TABLE OF CONTENTS




|                               |                                                                                                |                                                      |  |  |  |  |  | 
|------------------------------ | ---------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1  FINANCIAL STATEMENTS                                                                 
|                               |                                                                                                | CONSOLIDATED CONDENSED BALANCE SHEETS               
|                               |                                                                                                | CONSOLIDATED STATEMENTS OF INCOME (LOSS)            
|                               |                                                                                                | CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS     
|                               |                                                                                                | CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY     
|                               |                                                                                                | NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
|                               | ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                               | ITEM 3   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                         
|PART II  OTHER INFORMATION   
|                               | ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K.                                                    
|                               | SIGNATURES                                                                                    
|                               | EXHIBIT INDEX                                                                                 



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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549



---



FORM 10-Q

(Mark One)

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

For the quarterly period ended
September 30, 1999

OR

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

For the transition period from Not
Applicable to __________________

Commission file number 1-6016

ALLEN TELECOM INC.
_____________________________________________________________________
(Exact Name of Registrant as Specified in Its Charter)

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 38-0290950                          
|                                                               |  |                                     
|(State or Other Jurisdiction of
Incorporation or Organization) |  | (I.R.S. Employer Identification No.)

|                                                   |  |  | 
|-------------------------------------------------- |  |  | 
|25101 Chagrin
Boulevard, Suite 350,Beachwood, Ohio |  |  | 
|                                                   |  |  | 
|(Address of Principal Executive Offices)           |  |  | 

(Registrants Telephone Number,
Including Area Code) (216) 765-5818

NOT APPLICABLE
_____________________________________________________________________

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

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, and (2) has been subject to such filing
requirements for the past 90 days.

Yes X   No ____

Indicate the number of shares outstanding of each of the issuers classes of common stock:

|                          |  |                  |            | 
|------------------------- |  | ---------------- | ---------- | 
|                          |  | Outstanding at  
|Class of Common Stock     |  | October 31, 1999
|                          |  |                 
|Par value $1.00 per share |  |                  | 27,648,988 | 





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##### Table of Contents



ALLEN TELECOM INC.

TABLE OF CONTENTS

|        |  |  |                                            |  |  |      |         | 
|------- |  |  | ------------------------------------------ |  |  | ---- | ------- | 
|        |  |  |                                            |  |  | Page
|        |  |  |                                            |  |  | No. 
|        |  |  |                                            |  |  |     
|PART I  |  |  | FINANCIAL INFORMATION:                     | 
|       
|       
|       
|       
|        |  |  | ITEM 1  FINANCIAL STATEMENTS:             | 
|       
|       
|       
|       
|        |  |  | CONSOLIDATED CONDENSED BALANCE
SHEETS -    | 
|       
|       
|       
|       
|        |  |  | September 30, 1999 and December 31, 1998   |  |  |      | 3       | 
|       
|       
|       
|       
|        |  |  | CONSOLIDATED STATEMENTS OF INCOME (LOSS) - | 
|       
|       
|       
|       
|        |  |  | Three and Nine Months Ended                | 
|       
|       
|       
|       
|        |  |  | September 30, 1999 and 1998                |  |  |      | 4       | 
|       
|       
|       
|       
|        |  |  | CONSOLIDATED STATEMENTS OF CASH FLOWS -    | 
|       
|       
|       
|       
|        |  |  | Nine Months Ended                          | 
|       
|       
|       
|       
|        |  |  | September 30, 1999 and 1998                |  |  |      | 5       | 
|       
|       
|       
|       
|        |  |  | CONSOLIDATED STATEMENTS OF STOCKHOLDERS'   | 
|       
|       
|       
|       
|        |  |  | EQUITY  Nine Months Ended                 | 
|       
|       
|       
|       
|        |  |  | September 30, 1999 and 1998                |  |  |      | 6       | 
|       
|       
|       
|       
|        |  |  | NOTES TO CONSOLIDATED CONDENSED            | 
|       
|       
|       
|       
|        |  |  | FINANCIAL STATEMENTS                       |  |  |      | 7  10  | 
|       
|       
|       
|       
|        |  |  | ITEM 2 - MANAGEMENT'S DISCUSSION AND       | 
|       
|       
|       
|       
|        |  |  | ANALYSIS OF FINANCIAL CONDITION            | 
|       
|       
|       
|       
|        |  |  | AND RESULTS OF OPERATIONS                  |  |  |      | 11  17 | 
|       
|       
|       
|       
|        |  |  | ITEM 3 - QUANTITATIVE AND QUALITATIVE      | 
|       
|       
|       
|       
|        |  |  | DISCLOSURES ABOUT MARKET RISK              |  |  |      | 18      | 
|       
|       
|       
|       
|PART II |  |  | OTHER INFORMATION:                         | 
|       
|       
|       
|       
|        |  |  | ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K  |  |  |      | 18      | 
|       
|       
|       
|       
|        |  |  | SIGNATURES                                 |  |  |      | 19      | 
|       
|       
|       
|       
|        |  |  | EXHIBIT INDEX                              |  |  |      | 20      | 

2



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##### Table of Contents



ALLEN TELECOM INC.PART I  FINANCIAL INFORMATION
ITEM 1  FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS

(Amounts in Thousands)



















|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |              |        |         |         |  
|-------------------- | ---------------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ | ----------------------------------- | ------ | ------------- | ------- | ------------ | ------ | ------- | ------- | -
|                     |                                                            |                                                                                               |                                            |                                     |        | September 30, |         | December 31,
|                     |                                                            |                                                                                               |                                            |                                     |        | 1999          |         | 1998        
|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |             
|                     |                                                            |                                                                                               |                                            |                                     |        | (Unaudited)  
|ASSETS              
|                    
|                    
|                    
|                    
|                     | Current Assets:                                           
|                    
|                    
|                    
|                    
|                     |                                                            | Cash and equivalents                                                                          |                                            | $                                   | 14,225 |               |         | $            | 19,900 |        
|                    
|                    
|                    
|                    
|                     |                                                            | Accounts receivable (less allowance for doubtful
accounts of $3,290 and $3,189, respectively) |                                            |                                     | 93,022 |               |         |              | 83,739 |        
|                    
|                    
|                    
|                    
|                     |                                                            | Inventories: Raw materials                                                                    |                                            |                                     | 45,985 |               |         |              | 45,936 |        
|                    
|                    
|                    
|                    
|                     |                                                            |                                                                                               |                                            | Work in process                     |        |               | 21,961  |              |        |         | 19,634  |  
|                    
|                    
|                    
|                    
|                     |                                                            |                                                                                               |                                            | Finished goods                      |        |               | 22,645  |              |        |         | 19,165  |  
|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |             
|                     |                                                            |                                                                                               |                                            | Total inventories (net of reserves) |        |               | 90,591  |              |        |         | 84,735  |  
|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |             
|                     |                                                            | Assets of discontinued emissions testing business (Note 3)                                    |                                            |                                     |       |               |         |              | 848    |        
|                    
|                    
|                    
|                    
|                     |                                                            | Deferred income taxes                                                                         |                                            |                                     | 8,066  |               |         |              | 7,989  |        
|                    
|                    
|                    
|                    
|                     |                                                            | Other current assets                                                                          |                                            |                                     | 6,059  |               |         |              | 5,752  |        
|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |             
|                     |                                                            |                                                                                               |                                            | Total current assets                |        |               | 211,963 |              |        |         | 202,963 |  
|                    
|                    
|                    
|                    
|                     | Property, plant and equipment, net                         |                                                                                               |                                            | 54,036                              |        |               |         | 61,582       |       
|                    
|                    
|                    
|                    
|                     | Excess of cost over net assets of businesses acquired      |                                                                                               |                                            | 128,136                             |        |               |         | 131,939      |       
|                    
|                    
|                    
|                    
|                     | Assets of discontinued emissions testing business (Note 3) |                                                                                               |                                            |                                    |        |               |         | 24,950       |       
|                    
|                    
|                    
|                    
|                     | Deferred income taxes                                      |                                                                                               |                                            | 21,316                              |        |               |         | 16,186       |       
|                    
|                    
|                    
|                    
|                     | Other assets                                               |                                                                                               |                                            | 32,017                              |        |               |         | 27,965       |       
|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |             
|                     |                                                            |                                                                                               | TOTAL ASSETS                               |                                     | $      | 447,468       |         |              | $      | 465,585 |        
|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |             
|LIABILITIES         
|                    
|                    
|                    
|                    
|                     | Current Liabilities:                                      
|                    
|                    
|                    
|                    
|                     |                                                            | Notes payable and current maturities of long-term
obligations                                 |                                            | $                                   | 2,016  |               |         | $            | 11,556 |        
|                    
|                    
|                    
|                    
|                     |                                                            | Accounts payable                                                                              |                                            |                                     | 28,976 |               |         |              | 25,501 |        
|                    
|                    
|                    
|                    
|                     |                                                            | Accrued expenses                                                                              |                                            |                                     | 27,768 |               |         |              | 29,998 |        
|                    
|                    
|                    
|                    
|                     |                                                            | Income taxes payable                                                                          |                                            |                                     | 1,923  |               |         |              | 837    |        
|                    
|                    
|                    
|                    
|                     |                                                            | Deferred income taxes                                                                         |                                            |                                     | 2,057  |               |         |              | 1,606  |        
|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |             
|                     |                                                            |                                                                                               |                                            | Total current liabilities           |        |               | 62,740  |              |        |         | 69,498  |  
|                    
|                    
|                    
|                    
|                     | Long-term debt                                             |                                                                                               |                                            | 118,173                             |        |               |         | 128,677      |       
|                    
|                    
|                    
|                    
|                     | Deferred income taxes                                      |                                                                                               |                                            | 2,378                               |        |               |         | 429          |       
|                    
|                    
|                    
|                    
|                     | Other liabilities                                          |                                                                                               |                                            | 16,649                              |        |               |         | 16,900       |       
|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |             
|                     |                                                            |                                                                                               | TOTAL LIABILITIES                          |                                     |        | 199,940       |         |              |        | 215,504 |        
|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |             
|STOCKHOLDERS EQUITY
|                    
|                    
|                    
|                    
|                     | Common stock                                               |                                                                                               |                                            | 29,791                              |        |               |         | 29,759       |       
|                    
|                    
|                    
|                    
|                     | Paid-in capital                                            |                                                                                               |                                            | 180,652                             |        |               |         | 180,604      |       
|                    
|                    
|                    
|                    
|                     | Retained earnings                                          |                                                                                               |                                            | 63,445                              |        |               |         | 59,869       |       
|                    
|                    
|                    
|                    
|                     | Accumulated other comprehensive loss                       |                                                                                               |                                            | (9,354                              | )      |               |         | (2,255       | )     
|                    
|                    
|                    
|                    
|                     | Less: Treasury stock (at cost)                             |                                                                                               |                                            | (15,134                             | )      |               |         | (15,985      | )     
|                    
|                    
|                    
|                    
|                     |                                                            |                                                                                               |                                            | Unearned compensation               |        |               | (1,872  | )            |        |         | (1,911  | )
|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |             
|                     |                                                            |                                                                                               | TOTAL STOCKHOLDERS EQUITY                 |                                     |        | 247,528       |         |              |        | 250,081 |        
|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |             
|                     |                                                            |                                                                                               | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |                                     | $      | 447,468       |         |              | $      | 465,585 |        
|                     |                                                            |                                                                                               |                                            |                                     |        |               |         |             

See accompanying notes to the Consolidated Condensed Financial Statements.

3



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##### Table of Contents



ALLEN TELECOM INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Amounts in Thousands, Except Per Share Data)
(Unaudited)







|                                                                                                 |                         |                                                        |                                   |                           |         |                    |        |                   |         |        |         |      |          |        |         |      |          |        |  | 
|------------------------------------------------------------------------------------------------ | ----------------------- | ------------------------------------------------------ | --------------------------------- | ------------------------- | ------- | ------------------ | ------ | ----------------- | ------- | ------ | ------- | ---- | -------- | ------ | ------- | ---- | -------- | ------ |  | 
|                                                                                                 |                         |                                                        |                                   |                           |         | Three Months Ended |        | Nine Months Ended
|                                                                                                 |                         |                                                        |                                   |                           |         | September 30,      |        | September 30,    
|                                                                                                 |                         |                                                        |                                   |                           |         |                    |        |                  
|                                                                                                 |                         |                                                        |                                   |                           |         | 1999               |        | 1998              |         | 1999   |         | 1998
|                                                                                                 |                         |                                                        |                                   |                           |         |                    |        |                   |         |        |         |     
|Sales                                                                                            |                         | $                                                      | 89,536                            |                           |         | $                  | 90,955 |                   |         | $      | 242,950 |      |          | $      | 302,337 |     
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|Costs and expenses:                                                                             
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                 |                         | Cost of sales (Note 6)                                 |                                   |                           | (63,688 | )                  |        |                   | (69,027 | )      |         |      | (171,515 | )      |         |      | (226,999 | )     
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                 |                         | Selling, general and
administrative expenses (Note 6)  |                                   |                           | (14,954 | )                  |        |                   | (17,993 | )      |         |      | (42,497  | )      |         |      | (54,901  | )     
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                 |                         | Research and development and
product engineering costs |                                   |                           | (6,890  | )                  |        |                   | (7,398  | )      |         |      | (22,264  | )      |         |      | (23,244  | )     
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|Other income, net (Note 2)                                                                       |                         |                                                        | 3,013                             |                           |         |                    | 7,797  |                   |         |        | 3,238   |      |          |        | 5,456   |     
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|Interest expense                                                                                 |                         |                                                        | (2,397                            | )                         |         |                    | (2,342 | )                 |         |        | (7,094  | )    |          |        | (5,993  | )   
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|Interest income                                                                                  |                         |                                                        | 269                               |                           |         |                    | 356    |                   |         |        | 974     |      |          |        | 1,020   |     
|                                                                                                 |                         |                                                        |                                   |                           |         |                    |        |                   |         |        |         |      |          |        |         |     
|Income (loss) before taxes and
minority interests                                                |                         |                                                        | 4,889                             |                           |         |                    | 2,348  |                   |         |        | 3,792   |      |          |        | (2,324  | )   
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|(Provision) benefit for income taxes                                                             |                         |                                                        | (1,810                            | )                         |         |                    | 818    |                   |         |        | (1,425  | )    |          |        | 1,976   |     
|                                                                                                 |                         |                                                        |                                   |                           |         |                    |        |                   |         |        |         |      |          |        |         |     
|Income (loss) before minority
interests                                                          |                         |                                                        | 3,079                             |                           |         |                    | 3,166  |                   |         |        | 2,367   |      |          |        | (348    | )   
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|Minority interests                                                                               |                         |                                                        | (447                              | )                         |         |                    | (568   | )                 |         |        | (1,154  | )    |          |        | (1,850  | )   
|                                                                                                 |                         |                                                        |                                   |                           |         |                    |        |                   |         |        |         |      |          |        |         |     
|Income (loss) from continuing
operations                                                         |                         |                                                        | 2,632                             |                           |         |                    | 2,598  |                   |         |        | 1,213   |      |          |        | (2,198  | )   
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|Discontinued emissions testing
operation: Gain (loss) on disposal
(net of income taxes) (Note 3) |                         |                                                        |                                  |                           |         |                    | (4,710 | )                 |         |        | 2,363   |      |          |        | (4,710  | )   
|                                                                                                 |                         |                                                        |                                   |                           |         |                    |        |                   |         |        |         |      |          |        |         |     
|Net Income (loss)                                                                                |                         | $                                                      | 2,632                             |                           |         | $                  | (2,112 | )                 |         | $      | 3,576   |      |          | $      | (6,908  | )   
|                                                                                                 |                         |                                                        |                                   |                           |         |                    |        |                   |         |        |         |      |          |        |         |     
|Earnings (Loss) per Common                                                                      
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                 |                         |                                                        |                                   | Share, Basic and Diluted:
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                 | Continuing operations   |                                                        | $                                 | .10                       |         |                    | $      | .10               |         |        | $       | .04  |          |        | $       | (.08 | )       
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                 | Discontinued operations |                                                        |                                   |                          |         |                    |        | (.17              | )       |        |         | .09  |          |        |         | (.17 | )       
|                                                                                                 |                         |                                                        |                                   |                           |         |                    |        |                   |         |        |         |      |          |        |         |     
|                                                                                                 | Net income (loss)       |                                                        | $                                 | .10                       |         |                    | $      | (.07              | )       |        | $       | .13  |          |        | $       | (.25 | )       
|                                                                                                 |                         |                                                        |                                   |                           |         |                    |        |                   |         |        |         |      |          |        |         |     
|Weighted average common
shares outstanding:                                                     
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                 |                         |                                                        | Basic                             |                           |         | 27,480             |        |                   |         | 27,240 |         |      |          | 27,430 |         |      |          | 27,190 | 
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                 |                         |                                                        | Assumed exercise of stock options |                           |         | 240                |        |                   |         | 100    |         |      |          | 180    |         |      |          | 180    | 
|                                                                                                 |                         |                                                        |                                   |                           |         |                    |        |                   |         |        |         |      |          |        |         |     
|                                                                                                 |                         |                                                        | Diluted                           |                           |         | 27,720             |        |                   |         | 27,340 |         |      |          | 27,610 |         |      |          | 27,370 | 
|                                                                                                 |                         |                                                        |                                   |                           |         |                    |        |                   |         |        |         |      |          |        |         |     

See accompanying notes to the Consolidated Condensed Financial Statements.

4



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##### Table of Contents



ALLEN TELECOM INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)







|                                                                    |                                                          |                                                 |                                  |              |         |                   |         |         |         |     |        | 
|------------------------------------------------------------------- | -------------------------------------------------------- | ----------------------------------------------- | -------------------------------- | ------------ | ------- | ----------------- | ------- | ------- | ------- | --- | ------ | 
|                                                                    |                                                          |                                                 |                                  |              |         | Nine Months Ended
|                                                                    |                                                          |                                                 |                                  |              |         | September 30,    
|                                                                    |                                                          |                                                 |                                  |              |         |                  
|                                                                    |                                                          |                                                 |                                  |              |         | 1999              |         | 1998   
|                                                                    |                                                          |                                                 |                                  |              |         |                   |         |        
|INCOME (LOSS) FROM CONTINUING OPERATIONS                            |                                                          | $                                               | 1,213                            |              |         | $                 | (2,198  | )      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Adjustments to reconcile income (loss) to net cash flow:
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Depreciation                                    |                                  |              | 11,236  |                   |         |         | 11,610  |    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Amortization of goodwill                        |                                  |              | 5,195   |                   |         |         | 4,687   |    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Amortization of capitalized software            |                                  |              | 2,185   |                   |         |         | 1,494   |    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Other amortization                              |                                  |              | 544     |                   |         |         | 493     |    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Non-cash loss on write-down of assets           |                                  |              | 321     |                   |         |         | 17,010  |    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Gain on investments                             |                                  |              | (3,732  | )                 |         |         | (15,877 | )  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Changes in operating assets and liabilities:            
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Receivables                                     |                                  |              | (19,005 | )                 |         |         | 16,597  |    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Inventories                                     |                                  |              | (9,650  | )                 |         |         | 1,500   |    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Accounts payable and accrued expenses           |                                  |              | 4,394   |                   |         |         | (12,463 | )  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Income tax payable                              |                                  |              | (5,162  | )                 |         |         | (19,896 | )  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Other, net                                      |                                  |              | 2       |                   |         |         | (2,209  | )  
|                                                                    |                                                          |                                                 |                                  |              |         |                   |         |        
|                                                                    | CASH (USED) PROVIDED BY OPERATING ACTIVITIES             |                                                 |                                  | (12,459      | )       |                   |         | 748     |        
|                                                                    |                                                          |                                                 |                                  |              |         |                   |         |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                              
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Sale of discontinued emissions testing business |                                  |              | 9,387   |                   |         |         |        |    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Sale of investments                             |                                  |              | 10,934  |                   |         |         | 17,744  |    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Investments in telecommunications companies     |                                  |              | (423    | )                 |         |         | (29,710 | )  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Capital expenditures, net                       |                                  |              | (6,199  | )                 |         |         | (12,644 | )  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Capitalized software product costs              |                                  |              | (985    | )                 |         |         | (2,926  | )  
|                                                                    |                                                          |                                                 |                                  |              |         |                   |         |        
|                                                                    | CASH PROVIDED (USED) BY INVESTING ACTIVITIES             |                                                 |                                  | 12,714       |         |                   |         | (27,536 | )      
|                                                                    |                                                          |                                                 |                                  |              |         |                   |         |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                              
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | (Repayments of) proceeds from borrowings        |                                  |              | (6,422  | )                 |         |         | 8,905   |    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Treasury stock sold to employee benefit plan    |                                  |              | 694     |                   |         |         | 1,228   |    
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Exercise of stock options                       |                                  |              | 144     |                   |         |         | 313     |    
|                                                                    |                                                          |                                                 |                                  |              |         |                   |         |        
|                                                                    | CASH (USED) PROVIDED BY FINANCING ACTIVITIES             |                                                 |                                  | (5,584       | )       |                   |         | 10,446  |        
|                                                                    |                                                          |                                                 |                                  |              |         |                   |         |        
|Net Cash Provided (Used) By Discontinued
Emissions Testing Business |                                                          |                                                 | 1,810                            |              |         |                   | (1,659  | )      
|                                                                    |                                                          |                                                 |                                  |              |         |                   |         |        
|NET CASH USED                                                       |                                                          |                                                 | (3,519                           | )            |         |                   | (18,001 | )      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Effect of foreign currency exchange rate changes on cash            |                                                          |                                                 | (2,156                           | )            |         |                   | (379    | )      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Cash and equivalents at beginning of year                           |                                                          |                                                 | 19,900                           |              |         |                   | 30,775  |        
|                                                                    |                                                          |                                                 |                                  |              |         |                   |         |        
|CASH AND EQUIVALENTS AT END OF PERIOD                               |                                                          | $                                               | 14,225                           |              |         | $                 | 12,395  |        
|                                                                    |                                                          |                                                 |                                  |              |         |                   |         |        
|Supplemental cash flow data:                                       
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          |                                                 | Interest capitalized             |              | $       |                  |         |         | $       | 210 |       
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          |                                                 | Cash paid during the period for:
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          |                                                 |                                  | Interest     |         |                   | 5,830   |         |         |     | 5,462  | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          |                                                 |                                  | Income taxes |         |                   | 6,285   |         |         |     | 16,564 | 

See accompanying notes to the Consolidated Condensed Financial Statements.

5



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##### Table of Contents



ALLEN TELECOM INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(Amounts in Thousands)
(Unaudited)







|                                              |                                    |                                                     |                                    |        |        |        |        |   |         |   |               |   |               |  |   |        |         |        |  
|--------------------------------------------- | ---------------------------------- | --------------------------------------------------- | ---------------------------------- | ------ | ------ | ------ | ------ | - | ------- | - | ------------- | - | ------------- |  | - | ------ | ------- | ------ | -
|                                              |                                    |                                                     |                                    |        |        |        |        |   | Common  |   | Paid-In       |   | Comprehensive
|                                              |                                    |                                                     |                                    |        | Total  |        | Stock  |   | Capital |   | Income (Loss)
|                                              |                                    |                                                     |                                    |        |        |        |        |   |         |   |              
|For the nine months ended September 30, 1999:
|                                             
|                                             
|                                             
|                                             
|Beginning Balance, January 1, 1999            |                                    | $                                                   | 250,081                            |        |        | $      | 29,759 |   |         | $ | 180,604       |   |               |  |   |       
|                                             
|                                             
|                                             
|                                             
|Comprehensive Income (loss):                 
|                                             
|                                             
|                                             
|                                             
|                                              | Net income                         |                                                     |                                    | 3,576  |        |        |        |   |         |   |               |   |               |  | $ | 3,576  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Other comprehensive loss:         
|                                             
|                                             
|                                             
|                                             
|                                              |                                    | Foreign currency translation adjustments            |                                    |        | (7,099 | )      |        |   |         |   |               |   |               |  |   |        | (7,099  | )     
|                                              |                                    |                                                     |                                    |        |        |        |        |   |         |   |               |   |               |  |   |       
|                                              |                                    | Comprehensive loss                                  |                                    |        |        |        |        |   |         |   |               |   |               |  |   | $      | (3,523  | )     
|                                              |                                    |                                                     |                                    |        |        |        |        |   |         |   |               |   |               |  |   |       
|Treasury stock reissued                       |                                    |                                                     | 694                                |        |        |        |        |   |         |   | (81           | ) |               |  |   |       
|                                             
|                                             
|                                             
|                                             
|Exercise of stock options                     |                                    |                                                     | 144                                |        |        |        |        |   |         |   | 68            |   |               |  |   |       
|                                             
|                                             
|                                             
|                                             
|Restricted stock, net                         |                                    |                                                     | (170                               | )      |        |        | 32     |   |         |   | 61            |   |               |  |   |       
|                                             
|                                             
|                                             
|                                             
|Amortization of unearned compensation         |                                    |                                                     | 302                                |        |        |        |       |   |         |   |              |   |               |  |   |       
|                                              |                                    |                                                     |                                    |        |        |        |        |   |         |   |               |   |               |  |   |       
|Ending Balance, September 30, 1999            |                                    | $                                                   | 247,528                            |        |        | $      | 29,791 |   |         | $ | 180,652       |   |               |  |   |       
|                                              |                                    |                                                     |                                    |        |        |        |        |   |         |   |               |   |               |  |   |       
|For the nine months ended September 30, 1998:
|                                             
|                                             
|                                             
|                                             
|Beginning Balance, January 1, 1998            |                                    | $                                                   | 260,822                            |        |        | $      | 29,746 |   |         | $ | 180,538       |   |               |  |   |       
|                                             
|                                             
|                                             
|                                             
|Comprehensive Income (loss):                 
|                                             
|                                             
|                                             
|                                             
|                                              | Net loss                           |                                                     |                                    | (6,908 | )      |        |        |   |         |   |               |   |               |  | $ | (6,908 | )      
|                                             
|                                             
|                                             
|                                             
|                                              | Other comprehensive income (loss):
|                                             
|                                             
|                                             
|                                             
|                                              |                                    | Unrealized gain on securities arising during period |                                    |        | (9,588 | )      |        |   |         |   |               |   |               |  |   |        | (9,588  | )     
|                                             
|                                             
|                                             
|                                             
|                                              |                                    | Less: Tax on unrealized gain on securities          |                                    |        | 4,027  |        |        |   |         |   |               |   |               |  |   |        | 4,027   |       
|                                              |                                    |                                                     |                                    |        |        |        |        |   |         |   |               |   |               |  |   |       
|                                              |                                    |                                                     | Net: Unrealized gain on securities |        |        | (5,561 | )      |   |         |   |               |   |               |  |   |        |         | (5,561 | )
|                                             
|                                             
|                                             
|                                             
|                                              |                                    | Foreign currency translation adjustments            |                                    |        | (3,284 | )      |        |   |         |   |               |   |               |  |   |        | (3,284  | )     
|                                              |                                    |                                                     |                                    |        |        |        |        |   |         |   |               |   |               |  |   |       
|                                              |                                    | Other Comprehensive loss                            |                                    |        |        |        |        |   |         |   |               |   |               |  |   |        | (8,845  | )     
|                                              |                                    |                                                     |                                    |        |        |        |        |   |         |   |               |   |               |  |   |       
|                                              |                                    | Comprehensive loss                                  |                                    |        |        |        |        |   |         |   |               |   |               |  |   | $      | (15,753 | )     
|                                              |                                    |                                                     |                                    |        |        |        |        |   |         |   |               |   |               |  |   |       
|Exercise of stock options                     |                                    |                                                     | 313                                |        |        |        | 51     |   |         |   | 262           |  
|                                             
|                                             
|                                             
|                                             
|Treasury stock reissued                       |                                    |                                                     | 1,226                              |        |        |        |        |   |         |   | 402           |   |               |  |   |       
|                                             
|                                             
|                                             
|                                             
|Restricted stock, net                         |                                    |                                                     | (557                               | )      |        |        | (43    | ) |         |   | (640          | ) |               |  |   |       
|                                             
|                                             
|                                             
|                                             
|Amortization of unearned compensation         |                                    |                                                     | 383                                |        |        |        |       |   |         |   |              |   |               |  |   |       
|                                              |                                    |                                                     |                                    |        |        |        |        |   |         |   |               |   |               |  |   |       
|Ending Balance, September 30, 1998            |                                    | $                                                   | 246,434                            |        |        | $      | 29,754 |   |         | $ | 180,562       |   |               |  |   |       
|                                              |                                    |                                                     |                                    |        |        |        |        |   |         |   |               |   |               |  |   |       

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                              |                                    |                                                     |                                    |        |          |   |               |   |             |   |              |   |  |   |        |   |  |  | 
|--------------------------------------------- | ---------------------------------- | --------------------------------------------------- | ---------------------------------- | ------ | -------- | - | ------------- | - | ----------- | - | ------------ | - |  | - | ------ | - |  |  | 
|                                              |                                    |                                                     |                                    |        |          |   |               |   | Accumulated
|                                              |                                    |                                                     |                                    |        |          |   |               |   | Other      
|                                              |                                    |                                                     |                                    |        | Retained |   | Comprehensive |   | Treasury    |   | Unearned    
|                                              |                                    |                                                     |                                    |        | Earnings |   | Income (Loss) |   | Stock       |   | Compensation
|                                              |                                    |                                                     |                                    |        |          |   |               |   |             |   |             
|For the nine months ended September 30, 1999:
|                                             
|                                             
|                                             
|                                             
|Beginning Balance, January 1, 1999            |                                    | $                                                   | 59,869                             |        |          | $ | (2,255        | ) |             | $ | (15,985      | ) |  | $ | (1,911 | )
|                                             
|                                             
|                                             
|                                             
|Comprehensive Income (loss):                 
|                                             
|                                             
|                                             
|                                             
|                                              | Net income                         |                                                     |                                    | 3,576  |         
|                                             
|                                             
|                                             
|                                             
|                                              | Other comprehensive loss:         
|                                             
|                                             
|                                             
|                                             
|                                              |                                    | Foreign currency translation adjustments            |                                    |        |          |   |               |   | (7,099      | )
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                              |                                    | Comprehensive loss                                  |                                    |        |          |  
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|Treasury stock reissued                       |                                    |                                                     |                                    |        |          |   |               |   |             |   | 775          |  
|                                             
|                                             
|                                             
|                                             
|Exercise of stock options                     |                                    |                                                     |                                    |        |          |   |               |   |             |   | 76           |  
|                                             
|                                             
|                                             
|                                             
|Restricted stock, net                         |                                    |                                                     |                                    |        |          |   |               |   |             |   |              |   |  |   | (263   | )
|                                             
|                                             
|                                             
|                                             
|Amortization of unearned compensation         |                                    |                                                     |                                   |        |          |   |              |   |             |   |             |   |  |   | 302    |  
|                                              |                                    |                                                     |                                    |        |          |   |               |   |             |   |              |   |  |   |        |  
|Ending Balance, September 30, 1999            |                                    | $                                                   | 63,445                             |        |          | $ | (9,354        | ) |             | $ | (15,134      | ) |  | $ | (1,872 | )
|                                              |                                    |                                                     |                                    |        |          |   |               |   |             |   |              |   |  |   |        |  
|For the nine months ended September 30, 1998:
|                                             
|                                             
|                                             
|                                             
|Beginning Balance, January 1, 1998            |                                    | $                                                   | 70,091                             |        |          | $ | 207           |   |             | $ | (16,992      | ) |  | $ | (2,768 | )
|                                             
|                                             
|                                             
|                                             
|Comprehensive Income (loss):                 
|                                             
|                                             
|                                             
|                                             
|                                              | Net loss                           |                                                     |                                    | (6,908 | )       
|                                             
|                                             
|                                             
|                                             
|                                              | Other comprehensive income (loss):
|                                             
|                                             
|                                             
|                                             
|                                              |                                    | Unrealized gain on securities arising during period |                                    |        |          |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                    | Less: Tax on unrealized gain on securities          |                                    |        |          |  
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                              |                                    |                                                     | Net: Unrealized gain on securities |        |          |   |              
|                                             
|                                             
|                                             
|                                             
|                                              |                                    | Foreign currency translation adjustments            |                                    |        |          |  
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                              |                                    | Other Comprehensive loss                            |                                    |        |          |   |               |   | (8,845      | )
|                                              |                                    |                                                     |                                    |        |          |   |               |  
|                                              |                                    | Comprehensive loss                                  |                                    |        |          |  
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|Exercise of stock options                     |                                    |                                                     |                                    |       
|                                             
|                                             
|                                             
|                                             
|Treasury stock reissued                       |                                    |                                                     |                                    |        |          |   |               |   |             |   | 824          |  
|                                             
|                                             
|                                             
|                                             
|Restricted stock, net                         |                                    |                                                     |                                    |        |          |   |               |   |             |   | (236         | ) |  |   | 362    |  
|                                             
|                                             
|                                             
|                                             
|Amortization of unearned compensation         |                                    |                                                     |                                   |        |          |   |              |   |             |   |             |   |  |   | 383    |  
|                                              |                                    |                                                     |                                    |        |          |   |               |   |             |   |              |   |  |   |        |  
|Ending Balance, September 30, 1998            |                                    | $                                                   | 63,183                             |        |          | $ | (8,638        | ) |             | $ | (16,404      | ) |  | $ | (2,023 | )
|                                              |                                    |                                                     |                                    |        |          |   |               |   |             |   |              |   |  |   |        |  

See accompanying notes to the Consolidated Condensed Financial Statements.

6



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##### Table of Contents



ALLEN TELECOM INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)







1. General:

In the opinion of the management of Allen Telecom Inc. (the Company),
the accompanying unaudited consolidated condensed interim financial
statements reflect all adjustments necessary to present fairly the
financial position of the Company as of September 30, 1999 and the
consolidated results of its operations, cash flows and changes in
stockholders equity for the periods ended September 30, 1999 and 1998.
The results of operations for such interim periods are not necessarily
indicative of the results for the full year. The year-end 1998
consolidated condensed balance sheet was derived from audited financial
statements, but does not include all disclosures required by generally
accepted accounting principles. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Companys Annual Report on Form 10-K for the year ended December 31, 1998.

2. Other Income, net:

Other income for the third quarter and nine months ended September 30,
1999 relates principally to a gain on sale of the Companys investment in
NextWave Telecom Inc. The aggregate impact of other income for 1999 per
basic and diluted share, after related income tax effects, is $.07 and
$.08 for the three and nine-month periods, respectively. Other income in
the third quarter of 1998 includes gains from the sale of common stock
investments in telecommunication companies aggregating $.17 per basic and
diluted share after related income taxes. For the nine months ended
September 30, 1998, Other income also includes unrealized gains for the
adjustment to market value of a common stock investment of $8,100,000 and
the recognition of a loss reserve in the aggregate amount of $10,400,000
relating to investments in certain other telecommunication ventures
(including NextWave). The aggregate impact of other income for the nine
months ended September 30, 1998 was $.12 per basic and diluted share after
related income taxes.

3. Discontinued Operations:

On March 1, 1999, the Company sold its Marta Technologies, Inc. subsidiary
(Marta), which operated centralized automotive emissions testing
programs. Pursuant to the terms of the purchase agreement, the Company
recorded cash receipts of $9,387,000 and received a three-year $3,000,000,
12% installment note in exchange for all of the outstanding capital stock
of Marta. Additional purchase price consideration in the amount of
$2,000,000 may be earned and is contingent on future events. The gain on
sale of this discontinued operation is net of related income taxes in the
amount of approximately $1,400,000. In the third quarter of 1998, the
Company had recognized an additional loss reserve for the disposal of this
business in the amount of $4,710,000 (after related income tax benefit of
$2,640,000).

7



---



##### Table of Contents



4. Segment Disclosures:

The following table presents sales to external customers and results of
operations for the Companys two operating segments:

|                                                  |                               |   |                    |        |                   |   |       |        |      |   |        |         |   |   |        |         |  
|------------------------------------------------- | ----------------------------- | - | ------------------ | ------ | ----------------- | - | ----- | ------ | ---- | - | ------ | ------- | - | - | ------ | ------- | -
|                                                  |                               |   | Three Months Ended |        | Nine Months Ended
|                                                  |                               |   | September 30,      |        | September 30,    
|                                                  |                               |   |                    |        |                  
|                                                  |                               |   | 1999               |        | 1998              |   | 1999  |        | 1998
|                                                  |                               |   |                    |        |                   |   |       |        |     
|Sales to external customers:                     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Telecommunications equipment  |   | $                  | 84,470 |                   |   | $     | 83,641 |      |   | $      | 225,959 |   |   | $      | 280,473 |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Wireless engineering services |   |                    | 5,066  |                   |   |       | 7,314  |      |   |        | 16,991  |   |   |        | 21,864  |  
|                                                  |                               |   |                    |        |                   |   |       |        |      |   |        |         |   |   |        |        
|                                                  | Total sales                   |   | $                  | 89,536 |                   |   | $     | 90,955 |      |   | $      | 242,950 |   |   | $      | 302,337 |  
|                                                  |                               |   |                    |        |                   |   |       |        |      |   |        |         |   |   |        |        
|Results of Operations:                           
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Telecommunications equipment  |   | $                  | 7,491  |                   |   | $     | 1,396  |      |   | $      | 15,050  |   |   | $      | 10,931  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Wireless engineering services |   |                    | (180   | )                 |   |       | (2,036 | )    |   |        | 1,275   |   |   |        | (4,414  | )
|                                                  |                               |   |                    |        |                   |   |       |        |      |   |        |         |   |   |        |        
|                                                  |                               |   | 7,311              |        |                   |   | (640  | )      |      |   | 16,325 |         |   |   | 6,517  |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other income, net             |   |                    | 3,013  |                   |   |       | 7,797  |      |   |        | 3,238   |   |   |        | 5,456   |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Goodwill amortization         |   |                    | (1,733 | )                 |   |       | (1,544 | )    |   |        | (5,195  | ) |   |        | (4,687  | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | General corporate expenses    |   |                    | (1,574 | )                 |   |       | (1,279 | )    |   |        | (4,456  | ) |   |        | (4,637  | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net financing costs           |   |                    | (2,128 | )                 |   |       | (1,986 | )    |   |        | (6,120  | ) |   |        | (4,973  | )
|                                                  |                               |   |                    |        |                   |   |       |        |      |   |        |         |   |   |        |        
|Income (loss) before taxes and
minority interests |                               | $ | 4,889              |        |                   | $ | 2,348 |        |      | $ | 3,792  |         |   | $ | (2,324 | )      
|                                                  |                               |   |                    |        |                   |   |       |        |      |   |        |         |   |   |        |        

5. Impact of New Accounting Pronouncements:

The Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities, in June 1998. In June 1999, the FASB
issued Statement No. 137 Accounting for Derivative Instruments and
Hedging Activities  Deferral of the Effective Date of FASB Statement No.
133. This latter Statement delayed the implementation of Statement No.
133 which will now be effective for financial statements for all fiscal
quarters of all fiscal years beginning after June 15, 2000. Accordingly,
the Company will adopt the provisions of the standard on January 1, 2001.
The Company utilizes hedging activities primarily with regard to
receivables and payables to limit foreign currency exchange rate risk,
although utilization has been minimized with the introduction of the Euro.
The Company has not yet determined the effect, if any, of the adoption of
this Statement on results of operations and financial position.

8



---



##### Table of Contents



6. Operations:

On October 26, 1999, the Company announced the restructuring of certain of
its domestic operations, principally the decision to consolidate the high
volume manufacturing operations for its Site Management Products division
with its manufacturing plant in Italy, resulting in a reduction in force
and the sale of its domestic plant in Solon, Ohio. The Solon plant has
been operating at a substantial loss for the last two years.

The Company will continue to maintain its U.S. sales and customer service
operations, as well as its Sparks, Nevada research and development
facility to support its domestic OEM customer base for site management
products. The Company plans to sell its Solon manufacturing plant and
relocate the continuing employees from its Site Management Products,
Antenna Specialists and Mikom divisions to a smaller facility in the
community. As a result of these restructuring actions, the Company
expects to take a one-time charge, as yet to be determined, against
earnings in the fourth quarter of 1999.

In the second quarter of 1998, the Company announced the consolidation and
rationalization of certain product lines. In this connection, the Company
recorded a $15,800,000 before-tax special charge to earnings (or $.38 per
basic and diluted share after related income taxes) related to inventory,
other asset write-offs and employee terminations. Of this amount,
$12,200,000 was recorded in cost of sales, and $3,600,000 in selling,
general and administrative expenses.

7. Provision for Income Taxes:

The Benefit (Provision) for income taxes for the three and nine months
ended September 30, 1998 includes a $3,700,000 deferred tax benefit, or
$.13 per basic and diluted share, with respect to a change in the
applicable income tax rate on the undistributed earnings (prior to 1998)
of a foreign subsidiary as a result of the Companys acquisition of an
additional interest in such subsidiary. The acquisition allows for
earnings (when distributed) to be taxed at a lower rate. (See Note 8 for
additional information).

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8. Subsequent Event:

On October 21, 1999, the Company purchased the remaining 26% minority
interest in its Mikom GmbH subsidiary, together with most of the shares in
two related European entities, bringing total ownership in Mikom GmbH to
100%. The total purchase price was approximately $16,400,000. Of this
amount, $8,100,000 was paid in cash (utilizing existing credit lines),
$6,100,000 in the form of an irrevocable letter of credit due upon demand,
with an additional $2,200,000 due in October 2000. This transaction will
be reflected in the Companys fourth quarter 1999 financial statements.

As a result of this transaction, the Companys provision for income taxes
in the fourth quarter of 1999 will include a $1.0 million one-time
deferred tax benefit, with respect to a change in the applicable income
tax rate on the undistributed earnings (prior to 1999) of Mikom. The
acquisition allows for the Companys earnings (when distributed) to be
taxed at a lower rate. In addition, the Excess of cost over net assets
of business acquired (goodwill) will increase by approximately
$9,700,000.

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ALLEN TELECOM INC.
ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS

Results of Operations







Summary:

Allen Telecom Inc. reported income from continuing operations of $2.6 million
($.10 per basic and diluted share) for each of the three month periods ended
September 30, 1998 and 1999. For the nine months ended September 30, 1999, the
company reported income from continuing operations of $1.2 million, $.04 per
basic and diluted share, as compared with a loss of $2.2 million or ($.08) per
basic and diluted share in the comparable 1998 period.

Included in results of operations for the third quarter of 1999, is other
income relating principally to a gain on sale of the Companys investment in
NextWave Telecom Inc. The aggregate impact of other income for 1999 per basic
and diluted share, after related income tax effects, is $.07 and $.08 for the
three and nine month periods, respectively. Included in results of operations
for the third quarter of 1998 were gains from the sale of common stock
investments in telecommunication companies aggregating $.17 per basic and
diluted share after related income taxes. For the nine months ended September
30, 1998, other income also includes unrealized gains for the adjustment to
market value of a common stock investment of $8.1 million and the recognition
of a loss reserve in the aggregate amount of $10.4 million relating to
investments in certain other telecommunication ventures (including NextWave).
The aggregate impact of other income for the nine months ended September 30,
1998 was a $.12 gain per basic and diluted share after related income taxes.

Included in results of operations for the nine months ended September 30, 1998,
are special charges related to the consolidation and rationalization of certain
product lines. These actions included, among others, the discontinuance of
product development and marketing efforts on the SmartCell wireless local loop
product, which did not achieve adequate market acceptance, the consolidation of
two manufacturing operations of the Systems product line, the formation of a
worldwide Systems business, and the reorganization of the Companys North
American-based sales force. As a result of asset write-offs, severance and
other costs associated with such actions, the Company incurred a special charge
in the amount of $15.8 million before-tax, or $.38 per basic and diluted share
after related income taxes. (See Note 6 of Notes To Consolidated Condensed
Financial Statements.)

Telecommunications Equipment Manufacturing:

Telecommunications Equipment Manufacturing sales were up $.8 million, or 1.0%,
from $83.6 million in third quarter 1998 to $84.4 million in the third quarter
1999. Decreased sales in North and South America and Asia were more than
offset by increased sales in Europe, which were up
28.8% over third quarter 1998. Sales were down approximately 19.4% from $280.5
million for the nine-month period ended September 30, 1998 to $225.9 million
for the comparable 1999 period. The downturn was driven by a continued
unsettled climate in the global wireless telecommunications market with all
geographic regions showing a sales decline.

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|                                                 |  |               |      |              |  |      |      |      |  |   |       |  |  |   |       | 
|------------------------------------------------ |  | ------------- | ---- | ------------ |  | ---- | ---- | ---- |  | - | ----- |  |  | - | ----- | 
|Sales By Product Line                            |  | Third Quarter |      | Year to Date
|                                                 |  |               |      |             
|($ Millions)                                     |  | 1999          |      | 1998         |  | 1999 |      | 1998
|                                                 |  |               |      |              |  |      |      |     
|Systems Products                                 |  | $             | 24.2 |              |  | $    | 16.4 |      |  | $ | 69.9  |  |  | $ | 70.9  | 
|                                                
|                                                
|                                                
|                                                
|Site Management and Other Non-Antenna
Products   |  |               | 39.1 |              |  |      | 46.7 |      |  |   | 102.5 |  |  |   | 144.2 | 
|                                                
|                                                
|                                                
|                                                
|Mobile and Base Station Antennas                 |  |               | 21.1 |              |  |      | 20.5 |      |  |   | 53.5  |  |  |   | 65.4  | 
|                                                 |  |               |      |              |  |      |      |      |  |   |       |  |  |   |       | 
|Total Telecommunications Equipment
Manufacturing |  | $             | 84.4 |              |  | $    | 83.6 |      |  | $ | 225.9 |  |  | $ | 280.5 | 
|                                                 |  |               |      |              |  |      |      |      |  |   |       |  |  |   |       | 

Backlog for this Segment at September 30, 1999, increased 2.9% from June 30,
1999, from $69.1 million to $71.1 million.

Gross profit margins were 29.2% in the third quarter of 1999, as compared with
24.8% in the third quarter of 1998. The improvement is due to higher sales
volume of the Systems Products. Margins, excluding 1998 restructuring
expenses, were 29.5% and 29.8% for the nine-month period ended September 30,
1999 and 1998, respectively.

Selling, general and administrative expenses were $9.8 million, or 11.6% of
sales, and $12.4 million, or 14.9% of sales, for the third quarters of 1999 and
1998, respectively. This improvement is related to the restructuring efforts
completed in late 1998. For the nine-month periods ended September 30, 1999
and 1998 the ratio of selling, general and administrative expenses to sales
were 12.8% and 12.2% (excluding special charges), respectively.

On October 26, 1999, the Company announced the restructuring of certain of its
domestic operations, principally the decision to consolidate the high volume
manufacturing operations for its Site Management Products division with its
manufacturing plant in Italy, resulting in a reduction in force and the sale of
its domestic plant in Solon, Ohio. The Solon plant has been operating at a
substantial loss for the last two years. These actions should result in
improved gross profit margins and profitability for the Site Management
Products division in the year 2000.

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The Company will continue to maintain its U.S. sales and customer service
operations, as well as its Sparks, Nevada research and development facility to
support its domestic OEM customer base for site management products. The
Company plans to sell its Solon manufacturing plant and relocate the continuing
employees from its Site Management Products, Antenna Specialists and Mikom
divisions to a smaller facility in the community. As a result of these
restructuring actions, the Company expects to take a one-time charge, as yet to
be determined, against earnings in the fourth quarter of 1999.

Wireless Engineering Services:

Wireless Engineering Services sales were down $2.2 million, or 30.4%, from $7.3
million in third quarter 1998 to $5.1 million in third quarter 1999. Sales were
down approximately 22% from $21.9 million for the nine-month period ended
September 30, 1998, to $17.0 million for the nine-month period ended September
30, 1999.

Gross profit margins for Wireless Engineering Services were 23.1% in the third
quarter of 1999, as compared with 16.0% in the third quarter of 1998. This
margin increase is primarily attributable to the restructuring during the
fourth quarter of 1998, which improved margins in both software and engineering
products. In addition, deployment of engineers was at a higher rate in the
third quarter of 1999 than in the third quarter of 1998. Gross profit margins
also increased from 18.6% for the nine-month period ended September 30, 1998 to
27.8% for the nine-month period ended September 30, 1999.

The selling, general and administrative expenses for the Wireless Engineering
Services were 26.6% and 37.3% of sales for the third quarters of 1999 and 1998,
respectively. For the nine-month period ended September 30, 1999 and 1998 the
ratio of selling, general and administrative expenses to sales were 20.3% and
34.8%, respectively. This lower percentage is attributable to restructuring
efforts which occurred in the fourth quarter of 1998.

Wireless Engineering Services backlog was $1.1 million at September 30, 1999,
as compared to $1.0 million at June 30, 1999.

Research and Development:

Research and development and new product engineering costs were 8.2% and 8.1%
of sales in the third quarters of 1999 and 1998, respectively. The actual
dollar spending declined from the
same period of 1998 from $7.4 million to $6.9 million. A small decline in
spending is also expected in the fourth quarter due to the sale of the
Companys Signal Science Inc. business in October 1999. Spending for field
trials of the new E-911 Geolocation product are expected to become more
significant next year.

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Other Income:

See Note 2 of Notes to Consolidated Condensed Financial Statements for
information concerning these items.

Interest and Financing Expenses:

Net interest and financing costs were relatively stable for the three months
ended September 30, 1999 and 1998 at $2.1 million and $2.0 million,
respectively. Net interest and financing costs increased to $6.1 million from
$4.9 million in the nine months ended September 30, 1999 and 1998,
respectively. The principal reason for the increase is a higher level of
outstanding borrowings through most of the first quarter of 1999 due, in large
part, to expending $42.1 million in 1998 on investments in telecommunications
companies, as well as higher average interest rates on outstanding borrowings.

Provision for Income Taxes:

The Companys effective tax rate was 37% for the quarter and nine months ended
September 30, 1999. This is in line with the Companys current expectation for
the full year tax rate (before a special one time deferred tax benefit
discussed below), taking into consideration state taxes and available tax
credits. The Companys provision for income taxes for the fourth quarter of
1999 will include a $1.0 million one time deferred tax benefit with respect to
a change in the applicable income tax rate on the undistributed earnings (prior
to 1999) of its Mikom GmbH subsidiary, due to the purchase of the remaining
minority interest on October 21, 1999. The acquisition allows for the
Companys pro rata share of earnings (when distributed) to be taxed at a lower
rate.

In the third quarter of 1998, the Company recorded an income tax benefit
despite reporting income before taxes, which would otherwise have resulted in
an expected income tax provision. The third quarter of 1998 included a similar
$3.7 million deferred tax benefit with respect to a change in the applicable
income tax rate on the undistributed earnings (prior to 1998) of Mikom
as a result of the Companys then acquisition of an additional interest in that
subsidiary. This benefit was offset, in part, by certain additional tax
provisions. The aforementioned benefit was also the reason for the high level
of income tax benefit, relative to the loss before taxes, for the nine months
ended September 30, 1998.

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Through September 30, 1999, the Company has recorded a net U.S. deferred tax
asset pertaining to the recognition of net operating loss carrryforwards,
related temporary differences and tax credits in the amount of approximately
$24.0 million and has not provided any valuation allowance with respect
thereto. The Company believes the realization of this asset is more likely
than not.

Minority Interests:

Minority interest expense decreased from $1.9 million to $1.2 million in the
nine month period ended September 30, 1998 and 1999, respectively. Such
expense decreased from $.6 million to $.4 million in the quarters ended
September 30, 1998 and 1999, respectively. This decrease is due to the
aforementioned acquisition in late 1998 of a portion of the remaining minority
interest in Mikom GmbH. As indicated above, the remaining minority interest
was purchased in October 1999; accordingly, minority interest expense in fiscal
year 2000 will be substantially reduced.

Liquidity and Capital Resources:

As set forth in the Consolidated Condensed Statement of Cash Flows, the Company
used $12.5 million of cash in operations for the nine months ended September
30, 1999 as compared to generating cash of $.7 million for the comparable 1998
period. The decline in cash flow from operations is principally due to a
higher investment in working capital offset, in part, by lower income tax
payments in 1999. The Company generated $12.7 million from investing
activities in the first nine months of 1999, primarily from the sale of its
discontinued emissions testing business (as more fully described in Note 4 of
the Notes to Consolidated Condensed Financial Statements), and cash collected
from the sale of investments. This cash was used, in part, to repay long term
borrowings, which, along with the transfer of a $12.4 million capital lease
obligation in connection with the sale of the aforementioned discontinued
operation, is the principal reason for the decline in debt levels in the
Consolidated Condensed Balance Sheet at
September 30, 1999. Capital expenditures for 1999 were $6.2 million as compared
with $12.6 million in the comparable 1998 period due to tighter spending
controls. Capital spending is significantly below the level of depreciation
($11.2 million) which accounts for the decline in property, plant and equipment
at September 30, 1999, compared with December 31, 1998. At September 30,1999,
the Company had available unused worldwide lines of credit in the amount of
approximately $90.0 million.

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As described in Note 8 of the Notes To Consolidated Condensed Financial
Statements, the Company purchased the remaining 26% minority interest in its
Mikom GmbH subsidiary, together with most of the shares in two related European
entities. Of the $16.4 million purchase price, $8.1 million was paid in cash
through the use of existing credit lines, $6.1 million in the form of an
irrevocable letter of credit due upon demand with an additional $2.2 million
due in October 2000.

In the first nine months of 1998, the Company expended $29.7 million for
investments in telecommunications companies, relating primarily to the final
purchase price for the outstanding minority interest in its Italian subsidiary,
Forem S.r.l.

Year 2000:

Subsequent to the filing by the Company of its Annual Report on Form 10-K,
there have been no significant changes in outlook or timing with respect to the
Year 2000 (Y2K) issue. The Company is still substantially on target to meet
its objectives for the Y2K remediation plan, as follows.



| |  | The identification of computer hardware and netware systems, computer
software and related systems and test equipment that may be
susceptible to Y2K failures has been completed.                                                                                                                                                                                                                                            
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | The actual remediation and replacement of all critical laboratory,
factory and test equipment has been completed.                                                                                                                                                                                                                                                                                                            
| 
| |  | The remediation and replacement of internal business systems and
embedded chips is substantially complete. A number of software
vendors continue to issue new patches and/or service packs which are
in the process of being installed to correct Y2K problems. A few
isolated issues remain with one voice mail system and two bar coding
systems that are scheduled to be upgraded in the early part of the
fourth quarter.

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| |  | Final testing of solutions to Y2K problems periodically identified in
business systems, hardware, software and embedded chips for Y2K
compliance is substantially complete.                                                        
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Independent verification of Y2K compliance of internal software
systems is substantially complete.                                                                                                                                 
| 
| |  | Identification of significant vendors and key service providers has
been completed. Vendor audits of most key vendors are substantially
complete. Some changes in vendors have been required, and contingency
plans are in process.
| 
| |  | Contingency plans will be developed, as necessary, during the fourth
quarter of 1999 as the Companys Y2K readiness plan reaches
finalization.                                                                                     

Notwithstanding all of the Companys efforts, there are still many
uncertainties regarding the Y2K issue. For example, if the Company is
unsuccessful in identifying or finding all Y2K problems in its critical
operations or if critical customers or suppliers are unsuccessful in resolving
Y2K issues, the Companys results of operations or financial condition could be
materially impacted.

The total budgeted costs associated with required Y2K remediation efforts are
approximately $1.5 million, of which approximately $1.3 million was spent
through September 30, 1999.

Legal Disclaimer:

Statements included in this Form 10-Q, which are not historical in nature, are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
regarding the Companys future performance and financial results are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those set forth in the forward-looking statements. Allen
Telecom Inc.s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q
contain certain detailed factors that could cause the Companys actual results
to materially differ from forward-looking statements made by the Company,
including, among others, the costs and timetable for new product development,
the health and economic stability of the world and national markets, the
uncertain level of purchases by current and prospective customers of the
Companys products and services, the impact of competitive products and
pricing, the impact of U.S. and foreign government legislative/regulatory
actions, including, for example, the scope and timing of E-911 geolocation
requirements and spectrum availability for new wireless applications, the
successful discovery and correction of potential Year 2000 computer sensitive
problems by both the Company and its key suppliers and customers, and other
transactions.

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ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As set forth and discussed in Managements Discussion and Analysis of
Financial Condition and Results of Operations under Item 7 of its Annual
Report on Form 10-K for the year ended December 31, 1998, with the introduction
of the European Economic and Monetary Union common currency, the Euro, the
Companys exposure to foreign currency contracts risk has diminished
significantly in 1999. In this connection, the Company has significantly
reduced its usage of currency rate contracts.







PART II  OTHER INFORMATION







ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K.

|    |  |                                                                                                                                                                                                                                                                                            
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Exhibits                                                                                                                                                                                                                                                                                   
|   
|   
|   
|   
|    |  | (27) Financial Data Schedule.                                                                                                                                                                                                                                                              
|   
|   
|   
|   
|   
|   
|   
|   
|   
|   
|   
|   
|(b) |  | Reports on Form 8-K.                                                                                                                                                                                                                                                                       
|   
|   
|   
|   
|    |  | On September 30, 1999, the Company filed a Current Report on Form 8-K
dated September 28, 1999 reporting the engagement of Deloitte & Touche
LLP as the Companys worldwide auditing service provider, and the
dismissal of PricewaterhouseCoopers LLP as the Companys principal
auditors.

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SIGNATURES

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

|                        |  |  |     |  |  |                               
|----------------------- |  |  | --- |  |  | ------------------------------
|                        |  |  |     |  |  | Allen Telecom Inc.            
|                        |  |  |     |  |  |                               
|                        |  |  |     |  |  | (Registrant)                  
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|Date: November 11, 1999 |  |  | By: |  |  | /s/ Robert A. Youdelman       
|                        |  |  |     |  |  |                               
|                        |  |  |     |  |  | Robert A. Youdelman           
|                       
|                       
|                       
|                       
|                        |  |  |     |  |  | Executive Vice President      
|                       
|                       
|                       
|                       
|                        |  |  |     |  |  | (Chief Financial Officer)     
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|Date: November 11, 1999 |  |  | By: |  |  | /s/ James L. LePorte, III     
|                        |  |  |     |  |  |                               
|                        |  |  |     |  |  | James L. LePorte, III         
|                       
|                       
|                       
|                       
|                        |  |  |     |  |  | Vice President  Finance      
|                       
|                       
|                       
|                       
|                        |  |  |     |  |  | (Principal Accounting Officer)

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EXHIBIT INDEX

ALLEN TELECOM INC.

|               |  |  |                          | 
|-------------- |  |  | ------------------------ | 
|Exhibit Number
|              
|(27)           |  |  | Financial Data Schedule. | 

20