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                                                                    EXHIBIT 13.1



                      MESSAGE TO SHAREHOLDERS



DEAR FELLOW SHAREHOLDERS:                                     APRIL 2, 2002

         The year 2001 has been a disappointment for all of us. A dismal first
quarter was compounded by the collapse of the opto-electronic market and a sharp
decline in sales of the Company's optical support standard products in the
second half of the year.

FINANCIAL PERFORMANCE

For the fourth quarter of 2001, Hytek reported a net loss of $1,177,000, or
$0.36 per share, on revenues of $3.0 million. The largest factors contributing
to the fourth quarter loss were the $800,000 of write-down of opto-electronic
product inventory and the increase in valuation allowance of $200,000 for
deferred taxes (write-down of a deferred tax asset). This compares with a net
income of $21,000, or $0.00 per diluted share, on revenues of $2.1 million for
the fourth quarter of fiscal 2000.

While revenues for fiscal 2001 increased by 19% over fiscal 2000, production
costs increased by 62%. For the year ended December 29, 2001, there was a net
loss of $2.0 million, or $0.62 per share, on revenues of $9.5 million, as
compared net income of $560,000, or $0.17 per diluted share, on revenues of $7.9
million for the prior year ended December 30, 2000.

MARKETS AND APPLICATIONS

During 2001, approximately 54% of Company revenues were derived from military,
aerospace or government-funded programs. The Company continues to maintain its
MIL-PRF-38534 military certification. Revenues from the military-aerospace
market grew by over 50% from the prior year. Additional revenue growth during
2001 came from the medical device and instrumentation market. Revenue for the
Company's opto-electronic standard products, which include Thermo-Electric
Cooler Controllers and Laser Diode Drivers, declined by approximately 30%.
Applications for these products include fiber optic networks, "free space" data
transmission and certain "detector" product markets. Overall, during 2001, the
Company's standard products, which also include digital delay lines, accounted
for approximately 14% of total 2001 revenues.

PROCESSES AND TECHNOLOGY

The Company's traditional technology has utilized thick-film ceramic substrates
combined with "chip and wire" assembly processes and hermetic sealing of the
packaged circuits. We have added new processes and technologies as new market
and customer opportunities evolve. During 2001, we have expanded our
capabilities with the addition of automated pick-and-place equipment and
additional automated processes to expand our capabilities and better satisfy our
customers' requirements. There is a learning curve associated with new processes
and technologies that can have a temporary negative effect on product output and
margins.




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GOING FORWARD

We begin the year 2002 with a strong backlog and an expanded customer base. We
are no longer in the position of critical dependency on one very large customer.
Meeting our commitments to our existing customers with high quality products
will provide a solid base for continuing growth in the future. Our focus for the
ensuing year is on improving production efficiency, through-put and product
yields and achieving positive bottom line results. With the loyalty and support
of our shareholders, customers and employees, we believe that we can achieve
significantly improved operating results and increased shareholder value.




                                   Sincerely yours,



                                   Charles S. (Chuck) Byrne
                                   Chairman of the Board, President and
                                   Chief Executive Officer