<PAGE>



                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB

               Quarterly Report Pursuant to Section 13 or 15 (d)
                     of the Securities Exchange Act of 1934


For the quarterly period ended October 2, 1999      Commission file No. 0-11201
                               -------------                          -------

                           MERRIMAC INDUSTRIES, INC.
-----------------------------------------------------------------------------
      (Exact name of small business issuer as specified in its charter)


        New Jersey                                           22-1642321
-------------------------------                     -------------------------
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                          Identification No.)


41 Fairfield Place, West Caldwell, New Jersey                    07006
---------------------------------------------        ------------------------
 (Address of principal executive offices)                     (Zip code)


Registrant's telephone number including area code (973) 575-1300
                                                  --------------

Securities registered pursuant to Section 12(b) of the Exchange Act:

      Title of each class            Name of each exchange on which registered
 ----------------------------        -----------------------------------------
        Common Stock                          American Stock Exchange
 Common Stock Purchase Rights                 American Stock Exchange

Securities registered pursuant to Section 12(g) of the Exchange Act: None
                                                                     ----


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

     State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.

           Class                                Outstanding at November 8, 1999
-----------------------------                  -------------------------------
Common Stock ($.50 par value)                             1,738,638






<PAGE>


PART I.     FINANCIAL INFORMATION

ITEM 1.     Financial Statements

                           MERRIMAC INDUSTRIES, INC.
                          CONSOLIDATED BALANCE SHEETS
                          ---------------------------
                                 (Unaudited)
                                 -----------
                                                      October 2,    January 2,
                                                          1999        1999
                                                      -----------  -----------
ASSETS
------
Current assets:
  Cash and cash equivalents .......................   $   771,274  $ 1,852,666
  Accounts receivable .............................     4,097,520    3,755,131
  Inventories .....................................     3,612,307    3,101,256
  Income tax refund receivable.....................       233,258      413,018
  Other current assets ............................       620,800      357,906
  Deferred tax assets .............................       900,600      899,600
                                                      -----------  -----------
      Total current assets ........................    10,235,759   10,379,577
                                                      -----------  -----------
Property, plant and equipment .....................    20,522,295   16,539,251
  Less accumulated depreciation ...................    13,054,181   10,322,958
                                                      -----------  -----------
    Net property, plant and equipment .............     7,468,114    6,216,293
Other assets ......................................       380,124      319,512
Goodwill ..........................................     2,902,535          -
                                                      -----------  -----------
      Total Assets ................................   $20,986,532  $16,915,382
                                                      ===========  ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
-------------------------------------
Current liabilities:
  Current portion of long-term debt ...............   $   632,409  $       -
  Accounts payable ................................     1,719,059    1,479,284
  Accrued liabilities .............................     1,240,271    1,499,917
  Income taxes payable.............................       249,660          -
                                                      -----------  -----------
      Total current liabilities ...................     3,841,399    2,979,201
Long-term debt, net of current portion ............     3,372,427          -
Deferred compensation .............................       233,117      459,322
Deferred tax liabilities ..........................        54,600       54,600
                                                      -----------  -----------
      Total liabilities ...........................     7,501,543    3,493,123
                                                      -----------  -----------
Shareholders' equity:
  Common stock, par value $.50 per share:
    Authorized:  5,000,000 shares
    Issued:  2,697,542 and 2,690,405 shares .......     1,348,771    1,345,203
  Additional paid-in capital ......................    11,252,598   11,220,873
  Retained earnings ...............................     9,354,648    8,950,055
  Translation adjustments .........................       (31,733)         -
                                                      -----------  -----------
                                                       21,924,284   21,516,131
  Less treasury stock, at cost:
    958,904 and 902,549 shares ....................    (8,079,295)  (7,733,872)
  Less loan to officer-shareholder ................      (360,000)    (360,000)
                                                      -----------  -----------
     Total shareholders' equity ...................    13,484,989   13,422,259
                                                      -----------  -----------
     Total Liabilities and Shareholders' Equity ...   $20,986,532  $16,915,382
                                                      ===========  ===========


See accompanying notes to consolidated financial statements.



                                     - 1 -


<PAGE>

                              MERRIMAC INDUSTRIES, INC.
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                       -------------------------------------
                                   (Unaudited)
                                   -----------
<TABLE>
<CAPTION>

                                                         Quarter Ended           Nine Months Ended
                                                    -----------------------   -------------------------
                                                    October 2,   October 3,   October 2,    October 3,
                                                       1999         1998         1999          1998
                                                    -----------------------   -------------------------
<S>                                                  <C>         <C>         <C>           <C>
Net sales ...................................       $5,328,250   $5,120,946   $15,192,026   $16,487,212
                                                    ----------   ----------   -----------   -----------
Costs and expenses:
  Cost of sales .............................        2,694,482    2,851,976     7,847,373     9,101,555
  Selling, general and administrative .......        1,821,110    1,674,779     5,053,253     5,032,992
  Research and development ..................          577,410      282,264     1,523,728       745,665
                                                    ----------   ----------   -----------   -----------
                                                     5,093,002    4,809,019    14,424,354    14,880,212
                                                    ----------   ----------   -----------   -----------

Operating income ............................          235,248      311,927       767,672     1,607,000
Interest and other expense (income), net ....           65,540      (36,876)      145,079       (66,191)
                                                    ----------   ----------   -----------   -----------
Income before income taxes ..................          169,708      348,803       622,593     1,673,191
Provision for income taxes ..................           60,000      101,000       218,000       589,000
                                                    ----------   ----------   -----------   -----------
Net income ..................................       $  109,708   $  247,803   $   404,593   $ 1,084,191
                                                    ==========   ==========   ===========   ===========

Net income per common share:
  Basic......................................             $.06         $.14         $.23           $.62
  Diluted....................................             $.06         $.14         $.23           $.59
                                                          ====         ====         ====           ====
Weighted average number of
 shares outstanding:
  Basic......................................        1,741,327    1,782,675    1,749,739      1,758,769
  Diluted....................................        1,771,825    1,805,997    1,776,321      1,831,076


</TABLE>
See accompanying notes to consolidated financial statements.



                                      -2-


<PAGE>



                           MERRIMAC INDUSTRIES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                     -------------------------------------
                                  (Unaudited)
                                  -----------

                                                         Nine Months Ended
                                                      -------------------------
                                                      October 2,     October 3,
                                                         1999           1998
                                                      ----------     ----------
Cash flows from operating activities:
  Net income ........................................ $  404,593     $1,084,191
  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization..................  1,164,823        702,704
      Amortization of goodwill ......................     90,914            -
      Deferred compensation .........................     12,261        174,977
      Stock-based compensation expense ..............        -           87,400
      Changes in operating assets and liabilities:
        Accounts and income taxes receivable.........    631,964     (1,665,013)
        Inventories..................................   (306,973)     1,166,828
        Other current assets.........................   (247,757)      (250,454)
        Deferred tax assets..........................     (1,000)        34,300
        Other assets.................................    (23,594)        22,745
        Accounts payable.............................     57,421        (18,598)
        Accrued liabilities..........................   (334,758)       (69,836)
        Income taxes payable.........................    234,546        199,155
        Deferred compensation........................   (238,468)       (39,047)
                                                      ----------     ----------
Net cash provided by operating activities............  1,443,972      1,429,352
                                                      ----------     ----------
Cash flows from investing activities:
  Purchase of capital assets......................... (1,716,694)    (2,012,535)
  Proceeds from sales of capital assets..............        -           12,775
  Acquisition of business, net of cash acquired ..... (4,052,354)           -
                                                      ----------     ----------
Net cash used in investing activities................ (5,769,048)    (1,999,760)
                                                      ----------     ----------
Cash flows from financing activities:
  Borrowings under term loan facilities .............  2,500,000            -
  Borrowings under revolving credit facilities ......  2,500,000            -
  Repayment of borrowings under credit and
    lease facilities ................................ (1,446,290)           -
  Proceeds from the issuance of common stock.........     35,397        341,891
  Payment of dividends...............................        -           (1,009)
  Repurchase of common stock for the treasury .......   (345,423)           -
                                                      ----------     ----------
Net cash provided by financing activities ...........  3,243,684        340,882
                                                      ----------     ----------
Net decrease in cash and cash equivalents............ (1,081,392)      (229,526)
Cash and cash equivalents at beginning of year.......  1,852,666      2,414,725
                                                      ----------     ----------
Cash and cash equivalents at end of period........... $  771,274     $2,185,199
                                                      ==========     ==========

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Income taxes..................................... $  139,000     $  390,000
                                                      ==========     ==========
    Interest expense................................. $  220,224     $    6,056
                                                      ==========     ==========

See accompanying notes to consolidated financial statements.



                                      -3-


<PAGE>



                           MERRIMAC INDUSTRIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


A.   Basis of presentation

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in accordance with the  instructions  to Form 10-QSB and therefore,  do
not include all  information  and  footnote  disclosures  otherwise  required by
Regulation S-B. The financial  statements do,  however,  reflect all adjustments
which are, in the opinion of management,  necessary for a fair  presentation  of
the  financial  position of the Company as of October 2, 1999 and its results of
operations and cash flows for the periods presented.

B.   Inventories

     Inventories consist of the following:
                                               October 2,         January 2,
                                                  1999               1999
                                               ----------         ----------
     Finished goods ......................     $  630,723         $  607,738
     Work in process .....................      1,737,896          1,597,215
     Raw materials and purchased parts ...      1,243,688            896,303
                                               ----------         ----------
     Total                                     $3,612,307         $3,101,256
                                               ==========         ==========

C.   Net income per common share

     Effective  January 3, 1998, the Company adopted the provisions of Statement
of  Financial   Accounting  Standards  No.  128,  "Earnings  per  Share,"  which
establishes the new standard for computation and  presentation of net income per
common share.  Under the new requirements  both basic and diluted net income per
common share are presented.

     Basic net income per common  share is  calculated  by dividing  net income,
less dividends on preferred stock, if any, by the weighted average common shares
outstanding during the period.

     The  calculation  of diluted net income per common share is similar to that
of basic net income per common share,  except that the  denominator is increased
to  include  the  number  of  additional  common  shares  that  would  have been
outstanding  if  all  potentially  dilutive  common  shares,  principally  those
issuable under stock options, were issued during the reporting period.

D.   Comprehensive Income

     In June 1997, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 130, Reporting  Comprehensive Income ("SFAS
130"). SFAS 130 defines  comprehensive  income, which includes items in addition
to those reported in the statement of operations, and requires disclosures about
the  components  of  comprehensive  income.  Comprehensive  income  includes all
changes in  shareholders'  equity  during a period except those  resulting  from
investments by or distributions to shareholders. For the Company,



                                      -4-


<PAGE>



                            MERRIMAC INDUSTRIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


comprehensive  income  for all  periods  presented  consists  solely of net
income and foreign  currency  translation  adjustments  pursuant to Statement of
Financial  Accounting  Standards  No. 52,  "Foreign  Currency  Translation,"  as
follows:
<TABLE>
 <CAPTION>
                                                        Quarter Ended         Nine Months Ended
                                                     --------------------    ----------------------
                                                    October 2,  October 3,   October 2,  October 3,
                                                       1999        1998         1999        1998
                                                    ---------    ---------   ---------- -----------
     <S>                                            <C>          <C>         <C>         <C>
     Net income ................................    $109,708     $247,803    $404,593   $1,084,191
     Foreign currency translation adjustments ..      37,464      (26,528)    (31,733)      (9,207)
                                                    --------     --------    --------   ----------
     Total comprehensive income                     $147,172     $221,275    $372,860   $1,074,984
                                                    ========     ========    ========   ==========
</TABLE>
E.   Accounting period

     The  Company's  fiscal year is the 52-53 week period ending on the Saturday
closest to December 31. The Company has quarterly dates that correspond with the
Saturday  closest  to the last day of each  calendar  quarter  and each  quarter
consists of 13 weeks in a 52-week year. Every fifth year, the additional week to
make a 53-week  year  (fiscal year 1997 was the latest and fiscal year 2002 will
be the next) is added to the fourth  quarter,  making such quarter consist of 14
weeks.

F.   Transactions with management and loan to officer-shareholder

     On May 4, 1998,  the Company sold 20,000 (22,000 after giving effect to the
Company's  10% stock  dividend on June 5, 1998)  shares of Common Stock from its
treasury to Mason N. Carter, Chairman,  President and Chief Executive Officer of
the Company,  at a price of $12.75 per share (the  approximate  average  closing
price of the  Company's  Common  Stock  during the first  quarter of 1998).  The
Company  extended Mr. Carter a loan of $255,000 in connection  with the purchase
of these  shares  and  amended a prior  loan to Mr.  Carter of  $105,000.  A new
promissory note for a total of $360,000, due May 4, 2003, with interest payments
due quarterly (except as provided below), calculated at a variable interest rate
based on the prime rate of the  Company's  lending  bank,  was  executed  by Mr.
Carter in favor of the Company.  Payment of interest  accrued from November 1998
until November 1999, however,  will be deferred until the end of the term of the
new promissory note.  Payment of the loan is secured by the pledge of the 33,000
shares




                                      -5-


<PAGE>



                            MERRIMAC INDUSTRIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


of Common Stock that were  purchased by Mr.Carter with the proceeds of the loans
loans. The Company recorded  compensation expense of $52,000,  which was charged
to  operations  over  the  one-year  period   commencing  on  the  date  of  the
transaction,  as Mr. Carter performed services  throughout this time period. The
sale of these  shares of Common  Stock was exempt  from  registration  under the
Securities  Act of 1933,  as amended,  as a  transaction  not involving a public
offering under Section 4 (2) of the Act.

G.   Acquisition of Filtran Microcircuits Inc.

     In February  1999,  the Company  completed  the  acquisition  of all of the
outstanding  stock of  privately  held  Filtran  Microcircuits  Inc.  ("FMI") of
Ottawa,  Ontario,  Canada.  FMI,  which  had 1998  sales of  approximately  $3.2
million, is a manufacturer of microwave micro circuitry.  The purchase price was
approximately  $4.5  million,  net of $203,000  cash  acquired and including the
assumption of $451,000 existing  indebtedness,  and was financed by utilizing an
existing  unused credit  facility.  The  acquisition is being accounted for as a
purchase,  and,  accordingly,  the  purchase  price  has been  allocated  to the
underlying  assets and  liabilities  based on their estimated fair values at the
date of the  acquisition,  with the excess cost of  approximately  $3.0  million
recorded as goodwill which is being amortized over 20 years.

     The  unaudited  pro forma  combined  results  for the  comparative  periods
presented  for 1999 and 1998,  as if FMI had been  acquired at the  beginning of
1998, are estimated to be as follows:
<TABLE>
<CAPTION>
                                          Quarter Ended          Nine Months Ended
                                     ----------------------   ------------------------
                                     October 2,  October 3,   October 2,   October 3,
                                        1999        1998         1999          1998
                                     ----------  ----------   -----------  -----------
     <S>                             <C>          <C>          <C>            <C>
     Net sales.....................  $5,328,000  $6,284,000   $15,822,000  $19,019,000
     Net income....................     110,000     160,000       364,000      840,000
     Diluted net income per share..        $.06        $.09          $.20         $.46

</TABLE>

     The  proforma  results  are  based  on  various  assumptions  and  are  not
necessarily  indicative of what would have actually occurred had the acquisition
and related financing transactions been completed at the beginning of last year,
nor are they necessarily indicative of future consolidated results.



                                       -6-


<PAGE>

                           MERRIMAC INDUSTRIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


H.   Debt

     Long-term debt consists of the following:

     Revolving credit facility, interest 1/2% below prime........  $1,500,000
     Term loan, interest 1/2% below prime, due 2004..............   2,125,000
     Equipment loans, interest prime plus 1%, due July 1999
     to May 2001.................................................      74,184
     Capital leases, interest 6.9%, due November 2003............     305,652
                                                                   ----------
                                                                    4,004,836
     Less current portion........................................     632,409
                                                                   ----------
     Long-term portion...........................................  $3,372,427
                                                                   ==========

     The term loan is  secured  by  $2,500,000  of  recently  acquired  tangible
personal  property  and the  equipment  loans are covered by a general  security
agreement.  The revolving credit facility is unsecured.  Capital leases included
in  property,  plant and  equipment  have a  depreciated  cost of  approximately
$200,000.


I.   Recent Accounting Pronouncements

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Accounting Standards No. 133 ("Accounting for Derivative Instruments and Hedging
Activities").  This statement  establishes  accounting  and reporting  standards
requiring  that  all  derivative   instruments   (including  certain  derivative
instruments  embedded in other contracts) be recorded on the balance sheet as an
asset or liability and measured at its fair value.  This  statement is effective
for  fiscal  years  beginning  after June 15,  2000 but can be adopted  earlier.
Management has not yet determined the timing of or method to be used in adopting
this  statement.  Management  does not  believe at this time that such  adoption
would have a material impact on the Company's consolidated financial statements.



                                      -7-


<PAGE>





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


                         STATEMENT OF OPERATIONS SUMMARY
                         -------------------------------
                                   (Unaudited)
                                   -----------


The following table displays line items in the Consolidated Statements of
Operations as a percentage of net sales.

<TABLE>
<CAPTION>


                                                           Percentage of Net Sales
                                                ---------------------------------------------
                                                   Third Quarter          Year-to-date
                                                ---------------------------------------------
                                                   Quarter Ended         Nine Months Ended
                                                ---------------------  ----------------------
                                                October 2, October 3,  October 2,  October 3,
                                                   1999       1998        1999        1998
                                                  ------     ------     ------      ------
<S>                                               <C>        <C>        <C>         <C>
Net sales....................................     100.0%     100.0%     100.0%      100.0%
                                                  ------     ------      -----      ------
Costs and expenses:
  Cost of sales..............................      50.6       55.7       51.7        55.2
  Selling, general and administrative........      34.2       32.7       33.2        30.5
  Research and development...................      10.8        5.5       10.0         4.5
                                                  ------     ------      -----      ------
                                                   95.6       93.9       94.9        90.2
                                                  ------     ------      -----      ------

Operating income.............................       4.4        6.1        5.1         9.8
Interest and other expense (income), net.....       1.2       (0.7)       1.0        (0.4)
                                                  ------     ------      -----      ------

Income before income taxes...................       3.2        6.8        4.1        10.2
Provision for income taxes...................       1.1        2.0        1.4         3.6
                                                  ------     ------      -----      ------

Net income...................................       2.1%       4.8%       2.7%        6.6%
                                                  ======     ======      =====      ======

</TABLE>


                                      -8-

<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


     Quarter and nine months ended  October 2, 1999  compared to the quarter and
nine months ended October 3, 1998

     Results of operations for the quarter  reflects an increase in net sales of
$207,000 or 4.0%, and decreases in:  operating  income of $77,000 or 24.6%;  net
income of $138,000 or 55.7%;  and diluted net income per share of $.08 or 57.1%.
Nine months results of operations  reflect decreases in: net sales of $1,295,000
or 7.9%; operating income of $839,000 or 52.2%; net income of $680,000 or 62.7%;
and diluted net income per share of $.36 or 61.0%.

     The net sales decrease was primarily  attributable  to shipments  against a
smaller  firm order  backlog  that  existed as of the  beginning  of the current
fiscal year,  with the order release dates that  coincided  with  production and
shipment  schedules,  partially offset by net sales of recently acquired Filtran
Microcircuits Inc. ("FMI").

     Orders  received  for the third  quarter  of 1999 of  $4,446,000  increased
$847,000 or 23.5% compared to orders received for the third quarter of 1998, and
the backlog of firm unfilled  orders at October 2, 1999 increased  $1,552,000 or
24.2% to $7,975,000 for the same end of quarter comparisons,  including $645,000
of backlog at recently  acquired FMI.  Orders received for the first nine months
of 1999  were  $16,999,000  and for the  comparable  nine-month  period  in 1998
increased  $3,840,000 or 29.2%.  Compared to year-end  1998,  backlog  increased
$1,807,000 or 29.3%,  including $645,000 of backlog at recently acquired FMI. An
extended  delay of or reduction in new orders for Company  products could have a
material  financial impact on future sales and earnings.  Customer  requests for
design work have  increased and are currently  under  development  utilizing the
Company's  proprietary  Multi-Mix(TM)  Microtechnology.  This technology,  which
provides  greater  per unit  content,  enables  the  Company  to enter  into new
markets.

     Cost of sales decreased  $157,000 or 5.5% for the quarter and $1,254,000 or
13.8% for nine months. Cost of sales as a percentage of net sales decreased 5.1%
to 50.6%  for the  quarter  and 3.5% to 51.7% for nine  months.  Notwithstanding
higher  quarterly sales, the decrease in cost of sales for the third quarter was
achieved from  manufacturing  efficiencies,  reduction in labor  expense,  and a
favorable  sales product mix. For the first nine months,  these  decreases  were
primarily  attributable  to the effects of the decrease in sales revenue on cost
of sales and a reduction in direct labor and manufacturing overhead costs partly
related to efficiency  improvements  resulting  from last year's fourth  quarter
restructuring. Depreciation expense increased $129,000 for the third quarter and
$389,000 for the first nine months as a result of higher capital equipment


                                       -9-


<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


purchases in the current and prior years and due to the acquisition of FMI.

     Selling, general and administrative expenses increased $146,000 or 8.7% for
the quarter and $20,000 for nine months,  and when  expressed as a percentage of
net sales  increased  1.5% to 34.2% for the  quarter  and 2.8% to 33.2% for nine
months.  Increases in selling  expenses during the third quarter were related to
higher  selling and  marketing  expenses in  connection  with the  Company's new
Multi-Mix(TM) product line, and the inclusion of expenses from recently acquired
FMI. For the first nine months,  selling,  general and  administrative  expenses
increased slightly, as a result of the additional expenses incurred in the third
quarter  as  described  above,  and were  partially  offset  by a  reduction  in
compensation  costs related to last year's  restructuring.  Also,  the increases
arose from  higher  depreciation  and  amortization  expenses of $61,000 for the
third  quarter  and  $160,000  for the first nine  months,  which  included  the
amortization of goodwill attributable to the acquisition of FMI.

     Research and development expenses for new products,  primarily the recently
introduced Multi-Mix(TM) Microtechnology were $577,000 for the third quarter and
$1,524,000  for the nine  months,  increases of $295,000 or 105% and $778,000 or
104% compared to $282,000 and $746,000 for the prior year.

     Interest  expense,  net was $66,000 for the third  quarter and $145,000 for
the first nine months of 1999 and was incurred on borrowings  of $2,500,000  for
capital  expenditures  under the term loan facility,  and  borrowings  under its
revolving  credit  facility in connection with the acquisition of FMI during the
first quarter of 1999,  partially  offset by interest  income.  During 1998, the
Company  earned  interest  income on its invested  cash  balances of $37,000 and
$66,000 for the corresponding quarter and nine-month periods, respectively.

     Net income of $110,000 for the third  quarter was  $138,000  lower than net
income of $248,000  reported for the third quarter of 1998, a decrease of 55.7%.
Diluted net income per share was $.06,  a decrease of 57.1%  compared to diluted
net income per share of $.14  reported for the third  quarter of last year.  Net
income decreased $680,000 or 62.7% to $405,000 for the first nine months of 1999
compared to $1,084,000  reported in 1998.  Diluted net income per share was $.23
on a 3.0%  decrease  in the number of weighted  average  diluted  common  shares
outstanding,  compared  to the  diluted  net  income  per  share  amount of $.59
reported for the first nine months of the prior year.



                                      -10-


<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


Liquidity and Capital Resources

     The Company had liquid  resources  comprised  of cash and cash  equivalents
totaling approximately $800,000 at the end of the third quarter of 1999 compared
to  approximately  $2,200,000  at the end of the  third  quarter  of  1998.  The
Company's working capital was approximately $6,400,000 and its current ratio was
2.7 at the end of the third  quarter of 1999  compared  to  $9,000,000  and 4.6,
respectively, at the end of the third quarter of 1998.

     The Company's operating activities provided cash flows of $1,444,000 in the
first nine  months of 1999  compared to  $1,429,000  in the first nine months of
1998. The primary  reasons for the increase in operating cash flows in the first
nine months of 1999 are a decrease in accounts  receivable  as a result of lower
net sales and higher  depreciation and amortization  charges partially offset by
decreases  in  net  income  and  payments  made  on  accounts  payable,  accrued
liabilities  and  deferred  compensation.  The Company made net  investments  in
property,  plant and  equipment of  $1,717,000  in the first nine months of 1999
compared  to  $2,000,000  in the  first  nine  months  of  1998.  These  capital
expenditures  are related to new production and test equipment  capabilities  in
connection with the  introduction  of new products and  enhancements to existing
products.

     The cost to the  Company  for its  acquisition  of FMI,  net of $203,000 in
acquired cash and excluding the assumption of $451,000 in debt, was  $4,052,000,
which was financed by borrowings under a previously unused credit facility.


     The Company has a $7,000,000  revolving credit and term loan agreement with
Summit Bank with an interest rate at one-half  percent below the bank's floating
prime rate. The Company borrowed  $2,500,000 for capital  expenditures under the
term loan  facility  and  $2,000,000  under its  revolving  credit  facility  in
connection  with the  acquisition  of FMI during the first quarter of 1999.  The
Company has repaid $500,000 in the aggregate on the revolving  credit  facility.
The unused portion of the revolving  credit  facility of $3,000,000 is available
for working capital and general corporate purposes.

     Management  believes that with the liquid  resources and the remaining line
of  credit  available,  along  with  cash  flows  expected  to  be  provided  by
operations,   the  Company  will  have   sufficient   resources   for  currently
contemplated operations in 1999.

     The  Company's  capital   expenditures  for  new  projects  and  production
equipment are anticipated to exceed its depreciation  and amortization  expenses
in 1999.


                                      -11-

<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


     The Company has issued purchase order  commitments to processing  equipment
manufacturing  vendors  for  approximately  $400,000  of capital  equipment  and
building  improvements.  The Company anticipates that during 1999 such equipment
will be  purchased  and become  operational  and building  improvements  will be
completed.

     The Company has been  authorized by its Board of Directors to repurchase up
to 110,000  shares  (adjusted for the 10% stock dividend on June 5, 1998) of its
common  stock,  from  time to time,  depending  on  market  conditions,  and has
repurchased  approximately  68,000 shares of common stock to date.  During 1999,
the Company repurchased 56,000 shares of common stock at a cost of $346,000. The
Company  repurchased  8,000 shares of common stock during 1998, no shares during
1997, and 4,000 shares in 1996.

     Periodically,  the Company  explores the  possibility of acquiring  similar
manufacturers of electronic  devices or companies in related fields.  Management
believes that any such  acquisitions and business  operation  expansion could be
financed  through  its liquid  and  capital  resources  currently  available  as
previously  discussed and/or through additional  borrowing or issuance of equity
or debt securities.  The additional debt from any acquisitions,  if consummated,
would  increase  the  Company's  debt-to-equity  ratio  and such  debt or equity
securities  might,  at least in the near  term,  have a  dilutive  effect on net
income per share.  In February  1999, the Company  completed the  acquisition of
Filtran Microcircuits Inc.

Year 2000 Readiness Disclosure

     The Company  recognizes the need to assure that its operations  will not be
adversely impacted by Year 2000 software failures.  The impact on operations has
been evaluated and plans were formulated to ensure complete Year 2000 compliance
by  November  30,  1999.  The  Company's  manufactured  products  do not contain
software of any kind and therefore are not subject to Year 2000 problems. All of
the Company's  existing  mission-critical  manufacturing  software and financial
computer applications were made Year 2000 compliant as of December 31, 1998. Key
suppliers  have  been  contacted  and have  confirmed  that  they are Year  2000
compliant as of September 30, 1999.



                                      -12-



<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


              Information Technology Systems

     Without  remediation,  certain of the Company's  internally developed order
processing and manufacturing support applications would not have been capable of
processing  dates beyond  December 31, 1999 properly.  The Company has corrected
the  programs,  and all business  order  processing  and  manufacturing  support
operations  applications should properly process dates beyond December 31, 1999.
The  Company's  desktop  computers  and  internal  local area  network have been
checked for Year 2000 problems and none have been found. All programs  purchased
from  third  parties  are  believed  to  be  Year  2000   compliant,   based  on
certification received from the vendors.


              Non-Information Technology Systems

     Internal systems used in the Company's manufacturing processes are not date
dependent.  Other support systems,  such as security and HVAC, have been checked
and will not be adversely affected by dates beyond December 31, 1999.

             Costs to Company to Address Year 2000 Issues

     To date,  the Company has  expended  approximately  $70,000  (exclusive  of
internal  personnel  compensation  costs) to perform the program  remediation to
non-compliant  programs  and for  training and other  consulting  services.  The
Company  estimates  remaining  costs to project  completion to be  approximately
$30,000 to replace non-compliant systems that are not mission-critical.

            Risks of the Company to Year 2000 Issues

     The Company believes that the risks of the Year 2000 problem are moderately
low because its products are not date  dependent  and it has been  utilizing its
Year 2000 compliant internal software  applications since December 31, 1998. The
Company's  customers  are  evaluating  their  own Year 2000  readiness  and have
circulated  questionnaires  regarding the  Company's  level of  compliance.  The
Company  will  continue  to  update  its  customers  with  respect  to Year 2000
readiness and will monitor the progress of its customers to assess the attendant
risks of inadequate Year 2000 compliance.



                                      -13-


<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


         Contingency Plans

     Currently, the Company does not have a contingency plan, since its products
are not date dependent.  In addition, the Company's Year 2000 compliance program
is on schedule and nearly complete.


Recent Accounting Pronouncements


     In June 1998, the Financial  Accounting Standards Board issued Statement of
Accounting Standards No. 133 ("Accounting for Derivative Instruments and Hedging
Activities").  This statement  establishes  accounting  and reporting  standards
requiring  that  all  derivative   instruments   (including  certain  derivative
instruments  embedded in other contracts) be recorded on the balance sheet as an
asset or liability and measured at its fair value.  This  statement is effective
for  fiscal  years  beginning  after June 15,  2000 but can be adopted  earlier.
Management has not yet determined the timing of or method to be used in adopting
this  statement.  Management  does not  believe at this time that such  adoption
would have a material impact on the Company's consolidated financial statements.


Forward-Looking Statements


     This Form 10-QSB  contains  statements  relating  to future  results of the
Company   (including   certain   projections  and  business   trends)  that  are
"forward-looking  statements"  as defined in the Private  Securities  Litigation
Reform Act of 1995. Actual results may differ materially from those projected as
a result of  certain  risks and  uncertainties.  These  risks and  uncertainties
include,  but are not limited to:  general  economic  and  industry  conditions;
slower than anticipated penetration into the satellite  communications,  defense
and wireless  markets;  the risk that the benefits expected from the acquisition
of Filtran Microcircuits Inc. are not realized; competitive products and pricing
pressures;  risks relating to governmental  regulatory actions in communications
and defense programs;  and inventory risks due to technological  innovation,  as
well as other  risks  and  uncertainties,  including  but not  limited  to those
detailed from time to time in the Company's  Securities and Exchange  Commission
filings.  These forward-looking  statements are made only as of the date hereof,
and the Company undertakes no obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or otherwise.


                                      -14-

<PAGE>


PART II. OTHER INFORMATION


ITEM 6. Exhibits and Reports on Form 8-K.

(a) Exhibits:

Exhibit No.
-----------

3(a)(1)           Amendment dated June 10,1999 to the By-laws of the Company is
                  hereby incorporated by reference to Exhibit 3(a)(1) to the
                  Company's Quarterly Report on Form 10-QSB dated
                  August 12, 1999.

3(a)(2)           By-laws of the Company, as amended, is hereby incorporated
                  by reference to Exhibit 3(a)(2) to the Company's Quarterly
                  Report on Form 10-QSB dated August 12, 1999.

3(b)(1)           Amendment to the Certificate of Incorporation of the Company
                  filed on June 11, 1999 is hereby incorporated by reference to
                  Exhibit 3(b)(1) to the Company's Quarterly Report on Form
                  10-QSB dated August 12, 1999.

3(b)(2)           Restated Certificate of Incorporation of the Company filed
                  on June 14, 1999 is hereby incorporated by reference to
                  Exhibit 3(b)(2) to the Company's Quarterly Report on Form
                  10-QSB dated August 12, 1999.

4(a)              Shareholder Rights Agreement dated as of March 9, 1999 between
                  the Company and ChaseMellon Shareholder Services, L.L.C., as
                  rights agent, is hereby incorporated by reference to Exhibit 1
                  to the Company's Current Report on Form 8-K dated
                  March 9, 1999.

4(b)              Amendment NO.1 dated as of June 9, 1999 to the Shareholder
                  Rights Agreement  dated as of March 9, 1999  between the
                  Company and  ChaseMellon Shareholder  Services,  L.L.C., as
                  rights agent, is hereby incorporated by reference to Exhibit 1
                  to the Company's Current Report on Form 8-K dated
                  June 9, 1999.

11                Statement re: Computation of earnings per share.

27                Financial Data Schedule for the Third Quarter Ended
                  October 2, 1999.


(b)      Reports on Form 8-K.

        A Current Report on Form 8-K was filed on August 5, 1999 reporting the
        Company's results of operations for the second quarter 1999.

        A Current Report on Form 8-K was filed on November 5, 1999 reporting the
        Company's results of operations for the third quarter 1999.




                                        -15-


<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15 (d) 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.


                                          MERRIMAC INDUSTRIES, INC.
                                          -------------------------
                                                (Registrant)

    Date: November 12, 1999            By: /s/ Mason N. Carter
                                         -------------------------------------
                                         Mason N. Carter
                                         Chairman, President and
                                         Chief Executive Officer


    Date: November 12, 1999            By: /s/ Robert V. Condon
                                         -------------------------------------
                                         Robert V. Condon
                                         Vice President, Finance, Treasurer,
                                         Secretary and Chief Financial Officer








                                      -16-


<PAGE>
                                 EXHIBIT INDEX                    Sequentially
Exhibit                                                           Numbered Page

3(a)(1)           Amendment dated June 10,1999 to the By-laws of the Company is
                  hereby incorporated by reference to Exhibit 3(a)(1) to the
                  Company's Quarterly Report on Form 10-QSB dated
                  August 12, 1999.


3(a)(2)           By-laws of the Company, as amended, is hereby incorporated
                  by reference to Exhibit 3(a)(2) to the Company's Quarterly
                  Report on Form 10-QSB dated August 12, 1999.

3(b)(1)           Amendment to the Certificate of Incorporation of the Company
                  filed on June 11, 1999 is hereby incorporated by reference to
                  Exhibit 3(b)(1) to the Company's Quarterly Report on Form
                  10-QSB dated August 12, 1999.

3(b)(2)           Restated Certificate of Incorporation of the Company filed
                  on June 14, 1999 is hereby incorporated by reference to
                  Exhibit 3(b)(2) to the Company's Quarterly Report on Form
                  10-QSB dated August 12, 1999.

4(a)              Shareholder Rights Agreement dated as of March 9, 1999 between
                  the Company and ChaseMellon Shareholder Services, L.L.C., as
                  rights agent, is hereby incorporated by reference to Exhibit 1
                  to the Company's Current Report on Form 8-K dated
                  March 9, 1999.

4(b)              Amendment NO.1 dated as of June 9, 1999 to the Shareholder
                  Rights Agreement  dated as of March 9, 1999  between the
                  Company and  ChaseMellon Shareholder  Services,  L.L.C., as
                  rights agent, is hereby incorporated by reference to Exhibit 1
                  to the Company's Current Report on Form 8-K dated
                  June 9, 1999.

11                Statement re: Computation of earnings per share.

27                Financial Data Schedule for the Third Quarter Ended
                  October 2, 1999.







                                      -17-