TABLE OF CONTENTS




|                               |                                                                                                |  |  |  |  |  |  | 
|------------------------------ | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1  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 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|Exhibit 10(A)                 
|Exhibit 27                    



---



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 June 30, 2000 |  | 

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 |  | 44122     
|                                                   
|(Address of Principal Executive Offices)            |  | (Zip Code)

(Registrants Telephone Number, Including Area Code)      (216) 765-5855

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:

|                          |  |                             
|------------------------- |  | ----------------------------
|Class of Common Stock     |  | Outstanding atAugust 1, 2000
|                         
|Par value $1.00 per share |  | 27,942,050                  





---



##### Table of Contents



ALLEN TELECOM INC.

TABLE OF CONTENTS

|                               |                                                                                                |                                                                                                     |  |         |       | 
|------------------------------ | ---------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------- |  | ------- | ----- | 
|                               |                                                                                                |                                                                                                     |  | Page   
|                               |                                                                                                |                                                                                                     |  | No.    
|                               |                                                                                                |                                                                                                     |  |        
|PART I. FINANCIAL INFORMATION:
|                              
|                               | ITEM 1  Financial Statements:                                                                
|                              
|                               |                                                                                                | Condensed Consolidated Balance Sheets -
June 30, 2000 and December 31, 1999                         |  |         | 3     | 
|                              
|                               |                                                                                                | Condensed Consolidated Statements of Income -
Three and Six Months Ended June 30, 2000 and 1999     |  |         | 4     | 
|                              
|                               |                                                                                                | Condensed Consolidated Statements of Cash Flows -
Six Months Ended June 30, 2000 and 1999           |  |         | 5     | 
|                              
|                               |                                                                                                | Condensed Consolidated Statements of Stockholders
Equity  Six Months Ended June 30, 2000 and 1999 |  |         | 6     | 
|                              
|                               |                                                                                                | Notes to Condensed Consolidated Financial Statements                                                |  |         | 7  9
|                              
|                               | ITEM 2 - Managements Discussion and Analysis of
Financial Condition and Results of Operations |                                                                                                     |  | 10  14
|                              
|                               | ITEM 3 - Quantitative and Qualitative Disclosures About
Market Risks                           |                                                                                                     |  | 15      |      
|                              
|PART II. OTHER INFORMATION:   
|                              
|                               | ITEM 4 - Submission of Matters to a Vote of Security Holders                                   |                                                                                                     |  | 15      |      
|                              
|                               | ITEM 6 - Exhibits and Reports on Form 8-K                                                      |                                                                                                     |  | 16      |      
|                              
|                               |                                                                                                | Signatures                                                                                          |  |         | 17    | 
|                              
|                               |                                                                                                | Exhibit Index                                                                                       |  |         | 18    | 

2



---



##### Table of Contents









ALLEN TELECOM INC.PART I  FINANCIAL INFORMATION
ITEM 1  FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)

|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |              |        |         |         | 
|-------------------- | ----------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ | ----------------------------------- | ------ | ----------- | ------- | ------------ | ------ | ------- | ------- | 
|                     |                                                       |                                                                                               |                                            |                                     |        | June 30,    |         | December 31,
|                     |                                                       |                                                                                               |                                            |                                     |        | 2000        |         | 1999        
|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |             
|                     |                                                       |                                                                                               |                                            |                                     |        | (Unaudited)
|ASSETS              
|                    
|                    
|                    
|                    
|                     | Current Assets:                                      
|                    
|                    
|                    
|                    
|                     |                                                       | Cash and equivalents                                                                          |                                            | $                                   | 22,388 |             |         | $            | 22,085 |        
|                    
|                    
|                    
|                    
|                     |                                                       | Accounts receivable (less allowance for doubtful
accounts of $2,541 and $2,537, respectively) |                                            |                                     | 77,664 |             |         |              | 87,394 |        
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                     |                                                       | Inventories: Raw materials                                                                    |                                            |                                     | 48,480 |             |         |              | 43,608 |        
|                    
|                    
|                    
|                    
|                     |                                                       |                                                                                               |                                            | Work in process                     |        |             | 21,764  |              |        |         | 19,343  | 
|                    
|                    
|                    
|                    
|                     |                                                       |                                                                                               |                                            | Finished goods                      |        |             | 21,732  |              |        |         | 19,762  | 
|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |             
|                     |                                                       |                                                                                               |                                            | Total inventories (net of reserves) |        |             | 91,976  |              |        |         | 82,713  | 
|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |             
|                     |                                                       | Deferred income taxes                                                                         |                                            |                                     | 5,158  |             |         |              | 6,966  |        
|                    
|                    
|                    
|                    
|                     |                                                       | Other current assets                                                                          |                                            |                                     | 4,446  |             |         |              | 4,992  |        
|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |             
|                     |                                                       |                                                                                               |                                            | Total current assets                |        |             | 201,632 |              |        |         | 204,150 | 
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                    
|                     | Property, plant and equipment, net                    |                                                                                               |                                            | 40,252                              |        |             |         | 49,253       |       
|                    
|                    
|                    
|                    
|                     | Excess of cost over net assets of businesses acquired |                                                                                               |                                            | 131,713                             |        |             |         | 134,723      |       
|                    
|                    
|                    
|                    
|                     | Deferred income taxes                                 |                                                                                               |                                            | 32,944                              |        |             |         | 30,281       |       
|                    
|                    
|                    
|                    
|                     | Other assets                                          |                                                                                               |                                            | 38,476                              |        |             |         | 33,023       |       
|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |             
|                     |                                                       |                                                                                               | TOTAL ASSETS                               |                                     | $      | 445,017     |         |              | $      | 451,430 |        
|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |             
|LIABILITIES         
|                    
|                    
|                    
|                    
|                     | Current Liabilities:                                 
|                    
|                    
|                    
|                    
|                     |                                                       | Notes payable and current maturities of long-term
obligations                                 |                                            | $                                   | 1,199  |             |         | $            | 2,181  |        
|                    
|                    
|                    
|                    
|                     |                                                       | Accounts payable                                                                              |                                            |                                     | 37,043 |             |         |              | 41,139 |        
|                    
|                    
|                    
|                    
|                     |                                                       | Accrued expenses                                                                              |                                            |                                     | 26,806 |             |         |              | 27,943 |        
|                    
|                    
|                    
|                    
|                     |                                                       | Income taxes payable                                                                          |                                            |                                     | 2,268  |             |         |              | 2,464  |        
|                    
|                    
|                    
|                    
|                     |                                                       | Deferred income taxes                                                                         |                                            |                                     | 4,073  |             |         |              | 2,361  |        
|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |             
|                     |                                                       |                                                                                               |                                            | Total current liabilities           |        |             | 71,389  |              |        |         | 76,088  | 
|                    
|                    
|                    
|                    
|                     | Long-term debt                                        |                                                                                               |                                            | 129,460                             |        |             |         | 120,905      |       
|                    
|                    
|                    
|                    
|                     | Deferred income taxes                                 |                                                                                               |                                            | 1,516                               |        |             |         | 3,455        |       
|                    
|                    
|                    
|                    
|                     | Other liabilities                                     |                                                                                               |                                            | 10,196                              |        |             |         | 10,070       |       
|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |             
|                     |                                                       |                                                                                               | TOTAL LIABILITIES                          |                                     |        | 212,561     |         |              |        | 210,518 |        
|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |             
|STOCKHOLDERS EQUITY
|                    
|                    
|                    
|                    
|                     | Common stock                                          |                                                                                               |                                            | 30,026                              |        |             |         | 30,010       |       
|                    
|                    
|                    
|                    
|                     | Paid-in capital                                       |                                                                                               |                                            | 181,495                             |        |             |         | 181,335      |       
|                    
|                    
|                    
|                    
|                     | Retained earnings                                     |                                                                                               |                                            | 61,126                              |        |             |         | 57,014       |       
|                    
|                    
|                    
|                    
|                     | Accumulated other comprehensive loss                  |                                                                                               |                                            | (23,853                             | )      |             |         | (10,685      | )     
|                    
|                    
|                    
|                    
|                     | Less: Treasury stock (at cost)                        |                                                                                               |                                            | (14,828                             | )      |             |         | (14,978      | )     
|                    
|                    
|                    
|                    
|                     |                                                       |                                                                                               | Unearned compensation                      |                                     |        | (1,510      | )       |              |        | (1,784  | )      
|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |             
|                     |                                                       |                                                                                               | TOTAL STOCKHOLDERS EQUITY                 |                                     |        | 232,456     |         |              |        | 240,912 |        
|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |             
|                     |                                                       |                                                                                               | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |                                     | $      | 445,017     |         |              | $      | 451,430 |        
|                     |                                                       |                                                                                               |                                            |                                     |        |             |         |             

See accompanying notes to the Condensed Consolidated Financial Statements.

3



---



##### Table of Contents



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

|                                                                                      |                                        |                                                        |                                   |     |                    |        |                  |   |         |        |         |     |          |        |         |      |          |        | 
|------------------------------------------------------------------------------------- | -------------------------------------- | ------------------------------------------------------ | --------------------------------- | --- | ------------------ | ------ | ---------------- | - | ------- | ------ | ------- | --- | -------- | ------ | ------- | ---- | -------- | ------ | 
|                                                                                      |                                        |                                                        |                                   |     | Three Months Ended |        | Six Months Ended
|                                                                                      |                                        |                                                        |                                   |     | June 30,           |        | June 30,        
|                                                                                      |                                        |                                                        |                                   |     |                    |        |                 
|                                                                                      |                                        |                                                        |                                   |     | 2000               |        | 1999             |   | 2000    |        | 1999   
|                                                                                      |                                        |                                                        |                                   |     |                    |        |                  |   |         |        |        
|Sales                                                                                 |                                        | $                                                      | 88,440                            |     |                    | $      | 77,501           |   |         | $      | 176,396 |     |          | $      | 153,414 |     
|                                                                                      |                                        |                                                        |                                   |     |                    |        |                  |   |         |        |         |     |          |        |         |     
|Costs and expenses:                                                                  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                        | Cost of sales (Note 2)                                 |                                   |     | (60,856            | )      |                  |   | (54,144 | )      |         |     | (123,430 | )      |         |      | (107,827 | )     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                        | Selling, general and
administrative expenses (Note 2)  |                                   |     | (15,080            | )      |                  |   | (13,467 | )      |         |     | (31,341  | )      |         |      | (27,543  | )     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                        | Research and development and
product engineering costs |                                   |     | (6,381             | )      |                  |   | (7,710  | )      |         |     | (12,567  | )      |         |      | (15,374  | )     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Other income                                                                          |                                        |                                                        |                                  |     |                    |        | 390              |   |         |        |        |     |          |        | 225     |     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Interest expense                                                                      |                                        |                                                        | (2,625                            | )   |                    |        | (2,343           | ) |         |        | (5,096  | )   |          |        | (4,699  | )   
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Interest income                                                                       |                                        |                                                        | 417                               |     |                    |        | 415              |   |         |        | 927     |     |          |        | 707     |     
|                                                                                      |                                        |                                                        |                                   |     |                    |        |                  |   |         |        |         |     |          |        |         |     
|Income (loss) before taxes and
minority interests                                     |                                        |                                                        | 3,915                             |     |                    |        | 642              |   |         |        | 4,889   |     |          |        | (1,097  | )   
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|(Provision) benefit for income taxes                                                  |                                        |                                                        | (1,634                            | )   |                    |        | (222             | ) |         |        | (2,025  | )   |          |        | 385     |     
|                                                                                      |                                        |                                                        |                                   |     |                    |        |                  |   |         |        |         |     |          |        |         |     
|Income (loss) before minority
interests                                               |                                        |                                                        | 2,281                             |     |                    |        | 420              |   |         |        | 2,864   |     |          |        | (712    | )   
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Minority interests                                                                    |                                        |                                                        | (39                               | )   |                    |        | (403             | ) |         |        | (52     | )   |          |        | (707    | )   
|                                                                                      |                                        |                                                        |                                   |     |                    |        |                  |   |         |        |         |     |          |        |         |     
|Income (loss) from continuing
operations                                              |                                        |                                                        | 2,242                             |     |                    |        | 17               |   |         |        | 2,812   |     |          |        | (1,419  | )   
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Discontinued emissions testing
operation: Gain on sale (net of
income taxes) (Note 3) |                                        |                                                        |                                  |     |                    |        |                 |   |         |        | 1,300   |     |          |        | 2,363   |     
|                                                                                      |                                        |                                                        |                                   |     |                    |        |                  |   |         |        |         |     |          |        |         |     
|Net income                                                                            |                                        | $                                                      | 2,242                             |     |                    | $      | 17               |   |         | $      | 4,112   |     |          | $      | 944     |     
|                                                                                      |                                        |                                                        |                                   |     |                    |        |                  |   |         |        |         |     |          |        |         |     
|Earnings (Loss) per Common                                                           
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Share, Basic and Diluted:                                                            
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Continuing operations                  |                                                        | $                                 | .08 |                    |        | $                |  |         |        | $       | .10 |          |        | $       | (.05 | )       
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Discontinued operations  gain on sale |                                                        |                                   |    |                    |        |                  |  |         |        |         | .05 |          |        |         | .08  |         
|                                                                                      |                                        |                                                        |                                   |     |                    |        |                  |   |         |        |         |     |          |        |         |     
|                                                                                      | Net income                             |                                                        | $                                 | .08 |                    |        | $                |  |         |        | $       | .15 |          |        | $       | .03  |         
|                                                                                      |                                        |                                                        |                                   |     |                    |        |                  |   |         |        |         |     |          |        |         |     
|Weighted average common
shares outstanding:                                          
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                        |                                                        | Basic                             |     |                    | 27,800 |                  |   |         | 27,440 |         |     |          | 27,790 |         |      |          | 27,410 | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                        |                                                        | Assumed exercise of stock options |     |                    | 400    |                  |   |         | 230    |         |     |          | 370    |         |      |          | 150    | 
|                                                                                      |                                        |                                                        |                                   |     |                    |        |                  |   |         |        |         |     |          |        |         |     
|                                                                                      |                                        |                                                        | Diluted                           |     |                    | 28,200 |                  |   |         | 27,670 |         |     |          | 28,160 |         |      |          | 27,560 | 
|                                                                                      |                                        |                                                        |                                   |     |                    |        |                  |   |         |        |         |     |          |        |         |     

See accompanying notes to the Condensed Consolidated Financial Statements.

4



---



##### Table of Contents



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

|                                                             |                                                                |                                                 |                                  |              |         |                  |        |         |         |   |       | 
|------------------------------------------------------------ | -------------------------------------------------------------- | ----------------------------------------------- | -------------------------------- | ------------ | ------- | ---------------- | ------ | ------- | ------- | - | ----- | 
|                                                             |                                                                |                                                 |                                  |              |         | Six Months Ended
|                                                             |                                                                |                                                 |                                  |              |         | June 30,        
|                                                             |                                                                |                                                 |                                  |              |         |                 
|                                                             |                                                                |                                                 |                                  |              |         | 2000             |        | 1999   
|                                                             |                                                                |                                                 |                                  |              |         |                  |        |        
|CASH FLOW FROM OPERATIONS:                                  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Income (loss) from continuing operations                       |                                                 | $                                | 2,812        |         |                  | $      | (1,419  | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Adjustments to reconcile income (loss) to operating cash flow:
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Depreciation                                    |                                  |              | 6,947   |                  |        |         | 7,733   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Amortization of goodwill                        |                                  |              | 3,861   |                  |        |         | 3,462   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Amortization of capitalized software            |                                  |              | 1,512   |                  |        |         | 1,307   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Other amortization                              |                                  |              | 150     |                  |        |         | 501     |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Non-cash loss on write-down of assets           |                                  |              | 393     |                  |        |         |        |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Gain on investments                             |                                  |              |        |                  |        |         | (225    | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Changes in operating assets and liabilities:                  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Receivables                                     |                                  |              | 3,702   |                  |        |         | (10,035 | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Inventories                                     |                                  |              | (15,888 | )                |        |         | (9,483  | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Accounts payable and accrued expenses           |                                  |              | 5,857   |                  |        |         | 1,838   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Income tax payable                              |                                  |              | (1,406  | )                |        |         | (5,226  | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Other, net                                      |                                  |              | (3,061  | )                |        |         | (1,480  | )
|                                                             |                                                                |                                                 |                                  |              |         |                  |        |        
|                                                             | CASH PROVIDED (USED) BY OPERATING ACTIVITIES                   |                                                 |                                  | 4,879        |         |                  |        | (13,027 | )      
|                                                             |                                                                |                                                 |                                  |              |         |                  |        |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Sale of discontinued emissions testing business |                                  |              |        |                  |        |         | 9,387   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Collection from sale of common stock investment |                                  |              |        |                  |        |         | 7,434   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Investments in telecommunication subsidiaries   |                                  |              | (6,172  | )                |        |         |        |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Capital expenditures                            |                                  |              | (5,055  | )                |        |         | (3,315  | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Capitalized software product costs              |                                  |              | (1,658  | )                |        |         | (637    | )
|                                                             |                                                                |                                                 |                                  |              |         |                  |        |        
|                                                             | CASH (USED) PROVIDED BY INVESTING ACTIVITIES                   |                                                 |                                  | (12,885      | )       |                  |        | 12,869  |        
|                                                             |                                                                |                                                 |                                  |              |         |                  |        |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Proceeds from (repayments of) borrowings        |                                  |              | 8,455   |                  |        |         | (6,623  | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Collection on installment note receivable       |                                  |              | 1,000   |                  |        |         |        |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Treasury stock sold to employee benefit plan    |                                  |              | 407     |                  |        |         | 498     |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                | Exercise of stock options                       |                                  |              | 133     |                  |        |         | 52      |  
|                                                             |                                                                |                                                 |                                  |              |         |                  |        |        
|                                                             | CASH PROVIDED (USED) BY FINANCING ACTIVITIES                   |                                                 |                                  | 9,995        |         |                  |        | (6,073  | )      
|                                                             |                                                                |                                                 |                                  |              |         |                  |        |        
|Net Cash Provided By Discontinued
Emissions Testing Business |                                                                |                                                 |                                 |              |         |                  | 1,810  |        
|                                                             |                                                                |                                                 |                                  |              |         |                  |        |        
|NET CASH PROVIDED (USED)                                     |                                                                |                                                 | 1,989                            |              |         |                  | (4,421 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Effect of foreign currency exchange rate changes on cash     |                                                                |                                                 | (1,686                           | )            |         |                  | (887   | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Cash and equivalents at beginning of year                    |                                                                |                                                 | 22,085                           |              |         |                  | 19,900 |        
|                                                             |                                                                |                                                 |                                  |              |         |                  |        |        
|CASH AND EQUIVALENTS AT END OF PERIOD                        |                                                                | $                                               | 22,388                           |              |         | $                | 14,592 |        
|                                                             |                                                                |                                                 |                                  |              |         |                  |        |        
|Supplemental cash flow data:                                
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                |                                                 | Cash paid during the period for:
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                |                                                 |                                  | Interest     |         | $                | 4,999  |         |         | $ | 4,286 | 
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                |                                                 |                                  | Income taxes |         |                  | 4,098  |         |         |   | 4,523 | 

See accompanying notes to the Condensed Consolidated Financial Statements.

5



---



##### Table of Contents



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

|                                        |                           |                                          |         |       |         |       |        |         |  |               |         |               |  |          |   |               |         |              |        |          |  |   |         |             |         |   |         |   |  |   |        |   |  | 
|--------------------------------------- | ------------------------- | ---------------------------------------- | ------- | ----- | ------- | ----- | ------ | ------- |  | ------------- | ------- | ------------- |  | -------- | - | ------------- | ------- | ------------ | ------ | -------- |  | - | ------- | ----------- | ------- | - | ------- | - |  | - | ------ | - |  | 
|                                        |                           |                                          |         |       |         |       |        |         |  |               |         |               |  |          |   |               |         |              |        |          |  |   |         | Accumulated
|                                        |                           |                                          |         |       |         |       |        |         |  |               |         |               |  |          |   |               |         |              |        |          |  |   |         | Other      
|                                        |                           |                                          |         |       |         |       |        | Common  |  | Paid-In       |         | Comprehensive |  | Retained |   | Comprehensive |         | Treasury     |        | Unearned
|                                        |                           |                                          |         | Total |         | Stock |        | Capital |  | Income (Loss) |         | Earnings      |  | Loss     |   | Stock         |         | Compensation
|                                        |                           |                                          |         |       |         |       |        |         |  |               |         |               |  |          |   |               |         |             
|For the six months ended June 30, 2000:
|                                       
|                                       
|                                       
|                                       
|Beginning Balance, January 1, 2000      |                           | $                                        | 240,912 |       |         | $     | 30,010 |         |  | $             | 181,335 |               |  |          |   |               |         | $            | 57,014 |          |  | $ | (10,685 | )           |         | $ | (14,978 | ) |  | $ | (1,784 | )
|                                       
|                                       
|                                       
|                                       
|Comprehensive Income (loss):           
|                                       
|                                       
|                                       
|                                       
|                                        | Net income                |                                          |         | 4,112 |         |       |        |         |  |               |         |               |  |          | $ | 4,112         |         |              |        | 4,112    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Other comprehensive loss:
|                                       
|                                       
|                                       
|                                       
|                                        |                           | Foreign currency translation adjustments |         |       | (13,168 | )     |        |         |  |               |         |               |  |          |   |               | (13,168 | )            |        |          |  |   |         |             | (13,168 | )
|                                        |                           |                                          |         |       |         |       |        |         |  |               |         |               |  |          |   |              
|                                        |                           | Comprehensive loss                       |         |       |         |       |        |         |  |               |         |               |  |          |   | $             | (9,056  | )           
|                                        |                           |                                          |         |       |         |       |        |         |  |               |         |               |  |          |   |              
|Treasury stock reissued                 |                           |                                          | 406     |       |         |       |        |         |  |               | 168     |               |  |          |   |               |         |              |        |          |  |   |         |             |         |   | 238     |  
|                                       
|                                       
|                                       
|                                       
|Exercise of stock options               |                           |                                          | 133     |       |         |       | 23     |         |  |               | 110     |              
|                                       
|                                       
|                                       
|                                       
|Restricted stock, net                   |                           |                                          | (89     | )     |         |       | (7     | )       |  |               | (118    | )             |  |          |   |               |         |              |        |          |  |   |         |             |         |   | (88     | ) |  |   | 124    |  
|                                       
|                                       
|                                       
|                                       
|Amortization of unearned compensation   |                           |                                          | 150     |       |         |       |        |         |  |               |         |               |  |          |   |               |         |              |        |          |  |   |         |             |         |   |         |   |  |   | 150    |  
|                                        |                           |                                          |         |       |         |       |        |         |  |               |         |               |  |          |   |               |         |              |        |          |  |   |         |             |         |   |         |   |  |   |        |  
|Ending Balance, June 30, 2000           |                           | $                                        | 232,456 |       |         | $     | 30,026 |         |  | $             | 181,495 |               |  |          |   |               |         | $            | 61,126 |          |  | $ | (23,853 | )           |         | $ | (14,828 | ) |  | $ | (1,510 | )
|                                        |                           |                                          |         |       |         |       |        |         |  |               |         |               |  |          |   |               |         |              |        |          |  |   |         |             |         |   |         |   |  |   |        |  
|For the six months ended June 30, 1999:
|                                       
|                                       
|                                       
|                                       
|Beginning Balance, January 1, 1999      |                           | $                                        | 250,081 |       |         | $     | 29,759 |         |  | $             | 180,604 |               |  |          |   |               |         | $            | 59,869 |          |  | $ | (2,255  | )           |         | $ | (15,985 | ) |  | $ | (1,911 | )
|                                       
|                                       
|                                       
|                                       
|Comprehensive Income (loss):           
|                                       
|                                       
|                                       
|                                       
|                                        | Net income                |                                          |         | 944   |         |       |        |         |  |               |         |               |  |          | $ | 944           |         |              |        | 944      | 
|                                       
|                                       
|                                       
|                                       
|                                        | Other comprehensive loss:
|                                       
|                                       
|                                       
|                                       
|                                        |                           | Foreign currency translation adjustments |         |       | (8,102  | )     |        |         |  |               |         |               |  |          |   |               | (8,102  | )            |        |          |  |   |         |             | (8,102  | )
|                                        |                           |                                          |         |       |         |       |        |         |  |               |         |               |  |          |   |              
|                                        |                           | Comprehensive loss                       |         |       |         |       |        |         |  |               |         |               |  |          |   | $             | (7,158  | )           
|                                        |                           |                                          |         |       |         |       |        |         |  |               |         |               |  |          |   |              
|Treasury stock reissued                 |                           |                                          | 497     |       |         |       |        |         |  |               | (103    | )             |  |          |   |               |         |              |        |          |  |   |         |             |         |   | 600     |  
|                                       
|                                       
|                                       
|                                       
|Exercise of stock options               |                           |                                          | 52      |       |         |       | 10     |         |  |               | 42      |              
|                                       
|                                       
|                                       
|                                       
|Restricted stock, net                   |                           |                                          | (307    | )     |         |       | (18    | )       |  |               | (289    | )            
|                                       
|                                       
|                                       
|                                       
|Amortization of unearned compensation   |                           |                                          | 329     |       |         |       |        |         |  |               |         |               |  |          |   |               |         |              |        |          |  |   |         |             |         |   |         |   |  |   | 329    |  
|                                        |                           |                                          |         |       |         |       |        |         |  |               |         |               |  |          |   |               |         |              |        |          |  |   |         |             |         |   |         |   |  |   |        |  
|Ending Balance, June 30, 1999           |                           | $                                        | 243,494 |       |         | $     | 29,751 |         |  | $             | 180,254 |               |  |          |   |               |         | $            | 60,813 |          |  | $ | (10,357 | )           |         | $ | (15,385 | ) |  | $ | (1,582 | )
|                                        |                           |                                          |         |       |         |       |        |         |  |               |         |               |  |          |   |               |         |              |        |          |  |   |         |             |         |   |         |   |  |   |        |  







See accompanying notes to the Condensed Consolidated Financial Statements.

6



---



##### Table of Contents



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

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | Significant Accounting Policies:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   |  | General                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   |  | In the opinion of the management of Allen Telecom Inc. (the Company),
the accompanying unaudited condensed consolidated interim financial
statements reflect all adjustments necessary to present fairly the
financial position of the Company as of June 30, 2000 and the consolidated
results of its operations, cash flows and changes in stockholders equity
for the periods ended June 30, 2000 and 1999. The results of operations
for such interim periods are not necessarily indicative of the results for
the full year. The year-end 1999 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, 1999.                                                                                  
|  
|   |  | Consolidation Policy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   |  | The Companys consolidated financial statements include the accounts of
all wholly owned and majority owned subsidiaries. Intercompany accounts
and transactions have been eliminated. To facilitate preparation of
financial statements, the Companys principal European operations are
included in the consolidated financial statements on a two-month delayed
basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|2. |  | Special Charges:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   |  | In the fourth quarter 1999, the Company announced the restructuring of
certain operations including the discontinuance of certain product lines,
the closing of a manufacturing facility and other items. As previously
indicated in the financial statements for the year ending December 31,
1999, in the first quarter 2000 the Company incurred pretax charges of
$1,678,000, or $.04 per basic and diluted share after related income tax
effect, incremental to the fourth quarter 1999 restructuring charge.
These first quarter 2000 charges, which were not accruable at December 31,
1999, included termination costs of employees notified subsequent to
December 31, 1999, relocation costs, asset write-offs, and other
termination related benefits. Of this pretax charge, $960,000 was
recorded in cost of sales and $718,000 in selling, general and
administrative expenses. Of the charge, $393,000 relates to a non-cash
write-off of capital assets and $1,285,000 are cash related charges.

7



---



##### Table of Contents



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

| |  |                                                                                                                    
| |  | -------------------------------------------------------------------------------------------------------------------
| |  | The following is a summary of the activity for exit costs incurred
(amounts in thousands, except for employee data)

|                                          |  |           |        |           |  |               |     |                  |  |   |       |   |  |   |        |  
|----------------------------------------- |  | --------- | ------ | --------- |  | ------------- | --- | ---------------- |  | - | ----- | - |  | - | ------ | -
|                                          |  | Severance
|                                          |  |          
|                                          |  |           |        |           |  | Number of     |     | Sale of Building
|                                          |  | Accrual   |        | Employees |  | and Equipment |     | Other           
|Accrual balance at December 31, 1999      |  | $         | 1,374  |           |  |               | 93  |                  |  | $ | 2,271 |   |  | $ | 517    |  
|                                         
|                                         
|                                         
|                                         
|Addition to accrual in first quarter 2000 |  |           | 327    |           |  |               | 5   |                  |  |   | 393   |   |  |   | 958    |  
|                                         
|                                         
|                                         
|                                         
|Employees terminated                      |  |           |       |           |  |               | (98 | )                |  |   |      |   |  |   |       |  
|                                         
|                                         
|                                         
|                                         
|Charged against accrual                   |  |           | (1,176 | )         |  |               |    |                  |  |   | (463  | ) |  |   | (1,105 | )
|                                          |  |           |        |           |  |               |     |                  |  |   |       |   |  |   |        |  
|Balance June 30, 2000                     |  | $         | 525    |           |  |               |    |                  |  | $ | 2,201 |   |  | $ | 370    |  

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |  | The term of severance is based on years of service or determined by
contractual obligation, and is payable over a period of time. Severance
will be paid out in its entirety by October 31, 2001.                                                                                                                                                                                                                              
|  
|3. |  | Discontinued Operations:                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   |  | The gain on sale from discontinued operations in 2000 represents income
from previously contingent purchase price consideration (in the form of a
12% interest bearing installment note) earned on the sale of the Companys
former automotive emissions testing business sold in the first quarter of
1999. The gains in 2000 and 1999 are net of related income taxes in the
amount of $700,000 and $1,403,000, respectively.
|  
|4. |  | Segment Disclosures:                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   |  | The following table presents sales to external customers and results of
operations for the Companys two operating segments (amounts in
thousands):                                                                                                                                                                                                                                                                            

|                                                  |                               |   |                    |        |                  |   |        |        |      |   |        |         |  |   |        |         | 
|------------------------------------------------- | ----------------------------- | - | ------------------ | ------ | ---------------- | - | ------ | ------ | ---- | - | ------ | ------- |  | - | ------ | ------- | 
|                                                  |                               |   | Three Months Ended |        | Six Months Ended
|                                                  |                               |   | June 30            |        | June 30         
|                                                  |                               |   |                    |        |                 
|                                                  |                               |   | 2000               |        | 1999             |   | 2000   |        | 1999
|                                                  |                               |   |                    |        |                  |   |        |        |     
|Sales to external customers:                     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Telecommunications equipment  |   | $                  | 81,562 |                  |   | $      | 71,444 |      |   | $      | 163,518 |  |   | $      | 141,489 | 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Wireless engineering services |   |                    | 6,878  |                  |   |        | 6,057  |      |   |        | 12,878  |  |   |        | 11,925  | 
|                                                  |                               |   |                    |        |                  |   |        |        |      |   |        |         |  |   |        |        
|                                                  | Total Sales                   |   | $                  | 88,440 |                  |   | $      | 77,501 |      |   | $      | 176,396 |  |   | $      | 153,414 | 
|                                                  |                               |   |                    |        |                  |   |        |        |      |   |        |         |  |   |        |        
|Results of Operations:                           
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Telecommunications equipment  |   | $                  | 7,790  |                  |   | $      | 4,336  |      |   | $      | 13,470  |  |   | $      | 7,559   | 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Wireless engineering services |   |                    | 2,012  |                  |   |        | 1,219  |      |   |        | 2,897   |  |   |        | 1,455   | 
|                                                  |                               |   |                    |        |                  |   |        |        |      |   |        |         |  |   |        |        
|                                                  |                               |   | 9,802              |        |                  |   | 5,555  |        |      |   | 16,367 |         |  |   | 9,014  |        
|                                                 
|                                                 
|                                                 
|                                                 
|Other income                                      |                               |   |                   |        |                  |   | 390    |        |      |   |       |         |  |   | 225    |        
|                                                 
|                                                 
|                                                 
|                                                 
|Goodwill amortization                             |                               |   | (1,943             | )      |                  |   | (1,735 | )      |      |   | (3,861 | )       |  |   | (3,462 | )      
|                                                 
|                                                 
|                                                 
|                                                 
|General corporate expenses                        |                               |   | (1,736             | )      |                  |   | (1,640 | )      |      |   | (3,448 | )       |  |   | (2,882 | )      
|                                                 
|                                                 
|                                                 
|                                                 
|Net financing costs                               |                               |   | (2,208             | )      |                  |   | (1,928 | )      |      |   | (4,169 | )       |  |   | (3,992 | )      
|                                                  |                               |   |                    |        |                  |   |        |        |      |   |        |         |  |   |        |        
|Income (loss) before taxes and
minority interests |                               | $ | 3,915              |        |                  | $ | 642    |        |      | $ | 4,889  |         |  | $ | (1,097 | )      
|                                                  |                               |   |                    |        |                  |   |        |        |      |   |        |         |  |   |        |        

8



---



##### Table of Contents



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

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. |  | Impact of New Accounting Pronouncements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |  | The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, Accounting for Derivative Instruments and
Hedging Activities, in June 1998 which will now be effective for
financial statements for all fiscal quarters of 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 in its foreign subsidiaries to limit foreign currency
exchange rate risk on receivables. The Company has not yet determined the
effect, if any, of the adoption of this Statement on results of operations
and financial position.                                                                                                                                                                                                                                                                                             
|  
|   |  | In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, Accounting for Certain Transactions involving
Stock Compensation, an interpretation of APB Opinion No. 25. This
interpretation clarifies the application of APB Opinion 25, under which
the Company accounts for stock based compensation awards, for certain
issues. This Interpretation is effective July 1, 2000, but certain
conclusions in this interpretation cover specific events that occurred
after either December 15, 1998, or January 12, 2000. To the extent that
this Interpretation covers events occurring during the period after
December 15, 1998, or January 12, 2000, but before the effective date of
July 1, 2000, the effects of applying this Interpretation are recognized
on a prospective basis from July 1, 2000. The Company has not yet
determined the effect, if any, of the adoption of this Statement on
results of operations and financial position.
|  
|   |  | In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 (SAB 101), Revenue Recognition in Financial
Statements. SAB 101 summarizes certain of the staffs views in applying
generally accepted accounting principles to revenue recognition in
financial statements. SAB 101 is effective no later than the fourth
fiscal quarter of fiscal years beginning after December 15, 1999. The
provisions of SAB 101 did not require any change in the Companys revenue
recognition policies and practices.                                                                                                                                                                                                                                                                                                                                                                                                                                    

9



---



##### Table of Contents






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

Results of Operations

Summary:

Allen Telecom Inc. reported a net profit of $2.2 million ($.08 per share) for
the three months ended June 30, 2000, as compared with a breakeven ($.00 per
share) for the three months ended June 30, 1999. For the six months ended June
30, 2000 the Company reported a net profit of $4.1 million ($.15 per share), as
compared with a net profit of $0.9 million ($.03 per share) in 1999. Total
sales for the three months ended June 30, 2000 increased 14% from $77.5 million
in the second quarter 1999 to $88.4 million in the second quarter 2000. Sales
for the six months ended June 30, 2000 increased 15% over the same period last
year from $153.4 million to $176.4 million.

Included in the results of operations for the six months ended June 30, 2000,
are incremental pretax restructuring charges of approximately $1.7 million, or
$.04 per basic and diluted share after related income tax effect. The Company
has estimated cost savings resulting from restructuring actions taken in the
fourth quarter 1999 and first quarter 2000 to be in the pretax range of $6.0 to
$8.0 million on an annual basis. Of the projected cost savings, approximately
$4.4 million relate to cost of sales, $1.9 million to selling, general and
administrative costs, and $.7 million to R&D costs. See Note 2 of Notes to
Condensed Consolidated Financial Statements for additional information
concerning such special charges.

Telecommunications Equipment Manufacturing:

Telecommunications Equipment Manufacturing sales increased $10.1 million, or
14%, from $71.4 million in the second quarter 1999 to $81.5 million in the
second quarter 2000. Sales increased approximately 16% from $141.5 million for
the six months ended June 30, 1999 to $163.5 million for the six months ended
June 30, 2000. Increasing demand for antenna and site management products
drove the sales increase in both periods. Geographically, the largest
increases were in North and South America. Sales by product line were as
follows:

|                                                 |  |         |      |         |  |         |      |         |  |              |       |              |  |   |       | 
|------------------------------------------------ |  | ------- | ---- | ------- |  | ------- | ---- | ------- |  | ------------ | ----- | ------------ |  | - | ----- | 
|                                                
|Sales By Product Line                            |  |         |      |         |  |         |      |         |  | Year To Date |       | Year to Date
|                                                
|($ Millions)                                     |  | 2Q 2000 |      | 2Q 1999 |  | 2Q 2000 |      | 2Q 1999
|                                                
|Systems Products                                 |  | $       | 18.7 |         |  | $       | 22.6 |         |  | $            | 38.3  |              |  | $ | 45.8  | 
|                                                
|                                                
|                                                
|                                                
|Site Management and Other Non-Antenna
Products   |  |         | 41.9 |         |  |         | 31.2 |         |  |              | 85.1  |              |  |   | 63.4  | 
|                                                
|                                                
|                                                
|                                                
|Mobile and Base Station Antennas                 |  |         | 20.9 |         |  |         | 17.6 |         |  |              | 40.1  |              |  |   | 32.3  | 
|                                                
|Total Telecommunications Equipment
Manufacturing |  | $       | 81.5 |         |  | $       | 71.4 |         |  | $            | 163.5 |              |  | $ | 141.5 | 
|                                                

10



---



##### Table of Contents



ALLEN TELECOM INC.
ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)

The strong U.S. dollar relative to the Euro negatively impacted sales and
pretax income of European operations in the second quarter 2000 as compared to
the second quarter 1999. As a result of exchange differences, reported sales
and pretax income in the three months ended June 30, 2000 were $6.4 million and
$0.9 million lower, respectively, as compared with the corresponding period in
1999, assuming the exchange rates had stayed the same. For the six months
ended June 30, 2000, the reported sales and pretax income were $11.2 million
and $2.2 million lower, respectively.

Backlog for the Telecommunications Equipment Manufacturing Segment at June 30,
2000 increased 16.5% from $98.4 million at March 31, 2000 to $114.6 million.

Gross profit margins for this segment were 30.0% in the second quarter of 2000
(29.6% for the six months ended June 30, 2000), as compared with 29.8% in the
second quarter of 1999 (29.7% for the six months ended June 30, 1999),
excluding the aforementioned special charges. The higher gross profit margins
in the second quarter of 2000 were due primarily to higher sales of site
management products and cost savings from restructuring. Gross profit margins
for the six-month period ended June 30, 2000 were essentially the same as the
prior year six-month period.

Selling, general and administrative expenses were $10.3 million, or 12.6% of
sales, and $9.3 million, or 13.0% of sales (excluding special charges), for the
second quarters of 2000 and 1999, respectively. The higher costs were related
primarily to higher incentive compensation and commission expenses; however,
the ratio of expenses to sales decreased from the second quarter of 1999 due to
the spreading of costs on higher sales. For the six-month periods ended June
30, 2000 and 1999, the ratios of selling, general and administrative expenses
to sales were 12.7% and 13.5%, respectively.

Wireless Engineering Services:

Wireless Engineering Services sales were up $0.8 million, or 13%, from $6.1
million in second quarter 1999 to $6.9 million in second quarter 2000. This
increase was due primarily to higher software and engineering consulting sales.
Sales were up approximately $1.0 million or 8% from $11.9 million for the
six-month period ended June 30, 1999 to $12.9 in 2000.

Gross profit margins for this segment were 45.7% in the second quarter of 2000
(42.0% for the six months ended June 30, 2000), as compared with 33.7% in the
second quarter of 1999 (29.8% for the six months ended June 30, 1999). This
margin increase is primarily attributable to an increase in higher margin
software sales and full deployment of engineers, as well as the restructuring
actions taken during the fourth quarter of 1999, which improved margins in
engineering products. Gross profit margins increased sequentially from the
first to second quarter of 2000 from 37.7% to 45.7%, respectively, due to
higher software sales.

11



---



##### Table of Contents



ALLEN TELECOM INC.
ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)

Selling, general and administrative expenses for the Wireless Engineering
Services were 16.5% of sales in the second quarter of 2000 (19.5% for the six
months ended June 30, 2000), as compared with 13.5% in the second quarter of
1999 (17.6% for the six months ended June 30, 1999). This increase is
attributable to higher incentive compensation and facility expenses.

Research and Development:

Research and development and new product engineering costs were 7.2% and 9.9%
of sales in the second quarter of 2000 and 1999, respectively. The lower level
of expense as a percent of sales is attributable to the fourth quarter 1999
sale of the Companys research and development business for U.S.
government agencies, which had primarily R&D
expenditures, as well as much higher sales in 2000 compared to prior year. The
Company expects R&D spending to increase in the third and fourth quarters of
2000 due to additional spending for testing and field trials of the new E-911
Geolocation product, as well as increased development efforts on other new
products.

Interest and Financing Expenses:

Net interest and financing costs increased from $4.0 million for the six months
ended June 30, 1999 to $4.2 million for the six months ended June 30, 2000, and
from $1.9 million in the second quarter 1999 to $2.2 million in the second
quarter of 2000. The principal reasons for the increase are a higher level of
outstanding borrowings, as well as higher average interest rates.

Provision for Income Taxes:

The Companys effective tax rate was approximately 41.5% for the quarter and
six months ended June 30, 2000 as compared with 35% for the comparable 1999
periods. The principal reason for the increase is higher income relating to
the Companys foreign operations, which are taxed at higher rates than the
United States. The 2000 percentage is in line with the Companys current
expectation for the full year.

12



---



##### Table of Contents



ALLEN TELECOM INC.
ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)

Minority Interests:

Minority interest expense decreased from $707,000 to $52,000 in the six months
ended June 30, 1999 and 2000, respectively. This decrease is due to the
acquisition in late 1999 of the remaining minority interest in one of the
Companys foreign subsidiaries.

Liquidity and Capital Resources:

As set forth in the Condensed Consolidated Statements of Cash Flows, the
Company generated $4.9 million of cash from operations for the six months ended
June 30, 2000 as compared to using $13.0 million for the comparable 1999
period. The increase in cash flow from operations is principally due to the
collection of certain trade receivables and increased income from continuing
operations. The Company used $12.9 million in investing activities in the
first half of 2000, due primarily to the payment of purchase price for the
minority interest of a European subsidiary and capital expenditures, as
compared to generating $12.9 million in 1999. The cash flow from investing
activities in 1999 related to the sale of the Companys discontinued emissions
testing business and cash collected from the sale of a common stock investment.
Cash provided by financing activities for the period ended June 30, 2000 was
$10.0 million as compared with cash usage of $6.1 million for the comparable
1999 period. At June 30, 2000, the Company had available unused worldwide
lines of credit in the amount of $76.4 million.

As indicated above, the strong U.S. dollar relative to the Euro has also
negatively impacted the translated value of the Companys European operations
whose assets and liabilities are denominated principally in Euro currencies.
As can be seen in the Condensed Consolidated Statements of Stockholders Equity,
the Accumulated Other Comprehensive Loss (representing the net impact on the
translated net asset investment of foreign subsidiaries) has increased from
$10.7 million at December 31, 1999 to $23.9 million at June 30, 2000. This
decline in the translated value of the Companys net foreign asset position is
the principal reason for the decline in Stockholders Equity at June 30, 2000
as compared with December 31, 1999.

13



---



##### Table of Contents



ALLEN TELECOM INC.
ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)

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.
Factors that could cause the Companys actual results to materially differ from
forward-looking statements made by the Company, including, among others, the
cost, success and timetable for new product development, the health and
economic stability of the world and national markets, the uncertain timing and
level of purchases by current and prospective customers of the Companys
products and services, the impact of competitive products and pricing, the
future utilization of the Companys tax loss carry forwards, the impact of U.S.
and foreign government legislative/regulatory actions, including, for example,
the scope and timing of E911 geolocation requirements and spectrum availability
for new wireless applications, and the cost and availability of financing for
geolocation projects. Allen Telecom Inc.s Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q contain additional details concerning these
factors.

14



---



##### Table of Contents






ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

See 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, 1999.




PART II  OTHER INFORMATION




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

At the Annual Meeting of Stockholders of the Company held on April 28, 2000 two
proposals were voted upon by the Companys stockholders. A brief description
of each proposal voted upon at the Annual Meeting and the number of votes cast
for, against and withheld are set forth below.

A vote by ballot was taken at the Annual Meeting for the election of 8
Directors of the Company to hold office until the next Annual Meeting of
Stockholders of the Company and until their respective successors shall have
been duly elected and qualified. The aggregate numbers of shares of common
stock (a) voted in person or by proxy for each nominee, or (b) with respect to
which proxies were withheld for each nominee, were as follows:

|                    |  |     |            |          |  |  |           | 
|------------------- |  | --- | ---------- | -------- |  |  | --------- | 
|Nominee             |  | For |            | Withheld
|                    |  |     |            |         
|Philip Wm. Colburn  |  |     | 25,067,046 |          |  |  | 331,731   | 
|                   
|                   
|                   
|                   
|Jill K. Conway      |  |     | 25,100,070 |          |  |  | 298,707   | 
|                   
|                   
|                   
|                   
|J. Chisholm Lyons   |  |     | 24,219,584 |          |  |  | 1,179,193 | 
|                   
|                   
|                   
|                   
|John F. McNiff      |  |     | 25,109,741 |          |  |  | 289,036   | 
|                   
|                   
|                   
|                   
|Robert G. Paul      |  |     | 25,071,391 |          |  |  | 327,386   | 
|                   
|                   
|                   
|                   
|Charles W. Robinson |  |     | 25,091,896 |          |  |  | 306,881   | 
|                   
|                   
|                   
|                   
|Martyn F. Roetter   |  |     | 25,100,910 |          |  |  | 297,867   | 
|                   
|                   
|                   
|                   
|Gary B. Smith       |  |     | 25,103,622 |          |  |  | 295,155   | 

15



---



##### Table of Contents



PART II  OTHER INFORMATION
(Continued)

A vote by ballot was taken at the Annual Meeting on the proposal to ratify the
appointment of Deloitte & Touche LLP as auditors for the Company for the fiscal
year ending December 31, 2000. The aggregate numbers of shares of Common Stock
in person or by proxy which: (a) voted for, (b) voted against or (c) abstained
from the vote on such proposal were as follows:

|           |  |         |  |        
|---------- |  | ------- |  | -------
|For        |  | Against |  | Abstain
|           |  |         |  |        
|25,345,585 |  | 21,267  |  | 31,925 

The foregoing proposals are described more fully in the Companys definitive
proxy statement dated March 17, 2000, filed with the Securities and Exchange
Commission pursuant to Section 14(a) of the Securities Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

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

|    |  |                                 
|--- |  | --------------------------------
|(a) |  | Exhibits                        
|   
|    |  | (10)    Material Contracts      
|   
|    |  | (27)    Financial Data Schedule.
|   
|(b) |  | Reports on Form 8-K.            
|   
|    |  | None                            

16



---



##### Table of Contents



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: August 11, 2000 |  |  | By: |  |  | /s/ Robert A. Youdelman                                                      
|                      |  |  |     |  |  |                                                                              
|                      |  |  |     |  |  | Robert A. Youdelman
Executive Vice President
(Chief Financial Officer)       
|                     
|                     
|Date: August 11, 2000 |  |  | By: |  |  | /s/ James L. LePorte, III                                                    
|                      |  |  |     |  |  |                                                                              
|                      |  |  |     |  |  | James L. LePorte, III
Vice President  Finance
(Principal Accounting Officer)

17



---



##### Table of Contents



EXHIBIT INDEX
ALLEN TELECOM INC.

|               |  |                                                        
|-------------- |  | -------------------------------------------------------
|Exhibit Number
|              
|              
|(10)           |  | Material Contracts.                                    
|              
|               |  | (A)     Amendment to Allen Telecom Inc. 1982 Stock Plan
|              
|(27)           |  | Financial Data Schedule.                               

18