FORM 10-K
                            ---------------

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


           ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1999 Commission File Number 0-13433
                            ---------------

                          MILTOPE GROUP INC.
--------------------------------------------------------------------------
        (Exact name of registrant as specified in its charter)

                 DELAWARE                            11-2693062
--------------------------------------------------------------------------
(State or other jurisdiction of incorporation     (I.R.S. Employer
              or organization)                     Identification No.)

500 Richardson Road South, Hope Hull, Alabama          36043
--------------------------------------------------------------------------
  (Address of principal executive offices)           (Zip Code)

Registrant's telephone number including area code:  (334) 284-8665

Securities registered pursuant to Section 12(b) of the Act:  None

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

                  Common Shares, par value $.01 each
                  ----------------------------------
                           (Title of class)

     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 if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K.  [     ]

     The aggregate market value of the voting stock of the registrant
held by non-affiliates (which excludes voting shares held by officers
and directors of the registrant) was $3,173,731 as of February 18,
2000.

     Indicate the number of shares outstanding of each of the
registrant's classes of common stock:  Common Shares with a par value
of $.01 each: 5,871,523 as of February 18, 2000.

     Documents Incorporated by Reference:

The definitive Proxy Statement for the Annual Meeting of Stockholders
to be held April 20, 2000, to be filed with the Commission not later
than 120 days after the close of the Registrant's fiscal year, has been
incorporated by reference for Part III, Items 10, 11, 12 and 13, to
this annual report on Form 10-K.

<PAGE>
ITEM 1.   BUSINESS
          --------
General
-------
     Miltope   Group  Inc.  (the  "Company"),  a  Delaware  corporation
incorporated  in  March  1984,  is  the  parent  company   of   Miltope
Corporation,  an Alabama corporation ("Miltope"), and Miltope  Business
Products, Inc., a New York corporation ("MBP").  Miltope was originally
incorporated  as a New York corporation in 1975 to acquire  the  assets
and  business  of the Military Equipment Division of Potter  Instrument
Company,  Inc.  and  until June 1984 was a wholly owned  subsidiary  of
Stonebrook Group Inc. (formerly Stenbeck Reassurance Co. Inc.) ("SGI").
In June 1984, all of the outstanding stock of the Company was issued to
SGI in exchange for all of the outstanding stock of Miltope.  SGI is  a
privately  held  corporation  which,  since  1975,  has  supported  the
formation  and  funding  of companies engaged in  the  development  and
manufacture  of  electronic  hardware for  defense  and  communications
applications   and  in  communications  services.   In  January   1985,
shareholders of the Company (including SGI) sold 700,000 shares of  the
Company's  Common  Stock in an initial public  offering.   In  November
1985,  the  Company sold an additional 1,000,000 shares of  its  Common
Stock to the public.  As of December 30, 1994, Miltope merged with  and
into a newly formed Alabama corporation, which succeeded to all of  the
New  York  corporation's assets and liabilities.  On January  1,  1995,
XSource  Corporation  (formerly  Innova International  Corporation),  a
Delaware  corporation ("XSource"), acquired 62.8%  of  the  outstanding
shares  of  Common  Stock  of  the Company pursuant  to  certain  share
exchange  transactions with SGI,  which at such time was  a  holder  of
55.6%  of  the outstanding shares of common stock of the Company,   and
Stuvik  AB,  a  Swedish  corporation and, at such  time,  a  holder  of
approximately  7.2% of the outstanding shares of Company common  stock.
Prior  to  June of 1999, XSource Corporation was a subsidiary of  Great
Universal  Incorporated,  a  Delaware corporation  and  a  wholly-owned
subsidiary of MIC-USA Inc., ("MIC-USA"), a Delaware corporation  and  a
wholly-owned subsidiary of Millicom International Cellular S.A. ("MIC").
In connection with the June 1999 reorganization,  the  Company became a
subsidiary of Great Universal Incorporated, which became a wholly-owned
subsidiary of Great Universal LLC, a Delaware limited liability company
("GU-LLC"),  whose  sole  member  from the date of reorganization until
December 31, 1999 was MIC-USA. On December  31, 1999 MIC-USA formed the
1999  Great  Universal  LLC  Trust  (the  "Trust")  and  assigned   all
ownership interest of  GU-LLC  to  the Trust.  GU-LLC provides, through
its operating subsidiaries, integrated  network  products and services.
GU-LLC  is  engaged  in  the  teleservices,  television  and  media and
specialized electronics industries.

     Miltope Corporation designs, develops, and manufacturers computers
and   computer  peripheral  equipment  for  military,  industrial   and
commercial  applications where reliable operation of the  equipment  in
challenging  environments  is imperative.   The  systems  provided  are
qualified   for   use  in  airborne,  shipboard,   and   ground   based
applications.   Miltope's  product  lines  include  a  broad  range  of
computers,  computer workstations, servers, printers, disk  cartridges,
and mass storage systems. Miltope continues to increase its presence in
the  military  arena  including United States Air  Force  avionics  and
ground  based systems as well as United States Army system diagnostics.
Miltope's equipment that is designed and qualified for use as  part  of
in-flight entertainment, cabin management, and communication systems is
certified  for  use aboard virtually all commercial  and  business  jet
platforms.

     In  September  1994, the Company relocated its  headquarters  from
Melville, New York to Montgomery, Alabama.

     On January 12, 1995, the Company completed a $6,100,000 industrial
revenue  bond  offering  by  the Alabama State  Industrial  Development
Authority  ("SIDA"), the proceeds of which were used to improve,  equip
and  furnish  the  new Montgomery facility and to  pay  the  $3,375,000
principal  amount of bank indebtedness that was used  in  part  in  the
acquisition of such facility.

Segment Information
-------------------
     The  Company's  business  is divided into two  industry  segments,
consisting  of  the  manufacture of militarized  and  rugged  equipment
primarily  for military applications conducted by the "Military/Rugged"
segment,  and  the manufacture and distribution of commercial  products
conducted  by  the  "Commercial"  segment  (formerly  MBP).   Financial
information  regarding the Company's industry segments is  included  in
Note  10  to the Notes to Consolidated Financial Statements located  in
Item 8 of this Form 10-K.

Description of Business
-----------------------
Military/Rugged - General
-------------------------
     The military/rugged segment is engaged in the design, development,
manufacture  and testing of computer and computer peripheral  equipment
for  military,  rugged  and  other specialized  applications  requiring
reliable  operations in severe land, sea and airborne environments  for
military  customers.   Military/rugged product lines  include  a  broad
range  of  computers,  computer workstations, servers,  printers,  disk
cartridges,  and  mass  storage.  In 1988,  the  Company  introduced  a
complete  line of rugged Hewlett Packard Company computers and  related
peripherals  specifically designed for use in the United States  Army's
Tactical  Command  and Control System/Common Hardware Software  Program
("ATCCS/CHS") under a contract awarded to the Company in  August  1988,
as  well  as  to  other customers for related applications.   Miltope's
focus on the military markets is on rugged and militarized versions  of
computing  systems used in ensuring that tactical mission  requirements
are  met.   Expert  engineering skills and techniques are  utilized  to
augment  the  use of commercial off the shelf ("COTS") modules to  meet
extended   temperature,  shock,  vibration,  altitude,   and   humidity
conditions that are encountered during military missions.

     During  1995,  the  Company introduced  a  new  family  of  rugged
computer  products  consisting of hand held Intel based  computers  and
related  peripherals.   These  new  products  are  re-configurable  and
scaleable  for  specific applications and employ COTS technology.   The
hand  held  Intel based computers are being used for the United  States
Army's  Soldiers'  Portable On-system Repair Tools ("SPORT")  under  an
ongoing  contract awarded to the Company in June 1996, as  well  as  by
other  customers for related applications. Under this contract, Miltope
is  providing a rugged handheld computing and diagnostic system used on
every  US  Army weapon system such as the Abrams Main Battle Tank,  the
Bradley Fighting Vehicle, and the Apache Longbow attack helicopter.

      Several  long-term contracts are in place with the United  States
Government  supporting the Department of Defense  ("DOD")  digitization
and  communication  plan.  The  United  States  Air  Force  procures  a
militarized portable computer and printer suite used for processing and
recording   data   collected   through   the   Military  Satellite  and
Communications ("MILSATCOM") equipment.  Both the SPORT  and  MILSATCOM
equipment   have   been  continually  improved  to include leading edge
technology through product enhancements and technical refreshment.

      Substantially  all  of  the military/rugged segment sales consist
of  militarized and rugged products. Militarized equipment is  designed
and built, with respect to each component and the whole, to conform  to
stringent  United States Department of Defense specifications developed
for  severe  land,  sea  and  airborne operating  environments.   These
specifications   define   equipment  operating   parameters   including
atmosphere,  temperature and humidity conditions, permitted  levels  of
shock  and  vibration, susceptibility to electro-magnetic  interference
("EMI"),  EMI emission levels, and detection and hardening for  nuclear
survivability.  Rugged equipment is designed and manufactured  to  less
demanding specifications and may include commercially available devices
which are suitably modified for these applications.

     Production of equipment conforming to these DOD specifications has
required  the development over the years by the Company of  proprietary
electronic  and  electro-mechanical designs and engineering  techniques
and specialized manufacturing and testing methods.  By these means, the
Company has developed a broad range of proprietary components that meet
these  specifications and are otherwise unavailable in  the  commercial
market.    To  support  its'  engineering,  manufacturing  and  testing
activities,  the  Company has extensive manufacturing equipment,  clean
rooms and reliability and environmental testing facilities as well as a
multi-function  computer aided design ("CAD") system and  an  EMI  test
lab.

     Miltope's  latest  product  design is a Militarized  Mass  Storage
system  providing  144  GigaBytes of memory in  a  tactical,  airborne,
compact, military enclosure.  This system's interface is based on  high
throughput fibre channel technology typically found on the most complex
computing systems. This equipment is utilized to record mission data on
United States Air Force reconnaissance aircraft.

     Military/rugged  products are sold for use in  a  broad  range  of
military  programs  for  the United States Air Force,  Army,  Navy  and
Marine  Corps, for NATO, for the Australian, British, Canadian, French,
German,  Israeli, Italian, Spanish and Norwegian armed forces  and  for
the  armed forces of other countries.  Miltope's militarized and rugged
computers  and  peripheral products are compatible with  most  standard
military  computers and are sold to the DOD and many prime DOD  systems
contractors   and  integrators,  including  Bath  Iron  Works,   Boeing
Aerospace,  EDS, Raytheon E-Systems Inc., Northrop Grumman Corporation,
GTE  Corp.,  General Dynamics, Hughes Defense Communications,  Lockheed
Martin,  Marconi  Radar  Control Systems  Limited,   McDonnell  Douglas
Corp.,  Motorola  Inc., Teledyne Controls, CAE Inc.,  and  ITT  Defense
Systems.

     Miltope  believes  that it has captured a  major  portion  of  the
market for militarized printers and disk memory products.  In addition,
Miltope  is  recognized as a leading supplier of rugged  computers  and
related  equipment.  A key element of Miltope's strategy  has  been  to
develop  and  deliver  a  broad  range of high  reliability  peripheral
components  and  systems  on a cost effective  and  timely  basis.  The
breadth  of  Miltope's product offerings enables system integrators  to
avoid  the  risks normally encountered when procuring peripherals  from
multiple  suppliers and to also achieve significant  price  advantages.
Miltope's ability to meet the diverse requirements of its customers has
resulted  in substantial recurring business.  Also, as defense  budgets
have  been  reduced, an emphasis on commercially adaptable  electronics
and  the  requirement  for smaller, less expensive  and  more  portable
systems has occurred.  Miltope believes its new

product   family  of  rugged,  re-configurable  portable  and  handheld
computing  devices  will  serve  this  growing  market  niche  well  as
evidenced  by the DOD's award to Miltope of the SPORT Program  in  June
1996,  the  award  of the Hanscom Air Force Base MILSATCOM  program  in
November  1998 and the selection in November 1998 by IV Phoenix  Group,
Inc.  to  manufacture the Condor/Applique~ rugged computer for  initial
test trials.

     In  June  1996, Miltope was awarded a five year DOD  contract  for
Soldiers' Portable On-system Repair Tools (SPORT).  SPORT will  enhance
the  U.S.  Army's capability to diagnose and repair weapon systems  and
electronically display technical manuals.  Production deliveries  under
this  contract began in September 1997.  The contract has an  estimated
value of approximately $81,000,000 over a five year period.  There  can
be  no  assurances  this  estimate of  purchase  requirements  will  be
achieved.  As of February 18, 2000, Miltope has been issued firm orders
valued  at approximately $41,000,000 under this contract.  In addition,
the  Company has received orders for SPORT equipment from other defense
contractors.

     In November 1998, the Company was selected to deliver its TIC-2000
computer  and  other peripherals to the Electronic  Systems  Center  at
Hanscom  Air  Force  Base.  The TIC-2000 is a newly  developed  rugged,
portable  Intel  based  workstation that will be  integrated  into  the
United  States  Air  Force's Military Satellite Communication  network.
The  estimated  value of the contract is $3,000,000  over  a  two  year
period.   There  can  be  no  assurances  this  estimate  of   purchase
requirements  will be achieved.  As of February 18, 2000,  Miltope  has
received firm orders of approximately $2,500,000.

     In  November  1998, the Company was selected by IV  Phoenix  Group
Inc. to manufacture the Condor APPLIQUE' rugged computer for TRW.  This
computer  will  be  used in the United States Army's Force  XXI  Battle
Command, Brigade and Below Program.  This program will be the principal
digital  command and control system for the Army at the  brigade  level
and  below  and will provide enhanced situational awareness across  the
battle space.  The estimated value of the contract is $2,800,000 over a
two  year  period. As of February 18, 2000, Miltope has  received  firm
orders of approximately $2,800,000.

     In  August  1999,  the Company was selected by the  United  States
Army's  Test  Measurement and Diagnostic Equipment  Program  Office  to
perform  the  integration  of the Internal  Combustion  Engine  ("ICE")
hardware  and  software  with  SPORT.  Miltope  currently serves as the
prime contractor for the SPORT  computer. This integration program will
give the  United  States  Army  the  ability to perform automatic test,
diagnostics and maintenanceon diesel engines on all wheeled and tracked
vehicle platforms.  This contract  is  a yearly award over an estimated
period of  three  years.  Were the Company to be selected for all three
years of the  contract, the  estimated  value of this contract would be
$12,000,000  over  that  period.   There  can  be  no  assurances  this
estimate of purchase requirements will be achieved nor that the Company
will  be  selected  for  any   follow  on  delivery  orders.    As   of
February 18, 2000,  Miltope  has received  firm orders of approximately
$4,100,000.

     In  October 1999, the Company was selected by the Federal Aviation
Administration ("FAA"), as a supplier of in-flight workstations  to  be
utilized  in a variety of in-flight and ground based applications.  The
estimated  value of this contract is $800,000 over a two  year  period.
There  can  be  no  assurances that these levels of estimated  purchase
requirements  will  be achieved. As of February 18, 2000,  Miltope  has
received firm orders of approximately $400,000.

     In  December  1999, the Company was selected by  Raytheon  Optical
Systems to supply several 144 Gigabyte Mass Storage Units with state of
the  art  Fiber  Channel  interface. These  systems  will  be  used  in
reconnaissance systems aboard aircraft of the United States Air  Force.
The  estimated value of the contract is in excess of $1,500,000 over  a
three  year  period. There can be no assurances that  these  levels  of
estimated  purchase requirements will be achieved. As of  February  18,
2000, the Company has received firm orders of approximately $600,000.

Commercial - General
--------------------
     The   commercial  segment  develops,  manufactures   and   markets
commercial  products  primarily for transportation,  telecommunications
and  in-field maintenance markets.  Its products are airborne printers,
airline  ticket  and  boarding  pass  printers,  rugged  public  access
Internet  terminals,  mass storage devices, and derivatives  of  rugged
hand   held  Intel  based  computers  and  portable  RISC  workstations
originally   developed  for  military  applications.   This   segment's
business  represented approximately 46% of the Company's 1999 revenues,
approximately 45% of the Company's 1998 revenues and approximately  48%
of the Company's 1997 revenues.

     Growth  in the commercial sector has continued at Miltope  through
partnerships  with  providers  of  avionics,  in-flight  entertainment,
communication,  and  the  customization  of  commercial   and   private
aircraft.   For over fifteen years, Miltope has been providing  thermal
printers for use in flight deck and cabin installations.  Miltope holds
a  significant  domestic  market share for  all  airborne  flight  deck
printing  requirements.   Continual internal research  and  development
investment  in  the development of airborne products  for  the  rapidly
expanding  in-flight  entertainment market has  proven  successful  for
Miltope.  Miltope  equipment is currently being  utilized  as  integral
components   in  multiple  in-flight  systems.  Miltope's  capabilities
include  full  system  integration  and  application  development  that
provides  customers  with  a  complete system  solution.   Systems  are
designed, qualified, and delivered utilizing operating systems such  as
Windows98,  Windows NT, Linux, Solaris, and HP-UX.   The  Company  also
continues to develop and improve various products such as telephony and
internet servers, Redundant Arrayed Independent Disks ("RAID")  storage
systems, controller terminals and workstations, and sealed disk  drives
for  a  variety  of  applications related to  in-flight  entertainment,
communication, and avionics systems.

     Miltope's  airborne printer products are sold to a broad  base  of
airframe  manufacturers and commercial airline companies worldwide  for
use  in  flight deck and cabin workstation information systems.  During
1999,  customers  for  the airborne printer line of  products  included
Boeing,  B/E  Aerospace, British Airways, Continental  Airlines,  Delta
Airlines,   KLM,  Lufthansa,  Matsushita  Avionics  Systems,   Teledyne
Controls,   American  Airlines,  Itochu,  Embraer,  Transavia,   Qantas
Airways, Ltd.,United Airlines and AMR Eagle, Inc.. Miltope has received
firm  orders  during  1999  of approximately  $5,600,000  for  airborne
printer products.

     In   December  1996,  Miltope  was  awarded  a  contract  for  the
manufacture  of  rugged hard drives for use in Sony  Trans  Com  Inc.'s
Audio  Video on Demand In-Flight Entertainment System  ("P@ssport  TM")
to  be  sold  to  airline customers around the  world.   The  estimated
contract  value  is $10,200,000 over a five year period.  The  contract
value is based on the customer's best estimate of purchase requirements
during  the contract period.  There can be no assurances this  estimate
of  purchase  requirements will be achieved. As of February  18,  2000,
Miltope has received firm orders of approximately $2,300,000 from  this
customer for this product.

     In  December 1997, Miltope entered into a strategic agreement with
Honeywell,  Inc.  Business and Commuter Aviation  Systems,  to  provide
Portable Maintenance Access Terminals ("PMAT") for use in business jets
and  commuter  aircraft  around the world as an option  on  Honeywell's
integrated  avionics  systems.  As of February 18,  2000,  Miltope  has
received firm orders of approximately $3,200,000 for this product  from
this customer.

Sales and Significant Customers
-------------------------------
     Sales  in 1999 attributable to the military industry segment  were
approximately as follows: 65% from large DOD programs (each  accounting
for 5% or more of annual sales), 3% from smaller programs and sales  of
standard  items  in  Miltope's catalogue, 24%  from  sales  to  foreign
governments  and  defense contractors and 8% from  spare  parts  sales.
Sales to any one large DOD program have varied substantially from  year
to year due to product cycles and DOD requirements.

     In  1999, sales to the DOD accounted for 40% of net sales  of  the
Company.  No other customer accounted for more than 10% of net sales.

     The  Company has experienced large fluctuations from year to  year
in  the percentage of sales represented by particular customers due  to
product  cycles  and  customer requirements. The Company  believes  its
customers  and  the industry are moving to shorter lead  times  due  to
compressed technology cycles and changes in procurement strategies.

     Sales  in  1999  attributable to the commercial  industry  segment
amounted to approximately 46% of the Company's total net sales.

     During  1998 and 1999, the Company recorded sales of $261,000  and
$0,  respectively, to 3C Communications International, S.A., an  entity
affiliated through certain common ownership.  During 1998 and 1999, the
Company recorded sales of $2,186,000 and $2,382,000, respectively to IV
Phoenix  Group, Incorporated and Get 2 Net that are affiliates  of  the
Company through certain common ownership.

Government Contracts
--------------------
     Miltope's business is subject to various statutes, regulations and
provisions   governing  defense  contracts  including  the   Truth   in
Negotiations  Act,  which  provides for the  examination  by  the  U.S.
government  of  cost  records  to determine  whether  accurate  pricing
information was disclosed in connection with government contracts.

     Contracts with the U.S. government as well as with U.S. government
prime  contractors are typically at a fixed price with a delivery cycle
of  4  to 12 months, with contracts under any particular program  being
subject   to  further  funding  and  negotiation.   Miltope's   defense
contracts  contain customary provisions permitting termination  at  any
time  at the convenience of the customer and providing for payment  for
work-in-progress should the contract be canceled.

Backlog
-------
     Backlog for both the military and commercial industry segments  at
December  31, 1999 was $12,782,000, a 42% decrease from the $21,991,000
backlog  at December 31, 1998. On January 19, 2000, Miltope received  a
delivery  order under the SPORT contract for $13,500,000  that  is  not
included in the backlog figures as of December 31, 1999. Had this order
been  timely  received  prior to December  31,  1999,  the  backlog  at
December 31, 1999, would have been a 19.5% increase over the backlog at
December  31, 1998 that included the 1999 SPORT delivery order.  As  of
February 18, 2000 total backlog was approximately $26,000,000.  Backlog
includes  only  customer signed delivery orders from current  contracts
and  funded portions of multi-year contracts. The Company believes that
substantially  all  of  the backlog will be recognized  as  revenue  by
December  31, 2000.  The Company also believes that a substantial  part
of  new delivery orders and contract fundings received in 2000 will  be
recognized as revenue in the same year due to shorter lead times.

     Backlog for the commercial industry segment was approximately  60%
of  the total backlog at December 31, 1999 and approximately 31% of the
total backlog at December 31, 1998.

     Backlog   does   not  include  unfunded  portions  of   multi-year
contracts.    Unfunded   portions  of  multi-year   contracts   totaled
approximately  $40,000,000 and $87,000,000 at  December  31,  1999  and
December 31, 1998, respectively.

Competition
-----------
     Both  of  the Company's industry segments face intense competition
in  markets  for  certain  of their products.  Competition  comes  from
independent  producers  as well as prime contractors.   Some  of  these
competitors  have greater resources than the Company.   Competition  is
based  on  such  factors as price, technological  capability,  quality,
reliability and timely delivery.

     The  Company's competitive position in its industry  segments  has
been  based  upon  the experience of its technical personnel  in  their
respective  specialized  fields  of  computer  and  peripheral  product
design;  its  broad  range  of products;  its  ability  to  design  and
manufacture  its  products  to  meet  customers'  specifications;   its
specialized  manufacturing and testing facilities; its long association
with  many  of its customers and its managerial and marketing expertise
in  dealing with commercial customers, prime contractors and  the  DOD.
The  Company believes that once a particular supplier's computer and/or
peripheral products have been selected for incorporation in a  military
or  commercial program, further competition by other vendors during the
life cycle of that program is limited.

Engineering, Research and Development
-------------------------------------
     The  Company believes that success within the industry depends  in
large  part  upon  its ability to develop and apply new  technology  to
modify,  enhance and expand its existing line of proprietary  products.
The  funding of these activities is primarily internal through  Company
sponsored  research  and development.   Product development  activities
are  generally  the  result of the need to respond to  the  anticipated
requirements  of  future programs, the introduction of  new  technology
that can be used to enhance product performance and direct requests  by
customers  and  the  DOD.  In certain cases the  Company  has  licensed
technology  from commercial manufacturers for subsequent militarization
and ruggedization.

     Engineering  design techniques and expertise are leveraged  across
all  product  lines  enabling rapid development and  improved  time  to
market.  Management believes approximately 3% to 5% of  net  sales  for
engineering,  research and development expenditures  should  adequately
support the Company's business.

     Engineering, research and development expenditures in  1997,  1998
and  1999  were  approximately $1,700,000, $1,900,000  and  $1,250,000,
respectively.

     Miltope's  funded  research  and  development  efforts   for   its
military/rugged  segment include projects to enhance its  mass  storage
devices,   printers,  computer  workstations  and  portable/hand   held
computers.   Miltope's  funded  research  efforts  for  its  commercial
segment  include  projects  to  enhance  its  airline  in-flight  cabin
management  and  entertainment products,  airborne  printers  and  mass
storage devices.

Employees
---------
     At   December  31,  1999,  the  Company  employed  163   full-time
personnel.   None of the Company's employees are represented by a labor
union  and the Company has experienced no work stoppages.  The  Company
believes that relations with its employees are excellent.

Export Sales
------------
     The Company recorded foreign sales in its military/rugged industry
segment  of approximately  $1,111,000, $221,000 and $258,000  in  1997,
1998 and 1999, respectively. The Company recorded foreign sales in  its
commercial industry segment of approximately $11,657,000, $847,000  and
$3,000,000 in 1997, 1998 and 1999, respectively.

Source of Supply
----------------
     The  Company  utilized multiple suppliers for most  materials  and
components.   In  order  to minimize the risk of  delay  in  delivering
finished  systems, components are sometimes procured according  to  the
projected need for such components under annual purchasing agreements.

Miscellaneous
-------------
     Neither of the Company's two industry segments is subject to
seasonal business fluctuations.

<PAGE>
ITEM 2. PROPERTIES
        ----------
     The Company owns a 90,000 square foot building located on 25 acres
in Hope Hull (Montgomery), Alabama ("Hope Hull").

     In  addition,  the Company owns a 60,000 square foot assembly  and
test  facility in Troy, Alabama ("Troy") and a 25,000 square foot clean
room, assembly and test facility in Springfield, Vermont.

     The Company leases a 9,175 square foot facility in Boulder,
Colorado.

     The Company also leases various sales offices in the United
States.

     During  1999,  the  Company consolidated  its  Troy  manufacturing
facility  with  its Hope Hull facility as a planned measure  to  reduce
cost  redundancy  and maximize production efficiency. The  Company  has
determined  that  the net book value of the Troy facility  exceeds  the
estimated  fair  market  value  of the  facility  as  of  December  31,
1999.This impairment, in the amount of approximately $281,000, has been
recognized  in  the financial statements of the Company  for  the  year
ended December 31,1999.

     The  Company owns substantially all of the machinery and equipment
used  in  these facilities.  The Company believes that these facilities
are  well  maintained  and  are adequate  to  meet  its  needs  in  the
foreseeable future.

<PAGE>
ITEM 3. LEGAL PROCEEDINGS
        -----------------
      The  Company,  from  time  to time, is  a  party  to  pending  or
threatened legal proceedings and arbitration in the ordinary course  of
business. Based upon information currently available, and in  light  of
legal and other defenses available to the Company, management does  not
consider  liability  from any threatened or pending  litigation  to  be
material to the financial statements.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
        ---------------------------------------------------
     During  the  fourth  quarter of the fiscal year  covered  by  this
Report, no matters were submitted to a vote of security holders through
the solicitation of proxies or otherwise.

<PAGE>
                                PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
        MATTERS
        ------------------------------------------------------------
Market Information
------------------
     The Company's Common Stock has been traded in the over-the-counter
market under the NASDAQ symbol "MILT" since its initial public offering
on  January 23, 1985 and has been trading on the NASDAQ National Market
since  June  4, 1985.  On March 24, 1999, the Company began trading  on
the  NASDAQ Small Cap Market.  The high and low closing sale prices for
the  Common  Stock in the over-the-counter market reflect  inter-dealer
prices,  without retail mark-up, mark-down or commission  and  may  not
necessarily represent actual transactions.  The quarterly high and  low
selling  prices (the last daily sale price) of the Common  Stock  since
January 1, 1998 have been:

<TABLE>
        Calendar Year 1998           High        Low
        ------------------         --------   ---------
        <S>                        <C>       <C>
        First Quarter              $ 3-7/16   $ 3

        Second Quarter               3-1/2      2-3/8

        Third Quarter                2-5/8      1-11/32

        Fourth Quarter               1-7/8      7/8

        Calendar Year 1999
        ------------------
        First Quarter              $ 2        $ 1-3/16

        Second Quarter               1-5/8      1-1/32

        Third Quarter                1-1/2      13/16

        Fourth Quarter               1-1/16     11/16
</TABLE>

Holders of Common Stock
-----------------------
     As of February 18, 2000, there were approximately 869 shareholders
of record and beneficial owners of the Company's Common Stock.

Dividend Policy
---------------
     No  dividends  were paid in 1998 or 1999.  The  Company  does  not
presently  anticipate  paying  cash  dividends  on  its  Common  Stock.
However, the Board of Directors of the Company will review this  policy
from  time  to time in light of its earnings, capital requirements  and
financial  condition  and other relevant factors, including  applicable
debt  agreement limitations.  The Company's bank loan agreement permits
the  Company  to pay annual dividends of up to 50% of the prior  year's
net income.

<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
        -----------------------
     The following is a summary of selected consolidated financial data
of  the Company for the five years ended December 31, 1999 which should
be  read  in conjunction with the consolidated financial statements  of
the Company and the notes thereto:

           (All amounts in thousands, except per share data)

<TABLE>
                                                  Year ended December 31,
                               --------------------------------------------------------------
                                     1995       1996        1997        1998        1999
Income statement data:             --------   --------    --------    --------    --------
----------------------
<S>                                <C>        <C>         <C>         <C>         <C>
Net sales                          $ 65,708   $ 45,513    $ 40,372    $ 26,444    $ 30,223
Gross profit                         13,372     11,077       9,803       4,921       4,065
Income (loss) before income taxes      (984)     1,770       1,211      (4,297)     (5,601)
Net income (loss)                      (984)     2,170       3,271      (3,021)     (5,601)
Basic and diluted net income
   (loss) per share                    (.17)       .37         .56        (.51)       (.95)
Cash dividends per share                 -          -           -            -           -
Weighted average shares outstanding   5,853      5,867       5,870        5,872      5,872

Balance sheet data:
-------------------
Working capital                    $ 18,896   $ 17,999    $ 19,652    $ 18,039    $ 13,488
Total assets                         41,440     36,332      38,449      38,938      33,352
Long-term debt                       16,953     11,340      11,251      13,035      13,927
Stockholders' equity                 15,913     17,858      21,140      18,119      12,518

</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS
        ---------------------------------------------------------------
Business Environment
--------------------
     The   following   discussion  includes  certain  forward   looking
statements which are affected by important factors including,  but  not
limited  to,  actions of competitors, termination of contracts  at  the
convenience   of   the  United  States  government,  customer   funding
variations  in  connection  with  multi-year  contracts  and  follow-on
options  that  could  cause actual results to  differ  materially  from
forward looking statements.

     The    Company's   military/rugged   business   segment   provides
specialized  computers and related peripheral equipment to  the  United
States  and  foreign military defense departments.  Equipment  in  this
segment  takes  two  primary  forms.   The  first  of  these  is  fully
militarized  products,  usually designed especially  for  a  particular
mission  area  with  demanding environmental and quality  requirements.
The  second  of these is rugged products, usually based on a commercial
baseline product, but adapted by the Company to meet environmental  and
quality  specifications  that  exceed the requirements  for  commercial
products.

     This  entire segment has been impacted in recent years by  reduced
government   spending  and  defense  appropriations.   The  militarized
product  area has been especially subject to defense budget cuts.   The
military  continues to reduce funding for the development  and  limited
production  quantities of highly customized systems and products.   The
long design cycle for these programs creates an intangible cost in  the
form  of rapid technological obsolescence.  Some military programs that
would  have  sought militarized equipment some years ago have  modified
the  requirements to reflect a need for rugged or commercial  products.
This  trend has tended to benefit sales of the Company's rugged product
line.   Even  in  the rugged product area, however, defense  cuts  have
taken  a  toll.   Competition in this area has become  keen  in  recent
years, as many government contractors pursue fewer military programs.

     Through its commercial segment, the Company develops, manufactures
and   markets   commercial  products  primarily   for   transportation,
telecommunications and in-field maintenance markets.  Its products  are
airborne   printers,  in-flight  cabin  management  and   entertainment
products,  rugged  public  access  Internet  terminals,  mass   storage
devices,  and  derivatives of rugged hand held  Intel  based  computers
originally developed for military applications.

Results of Operations
---------------------
     The  Company  reported a net loss of approximately  $5,600,000  in
1999 compared to a net loss of approximately $3,000,000 in 1998 and net
income of approximately $3,300,000 in 1997.  The basic and diluted  net
loss  per share was $.95 in 1999 compared to basic and diluted net loss
per  share of $.51 in 1998 and a basic and diluted net income per share
of $.56 in 1997.

     Sales  for 1999 totaled approximately $30,200,000, an increase  of
approximately  $3,800,000,  or  14.4%,  from  1998.   This  change  was
attributable  to an increase in sales of SPORT units and  increases  in
airborne   printers  and  contract  sales.   Sales  in   1998   totaled
approximately $26,400,000, a decrease of approximately $14,000,000,  or
34.7%  from  1997.   This change was attributable  to  a  reduction  in
military sales of approximately $6,200,000 and a decrease in commercial
sales of approximately $7,700,000.

     Gross  profit, as a percent of sales, was 13.4% in 1999, 18.6%  in
1998  and  24.3% in 1997.  The decrease in 1999 from 1998 was primarily
attributable  to  increased  competition in  various  airborne  printer
products  and  contractually defined decreases in the  sales  price  of
SPORT  partially  offset  by  improved margins  in  various  commercial
airborne server applications.         .

     Selling,  general and administrative expenses, as a percentage  of
sales,  were  23.9%  in 1999, 24.7% in 1998 and  15.2%  in  1997.   The
decrease in 1999 as a percentage of sales was attributable to increased
sales  coupled with planned reductions in administrative and  marketing
costs  partially offset by increased management services  fees  from  a
company affiliated by certain common ownership.  The increases in  1997
and  1998  were  principally due to expenses related  to  employee  and
severance  costs  and  continued emphasis on  increased  marketing  and
business development efforts.

     Engineering, research and development expenses, as a percentage of
sales,  was 4.1% in 1999, 7.1% in 1998 and 4.2% in 1997.  The  decrease
in  1999  as a percent of sales was primarily attributable to increased
sales  volume  and  an emphasis on shared development expenses  between
customers and the Company.  The increase in 1998 as a percent of  sales
primarily  was  attributable to lower sales volume, increased  expenses
related  to  employee  severance and restructure  costs  and  increased
amounts  of  research and development for in-flight  entertainment  and
cabin workstation products.

Liquidity and Capital Resources
-------------------------------
     Working   capital  at  December  31,  1999  totaled  approximately
$13,500,000,  a decrease of approximately $4,550,000 from December  31,
1998.  Accounts  receivable  decreased approximately  $3,300,000  as  a
result  of lower sales in the fourth quarter of 1999 versus the  fourth
quarter of 1998 and expedited government payments in the fourth quarter
of  1999  due  to Year 2000 issues. Inventories decreased approximately
$3,900,000  primarily  as a result of improvements  in  matching  sales
requirements  to  appropriate  levels of  inventory.  Current  deferred
income  taxes decreased approximately $300,000 as a result of recording
a   deferred  tax  valuation  allowance.   Accounts  payable  decreased
approximately  $1,900,000  reflecting  decreases  in  inventories   and
improved  payment  cycles.  Accrued  expenses  increased  approximately
$1,100,000 as a result of the recognition of an overpayment made by the
federal government in 1999 relative to the SPORT program. Subsequent to
December  31,  1999  a  repayment  period  of  three  years  for   this
overpayment was negotiated with the federal government.

     The  Company entered into a revolving credit facility in July 1994
for  an  amount  not  to exceed $15,000,000. The Company's  $15,000,000
revolving credit agreement with its primary lender matured on  May  31,
1999  with an outstanding balance of approximately $12,000,000 and  was
converted   into  a  term  loan  payable  in  twelve  equal   quarterly
installments  commencing August 31, 1999.  The Company is currently  in
negotiation with several lenders for a replacement line of credit while
it continues to make principal and interest payments on this term loan.

     Cash  provided by (used in) operating activities was approximately
$2,100,000   in   1999,   approximately  $(3,600,000)   in   1998   and
approximately  $1,300,000 in 1997. The increase  in  cash  provided  by
operating  activities  in 1999 as compared to  1998  is  primarily  the
result of improved working capital management most notably in the areas
of  accounts receivable and inventories. The decrease in cash  used  in
operating  activities in 1998 compared to 1997 is primarily the  result
of  the  net  loss  and increases in inventories and other  assets  and
decreases in accounts payable and accrued expenses partially offset  by
a decrease in accounts receivable.

     In  April  1994, the Company purchased a new headquarters facility
and  related  capital  equipment located in Montgomery,  Alabama.   The
purchase was financed through a bank term loan and the proceeds of  the
offering  of  taxable revenue bonds (the "Bonds") by the Alabama  State
Industrial Development Authority which was completed January  12,  1995
(the  "SIDA  Offering").   Repayment of the  Bonds  is  secured  by  an
irrevocable letter of credit issued by Regions Bank in an amount up  to
$5,700,000 that in turn is secured by a mortgage on the Montgomery  and
Troy,  Alabama  facilities  and a security interest  in  the  equipment
located at such facilities.

     The  Company  has  net  operating loss carryforwards  for  federal
income  tax  purposes  of  approximately  $13,300,000  that  expire  as
follows: $5,880,000 in 2009, $1,290,000 in 2010, $2,460,000 in 2018 and
$3,730,000  in 2019. At December 31, 1999, the Company has a  valuation
allowance of $2,162,000 against the net deferred tax assets.   Although
realization is not assured, management believes it is more likely  than
not  that  the recorded deferred tax asset, net of valuation  allowance
provided, will be realized. The valuation allowance can be adjusted  in
future  periods as the probability of realization of the  deferred  tax
asset changes.

     The   Company  believes  that  its  working  capital  and  capital
requirement  needs for its current lines of business  and  new  product
development  will  be  met  by its cash flow from  operations  and  the
proceeds from a new line of credit that is currently being negotiated.

Effects of Inflation
--------------------
     Inflation  has  not  had  a significant impact  on  the  Company's
results of operations.

Year 2000 Compliance
--------------------
     As  has  been widely publicized, many computer and digital storage
systems  express dates using only the last two digits of the  year  and
will  thus require remediation or replacement to accommodate  the  year
2000  and beyond in order to avoid malfunction and resulting widespread
business disruption.

     The  Company has an ongoing Year 2000 project that identifies  the
programs  and  infrastructure that could be affected by any  Year  2000
issues  subsequent to December 31, 1999 and has implemented a  plan  to
resolve  those problems identified, on a timely basis.   The  plan  has
required  a  considerable amount of internal resources devoted  by  the
Company  to resolve the pertinent issues. As of December 31, 1999,  the
ongoing  resource cost of the Year 2000 project has not had a  material
adverse  effect  on the Company's financial condition  and  results  of
operations  for fiscal years beginning after December  31,  1999.   The
Company  currently  estimates the total cost of its Year  2000  project
has not  exceeded  $250,000  over  the  life  of  the  project.   Costs
associated  with  employees working on the Year 2000  project have been
expensed as incurred.  Hardware and software purchases related to  this
project have been capitalized where appropriate.  The Company does  not
anticipate  additional significant costs as a result of the  Year  2000
issue.

     The  Year 2000 project includes all management information systems
which  support ongoing business functions, other systems with  computer
based controls such as telecommunications, building  environmental  and
security  management  and  all  suppliers and  customers with which the
Company maintains a material business relationship.

     Management of the Company believes it has an effective program  in
place that has resolved the Year 2000 issues affecting it and that this
program  has progressed  normally and has been completed  on  a  timely
basis.  Despite management's beliefs and the Company's progress made on
the  Year  2000 issues as of December 31, 1999, it is not  possible  to
anticipate all possible future outcomes, especially when third  parties
are  involved.   In the event certain third parties  are  not  able  to
resolve  their  own Year 2000 issues, there could be  circumstances  in
which   the  Company  would  be  unable  to  receive  customer  orders,
manufacture,  test  and  ship products, invoice  customers  or  collect
payments  from those customers.  As part of its Year 2000 project,  the
Company  has  solicited written  assurances  from  its  customers   and
suppliers  that  each will be prepared for the Year  2000  issue.   The
Company  will perform periodic audits and tests of third party  systems
throughout the life of the project for Year 2000 compliance.   However,
there  can be no certainty of total compliance from any or all  of  the
third parties the Company deals with on a daily basis.

          The  Company  has  not yet seen the need for  any  widespread
     contingency  plans to be developed for the Year  2000  issue,  but
     this  will  be  monitored continuously as the Company  gains  more
     information  about  the compliance programs of its  suppliers  and
     customers.   Additionally, some risks of the Year 2000  issue  are
     beyond the control of the Company and its suppliers and customers.
     The  Company  does  not believe it can develop a contingency  plan
     that  will  totally  shield the Company from  an  economic  ripple
     effect throughout the entire economy should others fail to resolve
     their own Year 2000 problems.

          The  costs  of  the  Company's  Year  2000  project  and  the
     timeliness  of  the  completion  of  the  project  are  based   on
     management's best estimates, and reflect assumptions regarding the
     availability  and  cost of personnel trained  in  this  area,  the
     compliance   plans  of  third  parties  and  other  uncertainties.
     However, due to the complexity and pervasiveness of the Year  2000
     issue  and in particular the uncertainty of third party compliance
     programs,  there  can be no assurances given that these  estimates
     will  be achieved, and actual results could differ materially from
     those  anticipated.  As  of February 18,  2000,  the  Company  has
     experienced   no   significant  detrimental  effects   or   system
     disruptions  from  the  Year  2000  issue  but  will  continue  to
     implement  those  procedures  as  it  deems  necessary  to  ensure
     continued integrity of its programs and infrastructure relative to
     the Year 2000 issue.

<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
         ----------------------------------------------------------
     Market  risk is the risk of loss arising from adverse  changes  in
market  prices and interest rates.  The Company is exposed to  interest
risk  inherent  in  its  financial instruments.   The  Company  is  not
currently  subject to foreign currency or commodity  price  risk.   The
Company  manages its exposure to these market risks through its regular
operating and financing activities.

     The  Company  has  a  term  loan  and  an  Industrial  Development
Authority  Bond  Issue that are exposed to changes  in  interest  rates
during  the  course  of  their maturity.  Both  debt  instruments  bear
interest  at  current  market rates and thus  approximate  fair  market
value.   The Company manages its interest rate risk by (a) periodically
retiring and issuing debt and (b) periodically fixing the interest rate
on  the London Inter Bank Offered Rate (LIBOR) portion of its revolving
credit  loan  for  30  to  60 days in order to minimize  interest  rate
swings.   A  10% increase in interest rates would affect the  Company's
variable  debt obligations and could potentially reduce future earnings
by a maximum of approximately $95,000.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
        -------------------------------------------
     See Table of Contents to Consolidated Financial Statements on Page
F-1.

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
        ----------------------------------------------------
     During  the twenty-four months prior to the date of the  financial
statements  contained  herein,  no  Form  8-K  reporting  a  change  of
accountants  has  been filed which included a reported disagreement  on
any matter of accounting principles or practices or financial statement
disclosure.

<PAGE>

                               PART III
                               --------


Item 10.    Directors and Executive Officers of the Registrant.
            ---------------------------------------------------
     The  information  called  for  by  this  item  is incorporated  by
reference  from the Company's definitive Proxy Statement for  its  2000
annual  meeting  under  the  captions  "Proposal  No.1  -  Election  of
Directors",  "Board  of Directors and Committees"  and  "Section  16(a)
Beneficial  Ownership  Reporting  Compliance"  which  definitive  Proxy
Statement will be filed with the Securities and Exchange Commission not
later  than  120 days after the end of the Company's fiscal year  ended
December 31, 1999.

Item 11.   Executive Compensation.
           -----------------------
     The  information  called  for  by  this  item  is incorporated  by
reference  from the Company's definitive Proxy Statement for  its  2000
annual  meeting under the captions "Compensation of Executive  Officers
and  Directors" and "Compensation of Directors" which definitive  Proxy
Statement will be filed with the Securities and Exchange Commission not
later  than  120 days after the end of the Company's fiscal year  ended
December 31, 1999.

Item 12.   Security Ownership of Certain Beneficial Owners and
           Management.
           ----------------------------------------------------
     The  information  called  for  by  this  item  is incorporated  by
reference  from the Company's definitive Proxy Statement for  its  2000
annual  meeting  under  the  captions "Security  Ownership  of  Certain
Beneficial  Owners"  and  "Ownership  of  Common  Stock  by  Directors,
Nominees  and Officers" which definitive Proxy Statement will be  filed
with  the  Securities and Exchange Commission not later than  120  days
after the end of the Company's fiscal year ended December 31, 1999.

Item 13.   Certain Relationships and Related Transactions.
           -----------------------------------------------
     The  information  called  for  by  this  item  is incorporated  by
reference  from the Company's definitive Proxy Statement for  its  2000
annual  meeting under the captions "Certain Relationships  and  Related
Transactions" which definitive Proxy Statement will be filed  with  the
Securities  and Exchange Commission not later than 120 days  after  the
end of the Company's fiscal year ended December 31, 1999.

<PAGE>

PART IV
-------
<TABLE>
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
          ----------------------------------------------------------------
(a) The following documents are filed as part of this Report            Page
                                                                       ------
        <S>  <C>                                                       <C>
        1.   Consolidated Financial Statements:

             Table of Contents to Consolidated Financial Statements     F-1

             Independent Auditors' Report                               F-2

             Consolidated Balance Sheets as of December 31,
             1998 and 1999                                              F-3

             Consolidated Statements of Operations for the Years
             Ended December 31, 1997, 1998 and 1999                     F-4

             Consolidated Statements of Stockholders' Equity for
             the Years Ended December 31, 1997, 1998 and 1999           F-5

             Consolidated Statements of Cash Flows for the Years
             Ended December 31, 1997, 1998 and 1999                     F-6

             Notes to Consolidated Financial Statements                 F-7

             Independent Auditors' Consent                              F-20

        2.   All schedules are omitted because they are not applicable
             or the required information is shown in the consolidated
             financial statements or notes thereto.

        3.   Exhibits                                                   23


(b) There have been no reports on Form 8-K filed during the last
    quarter of the period ended December 31, 1999

<PAGE>

                       Intentionally Left  Blank

<PAGE>

</TABLE>
<TABLE>
Exhibit                                                               Page
Number     Description of Exhibit                                     Number
-------    ---------------------------------------------------        ------
<S>        <C>                                                        <C>
3(a)       Certificate of Incorporation of the Registrant, as
           amended to date [Incorporated by reference to
           Exhibit 3(a) to the Registrant's Registration
           Statement on Form S-1 filed with the Commission on
           September 6, 1984 (Registration No. 2-93134)]

3(b)       By-laws of the Registrant, as currently in effect
           [Incorporated by reference to Exhibit 3(b) to the
           Registrant's Form 10-K filed with the Commission
           on March 31, 1987 (File No. 0-13433)].

3(c)       Specimen share certificate for the Common Stock of
           the Registrant [Incorporated by reference to Exhibit
           4(b) to Amendment No. 1 to the Registrant's
           Registration Statement on Form S-1 filed with the
           Commission on January 8, 1985 (Registration No.
           2-93134)].

10(a)(A)   1985 Key Employee Stock Option Plan adopted by
           the Board of Directors of the Registrant on July 1,
           1985 [Incorporated by reference to Exhibit 10(a) to
           the Registrant's Registration Statement on Form S-1
           filed with the Commission on October 22, 1985
           (Registration No.33-1042)].

10(a)(B)   Form of 1985 Key Employee Stock Option
           Agreement, dated as of July 1, 1985, between the
           Registrant and certain key employees of the
           Registrant [Incorporated by reference to Exhibit
           10(b) to the Registrant's Registration Statement on
           Form S-1 filed with the Commission on October 22,
           1985 (Registration No. 33-1042)].

10(b)(A)   Incentive Stock Option Plan adopted by the Board of
           Directors of the Registrant on June 1, 1984 and
           approved by Stonebrook Group Inc. (formerly
           Stenbeck Reassurance Co. Inc.) on June 1, 1984, as
           amended by the Board of Directors of the Registrant
           on May 6, 1985 [Incorporated by reference to
           Exhibit 10(c) to the Registrant's Registration
           Statement on form S-1 filed with the Commission on
           October 22, 1985 (Registration No. 33-1042)].
</TABLE>
<PAGE>
<TABLE>

Exhibit                                                               Page
Number     Description of Exhibit                                     Number
--------   ----------------------                                     ------
<S>        <C>                                                        <C>
10(b)(B)   Form of Incentive Stock Option Agreement, dated as
           of June 1, 1984, between the Registrant and certain
           key employees of the Registrant [Incorporated by
           reference to Exhibit 10(e) to the Registrant's
           Registration Statement on Form S-1 filed with the
           Commission on October 22, 1985 (Registration No.
           33-1042)].

10(c)(A)   Management Stock Option Plan adopted by the Board
           of Directors of the Registrant on June 1, 1984 and
           approved by Stonebrook Group Inc. on June 1, 1984,
           as amended by the Board of Directors of the
           Registrant on May 6, 1985 [Incorporated by reference
           to Exhibit 10(f) to the Registrant's Registration
           Statement on Form S-1 filed with the Commission on
           October 22, 1985 (Registration No. 33-1042)].

10(c)(B)   Form of Management Stock Option Agreement, dated
           as of June 1, 1984, between the Registrant and
           certain management employees of the Registrant
           [Incorporated by reference to Exhibit 10(d) to the
           Registrant's Registration Statement on Form S-1 filed
           with the Commission on September 6, 1984
           (Registration No. 2-93134)].

10(d)      Miltope Corporation Cash Bonus Plan, as amended,
           effective January 1, 1984 [Incorporated by reference
           to Exhibit 10(e) to the Registrant's Registration
           Statement on Form S-1 filed with the Commission on
           September 6 , 1984 (Registration No. 2-93134)].

10(f)(A)   1995 Stock Option and Performance Award Plan
           adopted by the Board of Directors of the Registrant
           on April 11, 1995 and approved by the stockholders
           of the Registrant on June 5, 1995  [Incorporated
           by reference to Exhibit 4(a)(1) to the Registrant's
           Registration Statement on Form S-8 filed with the
           Commission on December 21, 1995 (File No. 33-65233)].

10(f)(B)   Form of Non-Qualified Stock Option Agreement under
           the 1995 Stock Option and Performance Award Plan
           [Incorporated by reference to Exhibit 4(a)(2) to the
           Registrant's Registration Statement on Form S-8 filed
            with the Commission on December 21, 1995
           (File No. 33-65233)].

</TABLE>
<PAGE>
<TABLE>

Exhibit                                                               Page
Number     Description of Exhibit                                     Number
--------   ----------------------                                     ------
<S>        <C>                                                        <C>
10(f)(C)   Form of Incentive Stock Option Agreement under the
           1995 Stock Option and Performance Award Plan
           [Incorporated by reference to Exhibit 4(a)(3) to the
           Registrant's Registration Statement on Form S-8 filed
           with the Commission on December 21, 1995
           (File No. 33-65233)].

10(g)(A)   Real Estate Sales Contract, dated July 18, 1984,
           between the City of Troy, Alabama and Miltope
           Corporation [Incorporated by reference to Exhibit
           10(o) to the Registrant's Registration Statement on
           Form S-1 filed with the Commission on September 6,
           1984 (Registration No. 2-93134)].

10(g)(B)   Lease Agreement, dated November 1, 1985, between
           the Industrial Development Board of the City of
           Troy, Alabama and Miltope Corporation
           [Incorporated by reference to Exhibit 10(s)(B) to the
           Registrant's Form 10-K filed with the Commission
           on March 31, 1986 (File No. 0-13433)].

10(j)      Purchase and Sale Agreement, dated April 19, 1994,
           between Collier Management Group, Inc. and
           Miltope Corporation, with respect to 500 Richardson
           Road South, Hope Hull, Alabama [Incorporated by
           reference to Exhibit 10(n) to the Registrant's Form 10-K
           filed with the Commission on March 31, 1995
           (File No. 0-13433)].

10(k)(A)(1)Loan Agreement, dated July 27, 1994, among First
           Alabama Bank, as lender, and Miltope Corporation
           and Miltope Business Products, Inc., as borrowers
           [Incorporated by reference to Exhibit 10(o)(A)(1)
           to the Registrant's Form 10-K filed with the
           Commission on March 31, 1995 (File No. 0-13433)].

10(k)(A)(2)Amendment to Loan Agreement, dated as of October
           3, 1994, among First Alabama Bank, Miltope
           Corporation and Miltope Business Products, Inc.
           [Incorporated by reference to Exhibit 10(o)(A)(2)
           to the Registrant's Form 10-K filed with the
           Commission on March 31, 1995 (File No. 0-13433)].

</TABLE>
<PAGE>
<TABLE>

Exhibit                                                                Page
Number      Description of Exhibit                                     Number
--------    ----------------------                                     ------
<S>         <C>                                                        <C>
10(k)(A)(3) Amendment to Loan Agreement and Related
            Documents, dated February 3, 1995, among First
            Alabama Bank, Miltope Corporation and Miltope
            Business Products, Inc. [Incorporated by reference
            to Exhibit 10(o)(A)(3) to the Registrant's Form 10-K
            filed with the Commission on March 31, 1995
            (File No. 0-13433)].

10(k)(A)(4) Amendments to Loan Agreement and Related
            Documents, dated February 6, 1997, among Regions
            Bank (formerly First Alabama Bank), Miltope
            Corporation and Miltope Business Products, Inc.
            [Incorporated by reference to Exhibit 10(k)(A)(4) to
            the Registrant's Form 10-K filed with the Commission
            on March 26, 1997 (File No. 0-13433)].

10(k)(A)(5) Amendments to Loan Agreement and Related
            Documents, dated December 1, 1997, among Regions
            Bank (formerly First Alabama Bank), Miltope
            Corporation and Miltope Business Products, Inc.
            [Incorporated by reference to Exhibit 10(K)(A)(5) to
            the Registrant's Form 10-K filed with the Commission
            on March 23, 1998 (File No. 0-13433)].

10(k)(B)    Guaranty Agreement, dated July 27, 1994, by the
            Registrant to First Alabama Bank [Incorporated by
            reference to Exhibit 10(o)(B) to the Registrant's
            Form 10-K filed with the Commission on March 31, 1995
            (File No. 0-13433)].

10(k)(C)    Security Agreement, dated July 27, 1994, among
            Miltope Corporation, Miltope Business Products, Inc.
            and First Alabama Bank [Incorporated by
            reference to Exhibit 10(o)(C) to the Registrant's
            Form 10-K filed with the Commission on March 31, 1995
            (File No. 0-13433)].

10(l)(A)    Term Loan Agreement, dated October 13, 1994,
            between First Alabama Bank, as lender, and Miltope
            Corporation, as borrower [Incorporated by
            reference to Exhibit 10(p)(A) to the Registrant's
            Form 10-K filed with the Commission on March 31, 1995
            (File No. 0-13433)].
</TABLE>
<PAGE>
<TABLE>

Exhibit                                                               Page
Number     Description of Exhibit                                     Number
--------   ----------------------                                     ------
<S>        <S>                                                        <S>
10(l)(B)   Real Estate Mortgage and Security Agreement, dated
           October 13, 1994, by Miltope Corporation in favor
           of First Alabama Bank [Incorporated by reference to
           Exhibit 10(p)(B) to the Registrant's Form 10-K
           filed with the Commission on March 31, 1995
           (File No. 0-13433)].

10(m)(A)   Loan Agreement, dated January 1, 1995, between the
           State Industrial Development Authority and Miltope
           Corporation [Incorporated by reference to Exhibit 10(q)(A)
           to the Registrant's Form 10-K filed with the Commission
           on March 31, 1995 (File No. 0-13433)].

10(m)(B)   Credit Agreement, dated January 1, 1995, between
           Miltope Corporation and First Alabama Bank
           [Incorporated by reference to Exhibit 10(q)(B) to the
           Registrant's Form 10-K filed with the     Commission
           on March 31, 1995 (File No. 0-13433)].

10(m)(C)   Guaranty Agreement, dated January 1, 1995, by the
           Registrant to First Alabama Bank [Incorporated by
           reference to Exhibit 10(o)(C) to the Registrant's
           Form 10-K filed with the Commission on
           March 31, 1995 (File No. 0-13433)].

10(m)(D)   Bond Purchase Agreement, dated January 11, 1995,
           among Miltope Corporation, the State Industrial
           Development Authority and Merchant Capital,
           L.L.C. [Incorporated by reference to Exhibit 10(q)(D)
           to the Registrant's Form 10-K filed with the Commission
           on March 31, 1995 (File No. 0-13433)].

10(m)(E)   Re-marketing Agreement, dated January 1, 1995,
           among Miltope Corporation, the State Industrial
           Development Authority and Merchant Capital,
           L.L.C. [Incorporated by reference to Exhibit 10(q)(E)
           to the Registrant's Form 10-K filed with the Commission
           on March 31, 1995 (File No. 0-13433)].

10(m)(F)   Real Estate Mortgage and Security Agreement, dated
           as of January 1, 1995, from Miltope Corporation in
           favor of First Alabama Bank [Incorporated by
           reference to Exhibit 10(q)(F) to the Registrant's
           Form 10-K filed with the Commission on
           March 31, 1995 (File No. 0-13433)].
</TABLE>
<PAGE>
<TABLE>

Exhibit                                                               Page
Number     Description of Exhibit                                     Number
--------   ----------------------                                     ------
<S>        <C>                                                        <C>
10(q)(A)   Stock Option Agreement, dated as of June 25, 1993,
           between the Registrant and William L. Dickinson.
           [Incorporated by reference to Exhibit 10(q) to the
           Registrant's Form 10-K filed with the Commission
           on March 31, 1994 (File No. 0-13433)].

10(q)(B)   Stock Option Agreement, dated as of June 3, 1994,
           between the Registrant and William L. Dickinson
           [Incorporated by reference to Exhibit 10(u)(B) to
           the Registrant's Form 10-K filed with the Commission
           on March 31, 1995 (File No. 0-13433)].

10(q)(C)   Stock Option Agreement, dated as of June 5, 1995,
           between the Registrant and William L. Dickinson.
           [Incorporated by reference to Exhibit 10(r)(C) to the
           Registrant's Form 10-K filed with the Commission
           on March 29, 1996 (File No. 0-13433)].

10(q)(D)   Stock Option Agreement, dated as of June 11, 1996,
           between the Registrant and William L. Dickinson.
           [Incorporated by reference to Exhibit 10(q)(D) to the
           Registrant's Form 10-K filed with the Commission
           on March 26,1997 (File No. 0-13433)].

10(q)(E)   Stock Option Agreement, dated as of September 11, 1997,
           between the Registrant and William L. Dickinson.
           [Incorporated by reference to Exhibit 10(q)(E) to the
           Registrants Form 10-K filed with the Commission on
           March 23, 1998 (File No. 0-13411)].

10(q)(F)   Stock Option Agreement, dated September 17, 1998,
           between the Registrant and William L.Dickinson.
           [Incorporated by reference to Exhibit 10(q)(F) to the
           Registrants Form 10-K filed with the Commission on
           March 31, 1999 (File No. 0-13411)].

10(u)      Stock Option Agreement, dated September 17, 1998,
           between the Registrant and Jerry Tuttle.
           [Incorporated by reference to Exhibit 10(u) to the
           Registrant's Form 10-K filed with the Commission
           on March 31, 1999 (File No. 0-13433)].
</TABLE>
<PAGE>
<TABLE>

Exhibit                                                               Page
Number     Description of Exhibit                                     Number
--------   ----------------------                                     ------
<S>        <C>                                                        <C>
*10(v)     Stock Option Agreement dated January 15, 1999
           between the Registrant and Thomas R. Dickinson.

10(w)(A)   Asset Purchase Agreement, dated as of December
           23, 1992, between Miltope Business Products, Inc.
           and Mag-Tek, Inc. [Incorporated by reference to
           Exhibit 10(x)(A) to the Registrant's Form 10-K filed
           with the Commission on March 25, 1993 (File No. 0-13433)].

10(w)(B)   Guaranty of the Registrant, dated as of December 23,
           1992, pursuant to Asset Purchase Agreement, dated
           as of December 23, 1992, between Miltope Business
           Products, Inc. and Mag-Tek, Inc. [Incorporated by
           reference to Exhibit 10(x)(B) to the Registrant's
           Form 10-K filed with the Commission on
           March 25, 1993 (File No. 0-13433)].

10(w)(C)   Supply Agreement, dated as of January 5, 1993,
           between Miltope Business Products, Inc. and
           Mag-Tek, Inc. [Incorporated by reference to Exhibit
           10(x)(C) to the Registrant's Form 10-K filed with the
           Commission on March 25, 1993 (File No. 0-13433)].

10(w)(D)   Escrow Agreement, dated as of January 5, 1993,
           among Miltope Business Products, Inc., Mag-Tek,
           Inc. and First Interstate Bank of California, as
           Escrow Agent [Incorporated by reference to Exhibit
           10(x)(D) to the Registrant's Form 10-K filed with the
           Commission on March 25, 1993 (File No. 0-13433)].

10(w)(E)   Marketing Agreement, dated as of January 5, 1993,
           between Miltope Business Products, Inc. and
           Mag-Tek, Inc. [Incorporated by reference to Exhibit
           10(x)(E) to the Registrant's Form 10-K filed with the
           Commission on March 25, 1993 (File No. 0-13433)].

10(w)(F)   Noncompetition Agreement, dated as of January 5,
           1993, between Miltope Business Products, Inc. and
           Mag-Tek, Inc. [Incorporated by reference to Exhibit
           10(x)(F) to the Registrant's Form 10-K filed with the
           Commission on March 25, 1993 (File No. 0-13433)].

*10(x)     Stock Option Agreement dated June 25, 1999,
           between the Registrant and Tom B. Dake.
--------------
* Filed herewith
</TABLE>
<PAGE>
<TABLE>

Exhibit                                                               Page
Number     Description of Exhibit                                     Number
-------    ----------------------                                     ------
<S>        <C>                                                        <C>
10(y)      Renegotiation Agreement, dated August  23, 1996,
           between the Registrant and Mag-Tek, Inc.
           [Incorporated by reference to Exhibit      10(y) to the
           Registrant's Form 10-K filed with the Commission
           on March 26, 1997 (File No. 0-13433)].

18         Letter regarding change in accounting principle, dated May
           13, 1994 [Incorporated by reference to Exhibit 18 to
           the Registrant's Form 10-Q filed with the
           Commission on May 16, 1994 (File No. 0-13433)].

*21        Subsidiaries of the Registrant.

*23        Independent Auditors' Consent, dated March 29, 2000,
           to the incorporation by reference in Registration
           Statements No. 2-97977, No. 33-8245,
           No. 33-78744 and No. 33-65233 on Form S-8 and
           No. 33-33752 on Form S-3 of their report dated
           February 18, 2000 (March 28,2000 as to the waiver
           Letter described in Note 5) appearing in this Annual
           Report on Form 10-K for the year ended
           December 31, 1999.

*27        Financial Data Schedule

-----------
* Filed herewith

</TABLE>
<PAGE>



                  THIS PAGE INTENTIONALLY LEFT BLANK


<PAGE>

                  MILTOPE GROUP INC. AND SUBSIDIARIES
                  -----------------------------------

        TABLE OF CONTENTS TO CONSOLIDATED FINANCIAL STATEMENTS
        ------------------------------------------------------



<TABLE>
                                                          Page
                                                         ------
<S>                                                      <C>
Independent Auditors' Report                              F-2

Consolidated Balance Sheets as of December 31, 1998
  and 1999                                                F-3

Consolidated Statements of Operations for the
  Years Ended December 31, 1997, 1998 and 1999            F-4

Consolidated Statements of Stockholders' Equity for the
  Years Ended December 31, 1997, 1998 and 1999            F-5

Consolidated Statements of Cash Flows for the
  Years Ended December 31, 1997, 1998 and 1999            F-6

Notes to Consolidated Financial Statements                F-7


</TABLE>

All supplemental schedules are omitted because they are not applicable
or the required information is shown in the consolidated financial
statements or notes thereto.

                                     F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT
----------------------------
To the Stockholders and Board of Directors
 of Miltope Group Inc.:

We have audited the accompanying consolidated balance sheets of Miltope
Group Inc. and its subsidiaries as of December 31, 1998 and 1999, and
the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the three years in the period ended
December 31, 1999.  These financial statements are the responsibility
of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of Miltope Group Inc.
and its subsidiaries at December 31, 1998 and 1999, and the results of
their operations and their cash flows for each of the three years in
the period ended December 31, 1999 in conformity with generally
accepted accounting principles.


/s/ Deloitte & Touche LLP
-------------------------
Birmingham, Alabama
February 18, 2000 (March 28, 2000 as to the waiver
 letter described in Note 5)

                                     F-2
<PAGE>

MILTOPE GROUP INC. AND SUBSIDIARIES
-----------------------------------

<TABLE>
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1999
-----------------------------------------------------------------------------
ASSETS                                                   1998          1999
------                                                -----------   -----------
<S>                                                   <C>           <C>
CURRENT ASSETS:
 Cash and cash equivalents                            $    57,000   $ 1,874,000
 Accounts receivable                                    6,792,000     3,540,000
 Inventories                                           17,867,000    13,949,000
 Deferred income taxes                                    829,000       535,000
 Other current assets                                     278,000       497,000
                                                      -----------   -----------
       Total current assets                            25,823,000    20,395,000
                                                      ===========   ===========
PROPERTY AND EQUIPMENT - at cost:
 Machinery and equipment                                7,689,000     8,016,000
 Furniture and fixtures                                 1,594,000     1,575,000
 Land, buildings and improvements                       8,101,000     8,138,000
                                                      -----------   -----------
       Total property and equipment                    17,384,000    17,729,000
 Less accumulated depreciation and amortization         8,549,000     9,731,000
                                                      -----------   -----------
       Property and equipment - net                     8,835,000     7,998,000
                                                      -----------   -----------
DEFERRED INCOME TAXES                                   3,335,000     3,629,000
OTHER ASSETS                                              945,000     1,330,000
                                                      -----------   -----------
TOTAL                                                 $38,938,000   $33,352,000
                                                      ===========   ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable                                     $ 4,462,000   $ 2,595,000
 Accrued expenses                                       1,012,000     2,092,000
 Current maturities of long-term debt                   2,310,000     2,220,000
                                                      -----------   -----------
       Total current liabilities                        7,784,000     6,907,000

LONG-TERM DEBT                                         13,035,000    13,522,000

OTHER LIABILITIES                                               -       405,000
                                                      -----------   -----------
       Total liabilities                               20,819,000    20,834,000
                                                      -----------   -----------
COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS' EQUITY:
 Common stock - $.01 par value; 20,000,000 shares
  authorized; 6,811,112 shares outstanding
  at December 31, 1998 and 1999                            68,000        68,000
 Capital-in-excess of par value                        20,264,000    20,264,000
 Retained earnings                                     12,033,000     6,432,000
                                                      -----------   -----------
                                                       32,365,000    26,764,000
 Less treasury stock, at cost                          14,246,000    14,246,000
                                                      -----------   -----------
       Total stockholders' equity                      18,119,000    12,518,000
                                                      -----------   -----------
TOTAL                                                 $38,938,000   $33,352,000
                                                      ===========   ===========
</TABLE>
See notes to consolidated financial statements.

                                     F-3
<PAGE>
MILTOPE GROUP INC. AND SUBSIDIARIES
-----------------------------------

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999
-------------------------------------------------------------------------------
<TABLE>

                                            1997              1998            1999
                                        -----------        -----------     -----------
<S>                                     <C>                <C>             <C>
NET SALES                               $40,372,000        $26,444,000     $30,233,000
                                        -----------        -----------     -----------
COSTS AND EXPENSES:
 Cost of sales                           30,569,000         21,523,000      26,168,000
 Selling, general and administrative      6,137,000          6,532,000       7,237,000
 Engineering, research and development    1,705,000          1,884,000       1,245,000
                                        -----------        -----------     -----------
       Total                             38,411,000         29,939,000      34,650,000
                                        -----------        -----------     -----------
INCOME (LOSS) FROM OPERATIONS             1,961,000         (3,495,000)     (4,417,000)

INTEREST EXPENSE - net                      750,000            802,000       1,184,000
                                        -----------        -----------     -----------
INCOME (LOSS) BEFORE INCOME TAXES         1,211,000         (4,297,000)     (5,601,000)

INCOME TAX BENEFIT                       (2,060,000)        (1,276,000)              -
                                        -----------       ------------     -----------
NET INCOME (LOSS)                       $ 3,271,000       $ (3,021,000)    $(5,601,000)
                                        ===========       ============     ===========
BASIC AND DILUTED NET
  INCOME (LOSS) PER SHARE               $       .56       $       (.51)    $      (.95)
                                        ===========       ============     ===========
WEIGHTED AVERAGE SHARES
  OUTSTANDING                             5,870,083          5,871,523       5,871,523
                                        ===========       ============     ===========
</TABLE>
See notes to consolidated financial statements.

                                     F-4
<PAGE>
MILTOPE GROUP INC. AND SUBSIDIARIES
-----------------------------------
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999
---------------------------------------------------------------------------------------------------------


                                 Common Stock         Capital-in-
                                            Par        Excess of      Retained       Treasury Stock
                                Shares     Value       Par Value      Earnings     Shares        Cost
                              ---------   --------   ------------   ------------   -------   ------------
<S>                           <C>         <C>        <C>            <C>            <C>       <C>
Balance, January 1, 1997      6,806,737   $ 68,000   $ 20,253,000   $ 11,783,000   939,589   $ 14,246,000

Exercise of stock options         4,375          -         11,000              -         -              -

Net income                            -          -              -      3,271,000         -              -
                              ---------   --------   ------------   ------------   -------   ------------
Balance, December 31, 1997    6,811,112     68,000     20,264,000     15,054,000   939,589     14,246,000

Net loss                              -          -              -     (3,021,000)        -              -
                              ---------   --------   ------------   ------------   -------   ------------
Balance, December 31, 1998    6,811,112     68,000     20,264,000     12,033,000   939,589     14,246,000

Net loss                              -          -              -     (5,601,000)        -              -
                              ---------   --------   ------------   ------------   -------   ------------
Balance, December 31, 1999    6,811,112   $ 68,000   $ 20,264,000   $  6,432,000   939,589   $ 14,246,000
                              =========   ========   ============   ============   =======   ============

</TABLE>

See notes to consolidated financial statements.

                                     F-5
<PAGE>
MILTOPE GROUP INC. AND SUBSIDIARIES
-----------------------------------
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999
------------------------------------------------------------------------------------------------------------
                                                                1997            1998            1999
OPERATING ACTIVITIES:                                       -----------     -----------      -----------
<S>                                                         <C>             <C>              <C>
 Net income (loss)                                          $ 3,271,000     $(3,021,000)     $(5,601,000)
 Adjustments to reconcile net income (loss) to net
 cash provided by (used in) operating activities:
  Depreciation and amortization                               1,670,000       1,506,000        1,230,000
  Provision for slow-moving and obsolete inventories            485,000       1,050,000        1,070,000
  Provision for doubtful accounts receivable                     95,000           5,000           12,000
  Provision for asset impairment                                432,000               -          281,000
  Gain on sale of investment available for sale                (566,000)              -                -
  Gain on sale of fixed assets                                        -          (4,000)               -
  Deferred income taxes                                      (2,120,000)     (1,579,000)               -
  Change in assets and liabilities provided (used) cash:
   Accounts receivable                                          819,000       3,180,000        3,240,000
   Inventories                                               (1,497,000)     (4,214,000)       2,848,000
   Other current assets                                         (45,000)        (36,000)        (219,000)
   Other assets                                                (146,000)       (127,000)        (403,000)
   Accounts payable and accrued expenses                     (1,106,000)       (314,000)        (786,000)
   Other liabilities                                                  -               -          405,000
                                                            -----------     -----------      -----------
     Net cash provided by (used in) operating activities      1,292,000      (3,554,000)       2,077,000
                                                            -----------     -----------      -----------
INVESTING ACTIVITIES:
 Purchases of property and equipment                         (1,725,000)       (704,000)        (657,000)
 Proceeds from sale of property and equipment                         -          48,000                -
 Proceeds from sale of investment available for sale            798,000               -                -
                                                            -----------     -----------      -----------
     Net cash used in investing activities                     (927,000)       (656,000)        (657,000)
                                                            -----------     -----------      -----------
FINANCING ACTIVITIES:
 Proceeds from revolving credit loan - net                      179,000       4,090,000          704,000
 Payments of other long-term debt                              (240,000)       (266,000)        (307,000)
 Exercise of stock options                                       11,000               -                -
                                                            -----------     -----------      -----------
     Net cash provided by (used in) financing activities        (50,000)      3,824,000          397,000
                                                            -----------     -----------      -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS            315,000        (386,000)       1,817,000
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                    128,000         443,000           57,000
                                                            -----------     -----------      -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                      $   443,000     $    57,000      $ 1,874,000
                                                            ===========     ===========      ===========
SUPPLEMENTAL DISCLOSURE:
 Cash payments made for:
  Income taxes                                              $    76,000     $    67,000      $         -
                                                            ===========     ===========      ===========
  Interest                                                  $   821,000     $   789,000      $ 1,161,000
                                                            ===========     ===========      ===========
</TABLE>

See notes to consolidated financial statements.

                                     F-6

<PAGE>
MILTOPE GROUP INC. AND SUBSIDIARIES
-----------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999
-----------------------------------------------------------------------
1.      SUMMARY OF SIGNIFICANT ACCOUNTING
        AND FINANCIAL REPORTING POLICIES
        ---------------------------------
   Principles  of Consolidation - The consolidated financial statements
   include  the  accounts  of Miltope Group Inc. and  its  wholly-owned
   subsidiaries,  Miltope  Corporation  ("Miltope"),  Miltope  Business
   Products,   Inc.  ("MBP")  and  Miltope's  wholly-owned  subsidiary,
   International  Miltope, Ltd., a Foreign Sales  Corporation  ("FSC").
   These  companies are collectively referred to as the "Company".  All
   material   intercompany  transactions  have  been  eliminated.   The
   Company   is   a   majority-owned  subsidiary  of  Great   Universal
   Incorporated.

   Nature  of  Operations  -  The  Company  through  its  two  industry
   segments,  military/rugged  and  commercial,  is  engaged   in   the
   development  of  computers and peripheral equipment for  rugged  and
   other   specialized   applications  for  military   and   commercial
   customers, domestic and international.

   Accounting   Estimates   -  The  Company's  consolidated   financial
   statements  are  prepared  in  conformity  with  generally  accepted
   accounting  principles which requires management to  make  estimates
   and  assumptions  that  affect the reported amounts  of  assets  and
   liabilities  and disclosure of contingent assets and liabilities  at
   the  date  of the consolidated financial statements and the reported
   amounts  of  revenues  and  expenses during  the  reporting  period.
   Actual results could differ from those estimates.

   Fair  Value  of  Financial Instruments - The carrying value  of  the
   Company's   accounts  receivable,  accounts  payable   and   accrued
   expenses  approximates fair value because of the short-term maturity
   of  those  instruments.  Additional information regarding  the  fair
   value of other financial instruments is disclosed in Note 5.

   Cash  Equivalents   -  The   Company   considers   all  highly-liquid
   investments with original maturitie s of three months or less  to  be
   cash equivalents.

   Investment  Available for Sale - Gains and losses on the disposition
   of  investments available for sale are computed under  the  specific
   identification method.

   Depreciation   and   Amortization  -  Depreciation   of   machinery,
   equipment,  furniture and fixtures is computed on the  straight-line
   method  over  the  estimated  useful lives  of  the  related  assets
   ranging  from  3  to  10  years.   Depreciation  of  buildings   and
   improvements  is  computed  on  the  straight-line  method  over  an
   estimated  useful  life  of  30 years.   Amortization  of  leasehold
   improvements  is  computed  on  the straight-line  method  over  the
   lesser  of  the  estimated useful life of  the  improvement  or  the
   remaining term of the lease.

   Revenue  Recognition - Multi-year contracts are accounted for  under
   the  percentage-of-completion method of accounting.  The  amount  of
   revenue  recognized is the portion of total contract price that  the
   cost expended to date bears to the anticipated total cost, based  on
   current  estimates  of  costs  at completion.   The  contract  price
   includes  all  amounts currently under contract, including  approved

                                     F-7
<PAGE>
   contract  changes  and claims that can be reasonably  estimated  and
   realization   is  probable.   Estimated  losses  on  contracts   are
   recorded  in  the period they are identified.  Revisions  in  profit
   estimates  are  reflected  in the period in  which  the  facts  that
   require  revision are known.  Sales and cost of sales for all  other
   products are recognized as deliveries are made.

   Engineering,  Research and Development - Engineering,  research  and
   development   expenditures  not  made  in  connection   with   sales
   contracts are charged to expense as incurred.

   Income  Taxes  -  The  Company recognizes deferred  tax  assets  and
   liabilities for the expected future tax consequences of events  that
   have   been   included  in  the  Company's  consolidated   financial
   statements or tax returns.  Deferred tax assets and liabilities  are
   determined   based   on  the  differences  between   the   financial
   accounting  and  tax bases of assets and liabilities  using  enacted
   tax  rates  in  effect  for the year in which  the  differences  are
   expected to reverse.

   Net  Income (Loss) Per Share - Basic and diluted earnings per  share
   are  computed by dividing net income (loss) by the weighted  average
   common  shares  outstanding (basic EPS) or weighted  average  common
   shares  outstanding assuming dilution (diluted EPS).  Based on  this
   computation,  there is no difference between basic and  diluted  net
   income  (loss)  per  share.  Options that could  potentially  dilute
   basic  net income per share in the future were not included  in  the
   computation of diluted net income per share because to do  so  would
   have   been  anti-dilutive.  Anti-dilutive  options  were   285,717,
   297,245 and 312,858 for 1997, 1998 and 1999, respectively.

   Recent  Accounting  Pronouncements - In  June  1998,  the  Financial
   Accounting    Standards  Board,  ("FASB"),   issued   Statement   of
   Financial   Accounting  Standard  ("SFAS")   133,   Accounting   for
   Derivative Instruments and Hedging Activities. It requires  that  an
   entity  recognize  all  derivative financial instruments  (including
   derivatives  embedded in other transactions)  as  either  assets  or
   liabilities  in  the  statement of financial  position  and  measure
   those  instruments  at  fair  value.  SFAS  133  ,  as  amended,  is
   required  to  be  adopted for years beginning after June  15,  2000.
   The  Company  is  currently evaluating SFAS  133  and  has  not  yet
   determined  its  impact  on  the  Company's  consolidated  financial
   statements.

   Reclassifications   -  Certain  prior  years   amounts   have   been
   reclassified to conform with the 1999 presentation.

                                     F-8

<PAGE>
2. ACCOUNTS RECEIVABLE
   -------------------
        Accounts receivable consist of the following:
<TABLE>
                                                       1998            1999
                                                    -----------     -----------
        <S>                                         <C>             <C>
        Amounts receivable from the
         United States Government                   $ 2,849,000     $   641,000
        Amounts receivable from other customers       3,974,000       2,944,000
        Allowance for doubtful accounts                 (31,000)        (45,000)
                                                    -----------     -----------
             Total                                  $ 6,792,000     $ 3,540,000
                                                    ===========     ===========
</TABLE>

3. INVENTORIES
   -----------
      Inventories consist of the following:
<TABLE>
                                                       1998            1999
                                                    -----------     -----------
        <S>                                         <C>             <C>
        Purchased parts and subassemblies           $12,874,000     $ 9,659,000
        Work-in-process                               4,993,000       4,290,000
                                                    -----------     -----------
             Total                                  $17,867,000     $13,949,000
                                                    ===========     ===========
</TABLE>

         Inventories, other than inventoried costs related to long-term
   contracts,  are  stated at the lower of cost (principally  first-in,
   first-out)  or  market.   Inventoried  costs  related  to  long-term
   contracts  (included in purchased parts and subassemblies and  work-
   in-progress)  are stated at actual costs, including engineering  and
   manufacturing  overheads,  contract  specific  tooling,  and   other
   related  non-recurring costs incurred to date,  reduced  by  amounts
   identified  with revenue recognized on units delivered  or  progress
   completed.   Inventoried  costs related to long-term  contracts  are
   reduced  by  charging any amounts in excess of estimated  realizable
   value  to  cost  of sales. Inventories include amounts  relating  to
   contracts  and  programs having production cycles  longer  than  one
   year  and  a portion thereof will not be realized within  one  year.
   Inventories include an allowance for slow-moving and obsolete  items
   of  $1,242,000, $1,383,000 and $665,000 at December 31,  1997,  1998
   and 1999, respectively.

4. OTHER ASSETS
   ------------
   The  Company  owned an investment in M-Systems Flash Disk  Pioneers,
   Ltd.  ("M-Systems"), a company based in Israel.   During  1997,  the
   Company  sold  153,242  shares  of M-Systems  stock  at  a  gain  of
   $566,000.

   In  1993,  the Company acquired certain assets of Mag-Tek,  Inc.,  a
   manufacturer   of  magnetic  stripe  products.   The   consideration
   included   aggregate   discounted  minimum   royalty   payments   of
   approximately $1,100,000.  In August 1996, the Company and  Mag-Tek,
   Inc.  entered  into  an agreement to terminate the  minimum  royalty
   payment  provisions  of  the related asset  purchase  contract.   In
   connection  with  this agreement, the remaining  long-term  debt  of
   $425,000 was written off and intangible assets were reduced  by  the
   same  amount.  In 1997, the Company recognized a $432,000 impairment
   in  the  value  of  all  remaining Mag-Tek,  Inc.  assets  including
   inventory, equipment and intangible assets.

                                     F-9
<PAGE>

5.      LONG-TERM DEBT
        --------------
<TABLE>
   Long-term debt consists of the following:
                                                   1998             1999
                                              ------------     ------------
      <S>                                     <C>              <C>
      Term loan                               $ 10,271,000     $ 10,975,000
      Industrial Development Authority
        Revenue Bonds                            5,074,000        4,767,000
                                              ------------     ------------
        Total                                   15,345,000       15,742,000
        Less current maturities                  2,310,000        2,220,000
                                              ------------     ------------
        Total                                 $ 13,035,000     $ 13,522,000
                                              ============     ============
</TABLE>

   The  Company's  $15,000,000  revolving  credit  agreement  with  its
   primary lender matured on    May  31,  1999 and was converted into a
   term loan payable in twelve equal  quarterly installments commencing
   August  31,  1999.   The Company  is  currently  in negotiation with
   several  lenders  for  a  replacement  line of  credit.  The balance
   remaining  on  the  revolving  agreement  at  May  31,1999  that was
   subsequently   converted   into  a   term  loan   was  approximately
   $12,000,000. The $12,000,000 term loan,  at  the  Company's  option,
   bears interest at the  bank's  reference  rate  (7.75% and 8.75%  at
   December 31, 1998 and 1999, respectively), or at a rate equaling the
   London Inter Bank Offered Rate (5.31% and 6.42% at December 31, 1998
   and 1999, respectively) plus 2.0%. The Company's accounts receivable,
   contract rights and inventories  are  pledged  as  collateral to the
   agreement.

   Principal payments for the Industrial Development Authority  Revenue
   Bonds  (the  "Bonds")  range  between  $345,000  and  $670,000  from
   December  2000  through December 2009.  Repayment of  the  Bonds  is
   secured  by  an  irrevocable letter of credit in  an  amount  up  to
   $5,700,000  that in turn is secured by a mortgage on the  Montgomery
   and  Troy,  Alabama  facilities  and  a  security  interest  in  the
   equipment  located  at such facilities. Letter of credit  commitment
   fees   paid   during  1998  and  1999  were  $64,000  and   $60,000,
   respectively.  Property  and equipment  with  a  carrying  value  of
   $7,281,000   and   $6,584,000  at  December  31,  1998   and   1999,
   respectively,  are  pledged as collateral.  The agreement  with  the
   Industrial  Development  Authority  bears  interest  at  a  variable
   market  rate  that ranged from 4.97% to 6.57% during 1999,  and  was
   5.62% and 6.25% at December 31, 1998 and 1999, respectively.

   The  credit  agreements referenced above include various  provisions
   requiring   the   maintenance  of  certain  financial   ratios   and
   limitations  on  (i) transactions with affiliates, (ii)  other  debt
   and   guarantees,  (iii)  investment  in,  and  advances  to,  other
   entities,  and  (iv) payment of dividends. The Company's  bank  loan
   agreement permits the Company to pay annual dividends of up  to  50%
   of  the  prior year's net income. At December 31, 1999, the  Company
   was  in  default of certain financial ratio requirements related  to
   minimum  net  worth and cash flows measured annually  and  to  total
   liabilities and tangible net worth measured quarterly. In  addition,
   the Company is in arrears on its November 1999 principal payment  of
   $975,000.  The Company obtained a letter dated March 28, 2000,  from
   the  primary lender waiving all violations as of December  31, 1999;
   revising the ratio requirement for total liabilities to tangible net
   worth for the measurement dates in 2000;  and revising the principal
   payment requirements for 2000 to a total of $1,875,000.

   The  aggregate  maturities of current and long-term debt  subsequent
   to December 31, 1999, reflecting  the revision by the primary lender
   are presented below.

                                     F-10
<PAGE>
<TABLE>
                     Year Ending December 31,
                     ------------------------
                           <S>                    <C>
                              2000                $ 2,220,000
                              2001                  3,880,000
                              2002                  4,420,000
                              2003                  2,055,000
                              2004                    490,000
                           Thereafter               2,677,000
                                                  -----------
                              Total               $15,742,000
                                                  ===========
</TABLE>

   The fair value of long-term debt approximated the carrying value as
   of December 31, 1998 and 1999, as all instruments are at variable
   interest rates.

6.   INCOME TAXES
     ------------
   The provision (benefit) for income taxes consists of the following:
<TABLE>
                       1997           1998             1999
                   ------------    -----------      -----------
     <S>           <C>             <C>              <C>
     Current:
        Federal    $     9,000     $   303,000                -
        State           51,000              -                 -
     Deferred       (2,120,000)     (1,579,000)               -
                   -----------     -----------      -----------
     Total         $(2,060,000)    $(1,276,000)     $         -
                   ===========     ===========      ===========
</TABLE>

     The deferred tax assets and liabilities at December 31, 1998 and
     1999 are comprised of the following:
<TABLE>
                                                  1998
                                 -----------------------------------------
                                                 Deferred
                                   Deferred        Tax
                                  Tax Assets    Liabilities        Total
                                 -----------    -----------     ----------
   <S>                           <C>            <C>             <C>
   Current:
     Inventories                 $   722,000     $        -     $  722,000
     Non-deductible accruals         107,000              -        107,000
                                 -----------     ----------     ----------
     Total current                   829,000              -        829,000
                                 -----------     ----------     ----------
   Long-term:
     Intangible assets                 3,000              -          3,000
     Net operating loss
       carryforward                3,422,000              -      3,422,000
     Alternative minimum tax
       credit carryforward           240,000              -        240,000
     Accelerated depreciation              -       (330,000)      (330,000)
                                 -----------     ----------     ----------
     Total long-term               3,665,000       (330,000)     3,335,000
                                 -----------     ----------     ----------
     Net                         $ 4,494,000     $ (330,000)    $4,164,000
                                 ===========     ==========     ==========
</TABLE>
                                     F-11
<PAGE>
<TABLE>
                                                  1999
                                 -----------------------------------------
                                                 Deferred
                                   Deferred        Tax
                                  Tax Assets    Liabilities        Total
                                 -----------    -----------     ----------
   <S>                           <C>            <C>             <C>
   Current :
     Inventories                 $   729,000     $        -     $  729,000
         Non-deductible accrual      109,000              -        109,000
         Prepaid expenses                  -        (19,000)       (19,000)
                                 -----------     ----------     ----------
        Total current                838,000        (19,000)       819,000
      Valuation allowance           (284,000)             -       (284,000)
                                 -----------     ----------     ----------
     Net current                     554,000        (19,000)       535,000
                                 -----------     ----------     ----------
     Long-term:
     Intangible assets                 2,000                         2,000
     Net operating loss
       carryforward                4,754,000                     4,754,000
     Government obligations          611,000                       611,000
     Alternative minimum tax
       credit carryforward           240,000                       240,000
        Accelerated depreciation           -       (100,000)      (100,000)
                                 -----------     ----------     ----------
        Total long-term            5,607,000       (100,000)     5,507,000
     Valuation allowance          (1,878,000)                   (1,878,000)
                                 -----------     ----------     ----------
     Net long-term                 3,729,000       (100,000)     3,629,000
                                 -----------     ----------     ----------
     Net                         $ 4,283,000    $  (119,000)   $ 4,164,000
                                 ===========    ===========    ===========
</TABLE>

   At  December 31, 1999, the Company established a valuation allowance
   of   $2,162,000  against  the  net  deferred  tax  assets.  Although
   realization  is not assured , management believes it is more  likely
   than  not  that  the recorded deferred tax asset, net  of  valuation
   allowance  provided, will be realized. The valuation  allowance  can
   be  adjusted in future periods as the probability of realization  of
   the deferred tax asset changes.

   The  Company has net operating loss carryforwards for federal income
   tax purposes at
   December  31,  1999  of  approximately $13,360,000  that  expire  as
   follows: $5,880,000 in 2009, $1,290,000 in 2010, $2,460,000 in  2018
   and  $3,730,000 in 2019. The Company also has approximately $240,000
   of  alternative minimum tax credit carryforwards available to offset
   future federal income taxes.


                                     F-12
<PAGE>

   The  Company's  benefit  for income taxes differs  from  the  amount
   computed  using the federal statutory tax rate as a  result  of  the
   following items:
<TABLE>
                                           1997             1998              1999
                                       ------------     ------------      ------------
   <S>                                 <C>             <C>               <C>
   Amount at federal statutory rate    $    412,000     $ (1,461,000)     $ (1,904,000)
   Increases (reductions) due to:
     State taxes - net of federal
       income tax benefit                    38,000         (119,000)         (261,000)
     Change in valuation allowance       (2,524,000)               -         2,162,000
     Adjustment to estimated income
       tax accruals                               -          207,000                 -
     Other                                   14,000           97,000             3,000
                                       ------------     ------------      ------------
   Total                               $ (2,060,000)    $ (1,276,000)     $          -
                                       ============     ============      ============

</TABLE>

7. EMPLOYEE BENEFIT PLANS
   ----------------------
   Savings  Plan  - The Company has a profit-sharing/401(k)  retirement
   plan   (the   "Plan")  which  covers  substantially  all  employees.
   Company  contributions are discretionary and are determined annually
   based  on  profits.  The Plan allows for an employee pay  conversion
   feature whereby each eligible employee may contribute up to  15%  of
   their  total  pay.  The  Company's provision pursuant  to  the  Plan
   amounted  to $91,000 in 1997. The Company made no contributions  for
   1998 or 1999.

   Performance  Based Bonus Plan - The Company has a  bonus  plan  that
   provides  for additional compensation to certain executive officers.
   The bonus is payable upon the attainment of certain
   financial  targets that are approved by the Board of Directors,  and
   is  calculated  as  a specified percentage of the officer's  current
   base  salary.  The Company's bonus provision for 1997 was  $132,000.
   No bonus provision was made for 1998 or 1999.

                                     F-13
<PAGE>

8. STOCK OPTIONS
   -------------
   The   Company  has  an  Incentive  Stock  Option  Plan  ("ISO"),   a
   Management  Stock  Option  Plan ("MSO") and  a  Key  Employee  Stock
   Option  Plan ("KSO").  The ISO, MSO and KSO Plans were cancelled  in
   1994  and 1995.  In addition, on April 11, 1995, the Company adopted
   the  1995 Stock Option and Performance Award Plan ("SOPA") which was
   approved  by the Company's stockholders on June 5, 1995.  Under  the
   ISO,  MSO, KSO and SOPA plans, 376,780, 187,700, 150,000 and 500,000
   shares  of  common stock, respectively, were reserved  for  issuance
   under  options to be granted for periods not to exceed ten years  at
   an  exercise price not less than the fair market value of the shares
   at  the date of grant, then are exercisable at a cumulative rate  of
   25%  in  each  of the first four years subsequent to the  applicable
   grant.

   Under  separate plans,  certain  of the Company's outside  directors
   have  been  granted options to purchase shares of  common  stock  at
   exercise  prices of 85% of the fair market value of such  shares  at
   date of grant.  Such options are exercisable at any time during  the
   term  of ten years as long as the recipient is a director or  within
   one year after termination of service.

   A  summary  of the Company's stock options as of December 31,  1997,
   1998  and  1999 and changes during the year ended on those dates  is
   presented below:

<TABLE>
                                    1997                               1998                                1999
                        --------------------------------    --------------------------------    ---------------------------------
                                               Weighted                           Weighted                              Weighted
                                    Weighted    Average                Weighted    Average                 Weighted      Average
                         Options     Average   Fair Value    Options    Average    Fair Value    Options    Average     Fair Value
                          for       Exercise   at Grant       for      Exercise    at Grant       for      Exercise     at Grant
                         Shares       Price       Date       Shares      Price      Date         Shares      Price         Date
                        -------    ---------  ----------    -------    --------   ----------    -------    --------    ----------

<S>                     <C>        <C>        <C>           <C>        <C>        <C>           <C>         <C>        <C>
 Outstanding at
  beginning of year     283,479      $3.57                  285,717     $3.56                   297,245      $3.14

 Granted
    Price = fair value   18,600      $3.71      $2.60        83,000     $2.93       $1.99       161,500      $1.41        $0.99

    Price < fair value    9,118      $3.29      $2.82        23,528     $1.28       $1.05


  Exercised              (4,375)     $2.48

  Canceled              (21,105)     $3.94                 (95,000)     $3.73                 (145, 887)     $3.24
                        -------                            -------                            ---------

  Outstanding at end
  of year               285,717      $3.56                 297,245      $3.14                   312,858      $2.20
                        =======                            =======                              =======

  Options exercisable
  at December 31:
  Director options       74,117      $3.44                  97,645      $2.92                    46,758      $2.25

  Employee options      105,500      $3.93                  77,150      $3.61                    64,050      $3.61
                        -------                            -------                              -------
  Total                 179,617      $3.73                 174,795      $3.22                   110,808      $3.04
                        =======                            =======                              =======

</TABLE>

                                     F-14
<PAGE>

  The  following  table  summarizes  information  about  stock  options
  outstanding at December 31, 1999:

<TABLE>
                                             Options Outstanding                            Options Exercisable
                              ---------------------------------------------------     ------------------------------
                                                  Weighted
                                                  Average            Weighted                           Weighted
                                Number           Remaining            Average           Number           Average
                              Outstanding     Contractual Life     Exercise Price     Outstanding     Exercies Price
                              ---------------------------------------------------     ------------------------------
  <S>                           <C>                 <C>               <C>               <C>               <C>
  Range of Exercise Prices
  $1.25    $4.46                295,858             8.36              $ 2.01             93,808           $ 2.59
  $5.50    $5.50                 17,000             3.72              $ 5.50             17,000           $ 5.50
                                -------                                                 -------
                                312,858             8.11              $  2.20           110,808           $ 3.04
                                =======                                                 =======
</TABLE>

  The  Company  applied  Accounting Principles Board  Opinion  No.  25,
  Accounting    for   Stock   Issued   to   Employees,   and    related
  interpretations  in accounting for its employee and  director  plans.
  Compensation  expense related to these plans under  this  methodology
  is  insignificant.   Had compensation cost been determined  based  on
  the  fair  value  at  the  grant date for awards  under  these  plans
  consistent  with  the  methodology prescribed  under  SFAS  No.  123,
  Accounting  for  Stock-Based Compensation (SFAS 123),  the  Company's
  net  income (loss) and basic and diluted net income (loss) per  share
  would approximate the pro forma amounts below.



<TABLE>
                                                     1997                 1998             1999
                                                  -----------         ------------     ------------
   <S>                                            <C>                 <C>              <C>
   Net income (loss):
    As reported                                   $ 3,271,000         $ (3,021,000)    $ (5,601,000)
    Pro forma                                     $ 3,173,000         $ (3,102,000)    $ (5,666,000)


  Basic and diluted net income (loss) per share:
   As reported                                    $       0.56        $      (0.51)    $       (.95)
   Pro forma                                      $       0.54        $      (0.53)    $       (.97)

</TABLE>

  Because  the  SFAS 123 method of accounting has not been  applied  to
  options  granted  prior to January 1, 1995, the resulting  pro  forma
  compensation  cost may not be representative of that to  be  expected
  in future years.

  For  purposes  of SFAS 123, the weighted average fair  value  of  the
  options  granted during 1997, 1998 and 1999 is estimated on the  date
  of  grant  using  the  Black-Scholes option-pricing  model  with  the
  following assumptions:
<TABLE>
                                  1997         1998        1999
                                --------     --------    --------
   <S>                          <C>          <C>         <C>
   Expected life (years)          10.0         10.0        10.0
   Risk-free interest rate        5.74%        5.87%       5.62%
   Dividend rate                     0%           0%          0%
   Expected volatility           52.30%       49.96%      57.18%

</TABLE>

                                     F-15
<PAGE>

9. COMMITMENTS AND CONTINGENCIES
   -----------------------------
   Leasing  Arrangements - The Company is obligated under several  non-
   cancelable  operating  leases covering land, office  facilities  and
   equipment.   The corporate headquarters resides upon  land  under  a
   lease  which  provides  for minimum rentals  through  2086.  Minimum
   rentals are subject to increases based on the annual consumer  price
   index.   Future  minimum lease payments under all  operating  leases
   with  an initial or remaining non-cancelable lease term of more than
   one year at December 31, 1999 are as follows:

<TABLE>
               Year Ending December 31,
               ------------------------
               <S>                      <C>
                       2000             $   297,000
                       2001                 219,000
                       2002                 200,000
                       2003                 163,000
                       2004                  57,000
                    Thereafter            2,673,000
                                        -----------
                      Total             $ 3,609,000
                                        ===========
</TABLE>

   Aggregate   rental  expense  under  operating  leases  amounted   to
   $237,000,   $282,000   and  $353,000  in  1997,   1998   and   1999,
   respectively.

   The  Company  leases  office  space at its  Hope  Hull  facility  to
   tenants  on  a  year-to-year basis, as well as  under  a  multi-year
   lease  with  entities affiliated through certain  common  ownership,
   where  future  minimum lease receipts at December 31,  1999  are  as
   follows:
<TABLE>
               Year Ending December 31,
               ------------------------
               <S>                      <C>
                       2000             $ 160,000
                       2001               100,000
                       2002               100,000
                                        ---------
                      Total             $ 360,000
                                        =========
</TABLE>

   Aggregate rental income under operating leases amounted to  $219,000
   $162,000 and $143,000 in 1997,  1998  and 1999, respectively. Rental
   income  from related parties was $118,000 in 1997, $149,000  in 1998
   and $143,000 in 1999.

   Litigation  - The Company, from time to time, is a party to  pending
   or  threatened  legal proceedings and arbitration  in  the  ordinary
   course  of  business.   Based upon information currently  available,
   and  in  light of legal and other defenses available to the Company,
   management  does  not  consider liability  from  any  threatened  or
   pending litigation to be material to the financial statements.

   Claims   -  From  time  to  time  the Company  has  certain  of  its
   contracts  that may be subject to final negotiation or  modification
   with the customer in the ordinary course of business.  Although  the
   ultimate  outcome of these negotiations or modifications is  unknown
   at  December  31,  1999, the Company believes that additional  costs
   evolving from these negotiations will not be material.

                                     F-16
<PAGE>
10.  SEGMENT INFORMATION
     -------------------
   The  Company's reportable segments are presented in accordance  with
   SFAS  131,  Disclosure about Segments of an Enterprise  and  Related
   Information.    SFAS   131  established  standards   for   reporting
   information  about  segments  in  annual  financial  statements  and
   requires  selected  information about segments in interim  financial
   reports  issued to stockholders.  It also established standards  for
   related  disclosures  about products and  services,  and  geographic
   areas.   Segments  are defined as components of an enterprise  about
   which  separate financial information is available that is evaluated
   regularly by the chief operating decision-maker in deciding  how  to
   allocate resources and in assessing performance.

   Under   this   standard,  the  Company's  reportable  segments   are
   organized  around  its  two  main products  and  services  segments,
   Military/Rugged   and   Commercial.   Through  its   military/rugged
   segment,  the  Company  is  engaged in the design,  manufacture  and
   testing  of computer and computer peripheral equipment for  military
   and other specialized applications requiring reliable operations  in
   severe  land,  sea  and airborne environments.  These  products  are
   generally sold by the Company's business  development group  through
   the   federal  government  bid  process.  The  Company's  commercial
   segment  designs,  develops,  manufactures  and  markets  commercial
   computer    related    products   primarily   for    transportation,
   telecommunications   and   in-field  maintenance   markets.    These
   products  are  sold  through  an established  network  of  marketing
   representatives and Company employed sales people to  a  broad  base
   of  customers  both  international  and  domestic.   The  accounting
   policies  of  the  segments are the same as those described  in  the
   summary   of   significant  accounting  policies.    The   Company's
   determination  of segment operating profit (loss) does  not  reflect
   other income (expense) or income taxes.
<TABLE>
                                                                                             General
    1997                                Military/Rugged     Commercial     Eliminations     Corporate     Consolidated
    -----                               ---------------    ------------    ------------    ------------   ------------
    <S>                                  <C>               <C>             <C>             <C>            <C>
    Net sales from external customers    $ 20,853,000      $ 19,519,000    $          -                   $ 40,372,000
                                         ============      ============    ============                   ============
    Segment operating profit             $    412,000      $  1,549,000    $          -                   $  1,961,000
                                         ============      ============    ============                   ============
    Identifiable assets                  $ 22,037,000      $ 12,301,000    $          -    $ 4,111,000    $ 38,449,000
                                         ============      ============    ============    ===========    ============
    Capital expenditures                 $  8  91,000      $    834,000                                   $  1,725,000
                                         ============      ============                                   ============
    Depreciation and amortization        $  1,052,000      $    618,000                                   $  1,670,000
                                         ============      ============                                   ============
                                                                                             General
   1998                                 Military/Rugged     Commercial     Eliminations     Corporate     Consolidated
   ------                               ---------------    ------------    ------------    ------------   ------------
   Net sales from external customers     $ 14,768,000      $ 11,676,000    $          -                   $ 26,444,000
                                         ============      ============    ============                   ============
   Segment operating loss                $ (3,280,000)     $   (215,000)   $          -                   $ (3,495,000)
                                         ============      ============    ============                   ============
   Identifiable assets                   $ 25,184,000      $  8,311,000    $          -    $ 5,443,000    $ 38,938,000
                                         ============      ============    ============    ===========    ============
   Capital expenditures                  $    389,000      $    315,000                                   $    704,000
                                         ============      ============                                   ============
   Depreciation and amortization         $    958,000      $    548,000                                   $  1,506,000
                                         ============      ============                                   ============

</TABLE>
                                     F-17
<PAGE>
<TABLE>
                                                                                             General
   1999                                 Military/Rugged     Commercial     Eliminations     Corporate     Consolidated
   ------                               ---------------    ------------    ------------    ------------   ------------
   <S>                                   <C>               <C>             <C>             <C>            <C>
   Net sales from external customers     $ 16,185,000      $ 14,048,000    $          -                   $ 30,233,000
                                         ============      ============    ============                   ============
   Segment operating loss                $ (2,631,000)     $ (1,786,000)   $          -                   $ (4,417,000)
                                         ============      ============    ============                   ============
   Identifiable assets                   $ 19,147,000      $  6,559,000    $          -    $ 7,646,000    $ 33,352,000
                                         ============      ============    ============    ===========    ============
   Capital expenditures                  $    341,000      $    316,000                                   $    657,000
                                         ============      ============                                   ============
   Depreciation and amortization         $    790,000      $    440,000                                   $  1,230,000
                                         ============      ============                                   ============
</TABLE>

   In  1997, 1998 and 1999, foreign sales accounted for 5%, 2%  and  2%
   respectively, of the military/rugged segment net sales and  60%,  7%
   and 21%, respectively, of the commercial segment net sales.

   During  1997, 1998 and 1999, the United States Government  accounted
   for  39%,  51%  and 51% of consolidated net sales  of  the  Company,
   respectively.


11. UNAUDITED QUARTERLY FINANCIAL DATA
    ----------------------------------
   Summarized  unaudited quarterly financial data for the  years  ended
   December 31, 1998 and 1999 is as follows:
<TABLE>
                                                            Thirteen Weeks Ended
                                   ------------------------------------------------------------
                                     March 29,       June 28,      September 27,   December 31,
                                       1998            1998            1998            1998
                                   ------------    -----------     ------------    -----------
     <S>                           <C>             <C>             <C>             <C>
     Net Sales                     $ 7,444,000     $ 5,939,000     $ 5,409,000     $ 7,652,000
                                   ===========     ===========     ===========     ===========
     Gross Profit                  $ 1,938,000     $ 1,056,000     $   725,000     $ 1,202,000
                                   ===========     ===========     ===========     ===========
     Net Loss                      $  (45,000)     $(1,251,000)    $  (903,000)    $  (822,000)
                                   ===========     ===========     ===========     ===========
     Basic and diluted net loss
       per share                   $     (.01)     $     (.21)     $      (.15)    $      (.14)
                                         ====            ====             ====            ====
</TABLE>
<TABLE>
                                                            Thirteen Weeks Ended
                                   ------------------------------------------------------------
                                     March 28,       June 27,      September 26,   December 31,
                                       1999            1999            1999            1999
                                   ------------    -----------     -----------     -----------
     <S>                           <C>             <C>             <C>             <C>
     Net Sales                     $ 7,381,000     $ 7,242,000     $ 8,305,000     $ 7,305,000
                                   ===========     ===========     ===========     ===========
     Gross Profit                  $ 1,544,000     $   453,000     $ 1,234,000     $   834,000
                                   ===========     ===========     ===========     ===========
     Net Loss                      $  (294,000)    $(2,230,000)    $(1,343,000)    $(1,734,000)
                                   ===========     ===========     ===========     ===========
     Basic and diluted net loss
       per share                   $     (.05)     $     (.38)     $      (.23)    $      (.29)
                                         ====            ====             ====            ====

</TABLE>

                                     F-18
<PAGE>
12.RELATED PARTY TRANSACTIONS
   --------------------------
   During  1997,  1998,  and  1999,  the  Company  recorded  sales   of
   $10,640,000,  $2,186,000 and $2,382,000, respectively,  to  entities
   which  are affiliated through certain common ownership.  At December
   31,   1998  and  1999,  accounts  receivable  on  such  sales   were
   $1,079,000  and $1,350,000, respectively. During 1999,  the  Company
   received   consulting  and  management  services  from   a   company
   affiliated  through  common ownership. Fees  for  such  services  of
   $628,000   are  included  in  selling,  general  and  administrative
   expenses  and  $598,000  of  this amount  expensed  is  included  in
   accrued expenses at December 31, 1999.

                                     F-19
<PAGE>

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration  Statements
No. 2-97977, No. 33-8245, No. 33-78744 and No. 33-65233 of Miltope Group
Inc. on Forms S-8 and No. 33-33752 of Miltope Group Inc. on Form S-3  of
our  report  dated  February  18, 2000  (March 28, 2000 as to the waiver
letter described in Note 5) appearing in this Annual Report on Form 10-K
of Miltope Group Inc. for the year ended December 31, 1999.

/s/Deloitte & Touche LLP
------------------------
Birmingham, Alabama
March 29, 2000


                                     F-20
<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.

                                        MILTOPE GROUP INC.

March 29, 2000                          /s/ Thomas R. Dickinson
                                        -----------------------
                                        Thomas R. Dickinson
                                        President and Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.

<TABLE>
<S>                                     <C>
March 29, 2000                          /s/ Thomas R. Dickinson
                                        -----------------------
                                        Thomas R. Dickinson
                                        President and Chief Executive
                                        Officer (Principal Executive Officer)


March 29, 2000                          /s/ Teddy G. Allen
                                        ------------------------
                                        Teddy G. Allen
                                        Chairman of the Board of
                                        Directors


March 29, 2000
                                        William L. Dickinson
                                        Director

March 29, 2000
                                        Lawrence P. Farrell, Jr.
                                        Director

March 29, 2000                          /s/ William Mustard
                                        -------------------
                                        William Mustard
                                        Director

March 29, 2000                          /s Teri Spencer
                                        -------------------
                                        Teri Spencer
                                        Director

March 29, 2000
                                        Jan H. Stenbeck
                                        Director

March 29, 2000                          /s/ Jerry O. Tuttle
                                        --------------------
                                        Jerry O. Tuttle
                                        Director


</TABLE>