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

                                  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 March 31, 2007

                                     or

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

        For the transition period from _______________ to _______________

                          Commission file number 1-3985

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

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

                New York                                   11-0707740
        (State of Incorporation)               (IRS Employer Identification No.)
    60 East 42nd Street, 42nd Floor,                         10165
           New York, New York                              (Zip Code)
(Address of principal executive offices)

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


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

    Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer (as defined in Rule 12b-2 of the Act), or a non-accelerated
filer.

Large accelerated filer |_|    Accelerated filer |X|   Non-accelerated filer |_|

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). |_| Yes |X| No

    The number of shares of EDO common stock outstanding as of May 2, 2007 was
21,192,769 shares, with a par value $1 per share.
================================================================================

<PAGE>

<TABLE>
<S>                                                                                                                <C>
                                               EDO CORPORATION

                                              TABLE OF CONTENTS


                                                                                                                 Page
PART I                Financial Information

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

                      Consolidated Balance Sheets -
                       March 31, 2007 (unaudited) and December 31, 2006 ...................................         3

                      Consolidated Statements of Earnings -
                       Three Months Ended March 31, 2007 and March 25, 2006 (unaudited)....................         4

                      Consolidated Statements of Cash Flows -
                       Three Months Ended March 31, 2007 and March 25, 2006 (unaudited)....................         5

                      Notes to Consolidated Financial Statements (unaudited)...............................         6

            ITEM 2    Management's Discussion and Analysis of Financial Condition and Results of
                       Operations..........................................................................        14

            ITEM 3    Quantitative and Qualitative Disclosures about Market Risk...........................        20

            ITEM 4    Controls and Procedures..............................................................        20

PART II               Other Information

            ITEM 1A   Risk Factors.........................................................................        20

            ITEM 4    Submission of Matters To a Vote of Security Holders..................................        20

            ITEM 6    Exhibits.............................................................................        20

Signature Page                 ............................................................................        21

</TABLE>

                                       2
<PAGE>

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

Item 1.  Financial Statements

                        EDO CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                                                                 MARCH 31,     DECEMBER 31,
                                                                                    2007           2006
                                                                                ------------   ------------
                                                                                (UNAUDITED)
                                                                                      (IN THOUSANDS)

                                           ASSETS
Current assets:
  Cash and cash equivalents                                                     $         -    $    25,322
  Accounts receivable, net                                                          270,694        265,298
  Inventories                                                                        66,161         56,255
  Deferred income tax asset, net                                                     12,549         12,160
  Prepayments and other                                                              15,542         13,682
                                                                                ------------   ------------
     Total current assets                                                           364,946        372,717
                                                                                ------------   ------------
Property, plant and equipment, net                                                   58,325         59,109
Goodwill                                                                            394,647        385,926
Other intangible assets, net                                                         91,611        103,776
Deferred income tax asset, net                                                       17,890          8,291
Other assets                                                                         14,981         20,003
                                                                                ------------   ------------
                                                                                $   942,400    $   949,822
                                                                                ============   ============

                    LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                              $    52,516    $    63,334
  Accrued liabilities                                                                75,767         78,780
  Contract advances and deposits                                                     47,511         44,323
  Postretirement benefits obligation, short-term                                      2,033          1,794
  Short-term borrowings under revolver                                              161,500        180,000
  Notes payable                                                                       7,766          7,766
                                                                                ------------   ------------
     Total current liabilities                                                      347,093        375,997
                                                                                ------------   ------------
Income taxes payable                                                                 19,044          4,154
Notes payable, long-term                                                             14,533         14,533
Long-term debt                                                                      201,250        201,250
Postretirement benefits obligation, long-term                                        77,220         77,734
Environmental obligation                                                              1,195          1,198
Other long-term liabilities                                                              37             40
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,
    21,302,886 issued in 2007 and 21,177,072 issued in 2006                          21,303         21,177
  Additional paid-in capital                                                        180,309        177,117
  Retained earnings                                                                 132,392        129,444
  Accumulated other comprehensive loss, net of income tax benefit ($25,268 in
    2007 and $25,814 in 2006)                                                       (36,535)       (37,319)
  Treasury shares at cost (121,163 shares in 2007 and 111,499 shares in 2006)        (2,216)        (1,966)
  Unearned Employee Stock Ownership Plan shares                                     (13,225)       (13,537)
                                                                                ------------   ------------
     Total shareholders' equity                                                     282,028        274,916
                                                                                ------------   ------------
                                                                                $   942,400    $   949,822
                                                                                ============   ============

          See accompanying Notes to Consolidated Financial Statements.
</TABLE>

                                       3

<PAGE>

                        EDO CORPORATION AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF EARNINGS


                                              FOR THE THREE MONTHS ENDED
                                             ---------------------------
                                               MARCH 31,      MARCH 25,
                                                 2007           2006
                                             ---------------------------
                                                     (UNAUDITED)
                                                   (IN THOUSANDS,
                                              EXCEPT PER SHARE AMOUNTS)

 Net Sales                                   $   255,416    $   119,709
                                             ------------   ------------

 Costs and Expenses
  Cost of sales                                  201,030         91,244
  Selling, general and administrative             33,713         25,358
  Acquisition-related costs                        2,152             --
  Research and development                         2,093          3,206
                                             ------------   ------------
                                                 238,988        119,808
                                             ------------   ------------
 Operating Earnings (Loss)                        16,428            (99)

 Non-Operating Income (Expense)
  Interest income                                    186          1,021
  Interest expense                                (6,176)        (2,424)
  Other, net                                         (39)          (146)
                                             ------------   ------------
                                                  (6,029)        (1,549)
                                             ------------   ------------

Earnings (loss) before income taxes               10,399         (1,648)
Income tax (expense) benefit                      (4,411)           709
                                             ------------   ------------
Net earnings (loss)                          $     5,988    $      (939)
                                             ============   ============
Net earnings (loss) per Common Share:
  Basic                                      $      0.32    $     (0.05)
                                             ============   ============
  Diluted                                    $      0.29    $     (0.05)
                                             ============   ============

Weighted-average common shares outstanding:
 Basic                                            18,538         18,012
                                             ============   ============
 Diluted                                          24,894         18,012
                                             ============   ============

 Dividends declared per common share         $      0.03    $      0.03
                                             ============   ============


          See accompanying Notes to Consolidated Financial Statements.

                                       4

<PAGE>

<TABLE>
<S>                                                                   <C>               <C>
                        EDO CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                          FOR THE THREE MONTHS ENDED
                                                                      ---------------------------------
                                                                          MARCH 31,         MARCH 25,
                                                                            2007              2006
                                                                      ---------------------------------
                                                                                 (UNAUDITED)
                                                                               (IN THOUSANDS)
Operating Activities:
  Earnings (loss) from operations                                     $        5,988    $         (939)
  Adjustments to earnings (loss) to arrive at cash provided by
     operations:
     Depreciation                                                              3,509             2,778
     Amortization                                                              2,565             1,614
     Bad debt recovery                                                           (42)              (66)
     Loss on disposal of property, plant and equipment                            67                29
     Long-Term Incentive Plan compensation expense                             1,741               972
     Stock option compensation expense                                           177               865
     Employee Stock Ownership Plan compensation expense                        1,010             1,186
     Dividends on unallocated Employee Stock Ownership Plan shares                53                58
     Common shares issued for directors' fees                                     53                55
     Changes in operating assets and liabilities, excluding
       effects of acquisitions:
       Accounts receivable                                                    (5,354)           21,216
       Inventories                                                            (9,906)          (14,450)
       Prepayments and other assets                                            3,161            (1,692)
       Accounts payable, accrued liabilities and other                          (843)          (13,544)
       Contract advances and deposits                                          3,188            15,935
                                                                      ---------------   ---------------
Cash provided by operations                                                    5,367            14,017
                                                                      ---------------   ---------------

Investing Activities:
  Settlement of purchase price on acquisitions                                (9,327)             (353)
  Purchase of plant and equipment                                             (2,792)           (4,971)
  Payments received on notes receivable                                           --               100
                                                                      ---------------   ---------------
Cash used by investing activities                                            (12,119)           (5,224)
                                                                      ---------------   ---------------

Financing Activities:
  Short-term borrowings under revolver                                         6,000                --
  Repayments of revolving debt                                               (24,500)               --
  Proceeds from exercise of stock options                                        315               258
  Excess income tax benefit from stock options and Long-Term
       Incentive Plan                                                            250               174
  Proceeds from management group receivables                                      --               140
  Payment of common share cash dividends                                        (635)             (609)
                                                                      ---------------   ---------------
Cash used by financing activities                                            (18,570)              (37)
                                                                      ---------------   ---------------
Net (decrease) increase in cash and cash equivalents                         (25,322)            8,756
Cash and cash equivalents at beginning of year                                25,322           108,731
                                                                      ---------------   ---------------
Cash and cash equivalents at end of period                            $           --    $      117,487
                                                                      ===============   ===============

Supplemental disclosures:
  Cash paid for:
     Interest                                                         $        4,110    $           --
                                                                      ===============   ===============
     Income taxes                                                     $          523    $        6,109
                                                                      ===============   ===============


          See accompanying Notes to Consolidated Financial Statements.

</TABLE>

                                       5

<PAGE>

                        EDO CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(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, 2006 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.

    Certain reclassifications have been made to prior year's presentations to
conform to current year's presentations.

(2) ACQUISITIONS

    On September 15, 2006, the Company acquired all of the stock of Impact
Science and Technology Inc., (IST) for $123.7 million, consisting of a cash
payment of $106.4 million and a $17.3 million promissory note to be paid over
three years. We also incurred $0.6 million of transaction costs. In addition,
there was a subsequent determination of final purchase price, resulting in a
$9.2 million accrual at December 31, 2006 and payment in January 2007. IST is a
privately-held company providing signals intelligence (SIGINT) systems and
analysis support to the intelligence community, and advanced countermeasures and
electronic-attack systems to the U.S. Department of Defense (DoD) and other
government agencies. The acquisition strengthened our position in specialized
communication products and expanded the Company's business in the intelligence
community. The acquired company became part of the Company's Electronic Systems
and Communications segment. The excess of the purchase price over the net assets
acquired related to IST is not deductible for income tax purposes. During the
first quarter of 2007, the Company finalized its valuation of the purchase price
and acquired intangible assets. The final allocation did not change the
amortization materially from the amounts reported as of December 31, 2006.

    On September 6, 2006, the Company acquired all of the stock of CAS Inc.,
(CAS) for $178.1 million, consisting of a cash payment of $173.2 million and
214,574 EDO common shares valued at $4.9 million. We also incurred $1.6 million
in transaction costs. CAS is a privately-held company providing engineering
services, logistics support, and weapon-systems analysis to the DoD. This
acquisition has strengthened and expanded our range of professional and
engineering services. The acquired company became part of the Company's
Engineered Systems and Services segment. The excess of the purchase price over
the net assets acquired recorded as goodwill and other intangible assets in the
amount of $168.5 million are deductible for income tax purposes over 15 years.
During the first quarter of 2007, the Company finalized its valuation of the
purchase price and acquired intangible assets. The final allocation did not
change the amortization materially from the amounts reported as of December 31,
2006.

(3) STOCK-BASED COMPENSATION

    The Company has granted non-qualified stock options and restricted shares
under the 2002 Long-Term Incentive Plan (LTIP), the 2002 Non-Employee Director
Stock Option Plan (NEDSOP) and in connection with the CAS and IST acquisitions.
These plans are described in Note 12 to the consolidated financial statements
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2006.

    The Company records stock-based compensation in accordance with the
provisions of Statement of Financial Accounting Standards No. 123 (Revised
10/04), "Share-Based Payment" ("FAS 123R"). During the quarter, the Company
granted 15,000 options to Directors that upon grant were fully vested. The
stock-based compensation expense related to stock option plans included in
operating expenses for the three months ended March 31, 2007 and March 25, 2006
was $0.2 million and $0.9 million, respectively. Tax benefits related to this
expense for the three months ended March 31, 2007 and March 25, 2006 were $0.1
million and $0.4 million, respectively, resulting in a reduction in net income
of $0.1 million for the three months ended March 31, 2007 and $0.5 million for
the three months ended March 25, 2006.

                                       6

<PAGE>

    The significant weighted average assumptions relating to the valuation of
the Company's stock options using the Black-Scholes option pricing model for the
three months ended March 31, 2007: expected dividend yield of 1%, risk free
interest rate of 4.69%, expected volatility of 34.93% and an expected option
life of 7 years.

    As of March 31, 2007, there was no unrecognized future compensation expense
related to non-vested stock options.

    During the quarter ended March 31, 2007, the Company issued 240,000
stock-settled appreciation right options to select key employees. Stock based
compensation expense recognized for stock-settled appreciation rights (SSAR)
awards was $0.2 million for the three months ended March 31, 2007. There were no
SSARs granted as of March 25, 2006.

    The significant weighted average assumptions relating to the valuation of
the Company's SSARs using the Black-Scholes option pricing model for the three
months ended March 31, 2007: expected dividend yield of 1%, risk free interest
rate of 4.60%, expected volatility of 34.80% and an expected option life of 5
years.

    As of March 31, 2007, there was $2.3 million of unrecognized future
compensation expense related to non-vested SSARs not yet recognized in the
consolidated statement of earnings.

    Stock based compensation expense recognized for restricted/performance share
awards were $1.6 million and $1.0 million for the three months ended March 31,
2007 and March 25, 2006, respectively. The unrecognized compensation cost
related to the unvested restricted shares at March 31, 2007 is approximately
$13.3 million and will be recognized over a weighted-average period of 2.4
years.

(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 other intangible assets with indefinite useful
lives and requires that those assets be reviewed for impairment at least
annually. Other 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 during the three
months ended March 31, 2007 were as follows:

<TABLE>
<S>                                                                 <C>            <C>             <C>
                                                                     ENGINEERED
                                                                       SYSTEMS       ELECTRONIC
                                                                         AND        SYSTEMS AND
                                                                      SERVICES     COMMUNICATIONS      TOTAL
                                                                    -------------  --------------  -------------
                                                                                   (IN THOUSANDS)
Balance as of January 1, 2007                                       $    186,460   $     199,466   $    385,926
Purchase price adjustments                                                   101               2            103
Reclass from intangibles based on final purchase price allocation          7,410           1,208          8,618
                                                                    -------------  --------------  -------------
Balance as of March 31, 2007                                        $    193,971   $     200,676   $    394,647
                                                                    =============  ==============  =============
</TABLE>

<TABLE>
<S>                                                                         <C>             <C>              <C>
     Summarized below are other intangible assets:

                                                                              MARCH 31,      DECEMBER 31,
                                                                                2007             2006           LIFE
                                                                            --------------  ---------------  -----------
                                                                                    (IN THOUSANDS)
        Other intangible assets subject to amortization:
             Capitalized non-compete agreements related to acquisitions     $       2,738   $        2,738   1-5 years
             Purchased technologies related to acquisitions                        27,213           28,083   8-25 years
             Customer contracts and relationships related to acquisitions          81,422           87,186   6-20 years
             Tradename related to acquisitions                                      5,498            8,464   3-10 years
                                                                            --------------  ---------------
                                                                                  116,871          126,471
               Less accumulated amortization                                      (25,660)         (23,095)
                                                                            --------------  ---------------
                                                                            $      91,211   $      103,376
                                                                            --------------  ---------------

        Other intangible assets not subject to amortization:
              Tradename related to acquisitions                                       400              400
                                                                            --------------  ---------------
                                                                            $      91,611   $      103,776
                                                                            ==============  ===============
</TABLE>

                                       7
<PAGE>

    The amortization expense for the three months ended March 31, 2007 and March
25, 2006 amounted to $2.6 million and $1.6 million, respectively. Total
remaining amortization expense for 2007, 2008, 2009, 2010, 2011 and thereafter
related to these other intangible assets is estimated to be $7.7 million, $9.5
million, $9.5 million, $8.7 million, $7.0 million and $48.8 million,
respectively.

(5) INVENTORIES

    Inventories are summarized by major classification as follows:

                                                      MARCH 31,    DECEMBER 31,
                                                        2007           2006
                                                    -------------  -------------
                                                           (IN THOUSANDS)
         Raw material and supplies                  $     14,221   $     14,881
         Work-in-process                                  38,897         52,742
         Finished goods                                   19,272         15,045
             Less: Unliquidated progress payments         (6,229)       (26,413)
                                                    -------------  -------------
                                                    $     66,161   $     56,255
                                                    =============  =============

(6) INCOME TAXES

    The Company adopted FASB Interpretation 48 ("FIN 48"), Accounting for
Uncertainty in Income Taxes, at the beginning of fiscal year 2007. FIN 48
creates a single model to address accounting for uncertainty in tax positions.
FIN 48 clarifies the accounting for income taxes, by prescribing a minimum
recognition threshold a tax position is required to meet before being recognized
in the financial statements. FIN 48 also provides guidance on derecognition,
measurement, classification, interest and penalties, accounting in interim
periods, disclosure and transition.

    As a result of the implementation, the Company recognized a $2.5 million net
increase to reserves for uncertain tax positions. This increase was accounted
for as an adjustment to the beginning balance of retained earnings on the
balance sheet. As of the adoption date, the Company had approximately $15.6
million of total gross unrecognized tax benefits. Of this total, approximately
$7.7 million represents the amount of net unrecognized tax benefits that, if
recognized, would favorably affect the effective income tax rate in any future
periods.

    The Company is subject to U.S. federal income tax as well as income tax of
multiple state jurisdictions. The Company has substantially concluded all U.S.
federal income tax matters for years through 2002 except as it relates to the
Company's amended return for 2002 claiming a federal research and development
credit which is currently under audit. Substantially all material state and
local matters have been concluded for years through 2002. In addition, the
Company is subject to income tax in various foreign jurisdictions. The Company
has substantially concluded all material tax matters in foreign jurisdictions
for years through 2004.

    While it is reasonably possible that a reduction in the unrecognized tax
benefit may occur, based on audit process protocol from the various taxing
authorities, it is not possible to estimate the impact of any amount of such
changes that may occur within the next twelve months.

    The Company's continuing practice is to recognize interest and/or
penalties related to income tax matters in income tax expense. The Company had
$5.6 million accrued for interest and penalties at the beginning of fiscal year
2007.

(7) EARNINGS PER SHARE

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

<TABLE>
<S>                                                                       <C>               <C>
                                                                            FOR THE THREE MONTHS ENDED
                                                                          ------------------------------
                                                                            MARCH 31,       MARCH 25,
                                                                              2007            2006
                                                                          -------------- ---------------
                                                                                  (IN THOUSANDS)

               Numerator:
                 Net earnings (loss) for basic and diluted calculation    $       5,988     $      (939)
                Effect of dilutive securities:
                    Convertible Notes                                             1,187              --
                                                                          -------------- ---------------
               Numerator for dilutive calculation                                 7,175            (939)

               Denominator:
                 Denominator for basic calculation                               18,538          18,012
                 Effect of dilutive securities:
                    Stock options                                                   470              --
                    Convertible Notes                                             5,886              --
                                                                          -------------- ---------------
                 Denominator for diluted calculation                             24,894          18,012
                                                                          ============== ===============
</TABLE>

                                       8
<PAGE>

    The assumed conversion of the 4.0% Notes was dilutive for the three months
ended March 31, 2007 and anti-dilutive for the three months ended March 25,
2006.

    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.

                                                      FOR THE THREE MONTHS ENDED
                                                      --------------------------
                                                        MARCH 31,      MARCH 25,
                                                          2007           2006
                                                      --------------------------
                                                             (IN THOUSANDS)
               4.00% Convertible Subordinated Notes         --            5,886
               Unexercised stock options                   398               74
                                                           ---            -----
                                                           398            5,960
                                                           ===            =====

(8) DEFINED BENEFIT PLAN

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

    For the three months ended March 31, 2007 and March 25, 2006, the Company
recorded pension expense of $0.8 million and $1.2 million, respectively, based
on the total expense for the respective years of $3.2 million in 2007 and $4.8
million in 2006. Summarized below are the components of the expense for each
period presented.

                                                   FOR THE THREE MONTHS ENDED
                                                   --------------------------
                                                    MARCH 31,       MARCH 25,
                                                      2007            2006
                                                   --------------------------
                                                        (IN THOUSANDS)

           Interest cost                           $    3,078     $    3,038
           Expected return on plan assets              (3,343)        (3,209)
           Amortization of unrecognized net loss        1,076          1,365
                                                   ----------     ----------
                                                   $      811     $    1,194
                                                   ==========     ==========

(9) EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

    The Company sponsors an employee stock ownership plan (ESOP) 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.

(10) COMPREHENSIVE INCOME

    As of March 31, 2007, accumulated other comprehensive loss included in
shareholders' equity in the accompanying consolidated balance sheets primarily
represents additional minimum liabilities on benefit plans and the effect of
adopting FASB Statement No. 158 (SFAS 158), Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans, on December 31, 2006.
Comprehensive income for the three months ended March 31, 2007 was $6.0 million
compared to comprehensive loss for the three months ended March 25, 2006 of $0.9
million.

                                       9

<PAGE>

(11) 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 reflected in
two business segments: Engineered Systems and Services and Electronic Systems
and Communications. The Engineered Systems and Services segment addresses the
Integrated Systems and Structures, Undersea Warfare, and Professional Services
markets. Primary products include aircraft armament systems, integrated
composite structures, mine countermeasure systems, sonar systems and components,
and flight line products. This segment also includes a wide range of
professional and engineering services. The Electronic Systems and Communications
segment includes products that serve the Electronic Warfare, C4 (Command,
Control, Communications and Computers) products and systems, and Intelligence
and Information Warfare markets. Primary products include electronic force
protection systems, interference cancellation technology, airborne electronic
warfare systems, electronic intelligence (ELINT) and electronic support measure
(ESM) systems, intelligence and information warfare systems, C4 products and
services, and antenna products.

                                                     FOR THE THREE MONTHS ENDED
                                                     --------------------------
                                                       MARCH 31,      MARCH 25,
                                                         2007           2006
                                                     --------------------------
                                                            (IN THOUSANDS)
         Net Sales:
         Engineered Systems and Services             $    116,386     $  59,266
         Electronic Systems and Communications            139,030        60,443
                                                     ------------     ---------
                                                     $    255,416     $ 119,709
                                                     ------------     ---------
         Operating Earnings (loss) :
         Engineered Systems and Services                    9,289         1,628
         Electronic Systems and Communications              7,139        (1,727)
                                                     ------------     ---------
                                                           16,428           (99)
         Net interest expense                              (5,990)       (1,403)
         Other, net                                           (39)         (146)
                                                     ------------     ---------
         Earnings (loss) before income taxes         $     10,399     $  (1,648)
                                                     ============     =========


(12) RECENT ACCOUNTING PRONOUNCEMENTS

    In September 2006, the Financial Accounting Standards Board ("FASB") issued
Statement No. 157, "Fair Value Measurements" (SFAS 157). SFAS 157 defines fair
value, establishes a framework for using fair value to measure assets and
liabilities, and expands disclosure requirements about fair value measurements.
SFAS 157 is effective for fiscal year beginning after November 15, 2007, and
early application is permitted. SFAS 157 becomes effective for the Company on
January 1, 2008. The Company does not believe SFAS 157 will have a material
impact on our results from operations or financial position.

(13) 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 the condensed consolidating financial information for the
Company and the contemplated subsidiary guarantors and non-guarantors at March
31, 2007 and December 31, 2006 and for the three months ended March 31, 2007 and
March 25, 2006. 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 four quarters.

                                       10

<PAGE>

<TABLE>
<S>                                             <C>             <C>           <C>             <C>           <C>
EDO CORPORATION
Condensed Consolidating Balance Sheet
March 31, 2007
(Unaudited)
                                                     EDO
                                                  Corporation
                                                    Parent      Subsidiary
                                                 Company Only    Guarantors   Non-Guarantors  Eliminations  Consolidated
                                                --------------  ------------  --------------  ------------  ------------
Assets
Current assets:
Cash and cash equivalents                       $      (1,108)  $    (2,543)  $       3,651            --   $        --
Accounts receivable, net                               53,805       211,151           5,738            --       270,694
Inventories                                            12,488        50,742           2,931            --        66,161
Deferred income tax asset, net                         12,549            --              --            --        12,549
Prepayments and other                                  11,554         3,644             344            --        15,542
                                                --------------  ------------  --------------  ------------  ------------
Total current assets                                   89,288       262,994          12,664            --       364,946

Investment in subsidiaries                            659,062            --              --      (659,062)           --
Property, plant and equipment, net                     27,511        27,313           3,501            --        58,325
Goodwill                                                   --       385,937           8,710            --       394,647
Other intangible assets, net                               --        82,626           8,985            --        91,611
Deferred income tax asset, net                         16,907           983              --            --        17,890
Other assets                                           22,724        (7,743)             --            --        14,981
                                                --------------  ------------  --------------  ------------  ------------
                                                $     815,492   $   752,110   $      33,860   $  (659,062)  $   942,400
                                                ==============  ============  ==============  ============  ============

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities        $      34,008   $    88,713   $       5,562            --   $   128,283
Contract advances and deposits                         15,625        31,886              --            --        47,511
Post retirement benefits obligation, short-term         2,033            --              --            --         2,033
Short-term borrowings under revolver                  161,500            --              --            --       161,500
Notes Payable                                           7,766            --              --            --         7,766
                                                ------------------------------------------------------------------------
Total current liabilities                             220,932       120,599           5,562            --       347,093

Long-term debt                                        201,250            --              --            --       201,250
Note payable, long-term                                14,533            --              --            --        14,533
Income taxes payable                                   19,044            --              --            --        19,044
Deferred income tax liabilities, net                     (427)           --             427            --            --
Other long-term liabilities                                37            --              --            --            37
Post retirement benefits obligation, long-term         77,220            --              --            --        77,220
Environmental obligation                                1,195            --              --            --         1,195
Inter-company accounts                                     --       475,384          21,246      (496,630)           --

Shareholders' equity:
Preferred shares                                           --            --              --            --            --
Common shares                                          21,303            98              --           (98)       21,303
Additional paid-in capital                            180,309        60,402           6,418       (66,820)      180,309
Retained earnings                                     132,392        99,678            (113)      (99,565)      132,392
Accumulated other comprehensive loss, net of
 income tax benefit                                   (36,855)           --             320            --       (36,535)
Treasury shares                                        (2,216)       (4,051)             --         4,051        (2,216)
Unearned ESOP shares                                  (13,225)           --              --            --       (13,225)
                                                --------------  ------------  --------------  ------------  ------------
Total shareholders' equity                            281,708       156,127           6,625      (162,432)      282,028
                                                --------------  ------------  --------------  ------------  ------------
                                                $     815,492   $   752,110   $      33,860   $  (659,062)  $   942,400
                                                ==============  ============  ==============  ============  ============
</TABLE>


<TABLE>
<S>                                                  <C>             <C>             <C>             <C>          <C>
EDO Corporation
Condensed Consolidating Statement of Earnings
March 31, 2007
(Unaudited)

                                                     EDO Corporation
                                                     Parent Company    Subsidiary
                                                           Only         Guarantors    Non-Guarantors Eliminations Consolidated
                                                     --------------- --------------- --------------- ------------ ------------

Net Sales                                            $       54,754  $      194,315  $        8,301  $    (1,954) $   255,416
Costs and expenses:
Cost of sales                                                43,551         153,511           5,922       (1,954)     201,030
Selling, general and administrative                           4,951          27,053           1,709           --       33,713
Acquisition-related costs                                        --           2,152              --           --        2,152
Research and development                                        662           1,384              47           --        2,093
                                                     -------------------------------------------------------------------------
                                                             49,164         184,100           7,678       (1,954)     238,988
                                                     -------------------------------------------------------------------------
Operating Earnings                                            5,590          10,215             623           --       16,428

Non-operating income (expense)
Interest income                                                  81              62              43           --          186
Interest expense                                             (6,174)             (2)             --           --       (6,176)
Other, net                                                      (60)             21              --           --          (39)
                                                     -------------------------------------------------------------------------
                                                             (6,153)             81              43           --       (6,029)
(Loss) earnings from operations before income taxes            (563)         10,296             666           --       10,399
Income tax benefit (expense)                                    532          (4,670)           (273)          --       (4,411)
                                                     -------------------------------------------------------------------------
(Loss) earnings from operations                                 (31)          5,626             393           --        5,988
Equity in undistributed earnings of subsidiaries              6,019              --              --       (6,019)          --
                                                     -------------------------------------------------------------------------
Net Earnings                                         $        5,988  $        5,626  $          393  $    (6,019) $     5,988
                                                     =============== =============== =============== ============ ============

</TABLE>

                                       11

<PAGE>

<TABLE>
<S>                                                  <C>             <C>             <C>             <C>          <C>
EDO Corporation
Condensed Consolidating Statement of Cash Flows
March 31, 2007
(Unaudited)
                                                     EDO Corporation
                                                     Parent Company    Subsidiary
                                                           Only         Guarantors   Non-Guarantors  Eliminations Consolidated
                                                     --------------- --------------- --------------  ------------ ------------
Operating activities:
Earnings from operations                             $         5,988  $       5,626  $         393   $    (6,019) $     5,988

Adjustments to earnings to arrive at cash
provided (used) by operations:
Depreciation                                                   1,270          2,057            182            --        3,509
Amortization                                                      --          2,369            196            --        2,565
Bad debt recovery                                                 (3)           (39)            --            --          (42)
Loss on sale of property and equipment                            --             67             --            --           67
Long-Term Incentive Plan compensation expense                  1,741             --             --            --        1,741
Stock option compensation expense                                177             --             --            --          177
Employee Stock Ownership Plan compensation
 expense                                                       1,010             --             --            --        1,010
Dividends on unallocated Employee Stock
 Ownership Plan shares                                            53             --             --            --           53
Common shares issued for directors' fees                          53             --             --            --           53
Changes in operating assets and liabilities,
 excluding effects of acquisitions:
Equity in earnings of subsidiaries                            (6,019)            --             --         6,019           --
Inter-company/Investments in subsidiaries                     36,008        (36,005)            (3)           --           --
Accounts receivable                                           (5,561)         1,079           (872)           --       (5,354)
Inventories                                                   (1,672)        (8,722)           488            --       (9,906)
Prepayments and other assets                                 (16,529)        19,728            (38)           --        3,161
Accounts payable, accrued liabilities and other               (5,770)         4,028            899            --         (843)
Contract advances and deposits                                 2,044          1,144             --            --        3,188
                                                     -------------------------------------------------------------------------
Cash provided (used) by continuing operations                 12,790         (8,668)         1,245            --        5,367

Investing activities:
Settlement of purchase price on acquisitions                  (9,327)            --             --            --       (9,327)
Purchase of plant and equipment                               (1,306)        (1,463)           (23)           --       (2,792)
                                                     -------------------------------------------------------------------------
Cash used by investing activities                            (10,633)        (1,463)           (23)           --      (12,119)

Financing activities:
Short-term borrowings under revolver                           6,000             --             --            --        6,000
Repayment of revolving debt                                  (24,500)            --             --            --      (24,500)
Proceeds from exercise of stock options                          315             --             --            --          315
Excess income tax benefit from stock options and
 Long-Term Incentive Plan                                        250             --             --            --          250
Payment of common share cash dividends                          (635)            --             --            --         (635)
                                                     -------------------------------------------------------------------------
Cash used by financing activities                            (18,570)            --             --            --      (18,570)
                                                     -------------------------------------------------------------------------
Net (decrease) increase in cash and cash
 equivalents                                                 (16,413)       (10,131)         1,222            --      (25,322)
Cash and cash equivalents at beginning of year                15,305          7,588          2,429            --       25,322
                                                     -------------------------------------------------------------------------
Cash and cash equivalents at end of year             $        (1,108) $      (2,543) $       3,651   $        --  $        --
                                                     ===============  ============== ==============  ============ ============
</TABLE>

<TABLE>
<S>                                                  <C>             <C>             <C>                          <C>
EDO CCORPORATION
Condensed Consolidating Balance Sheet
December 31, 2006
                                                     EDO Corporation
                                                     Parent Company    Subsidiary
                                                           Only         Guarantors   Non-Guarantors  Eliminations Consolidated
                                                     --------------- --------------- --------------- ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents                            $       15,305  $        7,588  $        2,429           --  $    25,322
Accounts receivable, net                                     48,241         212,191           4,866           --      265,298
Inventories                                                  10,816          42,020           3,419           --       56,255
Deferred income tax asset, net                               12,160              --              --           --       12,160
Prepayments and other                                        10,312           3,064             306           --       13,682
                                                     --------------- --------------- --------------- ------------ ------------
Total current assets                                         96,834         264,863          11,020           --      372,717

Investment in subsidiaries                                  678,997              --              --     (678,997)          --
Property, plant and equipment, net                           27,476          27,974           3,659           --       59,109
Goodwill                                                         --         377,216           8,710           --      385,926
Other intangible assets, net                                     --          94,594           9,182           --      103,776
Deferred income tax asset, net                                8,291              --              --           --        8,291
Other assets                                                 17,387           2,616              --           --       20,003
                                                     --------------- --------------- --------------- ------------ ------------
                                                     $      828,985  $      767,263  $       32,571  $  (678,997) $   949,822
                                                     =============== =============== =============== ============ ============

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities             $       52,769  $       84,685  $        4,660           --  $   142,114
Contract advances and deposits                               13,581          30,742              --           --       44,323
Postretirement benefits obligation, short-term                1,794              --              --           --        1,794
Short-term borrowings under revolver                        180,000              --              --           --      180,000
Notes payable                                                 7,766              --              --           --        7,766
                                                     --------------- --------------- --------------- ------------ ------------
Total current liabilities                                   255,910         115,427           4,660           --      375,997

Long-term debt                                              201,250              --              --           --      201,250
Income taxes payable                                          4,154              --              --           --        4,154
Deferred income tax liabilities, net                           (427)             --             427           --           --
Postretirement benefits obligation, long-term                77,734              --              --           --       77,734
Notes payable                                                14,533              --              --           --       14,533
Environmental obligation                                      1,198              --              --           --        1,198
Other long-term liabilities                                      40              --              --           --           40
Intercompany accounts                                            --         501,335          21,249     (522,584)          --
Shareholders' equity:
Preferred shares                                                 --              --              --           --           --
Common shares                                                21,177              98              --          (98)      21,177
Additional paid-in capital                                  177,117          60,403           6,418      (66,821)     177,117
Retained earnings                                           129,444          94,052            (506)     (93,546)     129,444
Accumulated other comprehensive loss, net of income
 tax benefit                                                (37,642)             --             323           --      (37,319)
Treasury shares                                              (1,966)         (4,052)             --        4,052       (1,966)
Unearned ESOP shares                                        (13,537)             --              --           --      (13,537)
                                                     --------------- --------------- --------------- ------------ ------------
Total shareholders' equity                                  274,593         150,501           6,235     (156,413)     274,916
                                                     --------------- --------------- --------------- ------------ ------------
                                                     $      828,985  $      767,263  $       32,571  $  (678,997) $   949,822
                                                     =============== =============== =============== ============ ============
</TABLE>
                                       12

<PAGE>


<TABLE>
<S>                                                  <C>             <C>             <C>             <C>          <C>
EDO Corporation
Condensed Consolidating Statement of Earnings
March 25, 2006
(Unaudited)

                                                     EDO Corporation
                                                     Parent Company      Subsidiary
                                                           Only           Guarantors  Non-Guarantors Eliminations Consolidated
                                                     --------------- --------------- --------------- ------------ ------------

Net Sales                                            $       46,987  $       69,086  $        6,354  $    (2,718) $   119,709
Costs and expenses:
Cost of sales                                                38,835          50,709           4,418       (2,718)      91,244
Selling, general and administrative                           5,508          17,142           2,708           --       25,358
Research and development                                        882           2,137             187           --        3,206
                                                     --------------- --------------- --------------- ------------ ------------
                                                             45,225          69,988           7,313       (2,718)     119,808

                                                     --------------- --------------- --------------- ------------ ------------
Operating Earnings (loss)                                     1,762            (902)           (959)          --          (99)

Non-operating income (expense)
Interest income                                                 967              --              54           --        1,021
Interest expense                                             (2,440)             16              --           --       (2,424)
Other, net                                                      (16)            (86)            (44)          --         (146)
                                                     --------------- --------------- --------------- ------------ ------------
                                                             (1,489)            (70)             10           --       (1,549)
Earnings (loss) earnings from operations before
 income taxes                                                   273            (972)           (949)          --       (1,648)
Income tax benefit (expense)                                  1,105            (603)            207           --          709
                                                     --------------- --------------- --------------- ------------ ------------
Earnings (loss) earnings from operations                      1,378          (1,575)           (742)          --         (939)
Equity in undistributed earnings of subsidiaries             (2,317)             --              --        2,317           --
                                                     --------------- --------------- --------------- ------------ ------------
Net loss                                             $         (939) $       (1,575) $         (742) $     2,317  $      (939)
                                                     =============== =============== =============== ============ ============
</TABLE>

                                       13

<PAGE>

<TABLE>
<S>                                                  <C>             <C>             <C>             <C>          <C>
EDO Corporation
Condensed Consolidating Statement of Cash Flows
March 25, 2006
(Unaudited)
                                                     EDO Corporation
                                                     Parent Company    Subsidiary
                                                           Only         Guarantors   Non-Guarantors  Eliminations Consolidated
                                                     --------------- --------------- --------------- ------------ ------------
Operating activities:
Loss from operations                                 $         (939) $       (1,575) $         (742)       2,317  $      (939)

Adjustments to loss to arrive at cash
  provided by operations:
Depreciation                                                  1,183           1,416             179                     2,778
Amortization                                                     --           1,363             251                     1,614
Bad debt (recovery) expense                                     (83)             17              --                       (66)
Loss on sale of property and equipment                           18              11              --                        29
LTIP compensation expense                                       972              --              --           --          972
Stock option compensation expense                               865              --              --           --          865
Employee Stock Ownership Plan compensation expense            1,186              --              --           --        1,186
Dividends on unallocated Employee Stock Ownership
  Plan shares                                                    58              --              --           --           58
Common shares issued for directors' fees                         55              --              --           --           55
Changes in operating assets and liabilities,
  excluding effects of acquisitions:
Equity in earnings of subsidiaries                            2,317              --              --       (2,317)          --
Inter-company/Investments in subsidiaries                       814            (792)            (22)          --           --
Accounts receivable                                           3,786          17,682            (252)          --       21,216
Inventories                                                   2,457         (16,993)             86           --      (14,450)
Prepayments and other assets                                   (772)         (1,020)            100           --       (1,692)
Accounts payable, accrued liabilities and other              (8,853)         (5,313)            622           --      (13,544)
Contract advances and deposits                                6,853           9,082              --           --       15,935
                                                     -------------------------------------------------------------------------
Cash provided by operations                                   9,917           3,878             222           --       14,017

Investing activities:
Settlement of purchase price on 2005 acquisition                 --            (353)             --           --         (353)
Purchase of plant and equipment                              (2,421)         (2,368)           (182)          --       (4,971)
Payments received on notes receivable                           100              --              --           --          100
                                                     -------------------------------------------------------------------------
Cash used by investing activities                            (2,321)         (2,721)           (182)          --       (5,224)

Financing activities:
Proceeds from exercise of stock options                         258              --              --           --          258
Excess income tax benefit from stock options and
  Long-Term Incentive Plan                                      174              --              --           --          174
Proceeds from management group receivables                      140              --              --           --          140
Payment of common share cash dividends                         (609)             --              --           --         (609)
                                                     -------------------------------------------------------------------------
Cash used by financing activities                               (37)             --              --           --          (37)
                                                     -------------------------------------------------------------------------
Net increase in cash and cash equivalents                     7,559           1,157              40           --        8,756
Cash and cash equivalents at beginning of year               99,067           4,232           5,432           --      108,731
                                                     -------------------------------------------------------------------------
Cash and cash equivalents at end of year             $      106,626  $        5,389  $        5,472  $        --  $   117,487
                                                     =============== =============== =============== ============ ============
</TABLE>


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

INTRODUCTION

    EDO Corporation (the "Company") designs and manufactures a diverse range of
products with core competencies in critical defense areas. We are a leading
supplier of sophisticated, highly engineered products and systems for defense,
aerospace and intelligence applications. We believe our advanced systems are
mission-critical on a wide range of military programs and are at the core of
transforming defense capabilities. We have two reporting segments: Engineered
Systems and Services and Electronic Systems and Communications. Our Engineered
Systems and Services segment comprises of aircraft armament systems, integrated
composite structures, undersea warfare sonar systems, and professional
engineering services. Our Electronic Systems and Communications segment provides
highly-engineered electronic systems and equipment including electronic warfare
systems, reconnaissance and surveillance systems, and command, control,
communications, and computers (C4) products and systems. The Company has a
disciplined acquisition program which is diversifying its 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 Shareholders 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.

                                       14
<PAGE>

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. Except for the treatment of tax
contingency accruals, there have been no material changes from the methodology
applied by management for critical estimates previously disclosed in the
Company's most recent Annual Report on Form 10-K. Effective January 1, 2007, the
company began to measure and record tax contingency accruals in accordance with
FIN 48 - Accounting for Uncertainty in Income Taxes - an Interpretation of FASB
Statement No. 109. The expanded disclosure requirements of FIN 48 are presented
in Note 6 of this report. FIN 48 prescribes a threshold for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. Only tax positions meeting the more-likely-than-not
recognition threshold at the effective date may be recognized or continue to be
recognized upon adoption of this Interpretation. FIN 48 also provides guidance
on accounting for de-recognition, interest and penalties, and classification and
disclosure of matters related to uncertainty in income taxes. The following is a
brief discussion of the critical accounting policies employed by us:

REVENUE RECOGNITION

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

INVENTORIES

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

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

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

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

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.

                                       15

<PAGE>

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

PENSION AND POST-RETIREMENT BENEFITS OBLIGATIONS

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

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

RESULTS OF OPERATIONS

    The following information should be read in conjunction with the
Consolidated Financial Statements as of March 31, 2007.

THREE MONTHS ENDED MARCH 31, 2007 COMPARED WITH THREE MONTHS ENDED
MARCH 25, 2006

    Net sales by segment were as follows:


                                             THREE MONTHS ENDED       INCREASE/
                                             ------------------      (DECREASE)
                                              MARCH 31,   MARCH 25      FROM
      SEGMENT                                   2007        2006    PRIOR PERIOD
      -------                                ---------   ---------  ------------
                                                  (IN THOUSANDS)
      Engineered Systems and Services        $ 116,386   $   59,266     96.4%
      Electronic Systems and Communications    139,030       60,443    130.0%
                                             ---------   ----------    ------
      Total                                  $ 255,416   $  119,709    113.4%
                                             =========   ==========    ------

    In the Engineered Systems and Services segment, the increase in sales is
attributable to higher sales in undersea warfare products and the contribution
of sales of CAS which was acquired on September 6, 2006. In addition, sales
increased on our flight line test systems products.

    In the Electronic Systems and Communications segment, the increase in sales
is attributable to deliveries associated with the Transition Switch Module (TSM)
program, deliveries of Warlock force protection systems and increased sales of
reconnaissance and surveillance systems due to achieving certain milestones on
various programs. In addition, sales were contributed by IST which was acquired
on September 15, 2006.

    Operating earnings (loss) by segment were as follows:

                                                 THREE MONTHS ENDED
                                                 ------------------
                                              MARCH 31,        MARCH 25
      Segment                                    2007            2006
      -------                                 ----------     -----------
                                                     (IN THOUSANDS)
      Engineered Systems and Services         $    9,289     $     1,628
      Electronic Systems and Communications        7,139          (1,727)
                                              ----------     -----------
      Total                                   $   16,428     $       (99)
                                              ==========     ===========

    For the three months ended March 31, 2007, we had an operating earnings of
$16.4 million or 6.4% of net sales compared to an operating loss for the three
months ended March 25, 2006 of $0.1 million.

                                       16

<PAGE>

    Items of note affecting operating earnings (loss) are summarized here to
help clarify the comparison of results.

                                                        THREE MONTHS ENDED
                                                        ------------------
                                                     MARCH 31,       MARCH 25
                                                       2007            2006
                                                     ---------      ----------
                                                            (IN THOUSANDS)
      Pension                                        $     811      $    1,194
      ESOP compensation expense                          1,010           1,186
      Stock-Based Compensation Expense re: options         177             865
      Other intangible asset amortization                2,565           1,614
                                                     ---------      ----------
                                                     $   4,563      $    4,859
                                                     =========      ==========

    The Engineered Systems and Services segment's operating earnings for the
three months ended March 31, 2007 were $9.3 million or 8.0% of this segment's
net sales compared to operating earnings of $1.6 million or 2.7% of this
segment's net sales for the three months ended March 25, 2006. This increase is
attributable to cost reductions on an aircraft armament program, increased sales
on undersea warfare products, increased sales on flight line test equipment and
the contribution of CAS, which was acquired on September 6, 2006.

    The Engineered Systems and Services segment's operating earnings for the
three months ended March 25, 2006 were negatively impacted by a provision for an
estimated settlement of a lawsuit and related legal costs.

    The Electronic Systems and Communications segment's operating earnings for
the three months ended March 31, 2007 were $7.1 million or 5.1% of this
segment's net sales compared to operating loss of $1.7 million or 2.9% of net
sales for the three months ended March 25, 2006. The increase is attributable to
the increased sales on our TSM program and the obtaining of milestones on the
reconnaissance and surveillance systems products. This was partially offset by
cost growth on a close-out of an open contract issue on a long standing contract
that is now complete.

    The Electronic Systems and Communications segment's operating earnings for
the three months ended March 25, 2006 were negatively impacted by cost growth of
$1.4 million on an interference cancellation program. This was offset by the
release of a reserve of $0.7 million on a completed electronic force protection
systems program and the release of a reserve of $0.6 million which had been held
for fulfillment of contractual offset commitments that have now been satisfied.
Furthermore, we provided for estimated liabilities and legal costs incurred in
connection with a contract dispute.

    Legal costs, estimated settlements and estimated liabilities for the legal
matters referred to in the immediately preceding paragraph had an adverse effect
on the results of operations for the three months ended March 25, 2006 of
approximately $2.7 million.

    Selling, general and administrative expenses for the three months ended
March 31, 2007 were $33.7 million or 13.2% of net sales compared to $25.4
million or 21.2% of net sales for the comparable prior year period ended March
25, 2006. The increase is attributable to the acquisitions of CAS and IST made
in 2006, including intangible asset amortization associated with these
acquisitions.

    During the three months ended March 31, 2007, the Company recorded
acquisition-related costs of $2.2 million for "stay-pay" related to the
acquisitions in 2005 and 2006. There were no acquisition related costs for the
three months ended March 25, 2006. The Company expects to incur similar amounts
related to these acquisition-related costs over the next 2 1/2 years.

    Research and development expense for the three months ended March 31, 2007
decreased to $2.1 million or 0.8% of net sales from $3.2 million or 2.7% of net
sales for the three months ended March 25, 2006, during which time there was
higher than usual spending on electronic force protection and aircraft armament
systems.

    Interest expense, net of interest income, for the three months ended March
31, 2007 increased to $6.0 million from $1.4 million for the three months ended
March 25, 2006 primarily due to interest on borrowings under our credit
facility. Also included in interest expense is interest on our 4.0% Convertible
Subordinated Notes due 2025 which were issued in November 2005, the amortization
of deferred debt issuance costs associated with the offering of the Notes and
amortization of deferred financing costs associated with our credit facility.

    The income tax expense for the three months ended March 31, 2007 reflects
an estimated annual effective tax rate of 42.5% compared with an income tax
benefit for the three months ended March 25, 2006, which reflects an estimated
annual effective tax rate of 43%.

    For the three months ended March 31, 2007, net earnings were $6.0 million or
$0.29 per diluted common share on 24.9 million diluted shares compared to net
loss of $0.9 million or $(0.05) per diluted common share on 18.0 million shares.
The convertible notes were dilutive for the three months ended March 31, 2007
and anti-dilutive for the three months ended March 25, 2006.

                                       17

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

BALANCE SHEET

    Cash and cash equivalents decreased to $0 million at March 31, 2007 from
$25.3 million at December 31, 2006. This decrease was due primarily to the net
pay down of borrowings under our credit facility of $18.5 million, $9.3 million
used to settle the final purchase prices of CAS and IST, and $2.8 million for
the purchase of plant and equipment. These decreases were partially offset by
cash provided by operations of $5.4 million.

    Accounts receivable increased slightly to $270.7 million at March 31, 2007
from $265.3 million at December 31, 2006 due in part to timing of collections of
billed receivables, increased sales, and the aforementioned acquisitions. At
March 31, 2007 approximately 92% of billed receivables were in the under-60 days
aging category.

    Inventories increased 17.6% to $66.2 million at March 31, 2007 from $56.3
million at December 31, 2006 due primarily to the efforts expended on
work-in-process on major programs, such as TSM.

    In the three months ended March 31, 2007, capital expenditures were $2.8
million compared to $5.0 million for the three months ended March 25, 2006. In
the first quarter of 2006, the higher expenditures were attributable to new
facility capital for our Antenna Products business unit which was relocated to a
new leased facility, as well as expansion and upgrades at several other
facilities.

FINANCING ACTIVITIES

Credit Facility

     We have a five-year credit facility with a consortium of banks, led by
Citibank, N.A., as the administrative agent, Bank of America, N.A, as the
documentation agent and Wachovia Bank, N.A. as syndication agent. The facility
expires in November 2010.

    The credit agreement provides for a revolving credit facility in an
aggregate amount equal to $300 million with sub-limits of $20 million for
short-term swing loans and $100 million for letters of credit. The potential
cash borrowing under the facility is reduced by the amount of outstanding
letters of credit. The Company has the option to select Base Rate or Eurodollar
Rate loans under the terms of the Credit Agreement. Any borrowings under the
facility would be priced initially at LIBOR plus a predetermined amount
depending on our consolidated leverage ratio at the time of the borrowing. At
March 31, 2007, LIBOR was approximately 5.32% and the applicable adjustment to
LIBOR was 2.75%. 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%. In addition, the agreement provides for
potential incremental credit extensions in the form of term loans or revolving
credit commitment increases of up to $300 million.

    At March 31, 2007 there was $31.8 million of letters of credit outstanding
and $161.5 million of direct borrowings outstanding under the credit facility,
resulting in $106.7 million available for additional borrowings. At December 31,
2006, there were $180.0 million of direct borrowings outstanding under the
credit facility. Accrued interest payable was $0.2 million and $0.8 million at
March 31, 2007 and December 31, 2006, respectively.

    In connection with the credit facility, the Company is required to maintain
both financial and non-financial covenants and ratios, including, but not
limited to, leverage ratio, fixed charge coverage ratio, and senior secured
leverage ratio. As of March 31, 2007, the Company was in compliance with its
covenants. The credit facility is secured by the Company's accounts receivable,
inventory and machinery and equipment.

4.0% Convertible Subordinated Notes due 2025 ("4.0% Notes")

    In November 2005, we completed the offering of $201.2 million principal of
4.0% Notes and received proceeds of $195.7 million, net of $5.5 million of
commissions. Interest payments are due May 15 and November 15 of each year
commencing on May 15, 2006. Accrued interest payable, included in accrued
liabilities, was $3.0 million and $1.0 million at March 31, 2007 and December
31, 2006, respectively. The Notes are convertible, unless previously redeemed or
repurchased by the Company, at the option of the holder at any time prior to
maturity, into the Company's common stock at an initial conversion price of
$34.19 per share, subject to adjustment in certain events. As of March 31, 2007,
there had been no such conversions.

Shelf Registration

    At March 31, 2007, our remaining capacity under the universal shelf
registration statement that became effective in January 2004, was approximately
$298.8 million.

                                       18

<PAGE>

    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, actively seek 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

    We are obligated under building and equipment leases expiring between 2007
and 2019. 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 credit 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.

    In order to aggregate all commitments and contractual obligations as of
March 31, 2007, we have included the following table:

<TABLE>
<S>                                                 <C>        <C>       <C>       <C>      <C>      <C>        <C>
                                                                    PAYMENTS DUE IN (IN MILLIONS):
                                                    ---------------------------------------------------------------------
                                                                                                                 2012 AND
COMMITMENTS AND CONTRACTUAL OBLIGATIONS:               TOTAL      2007     2008      2009     2010      2011      BEYOND
----------------------------------------            ---------  --------  --------  -------- --------   -------   --------
Borrowings Under Revolver                           $   161.5  $  161.5  $     --  $    --  $    --  $     --   $     --
Notes payable                                            22.3       7.8       8.8      5.7       --        --         --
4.0% Convertible Subordinated Notes due 2025 (1)        201.2        --        --       --       --        --      201.2
Operating leases                                        156.3      16.9      21.8     20.1     18.7      17.6       61.2
Letters of credit                                        31.8      13.6       6.0     11.6       --        --        0.6
Projected pension contributions (2)                      40.6       7.0      14.7      8.5      8.3       2.1         --
Advance payment and performance bonds                     1.9       0.2        --      1.7       --        --         --
                                                    ---------  --------  --------  -------  -------  --------   --------
Total                                               $  615.6   $  207.0  $   51.3  $  47.6  $  27.0  $   19.7   $  263.0
                                                    =========  ========  ========  =======  =======  ========   ========
</TABLE>

      (1) Excludes interest of approximately $8 million annually.

      (2) Actual pension contributions may differ from amounts presented above
and are contingent on cash flow and liquidity.

    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 is unlikely to 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.

    For the three months ended March 31, 2007, sales of TSM represented 16.0% of
net sales compared to less than one percent of net sales for the three months
ended March 25, 2006.

BACKLOG

    The funded backlog of unfilled orders at March 31, 2007 increased to $878.2
million from $804.4 million at December 31, 2006. Our backlog consists primarily
of current orders under long-lived, mission-critical programs of key defense
platforms.

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

    The statements in this Annual 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.

                                       19

<PAGE>

    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, tax
treatment of acquisitions, results of tax audits, and the amount of the
non-deductible portion of our non-cash ESOP compensation expense.

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

    For quantitative and qualitative disclosures about market risk, see Item
7A, "Quantitative and Qualitative Disclosures About Market Risk," of our annual
report on Form 10-K for the year ended December 31, 2006.

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
the Company carried out an evaluation, under the supervision and with the
participation of the Company's senior management, including the Chief Executive
Officer and the Chief Financial Officer, as well as the audit committee of the
Board of Directors, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures.

    Based on their evaluation, the Chief Executive Officer and the Chief
Financial Officer of the Company have concluded that the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934) are effective to ensure that the information
required to be disclosed by the Company in the reports that it files or submits
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms.

CHANGES IN INTERNAL CONTROLS

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

                           PART II - OTHER INFORMATION

ITEM 1A.  RISK FACTORS

    None.

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

    None.

ITEM 6. EXHIBITS


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

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

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

* Filed herewith.

                                       20

<PAGE>

                                   SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, its principal financial officer, thereunto duly authorized.

                                    EDO CORPORATION (Registrant)


                                    By:   /s/ FREDERIC B. BASSETT
                                          -----------------------
Dated:   May 4, 2007                      Frederic B. Bassett
                                          Senior Vice President Finance,
                                          Treasurer and Chief Financial Officer


                                       21