to a severance payment of $100,000.

     In January 1998, the Company entered into a four year employment agreement
with an officer. The agreement provides for annual base compensation of $90,000,
plus additional compensation based upon specific performance measures. The
agreement includes termination provisions providing for payout arrangements
depending on the nature of the termination.

NOTE 8.       OTHER DATA

              ACCRUED EXPENSES
              Accrued expenses consist of the following:
                                              June 30, 1999     June 30, 1998
                                              -------------     -------------

   Accrued commissions                        $ 1,102,000        $ 1,588,000
   Accrued payroll and related expenses         1,671,000          1,530,000
   Other                                          104,000            166,000
                                              -------------     -------------
                                              $ 2,877,000        $ 3,284,000
                                              -------------     -------------


                                      F-15
<PAGE>


VALUATION AND QUALIFYING ACCOUNTS

     Valuation and qualifying accounts included in the accompanying consolidated
financial statements consist of the following:

<TABLE>
<CAPTION>
                                                                                June 30, 1999         June 30, 1998
                                                                                -------------         -------------
<S>                                                                            <C>                   <C>
 Allowance for doubtful accounts receivable and sales returns                     $ 390,000             $ 390,000
                                                                                =============         =============
</TABLE>

              EMPLOYEE BENEFIT DEFINED CONTRIBUTION PLAN

     Effective November 1, 1985, the Company established a voluntary savings and
defined contribution plan under Section 401(k) of the Internal Revenue Code.
This Plan covers all employees meeting certain eligibility requirements and
allows participants to contribute an amount not to exceed 15% of annual
compensation. For the fiscal years ended June 30, 1999, 1998 and 1997, the
Company provided a matching contribution of $371,000, $350,000 and $303,000,
respectively, which was equal to 50% of each participant's contribution up to a
maximum of 6% of annual compensation. Employees are 100% vested in their own
contributions and become fully vested in the employer contributions over five
years.

                  PROFIT BONUS PLAN

     Effective commencing in fiscal year 1995, the Company adopted a profit
bonus plan for the benefit of eligible employees, as defined. The plan provides
that for each fiscal year the Board of Directors, in its discretion, may
establish a bonus pool not to exceed 10% of pretax income of the Company for the
subject fiscal year. The bonus pool is then allocated among eligible employees
in accordance with the terms of the plan. For fiscal years 1999, 1998 and 1997,
the Company recognized related compensation expense of $338,000, $657,000 and
$538,000, respectively.

NOTE 9.       FOREIGN OPERATIONS

     The Company markets and distributes a portion of its foreign sales through
Phase Components Ltd., a wholly-owned subsidiary in the United Kingdom. The
following table summarizes certain financial information covering the Company's
operations in the U.S. and U.K. for fiscal years 1999, 1998 and 1997. Net sales
information is based upon country of origin.

                                1999               1998               1997
                                ----               ----               ----
  Net sales
      U.S.                     $35,680,000        $37,893,000       $33,730,000
      U.K.                       1,885,000          2,506,000         2,799,000
                           ----------------   ----------------   ---------------
   Total                       $37,565,000        $40,399,000       $36,529,000
                           ================   ================   ===============

  Pretax income
      U.S.                     $ 3,013,000        $ 6,024,000       $ 4,869,000
      U.K.                         263,000            542,000           469,000
                           ----------------   ----------------   ---------------
   Total                        $3,276,000        $ 6,566,000       $ 5,338,000
                           ================   ================   ===============

  Identifiable Assets
      U.S.                     $42,009,000        $40,814,000       $35,176,000
      U.K.                       1,613,000          1,695,000         1,948,000
                           ----------------   ----------------   ---------------
   Total                       $43,622,000        $42,509,000       $37,124,000
                           ================   ================   ===============

     U.S. sales include $9,235,000, $9,645,000 and $8,753,000 for export in
fiscal years 1999, 1998 and 1997, respectively. Export sales were primarily to
customers in Western Europe, Canada and the Far East.



                                      F-16
<PAGE>


NOTE  10.   DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS

            CASH AND CASH EQUIVALENTS, ACCOUNTS RECEIVABLE, NET, ACCOUNTS
            PAYABLE, AND ACCRUED EXPENSES

     The carrying amount approximates fair value due to the short maturity of
these instruments.

              INVESTMENTS

     Cost and fair value of the Company's investments is presented in Note 2.
Fair value is based upon quoted market prices.

              LONG-TERM DEBT

     The carrying amounts of each of the Company's long-term debt instruments
approximate fair value as the underlying interest rates approximate rates which
would be offered to the Company for the same or similar instruments.

     Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial instrument.
These estimates are subjective in nature and involve uncertainties and matters
of significant judgement and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect the estimates.



                                      F-17