<PAGE>

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

                                   FORM 10-QSB

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

For the quarterly period ended September 27, 2003


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

For the transition period from       to

                           Commission File No. 0-11201

                            Merrimac Industries, Inc.
        (Exact Name of Small Business Issuer as Specified in Its Charter)


           DELAWARE                                          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)

                                 (973) 575-1300
                           (Issuer's Telephone Number)


Former name, former address and former fiscal year, if changed since last
report:  N/A

Check whether the issuer (1) 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  [ ]

As of November 10, 2003, there were 3,120,891 shares of Common Stock, par value
$0.01 per share, outstanding.

Transitional Small Business Disclosure Format (check one): Yes [ ]  No [X]

<PAGE>

                            MERRIMAC INDUSTRIES, INC.
                               41 Fairfield Place
                             West Caldwell, NJ 07006


                                      INDEX

                                                                            Page
PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements

          Consolidated Balance Sheets as of September 27, 2003
          and December 28, 2002.............................................. 1

          Consolidated Statements of Operations and Comprehensive Income (Loss)
          for the Three Months and Nine Months Ended September 27, 2003 and
          September 28, 2002................................................. 2

          Consolidated Statements of Cash Flows for the Nine
          Months Ended September 27, 2003 and September 28, 2002............. 3

          Notes to Consolidated Financial Statements......................... 4

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations ........................................ 11

Item 3.   Controls and Procedures .......................................... 19

PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K .................................. 21

Signatures................................................................... 26


<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


                            MERRIMAC INDUSTRIES, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                         SEPTEMBER 27,       DECEMBER 28,
                                                                                            2003                  2002
                                                                                            ----                  ----
                                                                                         (UNAUDITED)            (AUDITED)
<S>                                                                                       <C>                   <C>
                                ASSETS

Current assets:
  Cash and cash equivalents......................................................         $  556,932            $3,610,798
  Accounts receivable, net.......................................................          5,461,004             3,801,198
  Income tax refunds receivable..................................................             45,836               300,914
  Inventories, net...............................................................          3,581,798             4,015,331
  Other current assets...........................................................            687,745               318,141
  Deferred tax assets............................................................            945,000               945,000
                                                                                         -----------           -----------

    Total current assets.........................................................         11,278,315            12,991,382
                                                                                         -----------           -----------

Property, plant and equipment, at cost...........................................         37,388,908            36,420,776
  Less accumulated depreciation and amortization.................................         19,518,754            17,138,713
                                                                                         -----------           -----------
Property, plant and equipment, net...............................................         17,870,154            19,282,063
Restricted cash..................................................................          1,500,000                 -
Other assets.....................................................................            669,034               817,305
Deferred tax assets, non-current.................................................          1,084,000               905,000
Goodwill, net....................................................................          2,952,924             2,491,146
                                                                                         -----------           -----------

    Total Assets.................................................................        $35,354,427           $36,486,896
                                                                                         ===========           ===========


                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt..............................................         $1,007,485            $6,239,758
  Accounts payable...............................................................          1,266,776             1,554,517
  Accrued liabilities............................................................          1,759,167             1,541,309
  Income taxes payable...........................................................             38,663                37,857
                                                                                         -----------           -----------

    Total current liabilities....................................................          4,072,091             9,373,441

Long-term debt, net of current portion...........................................          5,330,111               429,420
Deferred compensation............................................................             96,020               123,452
Deferred liabilities.............................................................             48,014               155,483
Deferred tax liabilities.........................................................          1,736,000             1,703,000
                                                                                         -----------           -----------

    Total liabilities............................................................         11,282,236            11,784,796
                                                                                         -----------           -----------

Commitments and contingencies

Stockholders' equity:
  Preferred stock, par value $.01 per share:
    Authorized: 1,000,000 shares
    No shares issued
  Common stock, par value $.01 per share:
    Authorized: 20,000,000 shares
    Issued: 3,202,991 and 3,201,069 shares.......................................             32,030                32,011
  Common stock warrants..........................................................            837,200               837,200
  Additional paid-in capital.....................................................         17,849,714            17,841,970
  Retained earnings..............................................................          5,981,227             7,395,978
  Accumulated other comprehensive income (loss)..................................            457,886              (263,193)
                                                                                         -----------           -----------

                                                                                          25,158,057            25,843,966
  Less treasury stock, at cost:
    82,100 shares at September 27, 2003 and December 28, 2002....................           (573,866)             (573,866)
  Less loan to officer-stockholder...............................................           (512,000)             (568,000)
                                                                                         -----------           -----------

    Total stockholders' equity...................................................         24,072,191            24,702,100
                                                                                         -----------           -----------

    Total Liabilities and Stockholders' Equity...................................        $35,354,427           $36,486,896
                                                                                         ===========           ===========
</TABLE>

See accompanying notes.


                                       1
<PAGE>

                            MERRIMAC INDUSTRIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                         AND COMPREHENSIVE INCOME (LOSS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                           Quarters Ended              Nine Months Ended
                                                      -----------------------      -------------------------
                                                     September 27, September 28,  September 27,  September 28,
                                                         2003         2002            2003          2002
                                                      ----------   ----------      -----------   -----------
<S>                                                   <C>          <C>             <C>           <C>
OPERATIONS
Net sales ...................................         $6,356,685   $5,938,929      $19,480,926   $19,251,844
                                                      ----------   ----------      -----------   -----------
Costs and expenses:
  Cost of sales .............................          4,155,523    3,323,334       12,273,743    10,456,362
  Selling, general and administrative .......          2,261,529    1,820,659        7,175,800     6,451,326
  Research and development ..................            316,452      723,337        1,340,437     1,910,988
  Restructuring charge.......................             54,170           --          128,350       240,000
                                                      ----------   ----------      -----------   -----------
                                                       6,787,674    5,867,330       20,918,330    19,058,676
                                                      ----------   ----------      -----------   -----------

Operating income (loss)......................           (430,989)      71,599       (1,437,404)      193,168
Interest and other expense, net .............             51,972       24,545          164,548       127,476
Gain on disposition of assets ...............            (33,073)          --         (104,024)           --
                                                      ----------   ----------      -----------   -----------
Income (loss) before income taxes............           (449,888)      47,054       (1,497,928)       65,692
Provision (benefit) for income taxes ........             34,508      (10,000)         (83,177)      (80,000)
                                                      ----------   ----------      -----------   -----------
Net income (loss)............................         $ (484,396)  $   57,054      $(1,414,751)  $   145,692
                                                      ==========   ==========      ===========   ===========

Basic and diluted net income (loss) per common share       $(.16)     $   .02           $ (.45)        $ .05
                                                      ==========   ==========      ===========   ===========

Weighted average number of shares outstanding:
  Basic .....................................          3,120,624    3,145,370        3,120,437     3,055,713

  Diluted....................................          3,120,624    3,147,634        3,120,437     3,098,894


COMPREHENSIVE INCOME (LOSS)

Net income (loss)............................         $ (484,396)  $   57,054      $(1,414,751)  $   145,692
Comprehensive income:
  Foreign currency translation adjustment....            (21,049)    (174,775)         721,079        35,515
                                                      ----------   ----------      -----------   -----------
Comprehensive income (loss)..................         $ (505,445) $  (117,721)     $  (693,672)  $   181,207
                                                      ==========   ==========      ===========   ===========
</TABLE>

See accompanying notes.

                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                NINE MONTHS ENDED
                                                                                                -----------------

                                                                                      SEPTEMBER 27,             SEPTEMBER 28,
                                                                                          2003                        2002
                                                                                          ----                        ----
<S>                                                                                <C>                         <C>
Cash flows from operating activities:
  Net income (loss) ...........................................................    $   (1,414,751)             $     145,692
  Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:
    Depreciation and amortization .............................................         2,644,120                  1,938,138
    Amortization of deferred income ...........................................           (21,822)                   (65,466)
    Gain on disposition of assets .............................................          (104,024)                      --
    Deferred and other compensation ...........................................            13,800                     22,568
    Deferred tax benefit ......................................................          (122,546)                      --
    Changes in operating assets and liabilities:
     Accounts receivable ......................................................        (1,562,501)                   205,374
     Income tax refunds receivable ............................................           257,776                     92,712
     Inventories ..............................................................           447,679                     52,239
     Other current assets .....................................................          (174,785)                   304,573
     Other assets .............................................................           (72,709)                  (160,522)
     Accounts payable .........................................................          (308,359)                (1,881,560)
     Accrued liabilities ......................................................           146,304                   (451,878)
     Income taxes payable .....................................................               806                   (111,524)
     Deferred compensation ....................................................           (33,232)                   (31,224)
     Other liabilities ........................................................            67,107                    115,998
                                                                                   --------------             --------------

Net cash (used in) provided by operating activities ...........................          (237,137)                   175,120
                                                                                   --------------             --------------

Cash flows from investing activities:
  Purchase of capital assets ..................................................          (964,518)                (2,193,192)
  Proceeds from disposal of assets    .........................................           168,558                       --
                                                                                   --------------             --------------

Net cash used in investing activities .........................................          (795,960)                (2,193,192)
                                                                                   --------------             --------------

Cash flows from financing activities:
  Borrowing under revolving credit facility ...................................              --                      500,000
  Borrowing under mortgage facility ...........................................              --                    2,500,000
  Restricted cash .............................................................        (1,500,000)                      --
  Repayment of borrowings .....................................................          (609,515)                (6,721,484)
  Repurchase of common stock ..................................................              --                     (457,440)
  Proceeds from the issuance of common stock, net .............................              --                    5,110,347
  Proceeds from the exercise of stock options .................................             7,763                    163,307
                                                                                   --------------             --------------

Net cash (used in) provided by financing activities ...........................        (2,101,752)                 1,094,730
                                                                                   --------------             --------------

Effect of exchange rate changes ...............................................            80,983                      9,539
                                                                                   --------------             --------------

Net decrease in cash and cash equivalents .....................................        (3,053,866)                  (913,807)
Cash and cash equivalents at beginning of period ..............................         3,610,798                  1,844,434
                                                                                   --------------             --------------

Cash and cash equivalents at end of period ....................................    $      556,932             $      930,631
                                                                                   ==============             ==============

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Income taxes ..............................................................    $       73,551             $       24,645
                                                                                   ==============             ==============
    Loan interest .............................................................    $      204,429             $      185,860
                                                                                   ==============             ==============

    Unpaid purchases of capital assets ........................................    $       85,000             $      306,000
                                                                                   ==============             ==============
Supplemental disclosure of non-cash financing activity:
  Note payable for insurance premiums..........................................    $      192,396             $         --
                                                                                   ==============             ==============
</TABLE>

See accompanying notes.

                                       3
<PAGE>

                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. 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 generally
accepted accounting principles for a full fiscal year. 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
September 27, 2003 and its results of operations and cash flows for the periods
presented. Results of operations of interim periods are not necessarily
indicative of results for a full year. These financial statements should be read
in conjunction with the audited consolidated financial statements in the
Company's Annual Report on Form 10-KSB for the year ended December 28, 2002.

2. DEBT CLASSIFICATION AND MANAGEMENT'S PLANS

As discussed in Note 13, on April 17, 2003, the Company and Fleet Bank entered
into bank modification agreements that waived compliance with certain covenants
and further amended the terms of the applicable agreement and covenants. The
Company had classified the amounts owed to Fleet Bank, which were due on January
31, 2004, as a current liability at December 28, 2002.

On October 8, 2003, the Company completed the refinancing of its revolving
credit and term loan obligations with a new credit facility provided by The CIT
Group/Business Credit, Inc. ("CIT") that provides for a three-year secured
revolving line of credit, term loans and letter of credit facility for up to
$9,250,000. All obligations due to Fleet Bank were repaid from the proceeds of
such refinancing. Management of the Company has implemented certain cost and
capital expenditure reductions as a means to improve cash flow. The new
revolving credit facility combined with the expected cash flows from operations
should be sufficient to meet the Company's current obligations and to fund its
currently contemplated operations during the next twelve months.

The Company classified $4,973,000 of its debt to Fleet Bank as long-term debt in
the September 27, 2003 balance sheet, as the Company has refinanced this debt
with financing obtained from CIT. The Company also classified $1,500,000 as
restricted cash at September 27, 2003. Such amount is to be held as collateral
in connection with the new credit facility.

3. CONTRACT REVENUE RECOGNITION

Contract revenue and related costs on fixed-price contracts that require
customization of standard products to customer specifications are recorded as
title to these products transfers to the customer, which is generally on the
date of shipment. Prior to shipment, manufacturing costs incurred on such
contracts are recorded as work in process inventory. Anticipated losses on
contracts are charged to operations when identified. Revenue related to
non-recurring engineering charges is generally recognized upon shipment of the
initial units produced or based upon contractually established stages of
completion.

4. PRIVATE PLACEMENT OF COMMON STOCK

On February 28, 2002, the Company sold to DuPont Electronic Technologies 528,413
shares of Common Stock, representing approximately 16.6% of the Company's
outstanding Common Stock after giving effect to the sale, for an aggregate
purchase price of $5,284,000. The Company and DuPont Electronic Technologies
have also agreed to work together to better understand the dynamics of the
markets for high-frequency electronic components and modules. David B. Miller,
Vice President and General Manager of DuPont Electronic Technologies, was
appointed to the Company's Board of Directors. As a result of this sale,
pursuant to the anti-dilution provisions of the Warrants issued in conjunction
with the private placement of 360,000 shares of Common Stock in October 2000,
the exercise price of the Warrants was reduced to $17.80 and the number of
shares subject to the Warrants was increased to 429,775. The Warrants expired on
October 26, 2003. DuPont holds registration rights which give them the right to
register certain shares of Common Stock of the Company.

5. ADOPTION OF ACCOUNTING STANDARDS

SFAS No. 143, "Accounting for Asset Retirement Obligations", requires the fair
value for an asset retirement obligation to be recorded in the period in which
it is incurred. The Company adopted the provisions of SFAS No. 143, effective
December 29, 2002. The adoption of SFAS No. 143 did not have a material impact
on the Company's financial position or results of operations.



                                       4
<PAGE>

                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB
Statement No. 13 and Technical Corrections", requires gains and losses on
extinguishments of debt to be classified as income or loss from continuing
operations rather than as extraordinary items as previously required under SFAS
No. 4. Extraordinary treatment is required for certain extinguishments as
provided in APB Opinion No. 30. The statement also amended SFAS No. 13 for
certain sale-leaseback and sublease accounting. The Company adopted the
provisions of SFAS No. 145, effective December 29, 2002. The adoption of SFAS
No. 145 did not have a material impact on the Company's financial position or
results of operations.

SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities," nullifies EITF Issue No. 94-3. SFAS No. 146 requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred, whereas EITF No. 94-3 had recognized the
liability at the commitment date to an exit plan. The Company adopted the
provisions of SFAS No. 146, effective for exit or disposal activities initiated
after December 28, 2002. The adoption of SFAS No. 146 did not have a material
impact on the Company's financial position or results of operations.

FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others," elaborates on the disclosures to be made by a guarantor about its
obligations under certain guarantees issued. It also clarifies that a guarantor
is required to recognize, at the inception of a guarantee, a liability for the
fair value of the obligation undertaken in issuing the guarantee. FIN 45 expands
on the accounting guidance of SFAS No. 5 "Accounting for Contingencies," SFAS
No. 57, "Related Party Disclosures," and SFAS No. 107, "Disclosures about Fair
Value of Financial Instruments." It also incorporates without change the
provisions of FASB Interpretation No. 34, "Disclosure of Indirect Guarantees of
the Indebtedness of Others." The initial recognition requirements in this
Interpretation are effective for periods ending after December 15, 2002. The
adoption of FIN 45 did not have a material impact on the Company's financial
position or results of operations.

FASB Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51," requires certain variable interest
entities to be consolidated by the primary beneficiary of the entity if the
equity investors in the entity do not have the characteristics of a controlling
financial authority or do not have sufficient equity at risk for the entity to
finance its activities without additional subordinated support from other
parties. FIN 46 is effective for all new variable interest entities created or
acquired after January 31, 2003. For variable interest entities created or
acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for
fiscal periods ending after December 15, 2003. The Company is still evaluating
the effect of FIN 46 but does not expect the adoption of FIN 46 will have a
material impact on the Company's financial position or results of operations.

SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity", requires that certain financial instruments
previously accounted for as equity are now to be classified as liabilities. SFAS
No. 150 is effective for the first interim period beginning after June 15, 2003.
The adoption of SFAS No. 150 did not have a material impact on the Company's
financial position or results of operations.

6. STOCK-BASED COMPENSATION

SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure," provides alternative methods of transition for a voluntary change
to the fair value method of accounting for stock-based employee compensation. In
addition, this statement amends the disclosure requirements of SFAS No. 123,
"Accounting for Stock-Based Compensation", to require more prominent disclosures
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results in both annual and interim
financial statements. As permitted by SFAS No. 148, the Company will continue to
apply the provisions of APB Opinion No. 25, "Accounting for Stock-Based
Compensation," for all employee stock option grants and has elected to disclose
pro forma net income and earnings per share amounts as if the fair-value based
method had been applied in measuring compensation costs.

The table below sets forth the pro forma net loss and the pro forma net loss per
share information as calculated in accordance with SFAS No. 123 for the quarters
and nine-month periods ended September 27, 2003 and September 28, 2002:


                                       5


<PAGE>

                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                     Quarters Ended                Nine Months Ended
                                                               --------------------------    ----------------------------
                                                               September 27,   September 28,  September 27,   September 28,
                                                                   2003            2002            2003           2002
                                                               ------------    -----------    -------------    -----------
<S>                                                            <C>            <C>            <C>              <C>
Net income (loss) - as reported ...........................    $  (484,396)   $    57,054    $  (1,414,751)   $   145,692
     Plus: stock-based compensation
        expense included in reported net income (loss) ....              -              -                -              -
     Less: Stock-based compensation expense
        determined using the fair value method ............        (69,750)       (70,500)        (219,750)      (295,500)
                                                               -----------    -----------    -------------    -----------
     Net loss - pro forma .................................    $  (554,146)   $   (13,446)   $  (1,634,501)   $  (149,808)
                                                               ===========    ===========    =============    ===========

     Basic earnings (loss) per share:
      As reported .........................................    $      (.16)   $       .02    $       (.45)    $       .05
      Pro forma ...........................................    $      (.18)   $       .00    $       (.52)    $      (.05)
     Diluted earnings (loss) per share:
      As reported .........................................    $      (.16)   $       .02    $       (.45)    $       .05
      Pro forma ...........................................    $      (.18)   $       .00    $       (.52)    $      (.05)
                                                               ===========    ===========    =============    ===========

</TABLE>

The SFAS No. 123 method of accounting has been applied to options granted in
periods after December 31, 1994 and the resulting pro forma compensation expense
may not be indicative of pro forma expense in future years.

The fair value of each of the options granted in 2003 and 2002 was estimated on
the date of grant using the Black-Scholes option valuation model. The following
weighted average assumptions were utilized:


                                                        2003          2002
                                                        ----          ----
Expected option life (years).......................      2.6           2.4
Expected volatility................................    45.00%        45.00%
Risk-free interest rate............................     3.50%         3.50%
Expected dividend yield............................     0.00%         0.00%

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options, which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options and subscription rights have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the
fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its employee
stock options and subscription rights.

7. GOODWILL

The changes in the carrying amount of goodwill for the nine-month periods ended
September 27, 2003 and September 28, 2002 are as follows:

                                                       2003           2002
                                                       ----           ----
Balance, beginning of year.....................    $2,491,146      $2,451,037
Foreign currency adjustment....................       461,778          22,863
                                                   ----------      ----------
Balance, end of period.........................    $2,952,924      $2,473,900
                                                   ==========      ==========

                                       6
<PAGE>

                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


8. INVENTORIES

Inventories consist of the following:


                                                 SEPTEMBER 27,    DECEMBER 28,
                                                     2003            2002
                                                     ----            ----
Finished goods..............................     $    90,434      $   414,233
Work in process.............................       2,015,383        2,019,779
Raw materials and purchased parts...........       1,475,981        1,581,319
                                                 -----------      -----------
Total.......................................     $ 3,581,798      $ 4,015,331
                                                 ===========      ===========

Total inventories are net of valuation allowances for obsolescence of $1,091,000
at September 27, 2003 and $1,422,000 at December 28, 2002.

9. NET INCOME (LOSS) PER COMMON SHARE

Basic net income (loss) per common share is calculated by dividing net income
(loss) by the weighted average common shares outstanding during the period.

The calculation of diluted net income (loss) 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 and warrants, were issued during the reporting
period to the extent they are not anti-dilutive.

10. COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) includes all changes in stockholders' equity during
a period except those resulting from investments by or distributions to
stockholders. The Company has determined the component of comprehensive income
(loss) impacting the Company is cumulative translation adjustments.

11. 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. Periodically, the additional week to
make a 53-week year (fiscal year 1997 was the last and fiscal year 2003 will be
the next) is added to the fourth quarter, making such quarter consist of 14
weeks.

12. TRANSACTIONS WITH MANAGEMENT AND LOAN TO OFFICER-STOCKHOLDER

In May 1998, the Company sold 22,000 shares of Common Stock to Mason N. Carter,
Chairman, President and Chief Executive Officer of the Company, at a price of
$11.60 per share, which approximated the average closing price of the Company's
Common Stock during the first quarter of 1998. The Company lent Mr. Carter
$255,000 in connection with the purchase of these shares and combined that loan
with a prior loan to Mr. Carter in the amount of $105,000. The resulting total
principal amount of $360,000 was payable May 4, 2003 and bore interest at a
variable interest rate based on the prime rate of the Company's lending bank.
This loan was further amended on July 29, 2002. Accrued interest of $40,000 was
added to the principal, bringing the new principal amount of the loan to
$400,000, the due date was extended to May 4, 2006, and interest (at the same
rate as was previously applicable) is now payable monthly. Mr. Carter has
pledged 33,000 shares of Common Stock as security for this loan which is a
full-recourse loan.

On August 31, 2000, in connection with an amendment of Mr. Carter's employment
agreement, the Company loaned Mr. Carter an additional $280,000. Interest on the
loan will be calculated at a variable interest rate based on the prime rate of
the Company's lending bank, payable in accordance with Mr. Carter's employment
agreement. Each year the Company is required to forgive 20% of the amount due
under this loan and the accrued interest thereon. During 2003, the amount of
$56,000 of principal and $8,000 of accrued interest was forgiven. For fiscal
year 2004, the Company estimates that $56,000 of principal and $4,000 of accrued
interest will be forgiven.

                                       7
<PAGE>


                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. CURRENT AND LONG-TERM DEBT

The Company was obligated under the following debt instruments at September 27,
2003 and December 28, 2002:

<TABLE>
<CAPTION>
                                                                             SEPTEMBER 27,   DECEMBER 28,
                                                                                 2003           2002
                                                                                 ----           ----
<S>                                                                           <C>            <C>
Fleet Bank (A):
 Mortgage loan, callable January 31, 2004, interest 1/2% below
    prime ................................................................    $3,237,500     $3,368,750
 Term loan, callable January 31, 2004, interest LIBOR plus 2% ............     2,428,571      2,720,000
The Bank of Nova Scotia (B):
 Capital leases, interest 6.7%, due October 2004 .........................        51,631         70,553
 Capital leases, interest 8.7%, due June 2005 ............................       188,264        202,420
 Capital leases, interest 7.3%, due April 2006 ...........................       163,939        167,435
 Capital leases, interest 7.9%, due June 2006 ............................       138,351        140,020
First Insurance Funding Corp.-
 Note payable, insurance premiums, interest 6.75% due April 2004..........       129,340           --
                                                                              ----------     ----------
                                                                               6,337,596      6,669,178
Less current portion .....................................................     1,007,485      6,239,758
                                                                              ----------     ----------
Long-term portion ........................................................    $5,330,111     $  429,420
                                                                              ==========     ==========
</TABLE>

(A) The Company commenced borrowing in April 2001 under a $7,500,000 revolving
credit facility with Fleet Bank, at an interest rate of one-half percent below
the bank's floating prime rate. The weighted average interest rate on the
borrowings under this facility during 2002 was 4.22% and the interest rate was
3.50% and 3.75% at September 27, 2003 and December 28, 2002, respectively.

During the first quarter of 2002, the Company obtained an increase of $2,500,000
in the Company's lines of credit with Fleet Bank to a total of $10,000,000,
$3,500,000 of which consisted of a first mortgage originally callable in March
2007 on the Company's West Caldwell, New Jersey manufacturing facility.

In December 2002 the Company borrowed $2,720,000 under a seven-year term loan
with Fleet Bank, which lowered the amount then available under its revolving
line of credit to $3,780,000. The interest rate on the borrowings under this
facility was 3.31% and 3.42% at September 27, 2003 and December 28, 2002,
respectively.

The revolving credit facility, mortgage loan and term loan were secured by
substantially all assets located within the United States and the pledge of 65%
of the stock of the Company's subsidiary located in Costa Rica. The provisions
of the revolving credit and term loan agreement required the Company to maintain
certain financial covenants. At December 28, 2002, the Company was not in
compliance with certain of these covenants. The Company has not borrowed under
the revolving credit facility since December 2002.

On April 17, 2003, the Company and Fleet Bank entered into bank modification
agreements that waived compliance with certain covenants and further amended the
applicable terms of the agreements and covenants. Under the amended loan
agreements, Fleet Bank reduced the amount available under its revolving credit
facility to $1,000,000, based upon availability under a borrowing base
calculation and changed the maturity date of the Company's $3,500,000 first
mortgage loan and the $2,720,000 term loan to January 31, 2004, while extending
the maturity date of the revolving credit facility to January 31, 2004. In
connection with these modification agreements, the Company paid a $100,000 fee
to Fleet Bank and will accelerate the amortization of deferred financing costs
of $190,000 through January 31, 2004. The loan agreements contain a material
adverse change clause, under which Fleet Bank, in its good faith opinion, can
determine that the Company is in default under the agreements. The Company
believes that this clause is a Subjective Acceleration Clause as indicated in
FASB Technical Bulletin 79-3, and, based upon the Company's assessment under
those guidelines, among other factors, had classified the amounts as a current
liability at December 28, 2002.

                                       8
<PAGE>

                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


On October 8, 2003, the Company entered into a new financing agreement with CIT
which consists of a $5,000,000 revolving line of credit, that is temporarily
reduced by $750,000 until certain conditions are met, a $1,500,000 machinery and
equipment term loan ("Term Loan A") and a $2,750,000 real estate term loan
("Term Loan B"). The revolving line of credit is subject to an availability
limit under a borrowing base calculation (85% of eligible accounts receivable as
defined in the financing agreement plus 100% of the $1,500,000 restricted
cash). The revolving line of credit bears interest at the prime rate plus 1/2
percent (currently 4.50%). The principal amount of Term Loan A is payable in 60
equal monthly installments of $25,000 and bears interest at the prime rate plus
one percent (currently 5.0%). The principal amount of Term Loan B is payable in
84 equal monthly installments of $32,738 and bears interest at the prime rate
plus one percent. The revolving line of credit and the term loans are secured by
substantially all assets located within the United States and the pledge of 65%
of the stock of the Company's subsidiaries located in Costa Rica and Canada. The
provisions of the financing agreement require the Company to maintain certain
financial covenants.

The Company classified $4,973,000 of its debt to Fleet Bank as long-term debt in
the September 27, 2003 balance sheet, as the Company has refinanced this debt
with financing obtained from CIT. The Company also classified $1,500,000 as
restricted cash at September 27, 2003. Such amount is to be held as collateral
in connection with the new credit facility.

(B) Capital leases included in property, plant and equipment, net, have a
depreciated cost of approximately $583,000 at September 27, 2003 and $559,000 at
December 28, 2002.

14. LEASE MODIFICATION AND FACILITY SHARING AGREEMENT

In February 2001, the Company entered into a five-year lease in Costa Rica for a
36,200 square-foot facility for manufacturing new Multi-Mix (R) Microtechnology
products. The leasehold improvements and capital equipment for this
manufacturing facility were completed at a cost of approximately $5,600,000 and
this facility was opened for production in August 2002.

15. PRO FORMA WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

Had the sale of 528,413 shares of common stock on February 28, 2002 referred to
in Note 4 occurred at the beginning of the year, the pro forma basic and diluted
weighted average number of common shares outstanding would have been:

<TABLE>
<CAPTION>
                                                                NINE MONTHS ENDED
                                                                SEPTEMBER 28, 2002
                                                                ------------------
<S>                                                                  <C>
Basic:
Actual...........................................................    3,055,713
Adjustments for sale of Common Stock on February 28, 2002........      119,134
                                                                     ---------
Basic - pro forma................................................    3,174,847
Effect of dilutive securities - Stock options....................       43,181
                                                                     ---------
Diluted - pro forma..............................................    3,218,028
                                                                     =========
</TABLE>

16. BUSINESS SEGMENT DATA

The Company's operations are conducted primarily through two business segments:
(1) electronic components and (2) microwave micro-circuitry. These segments, and
the principal operations of each, are as follows:

Electronic components: Design, manufacture and sale of electronic component
devices offering extremely broad frequency coverage and high performance
characteristics for communications, defense and aerospace applications. Of the
identifiable assets, 80% are located in the United States and 20% are located in
Costa Rica.

Microwave micro-circuitry: Design, manufacture and sale of microstrip, bonded
stripline and thick metal-backed Teflon (R) (PTFE) and mixed dielectric
multilayer circuits for communications, defense and aerospace applications. Of
the identifiable assets all are located in Canada.

Information about the Company's operations in its business segments follows.
Operating income is net sales less operating expenses. Operating expenses
exclude interest expense, other income and income taxes. Assets are identified
with the appropriate business segment and are substantially all located in the
North America geographic area. Corporate assets consist principally of cash.
Corporate expenses are immaterial.

                                       9
<PAGE>

                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                 Quarters Ended                Nine Months Ended
                                                         ---------------------------       ---------------------------
                                                        September 27,     September 28,   September 27,    September 28,
                                                            2003              2002            2003              2002
                                                         ---------         ---------       ---------         ---------
                                                          (In thousands of dollars)          (In thousands of dollars)
<S>                                                      <C>               <C>             <C>               <C>
Industry segments:
    Sales to unaffiliated customers:
             Electronic components                       $   5,418         $   5,065       $  17,211         $  16,825
             Microwave micro-circuitry                       1,026             1,124           2,546             3,108
             Intersegment sales                                (87)             (250)           (276)             (681)
                                                         ---------         ---------       ---------         ---------
             Consolidated                                $   6,357         $   5,939       $  19,481         $  19,252
                                                         =========         =========       =========         =========

    Income (loss) before income taxes:
      Operating income (loss):
             Electronic components                       $    (514)        $    (100)      $  (1,377)        $      98
             Microwave micro-circuitry                          83               172             (61)               95
      Interest and other expense, net                          (52)              (25)           (164)             (127)
      Gain on disposition of assets                             33                 -             104                 -
                                                         ---------         ---------       ---------         ---------
             Consolidated                                $    (450)        $      47      $   (1,498)       $       66
                                                         =========         =========       =========         =========

      Identifiable assets:
             Electronic components                                                         $  29,339         $  30,270
             Microwave micro-circuitry                                                         5,537             5,087
             Corporate                                                                           557               931
             Intersegment                                                                        (79)             (240)
                                                                                           ---------         ---------
             Consolidated                                                                  $  35,354         $  36,048
                                                                                           =========         =========
      Depreciation and amortization:
             Electronic components                       $     856         $     654       $   2,476         $   1,764
             Microwave micro-circuitry                          56                53             168               174
                                                         ---------         ---------       ---------         ---------
             Consolidated                                $     912         $     707       $   2,644         $   1,938
                                                         =========         =========       =========         =========
      Capital expenditures:
             Electronic components                       $     158         $     535       $     917         $   2,076
             Microwave micro-circuitry                           5                24              48               117
                                                         ---------         ---------       ---------         ---------
             Consolidated                                $     163         $     559       $     965         $   2,193
                                                         =========         =========       =========         =========
</TABLE>

                                       10
<PAGE>

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


CRITICAL ACCOUNTING ESTIMATES AND POLICIES

The Company's management makes certain assumptions and estimates that impact the
reported amounts of assets, liabilities and stockholders' equity, and revenues
and expenses. The management judgments that are currently the most critical are
related to the accounting for the Company's investments in Multi-Mix (R)
Microtechnology, contract revenue recognition, inventory valuation, valuation of
goodwill and valuation of deferred tax assets.

Following is a summary of the carrying amounts of the Multi-Mix (R)
Microtechnology net assets included in the Company's consolidated financial
statements at September 27, 2003 and the related future planned purchases and
lease obligation commitments through January 2006.

Net assets:
Property, plant and equipment, at cost.............................. $13,453,000
Less accumulated depreciation and amortization......................   3,712,000
                                                                     -----------
Property, plant and equipment, net..................................   9,741,000
Inventories.........................................................     755,000
Other assets, net...................................................     272,000
                                                                     -----------
Total net assets at September 27, 2003.............................. $10,768,000
                                                                     -----------
Commitments:
Planned equipment purchases for the remainder of 2003............... $   200,000
Lease obligations through January 2006..............................     637,000
                                                                     -----------
Total commitments...................................................    $837,000
                                                                     -----------
Total net assets and commitments.................................... $11,605,000
                                                                     ===========

The Company anticipates receiving additional orders during the remainder of 2003
and 2004 for its Multi-Mix (R) Microtechnology products, for which substantial
research and development costs have also been incurred. Due to economic and
market conditions in the wireless industry, the telecommunications system
service providers have curtailed their capital equipment purchases from our
customers. While these circumstances have resulted in the delay or cancellation
of Multi-Mix (R) Microtechnology product purchases that had been anticipated
from certain specific customers or programs, the Company has recently
implemented a strategic focus effort utilizing product knowledge and customer
focus to expand specific sales opportunities. A continued extended delay or
reduction from planned levels in new orders expected from customers for these
products could require the Company to pursue alternatives related to the
utilization or realization of these assets and commitments, the net result of
which could be materially adverse to the financial results and position of the
Company. The Company has determined no provision for impairment is required at
this time.

                                       11
<PAGE>

The Company's planned equipment purchases and other commitments are expected to
be funded through its new revolving credit facility of $5,000,000, which becomes
due October 8, 2006, supplemented by cash resources and cash flows that are
expected to be provided by operations.

Contract revenue and related costs on fixed-price contracts that require
customization of standard products to customer specifications are recorded as
title to these products transfers to the customer, which is generally on the
date of shipment. Prior to shipment, manufacturing costs incurred on such
contracts are recorded as work in process inventory. Anticipated losses on
contracts are charged to operations when identified. Revenue related to
non-recurring engineering charges is generally recognized upon shipment of the
initial units produced or based upon contractually established stages of
completion.

Inventories are valued at the lower of average cost or market. Inventories are
periodically reviewed for their projected manufacturing usage utilization and,
when slow-moving or obsolete inventories are identified, a provision for a
potential loss is made and charged to operations. At September 27, 2003, total
inventories of $3,582,000 are net of a $1,091,000 valuation allowance for
obsolescence.

With the adoption of SFAS No. 142 by the Company on December 30, 2001, goodwill
is no longer subject to amortization over its estimated useful life. However,
goodwill will be subject to at least an annual assessment for impairment and
more frequently if circumstances indicate a possible impairment. The Company
performed the required initial assessment of its goodwill, all of which was
recognized in connection with the acquisition of Filtran, as of the beginning of
the 2002 fiscal year as well as the annual assessment during the fourth quarter
of 2002 and determined there was no impairment of goodwill.



                                       12
<PAGE>

The Company currently has significant deferred tax assets resulting from net
operating loss carryforwards, tax credit carryforwards and deductible temporary
differences, which will reduce taxable income in future periods. A valuation
allowance (or write-down) is required when it is more likely than not that all
or a portion of a deferred tax asset will not be realized. The Company's 2002
net loss weighed heavily in the Company's overall assessment. As a result of the
Company's assessment, the Company established a full valuation allowance for its
remaining net domestic deferred tax assets at December 28, 2002 and September
27, 2003.

                  CONSOLIDATED STATEMENTS 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           Percentage of Net Sales
                                                         ------------------------          ------------------------
                                                             Quarters Ended                     Nine Months Ended
                                                         ------------------------          ------------------------
                                                       September 27,   September 28,     September 27,    September 28,
                                                          2003             2002              2003             2002
                                                         ------           ------            ------           ------
<S>                                                      <C>              <C>               <C>              <C>
Net sales....................................            100.0%           100.0%            100.0%           100.0%
                                                         ------           ------            ------           ------
Costs and expenses:
  Cost of sales..............................             65.4             56.0              63.0             54.3
  Selling, general and administrative........             35.6             30.6              36.8             33.5
  Research and development...................              5.0             12.2               6.9              9.9
  Restructuring charge.......................              0.8               -                0.7              1.3
                                                         ------           ------            ------           ------
                                                         106.8             98.8             107.4             99.0
                                                         ------           ------            ------           ------

Operating income (loss)......................             (6.8)             1.2              (7.4)             1.0
Interest and other expense, net..............               .8               .4                .8               .6
Gain on disposition of assets................              (.5)              --               (.5)              --
                                                         ------           ------            ------           ------

Income (loss) before income taxes............             (7.1)              .8              (7.7)              .4
Provision (benefit) for income taxes.........               .5              (.2)              (.4)             (.4)
                                                         ------           ------            ------           ------
Net income (loss)............................             (7.6%)            1.0%             (7.3%)             .8%
                                                         ======           ======            ======           ======
</TABLE>

THIRD QUARTER AND THE FIRST NINE MONTHS OF 2003 COMPARED TO THE THIRD QUARTER
AND FIRST NINE MONTHS OF 2002

Consolidated results of operations for the third quarter of 2003 reflect an
increase in net sales from the third quarter of 2002 of $418,000 (or 7.0%) to
$6,357,000. This increase was attributable to a $353,000 increase in net sales
of electronic components and a $65,000 increase in sales of microwave
micro-circuitry products from the Company's wholly-owned subsidiary Filtran
Microcircuits Inc. ("FMI"). Consolidated results of operations for the first
nine months of 2003 reflect an increase in net sales compared to the first nine
months of 2002 of $229,000 (or 1.2%) to $19,481,000. For the first nine months
of 2003, an increase of $386,000 in the net sales of electronic components
attributable to improved orders in the Company's defense business was offset by
a $157,000 decrease in sales of microwave micro-circuitry products from FMI,
reflecting continued softness in the telecommunications sector that FMI serves,
principally millimeter wave applications for wireless broadband solutions.

Orders of $6,390,000 were received during the third quarter of 2003, an increase
of $617,000 or 10.7% compared to $5,773,000 in orders received during the third
quarter of 2002. Orders received during the third quarter of 2003 exceeded sales
during the third quarter of 2003 by approximately 0.5%. Orders of $21,619,000
were received for the first nine months of 2003, an increase of $855,000 or 4.1%
compared to $20,764,000 in orders received for the first nine months of 2002.
Orders received during the first nine months of 2003 exceeded sales during the
first nine months of 2003 by approximately 11.0% As a result, backlog increased
by $2,137,000 or 21.3% to $12,181,000 at the end of the third quarter of 2003
compared to $10,044,000 at year-end 2002.

The Company believes that the current economic downturn, resulting in reduced
spending by wireless telecommunications service providers, has caused many
wireless telecommunications companies to delay or forego purchases of the
Company's products. However, the Company expects that its defense customers
should continue to maintain their approximate current levels of orders during
fiscal year 2003, although there are no assurances they will do so. The Company
also anticipates increased levels of orders during the fiscal year 2003 for its
new Multi-Mix (R) Microtechnology products, for which the Company has made a
significant capital investment and incurred substantial research and development
costs. The Company expects that softness in the telecommunications sector that
FMI serves, principally millimeter wave applications for wireless broadband
solutions, which caused a substantial reduction in the microwave micro-circuitry
segment sales and profitability for the first nine months of 2003 compared to
prior-year results, will continue in the near term.

Cost of sales increased $832,000 or 25.0%, and as a percentage of net sales
increased 9.4 percentage points to 65.4% for the third quarter of 2003. Cost of
sales increased $1,817,000 or 17.4% and as a percentage of net sales increased
8.7 percentage points to 63.0% for the first nine months of 2003. Cost of sales
increased $566,000 and $1,423,000 for the third quarter and first nine months of
2003, respectively, in the electronic components segment, resulting from higher
manufacturing cost increases that were attributable to increases in depreciation
and other occupancy expenses related to the expansion of the Company's West
Caldwell, New Jersey and Costa Rica manufacturing production facilities. Cost of
sales for the electronic components segment also reflects reduced intersegment
purchases from FMI of $163,000 and $405,000 for the third quarter and first nine
months of 2003, respectively. Cost of sales increased $102,000 for the third
quarter of 2003 and decreased $11,000 for the first nine months of 2003 in the
microwave micro-circuitry segment, resulting from the overall decline in segment
sales for the third quarter and first nine months of 2003 of approximately 8.8%
and 18.1% compared to the third quarter and first nine months of the prior year.

Depreciation expense included in cost of sales for the third quarter of 2003 was
$725,000, an increase of $196,000 compared to the third quarter of 2002. For the
third quarter of 2003, approximately $442,000 of depreciation expense was
associated with Multi-Mix (R) Microtechnology capital assets. Depreciation
expense included in cost of sales for the first nine months of 2003 was
$2,118,000, an increase of $557,000 compared to the first nine months of 2002.
For the first

                                       13
<PAGE>

nine months of 2003 approximately $1,296,000 of depreciation expense was
associated with Multi-Mix (R) Microtechnology capital assets. The increase in
depreciation expense was a result of higher capital equipment purchases in the
prior year related to the new Costa Rica manufacturing facility and the
expansion of the West Caldwell, New Jersey manufacturing facility.

Gross profit for the third quarter of 2003 for the electronic components segment
decreased by $214,000 to $1,876,000 or 34.6% of segment net sales of $5,418,000
compared to gross profit of $2,090,000 or 41.3% of segment net sales of
$5,065,000 in the third quarter of 2002. Gross profit for the third quarter of
2003 for the microwave micro-circuitry segment decreased by $201,000 to $325,000
or 31.7% of segment net sales of $1,026,000, compared to $526,000 or 46.8% of
segment net sales of $1,124,000 in the third quarter of 2002. FMI sales include
intersegment sales of $87,000 and $250,000 in the third quarter of 2003 and
2002, respectively. Gross profit for the first nine months of 2003 for the
electronic components segment decreased by $1,037,000 to $6,494,000 or 37.7% of
segment net sales of $17,211,000 compared to gross profit of $7,531,000 or 44.8%
of segment net sales of $16,825,000 for the first nine months of 2002. Gross
profit for the first nine months of 2003 for the microwave micro-circuitry
segment decreased by $550,000 to $714,000 or 28.0% of segment net sales of
$2,546,000, compared to $1,264,000 or 40.7% of segment net sales of $3,108,000
in the first nine months of 2002. FMI sales include intersegment sales of
$276,000 and $681,000 in the first nine months of 2003 and 2002, respectively.
The declines are primarily attributable to competitive pricing, cost overruns,
increases in depreciation and other occupancy expenses related to expansion and
under-utilization of the Company's manufacturing facilities.

Selling, general and administrative expenses of $2,262,000 for the third quarter
of 2003 increased by $441,000 or 24.2%, and when expressed as a percentage of
net sales, increased by 5.0% to 35.6%. The increase was due to higher
commission, selling and professional fee expenses. Selling, general and
administrative expenses of $7,176,000 for the first nine months of 2003
increased by $725,000 or 11.2%, and when expressed as a percentage of net sales,
increased by 3.3 percentage points to 36.8% compared to the first nine months of
2002. The dollar increases for the first nine months of 2003 were primarily due
to the $300,000 of additional fees and costs incurred related to the amendment
of the Company's Fleet loan agreements incurred in the second quarter of 2003,
and the higher commissions, selling and other professional fee costs incurred in
the third quarter.

Research and development expenses for new products were $316,000 for the third
quarter of 2003, a decrease of $407,000 or 56.3% and when expressed as a
percentage of net sales, a decrease of 7.2 percentage points to 5.0% compared to
the third quarter of 2002. Except for $42,000 of expenses in the third quarter
of 2003 at FMI, a decrease of $84,000 from the third quarter of the prior year,
substantially all of the research and development expenses were related to
Multi-Mix (R) Microtechnology and Multi-Mix PICO (TM) products. Research and
development expenses for new products were $1,340,000 for the first nine months
of 2003, a decrease of $571,000 or 29.9% and when expressed as a percentage of
net sales, a decrease of 3.0 percentage points to 6.9% compared to the first
nine months of 2002. Except for $124,000 of expenses at FMI (a decrease of
$256,000 from the first nine months of 2002) a majority of the research and
development expenses were related to Multi-Mix (R) Microtechnology and Multi-Mix
PICO(TM) products.

During the third quarter of 2003 the Company reduced its headcount by 2 persons,
principally involved in manufacturing support and sales. The Company recorded a
personnel restructuring charge of $54,000, consisting of severance and certain
other personnel costs during the third quarter of 2003. During the second
quarter of 2002 the Company reduced its head count by 23 persons, principally
involved in production, manufacturing support and sales. The Company recorded a
restructuring charge of $240,000 in the second quarter of 2002.

Consolidated operating loss for the third quarter of 2003 was $431,000 compared
to consolidated operating income of $72,000 in the third quarter of 2002.
Consolidated operating loss for the first nine months of 2003 was $1,437,000
compared to consolidated operating income of $193,000 for the first nine months
of 2002.

Operating loss for the electronic components segment was $514,000 for the third
quarter of 2003 compared to an operating loss of $100,000 in the third quarter
of 2002. Operating income for the microwave micro-circuitry segment was $83,000
for the third quarter of 2003 compared to an operating income of $172,000 for
the third quarter of 2002. For the first nine months of 2003, the Company's
operating loss for its electronic component segment was $1,377,000 compared to
operating income of $98,000 for the first nine months of 2002. For the first
nine months of 2003, operating loss for the microwave micro-circuitry segment
was $61,000 compared to operating income of $95,000 for the first nine months of
2002.

Interest and other expense, net was $52,000 for the third quarter of 2003
compared to interest

                                       14
<PAGE>

and other expense, net of $25,000 for the third quarter of 2002. Interest and
other expense, net was $164,000 for the first nine months of 2003 compared to
interest and other expense, net of $127,000 for the first nine months of 2002.
Interest expense for the third quarter of 2003 was principally incurred on
borrowings under the mortgage loan and the term loan taken out during fiscal
year 2002. Interest expense for the third quarter of 2002 was principally
incurred on borrowings under a revolving credit facility and mortgage loan in
connection with capital equipment purchases and the building expansion
constructed during fiscal year 2001.

An income tax provision of $35,000 was recorded for the third quarter of 2003
with an effective tax rate of 8% compared to a tax benefit of $10,000 for the
third quarter of 2002 with an effective tax rate of 21%. An income tax benefit
of $83,000 was recorded for the first nine months of 2003, with an effective tax
rate of 6%, compared to an income tax benefit of $80,000 for the first nine
months of 2002. The 2003 tax benefit recorded represents deferred tax benefits
associated with FMI's research and development expenses incurred in Canada. No
U.S. tax benefits have been recorded in 2003.

Net loss for the third quarter of 2003 was $484,000 compared to net income of
$57,000 for the second quarter of 2002. Net loss per share for the third quarter
of 2003 was $.16 compared to net income of $.02 per share for the third  quarter
of 2002.

Net loss for the first nine months of 2003 was $1,415,000 compared to net income
of $146,000 for the first nine months of 2002. Net loss per share for the first
nine months of 2003 was $.45 compared to net income of $.05 per share for the
first nine months of 2002.

The weighted average number of basic shares outstanding decreased by
approximately 25,000 shares or 0.8% for the third quarter of 2003 compared to
the third quarter of 2002. The decrease in shares outstanding was primarily due
to the repurchase of 67,100 shares of treasury stock during the second half of
2002. The weighted average number of basic shares outstanding increased by
approximately 64,000 shares or 2.1% for the first nine months of 2003 compared
to the first nine months of 2002. The increase in shares outstanding was
primarily due to the issuance of 528,413 shares to DuPont Electronic
Technologies during the first quarter of 2002 partly offset by the repurchase of
treasury stock during the second half of 2002.

LIQUIDITY AND CAPITAL RESOURCES

The Company had liquid resources comprised of cash and cash equivalents totaling
approximately $600,000 at the end of the third quarter of 2003 compared to
approximately $3,600,000 at the end of 2002. The Company's working capital was
approximately $7,200,000 and its current ratio was 2.8 at the end of the third
quarter of 2003 compared to $3,600,000 and 1.4, respectively, at the end of
2002.

The Company's operating activities utilized cash of $237,000 during the first
nine months of 2003 compared to $175,000 of net positive cash flows during the
first nine months of 2002. The primary reasons for the operating cash flow usage
resulted from the net loss of $1,415,000, and an increase in accounts receivable
of $1,562,000 and other current asset amounts, offset by depreciation and
amortization charges of $2,644,000 and lower inventory levels.

The Company made net cash investments in property, plant and equipment of
$965,000 during the first nine months of 2003 (and had unpaid invoices for such
investments of $85,000 at September 27, 2003), compared to net cash investments
made in property, plant and equipment of $2,193,000 (and unpaid invoices for
such investments of $306,000 at September 28, 2002) during the first nine months
of 2002. 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 depreciated cost of capital equipment
associated with Multi-Mix (R) Microtechnology was $9,741,000 at the end of the
third quarter 2003, a decrease of $732,000 compared to $10,473,000 at the end of
fiscal year 2002.

In April 2001, the Company commenced borrowing under a $7,500,000 revolving
credit facility with Fleet Bank, at an interest rate of one-half percent below
the bank's floating prime rate. The weighted average interest rate on the
borrowings under this facility during 2002 was 4.22%, and the current interest
rate was 3.50% at September 27, 2003 and December 28, 2002.

The Company successfully completed a private placement of 528,413 shares of
Company Common Stock on February 28, 2002 that raised $5,284,000 before offering
expenses. From the proceeds of that offering, the Company repaid the $5,000,000
then outstanding under the revolving credit facility.

During the first quarter of 2002, the Company obtained an increase of $2,500,000
in the Company's lines of credit with Fleet Bank to a total of $10,000,000,
$3,500,000 of which

                                       15
<PAGE>

consisted of a first mortgage originally callable in March 2007 on the Company's
West Caldwell, New Jersey manufacturing facility.

In December 2002 the Company borrowed $2,720,000 under a seven-year term loan
with Fleet Bank, which lowered the amount then available under its revolving
line of credit to $3,780,000. The interest rate on the borrowings under this
facility was 3.31% and 3.42% at September 27, 2003 and December 28, 2002,
respectively.

The Company had not made any borrowings under the Fleet Bank revolving credit
facility since December 2002.

The revolving credit facility, mortgage loan and term loan are secured by
substantially all assets located within the United States and the pledge of 65%
of the stock of the Company's subsidiaries located in Costa Rica. The provisions
of the revolving credit and term loan agreement require the Company to maintain
certain financial covenants. At December 28, 2002, the Company was not in
compliance with certain of these covenants.

On April 17, 2003, the Company and Fleet Bank entered into bank modification
agreements, that waived compliance with certain covenants and further amended
the applicable terms of the agreements and covenants. Under the amended loan
agreements, Fleet Bank reduced the amount available under its revolving credit
facility to $1,000,000, based upon availability under a borrowing base
calculation, and changed the maturity date of the Company's $3,500,000 first
mortgage loan and the $2,720,000 term loan to January 31, 2004, while extending
the maturity date of the revolving credit facility to January 31, 2004. In
connection with these modification agreements, the Company paid a $100,000 fee
to Fleet Bank and will accelerate the amortization of deferred financing costs
of $190,000 through January 31, 2004. The loan agreements contain a material
adverse change clause, under which Fleet Bank, in its good faith opinion, can
determine that the Company is in default under the agreements. The Company
believes that this clause is a Subjective Acceleration Clause as indicated in
FASB Technical Bulletin 79-3, and, based upon the Company's assessment under
those guidelines, among other factors, it had classified the amounts as a
current liability at December 28, 2002.

On October 8, 2003, the Company completed the refinancing of its revolving
credit and term loan obligations with a new credit facility provided by The CIT
Group/Business Credit, Inc. ("CIT") that provides for a three-year secured
revolving credit, term loan and letter of credit facility for $9,250,000. All
obligations due to Fleet Bank were repaid from the proceeds of such refinancing.
Management of the Company has implemented certain cost and capital expenditure
reductions as a means to improve cash flow. The new revolving credit facility
combined with the expected cash flows from operations should be sufficient to
meet the Company's current obligations and to fund its currently contemplated
operations during the next twelve months.

The new financing agreement with CIT consists of a $5,000,000 revolving line of
credit, that is temporarily reduced by $750,000 until certain conditions are
met, a $1,500,000 machinery and equipment term loan ("Term Loan A") and a
$2,750,000 real estate term loan ("Term Loan B"). The revolving line of credit
is subject to an availability limit under a borrowing base calculation (85% of
eligible accounts receivable as defined in the financing agreement plus 100% of
the $1,500,000 restricted cash). The revolving line of credit bears interest at
the prime rate plus 1/2 percent (currently 4.50%). The principal amount of Term
Loan A is payable in 60 equal monthly installments of $25,000 and bears interest
at the prime rate plus one percent (currently 5.0%). The principal amount of
Term Loan B is payable in 84 equal monthly installments of $32,738 and bears
interest at the prime rate plus one percent. The revolving line of credit and
the term loans are secured by substantially all assets located within the United
States and the pledge of 65% of the stock of the Company's subsidiaries located
in Costa Rica and Canada. The provisions of the financing agreement require the
Company to maintain certain financial covenants.

The Company classified $4,973,000 of its debt to Fleet Bank as long-term debt in
the September 27, 2003 balance sheet, as the Company has refinanced this debt
with financing obtained from CIT. The Company also classified $1,500,000 as
restricted cash at September 27, 2003. Such amount is to be held as collateral
in connection with the new credit facility.

Depreciation and amortization expenses exceeded capital expenditures for new
projects and production equipment during the first nine months of 2003 by
approximately $1,679,000, and the Company anticipates that depreciation and
amortization expenses will exceed capital expenditures in fiscal year 2003. The
Company intends to issue commitments to purchase $200,000 of capital equipment
from various vendors. The Company anticipates that such equipment will be
purchased and become operational during the fourth quarter of 2003.

The Company entered into an agreement effective January 2001, with a customer to
relinquish to

                                       16
<PAGE>

this customer approximately half of the Company's 17,000 square-foot leased
manufacturing facility in Costa Rica. Associated with the transaction, the
Company entered into a new four-year lease agreement with a five-year renewal
option with its Costa Rica landlord for the reduced space. In addition, the
Company transferred certain employees to its customer, agreed to share certain
personnel resources and common costs, and committed to provide certain
management, administrative and other services to its customer. On March 31,
2003, the Company relinquished the balance of the space to its customer. The
completion of these transactions resulted in a gain of $71,000 during the second
quarter of 2003. In connection with the 2001 agreement, the Company received
$350,000 from its customer with the final payment of $100,000 received in
January 2003.

In February 2001, the Company entered into a five-year lease in Costa Rica for a
36,200 square-foot facility for manufacturing new Multi-Mix (R) Microtechnology
products. The leasehold improvements and capital equipment for this
manufacturing facility were recently completed at a cost of approximately
$5,600,000 and this facility was opened for production in August 2002.

RELATED PARTY TRANSACTIONS

In May 1998, the Company sold 22,000 shares of Common Stock to Mason N. Carter,
Chairman, President and Chief Executive Officer of the Company, at a price of
$11.60 per share, which approximated the average closing price of the Company's
Common Stock during the first quarter of 1998. The Company lent Mr. Carter
$255,000 in connection with the purchase of these shares and combined that loan
with a prior loan to Mr. Carter in the amount of $105,000. The resulting total
principal amount of $360,000 was payable May 4, 2003 and bore interest at a
variable interest rate based on the prime rate of the Company's lending bank.
This loan was further amended on July 29, 2002. Accrued interest of $40,000 was
added to the principal, bringing the new principal amount of the loan to
$400,000, the due date was extended to May 4, 2006, and interest (at the same
rate as was previously applicable) is now payable monthly. Mr. Carter has
pledged 33,000 shares of Common Stock as security for this loan, which is a
full-recourse loan.

On August 31, 2000, in connection with an amendment of Mr. Carter's employment
agreement, the Company loaned Mr. Carter an additional $280,000. Interest on the
loan varies and is based on the prime rate of the Company's lending bank,
payable in accordance with Mr. Carter's employment agreement. Each year the
Company is required to forgive 20% of the amount due under this loan and the
accrued interest thereon. During 2003, the Company forgave $56,000 of principal
and $8,000 of accrued interest and estimates that $56,000 of principal and
$4,000 of accrued interest will be forgiven in fiscal year 2004.

Pursuant to a stockholder's agreement, dated as of October 30, 1998, with a
former director and Chairman of the Company, this former director is required to
vote his shares of Common Stock as directed by the Board of Directors or the
Chief Executive Officer of the Company. There are no obligations of the Company
pursuant to such agreement.

During the third quarter and first nine months of 2003, the Company's General
Counsel KMZ Rosenman was paid $46,000 and $203,000, respectively, for providing
legal services to the Company. A director of the Company is counsel to KMZ
Rosenman but does not share in the fees that the Company pays to such law firm
and his compensation is not based on such fees.

During 2003, the Company retained Career Consultants, Inc. and SK Associates to
perform executive searches and to provide other services to the Company. The
Company paid an aggregate of $29,000 to these companies during the first nine
months of 2003. A director of the Company is the chairman and chief executive
officer of these companies.

During the first nine months of 2003, a director of the Company was paid $12,000
for providing financial-related consulting services to the Company. This
agreement terminated in April 2003.

During the third quarter and first nine months of 2003, a director of the
Company was paid $9,000 and $27,000, respectively, for providing
technology-related consulting services to the Company.

During the third quarter and first nine months of 2003, DuPont Electronic
Technologies, a stockholder, was paid $25,000 and $75,000, respectively, for
providing technological and marketing related services on a cost-sharing basis
to the Company.

Each director who is not an employee of the Company receives a monthly
director's fee of $1,500, plus an additional $500 for each meeting of the Board
and of any Committees of the Board attended. The directors are also reimbursed
reasonable travel expenses incurred in attending Board and Committee meetings.
In addition, pursuant to the 2001 Stock Option Plan, each non-employee director
is granted an immediately exercisable option to purchase 2,500 shares of the

                                       17
<PAGE>

Common Stock of the Company on the date of each Annual Meeting of Stockholders.
Each such grant is priced at the fair market value of the Common Stock on the
date of such grant.

On April 7, 2000, the Company sold to Ericsson Holding International, B.V.
("EHI") 375,000 shares of Common Stock, representing approximately 17.5% of the
Company's outstanding Common Stock after giving effect to the sale, for an
aggregate purchase price of $3,375,000. The agreements provided that the Company
will design, develop and produce exclusively for Ericsson Microelectronics, A.B.
("Ericsson") certain Multi-Mix (R) products that incorporate active RF power
transistors for use in wireless basestation applications, television
transmitters and certain other applications that are intended for Bluetooth
transceivers.

On October 26, 2000, the Company sold units comprising Common Stock and warrants
to purchase shares of Common Stock ("Warrants") to a group of investors led by
Adam Smith Investment Partners, L.P. and certain of its affiliates (the "Adam
Smith Investors"), EHI and Messrs. E. Cohen, Goldberg and Fuller, members of the
Board (the "Director Investors"). The units were sold at a price of $12.80 per
unit, each unit consisting of one share of Common Stock and one Warrant with an
exercise price of $21.25 which expired on October 26, 2003. The Adam Smith
Investors purchased 240,000 units, EHI purchased 100,000 units and Messrs. E.
Cohen, Goldberg and Fuller purchased 5,000, 11,000 and 4,000 units,
respectively, for an aggregate purchase price of $4,608,000. The Common Stock
portion of the units represented an aggregate of approximately 14% of the
outstanding Common Stock of the Company after giving effect to the sales.

On February 28, 2002, the Company sold to DuPont Electronic Technologies 528,413
shares of Common Stock, representing approximately 16.6% of the Company's
outstanding Common Stock after giving effect to the sale, for an aggregate
purchase price of $5,284,000. The Company and DuPont Electronic Technologies
have also agreed to work together to better understand the dynamics of the
markets for high-frequency electronic components and modules. David B. Miller,
Vice President and General Manager of DuPont Electronic Technologies, was
appointed to the Company's Board of Directors. As a result of this sale,
pursuant to the anti-dilution provisions of the Warrants issued in October 2000,
the exercise price of the Warrants was reduced to $17.80 and the number of
shares subject to the Warrants was increased to 429,775. The Warrants expired
October 26, 2003.

On October 1, 2002, EHI completed the sale of most of its microelectronics
business to Infineon Technologies AG ("Infineon"). As part of this transaction,
EHI transferred to Infineon 475,000 shares of the Company and the right to
acquire 119,380 shares of the Company's Common Stock pursuant to the Warrants,
and EHI assigned to Infineon its rights in the various agreements between EHI
and the Company, which were modified in certain respects pursuant to an
agreement with Infineon.

Infineon, the Adam Smith Investors and DuPont hold registration rights which
give them the right to register certain shares of Common Stock of the Company.

RECENT ACCOUNTING PRONOUNCEMENTS

SFAS No. 143, "Accounting for Asset Retirement Obligations", requires the fair
value for an asset retirement obligation to be recorded in the period in which
it is incurred. The Company's adoption of SFAS No. 143, effective December 29,
2002, did not have a material impact on the Company's financial position or
results of operations.

SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB
Statement No. 13 and Technical Corrections", requires gains and losses on
extinguishments of debt to be classified as income or loss from continuing
operations rather than as extraordinary items as previously required under SFAS
No. 4. Extraordinary treatment is required for certain extinguishments as
provided in APB Opinion No. 30. The statement also amended SFAS No. 13 for
certain sale-leaseback and sublease accounting. The Company's adoption of SFAS
No. 145 , effective December 29, 2002, did not have a material impact on the
Company's financial position or results of operations.

SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities", nullifies EITF Issue No. 94-3. SFAS No. 146 requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred, whereas EITF No. 94-3 had recognized the
liability at the commitment date to an exit plan. The Company's adoption of SFAS
No. 146, effective for exit or disposal activities initiated after December 28,
2002, did not have a material impact on the Company's financial position or
results of operations.

SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure," provides alternative methods of transition for a voluntary change
to the fair value method of accounting for stock-based employee compensation. In
addition, this statement amends the disclosure

                                       18
<PAGE>

requirements of SFAS No. 123, "Accounting for Stock-Based Compensation", to
require more prominent disclosures about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results in both annual and interim financial statements. The Company is required
to adopt the provisions of SFAS No. 148 in its financial statements for the
fiscal year ending January 3, 2004. As permitted by SFAS No. 148, the Company
will continue to apply the provisions of APB Opinion No. 25, "Accounting for
Stock-Based Compensation," for all employee stock option grants and has elected
to disclose pro-forma net income and earnings per share amounts as if the
fair-value based method had been applied in measuring compensation costs. In
addition, the Company is awaiting further guidance and clarity that may result
from current FASB and International Accounting Standards Board stock
compensation projects and will continue to evaluate any developments concerning
mandated, as opposed to optional, fair-value based expense recognition.

FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others," elaborates on the disclosures to be made by a guarantor about its
obligations under certain guarantees issued. It also clarifies that a guarantor
is required to recognize, at the inception of a guarantee, a liability for the
fair value of the obligation undertaken in issuing the guarantee. FIN 45 expands
on the accounting guidance of SFAS No. 5 "Accounting for Contingencies," SFAS
No. 57, "Related Party Disclosures," and SFAS No. 107, "Disclosures about Fair
Value of Financial Instruments." It also incorporates without change the
provisions of FASB Interpretation No. 34, "Disclosure of Indirect Guarantees of
the Indebtedness of Others." The initial recognition requirements in this
Interpretation are effective for periods ending after December 15, 2002. The
adoption of FIN 45 did not have a material impact on the Company's financial
position or results of operations.

FASB Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51," requires certain variable interest
entities to be consolidated by the primary beneficiary of the entity if the
equity investors in the entity do not have the characteristics of a controlling
financial authority or do not have sufficient equity at risk for the entity to
finance its activities without additional subordinated support from other
parties. FIN 46 is effective for all new variable interest entities created or
acquired after January 31, 2003. For variable interest entities created or
acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for
fiscal periods ending after December 15, 2003. The Company is still evaluating
the effect of FIN 46 but does not expect the adoption of FIN 46 will have a
material impact on the Company's financial position or results of operations.

SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity", requires that certain financial instruments
previously accounted for as equity are now to be classified as liabilities. SFAS
No. 150 is effective for the first interim period beginning after June 15, 2003.
The adoption of SFAS No. 150 did not have a material impact on the Company's
financial position or results of operations.

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-QSB contains statements relating to future
results of Merrimac Industries, Inc. ("Merrimac" and together with its
subsidiaries, 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: risks associated with demand for
and market acceptance of existing and newly developed products as to which the
Company has made significant investments, particularly its Multi-Mix(R)
products; 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; the ability to protect proprietary information and
technology; competitive products and pricing pressures; risks relating to
governmental regulatory actions in communications and defense programs; and
inventory risks due to technological innovation and product obsolescence, as
well as other risks and uncertainties, including but not limited to those
detailed from time to time in Merrimac's Securities and Exchange Commission
filings. These forward-looking statements are made only as of the date of the
filing of this Form 10-QSB, and Merrimac undertakes no obligation to update or
revise the forward-looking statements, whether as a result of new information,
future events or otherwise.

ITEM 3. CONTROLS AND PROCEDURES

As of September 27, 2003 (the end of the period covered by this report), the
Company's management carried out an evaluation, with the participation of the
Company's Chief Executive



                                       19
<PAGE>

Officer and Chief Financial Officer, of the effectiveness of the Company's
disclosure controls and procedures. Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective, as of and for the period
covered by this report, in timely alerting them to material information relating
to the Company (including the Company's consolidated subsidiaries) required to
be included in periodic reports filed under the Securities Exchange Act of 1934,
as amended (the "Exchange Act").

In designing and evaluating the Company's disclosure controls and procedures (as
defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act), management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurances of achieving the desired
control objectives, as ours are designed to do, and management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures. We believe that our disclosure controls and
procedures provide such reasonable assurance.

No change occurred in the Company's internal controls concerning financial
reporting during the Company's third quarter that has materially affected, or is
reasonably likely to materially affect, the Company's internal controls over
financial reporting.






                                       20
<PAGE>

PART II OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

EXHIBIT
NUMBER                        DESCRIPTION OF EXHIBIT
------                        ----------------------

3(a)         Certificate of Incorporation of Merrimac is hereby incorporated by
             reference to Exhibit 3(i)(b) to Post-Effective Amendment No. 2 to
             the Registration Statement on Form S-8 (No. 33-68862) of Merrimac
             dated February 23, 2001.

3(b)         By-laws of Merrimac are hereby incorporated by reference to Exhibit
             3(ii)(b) to Post-Effective Amendment No. 2 to the Registration
             Statement on Form S-8 (No. 33-68862) of Merrimac dated February 23,
             2001.

4(a)         Stockholder Rights Agreement dated as of March 9, 1999, between
             Merrimac and ChaseMellon Stockholder Services, L.L.C., as Rights
             Agent, is hereby incorporated by reference to Exhibit 1 to
             Merrimac's Current Report on Form 8-K for the period ending March
             9, 1999.

4(b)         Amendment No. 1 dated as of June 9, 1999, to the Stockholder Rights
             Agreement dated as of March 9, 1999, between Merrimac and
             ChaseMellon Stockholder Services, L.L.C., as Rights Agent, is
             hereby incorporated by reference to Exhibit 1 to Merrimac's Current
             Report on Form 8-K for the period ending June 9, 1999.

4(c)         Amendment No. 2 dated as of April 7, 2000, to the Stockholder
             Rights Agreement dated as of March 9, 1999, between Merrimac and
             ChaseMellon Stockholder Services, L.L.C., as Rights Agent, is
             hereby incorporated by reference to Exhibit 2 to Merrimac's Current
             Report on Form 8-K for the period ending April 10, 2000.

4(d)         Amendment No. 3 dated as of October 26, 2000, to the Stockholder
             Rights Agreement dated as of March 9, 1999, between Merrimac and
             ChaseMellon Stockholder Services, L.L.C., as Rights Agent, is
             hereby incorporated by reference to Exhibit 2 to Merrimac's Current
             Report on Form 8-K for the period ending October 27, 2000.

4(e)         Amendment No. 4 dated as of February 21, 2001, to the Stockholder
             Rights Agreement dated as of March 9, 1999, between Merrimac and
             Mellon Investor Services, L.L.C. (formerly known as ChaseMellon
             Stockholder Services, L.L.C.), as Rights Agent, is hereby
             incorporated by reference to Exhibit 1(d) to Merrimac's Current
             Report on Form 8-K for the period ending February 21, 2001.

4(f)         Amendment No. 5, dated February 28, 2002, to the Rights Agreement,
             between Merrimac and Mellon Investor Services LLC (f.k.a.
             ChaseMellon Shareholder Services, L.L.C.), as Rights Agent is
             hereby incorporated by reference to Exhibit 99.4 to Merrimac's Form
             8-K for the period ending March 6, 2002.

4(g)         Amendment No. 6, dated September 18, 2002, to the Rights Agreement,
             between Merrimac and Mellon Investor Services LLC, as Rights Agent
             is hereby incorporated by reference to Exhibit 99.3 to Merrimac's
             Form 8-K for the period ending September 18, 2002.

10(a)        Stock Purchase and Exclusivity Letter Agreement dated April 7,
             2000, among Ericsson Microelectronics, A.B., Ericsson Holdings
             International, B.V. and Merrimac is hereby incorporated by
             reference to Exhibit 10(a) to Merrimac's Quarterly Report on Form
             10-QSB for the period ending August 15, 2000.

                                       21
<PAGE>


10(b)        Letter Agreement, dated February 1, 2002, among Merrimac, Ericsson
             Holding International B.V. and Ericsson Microelectronics, A.B.,
             which amends the Stock Purchase and Exclusivity Letter, dated April
             7, 2000 is hereby incorporated by reference to Exhibit 99.4 to
             Merrimac's Form 8-K for the period ending September 18, 2002.

10(c)        Registration Rights Agreement dated as of April 7, 2000, between
             Merrimac and Ericsson Holding International, B.V. is hereby
             incorporated by reference to Exhibit 10(b) to Merrimac's Quarterly
             Report on Form 10-QSB for the period ending August 15, 2000.

10(d)        Subscription Agreement for Common Stock and Warrants dated October
             26, 2000, between Merrimac and Ericsson Holding International, B.V.
             (with a form of Warrant attached) is hereby incorporated by
             reference to Exhibit 10(t) to Merrimac's Annual Report on Form
             10-KSB for the year ending December 30, 2000.

10(e)        Registration Rights Agreement dated October 26, 2000, between
             Merrimac and Ericsson Holding International, B.V. is hereby
             incorporated by reference to Exhibit 10(u) to Merrimac's Annual
             Report on Form 10-KSB dated for the year ending December 30, 2000.

10(f)        Subscription Agreement for Common Stock and Warrants dated October
             26, 2000, between Merrimac and certain entities and individuals
             related to Adam Smith Investment Partners, L.P. (with a form of
             Warrant attached) is hereby incorporated by reference to Exhibit
             10(v) to Merrimac's Annual Report on Form 10-KSB for the year
             ending December 30, 2000.

10(g)        Registration Rights Agreement dated October 26, 2000, between
             Merrimac and certain entities and individuals related to Adam Smith
             Investment Partners, L.P. is hereby incorporated by reference to
             Exhibit 10(w) to Merrimac's Annual Report on Form 10-KSB for the
             year ending December 30, 2000.

10(h)        Subscription Agreement for Common Stock and Warrants dated October
             26, 2000, among Merrimac, Edward H. Cohen, Joseph B. Fuller and
             Joel H. Goldberg (with a form of Warrant attached) is hereby
             incorporated by reference to Exhibit 10(x) to Merrimac's Annual
             Report on Form 10-KSB for the year ending December 30, 2000.

10(i)        Subscription Agreement, dated February 28, 2002 between Merrimac
             and DuPont Chemical and Energy Operations, Inc., a subsidiary of
             E.I. DuPont de Nemours and Company is hereby incorporated by
             reference to Exhibit 99.2 to Merrimac's Form 8-K for the period
             ending February 28, 2002.

10(j)        Registration Rights Agreement, dated February 28, 2002 between
             Merrimac and DuPont Chemical and Energy Operations, Inc., a
             subsidiary of E.I. DuPont de Nemours and Company is hereby
             incorporated by reference to Exhibit 99.3 to Merrimac's Form 8-K
             for the period ending February 28, 2002.

10(k)        Consent and Waiver, dated as of September 18, 2002, among Merrimac,
             Ericsson Holding International B.V. and Infineon Technologies AG is
             hereby incorporated by reference to Exhibit 99.1 to Merrimac's Form
             8-K for the period ending September 18, 2002.

10(l)        Modification Agreement, dated as of September 27, 2002, between
             Merrimac and Infineon Technologies AG is hereby incorporated by
             reference to Exhibit 99.2 to Merrimac's Form 8-K for the period
             ending September 18, 2002.

10(m)        Profit Sharing Plan of Merrimac is hereby incorporated by reference
             to Exhibit 10(n) to Merrimac's Registration Statement on Form S-1
             (No. 2-79455).*

10(n)        1983 Key Employees Stock Option Plan of Merrimac effective March
             21, 1983, is hereby incorporated by reference to Exhibit 10(m) to
             Merrimac's Annual Report on Form 10-KSB for the year ending March
             31, 1983.*

                                       22
<PAGE>

10(o)        1993 Stock Option Plan of Merrimac effective March 31, 1993, is
             hereby incorporated by reference to Exhibit 4(c) to Merrimac's
             Registration Statement on Form S-8 (No. 33-68862) dated September
             14, 1993.*

10(p)        1997 Long-Term Incentive Plan of Merrimac is hereby incorporated by
             reference to Exhibit A to Merrimac's Proxy Statement for the period
             ending April 11, 1997.*

10(q)        Resolutions of the Stock Option Committee of the Board of Directors
             of Merrimac adopted June 3, 1998, amending the 1983 Key Employees
             Stock Option Plan of Merrimac, the 1993 Stock Option Plan of
             Merrimac and the 1997 Long-Term Incentive Plan of Merrimac and
             adjusting outstanding awards thereunder to give effect to
             Merrimac's 10% stock dividend paid June 5, 1998, are hereby
             incorporated by reference to Exhibit 10(f) to Merrimac's Annual
             Report on Form 10-KSB for the year ending March 30, 1999.*

10(r)        1995 Stock Purchase Plan of Merrimac is hereby incorporated by
             reference to Exhibit A to the Proxy Statement of Merrimac for the
             period ending December 31, 1994.*

10(s)        Resolutions of the Stock Purchase Plan Committee of the Board of
             Directors of Merrimac adopted June 3, 1998, amending the 1995 Stock
             Purchase Plan of Merrimac and adjusting outstanding awards
             thereunder to give effect to Merrimac's 10% stock dividend paid
             June 5, 1998, are hereby incorporated by reference to Exhibit
             10(g)(2) to Merrimac's Annual Report on Form 10-KSB for the year
             ending January 2, 1999.*

10(t)        1996 Stock Option Plan for Non-Employee Directors of Merrimac is
             hereby incorporated by reference to Exhibit 10(d) to Merrimac's
             Annual Report on Form 10-KSB dated for the year ending December 28,
             1996.*

10(u)        Resolutions of the Board of Directors of Merrimac, adopted June 3,
             1998, amending the 1996 Stock Option Plan for Non-Employee
             Directors of Merrimac and adjusting outstanding awards thereunder
             to give effect to Merrimac's 10% stock dividend paid June 5, 1998,
             are hereby incorporated by reference to Exhibit 10(h)(2) to
             Merrimac's Annual Report on Form 10-KSB for the year ending January
             2, 1999.*

10(v)        Amended and Restated Employment Agreement dated as of January 1,
             1998, between Merrimac and Mason N. Carter is hereby incorporated
             by reference to Exhibit 10(a) to Merrimac's Quarterly Report on
             Form 10-QSB for the period ending July 4, 1998.*

10(w)        Amendment dated August 31, 2000 to the Amended and Restated
             Employment Agreement dated January 1, 1998, between Merrimac and
             Mason N. Carter is hereby incorporated by reference to Exhibit
             10(a) to Merrimac's Quarterly Report on Form 10-QSB for the period
             ending September 30, 2000.*

10(x)        Amended and Restated Pledge Agreement dated as of May 4, 1998,
             between Merrimac and Mason N. Carter is hereby incorporated by
             reference to Exhibit 10(c) to Merrimac's Quarterly Report on Form
             10-QSB for the period ending July 4, 1998.*

10(y)        Amended Promissory Note dated as of May 4, 1998, executed by Mason
             N. Carter in favor of Merrimac is hereby incorporated by reference
             to Exhibit 10(l) to Merrimac's Annual Report on Form 10-KSB for the
             year ending January 2, 1999.*

10(z)        Registration Rights Agreement dated as of May 4, 1998, between
             Merrimac and Mason N. Carter is hereby incorporated by reference to
             Exhibit 10(e) to Merrimac's Quarterly Report on Form 10-QSB for the
             period ending July 4, 1998.*

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<PAGE>


10(aa)       Form of Severance Agreement entered into with certain officers of
             Merrimac is hereby incorporated by reference to Exhibit 10(i) to
             Merrimac's Annual Report on Form 10-KSB for the year ending January
             3, 1998.*

10(bb)       Schedule of officers with substantially identical agreements to the
             form filed as Exhibit 10(o)(1) hereto is hereby incorporated by
             reference to Exhibit 10(j) to Merrimac's Annual Report on Form
             10-KSB for the year ending January 3, 1998.*

10(cc)       Consulting Agreement dated as of January 1, 1998, between Merrimac
             and Arthur A. Oliner is hereby incorporated by reference to Exhibit
             10 to Merrimac's Quarterly Report on Form 10-QSB for the period
             ending April 4, 1998.*

10(dd)       Separation Agreement dated as of December 31, 1998, between
             Merrimac and Eugene W. Niemiec is hereby incorporated by reference
             to Exhibit 10(p) to Merrimac's Annual Report on Form 10-KSB for the
             year ending January 2, 1999.*

10(ee)       Stockholder's Agreement dated as of October 30, 1998, between
             Merrimac and Charles F. Huber II is hereby incorporated by
             reference to Exhibit 10 to Merrimac's Quarterly Report on Form
             10-QSB for the period ending October 3, 1998.

10(ff)       Shareholder's Agreement dated as of June 3, 1999, among Merrimac,
             William D. Witter, Inc. and William D. Witter is hereby
             incorporated by reference to Exhibit 10 to Merrimac's Quarterly
             Report on Form 10-QSB for the period ending July 3, 1999.

10(gg)       2001 Key Employee Incentive Plan is hereby incorporated by
             reference to Exhibit 4.01 to Merrimac's Form S-8 (No. 333-63434)
             dated June 20, 2001.*

10(hh)       2001 Stock Option Plan is hereby incorporated by reference to
             Exhibit 4.01 to Merrimac's Form S-8 (No. 333-63436) dated June 20,
             2001.*

10(ii)       2001 Stock Purchase Plan is hereby incorporated by reference to
             Exhibit 4.01 to Merrimac's Form S-8 (No. 333-63438) dated June 20,
             2001.*

10(jj)       2001 Amended and Restated Stock Option Plan is hereby incorporated
             by reference to Exhibit 4(i) to Merrimac's Quarterly Report on Form
             10-QSB for the period ending June 30, 2001.*

10(kk)       Third Amended and Restated Credit Agreement, dated December 23,
             2002, between Merrimac and Fleet National Bank, which amends the
             Credit and Security Agreement, dated October 7, 1997.

10(ll)       Revolving Loan Modification Agreement, dated April 17, 2003,
             between Merrimac and Fleet National Bank, which amends the Third
             Amended and Restated Credit Agreement, dated December 23, 2002.

10(mm)       Term Loan and Security Agreement, dated December 23, 2002, between
             Merrimac and Fleet National Bank.

10(nn)       Term Loan Modification Agreement, dated April 17, 2003, between
             Merrimac and Fleet National Bank, which amends the Term Loan and
             Security Agreement, dated December 23, 2002.

10(oo)       Term Loan and Security Agreement, dated March 26, 2002, between
             Merrimac and Fleet National Bank.

10(pp)       Term Loan Modification Agreement, dated April 17, 2003, which
             amends the Term Loan and Security Agreement, dated March 26, 2002.

                                       24
<PAGE>

10(qq)+      Financing Agreement, dated October 8, 2003, between Merrimac and
             The CIT Group/Business Credit, Inc.

10(rr)+      Trademark and Patent Security Agreement, dated October 8, 2003,
             between Merrimac and The CIT Group/Business Credit, Inc.

10(ss)+      Mortgage and Security Agreement, dated October 8, 2003, by Merrimac
             in favor of The CIT Group/Business Credit, Inc.

10(tt)*+     Merrimac Severance Plan, as adopted September 17, 2003.

11+          Statement regarding Computation of Earnings per Share.

31.1+        Chief Executive Officer's Certificate, pursuant to Section 302 of
             the Sarbanes-Oxley Act of 2002.

31.2+        Chief Financial Officer's Certificate, pursuant to Section 302 of
             the Sarbanes-Oxley Act of 2002.

32.1+        Chief Executive Officer's Certificate, pursuant to 18 U.S.C.
             Section 1350, as adopted pursuant to Section 906 of the
             Sarbanes-Oxley Act of 2002.

32.2+        Chief Financial Officer's Certificate, pursuant to 18 U.S.C.
             Section 1350, as adopted pursuant to Section 906 of the
             Sarbanes-Oxley Act of 2002.

*    Indicates that exhibit is a management contract or compensatory plan or
     arrangement.

+    Indicates that exhibit is filed as an exhibit hereto.

(b)  Reports on Form 8-K


     o   The Company filed a Form 8-K on August 12, 2003, in connection with a
         press release dated August 11, 2003 announcing its financial results
         for the second quarter and first six months ended June 28, 2003.

     o   The Company filed a Form 8-K on October 8, 2003, in connection with a
         press release dated October 8, 2003 announcing the completion of
         refinancing.

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<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.

Date: November 12, 2003                     By: /s/ Mason N. Carter
                                                ---------------------------
                                                Mason N. Carter
                                                Chairman, President and
                                                Chief Executive Officer

Date: November 12, 2003                     By: /s/ Robert V. Condon
                                                ---------------------------
                                                Robert V. Condon
                                                Chief Financial Officer








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