<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
     ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 24, 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)

<TABLE>
<S>                                            <C>
                NEW YORK                                   11-0707740
        (State of Incorporation)               (IRS Employer Identification No.)
</TABLE>

<TABLE>
<S>                                                        <C>
    60 EAST 42ND STREET, 42ND FLOOR,                         10165
           NEW YORK, NEW YORK                              (Zip Code)
(Address of principal executive offices)
</TABLE>

                                 (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 October 26, 2005
was 20,204,111 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 - September 24, 2005 (unaudited)
            and December 31, 2004........................................     3

            Consolidated Statements of Earnings - (unaudited)
            Three months ended September 24, 2005 and
            September 25, 2004...........................................     4

            Consolidated Statements of Earnings - (unaudited)
            Nine months ended September 24, 2005 and September 25, 2004..     5

            Consolidated Statements of Cash Flows - (unaudited)
            Nine months ended September 24, 2005 and September 25, 2004..     6

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

   ITEM 2   Management's Discussion and Analysis of Financial Condition
            and Results of Operations....................................    17

   ITEM 3   Quantitative and Qualitative Disclosures about Market Risk...    25

   ITEM 4   Controls and Procedures......................................    25

PART II OTHER INFORMATION

   ITEM 6   Exhibits.....................................................    26

SIGNATURES...............................................................    26
</TABLE>


                                        2

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                        EDO CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                   SEPTEMBER 24,   DECEMBER 31,
                                                                                        2005           2004
                                                                                   -------------   ------------
                                                                                    (UNAUDITED)
                                                                                       (IN THOUSANDS, EXCEPT
                                                                                        SHARE AND PER SHARE
                                                                                             AMOUNTS)
<S>                                                                                <C>             <C>
                                     ASSETS
Current assets:
   Cash and cash equivalents....................................................      $ 48,388       $ 98,884
   Accounts receivable, net.....................................................       180,753        153,810
   Inventories..................................................................        64,558         52,867
   Deferred income tax asset, net...............................................         4,990          5,046
   Notes receivable, current                                                             7,175          7,202
   Prepayments and other........................................................         4,472          3,493
                                                                                      --------       --------
      Total current assets......................................................       310,336        321,302
                                                                                      --------       --------
Property, plant and equipment, net..............................................        47,002         34,830
Goodwill........................................................................       132,388         91,651
Other intangible assets, net....................................................        51,737         50,356
Deferred income tax asset, net..................................................        30,092         30,241
Other assets....................................................................        20,332         18,309
                                                                                      --------       --------
                                                                                      $591,887       $546,689
                                                                                      ========       ========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable.............................................................      $ 27,383       $ 32,406
   Accrued liabilities..........................................................        56,130         48,492
   Contract advances and deposits...............................................        31,233         13,696
                                                                                      --------       --------
      Total current liabilities.................................................       114,746         94,594
                                                                                      --------       --------
Income taxes payable                                                                     5,768          5,768
Long-term debt..................................................................       137,800        137,800
Post-retirement benefits obligations............................................        96,123         94,936
Environmental obligation........................................................         1,648          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,
      20,302,365 issued in 2005 and 20,112,243 issued in 2004...................        20,302         20,112
   Additional paid-in capital...................................................       166,172        158,548
   Retained earnings............................................................       113,217         96,004
   Accumulated other comprehensive loss, net of income tax benefit..............       (42,491)       (42,619)
   Treasury shares at cost (99,204 shares in 2005 and 94,585 shares in 2004)....        (1,625)        (1,449)
   Unearned Employee Stock Ownership Plan shares................................       (15,101)       (16,039)
   Deferred compensation under Long-Term Incentive Plan.........................        (4,462)        (2,408)
   Management group receivables.................................................          (210)          (221)
                                                                                      --------       --------
      Total shareholders' equity................................................       235,802        211,928
                                                                                      --------       --------
                                                                                      $591,887       $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
                                                         -----------------------------
                                                         SEPTEMBER 24,   SEPTEMBER 25,
                                                              2005            2004
                                                         -------------   -------------
                                                                  (UNAUDITED)
                                                           (IN THOUSANDS, EXCEPT PER
                                                                 SHARE AMOUNTS)

<S>                                                      <C>             <C>
NET SALES ............................................      $175,884        $129,875
                                                            --------        --------
COSTS AND EXPENSES
   Cost of sales .....................................       133,098          94,168
   Selling, general and administrative ...............        21,626          18,326
   Research and development ..........................         3,578           3,333
   Environmental cost provision, Deer Park facility ..           288              --
                                                            --------        --------
                                                             158,590         115,827
                                                            --------        --------
OPERATING EARNINGS ...................................        17,294          14,048

NON-OPERATING INCOME (EXPENSE)
   Interest income ...................................           407             337
   Interest expense ..................................        (2,408)         (2,304)
   Other, net ........................................           (18)           (126)
                                                            --------        --------
                                                              (2,019)         (2,093)
                                                            --------        --------
Earnings before income taxes .........................        15,275          11,955
Income tax expense ...................................        (5,434)         (5,081)
                                                            --------        --------
NET EARNINGS .........................................      $  9,841        $  6,874
                                                            ========        ========
NET EARNINGS PER COMMON SHARE:
   Basic .............................................      $   0.54        $   0.39
                                                            ========        ========
   Diluted ...........................................      $   0.48        $   0.35
                                                            ========        ========
Weighted-average common shares outstanding:
   Basic .............................................        18,136          17,737
                                                            ========        ========
   Diluted ...........................................        22,794          22,406
                                                            ========        ========

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 NINE MONTHS ENDED
                                                         ------------------------------
                                                          SEPTEMBER 24,   SEPTEMBER 25,
                                                               2005            2004
                                                          -------------   -------------
                                                                   (UNAUDITED)
                                                         (IN THOUSANDS, EXCEPT PER SHARE
                                                                     AMOUNTS)
<S>                                                      <C>              <C>
NET SALES ............................................       $448,504        $367,042
                                                             --------        --------

COSTS AND EXPENSES
   Cost of sales .....................................        336,512         270,090
   Selling, general and administrative ...............         61,928          57,237
   Research and development ..........................         11,990           7,649
   Environmental cost provision, Deer Park facility ..          1,538              --
                                                              -------         -------
                                                              411,968         334,976
                                                              -------         -------
OPERATING EARNINGS ...................................         36,536          32,066

NON-OPERATING INCOME (EXPENSE)
   Interest income ...................................          1,202             781
   Interest expense ..................................         (6,873)         (6,771)
   Other, net ........................................            (78)           (151)
                                                             --------         -------
                                                               (5,749)         (6,141)
                                                             --------         -------
Earnings before income taxes .........................         30,787          25,925
Income tax expense ...................................        (11,949)        (11,018)
                                                             --------         -------
NET EARNINGS .........................................       $ 18,838        $ 14,907
                                                             ========        ========

NET EARNINGS PER COMMON SHARE:
   Basic: ............................................       $   1.04        $   0.84
                                                             ========        ========
   Diluted: ..........................................       $   0.97        $   0.81
                                                             ========        ========

Weighted-average common shares outstanding:
   Basic .............................................         18,044          17,652
                                                             ========        ========
   Diluted ...........................................         22,725          22,328
                                                             ========        ========
Dividends declared per common share ..................       $   0.09        $   0.09
                                                             ========        ========
</TABLE>

           See accompanying Notes to Consolidated Financial Statements


                                        5

<PAGE>

                        EDO CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                 FOR THE NINE MONTHS ENDED
                                                               -----------------------------
                                                               SEPTEMBER 24,   SEPTEMBER 25,
                                                                    2005            2004
                                                               -------------   -------------
                                                                        (UNAUDITED)
                                                                       (IN THOUSANDS)
<S>                                                            <C>             <C>
OPERATING ACTIVITIES:
   Earnings from operations ................................      $ 18,838        $ 14,907
   Adjustments to earnings to arrive at cash provided by
      operations:
      Depreciation .........................................         7,238           8,073
      Amortization .........................................         4,319           4,254
      Bad debt expense .....................................           999             289
      Deferred tax provision (benefit) .....................            --             164
      Loss on disposal of property, plant and equipment ....             3              32
      Environmental cost provision, Deer Park facility .....         1,538              --
      Deferred compensation expense ........................         1,298             699
      Non-cash Employee Stock Ownership Plan compensation
         expense ...........................................         3,771           3,086
      Dividends on unallocated Employee Stock Ownership Plan
         shares ............................................           191             206
      Common shares issued for directors' fees .............           148             104
      Income tax benefit from stock options and Long-Term
        Incentive Plan .....................................           661             700
      Changes in operating assets and liabilities, excluding
         effects of acquisitions:
         Accounts receivable ...............................       (22,214)          2,716
         Inventories .......................................       (10,133)        (16,561)
         Prepayments and other assets ......................         3,614           3,185
         Accounts payable, accrued liabilities and other ...          (620)         (6,860)
         Contribution to defined benefit pension plan ......        (6,000)             --
         Contract advances and deposits ....................        17,108           5,353
                                                                  --------        --------
   Cash provided by operations .............................        20,759          20,347
                                                                  --------        --------
INVESTING ACTIVITIES:
   Purchase of plant and equipment .........................       (18,404)         (7,005)
   Payments received on notes receivable ...................           225             225
   Cash paid for acquisitions, net of cash acquired ........       (45,180)            301
                                                                  --------        --------
Cash used by investing activities ..........................       (63,359)         (6,479)
                                                                  --------        --------
FINANCING ACTIVITIES:
   Proceeds from exercise of stock options .................           839             991
   Proceeds from management group receivables ..............            11             128
   Repayments of acquired debt .............................        (6,931)             --
   Payment of common share cash dividends ..................        (1,815)         (1,794)
                                                                  --------        --------
Cash used by financing activities ..........................        (7,896)           (675)
                                                                  --------        --------
Net (decrease) increase in cash and cash equivalents .......       (50,496)         13,193
Cash and cash equivalents at beginning of year .............        98,884          86,632
                                                                  --------        --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD .................      $ 48,388        $ 99,825
                                                                  ========        ========
Supplemental disclosures:
   Cash paid for:
      Interest .............................................      $  3,617        $  3,617
                                                                  ========        ========
      Income taxes .........................................      $ 11,017        $ 10,092
                                                                  ========        ========
</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 NINE MONTHS ENDED
                                                          -----------------------------   -----------------------------
                                                          SEPTEMBER 24,   SEPTEMBER 25,   SEPTEMBER 24,   SEPTEMBER 25,
                                                               2005            2004            2005            2004
                                                          -------------   -------------   -------------   -------------
                                                                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                       <C>             <C>             <C>             <C>
Earnings:
   As reported ........................................      $9,841          $6,874          $18,838         $14,907
Deferred compensation expense, net of tax .............         255             175              766             412
   Stock based compensation expense based on fair value
      method, net of tax ..............................        (470)           (542)          (1,685)         (1,555)
                                                             ------          ------          -------         -------
   Pro forma ..........................................      $9,626          $6,507          $17,919         $13,764
                                                             ======          ======          =======         =======
Basic earnings per common share:
   As reported ........................................      $ 0.54          $ 0.39          $  1.04         $  0.84
   Pro forma ..........................................      $ 0.53          $ 0.37          $  0.99         $  0.78
Diluted earnings per common share:
   As reported ........................................      $ 0.48          $ 0.35          $  0.97         $  0.81
   Pro forma ..........................................      $ 0.47          $ 0.34          $  0.93         $  0.76
                                                             ======          ======          =======         =======
</TABLE>

     During the three months ended September 24, 2005, the Company issued 26,375
common shares for the exercise of stock options and no restricted common shares
for long-term incentive awards. For the nine months ended September 24, 2005,
the Company issued 81,372 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.


                                        7

<PAGE>

(3)  ACQUISITIONS

     On September 21, 2005 the Company acquired for cash all of the stock of
Fiber Innovations, Inc. a privately-held company located in Walpole,
Massachusetts. Fiber Innovations is a designer and manufacturer of fiber
reinforced composites. The acquisition is expected to strengthen and expand the
range of products that the Company offers. The purchase price was $12.4 million,
excluding transaction costs of approximately $0.1 million and the provision for
additional contingent consideration based on achievement of future performance
goals. 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 Engineered Materials segment.

     On May 2, 2005, the Company acquired for cash all of the units of EVI
Technology, LLC, a privately-held company ("EVI"). EVI is 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 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.

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

     The following table summarizes the allocation of the EVI purchase price to
the assets acquired and liabilities assumed at the date of acquisition.

<TABLE>
<CAPTION>
                                EVI
                             AT MAY 2,
                               2005
                             ---------
<S>                          <C>
Current assets ...........    $ 5,467
Plant and equipment ......        322
Customer contracts and
   relationships .........      5,200
Trade name ...............        500
Goodwill .................     31,319
Liabilities ..............     (9,449)
                              -------
Total purchase price .....    $33,359
                              =======
</TABLE>

     The allocation of the purchase price for EVI has been finalized. There are
outstanding amounts held in escrow which, when settled, may result in further
adjustments to goodwill. The allocation of the purchase price for Fiber
Innovations, Inc. is expected to be finalized in the fourth quarter of 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 nine months
ended September 24, 2005 are as follows:


                                        8

<PAGE>

<TABLE>
<CAPTION>
                                                                COMMUNI-
                                                                CATIONS
                                                               AND SPACE   ENGINEERED
                                                     DEFENSE    PRODUCTS    MATERIALS     TOTAL
                                                    --------   ---------   ----------   --------
                                                                   (IN THOUSANDS)
<S>                                                 <C>        <C>         <C>          <C>
Balance as of January 1, 2005 ...................   $ 89,990     $1,661      $   --     $ 91,651
Acquisition of EVI Technology ...................     31,319         --          --       31,319
Preliminary allocation of acquisition of Fiber
   Innovations ..................................         --         --       9,418        9,418
                                                    --------     ------      ------     --------
Balance as of September 24, 2005 ................   $121,309     $1,661      $9,418     $132,388
                                                    ========     ======      ======     ========
</TABLE>

Summarized below are intangible assets subject to amortization.

<TABLE>
<CAPTION>
                                                                   SEPTEMBER 24,   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/EVI ...............................       44,398          39,198     10-20 years
Trade name related to the acquisitions of
   AERA/Darlington/Emblem/EVI ..................................        2,069           1,569     5-10 years
Other intangible assets related to the acquisition of Condor ...          916             916     2 years
                                                                     --------        --------
                                                                       67,504          61,804
Less accumulated amortization ..................................      (15,767)        (11,448)
                                                                     --------        --------
                                                                     $ 51,737        $ 50,356
                                                                     ========        ========
</TABLE>

     The amortization expense for the three months ended September 24, 2005 and
September 25, 2004 amounted to $1.7 million and $1.4 million, respectively. The
amortization expense for the nine months ended September 24, 2005 and September
25, 2004 amounted to $4.3 million and $4.2 million, respectively. Total
remaining amortization expense for 2005, 2006, 2007, 2008, 2009 and thereafter
related to these intangible assets is estimated to be $1.6 million, $6.2
million, $6.1 million, $5.4 million, $5.4 million and $27.0 million,
respectively.

     All intangible assets other than goodwill are subject to amortization.

(5)  INVENTORIES

     Inventories are summarized by major classification as follows:

<TABLE>
<CAPTION>
                                              SEPTEMBER 24,   DECEMBER 31,
                                                   2005           2004
                                              -------------   ------------
                                                     (IN THOUSANDS)
<S>                                           <C>             <C>
Raw material and supplies .................     $ 10,264        $10,461
Work-in-process ...........................       67,267         44,752
Finished goods ............................        1,415          2,043
   Less: Unliquidated progress payments ...      (14,388)        (4,389)
                                                --------        -------
                                                $ 64,558        $52,867
                                                ========        =======
</TABLE>

(6)  EARNINGS PER SHARE

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


                                        9

<PAGE>

<TABLE>
<CAPTION>
                                                          FOR THE THREE MONTHS ENDED      FOR THE NINE MONTHS ENDED
                                                        -----------------------------   -----------------------------
                                                        SEPTEMBER 24,   SEPTEMBER 25,   SEPTEMBER 24,   SEPTEMBER 25,
                                                             2005            2004            2005            2004
                                                        -------------   -------------   -------------   -------------
                                                                                (IN THOUSANDS)
<S>                                                     <C>             <C>             <C>             <C>
Numerator:
   Earnings from continuing operations for basic
      calculation ...................................      $ 9,841         $ 6,874         $18,838         $14,907
   Effect of dilutive securities:
      Convertible Notes .............................        1,067           1,040           3,201           3,120
                                                           -------         -------         -------         -------
   Numerator for diluted calculation ................      $10,908         $ 7,914         $22,039         $18,027
                                                           =======         =======         =======         =======

Denominator:
   Denominator for basic calculation ................       18,136          17,737          18,044          17,652
   Effect of dilutive securities:
      Stock options .................................          250             261             273             268
      Convertible Notes .............................        4,408           4,408           4,408           4,408
                                                           -------         -------         -------         -------
   Denominator for diluted calculation ..............       22,794          22,406          22,725          22,328
                                                           =======         =======         =======         =======
</TABLE>

     The assumed conversion of the Notes was dilutive for the 2005 and 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>
                                                         AS OF
                                             -----------------------------
                                             SEPTEMBER 24,   SEPTEMBER 25,
                                                  2005            2004
                                             -------------   -------------
<S>                                          <C>             <C>
5.25 % Convertible Subordinated Notes ....         --              --
Unexercised stock options ................         69             320
                                                  ---             ---
                                                   69             320
                                                  ===             ===
</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.

     Summarized below are the components of pension expense for each period
presented.

<TABLE>
<CAPTION>
                                                FOR THE THREE MONTHS ENDED      FOR THE NINE MONTHS ENDED
                                              -----------------------------   -----------------------------
                                              SEPTEMBER 24,   SEPTEMBER 25,   SEPTEMBER 24,   SEPTEMBER 25,
                                                   2005            2004            2005            2004
                                              -------------   -------------   -------------   -------------
                                                                      (IN THOUSANDS)
<S>                                           <C>             <C>             <C>             <C>
Interest cost .............................      $ 3,089         $ 3,037         $ 9,266         $ 9,111
Expected return on plan assets ............       (3,181)         (3,176)         (9,543)         (9,528)
Amortization of unrecognized net loss .....        1,162             689           3,486           2,067
                                                 -------         -------         -------         -------
                                                 $ 1,070         $   550         $ 3,209         $ 1,650
                                                 =======         =======         =======         =======
</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 September 24, 2005, accumulated other comprehensive loss included in
the accompanying consolidated balance sheet primarily represents additional
minimum liabilities on benefit plans. Comprehensive income for the three months
ended September 24, 2005 was $9.8 million compared to comprehensive income for
the three months ended September 25, 2004 of $6.9 million. Comprehensive income
for the nine months ended September 24, 2005 was $19.0 million compared to
comprehensive income from continuing operations for the nine months ended
September 25, 2004 of $15.0 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


                                       10

<PAGE>

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 NINE MONTHS ENDED
                                              -----------------------------   -----------------------------
                                              SEPTEMBER 24,   SEPTEMBER 25,   SEPTEMBER 24,   SEPTEMBER 25,
                                                   2005            2004           2005            2004
                                              -------------   -------------   -------------   -------------
                                                         (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                           <C>             <C>             <C>             <C>
Net Sales:
Defense....................................     $ 96,823        $ 98,781        $286,986        $286,248
Communications and Space Products..........       68,690          20,485         129,805          46,547
Engineered Materials.......................       10,371          10,609          31,713          34,247
                                                --------        --------        --------        --------
                                                $175,884        $129,875        $448,504        $367,042
                                                --------        --------        --------        --------
Operating earnings (loss):
Defense....................................     $  7,507        $  9,503        $ 22,848        $ 27,503
Communications and Space Products..........       10,706           2,633          15,539           1,639
Engineered Materials.......................         (631)          1,912            (313)          2,924
Environmental cost provision, Deer Park
facility ..................................         (288)             --          (1,538)             --
                                                --------        --------        --------        --------
                                                  17,294          14,048          36,536          32,066
Net interest expense.......................       (2,001)         (1,967)         (5,671)         (5,990)
Other, net.................................          (18)           (126)            (78)           (151)
                                                --------        --------        --------        --------
Earnings before income taxes...............     $ 15,275        $ 11,955        $ 30,787        $ 25,925
                                                --------        --------        --------        --------
</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
September 24, 2005 and December 31, 2004 and for the three and nine month
periods ended September 24, 2005 and September 25, 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.

On January 1, 2005 the Company merged into itself two wholly owned subsidiaries
resulting in three operating units of the former subsidiaries becoming operating
units of the Company.

EDO CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET
SEPTEMBER 24, 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                     $ 38,876        $  5,205       $ 4,307        $      --       $ 48,388
Accounts receivable, net                        61,153         114,448         5,152               --        180,753
Inventories                                     16,148          44,137         4,273               --         64,558
Deferred income tax asset, net                   4,958              32            --               --          4,990
Prepayments and other                            1,558           2,566           348               --          4,472
Notes receivable - current                       7,175
7,175
                                              --------        --------       -------        ---------       --------
Total current assets                           129,868         166,388        14,080               --        310,336

Investment in subsidiaries                     297,542              --            --         (297,542)            --
Property, plant and equipment, net              25,503          18,267         3,232               --         47,002
Goodwill                                            --         123,678         8,710               --        132,388
Other intangible assets, net                        --          39,869        11,868               --         51,737
Deferred income tax asset, net                  30,241            (149)           --               --         30,092
</TABLE>


                                       11

<PAGE>

<TABLE>
<S>                                        <C>               <C>          <C>              <C>            <C>
Other assets                                    19,433             899            --               --         20,332
                                              --------        --------       -------        ---------       --------
                                              $502,587        $348,952       $37,890        $(297,542)      $591,887
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities      $ 23,392        $ 56,233       $ 4,714        $    (815)      $ 83,524
Contract advances and deposits                   2,066          29,167            --               --         31,233
                                              --------        --------       -------        ---------       --------
Total current liabilities                       25,458          85,400         4,714             (815)       114,757

Long-term debt                                 137,800              --            --               --        137,800
Deferred income tax liabilities, net             5,599              --           158               --          5,757
Post retirement benefits obligations            96,123              --            --               --         96,123
Environmental obligation                         1,648              --            --               --          1,648
Intercompany accounts                               --         161,179        25,769         (186,948)            --
Shareholders' equity:
Preferred shares                                    --              --            --               --             --
Common shares                                   20,302              98            --              (98)        20,302
Additional paid-in capital                     166,172          25,221         6,418          (31,639)       166,172
Retained earnings                              113,217          81,232           862          (82,094)       113,217
Accumulated other comprehensive loss,
   net of income tax benefit                   (42,334)           (126)          (31)              --        (42,491)
Treasury shares                                 (1,625)         (4,052)           --            4,052         (1,625)
Unearned ESOP shares                           (15,101)             --            --               --        (15,101)

Management group receivables                      (210)             --            --               --           (210)
Deferred compensation under Long-Term
   Incentive Plan                               (4,462)             --            --               --         (4,462)
                                              --------        --------       -------        ---------       --------
Total shareholders' equity                     235,959         102,373         7,249         (109,779)       235,802
                                              --------        --------       -------        ---------       --------
                                              $502,587        $348,952       $37,890        $(297,542)      $591,887
                                              ========        ========       =======        =========       ========
</TABLE>

EDO CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF
EARNINGS FOR THE THREE MONTHS ENDED
SEPTEMBER 24, 2005

<TABLE>
<CAPTION>
                                           EDO Corporation
                                            Parent Company   Subsidiary
                                                 Only        Guarantors   Non-Guarantors   Eliminations   Consolidated
                                           ---------------   ----------   --------------   ------------   ------------
<S>                                        <C>               <C>          <C>              <C>            <C>
Net Sales                                     $ 45,238        $125,549        $7,849         $(2,752)       $175,884
Costs and expenses:
Cost of sales                                   37,270          93,426         5,154          (2,752)        133,098
Selling, general and administrative              3,696          16,138         1,792              --          21,626
Research and development                           679           2,686           213              --           3,578
Environmental cost provision, Deer Park
facility                                           288              --            --              --             288
                                              --------        --------        ------         -------        --------
                                                41,933         112,250         7,159          (2,752)        158,590
                                              --------        --------        ------         -------        --------
Operating earnings (loss)                        3,305          13,299           690              --          17,294
Non-operating income (expense)
Interest income                                    351              16            40              --             407
Interest expense                                (2,408)             --            --              --          (2,408)

Other, net                                          (6)             29           (41)             --             (18)
                                              --------        --------        ------         -------        --------
                                                (2,063)             45            (1)             --          (2,019)
Earnings (loss) before income taxes              1,242          13,344           689              --          15,275
Income tax (benefit) expense                      (628)          5,751           311              --           5,434
                                              --------        --------        ------         -------        --------
Earnings (loss) after income taxes               1,870           7,593           378              --           9,841
Equity in undistributed earnings of
   subsidiaries                                  7,971              --            --          (7,971)             --
                                              --------        --------        ------         -------        --------
Net earnings (loss)                           $  9,841        $  7,593        $  378         $(7,971)       $  9,841
                                              ========        ========        ======         =======        ========
</TABLE>


                                       12

<PAGE>

EDO CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF
EARNINGS FOR THE NINE MONTHS ENDED
SEPTEMBER 24, 2005

<TABLE>
<CAPTION>
                                          EDO Corporation
                                          Parent Company    Subsidiary      Non-
                                               Only         Guarantors   Guarantors   Eliminations   Consolidated
                                          ---------------   ----------   ----------   ------------   ------------
<S>                                       <C>               <C>          <C>          <C>            <C>
Net Sales                                    $132,178        $304,555     $22,054       $(10,283)      $448,504
Costs and expenses:
Cost of sales                                 108,874         222,573      15,348        (10,283)       336,512
Selling, general and administrative            11,230          45,892       4,806             --         61,928
Research and development                        3,701           7,547         742             --         11,990
Environmental cost provision, Deer Park
facility                                        1,538              --          --             --          1,538
                                             --------        --------     -------       --------       --------
                                              125,343         276,012      20,896        (10,283)       411,968
                                             --------        --------     -------       --------       --------
Operating earnings (loss)                       6,835          28,543       1,158             --         36,536

Non-operating income (expense)
Interest income                                 1,060              44          98             --          1,202
Interest expense                               (6,873)             --          --             --         (6,873)

Other, net                                          5              52        (135)            --            (78)
                                             --------        --------     -------       --------       --------
                                               (5,808)             96         (37)            --         (5,749)
(Loss) earnings before income taxes             1,027          28,639       1,121             --         30,787
Income tax (benefit) expense                     (495)         11,836         608             --         11,949
                                             --------        --------     -------       --------       --------
(Loss) earnings after income taxes              1,522          16,803         513             --         18,838
Equity in undistributed earnings of
subsidiaries                                   17,316              --          --        (17,316)            --
                                             --------        --------     -------       --------       --------
Net earnings                                 $ 18,838        $ 16,803     $   513       $(17,316)      $ 18,838
                                             ========        ========     =======       ========       ========
</TABLE>

EDO CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED
SEPTEMBER 24, 2005

<TABLE>
<CAPTION>
                                          EDO Corporation
                                          Parent Company    Subsidiary      Non-
                                               Only         Guarantors   Guarantors   Eliminations   Consolidated
                                          ---------------   ----------   ----------   ------------   ------------
<S>                                       <C>               <C>          <C>          <C>            <C>
OPERATING ACTIVITIES:
Earnings (loss) from continuing
operations                                   $ 18,838        $ 16,803     $   513       $(17,316)     $  18,838
Adjustments to earnings to arrive at
   cash provided (used) by continuing
   operations:
Depreciation                                    3,205           3,616         417             --          7,238
Amortization                                       --           3,568         751             --          4,319
Bad debt expense                                  244             755          --             --            999
Loss on sale of property, plant and
   equipment                                       --               3          --             --              3
Environmental cost provision, Deer Park
   facility                                     1,538              --          --             --          1,538
Deferred compensation expense                   1,298              --          --             --          1,298
Non-cash Employee Stock Ownership Plan
   compensation expense                         3,771              --          --             --          3,771
Dividends on unallocated Employee Stock
   Ownership Plan shares                          191              --          --             --            191
Common shares issued for directors'
   fees                                           148              --          --             --            148
Income tax benefit from stock options             661              --          --             --            661
Changes in operating assets and
   liabilities, excluding effects of
   acquisitions:
Equity in earnings of subsidiaries            (17,316)             --          --         17,316             --
Intercompany                                   22,997         (22,855)       (142)            --             --
Accounts receivable                            (6,730)        (15,064)       (420)            --        (22,214)
Inventories                                    (1,491)         (8,843)        201             --        (10,133)
Prepayments and other assets                    4,234            (608)        (12)            --          3,614
Accounts payable, accrued liabilities
   and other                                  (12,044)         12,674      (1,250)            --           (620)
Contribution to defined benefit pension
   plan                                        (6,000)             --          --             --         (6,000)
Contract advances and deposits                 (3,168)         20,276          --             --         17,108
                                             --------        --------     -------       --------      ---------
Cash provided  (used) by operations            10,376          10,325          58             --         20,759
                                             --------        --------     -------       --------      ---------

INVESTING ACTIVITIES:
Purchase of plant and equipment               (11,778)         (6,434)       (192)            --        (18,404)
Payments received on notes receivable             225              --          --             --            225
Cash paid for acquisitions, net of cash
   acquired                                   (45,180)             --          --             --        (45,180)
                                             --------        --------     -------       --------      ---------
Cash used by investing activities             (56,733)         (6,434)       (192)            --        (63,359)
                                             --------        --------     -------       --------      ---------

FINANCING ACTIVITIES:
Proceeds from exercise of stock options           839              --          --             --            839
Proceeds from management group
   receivables                                     11              --          --             --             11
Repayments of acquired debt                    (6,931)             --                                    (6,931)
Payment of common share cash dividends         (1,815)             --          --             --         (1,815)
                                             --------        --------     -------       --------      ---------
Cash (used) provided by financing
   activities                                  (7,896)             --          --             --         (7,896)
                                             --------        --------     -------       --------      ---------
Net increase (decrease) in cash and
   cash equivalents                           (54,253)          3,891        (134)            --        (50,496)
Cash and cash equivalents at beginning
   of year                                     93,129           1,314       4,441             --         98,884
                                             --------        --------     -------       --------      ---------
Cash and cash equivalents at end of
   period                                    $ 38,876        $  5,205     $ 4,307       $     --      $  48,388
                                             ========        ========     =======       ========      =========
</TABLE>


                                       13

<PAGE>

EDO CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                           EDO Corporation
                                           Parent Company    Subsidiary      Non-
                                                Only         Guarantors   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         33,736        4,474            --         52,867
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
SEPTEMBER 25, 2004

<TABLE>
<CAPTION>
                                      EDO Corporation
                                       Parent Company  Subsidiary
                                            Only       Guarantors  Non-Guarantors  Eliminations  Consolidated
                                      ---------------  ----------  --------------  ------------  ------------
<S>                                   <C>              <C>         <C>             <C>           <C>
Net Sales                                 $50,028        $75,928       $6,717         $(2,798)     $129,875
Costs and expenses:
Cost of sales                              38,408         53,049        5,509          (2,798)       94,168
Selling, general and administrative         4,326         13,059          941              --        18,326
Research and development                    1,229          1,679          425              --         3,333
                                          -------        -------       ------         -------      --------
                                           43,963         67,787        6,875          (2,798)      115,827
                                          -------        -------       ------         -------      --------
Operating earnings (loss)                   6,065          8,141         (158)             --        14,048

Non-operating income (expense)
Interest income                               302             16           19              --           337
Interest expense                           (2,304)            --           --              --        (2,304)
Other, net                                    (33)           (93)          --              --          (126)
                                          -------        -------       ------         -------      --------
                                           (2,035)           (77)          19              --        (2,093)
Earnings (loss) before income taxes         4,030          8,064         (139)             --        11,955
Income tax expense                          3,820          1,222           39              --         5,081
                                          -------        -------       ------         -------      --------
Earnings (loss) after income taxes            210          6,842         (178)             --         6,874
Equity in undistributed earnings of
   subsidiaries                             6,664             --           --          (6,664)           --
                                          -------        -------       ------         -------      --------
Net earnings (loss)                       $ 6,874        $ 6,842       $ (178)        $(6,664)     $  6,874
                                          =======        =======       ======         =======      ========
</TABLE>

EDO CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF
EARNINGS FOR THE NINE MONTHS ENDED
SEPTEMBER 25, 2004

<TABLE>
<CAPTION>
                                      EDO Corporation
                                       Parent Company  Subsidiary
                                            Only       Guarantors  Non-Guarantors  Eliminations  Consolidated
                                      ---------------  ----------  --------------  ------------  ------------
<S>                                   <C>              <C>         <C>             <C>           <C>
Net Sales                                $145,059       $210,128      $21,100        $ (9,245)     $367,042
Costs and expenses:
Cost of sales                             112,269        150,636       16,430          (9,245)      270,090
Selling, general and administrative        16,888         36,653        3,696              --        57,237
Research and development                    3,037          3,505        1,107              --         7,649
                                         --------       --------      -------        --------      --------
                                          132,194        190,794       21,233          (9,245)      334,976
                                         --------       --------      -------        --------      --------
Operating earnings (loss)                  12,865         19,334         (133)             --        32,066
Non-operating income (expense)
Interest income                               640             69           72              --           781
Interest expense                           (6,771)            --           --              --        (6,771)
Other, net                                   (128)           (23)          --              --          (151)
                                         --------       --------      -------        --------      --------
                                           (6,259)            46           72              --        (6,141)
Earnings (loss) before income taxes         6,606         19,380          (61)             --        25,925
Income tax expense                          3,029          7,776          213              --        11,018
                                         --------       --------      -------        --------      --------
Earnings (loss) after income taxes          3,577         11,604         (274)             --        14,907
Equity in undistributed earnings of
   subsidiaries                            11,330             --           --         (11,330)           --
                                         --------       --------      -------        --------      --------
Net earnings                             $ 14,907       $ 11,604      $  (274)       $(11,330)     $ 14,907
                                         ========       ========      =======        ========      ========
</TABLE>


                                       15

<PAGE>

EDO CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED
SEPTEMBER 25, 2004

<TABLE>
<CAPTION>
                                              EDO Corporation
                                               Parent Company  Subsidiary
                                                    Only       Guarantors  Non-Guarantors  Eliminations  Consolidated
                                              ---------------  ----------  --------------  ------------  ------------
<S>                                           <C>              <C>         <C>             <C>           <C>
OPERATING ACTIVITIES:
Earnings (loss) from continuing
   operations                                    $ 14,907       $ 11,604      $  (274)       $(11,330)     $ 14,907
Adjustments to earnings to arrive at cash
   provided (used) by continuing operations:
Depreciation                                        3,649          3,869          555              --         8,073
Amortization                                           --          3,500          754              --         4,254
Deferred tax benefit                                  246             --          (82)             --           164
Bad debt expense                                      190             99           --              --           289
Loss on sale of property, plant and
   equipment                                           25              7           --              --            32
Deferred compensation expense                         699             --           --              --           699
Non-cash Employee Stock Ownership Plan
   compensation expense                             3,086             --           --              --         3,086
Dividends on unallocated Employee Stock
   Ownership Plan shares                              206             --           --              --           206
Common shares issued for directors' fees              104             --           --              --           104
Income tax benefit from stock options                 700             --           --              --           700
Changes in operating assets and liabilities,
   excluding effects of acquisitions:
Equity in earnings of subsidiaries                (11,330)            --           --          11,330            --
Intercompany                                       17,223        (17,815)         592              --            --
Accounts receivable                                 4,685         (2,139)         170              --         2,716
Inventories                                           682        (16,475)        (768)             --       (16,561)
Prepayments and other assets                        1,585          1,430          170              --         3,185
Accounts payable, accrued liabilities
   and other                                      (12,964)         7,156       (1,052)             --        (6,860)
Contract advances and deposits                     (1,412)         6,765           --              --         5,353
                                                 --------       --------      -------        --------      --------
Cash provided (used) by operations                 22,281         (1,999)          65              --        20,347
                                                 --------       --------      -------        --------      --------

INVESTING ACTIVITIES:
Purchase of plant and equipment                    (2,897)        (3,944)        (164)             --        (7,005)
Payments received on notes receivable                 225             --           --              --           225
Cash received from Emblem Escrow
   settlement                                         301             --           --              --           301
                                                 --------       --------      -------        --------      --------
Cash used by investing activities                  (2,371)        (3,944)        (164)             --        (6,479)
                                                 --------       --------      -------        --------      --------

FINANCING ACTIVITIES:
Proceeds from exercise of stock options               991             --           --              --           991
Proceeds from management group
   receivables                                        128             --           --              --           128
Payment of common share cash dividends             (1,794)            --           --              --        (1,794)
                                                 --------       --------      -------        --------      --------
Cash (used) provided by financing
   activities                                        (675)            --           --              --          (675)
                                                 --------       --------      -------        --------      --------

Net increase (decrease) in cash and cash
   equivalents                                     19,235         (5,943)         (99)             --        13,193
Cash and cash equivalents at beginning
   of year                                         73,834          7,630        5,168              --        86,632
                                                 --------       --------      -------        --------      --------
Cash and cash equivalents at end of
   period                                        $ 93,069       $  1,687      $ 5,069        $     --      $ 99,825
                                                 ========       ========      =======        ========      ========
</TABLE>


                                       16

<PAGE>

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.

     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.


                                       17

<PAGE>

     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.

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.


                                       18

<PAGE>

RESULTS OF OPERATIONS

     The following information should be read in conjunction with the
Consolidated Financial Statements as of September 24, 2005.

THREE MONTHS ENDED SEPTEMBER 24, 2005 COMPARED WITH THREE MONTHS ENDED SEPTEMBER
25, 2004

     Net sales by segment were as follows:

<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED
                                       ---------------------   INCREASE/(DECREASE)
                                       SEPT. 24,   SEPT. 25,           FROM
SEGMENT                                   2005        2004         PRIOR PERIOD
-------                                ---------   ---------   -------------------
                                            (DOLLARS IN
                                             THOUSANDS)
<S>                                    <C>         <C>         <C>
Defense ............................    $ 96,823    $ 98,781           (2.0%)
Communications and Space Products ..      68,690      20,485          235.3%
Engineered Materials ...............      10,371      10,609           (2.2%)
                                        --------    --------          -----
Total ..............................    $175,884    $129,875           35.4%
                                        ========    ========          -----
</TABLE>

     In the Defense segment, the decrease in sales was attributed to lower sales
of professional services, reconnaissance and surveillance systems, electronic
warfare systems, and mine countermeasures systems. The decreases are
attributable primarily to timing of milestone achievements and deliveries, as
well as timing of cost input on programs where revenue is recognized on the
basis of percent complete. Another contributing factor was the loss of awards in
our professional services business. These decreases were partially offset by
increases in sales of C4 products and systems, including the Joint Enhanced Core
Communication Systems ("JECCS") program for the Marine Corps, which was awarded
last year. In addition, $7.6 million of sales were contributed from the
acquisition of EVI.

     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 for the remainder of this year. In the third quarter of 2005,
Warlock sales accounted for 30.2% of our total sales. In addition, there was an
increase in sales of antenna products in the three months ended September 24,
2005 compared to the three months ended September 25, 2004.

     In the Engineered Materials segment, sales for the third quarter were
slightly lower than sales in the prior year third quarter, due primarily to
increases in estimates-to-complete on several sonar array/depth sounder
programs, resulting in decreases to the percent complete and, therefore, a
decrease to sales of $1.1 million. A business unit in this segment located in
Baton Rouge, LA was not affected by the hurricanes that recently hit the Gulf
Coast.

     Operating earnings by segment were as follows:

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED
                                            ---------------------
                                            SEPT. 24,   SEPT. 25,
SEGMENT                                        2005        2004
-------                                     ---------   ---------
                                                 (DOLLARS IN
                                                  THOUSANDS)
<S>                                         <C>         <C>
Defense .................................    $ 7,507     $ 9,503
Communications and Space Products .......     10,706       2,633
Engineered Materials ....................       (631)      1,912
Environmental  cost  provision, Deer Park
   facility .............................       (288)         --
                                             -------     -------
Total ...................................    $17,294     $14,048
                                             =======     =======
</TABLE>

     Operating earnings for the three months ended September 24, 2005 were $17.3
million or 9.8% of net sales. This compares to operating earnings for the three
months ended September 25, 2004 of $14.0 million or 10.8% of net sales. During
the three months ended September 24, 2005, the Company incurred a charge of $0.3
million to reflect an increase in estimated costs for environmental cleanup
efforts relating to the Company's former Deer Park facility. This charge is in
addition to the $1.25 million recorded last quarter. Operating earnings this
quarter were also impacted by program-related items discussed in further detail
below.

     The Defense segment's operating earnings for the three months ended
September 24, 2005 were $7.5 million or 7.8% of this segment's net sales
compared to $9.5 million or 9.6% of this segment's net sales for the three
months ended September 25, 2004. Operating earnings for the three months ended
September 24, 2005 were negatively impacted by additional cost growth on an
undersea warfare systems program amounting to $1.0 million. System testing and
software modifications continue. We believe we have accounted for all costs for
the modification and future re-testing in our estimate-to-complete. The next
significant tests for the undersea warfare systems program are currently
scheduled to occur later this year/early next year. There was also cost growth
on an


                                       19

<PAGE>

electronic warfare systems program. In addition, the lower sales level and the
increases in pension expense and intangible asset amortization, as shown in the
table below, impacted this segment's earnings. Performance improvements on other
programs partially offset these negative impacts to earnings.

     The Communications and Space Products segment operating earnings for the
three months ended September 24, 2005 were $10.7 million or 15.6% of this
segment's net sales compared to $2.6 million or 12.9% of this segment's net
sales for the three months ended September 25, 2004. The increase in operating
earnings is related primarily to sales of the Warlock force protection systems
to the U.S. Army. This program will continue to be a significant contributor to
operating earnings in this segment for the remainder of the year.

     The Engineered Materials segment experienced an operating loss for the
three months ended September 24, 2005 of $0.6 million or 6.1% of this segment's
net sales compared to operating earnings of $1.9 million or 18.0% of this
segment's net sales for the three months ended September 25, 2004. In the third
quarter of 2005, there was a negative impact of $1.4 million which related to
the aforementioned cost growth on several sonar array/ depth sounder programs.
Operating earnings for the three months ended September 25, 2004 were positively
affected by a net $0.8 million, resulting from $1.1 million received in a
settlement of a legal matter, partially offset by related legal fees.

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

<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED
                                   ---------------------
                                   SEPT. 24,   SEPT. 25,
                                      2005        2004
                                   ---------   ---------
                                        (DOLLARS IN
                                         THOUSANDS)
<S>                                <C>         <C>
Pension ........................     $1,070      $  550
ESOP Compensation expense ......     $1,221      $1,058
Intangible asset amortization ..     $1,698      $1,366
</TABLE>

The increased 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
September 24, 2005 is attributable to our higher average stock price compared to
the three months ended September 25, 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, 2003, and 2005 and affects primarily the Defense
segment.

     Selling, general and administrative expenses for the three months ended
September 24, 2005 of $21.6 million decreased as a percent of net sales to 12.3%
from 14.1% for the three months ended September 25, 2004. The increase in sales
is the primary driver of the decrease.

     Research and development expense for the three months ended September 24,
2005 increased to $3.6 million or 2.0% of net sales from $3.3 million or 2.6% of
net sales for the three months ended September 25, 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
September 24, 2005 remained virtually unchanged at $2.0 million compared to the
three months ended September 25, 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 35.6% for the three month
period ended September 24, 2005 and 42.5% for the three month period ended
September 25, 2004. In the third quarter of 2005, an income tax benefit of $0.8
million was recorded resulting from the reversal of income tax contingencies
which were determined to no longer be needed.

     For the three months ended September 24, 2005, net earnings were $9.8
million or $0.48 per diluted common share on 22.8 million diluted shares
compared to net earnings of $6.9 million or $0.35 per diluted common share on
22.4 million diluted shares for the three months ended September 25, 2004. The
convertible notes had a dilutive effect in the third quarter of 2005 and in the
2004 comparable period.


                                       20

<PAGE>

NINE MONTHS ENDED SEPTEMBER 24, 2005 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
25, 2004

     Net sales by segment were as follows:

<TABLE>
<CAPTION>
                                              NINE MONTHS ENDED
                                           ----------------------   INCREASE/(DECREASE)
                                            SEPT. 24,   SEPT. 25,           FROM
SEGMENT                                        2005        2004         PRIOR PERIOD
-------                                     ---------   ---------   -------------------
                                           (DOLLARS IN THOUSANDS)
<S>                                        <C>          <C>         <C>
Defense.................................     $286,986    $286,248           0.0%
Communications and Space Products.......      129,805      46,547         178.9%
Engineered Materials....................       31,713      34,247          (7.4%)
                                             --------    --------         -----
Total...................................     $448,504    $367,042          22.2%
                                             ========    ========         =====
</TABLE>

     In the Defense segment, there were increases in sales of C4 products and
systems, including the Joint Enhanced Core Communication Systems ("JECCS") for
the Marine Corps. There was also an $11.9 million contribution to sales from the
acquisition of EVI. These increases were offset by decreases in sales of
professional services, electronic warfare systems, mine countermeasures systems
and aircraft armament systems. These decreases were primarily attributable to
lower levels and losses of awards in our professional services business. With
respect to the decreases in sales of electronic warfare systems, factors
included completions of certain programs as well as timing of revenue events.
For mine countermeasures and aircraft armament systems, the decrease is
attributable to timing of cost input as well as some schedule shifts which are
expected to generate sales in the upcoming quarter.

     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 for the remainder of this year. In the nine months ended September 24,
2005, Warlock sales accounted for 19.8% of our total sales. In addition, there
were increased sales of antenna products in the first nine 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 earlier part 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>
                                              NINE MONTHS ENDED
                                            ---------------------
                                            SEPT. 24,   SEPT. 25,
SEGMENT                                        2005        2004
-------                                     ---------   ---------
                                            (DOLLARS IN THOUSANDS)
<S>                                         <C>         <C>
Defense.................................     $22,848     $27,503
Communications and Space Products.......      15,539       1,639
Engineered Materials....................        (313)      2,924
Environmental cost provision, Deer Park
   facility..............................     (1,538)         --
                                             -------     -------
Total....................................    $36,536     $32,066
                                             =======     =======
</TABLE>

     Operating earnings for the nine months ended September 24, 2005 were $36.5
million or 8.1% of net sales. This compares to operating earnings for the nine
months ended September 25, 2004 of $32.1 million or 8.7% of net sales. During
the nine months ended September 24, 2005, the Company incurred a charge of $1.5
million to reserve for environmental cleanup efforts relating to the Company's
former Deer Park facility. Operating earnings for the nine months ended
September 24, 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 nine months ended
September 24, 2005 were $22.8 million or 8.0% of this segment's net sales
compared to $27.5 million or 9.6% of this segment's net sales for the nine
months ended September 25, 2004. Operating earnings in the first nine months of
2005 were negatively affected by cost growth totaling $2.8 million on the
aforementioned undersea warfare systems program. Ongoing system testing
identified various performance issues that required design and software
modifications, which are continuing. We believe we have accounted for all costs
for the modifications and future re-testing in our estimate-to-complete. The
next significant tests for the undersea warfare systems program are currently
scheduled to occur later this year/early next year. In the first nine months of
2004, there was a $2.3 million negative impact to earnings on the same program.

     In addition, operating earnings in the Defense segment for the nine months
ended September 24, 2005 were significantly impacted by the decreased sales in
our services business as well as cost growth on an electronic warfare systems
program. These negative impacts were partially offset by an adjustment of $1.6
million of the estimated costs to complete on an aircraft armament program.


                                       21

<PAGE>

     In the first nine months of 2004 there was a positive impact to operating
earnings in the Defense segment 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 2004. This increase in earnings was
partially offset by a $1.6 million negative impact to operating earnings
resulting from an increase in the estimate-to-complete on an aircraft armament
program.

     The Communications and Space Products segment operating earnings for the
nine months ended September 24, 2005 were $15.5 million or 12.0% of this
segment's net sales compared to $1.6 million or 3.5% of this segment's net sales
for the nine months ended September 25, 2004. This is primarily due to the
increased sales of the Warlock force protection systems. In addition, the
results for the first nine months of 2004 included losses relating to
adjustments to estimates-to-complete on development and start-up production
phases on certain interference cancellation programs resulting from issues
discovered during testing. Furthermore, there was a loss in the antenna product
line in the first nine months of 2004 due to production inefficiencies resulting
in inventory adjustments as well as increases in estimates-to-complete.

     The Engineered Materials segment experienced an operating loss for the nine
months ended September 24, 2005 of $0.3 million or 1.0% of this segment's net
sales compared to operating earnings of $2.9 million or 8.5% of this segment's
net sales for the nine months ended September 25, 2004. The decrease in
operating earnings is due to the aforementioned cost growth on several sonar
array and depth sounder programs. In addition, there were write-offs of
receivables of $0.4 million in the fiber composite business. Furthermore, 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 charge
to earnings. In the first nine months of 2004, there was a $0.8 million charge
on the same program. Also in the nine months ended September 25, 2004, this
segment's operating earnings were positively affected by a net $0.4 million,
resulting from $1.1 million received in a settlement of a legal matter,
partially offset by related legal fees.

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

<TABLE>
<CAPTION>
                                               NINE MONTHS ENDED
                                            ----------------------
                                             SEPT. 24,   SEPT 25,
                                                2005       2004
                                             ---------   --------
                                            (DOLLARS IN THOUSANDS)
<S>                                          <C>         <C>
Pension..................................     $3,209     $1,650
ESOP Compensation expense................     $3,771     $3,086
Intangible asset amortization............     $4,319     $4,237
</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 nine months of 2005
is attributable to our higher average stock price compared to the first nine
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, 2003, and
2005 and affects primarily the Defense segment.

     Selling, general and administrative expenses for the nine months ended
September 24, 2005 of $61.9 million decreased as a percent of net sales to 13.8%
from 15.6% for the nine months ended September 25, 2004. The decrease is
attributable primarily to the increase in sales.

     Research and development expense for the nine months ended September 24,
2005 increased to $12.0 million or 2.7% of net sales from $7.6 million or 2.1%
of net sales for the nine months ended September 25, 2004. This increase was
attributable to increased spending on force protection systems and composite
munitions.

     Interest expense, net of interest income, for the nine months ended
September 24, 2005 decreased to $5.7 million from $6.0 million for the nine
months ended September 25, 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 38.8% for the nine month
period ended September 24, 2005 and 42.5% for the nine month period ended
September 25, 2004. In the nine months ended September 24, 2005, an income tax
benefit of $0.8 million was recorded resulting from the reversal of income tax
reserves which were determined during the third quarter to no longer be needed.


                                       22

<PAGE>

     For the nine months ended September 24, 2005, net earnings were $18.8
million or $0.97 per diluted common share on 22.7 million diluted shares
compared to net earnings of $14.9 million or $0.81 per diluted common share on
22.3 million diluted shares for the nine months ended September 25, 2004. The
convertible notes were dilutive for the nine months ended September 24, 2005 and
for the nine months ended September 25, 2004.

LIQUIDITY AND CAPITAL RESOURCES

BALANCE SHEET

     Our cash and cash equivalents decreased 51.0% to $48.4 million at September
24, 2005 from $98.9 million at December 31, 2004. This decrease was due
primarily to $45.2 million for acquisitions, $18.4 million used for the purchase
of capital equipment, $6.9 million to repay acquired debt and $1.8 million for
the payment of common share dividends. These decreases were partially offset by
$20.8 million provided by operations.

     Accounts receivable increased 17.5% to $180.8 million at September 24, 2005
from $153.8 million at December 31, 2004 due in part to timing of collections of
billed receivables and increased sales. There was also growth in billed
receivables resulting from deliveries of Warlock force protection systems. At
September 24, 2005 approximately 82% of billed receivables are in the under-60
days aging category.

     Inventories increased 22.2% to $64.6 million at September 24, 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 continue to increase in the fourth quarter of
the year.

The notes receivable of $7.2 million at September 24, 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 of $7.0 million was due no later than October 9, 2005. While this
has not yet been collected, we see no reason to change its current
classification status. 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. We expect to have a new credit facility in place prior to the
expiration of the current credit facility.

     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 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 September 24, 2005, LIBOR was approximately 4.15% 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
September 24, 2005 and December 31, 2004. Letters of credit outstanding at
September 24, 2005 pertaining to the credit facility were $23.9 million,
resulting in $101.1 million available 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 September
24, 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")


                                       23

<PAGE>

     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 $3.3 million at September 24, 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 September 24, 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
September 24, 2005, we have included the following table. We are obligated under
building and equipment leases expiring between 2004 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
contributions may differ from amounts presented below 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 ......................    113.2     4.0    13.7     13.0    12.5    12.3      57.7
Letters of credit .....................     23.9    12.9     9.0      2.0      --      --        --
Pension contributions .................     23.0      --     6.0      6.0     6.0     5.0
Advance payment & performance bonds ...      1.9      --     0.2       --      --     1.7        --
                                          ------   -----   -----   ------   -----   -----     -----
Total .................................   $299.8   $16.9   $28.9   $158.8   $18.5   $19.0     $57.7
                                          ======   =====   =====   ======   =====   =====     =====
</TABLE>

     In September 2005, we contributed $6.0 million to the defined benefit
pension plan. 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.

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.

     Sales of Warlock force protection systems represented 30.2% of net sales
and 19.8% of net sales for the three and nine months ended September 24, 2005,
respectively.

BACKLOG

     The funded backlog of unfilled orders at September 24, 2005 increased to
$533.9 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.


                                       24

<PAGE>

"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

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.


                                       25

<PAGE>

                           PART II - OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

<TABLE>
<S>        <C>
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.
</TABLE>

*    Filed herewith.

(B) REPORTS ON FORM 8-K

The following report on Form 8-K was filed during the three months ended
September 24, 2005:

<TABLE>
<CAPTION>
DATE OF REPORT                         ITEMS REPORTED
--------------   ---------------------------------------------------------
<S>              <C>
 July 28, 2005   Earnings Release dated July 28, 2005 announcing financial
                 results for the quarter ended June 25, 2005.
</TABLE>

                                   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)


Dated: October 28, 2005                 By: /s/ FREDERIC B. BASSETT
                                            ------------------------------------
                                            Frederic B. Bassett
                                            Vice President Finance,
                                            Treasurer and Chief Financial
                                            Officer


                                       26