<PAGE>

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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 ---------------

                                    FORM 10-Q

(MARK ONE)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACTOF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 25, 2005

                                       OR

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

        FOR THE TRANSITION PERIOD FROM _______________ TO _______________

                          COMMISSION FILE NUMBER 1-3985

                          -----------------------------

                                 EDO CORPORATION
             (Exact name of registrant as specified in its charter)

                NEW YORK                                 11-0707740
        (State of Incorporation)              (IRS Employer Identification No.)
    60 EAST 42ND STREET, 42ND FLOOR,                        10165
           NEW YORK, NEW YORK                            (Zip Code)
(Address of principal executive offices)

                                 (212) 716-2000
              (Registrant's telephone number, including area code)

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

      Indicate by checkmark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [X] No [ ]

      The number of shares of EDO common stock outstanding as of July 26, 2005,
was 20,177,984 shares, with a par value $1 per share.

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

<PAGE>

                                 EDO CORPORATION

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                 Page
                                                                                                 ----
<S>                                                                                              <C>
PART I FINANCIAL INFORMATION

       ITEM 1 Financial Statements ............................................................    3

              Consolidated Balance Sheets - June 25, 2005 (unaudited) and December 31, 2004 ...    3

              Consolidated Statements of Earnings - (unaudited)
              Three months ended June 25, 2005 and June 26, 2004 ..............................    4

              Consolidated Statements of Earnings - (unaudited)
              Six months ended June 25, 2005 and June 26, 2004 ................................    5

              Consolidated Statements of Cash Flows - (unaudited)
              Six months ended June 25, 2005 and June 26, 2004 ................................    6

              Notes to Consolidated Financial Statements (unaudited) ..........................    7

       ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of
              Operations ......................................................................   16

       ITEM 3 Quantitative and Qualitative Disclosures about Market Risk ......................   24

       ITEM 4 Controls and Procedures .........................................................   24

PART II OTHER INFORMATION

       ITEM 4 Submission of Matters to a Vote of Security Holders .............................   24

       ITEM 6 Exhibits and Reports on Form 8-K ................................................   25

SIGNATURE PAGE ................................................................................   27
</TABLE>

                                        2

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                        EDO CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                    JUNE 25,     DECEMBER 31,
                                                                                     2005           2004
                                                                                  -----------    ------------
                                                                                  (UNAUDITED)
                                                                                     (IN THOUSANDS, EXCEPT
                                                                                      SHARE AND PER SHARE
                                                                                           AMOUNTS)
<S>                                                                               <C>            <C>
                                     ASSETS

Current assets:
  Cash and cash equivalents ...................................................   $    37,928    $    98,884
  Accounts receivable, net ....................................................       171,797        153,810
  Inventories .................................................................        74,483         52,867
  Deferred income tax asset, net ..............................................         4,933          5,046
  Notes receivable, current ...................................................         7,184          7,202
  Prepayments and other .......................................................         4,316          3,493
                                                                                  -----------    -----------
     Total current assets .....................................................       300,641        321,302
                                                                                  -----------    -----------
Property, plant and equipment, net ............................................        43,299         34,830
Goodwill ......................................................................       128,941         91,651
Other intangible assets, net ..................................................        47,735         50,356
Deferred income tax asset, net ................................................        30,241         30,241
Other assets ..................................................................        15,693         18,309
                                                                                  -----------    -----------
                                                                                  $   566,550    $   546,689
                                                                                  ===========    ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable ............................................................   $    30,265    $    32,406
  Accrued liabilities .........................................................        53,252         48,492
  Contract advances and deposits ..............................................        17,739         13,696
                                                                                  -----------    -----------
     Total current liabilities ................................................       101,256         94,594
                                                                                  -----------    -----------
Income taxes payable ..........................................................         5,768          5,768
Long-term debt ................................................................       137,800        137,800
Post-retirement benefits obligations ..........................................        95,714         94,936
Environmental obligation ......................................................         1,659          1,663
Shareholders' equity:
  Preferred shares, par value $1 per share, authorized
     500,000 shares ...........................................................            --             --
  Common shares, par value $1 per share, authorized 50,000,000
     shares, 20,275,990 issued in 2005 and 20,112,243 issued in 2004 ..........        20,276         20,112
  Additional paid-in capital ..................................................       164,798        158,548
  Retained earnings ...........................................................       103,920         96,004
  Accumulated other comprehensive loss, net of income tax
     benefit ..................................................................       (42,456)       (42,619)
  Treasury shares at cost (100,006 shares in 2005 and 94,585 shares in 2004)...        (1,638)        (1,449)
  Unearned Employee Stock Ownership Plan shares ...............................       (15,414)       (16,039)
  Deferred compensation under Long-Term Incentive Plan ........................        (4,912)        (2,408)
  Management group receivables ................................................          (221)          (221)
                                                                                  -----------    -----------
     Total shareholders' equity ...............................................       224,353        211,928
                                                                                  -----------    -----------
                                                                                  $   566,550    $   546,689
                                                                                  ===========    ===========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.

                                        3

<PAGE>

                        EDO CORPORATION AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF EARNINGS

<TABLE>
<CAPTION>
                                             FOR THE THREE MONTHS ENDED
                                               JUNE 25,      JUNE 26,
                                                 2005          2004
                                              ----------    ----------
                                                    (UNAUDITED)
                                               (IN THOUSANDS, EXCEPT
                                                 PER SHARE AMOUNTS)
<S>                                           <C>           <C>
NET SALES .................................   $  156,112    $  126,290
COSTS AND EXPENSES
    Cost of sales .........................      118,360        95,264
    Selling, general and administrative ...       20,014        18,824
    Research and development ..............        3,994         2,851
    Environmental cost provision,
     Deer Park facility....................        1,250            --
                                              ----------    ----------
                                                 143,618       116,939
                                              ----------    ----------
OPERATING EARNINGS ........................       12,494         9,351

NON-OPERATING INCOME (EXPENSE)
    Interest income .......................          294           202
    Interest expense ......................       (2,274)       (2,244)
    Other, net ............................          (15)          (47)
                                              ----------    ----------
                                                  (1,995)       (2,089)
                                              ----------    ----------
Earnings before income taxes ..............       10,499         7,262
Income tax expense ........................       (4,410)       (3,086)
                                              ----------    ----------
NET EARNINGS ..............................   $    6,089    $    4,176
                                              ==========    ==========

NET EARNINGS PER COMMON SHARE:
    Basic:                                    $     0.34    $     0.24
                                              ==========    ==========
    Diluted: ..............................   $     0.31    $     0.23
                                              ==========    ==========

Weighted-average common shares outstanding:
  Basic ...................................       18,065        17,670
                                              ==========    ==========
  Diluted .................................       22,741        17,927
                                              ==========    ==========

  Dividends declared per common share .....   $     0.03    $     0.03
                                              ==========    ==========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.

                                        4

<PAGE>

                        EDO CORPORATION AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF EARNINGS

<TABLE>
<CAPTION>
                                                FOR THE SIX MONTHS ENDED
                                                 JUNE 25,      JUNE 26,
                                                   2005          2004
                                                ----------    ----------
                                                      (UNAUDITED)
                                                 (IN THOUSANDS, EXCEPT
                                                   PER SHARE AMOUNTS)
<S>                                             <C>           <C>
NET SALES ...................................   $  272,620    $  237,167

COSTS AND EXPENSES
   Cost of sales ............................      203,414       175,922
   Selling, general and administrative ......       40,302        38,911
   Research and development .................        8,412         4,316
   Environmental cost provision, Deer
    Park facility............................        1,250            --
                                                ----------    ----------
                                                   253,378       219,149
                                                ----------    ----------
OPERATING EARNINGS ..........................       19,242        18,018

NON-OPERATING INCOME (EXPENSE)
   Interest income ..........................          795           444
   Interest expense .........................       (4,465)       (4,467)
   Other, net ...............................          (60)          (25)
                                                ----------    ----------
                                                    (3,730)       (4,048)
                                                ----------    ----------
Earnings before income taxes ................       15,512        13,970
Income tax expense ..........................       (6,515)       (5,937)
                                                ----------    ----------
NET EARNINGS ................................   $    8,997    $    8,033
                                                ==========    ==========
NET EARNINGS PER COMMON SHARE:
   Basic ....................................   $     0.50    $     0.46
                                                ==========    ==========
   Diluted ..................................   $     0.49    $     0.45
                                                ==========    ==========

Weighted-average common shares outstanding:
  Basic .....................................       17,998        17,610
                                                ==========    ==========
  Diluted ...................................       22,690        17,880
                                                ==========    ==========

  Dividends declared per common share .......   $     0.06    $     0.06
                                                ==========    ==========
</TABLE>

           See accompanying Notes to Consolidated Financial Statements

                                       5
<PAGE>

                        EDO CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                    FOR THE SIX MONTHS ENDED
                                                                                -------------------------------
                                                                                JUNE 25,               JUNE 26,
                                                                                  2005                   2004
                                                                                --------               --------
                                                                                          (UNAUDITED)
                                                                                         (IN THOUSANDS)
<S>                                                                             <C>                    <C>
OPERATING ACTIVITIES:
  Net earnings                                                                  $  8,997               $  8,033
  Adjustments to earnings to arrive at cash provided by operations:
     Depreciation                                                                  4,942                  5,455
     Amortization                                                                  2,621                  2,885
     Bad debt expense                                                                824                    190
     Deferred tax provision                                                          113                    164
     Loss on disposal of property, plant and equipment                                --                     26
     Environmental cost provision, Deer Park facility                              1,250                     --
     Deferred compensation expense                                                   866                    402
     Non-cash Employee Stock Ownership Plan compensation expense                   2,550                  2,028
     Dividends on unallocated Employee Stock Ownership Plan shares                   128                    139
     Common shares issued for directors' fees                                         98                     67
     Income tax benefit from stock options and Long-Term Incentive Plan              435                    449
     Changes in operating assets and liabilities, excluding
      effects of acquisitions:
       Accounts receivable                                                       (13,994)                (1,994)
       Inventories                                                               (21,616)               (14,670)
       Prepayments and other assets                                                1,929                  1,719
       Accounts payable, accrued liabilities and other                              (638)               (10,651)
       Contract advances and deposits                                              4,043                  4,037
                                                                                --------               --------
Cash used by operations                                                           (7,452)                (1,721)
                                                                                --------               --------

INVESTING ACTIVITIES:

  Purchase of plant and equipment                                                (13,089)                (4,199)
  Payments received on notes receivable                                              150                    150
  Cash paid for acquisitions, net of cash acquired                               (35,072)                    --
  Cash received from Emblem escrow settlement                                         --                    301
                                                                                --------               --------
Cash used by investing activities                                                (48,011)                (3,748)
                                                                                --------               --------

FINANCING ACTIVITIES:

  Proceeds from exercise of stock options                                            593                    656
  Proceeds from management group receivables                                          --                    117
  Repayments of acquired debt                                                     (4,877)                    --
  Payment of common share cash dividends                                          (1,209)                (1,195)
                                                                                --------               --------
Cash used by financing activities                                                 (5,493)                  (422)
                                                                                --------               --------
Net decrease in cash and cash equivalents                                        (60,956)                (5,891)
Cash and cash equivalents at beginning of year                                    98,884                 86,632
                                                                                --------               --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      $ 37,928               $ 80,741
                                                                                ========               ========

Supplemental disclosures:
  Cash paid for:
     Interest                                                                   $  3,617               $  3,617
                                                                                ========               ========
     Income taxes                                                               $  7,393               $  7,332
                                                                                ========               ========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.

                                       6
<PAGE>
                        EDO CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)   UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

      The accompanying unaudited consolidated financial statements have been
prepared in accordance with instructions to Form 10-Q and, therefore, do not
include all information and footnotes normally included in consolidated
financial statements prepared in conformity with accounting principles generally
accepted in the United States. They should be read in conjunction with the
consolidated financial statements and notes thereto of EDO Corporation and
Subsidiaries (the "Company") for the year ended December 31, 2004 filed by the
Company on Form 10-K with the Securities and Exchange Commission.

      The accompanying consolidated financial statements include all adjustments
(consisting of normal recurring adjustments) that management considers necessary
for a fair presentation of its consolidated financial position and results of
operations for the interim periods presented. The results of operations for the
interim periods are not necessarily indicative of the results that may be
expected for the entire year.

(2) STOCK-BASED COMPENSATION

      The Company accounts for its stock-based compensation plans in accordance
with Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees" and related interpretations. Under APB No. 25, because the
exercise price of the Company's stock options is set equal to the market price
of the underlying stock on the date of grant, no compensation expense is
recognized. The following table illustrates the effect on net earnings and
earnings per share if the Company had applied the fair market value recognition
provisions of SFAS No. 123 "Accounting for Stock-Based Compensation" whereby
compensation expense would be recognized as incurred for stock-based employee
compensation. For purposes of pro forma disclosures, the estimated fair value of
the options is amortized to expense over the options' vesting period.

<TABLE>
<CAPTION>
                                                                  FOR THE THREE MONTHS ENDED    FOR THE SIX MONTHS ENDED
                                                                    JUNE 25,      JUNE 26,        JUNE 25,     JUNE 26,
                                                                      2005          2004           2005            2004
                                                                  ------------  -------------  -------------  ----------
                                                                           (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<S>                                                               <C>           <C>            <C>            <C>
Earnings:
  As reported................................................     $      6,089  $       4,176  $       8,997  $    8,033
 Deferred compensation expense, net of tax.......................          272            115            502         231
  Stock based compensation expense based on fair value
     method, net of tax......................................             (554)          (490)        (1,207)     (1,026)
                                                                  ------------  -------------  -------------  ----------
  Pro forma..................................................      $     5,807  $       3,801  $       8,292  $    7,238
                                                                  ------------  -------------  -------------  ----------
Basic earnings per common share:
  As reported................................................     $       0.34 $         0.24  $        0.50  $     0.46
  Pro forma..................................................             0.32           0.22           0.46        0.41
Diluted earnings per common share:
  As reported................................................     $       0.31  $        0.23 $         0.49  $     0.45
  Pro forma..................................................             0.30           0.21           0.45        0.40
                                                                  ------------  -------------  -------------  ----------
</TABLE>

      During the three months ended June 25, 2005, the Company issued 37,244
common shares for the exercise of stock options and 2,500 restricted common
shares for long-term incentive awards. For the six months ended June 25, 2005,
the Company issued 54,997 common shares for the exercise of stock options and
108,750 restricted common shares for long-term incentive awards.

      On December 16, 2004, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 123 (revised 2004), "Share-Based Payment," which is a revision
of SFAS No. 123, "Accounting for Stock-Based Compensation." SFAS 123(R)
supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for
Stock Issued to Employees," and amends SFAS No. 95, "Statement of Cash Flows."
Generally, the approach in SFAS 123(R) is similar to the approach described in
SFAS 123. However, SFAS 123(R) requires all share-based payments to employees,
including grants of employee stock options, to be recognized in the income
statement based on their fair values. Pro forma disclosure is no longer an
alternative. SFAS 123(R) must be adopted in the first annual period beginning
after June 15, 2005. We expect to adopt Statement 123(R) in the first quarter of
fiscal 2006.

      As permitted by SFAS 123, we currently account for share-based payments to
employees using APB No. 25's intrinsic value method and generally recognize no
compensation cost for employee stock options. Accordingly, the adoption of SFAS
123(R)'s fair value method will have a significant impact on our result of
operations, although it will have no impact on our overall financial position.
The impact of the adoption of SFAS 123(R) cannot be predicted at this time
because it will depend on levels of share-based payments granted in the future.
However, had we adopted Statement 123(R) in prior periods, the impact of that
standard would have approximated the impact of SFAS 123 as described in the
disclosure of pro forma net income and earnings per share.

(3) ACQUISITIONS

      During the second quarter of 2005, the Company acquired a designer,
manufacturer and integrator of classified intelligence systems. The acquisition
is expected to expand the range of products and related services that the
Company offers. The Company has not yet completed its analysis of the fair
value of the acquired assets and liabilities; therefore, amounts recorded are
subject to change. The acquisition was accounted for as a purchase and,
accordingly, the operating results are included in the Company's consolidated
financial statements since the acquisition date. The acquired company became
part of the Company's Defense segment.

                                       7
<PAGE>

      On a proforma basis, had the acquisition taken place as of the beginning
of each respective year, the results of operations would not have been
materially affected for 2004 and 2005.

(4) BUSINESS COMBINATIONS AND GOODWILL AND OTHER INTANGIBLE ASSETS

      Statement of Financial Accounting Standard ("SFAS") No. 141, "Business
Combinations," requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001. SFAS No. 141 also includes
guidance on the initial recognition and measurement of goodwill and other
intangible assets arising from business combinations completed after June 30,
2001. SFAS No. 142, "Goodwill and Other Intangible Assets," prohibits the
amortization of goodwill and intangible assets with indefinite useful lives and
requires that these assets be reviewed for impairment at least annually.
Intangible assets with definite lives are amortized over their estimated useful
lives.

      In accordance with SFAS No. 142, goodwill must be tested at least annually
for impairment at the reporting unit level. If an indication of impairment
exists, the Company is required to determine if such goodwill's implied fair
value is less than the carrying value in order to determine the amount, if any,
of the impairment loss required to be recorded. Impairment indicators include,
among other conditions, cash flow deficits, an historic or anticipated decline
in revenue or operating profits, adverse legal or regulatory developments,
accumulation of costs significantly in excess of amounts originally expected to
acquire the asset and/or a material decrease in the fair value of some or all of
the assets. The Company performs the required impairment tests of goodwill as of
October 1, each year.

      The changes in the carrying amount of goodwill by segment for the six
months ended June 25, 2005 are as follows:


<TABLE>
<CAPTION>
                                                                        COMMUNI-
                                                                         CATIONS
                                                                        AND SPACE
                                                         DEFENSE        PRODUCTS          TOTAL
                                                        ----------     ----------     ------------
                                                                       (IN THOUSANDS)
<S>                                                     <C>            <C>            <C>
Balance as of January 1, 2005.......................... $   89,990     $    1,661     $     91,651
Preliminary allocation for acquisition.................     37,290             --           37,290
                                                        ----------     ----------     ------------
Balance as of June 25, 2005............................ $  127,280     $    1,661     $    128,941
                                                        ==========     ==========     ============
</TABLE>

      Summarized below are intangible assets subject to amortization.

<TABLE>
<CAPTION>
                                                                     JUNE  25,   DECEMBER 31,
                                                                        2005        2004           LIFE
                                                                    ----------   ------------   ----------
                                                                          (IN THOUSANDS)
<S>                                                                 <C>          <C>            <C>
Capitalized non-compete agreements related to the
  acquisitions of DSI/AERA/Darlington/Emblem....................    $    3,118   $      3,118    1-5 years
Purchased technologies related to the acquisitions of
Condor/Emblem...................................................        17,003         17,003   8-20 years
Customer contracts and relationships related to the acquisitions
 of AERA/Darlington/Emblem........................................      39,198         39,198  10-20 years
Tradename related to the acquisitions of
AERA/Darlington/Emblem.............................................      1,569          1,569   5-10 years
Other intangible assets related to the acquisition of Condor....           916            916   2 years
                                                                    ----------   ------------
                                                                        61,804         61,804
Less accumulated amortization...................................       (14,069)       (11,448)
                                                                    -----------  ------------
                                                                    $   47,735   $     50,356
                                                                    ==========   ============
</TABLE>

      The amortization expense for the three months ended June 25, 2005 and June
26, 2004 amounted to $1.3 million and $1.4 million, respectively. The
amortization expense for the six months ended June 25, 2005 and June 26, 2004
amounted to $2.6 million and $2.9 million, respectively. Total remaining
amortization expense for 2005, 2006, 2007, 2008, 2009 and thereafter related to
these intangible assets is estimated to be $2.6 million, $5.3 million, $5.1
million, $4.5 million, $4.4 million and $25.8 million, respectively.

      All intangible assets other than goodwill are subject to amortization.

      (5) INVENTORIES

                                       8
<PAGE>

      Inventories are summarized by major classification as follows:

<TABLE>
<CAPTION>
                                                JUNE 25,     DECEMBER 31,
                                                  2005           2004
                                               ----------    ------------
                                                     (IN THOUSANDS)
<S>                                            <C>           <C>
Raw material and supplies..................    $   10,674    $     10,461
Work-in-process............................        75,525          44,752
Finished goods.............................         2,008           2,043
      Less: Unliquidated progress payments        (13,724)         (4,389)
                                               -----------   ------------
                                               $   74,483    $     52,867
                                               ==========    ============
</TABLE>

(6) EARNINGS PER SHARE

      The following table sets forth the basis for the computation of basic and
diluted earnings per share:


<TABLE>
<CAPTION>
                                                            FOR THE THREE MONTHS      FOR THE SIX MONTHS
                                                                    ENDED                   ENDED
                                                           -----------------------  ----------------------
                                                            JUNE 25,     JUNE 26,    JUNE 25,    JUNE 26,
                                                              2005         2004        2005        2004
<S>                                                        <C>          <C>         <C>         <C>
Numerator:
  Earnings   from   continuing   operations
     for basic calculation.............................    $    6,089   $    4,176  $    8,997  $    8,033
  Effect of dilutive securities:
     Convertible notes.................................         1,067           --       2,134          --
                                                           ----------   ----------  ----------  ----------
  Numerator for diluted calculation....................    $    7,156   $    4,176  $   11,131  $    8,033
                                                           ==========   ==========  ==========  ==========
Denominator:
  Denominator for basic calculation....................        18,065       17,670      17,998      17,610
  Effect of dilutive securities:
     Stock options.....................................           268          257         284         270
     Convertible notes.................................         4,408           --       4,408          --
                                                           ----------   ----------  ----------  ----------
  Denominator for diluted calculation..................        22,741       17,927      22,690      17,880
                                                           ==========   ==========  ==========  ==========
</TABLE>

      The assumed conversion of the notes was dilutive for 2005 and
anti-dilutive for 2004.

      The following table summarizes, for each year presented, the number of
shares excluded from the computation of diluted earnings per share, as their
effect upon potential issuance was anti-dilutive.

<TABLE>
<CAPTION>
                                                    FOR THE SIX MONTHS
                                                          ENDED
                                                    ------------------
                                                     JUNE 25,  JUNE 26,
                                                      2005      2004
                                                    ---------  -------
<C>                                                 <C>        <C>
5.25 % Convertible Subordinated Notes.........              -    4,408
Unexercised stock options.....................             67      342
                                                    ---------  -------
                                                           67    4,750
                                                    =========  =======
</TABLE>

(7) DEFINED BENEFIT PLAN

      The Company maintains a qualified noncontributory defined benefit pension
plan covering less than half of its employees. In November 2002, the plan was
amended whereby benefits accrued under the plan were frozen as of December 31,
2002. The Company's funding policy is to make annual contributions to the extent
such contributions are actuarially determined and tax deductible.

      For the three months ended June 25, 2005 and June 26, 2004, the Company
recorded pension expense of $1.1 million and $0.5 million, respectively. For the
six months ended June 25, 2005 and June 26, 2004, the Company recorded pension
expense of $2.1 million and $1.1 million, respectively. Summarized below are the
components of the expense for each period presented.

<TABLE>
<CAPTION>
                                                 FOR THE THREE MONTHS ENDED   FOR THE SIX MONTHS ENDED
                                                   JUNE 25,      JUNE 26,       JUNE 25,    JUNE 26,
                                                     2005          2004           2005        2004
                                                 -----------   -----------    -----------   --------
                                                                     (IN THOUSANDS)
<S>                                              <C>           <C>            <C>           <C>
Service cost...................................  $     3,088   $     3,037    $     6,177   $  6,074
Expected return on plan assets.................       (3,181)       (3,176)        (6,362)    (6,352)
</TABLE>

                                       9
<PAGE>

<TABLE>
<S>                                              <C>           <C>            <C>           <C>
Amortization of unrecognized net loss..........         1,162            689         2,324        1,378
                                                 ------------  -------------  ------------  -----------
                                                 $      1,069  $         550  $      2,139  $     1,100
                                                 ============  =============  ============  ===========
</TABLE>

(8) EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

      The Company sponsors an employee stock ownership plan which provides
retirement benefits to substantially all employees. The cost basis of the
unearned/unallocated shares was initially recorded as a reduction to
shareholders' equity. Compensation expense is recorded based on the market value
of the Company's common shares as they are committed-to-be-released quarterly,
as payments are made under the related indirect loan. The difference between the
market value and the cost basis of the shares was recorded as additional paid-in
capital. Dividends on unallocated shares are recorded as compensation expense.

(9) COMPREHENSIVE INCOME

      As of June 25, 2005, accumulated other comprehensive income included in
the accompanying consolidated balance sheet primarily represents additional
minimum liabilities on benefit plans. Comprehensive income for the three months
ended June 25, 2005 was $6.4 million compared to comprehensive income for the
three months ended June 26, 2004 of $4.2 million. Comprehensive income for the
six months ended June 25, 2005 was $9.2 million compared to comprehensive income
for the six months ended June 26, 2004 of $8.1 million.

(10) BUSINESS SEGMENTS

      The Company determines its operating segments based upon an analysis of
its products and services, production processes, types of customers, economic
characteristics and the related regulatory environment, which is consistent with
how management operates the Company. The Company's operations are conducted in
three segments: Defense, Communications and Space Products, and Engineered
Materials. The Defense segment provides integrated front-line warfighting
systems and components including electronic warfare, radar countermeasures
systems, reconnaissance and surveillance systems, aircraft weapons suspension
and release systems, airborne mine countermeasures systems, integrated combat
and sonar systems, command, control, communications and computers (C4) products
and systems, undersea-warfare systems and professional, operational, technical
and information technology services for military forces and governments
worldwide. The Communications and Space Products segment supplies antenna
products and ultra-miniature electronics and systems for the remote sensing and
electronic warfare industries. The Engineered Materials segment supplies
commercial and military piezo-electric ceramic products and integrated composite
structures for the aircraft and oil industries.

<TABLE>
<CAPTION>
                                                     FOR THE THREE MONTHS ENDED   FOR THE SIX MONTHS ENDED
                                                       JUNE 25,       JUNE 26,      JUNE 25,     JUNE 26,
                                                         2005           2004          2005         2004
                                                         ----           ----          ----         ----
                                                           (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                  <C>            <C>           <C>           <C>
Net Sales:
Defense...........................................   $    104,036   $   99,427    $   190,163   $  187,467
Communications and Space Products.................         41,315       14,510         61,115       26,062
Engineered Materials..............................         10,761       12,353         21,342       23,638
                                                     ------------   ----------    -----------   ----------
                                                          156,112   $  126,290        272,620   $  237,167
                                                     ------------   ----------    ------------  ----------
Operating earnings (loss):
Defense...........................................   $      8,954   $    8,970    $    15,341   $   18,000
Communications and Space Products.................          4,948           97          4,833         (994)
Engineered Materials..............................           (158)         284            318        1,012
Environmental cost provision, Deer Park facility..         (1,250)          --         (1,250)          --
                                                     ------------   ----------    -----------   ----------
                                                           12,494        9,351         19,242       18,018
                                                     ------------   ----------    -----------   ----------

Net interest expense..............................         (1,980)      (2,042)        (3,670)      (4,023)

Other, net........................................            (15)         (47)           (60)         (25)
                                                     ------------   ----------    -----------   ----------
Earnings before income taxes......................   $     10,499   $    7,262    $    15,512   $   13,970
                                                     ------------   ----------    -----------   ----------
</TABLE>

      (11) GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

      The Company may, from time to time, issue indebtedness, a condition of
which would be the guarantee of this indebtedness by certain of its
subsidiaries. Presented below is condensed consolidating financial information
for the Company and the contemplated subsidiary guarantors and non-guarantors at
June 25, 2005 and December 31, 2003 and for the three and six month periods
ended June 25, 2005 and June 26, 2004. Each contemplated subsidiary guarantor is
100% owned, directly or indirectly, by the Company. Any guarantees that may be
issued will be full and unconditional, as well as joint and several. In
connection with the Company's credit facility, the Company cannot declare or pay
any dividend on its outstanding common stock in an amount that exceeds fifty
percent of its consolidated net income for the immediately preceding quarter.

                                       10
<PAGE>

      On January 1, 2005 the Company merged two wholly owned subsidiaries into
itself, the result of which caused three divisions of the former subsidiaries to
become part of the parent.

EDO CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET
JUNE 25, 2005

<TABLE>
<CAPTION>
                                             EDO Corporation
                                             Parent Company      Subsidiary
                                                  Only           Guarantors       Non-Guarantors      Eliminations      Consolidated
                                             ---------------     ----------       --------------      ------------      ------------
<S>                                          <C>                 <C>              <C>                 <C>               <C>
ASSETS
Current assets:
Cash and cash equivalents                       $  34,101         $    (850)        $   4,677          $      --         $  37,928
Accounts receivable, net                           59,341           109,069             3,387                 --           171,797
Inventories                                        26,071            44,219             4,193                 --            74,483
Deferred income tax asset, net                      4,933                --                --                 --             4,933
Prepayments and other                               2,671             1,317               328                 --             4,316
Notes receivable                                    7,184                                  --                 --             7,184
                                                ---------          --------         ---------          ---------         ---------
Total current assets                              134,301           153,755            12,585                 --           300,641

Investment in subsidiaries                        293,577                                               (293,577)               --
Property, plant and equipment, net                 23,146            16,918             3,235                 --            43,299
Goodwill                                               --           120,231             8,710                 --           128,941
Other intangible assets, net                                         35,625            12,110                 --            47,735
Deferred income tax asset, net                     30,241                                  --                 --            30,241
Other assets                                       14,750               943                --                 --            15,693
                                                ---------          --------         ---------          ---------         ---------
                                                $ 496,015         $ 327,472         $  36,640          $(293,577)        $ 566,550

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities        $  28,165         $  52,119         $   3,854          $    (621)        $  83,517
Contract advances and deposits                      2,417            15,322                --                 --            17,739
                                                ---------          --------         ---------          ---------         ---------
Total current liabilities                          30,582            67,441             3,854               (621)          101,256

Long-term debt                                    137,800                --                --                 --           137,800
Post retirement benefits obligations               95,714               (66)               66                 --            95,714
Income taxes payable                                5,768                --                --                 --             5,768
Environmental obligation                            1,659                --                --                 --             1,659
Intercompany accounts                                  --           168,698            25,794           (194,492)               --
Shareholders' equity:
Preferred shares
Common shares                                      20,276                98                --                (98)           20,276
Additional paid-in capital                        164,798            25,221             6,418            (31,639)          164,798
Retained earnings                                 103,920            70,295               484            (70,779)          103,920
Accumulated other comprehensive loss,
   net of income tax benefit                      (42,317)             (163)               24                 --           (42,456)
Treasury shares                                    (1,638)           (4,052)               --              4,052            (1,638)
Unearned ESOP shares                              (15,414)               --                --                 --           (15,414)
Management group receivables                         (221)               --                --                 --              (221)
Deferred compensation under Long-Term
   Incentive Plan                                  (4,912)               --                --                 --            (4,912)
                                                ---------          --------         ---------          ---------         ---------
Total shareholders' equity                        224,492            91,399             6,926            (98,464)          224,353
                                                ---------          --------         ---------          ---------         ---------
                                                $ 496,015         $ 327,472         $  36,640          $(293,577)        $ 566,550
                                                =========         =========         =========          =========         =========
</TABLE>

EDO CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF
EARNINGS FOR THE THREE MONTHS ENDED
JUNE 25, 2005

<TABLE>
<CAPTION>
                                        EDO Corporation
                                        Parent Company   Subsidiary
                                            Only         Guarantors   Non-Guarantors   Eliminations     Consolidated
                                        ---------------  ----------   --------------   ------------     ------------
<S>                                     <C>              <C>          <C>              <C>              <C>
Net Sales                                 $ 50,690        $ 92,941        $ 6,801        $   5,680        $ 156,112
Costs and expenses:
Cost of sales                               41,914          65,971          4,795            5,680          118,360
Selling, general and administrative          3,806          14,786          1,422               --           20,014
Research and development                     1,639           2,092            263               --            3,994
Environmental cost provision,
 Deer Park facility                          1,250                                                            1,250
                                            48,609          82,849          6,480            5,680          143,618
Operating Earnings                           2,081          10,092            321               --           12,494
Non-operating income (expense)
Interest income                                246              11             37               --              294
</TABLE>

                                       11
<PAGE>

<TABLE>
<S>                                       <C>             <C>             <C>            <C>              <C>
Interest expense                            (2,274)             --             --               --           (2,274)
Other, net                                       1             29            (45)              --              (15)
Income tax (benefit) expense                   248           3,981            181               --            4,410

(Loss) earnings after income taxes            (194)          6,151            132               --            6,089
Equity in undistributed earnings of
subsidiaries                                 6,283              --             --           (6,283)              --

Net earnings                              $  6,089        $  6,151        $   132        $  (6,283)       $   6,089
                                          ========        ========        =======        =========        =========
</TABLE>

EDO CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF
EARNINGS FOR THE SIX MONTHS ENDED
JUNE 25, 2005

<TABLE>
<CAPTION>
                                     EDO Corporation
                                      Parent Company   Subsidiary
                                           Only        Guarantors    Non-Guarantors  Eliminations    Consolidated
                                     ---------------   ----------    --------------  ------------    ------------
<S>                                  <C>               <C>           <C>             <C>             <C>
Net Sales                                $ 86,940       $ 179,006       $ 14,205       $  (7,531)      $ 272,620
Costs and expenses:
Cost of sales                              71,604         129,147         10,194          (7,531)        203,414
Selling, general and administrative         7,534          29,754          3,014              --          40,302
Research and development                    3,022           4,861            529              --           8,412
Environmental cost provision, Deer Park
 Facility                                   1,250              --             --              --           1,250
                                           83,410         163,762         13,737          (2,956)        253,378
Operating Earnings                          3,530          15,244            468              --          19,242

Non-operating income (expense)
Interest income                               709              28             58              --             795
Interest expense                           (4,465)             --             --              --          (4,465)
Other, net                                     11              23            (94)             --             (60)
                                           (3,745)             51            (36)             --          (3,730)
(Loss) earnings before income taxes          (215)         15,295            432              --          15,512
Income tax (benefit) expense                  133           6,085            297              --           6,515
(Loss) earnings after income taxes           (348)          9,210            135              --           8,997
Equity in undistributed earnings of
subsidiaries                                9,345              --             --          (9,345)             --
Net earnings                             $  8,997           9,210       $    135       $  (9,345)      $   8,997
                                         ========       =========       ========       =========       =========
</TABLE>

EDO CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED
JUNE 25, 2005

<TABLE>
<CAPTION>
                                                           EDO Corporation
                                                            Parent Company  Subsidiary
                                                                 Only       Guarantors   Non-Guarantors  Eliminations  Consolidated
                                                           ---------------  ----------   --------------  ------------  ------------
<S>                                                        <C>              <C>            <C>             <C>            <C>
Operating Activities:
Net earnings                                                   $  8,997     $  9,210        $   135        $ (9,345)      $ 8,997
Adjustments to earnings to arrive at cash
  provided (used) by continuing operations:
Depreciation                                                      2,291        2,386            265                         4,942
Amortization                                                          0        2,112            509                         2,621
Deferred tax benefit                                                113            0                                          113
Bad debt expense                                                    184          640                                          824
Loss on sale of property, plant and equipment                         0            0                                            0
Environmental cost provision-Deer Park                            1,250            0                                        1,250
Impairment loss on assets held for sale                                            0                                            0
Deferred compensation expense                                       866            0                                          866
Non-cash Employee Stock Ownership Plan
  compensation expense                                            2,550                                                     2,550
Non-cash stock option compensation expense                                                                                      0
Dividends on unallocated Employee Stock Ownership
  Plan shares                                                       128                                                       128
Common shares issued for directors' fees                             98                                                        98
Income tax benefit from stock options                               435                                                       435
Changes in operating assets and liabilities,
  excluding effects of acquisitions:
Equity in earnings of subsidiaries                               (9,345)                                      9,345             0
Intercompany/Investment in                                        6,746       (6,629)          (117)                            0
Accounts receivable                                              (4,858)     (10,481)         1,345                       (13,994)
Inventories                                                     (11,414)     (10,483)           281                       (21,616)
</TABLE>

                                       12
<PAGE>

<TABLE>
<S>                                                        <C>              <C>            <C>             <C>            <C>
Prepayments and other assets                                      1,870           51               8                        1,929
Contribution to defined benefit pension plan                                                                                    0
Accounts payable, accrued liabilities and other                   7,202        8,711         (2,147)                         (638)
Contract advances and deposits                                   (2,817)       6,860                                        4,043

                                                               --------     --------        -------        --------       -------
Cash provided (used) by continuing operations                   (10,108)       2,377            279               0        (7,452)


Investing Activities:
Purchase of plant and equipment                                  (8,505)      (4,541)           (43)                      (13,089)
Proceeds from sale of property, plant and equipment                                                                             0
Payments received on notes receivable                               150                                                       150
Purchase of marketable securities                                     0                                                         0
Restricted cash                                                       0                                                         0
Cash paid for acquisitions, net of cash acquired                (35,072)                                                  (35,072)
Cash received from Emblem escrow settlement                           0                           0                             0

                                                               --------     --------        -------        --------       -------
Cash used by investing activities                               (43,427)      (4,541)           (43)              0       (52,888)

Financing Activities:
Proceeds from exercise of stock options                             593                                                       593
Proceeds from management group receivables                            0            0                                            0
Repayments of acquired debt                                      (4,877)                                                   (4,377)
Payment of common share cash dividends                           (1,209)                                                   (1,209)

                                                               --------     --------        -------        --------       -------
Cash (used) provided by financing activities                     (5,493)           0              0               0          (616)

                                                               --------     --------        -------        --------       -------
Net decrease in cash and cash equivalents                       (59,028)      (2,164)           236               0       (60,956)

Cash and cash equivalents at beginning of year                   93,129        1,314          4,441                        98,884

                                                               --------     --------        -------        --------       -------
Cash and cash equivalents at end of the period                 $ 34,101     $   (850)       $ 4,677        $     --      $ 37,928
                                                               ========     ========        =======        ======        ========
</TABLE>

                                       13
<PAGE>

EDO CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                          EDO Corporation
                                          Parent Company   Subsidiary
                                               Only        Guarantors   Non-Guarantors  Eliminations   Consolidated
                                          ---------------  ----------   --------------  ------------   ------------
<S>                                       <C>              <C>          <C>             <C>            <C>
ASSETS
Current assets:
Cash and cash equivalents                    $  93,129      $   1,314      $   4,441             --      $  98,884
Accounts receivable, net                        54,667         94,411          4,732             --        153,810
Inventories                                     14,657         33,735          4,474             --         52,866
Deferred income tax asset, net                   5,046             --             --             --          5,046
Notes receivable                                 7,202             --             --             --          7,202
Prepayments and other                            2,029          1,128            336             --          3,493
                                             ---------      ---------      ---------      ---------      ---------
Total current assets                           176,730        130,589         13,983             --        321,302
                                             ---------      ---------      ---------      ---------      ---------

Investment in subsidiaries                     150,136             --             --       (150,136)            --
Property, plant and equipment, net              16,931         14,442          3,457             --         34,830
Goodwill                                            --         82,941          8,710             --         91,651
Other intangible assets, net                        --         37,737         12,619             --         50,356
Deferred income tax asset, net                  30,241             --             --             --         30,241
Other assets                                    17,394            915             --             --         18,309
                                             ---------      ---------      ---------      ---------      ---------
                                             $ 391,432      $ 266,624      $  38,769      $(150,136)     $ 546,689
                                             ---------      ---------      ---------      ---------      ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities     $  34,489      $  40,677      $   5,732             --      $  80,898
          Contract advances and deposits         5,234          8,462             --             --         13,696
                                             ---------      ---------      ---------      ---------      ---------

Total current liabilities                       39,723         49,139          5,732             --         94,594
                                             ---------      ---------      ---------      ---------      ---------

Long-term debt                                 137,800             --             --             --        137,800
Income taxes payable, long-term                  5,768             --             --             --          5,768
Deferred income tax liabilities, net              (169)            --            169             --             --
Post retirement benefits obligations            94,936             --             --             --         94,936
Environmental obligation                         1,663             --             --             --          1,663
Intercompany accounts                         (100,828)       138,931         25,911        (64,014)            --

Shareholders' equity:
Preferred shares                                    --             --             --             --             --
Common shares                                   20,112             98             --            (98)        20,112
Additional paid-in capital                     158,548         25,221          6,418        (31,639)       158,548
Retained earnings                               96,004         58,088            349        (58,437)        96,004
Accumulated other comprehensive loss,
net of income tax benefit                      (42,008)          (801)           190             --        (42,619)
Treasury shares                                 (1,449)        (4,052)            --          4,052         (1,449)
Unearned ESOP shares                           (16,039)            --             --             --        (16,039)
Management group receivables                      (221)            --             --             --           (221)
Deferred compensation under Long-Term
Incentive Plan                                  (2,408)            --             --             --         (2,408)
                                             ---------      ---------      ---------      ---------      ---------
Total shareholders' equity                     212,539         78,554          6,957        (86,122)       211,928
                                             ---------      ---------      ---------      ---------      ---------

                                             $ 391,432      $ 266,624      $  38,769      $(150,136)     $ 546,689
                                             =========      =========      =========      =========      =========
</TABLE>

                                       14
<PAGE>

EDO CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF
EARNINGS FOR THE THREE MONTHS ENDED
JUNE 26, 2004

<TABLE>
<CAPTION>
                                         EDO Corporation
                                          Parent Company  Subsidiary
                                               Only       Guarantors  Non-Guarantors Eliminations   Consolidated
                                         ---------------  ----------  -------------- ------------   ------------
<S>                                      <C>              <C>         <C>            <C>            <C>
Continuing Operations:
Net Sales                                   $ 48,881       $ 73,328      $ 7,037      $  (2,956)     $ 126,290
Costs and expenses:
Cost of sales                                 38,672         52,566        6,982         (2,956)        95,264
Selling, general and administrative            5,975         13,488         (639)            --         18,824
Research and development                       1,100          1,069          682             --          2,851
                                            --------       --------      -------      ---------      ---------
                                              45,747         67,123        7,025         (2,956)       116,939
                                            --------       --------      -------      ---------      ---------
Operating Earnings                             3,134          6,205           12             --          9,351
                                            --------       --------      -------      ---------      ---------
Non-operating income (expense)
Interest income                                  167             24           11             --            202
Interest expense                              (2,244)            --           --             --         (2,244)
Other, net                                       (44)            (3)          --             --            (47)
                                            --------       --------      -------      ---------      ---------
                                              (2,121)            21           11             --         (2,089)
(Loss) earnings from continuing
   operations before income taxes              1,013          6,226           23             --          7,262
Income tax (benefit) expense                     863          2,144           79             --          3,086
                                            --------       --------      -------      ---------      ---------
Earnings (loss) from continuing
   operations                                    150          4,082        ( 56)             --          4,176
Equity in undistributed earnings of
   subsidiaries                                4,026             --           --         (4,026)            --
                                            --------       --------      -------      ---------      ---------
Net earnings from continuing operations        4,176          4,082          (56)            --          4,176
Earnings from discontinued operations             --             --           --             --             --
                                            --------       --------      -------      ---------      ---------
Net earnings                                $  4,176       $  4,082      $   (56)     $  (4,024)     $   4,176
                                            ========       ========      =======      =========      =========
</TABLE>

EDO CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF
EARNINGS FOR THE SIX MONTHS ENDED
JUNE 26, 2004

<TABLE>
<CAPTION>
                                          EDO Corporation
                                          Parent Company   Subsidiary
                                              Only         Guarantors    Non-Guarantors   Eliminations    Consolidated
                                          ---------------  ----------    --------------   ------------    ------------
<S>                                       <C>              <C>           <C>               <C>             <C>
Continuing Operations:
Net Sales                                    $ 95,031       $ 134,200      $ 14,383        $ (6,447)       $ 237,167

Costs and expenses:
Cost of sales                                  73,861          97,587        10,921          (6,447)         175,922
Selling, general and administrative            12,562          23,594         2,755                           38,911
Research and development                        1,808           1,826           682                            4,316
Acquisition-related costs                           0               0             0                               --
Benefit plan curtailment loss                       0               0             0                               --
Impairment on Deer Park facility                    0               0             0                               --
                                             --------       ---------      --------        --------        ---------
                                               88,231         123,007        14,358          (6,447)         219,149

                                             --------       ---------      --------        --------        ---------
                                                6,800          11,193            25               0           18,018

Non-operating income (expense)
Interest income                                   338              53            53                              444
Interest expense                               (4,467)                                                        (4,467)
Other, net                                        (95)             70                                            (25)
                                             --------       ---------      --------        --------        ---------
                                               (4,224)            123            53                           (4,048)

(Loss) earnings from continuing operations
  before income taxes                           2,576          11,316            78               0           13,970
Income tax (benefit) expense                    1,083           4,680           174                            5,937
                                             --------       ---------      --------        --------        ---------
(Loss) earnings from continuing operations      1,493           6,636           (96)              0            8,033
Equity in undistributed earnings of
  subsidiaries                                  6,540               0             0          (6,540)              --
                                             --------       ---------      --------        --------        ---------
                                                8,033           6,636           (96)         (6,540)           8,033
Earnings from discontinued operations               0                                                             --

                                             --------       ---------      --------        --------        ---------
Net earnings                                 $  8,033       $   6,636      $    (96)       $ (6,540)       $   8,033
                                             ========       =========      ========        ========        =========

</TABLE>

                                       15
<PAGE>

EDO CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED
JUNE 26, 2004

<TABLE>
<CAPTION>
                                                                  EDO
                                                              Corporation
                                                                 Parent     Subsidiary
                                                             Company Only   Guarantors   Non-Guarantors  Eliminations  Consolidated
                                                             ------------   ----------   --------------  ------------  ------------
<S>                                                          <C>            <C>          <C>             <C>           <C>
Operating Activities:
Earnings from continuing operations                               $ 8,033      $ 6,634            $ (96)     $ (6,538)      $ 8,033
Adjustments to earnings to arrive at cash provided
(used) by continuing operations:
Depreciation                                                        1,292        3,767              396                       5,455
Amortization                                                            0        2,382              503                       2,885
Deferred tax benefit                                                  164                                                       164
Bad debt expense                                                        0          190                                          190
Loss on sale of property, plant and equipment                           0           26                                           26
Impairment loss on assets held for sale                                              0                                            0
Deferred compensation expense                                         402                                                       402
Non-cash Employee Stock Ownership Plan compensation expense         2,028                                                     2,028
Non-cash stock option compensation expense                                                                                        0
Dividends on unallocated Employee Stock Ownership Plan shares         139                                                       139
Common shares issued for directors' fees                               67                                                        67
Income tax benefit from stock options                                 449                                                       449
Changes in operating assets and liabilities, excluding effects
of acquisitions:
Equity in earnings of subsidiaries                                 (6,538)                                      6,538             0
Intercompany/Investment in                                          1,179       (1,462)             283                           0
Accounts receivable                                                 2,059       (3,629)            (424)                     (1,994)
Inventories                                                        (2,404)     (11,783)            (483)                    (14,670)
Prepayments and other assets                                          321        1,391                7                       1,719
Contribution to defined benefit pension plan                                                                                      0
Accounts payable, accrued liabilities and other                   (11,384)       1,197             (464)                    (10,651)
Contract advances and deposits                                       (782)       4,819                                        4,037

                                                                 --------  -----------  ---------------  ------------  ------------
Cash provided (used) by continuing operations                      (4,975)       3,532             (278)            0        (1,721)

Net cash provided by discontinued operations                            0                                                         0

Investing Activities:
Purchase of plant and equipment                                      (264)      (3,772)             (163)                    (4,199)
Proceeds from sale of property, plant and equipment                                                                               0
Payments received on notes receivable                                 150                                                       150
Purchase of marketable securities                                       0                                                         0
Restricted cash                                                         0                                                         0
Cash paid for acquisitions, net of cash acquired                        0                                                         0
Cash received from Emblem escrow settlement                             0            0              301                         301

                                                                 --------  -----------  ---------------  ------------  ------------
Cash used by investing activities                                    (114)      (3,772)             138             0        (3,748)

Financing Activities:
Proceeds from exercise of stock options                               656                                                       656
Proceeds from management group receivables                            117                                                       117
Repayments of acquired debt                                             0                                                         0
Payment of common share cash dividends                             (1,195)                                                   (1,195)

                                                                 --------  -----------  ---------------  ------------  ------------
Cash (used) provided by financing activities                         (422)           0                0             0          (422)

                                                                 --------  -----------  ---------------  ------------  ------------
Net decrease in cash and cash equivalents                          (5,511)        (240)            (140)            0        (5,891)

Cash and cash equivalents at beginning of year                     73,834        7,630            5,168                      86,632

                                                                 --------  -----------  ---------------  ------------  ------------
Cash and cash equivalents at end of year                         $ 68,322      $ 7,391          $ 5,028           $ -    $   80,741

</TABLE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

INTRODUCTION

      EDO Corporation was incorporated in New York in 1925 by Earl Dodge Osborn,
from whose initials "EDO" is derived.

                                       16
<PAGE>

      EDO Corporation (the "Company") provides military and commercial products
and professional services, with core competencies in a wide range of critical
defense areas, including:

            -     Defense Electronics

            -     Aircraft Armament

            -     Undersea Warfare

            -     Professional Services

            -     C4 - Command, Control, Communications and Computers

            -     Integrated Composite Structures

      We are a leading supplier of sophisticated, highly engineered products and
systems for defense, aerospace and industrial applications. We believe our
advanced electronic, electromechanical systems, information systems and
engineered materials are mission-critical on a wide range of military programs.
We have three reporting segments: Defense, Communications and Space Products,
and Engineered Materials. Our Defense segment provides integrated front-line
warfighting systems and components including electronic-warfare systems,
reconnaissance and surveillance systems, aircraft weapons suspension and release
systems, integrated combat systems, command, control, communications, and
computers (C4) products and systems, undersea-warfare systems and professional
and engineering services for military forces and friendly governments worldwide.
Our Communications and Space Products segment supplies antenna products and
ultra-miniature electronics and systems for the remote sensing and electronic
warfare industries. Our Engineered Materials segment supplies commercial and
military piezo-electric ceramic products and integrated composite structures for
the aircraft and oil industries. A disciplined acquisition program is
diversifying the base of major platforms and customers.

      The Company's Annual Report on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and all amendments to those reports, and the Proxy
Statement for its Annual Meeting of Stockholders are made available, free of
charge, on its Web site www.edocorp.com, as soon as reasonably practicable after
such reports have been filed with or furnished to the Securities and Exchange
Commission.

DISCUSSION OF CRITICAL ACCOUNTING POLICIES

      We make estimates and assumptions in the preparation of our consolidated
financial statements in conformity with accounting principles generally accepted
in the United States. Actual results could differ significantly from those
estimates under different assumptions and conditions. We believe that the
following discussion addresses our critical accounting policies, which are those
that are most important to the portrayal of our consolidated financial condition
and results of operations and which require our most difficult and subjective
judgments, often as a result of the need to make estimates about the effect of
matters that are inherently uncertain. The following is a brief discussion of
the critical accounting policies employed by us.

REVENUE RECOGNITION

      Sales under long-term, fixed-price contracts, including pro-rata profits,
are generally recorded based on the relationship of costs incurred to date to
total projected final costs or, alternatively, as deliveries and other
milestones are achieved or services are provided. These projections are revised
throughout the lives of the contracts. Adjustments to profits resulting from
such revisions are made cumulative to the date of change and may affect current
period earnings. Sales on other than long-term contract orders (principally
commercial products) are recorded as shipments are made. Our gross profit is
affected by a variety of factors, including the mix of products, systems and
services sold, production efficiencies, price competition and general economic
conditions. Estimated losses on long-term contracts are recorded when
identified.

INVENTORIES

      Inventories under long-term contracts and programs reflect all accumulated
production costs, including factory overhead, initial tooling and other related
costs (including general and administrative expenses relating to certain of our
defense contracts), less the portion of such costs charged to cost of sales. All
other inventories are stated at the lower of cost (principally first-in,
first-out method) or market. Inventory costs in excess of amounts recoverable
under contracts and which relate to a specific technology or application and
which may not have alternative uses are charged to cost of sales when such
circumstances are identified.

      From time to time, we manufacture certain products prior to receiving firm
contracts in anticipation of future demand. Such costs are inventoried and are
incurred to help maintain stable and efficient production schedules.

      Several factors may influence the sale and use of our inventories,
including our decision to exit a product line, technological change, new product
development and/or revised estimates of future product demand. If inventory is
determined to be overvalued due to one or more of the above factors, we would be
required to recognize such loss in value at the time of such determination.

      Under the contractual arrangements by which progress payments are
received, the United States Government has a title to or a security interest in
the inventories identified with related contracts.

                                       17
<PAGE>

PROPERTY, PLANT AND EQUIPMENT AND OTHER LONG-LIVED ASSETS

      Property, plant and equipment is recorded at cost and is depreciated on a
straight-line basis over the estimated useful lives of such assets. Leasehold
improvements are amortized over the shorter of their estimated useful lives or
their respective lease periods.

      In those cases where we determine that the useful life of property, plant
and equipment should be shortened, we depreciate the net book value in excess of
salvage value over its revised remaining useful life thereby increasing
depreciation expense. Factors such as technological advances, changes to our
business model, changes in our capital strategy, changes in the planned use of
equipment, fixtures, software or changes in the planned use of facilities could
result in shortened useful lives. Long-lived assets, other than goodwill, are
reviewed by us for impairment whenever events or changes in circumstances
indicate that the carrying amount of any such asset may not be recoverable. The
estimate of cash flow, which is used to determine recoverability, is based upon,
among other things, certain assumptions about future operating performance.

      Our estimates of undiscounted cash flow may differ from actual cash flow
due to such factors including technological advances, changes to our business
model, or changes in our capital strategy or planned use of long-lived assets.
If the sum of the undiscounted cash flows, excluding interest, is less than the
carrying value, we would recognize an impairment loss, measured as the amount by
which the carrying value exceeds the fair value of the asset.

      In accordance with SFAS No. 142, goodwill must be tested at least annually
for impairment at the reporting unit level. If an indication of impairment
exists, we are required to determine if such goodwill's implied fair value is
less than the unit carrying value in order to determine the amount, if any, of
the impairment loss required to be recorded. Impairment indicators include,
among other conditions, cash flow deficits, an historic or anticipated decline
in revenue or operating profits, adverse legal or regulatory developments,
accumulation of costs significantly in excess of amounts originally expected to
acquire the asset and/or a material decrease in the fair value of some or all of
the assets.

      To determine the fair value of our reporting units, we generally use a
present value technique (discounted cash flow) corroborated by market multiples
when available and as appropriate, for all of the reporting units. The
discounted cash flow method measures intrinsic value by reference to an
enterprise's or an asset's expected annual free cash flows. We applied what we
believe to be the most appropriate valuation methodology for each of the
reporting units. If we had established different reporting units or utilized
different valuation methodologies, the impairment test results could differ.

PENSION AND POST-RETIREMENT BENEFITS OBLIGATIONS

      We sponsor defined benefit pension and other retirement plans in various
forms covering all eligible employees. Several statistical and other factors
which attempt to anticipate future events are used in calculating the expense
and liability related to the plans. These factors include assumptions about the
discount rate and expected return on plan assets within certain guidelines and
in conjunction with our actuarial consultants. In addition, our actuarial
consultants also use subjective factors such as withdrawal and mortality rates
to estimate the expense and liability related to these plans. The actuarial
assumptions used by us may differ significantly, either favorably or
unfavorably, from actual results due to changing market, economic or regulatory
conditions, higher or lower withdrawal rates or longer or shorter life spans of
participants.

      We used the building block approach to the estimation of the long-term
rate of return on assets. Under this approach, we reviewed the publicly
available common source data for the range of returns on basic types of equity
and fixed income instruments and the differential to those rates provided by
active investment management. In consultation with our actuarial and active
asset management consultants and taking into account the funds' actual
performance and expected asset allocation going forward, we selected an overall
return rate within the resulting range.

RESULTS OF OPERATIONS

      The following information should be read in conjunction with the
Consolidated Financial Statements as of June 25, 2005.

THREE MONTHS ENDED JUNE 25, 2005 COMPARED WITH THREE MONTHS ENDED JUNE 26, 2004

      Net sales by segment were as follows:

                                       18
<PAGE>

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED        INCREASE/(DECREASE)
                                              JUNE 25,      JUNE 26,            FROM
SEGMENT                                         2005          2004          PRIOR PERIOD
------------------------------------------    --------      --------     -------------------
                                              (DOLLARS IN THOUSANDS)
<S>                                            <C>          <C>          <C>
Defense ..................................     $104,036     $ 99,427              4.6%
Communications and Space Products ........       41,315       14,510            184.7%
Engineered Materials .....................       10,761       12,353            (12.9)%
                                               --------     --------            -----
Total ....................................     $156,112     $126,290             23.6%
                                               ========     ========            =====
</TABLE>

    In the Defense segment, the increase in sales was attributed to higher sales
of C4 products and systems, including the Joint Enhanced Core Communication
Systems ("JECCS") for the Marine Corps, which was awarded last year. In
addition, $4.3 million of sales were contributed from the acquired company.
These increases were partially offset by decreases in sales of electronic
warfare systems and professional services.

    In the Communications and Space Products segment, the increase in sales was
primarily attributable to deliveries of Warlock force protection systems to the
U.S. Army. The Warlock program will continue to be a significant contributor to
sales and margin as deliveries increase in the second half of this year. In
addition, there was an increase in sales of antenna products in the three months
ended June 25, 2005 compared to the three months ended June 26, 2004.

    In the Engineered Materials segment, the decrease in sales was primarily
attributable to higher sales of fiber composite piping in the prior year second
quarter, wherein we had been awarded a contract to replace a competitor's
composite piping that had failed.

    Operating earnings by segment were as follows:

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED
                                                       JUNE 25,         JUNE 26,
SEGMENT                                                  2005            2004
-----------------------------------------------        --------         --------
                                                         (DOLLARS IN THOUSANDS)
<S>                                                    <C>              <C>
Defense .......................................        $  8,954         $  8,970
Communications and Space Products .............           4,948               97
Engineered Materials ..........................            (158)             284
Environmental cost provision, Deer Park
  facility.....................................          (1,250)              --
                                                       --------         --------
Total .........................................        $ 12,494         $  9,351
                                                       ========         ========
</TABLE>

      Operating earnings for the three months ended June 25, 2005 were $12.5
million or 8.0% of net sales. This compares to operating earnings for the three
months ended June 26, 2004 of $9.4 million or 7.4% of net sales. During the
three months ended June 25, 2005, the Company incurred a charge of $1.25 million
to reserve for an environmental cleanup effort relating to the Company's former
Deer Park facility.

      The Defense segment's operating earnings for the three months ended June
25, 2005 were $9.0 million or 8.6% of this segment's net sales and are
consistent with the $9.0 million or 9.0% of this segment's net sales for the
three months ended June 26, 2004. Operating earnings for the three months ended
June 25, 2005 were negatively impacted by a $1.8 million cost growth on an
undersea warfare systems program. Ongoing system testing identified various
performance issues that require design and software modifications. We believe we
have accounted for all costs for the modification and future re-testing in our
estimate-to-complete. The next significant test for the undersea warfare systems
program is currently scheduled to occur later this year. There was also cost
growth on several other Defense segment programs. These impacts were offset by
performance improvements on other programs and closeout of contracts at lower
costs than originally anticipated.

      For the three months ended June 26, 2004, operating earnings in the
Defense segment were positively impacted by approximately $3.4 million resulting
from the release of a reserve which had been previously established for a
potential issue on MK105-related contracts. The release of the reserve was
triggered by final closeout of MK105 programs and proven performance resulting
from system utilization over the course of the year. These increases were
partially offset by the effect of increasing the estimate-to-complete on an
aircraft armament program resulting in a $1.3 million negative impact to
operating earnings and a $2.3 million impact on the undersea warfare systems
program.

      The Communications and Space Products segment operating earnings for the
three months ended June 25, 2005 were $4.9 million or 12.0% of this segment's
net sales compared to $0.1 million or 0.7% of this segment's net sales for the
three months ended June 26, 2004. The increase in operating earnings is related
primarily to sales of the Warlock Program to the U.S. Army. This program will be
a significant contributor to operating earnings in this segment in the second
half of 2005. The results for the three months ended June 26, 2004 included $0.8
million of charges in the antenna product line due to production inefficiencies
resulting in inventory adjustments as well as increases in
estimates-to-complete.

      The Engineered Materials segment's experienced an operating loss for the
three months ended June 25, 2005 of $0.2 million or 1.5% of this segment's net
sales compared to operating earnings of $0.3 million or 2.3% of this segment's
net sales for the three months ended June 26, 2004. In the second quarter of
2005, there was a negative impact of $0.4 million which related to the undersea
warfare systems program issue in the Defense segment. A component for sonar
equipment produced in the engineered materials segment experienced failures
during testing. The estimate of the cost to remedy the problem resulted in the
$0.4 million charge to earnings. In addition, there was a write-off of $0.2
million to a receivable from a customer of our fiber composite business that
filed

                                       19
<PAGE>

for bankruptcy. Earnings were also negatively impacted by the lower sales
volume. In the three months ended June 26, 2004 there was a charge to earnings
of $0.8 million due to an increase to the estimate-to-complete of the
aforementioned undersea warfare systems program.

      Other items of note affecting operating earnings are summarized here to
help clarify the comparison of results.

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED
                                                         JUNE 25,        JUNE 26,
                                                           2005           2004
                                                         --------        --------
                                                          (DOLLARS IN THOUSANDS)
<S>                                                       <C>            <C>
Pension ........................................          $1,069          $  550
ESOP Compensation expense ......................          $1,236          $  977
Intangible asset amortization ..................          $1,311          $1,438
</TABLE>

The increase in pension expense in 2005 compared to 2004 is attributable to
changes in actuarial assumptions such as discount rate and return on plan
assets. The higher ESOP compensation expense for the three months ended June 25,
2005 is attributable to our higher average stock price compared to the three
months ended June 26, 2004. Pension and ESOP compensation expense are allocated
between cost of sales and selling, general and administrative expense. The
intangible asset amortization expense is associated with the acquisitions made
in 2002 and 2003 and affects primarily the Defense segment. Operating earnings
for the three months ended June 25, 2005 were also affected by several
contract-related items which are described in further detail below in the
discussion of segment operating earnings.

      Selling, general and administrative expenses for the three months ended
June 25, 2005 of $20.0 million decreased as a percent of net sales to 12.8% from
14.9% for the three months ended June 26, 2004. The increase in sales is the
primary driver of the decrease.

      Research and development expense for the three months ended June 25, 2005
increased to $4.0 million or 2.6% of net sales from $2.9 million or 2.3% of net
sales for the three months ended June 26, 2004. The increase is due to increased
spending on force protection and composite munitions.

      Interest expense, net of interest income, for the three months ended June
25, 2005 remained virtually unchanged at $2.0 million compared to the three
months ended June 26, 2004. Interest expense is associated primarily with our
$137.8 million principal amount of 5.25% Convertible Subordinated Notes
("Notes") issued in April 2002, amortization of deferred debt issuance costs
associated with the offering of the Notes, and amortization of deferred
financing costs associated with our credit facility.

      Income tax expense reflects an effective rate of 42% for the three month
period ended June 25, 2005 and 42.5% for the three month period ended June 26,
2004.

      For the three months ended June 25, 2005, net earnings were $6.1 million
or $0.31 per diluted common share on 22.7 million diluted shares compared to net
earnings of $4.2 million or $0.23 per diluted common share on 17.9 million
diluted shares for the three months ended June 26, 2004. The convertible notes
had a dilutive effect in the second quarter of 2005 but not in the 2004
comparable period.

SIX MONTHS ENDED JUNE 25, 2005 COMPARED WITH SIX MONTHS ENDED JUNE 26, 2004

      Net sales by segment were as follows:

<TABLE>
<CAPTION>
                                                  SIX MONTHS ENDED      INCREASE/(DECREASE)
                                               JUNE 25,     JUNE 26,            FROM
SEGMENT                                          2005         2004         PRIOR PERIOD
------------------------------------------     --------     --------    -------------------
                                               (DOLLARS IN THOUSANDS)
<S>                                            <C>          <C>         <C>
Defense ..................................     $190,163     $187,467            1.4%
Communications and Space Products ........       61,115       26,062          134.5%
Engineered Materials .....................       21,342       23,638           (9.7%)
                                               --------     --------          -----
Total ....................................     $272,620     $237,167           14.9%
                                               ========     ========          -----
</TABLE>

      In the Defense segment, the increase in sales was attributable to
increases in sales of reconnaissance and surveillance systems and C4 products
and systems, including the Joint Enhanced Core Communication Systems ("JECCS")
for the Marine Corps. There was also a $4.3 million contribution to sales from
the acquired company. These increases were offset by decreases in sales of
electronic warfare systems and professional services.

      In the Communications and Space Products segment, the increase in sales
was attributable to deliveries of Warlock force protection systems to the U.S.
Army. The Warlock program will continue to be a significant contributor to sales
and margin as

                                       20
<PAGE>

deliveries increase in the second half of this year. In addition, there were
increased sales of antenna products in the first six months of 2005 compared to
the comparable period of 2004.

      In the Engineered Materials segment, the decrease in sales was primarily
attributable to higher sales of fiber composite piping in the first half of the
prior year, wherein we had been awarded a contract to replace a competitor's
composite piping that had failed.

      Operating earnings by segment were as follows:

<TABLE>
<CAPTION>
                                                            SIX MONTHS ENDED
                                                       JUNE 25,        JUNE 26,
SEGMENT                                                  2005            2004
------------------------------------------------       --------        --------
                                                         (DOLLARS IN THOUSANDS)
<S>                                                    <C>             <C>
Defense ........................................       $ 15,341        $ 18,000
Communications and Space Products ..............          4,833            (994)
Engineered Materials ...........................            318           1,012
Environmental cost provision, Deer Park
  facility......................................         (1,250)             --
                                                       --------        --------
Total ..........................................       $ 19,242        $ 18,018
                                                       ========        ========
</TABLE>

      Operating earnings for the six months ended June 25, 2005 were $19.2
million or 7.1% of net sales. This compares to operating earnings for the six
months ended June 26, 2004 of $18.0 million or 7.6% of net sales. During the six
months ended June 25, 2005, the Company incurred a charge of $1.25 million to
reserve for an environmental cleanup effort relating to the Company's former
Deer Park facility.

      Operating earnings for the six months ended June 25, 2005 were also
affected by several contract-related items which are described in further detail
below in the discussion of segment operating earnings.

      The Defense segment's operating earnings for the six months ended June 25,
2005 were $15.3 million or 8.1% of this segment's net sales compared to $18.0
million or 9.6% of this segment's net sales for the six months ended June 26,
2004. This decrease in operating earnings was attributable to decreased sales in
our services business and a loss on an electronic warfare systems program. In
addition, operating earnings were negatively impacted by the aforementioned cost
growth totaling approximately $1.8 million on the undersea warfare systems
program. Ongoing system testing identified various performance issues that
require design and software modifications. We believe we have accounted for all
costs for the modifications and future re-testing in our estimate-to-complete.
The next significant test for the undersea warfare systems program is currently
scheduled to occur later this year.

      In the first six months of 2004 there was a positive impact to operating
earnings of approximately $3.4 million resulting from the release of a reserve
which had been previously established for a potential issue on MK105-related
contracts. The release of the reserve was triggered by final deliveries of MK105
systems made in 2003 and proven performance resulting from system utilization
over the course of the year. These increases were partially offset by the effect
of increasing the estimate-to-complete on an aircraft armament program resulting
in a $1.6 million negative impact to operating earnings and a $2.3 million
impact on the undersea warfare systems program.

      The Communications and Space Products segment operating earnings for the
six months ended June 25, 2005 were $4.8 million or 7.9% of this segment's net
sales compared to an operating loss of $1.0 million or 3.8% of this segment's
net sales for the six months ended June 26, 2004. This is primarily due to the
increased sales of the Warlock force protection systems. The operating loss in
2004 related to adjustments to estimates-to-complete on development and start-up
production phases on certain interference cancellation programs resulting from
issues discovered during testing. In addition, in the first six months of 2004,
there was a loss in the antenna product line due to production inefficiencies
resulting in inventory adjustments as well as increases in
estimates-to-complete.

      The Engineered Materials segment's operating earnings for the six months
ended June 25, 2005 were $0.3 million 1.5% of this segment's net sales compared
to operating earnings of $1.0 million or 4.3% of this segment's net sales for
the six months ended June 26, 2004. The decrease in operating earnings is due to
write-offs of receivables of $0.3 million in the fiber composite business and
lower sales volume. In addition, in the first six months of 2005, there was a
negative impact of $0.4 million which related to the undersea warfare systems
program issue in the Defense segment. A component for sonar equipment produced
in the engineered materials segment experienced failures during testing. The
estimate of the cost to remedy the problem resulted in the $0.4 million charge
to earnings. In the first six months of 2004, there was a $0.8 million charge on
the same program.

      Other items of note affecting operating earnings are summarized here to
help clarify the comparison of results.

                                       21
<PAGE>

<TABLE>
<CAPTION>
                                                              SIX MONTHS ENDED
                                                         JUNE 25,        JUNE 26,
                                                           2005            2004
                                                         --------        -------
                                                         (DOLLARS IN THOUSANDS)
<S>                                                       <C>             <C>
Pension ........................................          $2,139          $1,100
ESOP Compensation expense ......................          $2,550          $2,028
Intangible asset amortization ..................          $2,621          $2,871
</TABLE>

      The increase in pension expense in 2005 compared to 2004 is attributable
to changes in actuarial assumptions such as discount rate and return on plan
assets. The higher ESOP compensation expense for the first six months of 2005 is
attributable to our higher average stock price compared to the first six months
of 2004. Pension and ESOP compensation expense are allocated between cost of
sales and selling, general and administrative expense. The intangible asset
amortization expense is associated with the acquisitions made in 2002 and 2003
and affects primarily the Defense segment.

      Selling, general and administrative expenses for the six months ended June
25, 2005 of $40.3 million decreased as a percent of net sales to 14.8% from
16.4% for the six months ended June 26, 2004. The decrease is attributable
primarily to the increase in sales.

      Research and development expense for the six months ended June 25, 2005
increased to $8.4 million or 3.1% of net sales from $4.3 million or 1.8% of net
sales for the six months ended June 26, 2004. This increase was attributable to
increased spending on force protection systems and composite munitions.

      Interest expense, net of interest income, for the six months ended June
25, 2005 decreased to $3.7 million from $4.0 million for the six months ended
June 26, 2004, primarily due to lower interest income on a lower average cash
balance. Interest expense is associated primarily with our $137.8 million
principal amount of 5.25% Convertible Subordinated Notes ("Notes") issued in
April 2002, amortization of deferred debt issuance costs associated with the
offering of the Notes, and amortization of deferred financing costs associated
with our credit facility.

      Income tax expense reflects an effective rate of 42% for the six month
period ended June 25, 2005 and 42.5% for the six month period ended June 26,
2004.

      For the six months ended June 25, 2005, net earnings were $9.0 million or
$0.49 per diluted common share on 22.7 million diluted shares compared to net
earnings from continuing operations of $8.0 million or $0.45 per diluted common
share on 17.9 million diluted shares for the six months ended June 26, 2004. The
convertible notes were dilutive for the six months ended June 25, 2005 and
anti-dilutive for the six months ended June 26, 2004.

LIQUIDITY AND CAPITAL RESOURCES

BALANCE SHEET

      Our cash and cash equivalents decreased 61.6% to $37.9 million at June 25,
2005 from $98.9 million at December 31, 2004. This decrease was due primarily to
$35.1 million for the acquisition, $13.1 million used for the purchase of
capital equipment, $7.5 million used by operations, $4.9 million to repay
acquired debt, and $1.2 million for the payment of common share dividends.

      Accounts receivable increased 11.7% to $171.8 million at June 25, 2005
from $153.8 million at December 31, 2004 due in part to timing of collections of
billed receivables and increased sales. At June 25, 2005 approximately 80% of
billed receivables are in the under-60 days aging category. There was also
growth in unbilled receivables resulting from work progressing on large programs
such as the Warlock force protection program.

      Inventories increased 40.9% to $74.5 million at June 25, 2005 from $52.9
million at December 31, 2004 due primarily to the efforts expended on
work-in-progress on major programs, such as the Warlock force protection systems
program for which deliveries will increase in the second half of the year.

      The notes receivable of $7.2 million at June 25, 2005 and at December 31,
2004 represent notes receivable from the sale of our facility in Deer Park in
2003 and the sale of our College Point facility in January 1996. The Deer Park
facility note is due no later than October 9, 2005. The College Point facility
note is due in annual amounts through September 2005 with a final payment due on
December 31, 2005 and bears interest at 7% per annum. The latter note receivable
is secured by a mortgage on the facility.

FINANCING ACTIVITIES

Credit Facility

      We have a $200.0 million credit facility with a consortium of banks, led
by Citibank, N.A. as the administrative agent, Bank of America as the
syndication agent and Wachovia Bank, N.A. as the documentation agent. The
facility expires in November 2005.

      The credit facility provides us with sub-limits of borrowing up to $125.0
million for acquisition-related financing and up to $125.0 million in standby
letters of credit financing. The potential cash borrowing under the facility is
reduced by the amount of outstanding

                                       22
<PAGE>

letters of credit. Borrowings under the facility will be priced initially at
LIBOR plus a predetermined amount, ranging from 1.25% to 1.75%, depending on our
consolidated leverage ratio at the time of the borrowing. At June 25, 2005,
LIBOR was approximately 3.45% and the applicable adjustment to LIBOR was 1.25%.
The facility requires us to pay each lender in the consortium a commitment fee
on the average daily unused portion of their respective commitment at a rate
equal to 0.25%.

      There were no direct borrowings outstanding under the credit facility
at June 25, 2005 and December 31, 2004. Letters of credit outstanding at June
25, 2005 pertaining to the credit facility were $29.9 million, resulting in
$95.1 million available at June 25, 2005 for standby letters of credit, if
needed.

      In connection with the credit facility, we are required to maintain both
financial and non-financial covenants and ratios, including but not limited to
leverage ratio, fixed charge coverage ratio, earnings before interest and taxes
to interest expense ratio, total unsubordinated debt to tangible net worth, net
income and dividends. Also, the Company cannot declare or pay any dividend on
its outstanding common stock in an amount that exceeds fifty percent of its
consolidated net income for the immediately preceding quarter. As of June 25,
2005, we were in compliance with our covenants. The credit facility is secured
by our accounts receivable, inventory and machinery and equipment.

5.25% Convertible Subordinated Notes due 2007("Notes")

      In April 2002, we issued the $137.8 million of Notes. Interest payments on
the Notes are due April 15 and October 15 of each year, commencing on October
15, 2002. Accrued interest payable, included in accrued liabilities on our
consolidated balance sheet, was $1.4 million at June 25, 2005 and $1.5 million
at December 31, 2004.

      The Notes are convertible, unless previously redeemed or repurchased by
us, at the option of the holder at any time prior to maturity, into our common
shares at an initial conversion price of $31.26 per share, subject to adjustment
in certain events. As of June 25, 2005, there had been no conversions.

Shelf Registration

      On December 23, 2003, we filed a shelf registration statement to
potentially offer for sale common shares, preferred shares, debt securities and
warrants. We may sell any combination of the foregoing securities in one or more
offerings up to an aggregate initial offering price of $500,000,000.

      We believe that, for the foreseeable future, we have adequate liquidity
and sufficient capital to fund our currently anticipated requirements for
working capital, capital expenditures, including acquisitions, research and
development expenditures, interest payments and funding of our pension and
post-retirement benefit obligations. We continue to focus on positioning
ourselves to be a significant player in the consolidation of first-tier defense
suppliers and, to that end, have actively sought candidates for strategic
acquisitions. Future acquisitions may be funded from any of the following
sources: cash on hand; borrowings under our credit facility; issuance of our
common stock or other equity securities; and/or convertible or other debt
offerings.

COMMITMENTS AND CONTINGENCIES

    In order to aggregate all commitments and contractual obligations as of June
25, 2005, we have included the following table. We are obligated under building
and equipment leases expiring between 2005 and 2017. The aggregate future
minimum lease commitments under those obligations with noncancellable terms in
excess of one year are shown below. Our commitments under letters of credit and
advance payment and performance bonds relate primarily to advances received on
foreign contracts should we fail to perform in accordance with the contract
terms. We do not expect to have to make payments under these letters of credits
or bonds since these obligations are removed as we perform under the related
contracts. The amounts for letters of credit and performance bonds represent the
amount of commitment expiration per period. Actual pension contribution may
differ from amounts presented above and are contingent on cash flow and
liquidity.


<TABLE>
<CAPTION>
                                                    Payments Due In (in millions):
                                         -----------------------------------------------------
                                                                                                2010 and
                                           Total     2005      2006      2007    2008    2009    Beyond
                                         --------  --------   ------   -------  ------  ------  --------
<S>                                      <C>       <C>        <C>      <C>      <C>     <C>     <C>
5.25%  Convertible  Subordinated  Notes
  due 2007, excluding interest........   $  137.8  $     --   $   --   $ 137.8  $   --  $   --  $     --
Operating leases......................      107.8       7.4     13.1      12.1    11.6    11.3      52.3
Letters of credit.....................       30.3      20.0      8.2       2.1      --      --        --
Pension Contributions                        29.0       6.0      6.0       6.0     6.0     5.0
Advance payment & Performance Bonds           1.9        --      0.2        --      --     1.7        --
                                         --------  --------   ------   ------- -------  ------  --------
Total.................................   $  306.8  $   33.4   $ 27.5   $ 158.0  $ 17.6  $ 18.0  $   52.3
                                         ========  ========   ======   =======  ======  ======  ========
</TABLE>

      Additionally, we are subject to certain legal actions that arise out of
the normal course of business. It is our belief that the ultimate outcome of
these actions will not have a material adverse effect on our consolidated
financial position, results of operations or liquidity.

                                       23
<PAGE>

CONCENTRATION OF SALES

      We conduct a significant amount of our business with the United States
Government. Although there are currently no indications of a significant change
in the status of government funding of certain programs, should this occur, our
results of operations, financial position and liquidity could be materially
affected. Such a change could have a significant impact on our profitability and
our stock price. This could also affect our ability to acquire funds from our
credit facility due to covenant restrictions or from other sources.

      For the three months ended June 25, 2005, sales of Warlock force
protection systems represented 19.3% of net sales and 13.1% of net sales for the
six months ended June 25, 2005.

BACKLOG

      The funded backlog of unfilled orders at June 25, 2005 increased to $535.1
million from $474.6 million at December 31, 2004. Our backlog consists primarily
of current orders under long-lived, mission-critical programs on key defense
platforms.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995

      The statements in this Quarterly Report and in oral statements that may be
made by representatives of the Company relating to plans, strategies, economic
performance and trends and other statements that are not descriptions of
historical facts may be forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27(a) of the
Securities Act of 1933 and Section 21(e) of the Securities Exchange Act of 1934.
Forward looking statements are inherently subject to risks and uncertainties,
and actual results could differ materially from those currently anticipated due
to a number of factors, which include, but are not limited to the following for
each of the types of information noted below.

      U.S. and international military program sales, follow on procurement,
contract continuance, and future program awards, upgrades and spares support are
subject to: U.S. and international military budget constraints and
determinations; U.S. congressional and international legislative body
discretion; U.S. and international government administration policies and
priorities; changing world military threats, strategies and missions;
competition from foreign manufacturers of platforms and equipment; NATO country
determinations regarding participation in common programs; changes in U.S. and
international government procurement timing, strategies and practices, the
general state of world military readiness and deployment; and the ability to
obtain export licenses.

      Commercial satellite programs and equipment sales, follow-on procurement,
contract continuance and future program awards, upgrades and spares support are
subject to: establishment and continuance of various consortiums for satellite
constellation programs; delay in launch dates due to equipment, weather or other
factors beyond our control; and development of sufficient customer base to
support a particular satellite constellation program.

      Commercial product sales are subject to: success of product development
programs currently underway or planned; competitiveness of current and future
production costs and prices and market and consumer base development of new
product programs.

      Achievement of margins on sales, earnings and cash flow can be affected
by: unanticipated technical problems; government termination of contracts for
convenience; decline in expected levels of sales; underestimation of anticipated
costs on specific programs; the ability to effect acquisitions; and risks
inherent in integrating recent acquisitions into our overall structure.

      Expectations of future income tax rates can be affected by a variety of
factors, including statutory changes in Federal and state tax rates,
nondeductibility of goodwill amortization and IPR&D acquired in a stock purchase
business combination and the nondeductibility of our noncash ESOP compensation
expense.

      The Company has no obligation to update any forward-looking statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

      The information called for by this item is provided under Item 2 -
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

ITEM 4. CONTROLS AND PROCEDURES

                                       24
<PAGE>

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

      As of the end of the period covered by this Quarterly Report on Form 10-Q,
EDO carried out an evaluation of the effectiveness of the design and operation
of its disclosure controls and procedures under the supervision and with the
participation of its management, including its Review and Disclosure Committee,
its Chief Executive Officer and its Chief Financial Officer. The Chief Executive
Officer and Chief Financial Officer concluded that EDO's disclosure controls and
procedures are effective to ensure that material information is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission rules and forms.

CHANGES IN INTERNAL CONTROLS

      There were no changes in EDO's internal controls over financial reporting
during EDO's last fiscal quarter that have materially affected, or are likely to
materially affect internal controls over financial reporting.

                           PART II - OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      At the Company's Annual Meeting of Shareholders held on April 26, 2005,
the following actions were taken:

      (a) Election of Directors. The following nominees were elected as
directors. The votes cast for, against or withheld for each nominee were as
follows:

<TABLE>
<CAPTION>
   DIRECTOR                 VOTES FOR             VOTES AGAINST               VOTES WITHHELD
------------------        -------------           -------------               --------------
<S>                       <C>                     <C>                         <C>
Robert E. Allen           17,788,149.00           N/A                            644,402.00
Robert Alvine             17,889,333.00           N/A                            543,218.00
Dennis C. Blair           18,356,568.00           N/A                             75,983.00
Robert M. Hanisee         17,363,814.00           N/A                          1,068,737.00
Michael J. Hegarty        17,472,404.00           N/A                            960,147.00
Leslie F. Kenne           17,960,276.00           N/A                            472,275.00
Paul J. Kern              18,346,335.00           N/A                             86,216.00
Ronald L. Leach           17,346,752.00           N/A                          1,085,799.00
James Roth                17,768,345.00           N/A                            664,206.00
James M. Smith            17,841,152.00           N/A                            591,399.00
Robert S. Tyrer           18,354,845.00           N/A                             77,706.00
Robert Walmsley           18,356,285.00           N/A                             76,266.00
</TABLE>

      (b) An approval to the EDO Corporation Incentive Compensation Plan was
approved. The votes cast for, against or withheld were as follows: 13,477,266
votes cast in favor, 2,253,896 votes cast against, 60,164 abstentions and
2,641,230 broker non-votes.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

3(a)(1) Restated Certificate of Incorporation of the Company dated May 10, 2004
(incorporated herein by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2004, Exhibit 3(a)(1)).

3(b) By-Laws of the Company as amended October 26, 2004 (incorporated herein
by reference to the Company's Quarterly Report on Form 10-Q for the quarterly
period ended September 25, 2004, Exhibit 3(b)).

                                       25
<PAGE>

10.1 EDO Corporation Incentive Compensation Plan + (incorporated herein by
reference from Appendix A to EDO Corporation's 2005 Proxy Statement on Schedule
14A filed with the Commission on March 21, 2005).

31.1* Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and
15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.

31.2* Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and
15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.

32* Certification of Chief Executive Officer and Chief Financial Officer
Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

*  Filed herewith.

+  Indicates management contract or compensatory contract or arrangement.

(b) REPORTS ON FORM 8-K

      The following report on Form 8-K was filed during the three months ended
June 25, 2005:

<TABLE>
<CAPTION>
DATE OF REPORT                            ITEMS REPORTED
--------------       ----------------------------------------------------------
<S>                  <C>
April 28, 2005       Earnings Release, dated April 28,2005 announcing financial
                     results for the quarter ended March 26, 2005

April 29, 2005       Earnings Release correction for the April 28,2005 8-K
                     filing.

 June 24, 2005       EDO Corporation received a letter contract signifying the
                     initiation of the Department of The Army to execute a
                     contractual modification to existing contract
                     W15PIT-04-C-L001.
</TABLE>

                                       26
<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, its principal financial officer, thereunto duly authorized.

                                           EDO CORPORATION (Registrant)

                                           By: /s/ FREDERIC B. BASSETT
                                               -----------------------
Dated: July 29, 2005                              Frederic B. Bassett
                                          Vice President  Finance,  Treasurer
                                              and Chief Financial Officer

                                       27