<PAGE>

================================================================================

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

                                   FORM 10-Q

(MARK ONE)

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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003

                                       OR

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

                  FOR THE TRANSITION PERIOD FROM       TO

                         COMMISSION FILE NUMBER 0-22583

                                 ORBIT/FR, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                    DELAWARE                                 23-2874370
          (STATE OR OTHER JURISDICTION                    (I.R.S. EMPLOYER
        OF INCORPORATION OR ORGANIZATION)                IDENTIFICATION NO.)

        506 PRUDENTIAL ROAD, HORSHAM, PA                        19044
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                 (ZIP CODE)

                                 (215) 674-5100
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

                                 NOT APPLICABLE
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
                                    REPORT)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (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[ ]

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

         There were 6,084,473 shares of common stock, $.01 par value,
outstanding as of May 15, 2003.

================================================================================

<PAGE>

                                 ORBIT/FR, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                                         PAGE NO.
                                                                                                                         --------
<S>                                                                                                                      <C>
PART I.        FINANCIAL INFORMATION

               Item 1.        Consolidated Financial Statements

                              Consolidated Balance Sheets--March 31, 2003
                                (Unaudited) and December 31, 2002.....................................................      3

                              Consolidated Statements of Operations-- Three months
                                ended March 31, 2003 and 2002 (Unaudited).............................................      4

                              Consolidated Statements of Cash Flows-- Three months
                                ended March 31, 2003 and 2002 (Unaudited).............................................      5

                              Notes to Consolidated Financial Statements
                                (Unaudited)...........................................................................      6

               Item 2.        Management's Discussion and Analysis of Financial
                                Condition and Results of Operations..................................................      10

               Item 3.        Quantitative and Qualitative Disclosure of Market Risk.................................      12

               Item 4         Controls and procedures................................................................      12

PART II.       Other Information

               Item 1.        Legal Proceedings......................................................................      13

               Item 2.        Changes in Securities and Use of Proceeds..............................................      13

               Item 3.        Defaults upon Senior Securities........................................................      13

               Item 4.        Submission of Matters to a Vote of Security Holders....................................      13

               Item 5.        Other Information......................................................................      13

               Item 6.        Exhibits and Reports on Form 8-K.......................................................      13

Signatures...........................................................................................................      15
</TABLE>

                                                                               2

<PAGE>

                                 ORBIT/FR, INC.
                           CONSOLIDATED BALANCE SHEETS
                    (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                        MARCH 31,   DECEMBER 31,
                                                                         2003          2002
                                                                       -----------  ------------
                                                                       (UNAUDITED)
<S>                                                                    <C>          <C>
                          ASSETS

Current assets:
   Cash and cash equivalents                                             $  2,776     $  3,030
   Accounts receivable, less allowance of $256 and $254
     in 2003 and 2002, respectively                                         3,367        4,160
   Inventory                                                                1,257        1,580
   Costs and estimated earnings in excess of billings
     on uncompleted contracts                                                 727          683
   Deferred income taxes                                                      411          386
   Other                                                                      427          302
                                                                         --------     --------
Total current assets                                                        8,965       10,141

Property and equipment, net                                                 1,382        1,166
Deferred income taxes                                                         140          135
Cost in excess of net assets acquired                                         381          381
Other                                                                          36           52
                                                                         --------     --------

Total assets                                                             $ 10,904     $ 11,875
                                                                         ========     ========

          LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                      $  1,034     $  1,017
   Accounts payable--Parent                                                   485          607
   Accrued expenses                                                         2,077        1,857
   Customer advances                                                          159          159
   Income taxes payable                                                        29           42
   Billings in excess of costs and estimated earnings
     on uncompleted contracts                                                 526        1,426
   Deferred income taxes                                                      284          284
                                                                         --------     --------
Total liabilities, all current                                              4,594        5,392
                                                                         --------     --------

Stockholders' equity:
   Preferred stock: $.01 par value:
     Authorized shares--2,000,000
     Issued and outstanding shares--none                                       --           --
   Common stock: $.01 par value:
     Authorized shares--10,000,000
     Issued shares--6,084,473                                                  61           61
   Additional paid-in capital                                              15,173       15,173
   Accumulated deficit                                                     (8,681)      (8,508)
   Treasury stock--82,900 shares                                             (243)        (243)
                                                                         --------     --------
Total stockholders' equity                                                  6,310        6,483
                                                                         --------     --------

Total liabilities and stockholders' equity                               $ 10,904     $ 11,875
                                                                         ========     ========
</TABLE>

                             See accompanying notes.

                                                                               3

<PAGE>

                                 ORBIT/FR, INC.

                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
             (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED MARCH 31,
                                                                                 2003             2002
                                                                                 ----             ----
<S>                                                                           <C>              <C>
Contract revenues                                                             $     4,584      $     3,833
Cost of revenues                                                                    3,131            2,835
                                                                              -----------      -----------
Gross profit                                                                        1,453              998
                                                                              -----------      -----------
Operating expenses:
   General and administrative                                                         596              674
   Sales and marketing                                                                631              521
   Research and development                                                           290              265
                                                                              -----------      -----------
Total operating expenses                                                            1,517            1,460
                                                                              -----------      -----------
Operating loss                                                                        (64)            (462)
Other income (loss), net                                                              (33)               2
                                                                              -----------      -----------
Loss before income taxes and cumulative
   effect of change in accounting principle                                           (97)            (460)
Income tax expense                                                                     76               86
                                                                              -----------      -----------
Loss before cumulative effect of
   change in accounting principle                                                    (173)            (546)
Cumulative effect of change in accounting principle                                    --             (301)
                                                                              -----------      -----------
Net loss                                                                      $      (173)     $      (847)
                                                                              ===========      ===========
Basic and diluted net loss per share
   before cumulative effect of change in
   accounting principle                                                       $     (0.03)     $     (0.09)
Cumulative effect of change in accounting principle                                    --            (0.05)
                                                                              -----------      -----------
Basic and diluted net loss per share                                          $     (0.03)     $     (0.14)
                                                                              ===========      ===========
Weighted average number
   common shares - basic and diluted                                            6,001,573        6,001,573
                                                                              ===========      ===========
</TABLE>

                             See accompanying notes.

                                                                               4

<PAGE>

                                 ORBIT/FR, INC.

                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                    THREE MONTHS ENDED
                                                                                         MARCH 31,
                                                                                         ---------
                                                                                     2003        2002
                                                                                     ----        ----
<S>                                                                                <C>         <C>
Cash flows from operating activities:
Net loss                                                                           $   (173)   $   (847)
Adjustments to reconcile net loss to net cash
 provided by (used in) operating activities:
      Depreciation                                                                      106         108
      Cumulative effect of change in accounting principle                                --         301
      Deferred income tax (expense) benefit                                             (30)        (11)
      Changes in operating assets and liabilities:
         Accounts receivable                                                            793       1,247
         Inventory                                                                      323         367
         Costs and estimated earnings in excess of
            billings on uncompleted contracts                                           (44)       (561)
         Other assets                                                                  (125)       (131)
         Accounts payable and accrued expenses                                          237          19
         Accounts payable--Parent                                                      (122)       (230)
         Income taxes payable                                                           (13)         12
         Customer advances                                                               --        (389)
         Billings in excess of costs and estimated
            earnings on uncompleted contracts                                          (900)         97
                                                                                   --------    --------

Net cash provided by (used in) operating activities                                      52         (18)
                                                                                   --------    --------

Cash flows from investing activities:
      Purchase of property and equipment                                               (322)        (36)
                                                                                   --------    --------

Net cash used in investing activities                                                  (322)        (36)
                                                                                   --------    --------

Cash flows from financing activities
      Net repayments of note receivable                                                  16          --
                                                                                   --------    --------

Net cash provided by financing activities                                                16          --
                                                                                   --------    --------

Net decrease in cash and cash equivalents                                              (254)        (54)
Cash and cash equivalents at beginning of period                                      3,030       4,413
                                                                                   --------    --------
Cash and cash equivalents at end of period                                         $  2,776    $  4,359
                                                                                   ========    ========

Supplemental disclosures of cash flow information:

Cash paid during the period for income taxes                                       $     87    $     61
                                                                                   ========    ========
</TABLE>

                             See accompanying notes.

                                                                               5

<PAGE>

                                 ORBIT/FR, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2003
             (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1. OWNERSHIP AND BASIS OF PRESENTATION

         ORBIT/FR, Inc. (the "Company"), was incorporated in Delaware on
December 9, 1996, as a wholly owned subsidiary of Orbit-Alchut Technologies,
Ltd., an Israeli publicly traded corporation (hereinafter referred to as the
"Parent"). The Company develops, markets, and supports sophisticated automated
microwave test and measurement systems for the wireless communications,
satellite, automotive, aerospace/defense and electromagnetic compatibility (EMC)
industries, and manufactures anechoic foam, a microwave absorbing material that
is an integral component of microwave test and measurement systems. ORBIT/FR,
Inc., a holding company, supports its world wide customers through its
subsidiaries ORBIT/FR Engineering, LTD (hereinafter referred to as
"Engineering", Israel), ORBIT/FR Europe, (Germany), Advanced Electromagnetics,
Inc. ("AEMI", San Diego, CA), and Orbit Advanced Technologies, Inc. and Flam and
Russell, Inc. (Horsham, PA). The Company sells its products to customers
throughout Asia, Europe, Israel, and North and South America.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Interim Financial Information

         The accompanying unaudited consolidated financial statements for the
three months ended March 31, 2003 and 2002 have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting solely of normal
recurring adjustments) necessary for a fair presentation of the consolidated
financial statements have been included. The results of interim periods are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2003. The consolidated financial statements and footnotes should be
read in conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations contained in this Form 10-Q and the
Company's Forms 10-K and the amendment thereto on Form10K/A for the period ended
December 31, 2002, filed on March 31, 2003 and April 30, 2003, respectively,
with the Securities and Exchange Commission, which included the consolidated
financial statements and footnotes for the year ended December 31, 2002.

  Principles of Consolidation

         The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany accounts
and transactions of the Company and its wholly-owned subsidiaries have been
eliminated in consolidation.

  Use of Estimates

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts in the financial statements
and accompanying notes. Actual results could differ from those estimates.

                                                                               6

<PAGE>

                                 ORBIT/FR, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2003
             (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

  Net Loss Per Share

         Basic loss per share is calculated by dividing net loss by the weighted
average common shares outstanding for the period. Diluted loss per share is
calculated by dividing net loss by the weighted average common shares
outstanding for the period plus the dilutive effect of stock options. The
dilutive effect of stock options was not assumed for the three months ended
March 31, 2003 and 2002 because the effect of these securities is antidilutive.

3. ADOPTION OF NEW ACCOUNTING STANDARD REGARDING GOODWILL AND OTHER INTANGIBLE
ASSETS

         Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets" ("SFAS No. 142"), was issued in July 2001 and became
effective for the Company on January 1, 2002. SFAS No. 142 addresses how
goodwill and other intangible assets should be accounted for upon their
acquisition and afterwards. The primary impact of SFAS No. 142 on the Company is
that existing goodwill ("cost in excess of net assets acquired") is no longer
amortized beginning in 2002. Instead of amortization, goodwill is subject to an
assessment for impairment on a reporting unit basis by applying a
fair-value-based test annually, and more frequently if circumstances indicate a
possible impairment. If a reporting unit's net book value is more than its fair
value and the reporting unit's net book value of its goodwill exceeds the fair
value of that goodwill, an impairment loss is recognized in an amount equal to
the excess goodwill net book value.

         Based on the December 31, 2001 cost in excess of net assets acquired
balance, the Company reported lower amortization of goodwill and higher
operating profit of approximately $43 for the full year 2002 compared to the
full year 2001. The Company tested the goodwill of AEMI for impairment during
the first quarter of 2002 using a present value of future cash flows valuation
method. This process resulted in an impairment of $301 which is accounted for as
a cumulative effect of a change in accounting principle during the three months
ended March 31, 2002.

4. INVENTORY

         Inventory consisted of the following:

<TABLE>
<CAPTION>
                        MARCH 31,             DECEMBER 31,
                          2003                   2002
                       -----------            -----------
                       (UNAUDITED)
<S>                    <C>                    <C>
Work-in-process         $     689              $    973
Parts and components          568                   607
                        ---------              --------
                        $   1,257              $  1,580
                        =========              ========
</TABLE>

                                                                               7

<PAGE>

                                 ORBIT/FR, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2003
             (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

5. PROPERTY AND EQUIPMENT

         Property and equipment consisted of the following:

<TABLE>
<CAPTION>
                                                                                     MARCH 31,      DECEMBER 31,
                                                                                       2003             2002
                                                                                   -----------      ------------
                                                                                   (UNAUDITED)
<S>                                                                                <C>              <C>
Lab and computer equipment                                                         $    2,287       $    1,972
Office equipment                                                                          923            1,158
Transportation equipment                                                                  351              336
Furniture and fixtures                                                                     31               44
Leasehold improvements                                                                    320              320
                                                                                   ----------       ----------
                                                                                        3,912            3,830
Less accumulated depreciation                                                           2,530            2,664
                                                                                   ----------       ----------
Property and equipment, net                                                        $    1,382       $    1,166
                                                                                   ==========       ==========
</TABLE>

6. ACCRUED EXPENSES

   Accrued expenses consists of the following:

<TABLE>
<CAPTION>
                                                                                    MARCH 31,    DECEMBER 31,
                                                                                       2003         2002
                                                                                   -----------   -----------
                                                                                   (UNAUDITED)
<S>                                                                                <C>           <C>
Accrued contract costs                                                             $      476    $      381
Accrued compensation                                                                      831           758
Accrued commissions                                                                       111            99
Accrued royalties                                                                         110           114
Accrued warranty                                                                          286           293
Other accruals                                                                            263           212
                                                                                   ----------    ----------
                                                                                   $    2,077    $    1,857
                                                                                   ==========    ==========
</TABLE>

7. LONG-TERM CONTRACTS

<TABLE>
<CAPTION>
                                                                                    MARCH 31,    DECEMBER 31,
                                                                                       2003         2002
                                                                                   -----------   -----------
                                                                                   (UNAUDITED)
<S>                                                                                <C>           <C>
Accumulated expenditures on uncompleted contracts                                  $   11,692    $    9,796
Estimated earnings thereon                                                                249          (136)
                                                                                   ----------    ----------
                                                                                       11,941         9,660
Less: applicable progress billings                                                     11,740        10,403
                                                                                   ----------    ----------
   Total                                                                           $      201    $     (743)
                                                                                   ==========    ==========
</TABLE>

The long-term contracts are shown in the accompanying balance sheets as follows:

                                                                               8

<PAGE>

                                 ORBIT/FR, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2003
             (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

7. LONG-TERM CONTRACTS (CONTINUED)

<TABLE>
<CAPTION>
                                                                                    MARCH 31,    DECEMBER 31,
                                                                                       2003         2002
                                                                                   -----------   -----------
                                                                                   (UNAUDITED)
<S>                                                                                <C>           <C>
Costs and estimated earnings on uncompleted
  contracts in excess of billings                                                  $      727    $      683
Billings on uncompleted contracts in excess of
  costs and estimated earnings                                                           (526)       (1,426)
                                                                                   ----------    ----------
                                                                                   $      201    $     (743)
                                                                                   ==========    ==========
</TABLE>

8. RELATED PARTY TRANSACTIONS

         Engineering and the Parent have an agreement, whereby Engineering
purchases from the Parent electrical and mechanical production services. In
addition, the Parent provides other administrative services, including, but not
limited to, bookkeeping, computer, legal, accounting, cost management,
information systems, and production support. Engineering pays the Parent for
these services based upon a rate of cost of production services plus 21%.
Engineering is leasing office space from the Parent on an annual basis, for a
rental of $61 per year. These agreements are to be evaluated on an annual basis.

9. SEGMENT AND GEOGRAPHIC INFORMATION

         The Company operates exclusively in one industry segment, the business
of developing, marketing and supporting sophisticated automated microwave test
and measurement systems. In addition to its principal operations and markets in
the United States, the Company conducts sales, customer support and service
operations out of other geographic locations in Europe, Asia, and North America.
The following table represents financial information by geographic region for
the three months ended March 31, 2003 and 2002.

<TABLE>
<CAPTION>
                                              North America     Europe        Asia         Total
                                              -------------     ------        ----         -----
<S>                                           <C>             <C>          <C>          <C>
Three months ended March 31, 2003

   Sales to unaffiliated customers            $       2,648   $      559   $    1,377   $    4,584
   Cost of sales to unaffiliated customers            1,892          477          762        3,131
                                              -------------   ----------   ----------   ----------
   Gross profit from unaffiliated customers   $         756   $       82   $      615   $    1,453
                                              =============   ==========   ==========   ==========

Three months ended March 31, 2002

   Sales to unaffiliated customers            $       1,149   $      942   $    1,742   $    3,833
   Cost of sales to unaffiliated customers              864          882        1,089        2,835
                                              -------------   ----------   ----------   ----------
   Gross profit from unaffiliated customers   $         285   $       60   $      653   $      998
                                              =============   ==========   ==========   ==========

</TABLE>

         In table above "North America" includes all United States operations,
and "Europe" includes subsidiaries in Germany and Israel.

                                                                               9

<PAGE>

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

FORWARD LOOKING STATEMENTS

         Certain information contained in this Form 10-Q contains forward
looking statements (as such term is defined in the Securities Exchange Act of
1934 and the regulations thereunder), including without limitation, statements
as to the Company's financial condition, results of operations and liquidity and
capital resources and statements as to management's beliefs, expectations or
options. Such forward looking statements are subject to risks and uncertainties
and may be affected by various factors which may cause actual results to differ
materially from those in the forward looking statements. Certain of these risks,
uncertainties and other factors, as and when applicable, are discussed in the
Company's filings with the Securities and Exchange Commission including its most
recent Registration Statement on Form S-1, and in its most recent Annual Report
on Form 10-K, as amended, a copy of which may be obtained from the Company upon
request and without charge (except for the exhibits thereto).

RESULTS OF OPERATIONS

         The following table sets forth certain financial data as a percentage
of revenues for the periods indicated:

<TABLE>
<CAPTION>
                                                                THREE-MONTHS ENDED MARCH 31,
                                                                ----------------------------
                                                                2003                   2002
                                                                ----                   ----
<S>                                                            <C>                    <C>
Revenues                                                       100.0%                 100.0%
Gross profit                                                    31.7                   26.0
General and administrative                                      13.0                   17.6
Sales and marketing                                             13.8                   13.6
Research and development                                         6.3                    6.9
Operating loss                                                  (1.4)                 (12.0)
Loss before income
      tax expense                                               (2.1)                 (12.0)
Net loss                                                        (3.8)                 (22.1)
</TABLE>

THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THREE MONTHS ENDED MARCH 31, 2002.

         Revenues. Revenues for the three months ended March 31, 2003 were
approximately $4.6 million compared to approximately $3.8 million for the three
months ended March 31, 2002, an increase of approximately $800,000 or 21%.
Revenues from the defense, satellite, EMC and automotive markets increased
approximately $1.7 million, $166,000, $25,000, and $21,000, respectively.
Revenues from the wireless and university markets decreased approximately
$913,000 and $267,000. Geographically, revenues from North America increased
approximately $1.5 million, while revenues from Asia and Europe decreased
approximately $360,000 and $382,000 from prior year levels. The increase in
revenues related to the defense industry was a result of significant completion
of North American defense contracts in the three months ended March 31, 2003.
Significant European and Asian wireless revenues recognized during the three
months ended March 31, 2002 were not completely replaced during the 2003.

                                                                              10

<PAGE>

         Cost of revenues. Cost of revenues for the three months ended March 31,
2003 were approximately $3.1 million compared to approximately $2.8 million for
the three months ended March 31, 2002. Gross margins increased to 32% for the
three months ended March 31, 2003 from 26% for the three months ended March 31,
2002. The increased margins are due to greater efficiencies related to greater
beginning backlog, and fewer cost overruns recognized on large contracts.

         General and administrative expenses. General and administrative
expenses for the three months ended March 31, 2003 were $596,000 compared to
$674,000 for the three months ended March 31, 2002, a decrease of approximately
$78,000 or 12%, a result of the Company's shift of resources from general and
administrative expenses to cost of revenues during the three months ended March
31, 2003. As a percentage of revenues, general and administrative expenses
decreased to 13.0% for the three months ended March 31, 2003 from 17.6% for the
three months ended March 31, 2002.

         Sales and marketing expenses. Sales and marketing expenses for the
three months ended March 31, 2003 were $631,000 compared to $521,000 for the
three months ended March 31, 2002, an increase of approximately $110,000 or 21%.
This increase is a result of the Company's investment in senior marketing
personnel, and its increased focus on worldwide marketing opportunities. As a
percentage of revenues, sales and marketing expenses increased to 13.8% for the
three months ended March 31, 2003, from 13.6% for the three months ended March
31, 2002.

         Research and development expenses. Research and development expenses
for the three months ended March 31, 2003 were $290,000 compared to $265,000 for
the three months ended March 31, 2002, an increase of $25,000 or 9%, due mainly
to the Company's continued expenditures on development activity focused on new
software development. As a percentage of revenues, research and development
expenses decreased to 6.3% for the three months ended March 31, 2003, from 6.9%
for the three months ended March 31, 2002.

         Other income (loss). Other income (loss), net, for the three months
ended March 31, 2003 was a loss of approximately $33,000 compared to income of
$2,000 for the three months ended March 31, 2002, a decrease of approximately
$35,000. The increased loss is a result of a decrease in the Company's interest
income due to a reduction in interest rates and cash balances available for
investment, and foreign currency translation losses recognized during the three
months ended March 31, 2003.

         Income taxes. Income tax expense for the three months ended March 31,
2003 was $76,000 compared to $86,000 of income tax expense for the three months
ended March 31, 2002, a decrease in expense of $10,000. Although no income tax
benefit on losses was recorded during the quarter ended March 31, 2003, the
Company's income tax expense for the three months ended March 31, 2003 reflects
income taxes recorded by its profitable foreign operations.

         Cumulative effect of a change in accounting principle. During the three
months ended March 31, 2002, the Company adopted the Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS No.
142"). Under SFAS No. 142, goodwill is no longer amortized over its estimated
useful life, but is subject to an annual fair value based assessment. This fair
value assessment resulted in an impairment of $301,000 at January 1, 2002, which
was accounted for as a cumulative effect of a change in accounting principle
during the three months ended March 31, 2002. No such impairment was recognized
during the three months ended March 31, 2003.

LIQUIDITY AND CAPITAL RESOURCES

         During recent years the Company has satisfied its working capital
requirements through cash flows from equity financing. Net operating losses
recorded in recent years have caused negative cash flows from operating
activities.

                                                                              11

<PAGE>

         Net cash provided by operating activities during the three months ended
March 31, 2003 was $52,000 compared to $18,000 used in operating activities
during the three months ended March 31, 2002. No significant cash transaction
occurred in either period. The Company's net income, adjusted for non cash
items, used $97,000 of operating cash, compared to $449,000 used in operating
activities during the three months ended March 31, 2002. Changes in the
Company's operating assets and liabilities during the three months ended March
31, 2003 provided $149,000 in operating cash compared to $431,000 provided in
the three months ended March 31, 2002.

         Net cash used in investing activities during the three months ended
March 31, 2003 for the purchase of property and equipment was $322,000.
Approximately $225,000 of this amount was invested in the Company's new absorber
manufacturing facility in Santee California. During the three months ended March
31, 2002 the Company purchased $36,000 in property and equipment.

         The Company has exposure to currency fluctuations as a result of
billing certain of its contracts in foreign currency. When selling to customers
in countries with less stable currencies, the Company bills in U.S. dollars. For
the three months ended March 31, 2003, approximately 90% of the Company's
revenues were billed in U.S. dollars. Substantially all of the costs of the
Company's contracts, including costs subcontracted to the Parent, have been, and
will continue to be, U.S. dollar-denominated except for wages for employees of
the Company's Israeli and German subsidiaries, which are denominated in local
currency. The Company intends to continue to enter into U.S. dollar-denominated
contracts.

INFLATION AND SEASONALITY

         The Company does not believe that inflation or seasonality has had a
significant effect on the Company's operations to date.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We are exposed to market risk from fluctuations in foreign currency
exchange rates. We manage exposure to variability in foreign currency exchange
rates primarily through the use of natural hedges, as both liabilities and
assets are denominated in the local currency. However, different durations in
our funding obligations and assets may expose us to the risk of foreign exchange
rate fluctuations. We have not entered into any derivative instrument
transactions to manage this risk. Based on our overall foreign currency rate
exposure at March 31, 2003, we do not believe that a hypothetical 10% change in
foreign currency rates would materially adversely affect our financial position.

ITEM 4.  CONTROLS AND PROCEDURES

         The Company's Chief Executive Officer and Chief Financial Officer,
after evaluating the effectiveness of the Company's disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(c)) as of a
date within 90 days of filing date of this quarterly report (the "Evaluation
Date"), have concluded that as of the Evaluation Date, the Company's disclosure
controls and procedures were adequate and effective to ensure that material
information relating to the Company would be made known to them by others within
the Company, particularly during the period in which this quarterly report was
being prepared. There were no significant changes in the Company's internal
controls or in other factors that could significantly affect the Company's
internal controls and procedures subsequent to the Evaluation Date, nor any
significant deficiencies or material weaknesses in such internal controls and
procedures requiring corrective actions.

                                                                              12

<PAGE>

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         The Company is not currently subject to any material legal proceedings
and is not aware of any threatened litigation, unasserted claims or assessments
that could have a material adverse effect on the Company's business, operating
results, or financial condition.

ITEM 2.  CHANGES IN SECURITIES--NOT APPLICABLE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES--NOT APPLICABLE

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

         A special meeting of the Company's stockholders was held on January 23,
2003. At the special meeting, the stockholders approved an amendment to the
Company's certificate of incorporation to effect a 1-for-4 reverse stock split
and granted the Company's Board of Directors the authority to effectuate the
reverse stock split in the Board's discretion. The results of the votes cast by
the Company's stockholders are as follows:

<TABLE>
<CAPTION>
   For              Against           Abstain
   ---              -------           -------
<S>                 <C>               <C>
3,700,000              0                 0
</TABLE>

The reverse stock split was intended to effect an increase in the trading price
per share of the Company's Common Stock in order to comply with Nasdaq's minimum
closing bid price requirements. However, in light of the Company's inability to
meet the minimum public float market value requirement to maintain its listing
on the Nasdaq SmallCap Market, the Board has elected not to proceed with the
reverse stock split at this time. On April 9, 2003, the Company received a
letter from The Nasdaq Stock Market, Inc. notifying the Company that the Nasdaq
Listing Qualifications Panel rejected the Company's appeal of the Nasdaq Staff
Determination to delist the Company's securities from The Nasdaq SmallCap Market
due to the Company's failure to meet The Nasdaq SmallCap Market continued
listing requirement for minimum market value of public float. The Company's
Common Stock was delisted from The Nasdaq SmallCap Market effective April 11,
2003, and was immediately eligible for quotation on the OTC Bulletin Board
effective with the open of business on April 11, 2003, under the symbol ORFR.

ITEM 5. OTHER INFORMATION--NOT APPLICABLE

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         a.       EXHIBITS

                  99.1   Certification pursuant to 18 U.S.C. Section 1350, as
                         adopted pursuant to Section 906 of the Sarbanes-Oxley
                         Act of 2002, Israel Adan, President and Chief Executive
                         Officer.

                  99.2   Certification pursuant to 18 U.S.C. Section 1350, as
                         adopted pursuant to Section 906 of the Sarbanes-Oxley
                         Act of 2002, Dave Lubbe, Chief Financial Officer.

                                                                              13

<PAGE>

         b.       REPORTS ON FORM 8-K

         1.       The Company filed a Form 8-K on February 6, 2003, reporting
                  that, on February 4, 2003, the Company received a letter from
                  The Nasdaq Stock Market, Inc. notifying the Company that the
                  Company's common stock failed to meet The Nasdaq SmallCap
                  Market continued listing requirement for minimum market value
                  of public float.

         2.       The Company filed a Form 8-K on April 10, 2003, reporting
                  that, on April 9, 2003, the Company received a letter from The
                  Nasdaq Stock Market, Inc. notifying the Company that the
                  Nasdaq Listing Qualifications Panel rejected the Company's
                  appeal of the Nasdaq Staff Determination to delist the
                  Company's securities from The Nasdaq SmallCap Market because
                  the Company's Common Stock failed to meet The Nasdaq SmallCap
                  Market continued listing requirement for minimum market value
                  of public float. The report further stated that the Company's
                  securities would be delisted from The Nasdaq SmallCap Market
                  effective April 11, 2003, and would be immediately eligible
                  for quotation on the OTC Bulletin Board effective with the
                  open of business on April 11, 2003, under the symbol ORFR.

                                                                              14

<PAGE>

ORBIT/FR, INC.

SIGNATURES

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

                                                          ORBIT/FR, INC.
                                                 -----------------------
                                                       Registrant

Date:  May 15, 2003
                                             _____________________________
                                           President and Chief Executive Officer

Date: May 15, 2003
                                             _______________________
                                                Chief Financial Officer

                                                                              15

<PAGE>

                                 CERTIFICATIONS

          CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT
                TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Israel Adan, Chief Executive Officer of ORBIT/FR, Inc. certify that:

1.       I have reviewed this quarterly report on Form 10-Q of ORBIT/FR, Inc.;

2.       Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a)       such disclosure controls and procedures to ensure that
                  material information relating to the registrant, including its
                  consolidated subsidiaries, is made known to us by others
                  within those entities, particularly during the period in which
                  this quarterly report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         c)       presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

                                                                              16

<PAGE>

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 15, 2003                                       /s/ Israel Adan
                                                         -----------------------
                                                         Israel Adan
                                                         Chief Executive Officer

                                                                              17

<PAGE>

          CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT
                TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dave Lubbe, Chief Financial Officer of ORBIT/FR, Inc. certify that:

1.       I have reviewed this quarterly report on Form 10-Q of ORBIT/FR, Inc.;

2.       Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash of the
registrant as of, and for, the periods presented in this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         c)       presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

                                                                              18

<PAGE>

6.       The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 15, 2003                                       /s/ Dave Lubbe
                                                         -----------------------
                                                         Dave Lubbe
                                                         Chief Financial Officer

                                                                              19