<PAGE>

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   Form 10-Q

              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended June 30, 2000

                        Commission file number 1-12657

                             DYNATECH CORPORATION
        (to be renamed Acterna Corporation on or about August 29, 2000)

            (Exact name of registrant as specified in its charter)

         DELAWARE                                               04-2258582
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                            Identification Number)

                         3 New England Executive Park
                     Burlington, Massachusetts 01803-5087
              (Address of principal executive offices)(Zip code)

      Registrant's telephone number, including area code: (781) 272-6100



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 _.

At July 15, 2000, there were 187,975,019 shares of common stock of the
registrant outstanding.
<PAGE>

                          Part I. Financial Information
                          ------------------------------

Item 1.  Financial Statements

                              DYNATECH CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                         Three Months Ended
                                                                               June 30,
                                                                     2000                    1999
                                                                  ------------            ----------
                                                                (In thousands, except per share data)
<S>                                                                <C>                     <C>
   Net sales                                                       $208,171                $ 90,794
   Cost of sales                                                     89,608                  30,758
                                                                    -------                --------
   Gross profit                                                     118,563                  60,036
                                                                    -------                --------
   Selling, general & administrative
    expense                                                          74,407                  31,513
   Product development expense                                       26,211                  12,143
   Recapitalization and other related costs                           9,194                  13,259
   Purchased incomplete technology                                   50,000                     ---
   Amortization of intangibles                                       12,879                     717
                                                                   --------                --------
      Total operating expense                                       172,691                  57,632
                                                                   --------                --------
   Operating income (loss)                                          (54,128)                  2,404

   Interest expense                                                 (18,672)                (12,848)
   Interest income                                                      597                     700
   Other income (expense)                                            (1,319)                    (39)
                                                                   --------                --------
   Loss from continuing operations
    before income taxes and extraordinary
    item                                                            (73,522)                 (9,783)

   Benefit for income taxes                                          (1,787)                 (3,492)
                                                                   --------                --------
   Loss from continuing
    operations before extraordinary item                            (71,735)                 (6,291)

   Discontinued operations:
    Operating income, net of income tax
     provision of $5,193 in 1999                                        ---                   8,842
                                                                   --------                --------
   Income (loss) before extraordinary
    item                                                            (71,735)                  2,551

   Extraordinary item, net of income tax
     benefit of $6,524                                              (10,659)                    ---
                                                                   --------                --------
   Net income (loss)                                               $(82,394)               $  2,551
                                                                   ========                ========
   Income (loss) per common share-basic and diluted:
      Continuing operations                                        $ (0.43)                $  (0.04)
      Discontinued operations                                          ---                     0.06

</TABLE>

                                                                               2
<PAGE>

<TABLE>
<CAPTION>

<S>                                                             <C>                     <C>
      Extraordinary loss                                             (0.07)                     ---
                                                                  --------                ---------
   Net income (loss) per common share-basic and diluted           $  (0.50)               $    0.02
                                                                  ========                =========
   Weighted average number of common shares:
      Basic and diluted                                            165,427                  147,221
                                                                  ========                =========
</TABLE>











---------------------------------
See notes to condensed consolidated financial statements.

                                                                               3
<PAGE>

                              DYNATECH CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                 June 30,             March 31,
                                                                                  2000                  2000
                                                                               (Unaudited)
                                                                               ------------          -----------
ASSETS                                                                                   (In thousands)
Current assets:
<S>                                                                            <C>                   <C>
   Cash and cash equivalents                                                   $   69,501            $  33,839
   Accounts receivable, net                                                       176,035               78,236
   Inventories:
      Raw materials                                                                32,151               11,085
      Work in process                                                              46,242               12,859
      Finished goods                                                               67,042                6,308
                                                                               ----------            ---------
         Total inventory                                                          145,435               30,252
   Deferred income taxes                                                           32,448               21,548
   Other current assets                                                            47,922               16,332
                                                                               ----------            ---------
      Total current assets                                                        471,341              180,207
                                                                               ----------            ---------
Property and equipment, net                                                        80,327               27,316

Other assets:
  Net assets held for sale                                                         87,159               72,601
  Intangible assets, net                                                          528,537               58,508
  Deferred income taxes                                                            54,532               42,689
  Deferred debt issuance costs, net                                                29,009               21,382
  Other                                                                            17,395               12,135
                                                                               ----------            ---------
                                                                               $1,268,300            $ 414,838
                                                                               ==========            =========
LIABILITIES & SHAREHOLDERS' DEFICIT
Current liabilities:
   Notes payable                                                               $    7,063            $     ---
   Current portion of long-term
    debt                                                                           17,367                7,646
   Accounts payable                                                                68,984               38,374
   Accrued expenses:
      Compensation and benefits                                                    49,226               35,036
      Deferred revenue                                                             16,254               13,564
      Warranty                                                                     12,431                8,297
      Interest                                                                      5,382               10,055
      Taxes other than income taxes                                                13,827                1,844
      Other                                                                        34,165                7,426
  Accrued income taxes                                                              6,318                5,703
                                                                               ----------            ---------
         Total current liabilities                                                231,017              127,945

Long-term debt                                                                    968,437              572,288
Deferred compensation                                                              52,948               11,280
Deferred income taxes                                                              58,556                  ---

Shareholders' deficit:
   Common stock                                                                     1,873                1,225
   Additional paid-in capital                                                     732,531              344,873
   Accumulated deficit                                                           (706,323)            (623,929)
   Unearned compensation                                                          (71,335)             (16,965)
   Other comprehensive loss                                                           596               (1,879)
                                                                               ----------            ---------
</TABLE>

                                                                               4
<PAGE>

<TABLE>
<CAPTION>


<S>                                                                               <C>                 <C>
   Total shareholders' deficit                                                    (42,658)            (296,675)
                                                                               ----------            ---------
                                                                               $1,268,300            $ 414,838
                                                                               ==========            =========
</TABLE>










---------------------------------
See notes to condensed consolidated financial statements.

                                                                               5
<PAGE>

                              DYNATECH CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                Three Months Ended
                                                                                                     June 30,
                                                                                           2000                    1999
                                                                                         ----------             -----------

                                                                                                   (In thousands)
Operating activities:
<S>                                                                                      <C>                    <C>
   Net income (loss)                                                                     $    (82,394)          $    2,551
   Adjustments for noncash items included in net income:
      Depreciation                                                                              3,508                2,771
      Amortization of intangibles                                                              12,879                2,806
      Amortization of unearned compensation                                                     2,268                  269
      Amortization of deferred debt issuance costs, net of tax                                    873                  808
      Writeoff of deferred debt issuance costs                                                 10,019                  ---
      Purchased incomplete technology                                                          50,000                  ---
      Recapitalization and other related costs                                                  9,194                  ---
   Change in operating assets and liabilities                                                 (94,475)             (17,301)
                                                                                         ------------           ----------
Net cash flows used in operating activities                                                   (88,128)              (8,096)

Investing activities:
   Purchases of property and equipment                                                         (5,496)              (3,678)
   Proceeds from sale of business                                                               3,500                  ---
   Businesses acquired in purchase transaction, net of
    cash acquired and non-cash issuance of common stock                                      (237,426)                 ---
   Other                                                                                         (156)              (1,504)
                                                                                         ------------           ----------
Net cash flows used in investing activities                                                  (239,578)              (5,182)

Financing activities:
   Net borrowings (repayments) of debt                                                        190,834              (10,170)
   Repayment of capital lease obligations                                                          (5)                 (63)
   Capitalized debt issuance costs                                                            (18,519)                 ---
   Proceeds from issuance of common stock, net of
    expenses                                                                                  192,466                   27
                                                                                         ------------           ----------
Net cash flows provided by (used in) financing activities                                     364,776              (10,206)
Effect of exchange rate change on cash                                                         (1,408)                (942)
                                                                                         ------------           ----------
Increase (decrease) in cash and cash equivalents                                               35,662              (24,426)
Cash and cash equivalents at beginning of year                                                 33,839               70,362
                                                                                         --------------         ----------
Cash and cash equivalents at end of period                                               $     69,501           $   45,936
                                                                                         ============           ==========
</TABLE>


---------------------------------
See notes to condensed consolidated financial statements.

                                                                               6
<PAGE>

                              DYNATECH CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A.   BASIS OF PRESENTATION AND RESULTS OF OPERATIONS

     Dynatech Corporation (the "Company" or "Dynatech") was organized in 1959
     and its operations are conducted primarily by wholly-owned subsidiaries
     located principally in the United States and Europe, with distribution and
     sales offices in the Middle East, Africa, Latin America and Asia.

     The Company is managed in two business segments: communications test and
     inflight information systems. The communications test business develops,
     manufactures and markets instruments, systems, software and services to
     test, deploy, manage and optimize communications networks, equipment and
     services. The inflight information systems segment, through the Company's
     AIRSHOW, Inc. subsidiary, provides systems that deliver real-time news,
     information and flight data to aircraft passengers. The Company also has
     other subsidiaries that, in the aggregate, are not reportable as a segment
     ("Other Subsidiaries"). These Other Subsidiaries include da Vinci Systems,
     Inc., which manufactures systems that correct or enhance the accuracy of
     color during the process of transferring film-based images to videotape,
     and Dataviews Corporation, which was sold in June 2000.

     The Company operates on a fiscal year ending on March 31 in the calendar
     year indicated (e.g., references to fiscal 2001 refers to the Company's
     fiscal year which began April 1, 2000 and will end March 31, 2001).


B.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     In the opinion of management, the unaudited condensed consolidated balance
     sheet at June 30, 2000, and the unaudited consolidated statements of
     operations and unaudited consolidated condensed statements of cash flows
     for the interim periods ended June 30, 2000 and 1999 include all
     adjustments (consisting only of normal recurring adjustments) necessary to
     present fairly these financial statements.

     Certain information and footnote disclosures normally included in financial
     statements prepared in accordance with generally accepted accounting
     principles have been condensed or omitted. The year-end balance sheet data
     was derived from audited financial statements, but does not include
     disclosures required by generally accepted accounting principles. These
     condensed statements should be read in conjunction with the Company's most
     recent Form 10-K as of March 31, 2000 and the Company's Current Report on
     Form 8-K dated May 31, 2000 and its Current Report on Form 8-K/A dated July
     18, 2000 disclosing pro forma information relating to the WWG Merger.

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make certain
     estimates and assumptions that affect the reported amount 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 reported period. Significant estimates in these
     financial statements include purchase price allocations, allowances for
     accounts receivable, net realizable value of inventories, purchased
     incomplete technology, warranty accruals and tax valuation reserves. Actual
     results could differ from those estimates.

                                                                               7
<PAGE>

C.   ACQUISITION

     Wavetek Wandel Goltermann, Inc.

     On May 23, 2000, the Company and its wholly-owned subsidiary DWW
     Acquisition Corporation, a Delaware corporation ("MergerCo"), completed
     their merger (the "WWG Merger") with Wavetek Wandel Goltermann, Inc., a
     Delaware corporation ("WWG"), pursuant to which WWG became an indirect,
     wholly-owned subsidiary of Dynatech.

     The WWG Merger was consummated pursuant to an Agreement and Plan of WWG
     Merger, dated as of February 14, 2000 (the "Merger Agreement"), among
     Dynatech, MergerCo and WWG. In the WWG Merger, Dynatech paid to the former
     WWG stockholders approximately $250 million in cash and issued
     approximately 15 million newly-issued shares of Dynatech common stock. In
     addition, Dynatech paid approximately $8 million in cash in exchange for
     all outstanding WWG options.

     The acquisition was accounted for using the purchase method of accounting.
     As part of the purchase price allocation, the Company increased the
     carrying value of the acquired inventory by $35 million in order to record
     this inventory at its fair value, and also recorded a charge of $50
     million for acquired incomplete technology. This purchased incomplete
     technology had not reached technological feasibility and had no
     alternative future use. The Company generated approximately $481 million
     of excess purchase price that has not yet been allocated between specific
     intangible assets and goodwill. This excess purchase price has been
     amortized using a six year life. The purchase price allocations are
     preliminary based on management's best estimates. The final allocation of
     the purchase price has not yet been completed, and completion of the
     allocation of the excess purchase price and other purchase accounting
     adjustments depend upon certain valuations and other studies that are still
     in progress.

     In connection with the WWG Merger and the concurrent establishment of the
     Company's New Credit Facility (see Note N. Debt), the Company paid Clayton,
     Dubilier & Rice, Inc., an investment firm that manages Clayton, Dubilier &
     Rice Fund V Limited Partnership and Clayton, Dubilier & Rice Fund VI
     Limited Partnership, the Company's controlling shareholders, $6.0 million
     for services provided in connection with the WWG Merger and the related
     financing.

     The purchase accounting is summarized as follows (in thousands):
<TABLE>
<CAPTION>

<S>                                                                                       <C>
           Cash in exchange for WWG stock                                                 $ 249,562
           Cash in exchange for WWG options                                                   8,248
           Dynatech common stock (approximately 14,987 shares)                              130,000
                                                                                          ---------
                                                                                            387,810
           Add: Estimated acquisition costs                                                  10,214
                                                                                          ---------
                Total purchase price                                                        398,024
           Add: WWG net tangible liabilities acquired                                       134,522
</TABLE>

                                                                               8
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                         <C>
            Less: Inventory step-up to fair value                                           (35,000)
            Less: In-process research and development acquired                              (50,000)
            Add: Deferred tax liabilities                                                    33,947
                                                                                          ---------
                 Excess purchase price                                                    $ 481,493
                                                                                          =========
</TABLE>

D.    PROBABLE ACQUISITION

      Superior Electronics Group, Inc., dba Cheetah Technologies

      On June 27, 2000, the Company entered into an Asset Purchase Agreement to
      acquire substantially all of the assets and assume specified liabilities
      of Superior Electronics Group, Inc., a Florida corporation doing business
      as Cheetah Technologies ("Cheetah"). Cheetah supplies automated test,
      monitoring and management systems for cable television and
      telecommunications networks, and will be included in the Company's
      communications test segment. This probable transaction is expected to
      close in August 2000.


E.    DISCONTINUED OPERATIONS

      In May 2000, the Board of Directors approved a plan to divest the
      industrial computing and communications segment, which consists of ICS
      Advent and Itronix Corporation subsidiaries. In connection with its
      decision, the Board authorized management to retain one or more investment
      banks to assist the Company with respect to the divestiture. The segment's
      results of operations including net sales, operating costs and expenses
      and income taxes for the three month period ended June 30, 2000 have been
      deferred and included in the balance sheet as net assets held for sale
      within non-current assets (see below). The segment's results of operations
      including net sales, operating costs and expenses and income taxes for the
      three month period ended June 30, 1999 have been reclassified in the
      accompanying statements of operations as discontinued operations. The
      Company's balance sheets as of June 30, 2000 and March 31, 2000 reflect
      the net assets of the industrial computing and communications segment as
      net assets held for sale within non-current assets. The Statements of Cash
      Flows for the three month periods ended June 30, 2000 and 1999 have not
      been reclassified for the discontinued businesses.

      Management anticipates net operating losses from the discontinued segment
      through the first quarter of fiscal 2002, at which time the Company
      anticipates to have sold these businesses (operating losses for the
      segment for the three month period ended June 30, 2000 were $3.9
      million). Management believes that the net proceeds from the disposition
      of these companies will exceed the carrying amount of the net assets and
      the operating losses through the date of disposition. Accordingly, the
      anticipated net gain from the disposal of the segment will not be
      reflected in the statements of operations until they are realized.

F.    EXTRAORDINARY ITEM

      In connection with the WWG Merger, the Company recorded an extraordinary
      charge of $10.7 million (net of an income tax benefit of $6.6 million), of
      which $7.3 million (pretax) related to a premium paid by the Company to
      WWG's former bondholders to repurchase WWG's senior subordinated debt
      outstanding prior to the WWG Merger. In addition the Company booked a
      charge of $10.0 million (pretax) for the unamortized deferred debt
      issuance costs which originated at the time of the recapitalization of the
      Company in May of 1998.

G.    DIVESTITURE

      In June 2000, the Company sold the assets and liabilities of DataViews
      Corporation ("DataViews"), a subsidiary which manufactures software for
      graphical-user-interface applications, to GE Fanuc for $3.5 million. The
      sale generated a loss of approximately $0.1 million. Prior to the sale,
      for segment reporting purposes the results of DataViews were included in
      the Company's financial statements within "Other Subsidiaries".

H.    PRO FORMA FINANCIAL INFORMATION

      The following unaudited pro forma condensed consolidated financial
      statements give effect to the following assuming that these transactions
      occurred on the first day in the periods presented:

      o  The merger with WWG (after giving effect to certain divestitures of
         WWG);

      o  The acquisition of Sierra Design Labs which occurred on September 10,
         1999;

      o  The acquisition of Applied Digital Access, Inc. which occurred on
         November 1, 1999;

      o  The exclusion of the results of operations for the full period
         presented relating to the divestiture of DataViews Corporation; and

      o  The issuance of common stock to the CDR Funds and the Rights Offering
         (see Note M. Income (Loss) per Share).

                                                                              9

<PAGE>

     The condensed, unaudited pro forma statement of operations data listed
     below is for informational purposes only and does not necessarily represent
     what the Company's results of operations would have been if the above
     listed transactions had in fact occurred at the beginning of the periods
     presented and are not necessarily indicative of the results of operations
     for any future period.

<TABLE>
<CAPTION>
                                                                                          Three Months Ended
                                                                                                June 30,
                                                                                        2000                 1999
                                                                                        ----                 ----
<S>                                                                                  <C>                 <C>
          Revenue                                                                    $ 284,236           $ 201,062
          Loss before extraordinary item                                              (110,181)            (30,261)
          Net loss                                                                    (120,840)            (30,261)

          Loss per share - basic and diluted:
            Loss before extraordinary item                                            $(0.59)               $(0.16)
                                                                                       (0.65)                (0.16)
</TABLE>



I.    RECAPITALIZATION

      On May 21, 1998, CDRD Merger Corporation, a nonsubstantive transitory
      merger vehicle, which was organized at the direction of Clayton, Dubilier
      & Rice, Inc. ("CDR"), a private investment firm, was merged with and into
      the Company (the "Recapitalization") with the Company continuing as the
      surviving corporation. In the Recapitalization, (1) each then outstanding
      share of common stock, par value $0.20 per share, of the Company was
      converted into the right to receive $47.75 in cash and 0.5 shares of
      common stock, no par value, of the Company (the "Common Stock") and (2)
      each then outstanding share of common stock of CDRD Merger Corporation was
      converted into one share of Common Stock.


J.    RECAPITALIZATION AND OTHER RELATED COSTS

      Recapitalization and other related costs from continuing operations during
      the first three months of fiscal 2001 of $9.2 million related to an
      executive who left the Company during fiscal 2000. Recapitalization and
      other related costs during the first three months of fiscal 2000 of $13.3
      million related to termination expenses of certain executives including
      the retirement of John F. Reno, former Chairman, President and Chief
      Executive Officer of the Company, as well as other employees.

K.    NEW PRONOUNCEMENTS

      In December 1999, the Securities and Exchange Commission released Staff
      Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
      ("SAB 101"). This bulletin provides guidance from the staff on applying
      generally accepted accounting principles to revenue recognition in
      financial statements. In June 2000, the SEC issued SAB 101B which defers
      the effective date for the Company to the fourth quarter of fiscal 2001.
      The Company is currently in the process of assessing the impact, if any,
      that the current guidance and interpretations of SAB 101 may have on the
      financial statements.

                                                                              10
<PAGE>

      In March 2000, the Financial Accounting Standards Board issued Financial
      Accounting Standards Board Interpretation No. 44, "Accounting for Certain
      Transactions Involving Stock Compensation - an interpretation of APB
      Opinion No. 25" ("FIN 44"). FIN 44 clarifies the application of APB
      Opinion No. 25 and among other issues clarifies the following: the
      definition of an employee for purposes of applying APB Opinion No. 25; the
      criteria for determining whether a plan qualifies as a noncompensatory
      plan; the accounting consequence of various modifications to the terms of
      previously fixed stock options or awards; and the accounting for an
      exchange of stock compensation awards in a business combination. FIN 44 is
      effective July 1, 2000, but certain conclusions in FIN 44 cover specific
      events that occurred after either December 15, 1998 or January 12, 2000.
      The Company does not expect the application of FIN 44 to have a material
      impact on its results of operations and financial position.

      On June 15, 1998, the Financial Accounting Standards Board issued
      Statement of Financial Accounting Standards No. 133 ("FAS 133"),
      "Accounting for Derivative Instruments and Hedging Activities." FAS 133
      was amended by Statement of Financial Accounting Standards No. 137, which
      modified the effective date of FAS 133 to all fiscal quarters of all
      fiscal years beginning after June 15, 2000. FAS 133, as amended, requires
      that all derivative instruments be recorded on the balance sheet at their
      fair value. Changes in the fair value of derivatives are recorded each
      period in current earnings or other comprehensive income, depending on
      whether a derivative is designated as part of a hedge transaction and, if
      it is, the type of hedge transaction. The Company is assessing the impact
      of the adoption of FAS 133 on its results of operations and its financial
      position.


L.    LEGAL PROCEEDINGS

      The Company is a party to various legal actions that arose in the ordinary
      course of its business. The Company does not expect that resolution of
      these legal actions will have, individually or in the aggregate, a
      material adverse effect on the Company's financial condition or results of
      operations.

      Whistler Litigation. In 1994, the Company sold its radar detector business
      to Whistler Corporation of Massachusetts. On June 27, 1996, Cincinnati
      Microwave, Inc. ("CMI") filed an action in the United States District
      Court for the Southern District of Ohio against the Company and Whistler
      alleging willful infringement of CMI's patent for a mute function in radar
      detectors. The Company, along with Whistler, has asserted in response that
      it did not infringe CMI's patent and that, in any event, the patent is
      invalid and unenforceable.

      The Company obtained an opinion from outside counsel that CMI's patent is
      invalid. The Company intends to offer that opinion (and other evidence) to
      demonstrate that any alleged infringement of CMI's patent due to the
      Company's prior manufacture and sale of the Whistler series radar
      detectors was not valid.

      On February 14, 1997, CMI filed for bankruptcy in the United States
      Bankruptcy Court for the Southern District of Ohio. Pursuant to that
      filing, CMI sold its mute feature patent (and other assets) to Escort
      Acquisition Corp. CMI, however, retained the right to seek past damages
      from the Company.

                                                                              11
<PAGE>

      On March 24, 1998, CMI and its co-plaintiff Escort filed a motion for
      summary judgment. The Company opposed that motion and went on to complete
      discovery, which closed on June 20, 1998. The Company then filed its own
      series of summary judgment motions.

      A hearing on the parties' dispositive motions was held in May 1999. On May
      27, 1999, Whistler filed a Chapter 11 bankruptcy petition in the United
      States District Court for the District of Massachusetts. As a result of
      that filing, CMI's patent infringement litigation is stayed as to
      Whistler.

      On February 18, 2000, the United States Magistrate issued a Report and
      Recommendation on some of the pending motions, recommending that judgment
      be entered in the Company's favor on half of the claims asserted by CMI.
      Then, on June 9, 2000, the Magistrate issued a second Report and
      Recommendation, recommending that the plaintiffs be precluded from
      recovering any damages for any alleged infringement that occurred prior to
      June 1996. Because the Company could not have infringed on CMI's patent
      after it sold its radar detector business to Whistler in 1994, if this
      Recommendation is adopted by the District Court Judge, the Company would
      have no liability to CMI. The parties have filed (and will file) various
      objections to the two Report and Recommendations. If necessary, trial in
      this matter is scheduled for November 2000. The Company intends to
      continue to defend this lawsuit vigorously and does not believe that the
      outcome of this litigation will have a material adverse effect on its
      financial condition, results of operation, or liquidity.

                                                                              12
<PAGE>

M.    INCOME (LOSS) PER SHARE

      Income (loss) per share is calculated as follows:
<TABLE>
<CAPTION>

                                                                                      Three Months Ended
                                                                                           June 30,
                                                                                      2000           1999
                                                                                     -------       -------
                                                                      (In thousands, except per share data)

      Net income (loss):
<S>                                                                                 <C>           <C>
        Continuing operations                                                       $(71,735)     $ (6,291)
        Discontinued operations                                                          ---         8,842
        Extraordinary item                                                           (10,659)          ---
                                                                                    --------      --------
      Net income (loss)                                                             $(82,394)     $  2,551
                                                                                    ========      ========
      BASIC AND DILUTED:

      Common stock outstanding, beginning of period                                   122,527      120,665
      Weighted average common stock issued during the period                           26,186            8
                                                                                    --------      --------
                                                                                      148,713      120,673
      Bonus element adjustment related to rights offering                              16,714       26,548
                                                                                    --------      --------
      Weighted average common stock outstanding, end of period                        165,427      147,221
                                                                                    =========     =========
      Income (loss) per common share:
        Continuing operations                                                       $  (0.43)     $  (0.04)
        Discontinued operations                                                          ---          0.06
        Extraordinary item                                                             (0.07)          ---
                                                                                    --------      --------
      Net income (loss) per common share                                            $  (0.50)     $  0.02
                                                                                    ========      ========
</TABLE>

      On May 23, 2000, in order to finance the WWG Merger, the Company sold
      12.5 million and 30.625 million shares of common stock to Clayton,
      Dubilier & Rice Fund V Limited Partnership ("CDR Fund V") and Clayton,
      Dubilier & Rice Fund VI Limited Partnership ("CDR Fund VI"),
      respectively, at a price of $4.00 per share. In order to reverse the
      diminution of percentage ownership of all other shareholders as a result
      of shares issued in connection with the WWG Merger, the Company made a
      rights offering to all of its shareholders (including CDR Fund V) of
      record on April 20, 2000 (the "Rights Offering"). CDR Fund V elected to
      waive its right to participate in this Rights Offering. As a result, on
      June 30, 2000, the Company sold 4,983,000 shares of common stock to
      shareholders of record on April 20, 2000 (other than CDR Fund V) that
      subscribed for shares in the Rights Offering at a price of $4.00 per
      share. The closing trading price of the common stock on May 22, 2000,
      immediately prior to the sale of the common stock to CDR Fund V and CDR
      Fund VI (the "CDR Funds"), was $11.25.

      For purposes of calculating weighted average shares and earnings per
      share, the Company has treated the sale of common stock to the CDR
      Funds and the sale of the 4,983,000 shares of common stock in the Rights
      Offering as a rights offer. Since the common stock was offered to all
      shareholders at a price that was less than that of the market trading
      price (the "bonus element"), a retroactive adjustment of $1.22 per share
      has been made to weighted average shares to consider this bonus element.

                                                                              13
<PAGE>

      During the first three months of fiscal 2001 and 2000, the Company
      excluded from its diluted weighted average shares outstanding the
      effect of the weighted average common stock equivalents which totalled
      12.0 million shares and 8.9 million shares, respectively, as the Company
      incurred a net loss from continuing operations. The inclusion of the
      common stock equivalents has been excluded from the calculation of diluted
      weighted average shares outstanding as inclusion would result in an
      antidilutive effect on net loss per common share from continuing
      operations.


N.    DEBT

      Long-term debt is summarized below (in thousands):
<TABLE>
<CAPTION>

                                                                                     June 30,       March 31,
                                                                                       2000           2000
                                                                                     --------       --------
<S>                                                                                  <C>            <C>
      Senior secured credit facilities                                               $682,295       $304,861
      Senior subordinated notes                                                       275,000        275,000
      Capitalized leases and other debt obligations                                    28,509             73
                                                                                     --------       --------
         Total debt                                                                   985,804        579,934
               Less current portion                                                    17,367          7,646
                                                                                     --------       --------
      Long-term debt                                                                 $968,437       $572,288
                                                                                     ========       ========
</TABLE>


      To finance the WWG Merger, the Company needed to restructure its current
      debt and equity. As a result, on May 23, 2000, the Company entered into a
      new credit facility with a syndicate of lenders (the "New Credit
      Facility"). The Company's new senior credit agreement (the "New Senior
      Credit Agreement"), which established the New Credit Facility, provided
      for senior secured credit facilities in an aggregate principal amount of
      up to $860 million, consisting of (1) a revolving credit facility
      available to Dynatech LLC in U.S. dollars or euros, in an aggregate
      principal amount of up to $175 million, which can also be used to issue
      letters of credit (the "New Revolving Credit Facility"), (2) a Tranche A
      term loan of $75 million to Dynatech LLC with a six year amortization (the
      "Tranche A Term Loan"), (3) a Tranche B term loan of $510 million to
      Dynatech LLC with a seven and one-half year amortization (the "Tranche B
      Term Loan"), and (4) German term loans from certain German banks in an
      aggregate amount equal to (Euro) 108.375 million to the Company's German
      subsidiaries with six year amortization periods (the "German Term Loans")
      (all term loans collectively, the "New Term Loans"). The New Credit
      Facility also provides for the issuance of a letter of credit that the
      German banks may draw upon in the event of the failure of the Company's
      German subsidiaries to make payments on the (Euro) 108.375 million loans,
      and the Company's German subsidiaries are required to reimburse the letter
      of credit issuer for any such issuances. The amount of the letter of
      credit also may be fully drawn under certain circumstances, and in such
      event the amount of the draw shall convert into term loans to the
      Company's German subsidiaries with similar amortization to the German term
      loans.

      The Company used the New Term Loans to refinance certain existing
      indebtedness of the Company and as part of the financing for the WWG
      merger. The New Revolving Credit Facility is available to the Company from
      time to time for potential acquisitions and other general corporate
      purposes.

                                                                              14
<PAGE>

     Principal and interest payments under the New Credit Facility and interest
     payments on the Senior Subordinated Notes represent significant liquidity
     requirements for the Company. The Tranche A Term Loan will be amortized in
     four quarterly installments of $750 thousand commencing on June 30, 2000,
     four quarterly installments of $2.0 million commencing on June 30, 2001,
     four quarterly installments of $3.75 million commencing on June 30, 2002,
     four quarterly installments of $7.5 million commencing on June 30, 2003,
     four quarterly installments of $2.5 million commencing on June 30, 2004
     and four quarterly installments of $2.25 million commencing on June 30,
     2005. The Tranche B Term Loan will be amortized in 24 quarterly
     installments of $2.0 million, commencing on June 30, 2000, four quarterly
     installments of $77.5 million commencing on June 30, 2006, and two
     quarterly installments of $76.0 million commencing on June 30, 2007. The
     German Term Loans will be amortized in four quarterly installments of
     (Euro) 530 thousand commencing on June 30, 2000, twelve quarterly
     installments of (Euro) 790 thousand commencing on June 30, 2001, four
     quarterly installments of (Euro) 7.625 million commencing on June 30, 2004,
     three quarterly installments of (Euro) 15.780 million commencing on June
     30, 2005 and one quarterly installment of (Euro) 18.935 million on March
     31, 2006. The $275 million of Senior Subordinated Notes will mature in
     2008, and bear interest at 9 3/4% per annum. As a result of the substantial
     indebtedness incurred in connection with the WWG Merger, it is expected
     that the Company's interest expense will be higher and will have a greater
     proportionate impact on net income in comparison to preceding periods.

     The loans under the New Credit Facility bear interest at floating rates
     based upon the interest rate option elected by the Company. To fix the
     interest charged on a portion of the total debt outstanding under the New
     Term Loans, the Company entered into interest rate swaps that are
     effective for periods ranging from two to three years which began in
     September 30, 1998. After giving effects to these arrangements, $220
     million of the debt outstanding is subject to an effective average annual
     fixed rate of 5.66% (plus an applicable margin). The terms of one interest
     rate swap contract provide upon termination for a one-year option to renew
     50% of the notional amount at the discretion of the lender.

     The obligations of Dynatech LLC under the New Revolving Credit Facility,
     the Tranche A Term Loan, the Tranche B Term Loan and the reimbursement
     obligations of the German subsidiaries under the letter of credit relating
     to the German Term Loan are guaranteed by each active direct or indirect
     U.S. subsidiary of Dynatech LLC and by Dynatech Corporation. The
     obligations under the New Credit Facility are secured by a pledge of the
     Company's equity interest in Dynatech LLC, by substantially all of the
     assets of Dynatech LLC and each active direct or indirect U.S. subsidiary
     of Dynatech LLC, and by a pledge of the capital stock of each such direct
     or indirect U.S. subsidiary, and 65% of the capital stock of each
     subsidiary of Dynatech LLC that acts as a holding company of Dynatech LLC's
     foreign subsidiaries.

     The Company's New Credit Facility generally permits voluntary prepayment of
     loans thereunder without premium or penalty, subject to certain
     limitations. Mandatory prepayments are required to be made from (a) 100% of
     net proceeds from certain asset sales, casualty insurance and condemnation
     awards or other similar recoveries; (b) 100% of the net proceeds from the
     issuance of indebtedness by the Company, other than as permitted by the New
     Credit Facility; and (c) 50% of annual excess cash flow for each fiscal
     year in which the ratio of the Company's debt on the last day of such
     fiscal year to the Company's EBITDA (defined as earnings before interest,
     taxes, depreciation and amortization) for such fiscal year is greater than
     or equal to 4.0 to 1.0.

                                                                              15
<PAGE>

O.   SHAREHOLDERS' DEFICIT

     The following is a summary of the change in shareholders' deficit for the
     period ended June 30, 2000 (in thousands).

<TABLE>
<CAPTION>

                               Number
                             Of Shares               Additional                                   Other         Total
                               Common      Common      Paid-In    Accumulated     Unearned    Comprehensive  Stockholders'
                               Stock       Stock       Capital      Deficit     Compensation       Loss        Deficit
                             ----------   --------   ---------     ----------    ----------     ----------    ----------
<S>                         <C>         <C>        <C>           <C>          <C>            <C>           <C>
Balance, March 31, 2000         122,527  $  1,225   $ 344,873     $ (623,929)  $  (16,965)    $  (1,879)    $ (296,675)

Net loss current year                                                (82,394)                                  (82,394)
Translation adjustment                                                                            2,475          2,475
                                                                                                            ----------
Total comprehensive
 loss                                                                                                          (79,919)
                                                                                                            ----------
Adjustment to unearned
  compensation                                         (1,315)                      1,322                            7
Issuance of common stock
 to CD&R                        43,125        431     172,069                                                  172,500
Issuance of common stock
 in connection of rights
 offering, net of fees           4,983         50      16,882                                                   16,932
Issuance of common stock
 to WWG shareholders            14,987        150     129,850                                                  130,000
Stock option expense                                    9,194                                                    9,194
Amortization of unearned
 compensation                                                                       2,268                        2,268
Exercise of stock
 options and other
 issuances                       1,682         17       3,018                                                    3,035
Unearned compensation
 from stock option
 grants                                                57,960                     (57,960)                         ---

                            ----------   --------   ---------     ----------   ----------     ----------    ----------
Balance, June 30, 2000         187,304   $  1,873   $ 732,531     $ (706,323)  $  (71,335)    $      596    $  (42,658)
                             ==========  =========  =========     ===========  ============   ==========    ===========

</TABLE>


P.    SEGMENT INFORMATION

      Net sales, earnings before interest, taxes and amortization ("EBITA"), and
      total assets for the three months ended June 30, 2000 and 1999 is shown
      below (in thousands):

<TABLE>
<CAPTION>

                                                                       Three Months Ended
                                                                            June 30,
                       SEGMENT                                        2000             1999
                                                                      ----             ----
       Communications test segment:
<S>                                                               <C>               <C>
         Net Sales                                                $ 181,069         $  67,281
         EBITA                                                       23,834            10,661
         Total assets                                               977,821            79,023

       Inflight information systems segment:
         Net Sales                                                   18,788            17,292
         EBITA                                                        4,003             5,957
         Total assets                                                39,776            36,326

       Other subsidiaries:
         Net Sales                                                    8,314             6,221
         EBITA                                                        1,526             1,123
</TABLE>

                                                                              16
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                  <C>                <C>
         Total assets                                                11,503             4,443

       Discontinued operations:
         Net assets held for sale                                    87,159               N/A
         Total assets                                                   N/A            84,615

       Corporate:
         Loss before interest and taxes                              (1,566)           (1,130)
         Total assets                                               152,041           114,020

       Total company:
         Net Sales                                               $  208,171          $ 90,794
         EBITA                                                       27,797            16,611
         Total assets                                             1,268,300           318,427

</TABLE>

         Nonrecurring charges (including recapitalization and other related
         costs and purchased incomplete technology) of $78.9 million and $13.3
         million, and the amortization of unearned compensation of $2.1 million
         and $0.3 million, for the first three months of fiscal 2001 and fiscal
         2000, respectively, have been excluded from EBITA.

                                                                              17
<PAGE>

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

This Form 10-Q contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include, but are not limited to, product demand and market
acceptance risks, the effect of economic conditions, the effect of competitive
products and pricing, product development, commercialization and technological
difficulties, capacity and supply constraints or difficulties, availability of
capital resources, general business and economic conditions, the effect of the
Company's accounting policies, and other risks detailed in the Company's most
recent Form 10-K as of March 31, 2000.

OVERVIEW

The Company has reported its results of operations in two business segments:
communications test and inflight information systems. The Company's
communications test business, which includes TTC and WWG, develops, manufactures
and markets instruments, systems, software and services to test, deploy, manage
and optimize communications networks, equipment and services. The Company's
inflight information systems segment, through its AIRSHOW, Inc. subsidiary, is
the leading provider of systems that deliver real-time news, information and
flight data to aircraft passengers. The Company also has other subsidiaries
that, in the aggregate, are not reportable as a segment ("Other Subsidiaries").
These Other Subsidiaries include da Vinci Systems, Inc. which manufactures
systems that correct or enhance the accuracy of color during the process of
transferring film-based images to videotape; and Dataviews Corporation, which
was sold in June 2000.

On May 23, 2000, the Company completed the merger of one of its subsidiaries
with Wavetek Wandel Goltermann, Inc. ("WWG"), a developer, manufacturer and
marketer of communications test instruments, systems, software and services in
Europe. To finance the WWG merger, the Company sold 12.5 million and 30.625
million newly-issued, but unregistered shares of Common Stock to CDR Fund V and
CDR Fund VI, respectively, for an aggregate purchase price of $172.5 million. In
addition, on June 30, 2000, the Company sold in the Rights Offering 4.983
million newly-issued registered shares of common stock to shareholders of record
on April 20, 2000, (other than CDR Fund V) at the same price per share that was
paid by CDR Fund V and CDR Fund VI. The Rights Offering provided such
shareholders with the opportunity to reverse the diminution of their percentage
equity ownership interest in the Company that resulted from the sale of common
stock to CDR Fund V and CDR Fund VI. CDR Fund V and CDR Fund VI, our controlling
shareholders, hold approximately 66% and 16%, respectively, of the outstanding
shares of common stock of the Company.

In connection with the WWG Merger, the Company also entered into a new credit
agreement for $860 million with a bank syndicate led by J.P. Morgan ("New Credit
Agreement"). The proceeds were used to finance the WWG Merger, refinance WWG and
Dynatech debt and provide for additional working capital and borrowing capacity.

In May 2000, the Board of Directors approved a plan to divest the industrial
computing and communications segment, which consists of the Company's ICS Advent
and Itronix Corporation subsidiaries. The Company's balance sheet reflects the
net assets of the industrial computing and communications

                                                                              18
<PAGE>

segment as net assets held for sale within non-current assets. Management
anticipates net operating losses from the discontinued segment through the first
quarter of fiscal 2002, at which time the Company anticipates to have sold these
businesses. Management believes that the net proceeds from the disposition of
these companies will exceed the carrying amount of the net assets and the
operating losses through the date of disposition. Accordingly, the anticipated
net gains from the disposal of the segment will not be reflected in the
statements of operations until they are realized.


RESULTS OF OPERATIONS

Three Months Ended June 30, 2000 as Compared to Three Months Ended June 30, 1999

Net Sales. For the three months ended June 30, 2000, consolidated sales from
continuing operations increased $117.4 million or 129.3% to $208.2 million as
compared to $90.8 million for the three months ended June 30, 1999. The increase
occurred within all business units, but the biggest increase was in the
communications test segment. Of the $117.4 million increase, $113.8 million was
attributable to businesses within the communications test segment, of which 31%
of the increase was related to core business; 12% was attributable to the
additional sales from Applied Digital Access, Inc. ("ADA") which was acquired in
November 1999; and 57% was attributable to the acquisition of WWG.

Gross Profit. Gross profit from continuing operations increased $58.5 million to
$118.6 million or 57.0% of consolidated sales for the three months ended June
30, 2000 as compared to $60.0 million or 66.1% of consolidated sales for the
three months ended June 30, 1999. The decrease in gross margin as a percentage
of sales, is, in part, a result of $8.8 million (or 4.2% of consolidated sales)
of amortization of the inventory step up from the acquisition of WWG. In
addition, WWG sold products that are complementary to the Company's products,
but are not manufactured by the Company. These products have a lower gross
margin than the Company's primary products. The Company's Airshow subsidiary
also experienced increased sales to the general aviation customer group as well
as additional service revenue, both of which carry lower gross margins than the
consolidated group.

Operating Expenses. Operating expenses from continuing operations consist of
selling, general and administrative expense; product development expense;
recapitalization and other related costs; purchased incomplete technology; and
amortization of intangibles. Total operating expenses were $172.7 million or
83.0% of consolidated sales for the three months ended June 30, 2000, as
compared to $57.6 million or 63.5% of consolidated sales for the three months
ended June 30, 1999. Excluding the impact of the write-off of in-process
research and development as well as recapitalization and other related costs,
total operating expenses were $113.5 million or 54.5% of consolidated sales and
$44.4 million or 48.9% of consolidated sales for the three months ended June 30,
2000 and 1999, respectively. The increase is primarily a result of the
acquisition of WWG, which has a higher cost structure than the Company has had
historically, as well as expenses incurred since the acquisition for the
re-branding of the products offered by the combined businesses within the
communications test segment.

Included in both cost of sales and operating expenses from continuing operations
is the amortization of unearned compensation that relates to the issuance of
stock options to employees and non-employee directors at a grant

                                                                              19
<PAGE>

price lower than fair market value (defined as the closing price on the open
market at the date of issuance). The amortization of unearned compensation
during the first three months of fiscal 2001 and fiscal 2000 was $2.1 million
and $0.3 million, respectively, and has been allocated to cost of sales;
selling, general and administrative expense; and product development expense.

Selling, general and administrative expense from continuing operations was $74.4
million or 35.7% of consolidated sales for the three months ended June 30, 2000
as compared to $31.5 million or 34.7% of consolidated sales for the three months
ended June 30, 1999. The percentage increase is in part a result of expenses
relating to rebranding, severance, and additional consultants hired for the
integration of WWG with the Company's communications test segment.

Product development expense was $26.2 million or 12.6% of consolidated sales for
the three months ended June 30, 2000 as compared to $12.1 million or 13.4% of
consolidated sales for the same period a year ago. The percentage decrease is a
result of the WWG Merger as WWG has a lower percentage of product development
expense to sales than the Company has had on an historical basis.

Recapitalization and other related costs from continuing operations were $9.2
million and $13.3 million at June 30, 2000 and June 30, 1999, respectively. The
expense incurred during the first three months of fiscal 2001 of $9.2 million
related to an executive who left the Company during fiscal 2000. The expense
incurred during the first three months of fiscal 2000 related to termination
expenses of certain executives including the retirement of John F. Reno, former
Chairman, President and Chief Executive Officer of the Company, as well as other
employees.

In connection with the WWG Merger, the Company wrote off $50 million of
purchased incomplete technology during the first three months of fiscal 2001
that had not reached technological feasibility and had no alternative future
use.

Amortization of intangibles from continuing operations was $12.9 million for the
three months ended June 30, 2000 as compared to $0.7 million for the same period
a year ago. The increase was primarily attributable to increased goodwill
amortization related to the acquisitions of ADA and WWG.

Operating income (loss). Operating loss from continuing operations was $54.1
million as compared to operating income of $2.4 million for the same period a
year ago. The change was a result of the write-off of the purchased incomplete
technology, the recapitalization and other related costs, as well as expenses
relating to rebranding, severance, and additional consultants for the
integration of WWG with the Company's communications test segment.

Interest. Interest expense from continuing operations was $18.7 million for the
three months ended June 30, 2000 as compared to $12.8 million for the same
period a year ago. The increase in interest expense was attributable to the
additional debt incurred in connection with the WWG Merger.

Taxes. The effective tax rate for the three months ended June 30, 2000 was 2.4%
as compared to 35.7% for the same period a year ago. The principal reasons for
the decrease in the effective tax rate were: (1) the $50 million non-deductible
charge for purchased incomplete technology in connection with the WWG Merger;
(2) additional non-deductible goodwill amortization expected in the current
fiscal year as a result of the WWG Merger; and (3) expected

                                                                              20
<PAGE>

changes in the amount of income earned in various countries with tax rates
higher than the U.S. federal rate.

Extraordinary item. In connection with the WWG Merger, the Company recorded an
extraordinary charge of approximately $10.7 million (net of an income tax
benefit of $6.6 million), of which $7.3 million (pretax) related to a premium
paid by the Company to WWG's former bondholders for the repurchase of WWG's
senior subordinated debt outstanding prior to the WWG Merger. In addition the
Company booked a charge of $10.0 million (pretax) for the unamortized deferred
debt issuance costs which originated at the time of the Recapitalization.

Net income (loss). Net loss was $82.4 million or $(0.50) per share on a diluted
basis for the three months ended June 30, 2000 as compared to net income of $2.6
million or $0.02 per share on a diluted basis for the same period a year ago.
The loss was primarily attributable to the write-off of the purchased incomplete
technology and the extraordinary charge in connection with the WWG Merger as
well as other expenses described above.

Backlog. Backlog at June 30, 2000 was $308.3 million as compared to $180.4
million at March 31, 2000, primarily a result of the addition of WWG's backlog.


SEGMENT DISCLOSURE

The Company measures the performance of its subsidiaries by their respective new
orders received ("bookings"), sales and earnings before interest, taxes and
amortization ("EBITA") which excludes non-recurring and one-time charges.
Included in each segment's EBITA is an allocation of corporate expenses. The
information below includes sales and EBITA for the two segments the Company
operates in (in thousands):

<TABLE>
<CAPTION>
                                                                   Three Months Ended
                                                                        June 30,
                          SEGMENT                                2000               1999
                                                                 ----               ----
Communications test segment:
<S>                                                          <C>                  <C>
   Bookings                                                  $  182,978           $ 76,358
   Net Sales                                                    181,069             67,281
   EBITA                                                         23,834             10,661

 Inflight information systems segment:
   Bookings                                                  $   17,860           $ 17,201
   Net Sales                                                     18,788             17,292
   EBITA                                                          4,003              5,957

 Other subsidiaries:
   Bookings                                                  $    7,863           $  7,620
   Net Sales                                                      8,314              6,221
   EBITA                                                          1,526              1,123
</TABLE>


Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999
- Communications Test Products

Bookings for communications test products increased to $183.0 million for the
three months ended June 30, 2000 as compared to $76.4 million for the same
period a year ago, primarily due to the WWG Merger and the acquisition of ADA

                                                                              21
<PAGE>

(for which no comparison existed during the first quarter of fiscal 2000) as
well as an increase in bookings for the Company's instruments, systems and
services at the Company's historical communications test businesses.

Net sales of communications test products increased $113.8 million or 169.1% to
$181.1 million for the three months ended June 30, 2000 as compared to $67.3
million for the three months ended June 30, 1999, primarily due to the WWG
Merger. In addition, the Company sold more test instruments in the first quarter
of fiscal 2001 as compared to the same period last year due primarily to the
large backlog of orders at March 31, 2000, as well as additional sales from the
acquisition of ADA. The increase is related to the following areas within the
communications test segment: 31% of the increase was related to core business;
12% was attributable to the additional sales from ADA; and 57% was attributable
to the acquisition of WWG.

EBITA for the communications test products increased $13.2 million or 123.6% to
$23.8 million for the three months ended June 30, 20000 as compared to $10.7
million for the same period a year ago. The increase in EBITA is a result of the
increases in sales offset by the expenses relating to the rebranding, severance,
and additional consultant expenses for the integration of WWG with the Company.


Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999
- Inflight Information Systems

Bookings for the inflight information systems products increased 3.8% to $17.9
million for the three months ended June 30, 2000 as compared to $17.2 million
for the same period a year ago. The Company is currently experiencing a leveling
off of demand for these products due to a slow down in orders from the
commercial airlines offset slightly by an increase in volume in the general
aviation market.

Net sales of inflight information systems products increased 8.7% to $18.8
million for the three months ended June 30, 2000 as compared to $17.3 million
for the three months ended June 30, 1999. The slight increase was primarily due
to the slight increase in demand for products sold to the general aviation
market.

EBITA for the inflight information systems products decreased to $4.0 million
for the three months ended June 30, 2000 as compared to $6.0 million for the
same period a year ago. The decrease was in part attributable to the increase in
products shipped to the general aviation market, which are sold at margins lower
than the business as a whole. In addition, the Company incurred increased costs
due to the additional field service technicians that were hired to support
customers in the general aviation market during the fourth quarter of fiscal
2000.


Liquidity and Capital Resources

The Company's liquidity needs arise primarily from debt service on the
substantial indebtedness incurred in connection with the WWG Merger and from the
funding of working capital and capital expenditures. As of June 30, 2000, the
Company had $985.8 million of indebtedness, primarily consisting of $275.0
million principal amount of the Senior Subordinated Notes, $682.3 million in
borrowings under the Term Loan Facility and $28.5 million under other debt
obligations.

                                                                              22
<PAGE>

Cash Flows.  The Company's cash and cash equivalents increased $35.7 million
during the three months ended June 30, 2000.

Working Capital. For the three months ended June 30, 2000, the Company's working
capital decreased as its operating assets and liabilities used $78.8 million of
cash. Accounts receivable increased, creating a use of cash of $12.8 million.
Inventory levels also increased, creating a use of cash of $8.7 million. Other
current assets increased, creating a use of cash of $20.5 million. Accounts
payable decreased, creating a use of cash of $5.5 million. Other current
liabilities decreased, creating a use of cash of $31.3 million. The decrease is
due in part to management incentive payments made during the first quarter of
fiscal year 2001 as well as the mandatory semiannual payment of interest
expense on the Senior Subordinated Notes.

Investing activities. The Company's investing activities totaled $239.6 million
for the three months ended June 30, 2000 primarily for the acquisition of WWG.

The Company's capital expenditures during the first three months of fiscal 2001
were $5.5 million as compared to $3.7 million for the same period last year. The
Company is, in accordance with the terms of the New Credit Agreement, subject to
maximum capital expenditure levels. At June 30, 2000, the Company was in
compliance with its covenants as indicated in the New Credit Agreement.

Debt and equity. The Company's financing activities provided $364.8 million in
cash during the first quarter of fiscal 2001, in part due to the borrowing of
cash under the New Credit Agreement as well as proceeds received from the
issuance of common stock to the CDR Funds and other shareholders.

Debt

To finance the WWG Merger, the Company needed to restructure its current debt
and equity. As a result, on May 23, 2000, the Company entered into a new credit
facility with a syndicate of lenders (the "New Credit Facility"). The Company's
new senior credit agreement (the "New Senior Credit Agreement"), which
established the New Credit Facility, provided for senior secured credit
facilities in an aggregate principal amount of up to $860 million, consisting of
(1) a revolving credit facility available to Dynatech LLC in U.S. dollars or
euros, in an aggregate principal amount of up to $175 million, which can also be
used to issue letters of credit (the "New Revolving Credit Facility"), (2) a
Tranche A term loan of $75 million to Dynatech LLC with a six year amortization
(the "Tranche A Term Loan"), (3) a Tranche B term loan of $510 million to
Dynatech LLC with a seven and one-half year amortization (the "Tranche B Term
Loan"), and (4) German term loans from certain German banks in an aggregate
amount equal to (Euro) 108.375 million to the Company's German subsidiaries with
six year amortization periods (the "German Term Loans") (all term loans
collectively, the "New Term Loans"). The New Credit Facility also provides for
the issuance of a letter of credit that the German banks may draw upon in the
event of the failure of the Company's German subsidiaries to make payments on
the (Euro) 108.375 million loans, and the Company's German subsidiaries are
required to reimburse the letter of credit issuer for any such issuances. The
amount of the letter of credit also may be fully drawn under certain
circumstances, and in such event the amount of the draw shall convert into term
loans to the Company's German subsidiaries with similar amortization to the
German term loans.

The Company used the New Term Loans to refinance certain existing indebtedness
of the Company and as part of the financing for the WWG merger.

                                                                              23
<PAGE>

The New Revolving Credit Facility is available to the Company from time to time
for potential acquisitions and other general corporate purposes.

Principal and interest payments under the New Credit Facility and interest
payments on the Senior Subordinated Notes represent significant liquidity
requirements for the Company. The Tranche A Term Loan will be amortized in four
quarterly installments of $750 thousand commencing on June 30, 2000, four
quarterly installments of $2.0 million commencing on June 30, 2001, four
quarterly installments of $3.75 million commencing on June 30, 2002, four
quarterly installments of $7.5 million commencing on June 30, 2003, four
quarterly installments of $2.5 million commencing on June 30, 2004 and four
quarterly installments of $2.25 million commencing on June 30, 2005. The Tranche
B Term Loan will be amortized in 24 quarterly installments of $2.0 million,
commencing on June 30, 2000, four quarterly installments of $77.5 million
commencing on June 30, 2006, and two quarterly installments of $76.0 million
commencing on June 30, 2007. The German Term Loans will be amortized in four
quarterly installments of (Euro) 530 thousand commencing on June 30, 2000,
twelve quarterly installments of (Euro) 790 thousand commencing on June 30,
2001, four quarterly installments of (Euro) 7.625 million commencing on June 30,
2004, three quarterly installments of (Euro) 15.780 million commencing on June
30, 2005 and one quarterly installment of (Euro) 18.935 million on March 31,
2006. The $275 million of Senior Subordinated Notes will mature in 2008, and
bear interest at 9 3/4% per annum. As a result of the substantial indebtedness
incurred in connection with the WWG Merger, it is expected that the Company's
interest expense will be higher and will have a greater proportionate impact on
net income in comparison to preceding periods.

The loans under the New Credit Facility bear interest at floating rates based
upon the interest rate option elected by the Company. To fix the interest
charged on a portion of the total debt outstanding under the New Term Loans, the
Company entered into interest rate swaps that are effective for periods ranging
from two to three years which began in September 30, 1998. After giving effects
to these arrangements, $220 million of the debt outstanding is subject to an
effective average annual fixed rate of 5.66% (plus an applicable margin). The
terms of one interest rate swap contract provide upon termination for a one-year
option to renew 50% of the notional amount at the discretion of the lender.

The obligations of Dynatech LLC under the New Revolving Credit Facility, the
Tranche A Term Loan, the Tranche B Term Loan and the reimbursement obligations
of the German subsidiaries under the letter of credit relating to the German
Term Loan are guaranteed by each active direct or indirect U.S. subsidiary of
Dynatech LLC and by Dynatech Corporation. The obligations under the New Credit
Facility are secured by a pledge of the Company's equity interest in Dynatech
LLC, by substantially all of the assets of Dynatech LLC and each active direct
or indirect U.S. subsidiary of Dynatech LLC, and by a pledge of the capital
stock of each such direct or indirect U.S. subsidiary, and 65% of the capital
stock of each subsidiary of Dynatech LLC that acts as a holding company of
Dynatech LLC's foreign subsidiaries.

The Company's New Credit Facility generally permits voluntary prepayment of
loans thereunder without premium or penalty, subject to certain limitations.
Mandatory prepayments are required to be made from (a) 100% of net proceeds from
certain asset sales, casualty insurance and condemnation awards or other similar
recoveries; (b) 100% of the net proceeds from the issuance of indebtedness by
the Company, other than as permitted by the New Credit Facility; and (c) 50% of
annual excess cash flow for each fiscal year in which the ratio of the Company's
debt on the last day of such fiscal year to the Company's EBITDA (defined as
earnings before interest, taxes,

                                                                              24
<PAGE>

depreciation and amortization) for such fiscal year is greater than or equal to
4.0 to 1.0.

Future Financing Sources and Cash Flows. The amount available under the New
Revolving Credit Facility that remained unused at June 30, 2000 was $175
million. The unused portion of this facility will be available to meet future
working capital and other business needs of the Company. The Company anticipates
borrowing approximately $100 million to finance its acquisition of Cheetah,
which is expected to be completed during August 2000.

Among other potential sources of liquidity, the Company is currently considering
a public offering of its common stock. If the offering occurs, the Company
intends to use the net proceeds of the offering to reduce its bank debt and
would expect to renegotiate the terms of its New Credit Facility at that time.
There can be no assurance that the Company will make a public offering of its
common stock.

The Company believes that cash generated from operations, together with amounts
available under the New Revolving Credit Facility and any other available
sources of liquidity, will be adequate to permit the Company to meet its debt
service obligations, capital expenditure program requirements, ongoing operating
costs and working capital needs, although no assurance can be given in this
regard. The Company's future operating performance and ability to service or
refinance the Senior Subordinated Notes and to repay, extend or refinance the
New Credit Facility (including the New Revolving Credit Facility) will be, among
other things, subject to future economic conditions and to financial, business
and other factors, many of which are beyond the Company's control.

Covenant Restrictions. The Company's New Credit Facility contains covenants
that, among other things, restrict the Company's ability to dispose of assets,
incur additional debt, guarantee obligations or contingent liabilities, repay
its Senior Subordinated Notes, pay dividends, create liens on assets, make
investments, loans or advances, engage in mergers or consolidations, make
capital expenditures or engage in certain transactions with affiliates. The
Company's New Credit Facility contains customary events of default. The
indenture governing the Senior Subordinated Notes limit the Company's ability to
incur additional indebtedness. Such restrictions, together with the highly
leveraged nature of the Company, could limit the Company's ability to respond to
market conditions, to meet its capital-spending program, to provide for
unanticipated capital investments, or to take advantage of business
opportunities. These restrictions, among other things, preclude Dynatech LLC
from distributing assets to Dynatech Corporation (which has no independent
operations and no significant assets other than its membership interest in
Dynatech LLC), except in limited circumstances. In addition, under the New
Credit Facility, the Company is required to comply with a minimum interest
expense coverage ratio and a maximum leverage ratio. These financial tests
become more restrictive in future years. The Term Loans under the New Credit
Facility are governed by negative covenants that are substantially similar to
the negative covenants contained in the indenture governing the Senior
Subordinated Notes, which also impose restrictions on the operation of the
Company's business.



New Pronouncements

In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB
101"). This bulletin provides guidance from the staff on applying generally
accepted accounting principles to revenue recognition in financial statements.
In June 2000, the SEC issued SAB 101B which defers the effective date for the
Company to the fourth quarter of fiscal 2001. The Company is currently in the
process of assessing the impact, if any, that the current guidance and
interpretations of SAB 101 may have on the financial statements.

In March 2000, the Financial Accounting Standards Board issued Financial
Accounting Standards Board Interpretation No. 44, "Accounting for Certain
Transactions Involving Stock Compensation - an interpretation of APB Opinion No.
25" ("FIN 44"). FIN 44 clarifies the application of APB Opinion No. 25 and among
other issues clarifies the following: the definition of an employee for purposes
of applying APB Opinion No. 25; the criteria for determining whether a plan
qualifies as a noncompensatory plan; the accounting consequence of various
modifications to the terms of previously fixed stock options or awards; and the
accounting for an exchange of stock compensation awards in a business
combination. FIN 44 is effective July 1, 2000, but certain conclusions in FIN 44
cover specific events that occurred after either December 15, 1998 or January
12, 2000. The Company does not expect the application of FIN 44 to have a
material impact on its results of operations and financial position.

On June 15, 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("FAS 133"), "Accounting for Derivative
Instruments and Hedging Activities." FAS 133 was amended by

                                                                              25
<PAGE>

Statement of Financial Accounting Standards No. 137, which modified the
effective date of FAS 133 to all fiscal quarters of all fiscal years beginning
after June 15, 2000. FAS 133, as amended, requires that all derivative
instruments be recorded on the balance sheet at their fair value. Changes in the
fair value of derivatives are recorded each period in current earnings or other
comprehensive income, depending on whether a derivative is designated as part of
a hedge transaction and, if it is, the type of hedge transaction. The Company is
assessing the impact of the adoption of FAS 133 on its results of operations and
its financial position.


Quantitative and Qualitative Disclosures about Market Risk

The Company operates both manufacturing facilities and sales offices in over 80
countries. The Company is subject to business risks inherent in non-U.S.
activities, including political and economic uncertainty, import and export
limitations, and market risk related to changes in interest rates and foreign
currency exchange rates. The Company believes the political and economic risks
related to its foreign operations are mitigated due to the stability of the
countries in which its facilities are located. The Company's principal currency
exposures against the U.S. dollar are in the major European currencies and in
Canadian currency. The Company does not use foreign currency forward exchange
contracts to mitigate fluctuations in currency. The Company's market risk
exposure to currency rate fluctuations is not material. The Company does not
hold derivatives for trading purposes.

The Company uses derivative financial instruments consisting solely of interest
rate swap contracts. The Company's objective in managing its exposure to changes
in interest rates (on its variable rate debt) is to limit the impact of such
changes on earnings and cash flow and to lower its overall borrowing costs.

The Company currently has three interest rate hedge contracts with notional
amounts totaling $220 million which fixed its variable rate debt to a fixed
interest rate for periods of two to three years in which the Company pays a
fixed interest rate on a portion of its outstanding debt and receives
three-month LIBOR. In addition through the acquisition of WWG, the Company
obtained three additional interest rate hedge contracts for a total of DM 20
million (approximately $9.2 million). At June 30, 2000, all of the interest rate
swap contracts had an interest rate lower than the three-month LIBOR quoted by
its financial institutions, as variable rate three-month LIBOR interest rates
declined after the swap contracts became effective. Therefore, the Company
recognized a reduction in interest expense (calculated as the difference between
the interest rate in the swap contracts and the three-month LIBOR rate)
recognized by the Company during the three months of fiscal 2001 was $0.3
million. The Company has performed a sensitivity analysis assuming a
hypothetical 10% adverse movement in the floating interest rate on the interest
rate sensitive instruments described above. The Company believes that such a
movement is reasonably possible in the near term. As of June 30, 2000, the
analysis demonstrated that such movement would cause the Company to recognize
additional interest expense of approximately $1.5 million on an annual basis,
and accordingly, would cause a hypothetical loss in cash flows of approximately
$1.5 million on an annual basis.

                                                                              26
<PAGE>

                           PART II. Other Information

Item 1.  Legal Proceedings

Litigation. The Company is involved from time to time in routine legal matters
incidental to its business. The Company believes that the resolution of such
matters will not have a material adverse effect on the Company's financial
condition or results of operations.

The Company is a party to various legal actions that arose in the ordinary
course of its business. The Company does not expect that resolution of these
legal actions will have, individually or in the aggregate, a material adverse
effect on the Company's financial condition or results of operations.

Whistler Litigation. In 1994, the Company sold its radar detector business to
Whistler Corporation of Massachusetts. On June 27, 1996, Cincinnati Microwave,
Inc. ("CMI") filed an action in the United States District Court for the
Southern District of Ohio against the Company and Whistler alleging willful
infringement of CMI's patent for a mute function in radar detectors. The
Company, along with Whistler, has asserted in response that it did not infringe
CMI's patent and that, in any event, the patent is invalid and unenforceable.

The Company obtained an opinion from outside counsel that CMI's patent is
invalid. The Company intends to offer that opinion (and other evidence) to
demonstrate that any alleged infringement of CMI's patent due to the Company's
prior manufacture and sale of the Whistler series radar detectors was not valid.

On February 14, 1997, CMI filed for bankruptcy in the United States Bankruptcy
Court for the Southern District of Ohio. Pursuant to that filing, CMI sold its
mute feature patent (and other assets) to Escort Acquisition Corp. CMI, however,
retained the right to seek past damages from the Company.

On March 24, 1998, CMI and its co-plaintiff Escort filed a motion for summary
judgment. The Company opposed that motion and went on to complete discovery,
which closed on June 20, 1998. The Company then filed its own series of summary
judgment motions.

A hearing on the parties' dispositive motions was held in May 1999. On May 27,
1999, Whistler filed a Chapter 11 bankruptcy petition in the United States
District Court for the District of Massachusetts. As a result of that filing,
CMI's patent infringement litigation is stayed as to Whistler.

On February 18, 2000, the United States Magistrate issued a Report and
Recommendation on some of the pending motions, recommending that judgment be
entered in the Company's favor on half of the claims asserted by CMI. Then, on
June 9, 2000, the Magistrate issued a second Report and Recommendation,
recommending that the plaintiffs be precluded from recovering any damages for
any alleged infringement that occurred prior to June 1996. Because the Company
could not have infringed on CMI's patent after it sold its radar detector
business to Whistler in 1994, if this Recommendation is adopted by the District
Court Judge, the Company would have no liability to CMI. The parties have filed
(and will file) various objections to the two Report and Recommendations. If
necessary, trial in this matter is scheduled for November 2000. The Company
intends to

                                                                              27
<PAGE>

continue to defend this lawsuit vigorously and does not believe that the outcome
of this litigation will have a material adverse effect on its financial
condition, results of operation, or liquidity.


Item 2. Changes in Securities and Use of Proceeds

To finance the WWG Merger, on May 23, 2000, the Company sold 12.5 million and
30.625 million shares of common stock in a private placement to CDR Fund V and
CDR Fund VI, respectively, for a purchase price of $4.00 per share and an
aggregate purchase price of $172.5 million. Such sales were made in reliance
upon the exemption from registration provided by Section 4(2) of the Securities
Act of 1933 and Regulation D thereunder.

In addition, on May 23, 2000, the Company issued approximately 15 million
newly-issued, unregistered shares of common stock to specified former WWG
stockholders in connection with the WWG Merger in reliance upon the exemption
from registration provided by Section 4(2) of the Securities Act of 1933 and
Regulation D thereunder.

On June 5, 2000, pursuant to the Dynatech Corporation Directors Stock Purchase
Plan, Peter M. Wagner purchased 62,500 newly-issued, unregistered shares of
common stock in a private placement for an aggregate purchase price of $250,000.
The sale was made in reliance upon the exemption from registration provided by
Section 4(2) of the Securities Act of 1933 and Regulation D thereunder.


Item 4. Submission of Matters to a Vote

Pursuant to the written action of a majority of its shareholders, on May 18,
2000, the Company amended its certificate of incorporation to increase the
number of shares of authorized common stock to 350 million from 200 million
shares.

On August 9, 2000, the Company filed a Definitive Information Statement with the
SEC indicating that the Board of Directors has determined that it is advisable
and in the best interests of the Company to amend the Company's Certificate of
Incorporation in order to change the Company's name from "Dynatech Corporation"
to "Acterna Corporation." The amendment will become effective upon the written
consent of the holders of not less than a majority of the common stock and the
filing of the amendment with the Secretary of State of the State of Delaware.
The Company anticipates that CDR Fund V and CDR Fund VI, its controlling
shareholders, will give their written consent to the adoption of the amendment
and that the filing of the amendment will occur on or about August 29, 2000.


Item 6. Exhibits and Reports on Form 8-K

    (a)   Exhibits

          The exhibit numbers in the following list correspond to the numbers
          assigned to such exhibits in the Exhibit Table of Item 601 of
          Regulation S-K:

                        Exhibit Number   Description
                        --------------   -----------

                                                                              28
<PAGE>

                              3.1        Certificate of Incorporation (as
                                         amended)

                             27          Financial Data Schedule

    (b)    Reports on Form 8-K

           1.  The Company filed a Current Report on Form 8-K dated May 31, 2000
               relating to the merger by DWW Acquisition Corporation, a
               subsidiary of Dynatech Corporation, and Wavetek Wandel
               Goltermann, Inc.
           2.  The Company filed a Current Report on Form 8-K/A dated July 18,
               2000 which updated the pro forma information required by Item 7
               to the initial Form 8-K relating to the merger by DWW Acquisition
               Corporation, a subsidiary of Dynatech Corporation, and Wavetek
               Wandel Goltermann, Inc.

                                                                              29
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                          DYNATECH CORPORATION
                                          -----------------------------------


Date     August 14, 2000                  /s/ ALLAN M. KLINE
---------------------------               -----------------------------------
                                          Allan M. Kline
                                          Vice President, Chief Financial
                                          Officer and Treasurer


Date     August 14, 2000                  /s/ ROBERT W. WOODBURY, JR.
---------------------------               -----------------------------------
                                          Robert W. Woodbury, Jr.
                                          Vice President, Corporate
                                          Controller and Principal Accounting
                                          Officer

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