SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                  For the quarterly period ended June 30, 2003


                           Commission File No. 0-26912


                             Vodavi Technology, Inc.
             (Exact name of registrant as specified in its charter)


                     DELAWARE                                    86-0789350
          (State or other jurisdiction of                     (I.R.S. Employer
          incorporation or organization)                     Identification No.)


4717 EAST HILTON AVENUE, STE. 400, PHOENIX, ARIZONA                 85034
     (Address of principal executive offices)                    (Zip Code)


                                 (480) 443-6000
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ].

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

The number of shares  outstanding of registrant's  Common Stock, $.001 par value
per share, as of July 25, 2003 was 3,520,589.
<PAGE>
                             VODAVI TECHNOLOGY, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                       FOR THE QUARTER ENDED JUNE 30, 2003

                                TABLE OF CONTENTS

                                                                            Page
PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Consolidated Balance Sheets - June 30, 2003
          and December 31, 2002                                                3

          Consolidated Statements of Operations - Three and                    4
          Six Months Ended June 30, 2003 and 2002

          Consolidated Statements of Cash Flows - Six Months
          Ended June 30, 2003 and 2002                                         5

          Notes to Consolidated Financial Statements                           6

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

Item 3.   Quantitative and Qualitative Disclosures about Market Risk          16

Item 4.   Controls and Procedures                                             16

PART II.  OTHER INFORMATION                                                   17

          SIGNATURES                                                          18

                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                             VODAVI TECHNOLOGY, INC.
                           CONSOLIDATED BALANCE SHEETS
                       IN THOUSANDS, EXCEPT SHARE AMOUNTS

                                                     June 30,      December 31,
                                                       2003            2002
                                                   ------------    ------------
                                                    (Unaudited)
CURRENT ASSETS:
Cash                                               $        135    $      1,141
Accounts receivable, net of reserves for
  doubtful accounts and sales returns of
  $503 and $422, respectively                             7,296           6,671
Inventory                                                 5,328           5,550
Income tax receivable                                        --             300
Deferred income taxes                                       436             436
Prepaids and other current assets                           571             731
                                                   ------------    ------------
     Total current assets                                13,766          14,829

PROPERTY AND EQUIPMENT, net                               1,639           1,631

GOODWILL                                                    725             725

DEFERRED TAXES                                              160             160

OTHER LONG-TERM ASSETS                                       81              43
                                                   ------------    ------------
                                                   $     16,371    $     17,388
                                                   ============    ============

CURRENT LIABILITIES:
Accounts payable                                   $        802    $      1,250
Accrued liabilities                                       1,436           1,551
Accounts payable to stockholder                           3,627           3,965
Current portion of long-term debt                           200              --
Revolving credit facility                                   487              --
                                                   ------------    ------------
     Total current liabilities                            6,552           6,766
                                                   ------------    ------------

Long-term debt                                              800              --
                                                   ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value; 1,000,000
  shares authorized, no shares issued                        --              --
Common stock, $.001 par value; 10,000,000
  shares authorized; 3,839,289 and 4,668,488
  shares issued                                               4               5
Additional paid-in capital                               11,441          13,503
Accumulated deficit                                      (1,667)         (2,127)
Treasury stock, 318,700 shares at cost                     (759)           (759)
                                                   ------------    ------------
                                                          9,019          10,622
                                                   ------------    ------------
                                                   $     16,371    $     17,388
                                                   ============    ============

              The accompanying notes are an integral part of these
                          consolidated balance sheets.

                                       3
<PAGE>
                      VODAVI TECHNOLOGY, INC.
              CONSOLIDATED STATEMENTS OF OPERATIONS
              IN THOUSANDS EXCEPT PER SHARE AMOUNTS
                           (Unaudited)

<TABLE>
<CAPTION>
                                                                    Three Months Ended             Six Months Ended
                                                                          June 30,                      June 30,
                                                                ---------------------------   ---------------------------
                                                                    2003           2002           2003           2002
                                                                ------------   ------------   ------------   ------------
<S>                                                             <C>            <C>            <C>            <C>
REVENUE, net                                                    $     10,214   $      9,459   $     19,277   $     18,249

COST OF GOODS SOLD                                                     6,770          5,996         12,654         11,634
                                                                ------------   ------------   ------------   ------------

GROSS MARGIN                                                           3,444          3,463          6,623          6,615
                                                                ------------   ------------   ------------   ------------

OPERATING EXPENSES:
Engineering and product development                                      517            569          1,070          1,059
Selling, general and administrative                                    2,348          2,367          4,737          4,719
                                                                ------------   ------------   ------------   ------------
                                                                       2,865          2,936          5,807          5,778
                                                                ------------   ------------   ------------   ------------

OPERATING INCOME                                                         579            527            816            837

INTEREST EXPENSE                                                          27             28             52             59
                                                                ------------   ------------   ------------   ------------

INCOME BEFORE INCOME TAXES AND CHANGE IN ACCOUNTING PRINCIPLE            552            499            764            778

INCOME TAX PROVISION                                                     219            197            304            309
                                                                ------------   ------------   ------------   ------------

INCOME BEFORE CHANGE IN ACCOUNTING PRINCIPLE                             333            302            460            469

CHANGE IN ACCOUNTING PRINCIPLE,
net of tax                                                                --             --             --         (1,263)
                                                                ------------   ------------   ------------   ------------

NET INCOME (LOSS)                                               $        333   $        302   $        460   $       (794)
                                                                ============   ============   ============   ============

EARNINGS PER COMMON SHARE:
Basic
Income before change in accounting principle                    $       0.08   $       0.07   $       0.11   $       0.11
Change in accounting principle                                            --             --             --          (0.29)
                                                                ------------   ------------   ------------   ------------
Net income (loss)                                               $       0.08   $       0.07   $       0.11   $      (0.18)
                                                                ============   ============   ============   ============
Diluted
Income before change in accounting principle                    $       0.08   $       0.07   $       0.10   $       0.11
Change in accounting principle                                            --             --             --          (0.29)
                                                                ------------   ------------   ------------   ------------
Net income (loss)                                               $       0.08   $       0.07   $       0.10   $      (0.18)
                                                                ============   ============   ============   ============

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic                                                                  4,193          4,350          4,271          4,311
                                                                ============   ============   ============   ============
Diluted                                                                4,354          4,462          4,407          4,391
                                                                ============   ============   ============   ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       4
<PAGE>
                             VODAVI TECHNOLOGY, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  IN THOUSANDS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                            Six Months Ended
                                                                                June 30,
                                                                      ----------------------------
                                                                          2003            2002
                                                                      ------------    ------------
<S>                                                                   <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                   $        460    $       (794)
  Adjustments to reconcile net income (loss) to net cash
    flows (used in) provided by operating activities:
      Depreciation and amortization                                            234             352
      Deferred rent obligations                                                 (4)            (16)
      Change in accounting principle                                            --           1,263
  Changes in working capital:
      Accounts receivable, net                                                (625)           (267)
      Inventory                                                                222           1,682
      Income tax receivable                                                    300             839
      Prepaids and other current assets                                        160             (85)
      Other long-term assets and deferred taxes                                (38)             (9)
      Accounts payable and payable to stockholder                             (786)            523
      Accrued liabilities                                                     (111)           (398)
                                                                      ------------    ------------
          Net cash flows provided by (used in) operating activities           (188)          3,090
                                                                      ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Cash paid to acquire property and equipment                                 (242)           (386)
  Cash paid to acquire DataSpeak Systems, Inc.                                  --            (624)
                                                                      ------------    ------------
          Net cash flows used in investing activities                         (242)         (1,010)
                                                                      ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net advances (payments) on revolving credit facility                         487          (1,768)
  Borrowings on term loan                                                    1,000              --
  Stock repurchase                                                          (2,063)             --
                                                                      ------------    ------------
          Net cash flows used in financing activities                         (576)         (1,768)
                                                                      ------------    ------------

CHANGE IN CASH                                                              (1,006)            312

CASH, beginning of period                                                    1,141             340
                                                                      ------------    ------------

CASH, end of period                                                   $        135    $        652
                                                                      ============    ============
SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid for interest                                              $         27    $         59
                                                                      ============    ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH
  INVESTING AND FINANCING ACTIVITIES:
  Common stock issued to acquire DataSpeak Systems, Inc.              $         --    $        135
                                                                      ============    ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       5
<PAGE>
                             VODAVI TECHNOLOGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003
                                    UNAUDITED

(a)  INTERIM FINANCIAL REPORTING

The accompanying  unaudited Consolidated Financial Statements have been prepared
by Vodavi Technology, Inc. and subsidiaries ("Vodavi" or the "Company") pursuant
to the rules and regulations of the Securities and Exchange  Commission  ("SEC")
and, in the opinion of management, include all adjustments (consisting of normal
recurring accruals and adjustments) necessary for a fair presentation of results
of  operations,  financial  position,  and cash flows as of and for the  periods
presented.

The  preparation of financial  statements and related  disclosures in conformity
with accounting  principles  generally  accepted in the United States of America
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  financial  statements  and revenue and expenses
during the period  reported.  Actual results could differ from those  estimates.
Estimates are used in accounting  for,  among other things,  customer  incentive
programs,  allowances for bad debts and sales returns,  inventory  obsolescence,
product warranty,  depreciation,  taxes and other  contingencies.  Estimates and
assumptions are reviewed periodically and the effects of revisions are reflected
in the Consolidated Financial Statements in the period they are determined to be
necessary.

The  results  for the  six  months  ended  June  30,  2003  are not  necessarily
indicative of financial  results for the full year.  These financial  statements
should be read in conjunction with the audited Consolidated Financial Statements
and notes thereto  included in Vodavi's  Annual Report on Form 10-K for the year
ended December 31, 2002.










                        [SPACE INTENTIONALLY LEFT BLANK]










                                       6
<PAGE>
(b)  CALCULATION OF EARNINGS PER SHARE

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share",  the Company displays basic and diluted earnings per share
(EPS).  Basic EPS is  determined  by dividing net income  (loss) by the weighted
average number of common shares  outstanding.  The basic weighted average number
of common shares outstanding  excludes all dilutive  securities.  Diluted EPS is
determined  by  dividing  net income by the  weighted  average  number of common
shares and dilutive securities outstanding.

A reconciliation  of the numerator and denominator  (weighted  average number of
shares outstanding) of the basic and diluted EPS computation is as follows:

<TABLE>
<CAPTION>
                                                 Three Months Ended         Six Months Ended
                                                      June 30,                  June 30,
                                               -----------------------   -----------------------
                                                  2003         2002         2003         2002
                                               ----------   ----------   ----------   ----------
                                                                 (In thousands)
<S>                                            <C>          <C>          <C>          <C>
Income before change in accounting principle   $      333   $      302   $      460   $      469
Change in accounting principle                         --           --           --       (1,263)
                                               ----------   ----------   ----------   ----------
Net income (loss)                              $      333   $      302   $      460   $     (794)
                                               ==========   ==========   ==========   ==========

Weighted average common shares:
Basic                                               4,193        4,350        4,271        4,311
Effect of dilutive stock options (1)                  161          112          136           80
                                               ----------   ----------   ----------   ----------
Diluted                                             4,354        4,462        4,407        4,391
                                               ==========   ==========   ==========   ==========

Anti-dilutive stock options (1)                       600          603          607          606
</TABLE>

(1)  Dilutive  securities are calculated using the treasury stock method and the
     average market price during the period. If an option's strike price is less
     than the average  market price during the reporting  period,  the option is
     dilutive.  If an option's  strike price is greater than the average  market
     price during the reporting  period,  the option is anti-dilutive and is not
     included in the weighted average common shares calculation. All options are
     anti-dilutive  in  reporting  periods  that  result  in a  loss,  excluding
     extraordinary items, regardless of the average market price.

(c)  STOCK OPTION PLANS

Statement of Financial  Accounting  Standard  ("SFAS") No. 123,  "Accounting for
Stock-Based Compensation",  encourages entities to recognize as expense over the
vesting  period the fair value of all  stock-based  awards on the date of grant.
Alternatively,  SFAS No. 123 allows entities to continue to apply the provisions
of APB Opinion No. 25,  "Accounting for Stock Issued to Employees",  and provide
pro forma earnings per share  disclosures for employee stock option grants as if
the  fair-value-based  method as defined in SFAS No. 123 had been  applied.  The
Company applies the intrinsic value method under APB No. 25 and provides the pro
forma disclosure provisions of SFAS No. 123.

No  stock-based  employee  compensation  cost is  reflected in net income as all
options  granted  under the Plan had an exercise  price equal to or greater than
the market price of the  underlying  common  stock on the date of grant.  If the
Company had accounted for its stock-based  compensation  plan using a fair value
based method of  accounting  as  prescribed  in SFAS No. 123, the  Company's net
income and earnings per share would have been reported as follows:

                                       7
<PAGE>
<TABLE>
<CAPTION>
                                    Three Months Ended           Six Months Ended
                                         June 30,                    June 30,
                                 ------------------------    ------------------------
                                    2003          2002          2003          2002
                                 ----------    ----------    ----------    ----------
                                      (In Thousands, Except Per Share Amounts)
<S>                              <C>           <C>           <C>           <C>
Net income (loss):
As reported                      $      333    $      302    $      460    $     (794)
Options expense, net of taxes            29            31            61            57
                                 ----------    ----------    ----------    ----------
Pro forma net income (loss)      $      304    $      271    $      399    $     (851)
                                 ==========    ==========    ==========    ==========

Earnings (loss) per share:
As reported - Basic              $     0.08    $     0.07    $     0.11    $    (0.18)
As reported - Diluted                  0.08          0.07          0.10         (0.18)
Pro forma - Basic                      0.07          0.06          0.09         (0.20)
Pro forma - Diluted              $     0.07    $     0.06    $     0.09    $    (0.19)
</TABLE>

(d)  SEGMENT REPORTING

The Company  operates in one reportable  segment,  the  distribution of business
telecommunications  equipment.  Accordingly,  the  Company  has  only  presented
financial information for its one reportable segment.

(e)  CREDIT AGREEMENT

In April  2003,  the  Company  entered  into a credit  agreement  with  Comerica
Bank-California ("Comerica"), which established a $5.0 million revolving line of
credit facility and a $1.0 million term loan (the "Credit  Facility").  Advances
under the  Credit  Facility  are based upon  eligible  accounts  receivable  and
inventory  of  the  Company's  wholly  owned  subsidiary  Vodavi  Communications
Systems,  Inc. and are secured by substantially all of the Company's assets. The
Credit  Facility  contains  covenants  that are  customary  for  similar  credit
facilities and also prohibits our operating  subsidiaries  from paying dividends
to our company without the consent of Comerica.

The $5.0 million  revolving  line of credit bears  interest at Comerica's  prime
rate (4.0% as of June 30, 2003) and requires  monthly  payments of interest only
with all unpaid  principal and accrued  interest due at its  expiration in April
2005.  If the Company is unable to reduce the  principal  balance on the line of
credit to zero for at least thirty consecutive days during any fiscal year, then
any remaining  balance will be converted  into a term loan, or term balance,  as
defined in the  agreement.  In addition to  interest  on the term  balance,  the
Company  will be required to make  monthly  payments of  principal  in an amount
sufficient to fully amortize the term balance over a thirty-six month period.

The $1.0 million term loan was  available to the Company only for the purpose of
acquiring  its  common  stock.  Advances  on the  term  loan  bear  interest  at
Comerica's  prime rate plus 0.5%,  or 4.5% as of June 30,  2003.  In addition to
interest on the term loan, the Company will be required to make monthly payments
of  principal  in an amount  sufficient  to fully  amortize the term loan over a
sixty-month  period  with all  unpaid  principal  and  accrued  interest  due in
thirty-six months, or by June 2006.

(f)  SELF TENDER OFFER - STOCK REPURCHASE

In May 2003,  the  Company  commenced  a  self-tender  offer to  purchase  up to
1,000,000  shares of its common stock for $2.40 per share. On June 13, 2003, the
Company  repurchased  829,199  shares  of its  common  stock at $2.40  per share
pursuant to the tender offer. The purchase price of approximately  $2.1 million,
which  includes  offering  costs  of  approximately   $73,000,  is  recorded  as
reductions to common stock and  additional  paid in capital in the  accompanying
consolidated balance sheet as of June 30, 2003.

                                       8
<PAGE>
(g)  CHANGE IN ACCOUNTING PRINCIPLE AND RECENT ACCOUNTING PRONOUNCEMENTS

In 2001, the Financial  Accounting Standards Board ("FASB") issued SFAS No. 141,
ACCOUNTING  FOR  BUSINESS  COMBINATIONS,  and SFAS No. 142,  GOODWILL  AND OTHER
INTANGIBLE   ASSETS.   These   statements   modified   accounting  for  business
combinations  after  June 30,  2001 and  affected  the  Company's  treatment  of
goodwill and other intangible  assets effective  January 1, 2002. The statements
require that goodwill  existing at the date of adoption be reviewed for possible
impairment  and that  impairment  tests be  performed  at least  annually,  with
impaired assets written-down to fair value. Additionally,  existing goodwill and
intangible   assets  must  be  assessed  and  classified   consistent  with  the
statements'  criteria.  Intangible  assets  with  estimated  useful  lives  will
continue to be  amortized  over those  periods.  Amortization  of  goodwill  and
intangible assets with indefinite lives will cease.

The Company  determined  that upon  adoption of these  statements  on January 1,
2002,  the $1.6  million  carrying  amount of the  goodwill  as of that date was
impaired.  The  goodwill  impairment  was  recognized  in  2002 as a  change  in
accounting principle, net of $375,000 of income taxes.

In October  2001,  the FASB issued SFAS No. 144  "Accounting  for  Impairment or
Disposal of Long-Lived Assets".  SFAS No. 144 addresses financial accounting and
reporting for the  impairment or disposal of long-lived  assets.  This statement
also extends the reporting  requirements to report  separately,  as discontinued
operations,  components  of an entity that have  either been  disposed of or are
classified as held-for-sale. We adopted the provisions of SFAS No. 144 effective
January 1, 2002.  The adoption of this  statement did not have any impact on our
financial condition or results from operations.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities." SFAS No. 146 requires companies to recognize
costs associated with exit or disposal  activities when they are incurred rather
than at the date of a  commitment  to an exit or  disposal  plan.  SFAS No.  146
replaced  EITF Issue No.  94-3,  "Liability  Recognition  for  Certain  Employee
Termination  Benefits  and Other  Costs to Exit an Activity  (including  Certain
Costs Incurred in a Restructuring),"  and applies to exit or disposal activities
initiated after December 31, 2002. The  requirements of SFAS No. 146 will not be
required unless and until the Company has a future exit or disposal activity.

In November 2002, the FASB issued FASB  Interpretation  Number 45,  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantee of the Indebtedness of Others". This Interpretation  elaborates on the
disclosures  to be made by a  guarantor  in its  interim  and  annual  financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize,  at the inception of a
guarantee,  a  liability  for the fair  value of the  obligation  undertaken  in
issuing  the  guarantee.   The  initial   recognition  and  initial  measurement
provisions in this  interpretation  apply to guarantees issued or modified after
December  31,  2002.  We  have  adopted  the   disclosure   provisions  of  this
interpretation.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensations  - A  Transition  and  Disclosure - an Amendment to SFAS No. 123."
SFAS No. 148 amends SFAS No. 123, "Accounting for Stock-Based Compensation",  to
provide alternative methods of transition for an entity that voluntarily changes
to  the  fair  value  based  method  of  accounting  for  stock-based   employee
compensation.  It also amends the  disclosure  provisions  of that  Statement to
require  prominent  disclosure  about the effects on  reported  net income of an
entity's  accounting  policy  decisions  with  respect to  stock-based  employee
compensation.  Finally,  this  statement  amends APB  Opinion  No. 28,  "Interim
Financial  Reporting",  to require  disclosure  about  those  effects in interim
financial information.  We have adopted the disclosure  requirements of SFAS No.
148 as of December 31, 2002.

(h)  COMMITMENTS AND CONTINGENCIES

The Company is subject to certain asserted and unasserted claims  encountered in
the normal course of business. The Company believes that the resolution of these
matters will not have a material  adverse  effect on its  financial  position or
results of  operations.  The Company  cannot provide  assurance,  however,  that
damages that result in a material  adverse  effect on its financial  position or
results of operations will not be imposed by these matters.

                                       9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

BUSINESS OVERVIEW

We  design,   develop,   market,   and   support  a  broad   range  of  business
telecommunications  solutions,  including telephony  products,  voice processing
products,  and  computer-telephony  products  for a  wide  variety  of  business
applications.   Our  telecommunications   solutions  incorporate   sophisticated
features,  such as automatic call  distribution  and Internet  protocol,  or IP,
gateways.  Our voice  processing  products  include  interactive  voice response
systems,  automated  attendant,  and voice and fax mail. Our  computer-telephony
products enable users to integrate the  functionality of their telephone systems
with their  computer  systems.  We market our  products  primarily in the United
States as well as in foreign countries  through a distribution  model consisting
primarily of wholesale distributors and direct dealers.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     Management's  Discussion and Analysis of Financial Condition and Results of
Operations  discusses our  consolidated  financial  statements,  which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States. The preparation of these financial statements requires us to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and the disclosure of contingent  assets and liabilities at the date
of the financial  statements  and the reported  amounts of revenues and expenses
during the reporting period. On an on-going basis, we evaluate our estimates and
judgments,  including  those related to customer  incentives,  bad debts,  sales
returns,  excess and obsolete  inventory,  and contingencies and litigation.  We
base our estimates and judgments on historical  experience  and on various other
factors that are reasonable under the  circumstances,  the results of which form
the  basis  for  making  judgments  about the  carrying  values  of  assets  and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

     We believe  the  following  critical  accounting  policies  affect our more
significant  judgments and estimates used in the preparation of our consolidated
financial statements:

CUSTOMER INCENTIVES

     We record reductions to revenue for customer incentive programs,  including
special pricing agreements,  price protection for our distributors,  promotions,
and other  volume-related  rebate  programs.  Such  reductions  to  revenue  are
estimates,  which are based on a number of factors,  including  our  assumptions
related to customer redemption rates, sales volumes, and inventory levels at our
distributors. If actual results differ from our original assumptions,  revisions
are made to our  estimates  that could result in  additional  reductions  to our
reported revenue in the period the revisions are made.  Additionally,  if market
conditions  were to  decline,  we may take  actions  to  increase  the  level of
customer  incentive  offerings that could result in an incremental  reduction of
revenue in the period in which we offer the incentive.

BAD DEBTS

     We maintain allowances for doubtful accounts for estimated losses resulting
from the inability of our customers to make required payments.  If the financial
condition of our customers  were to  deteriorate,  resulting in an impairment of
their  ability  to  make  payments,   additional  allowances  may  be  required.
Additionally,  we have a significant  concentration of accounts  receivable with
our largest  distributor,  Graybar Electric  Company,  Inc. As of June 30, 2003,
Graybar  accounted  for  43% of our  total  accounts  receivable.  If  Graybar's
financial  condition were to  deteriorate,  resulting in their inability to make
payments  to us,  it could  have a  material  adverse  impact  on our  financial
condition and results of operations.

SALES RETURNS

     We  maintain  allowances  for  estimated  sales  returns.   While  we  have
distribution  agreements with our largest  distributors that limit the amount of
sales  returns on active  products,  we  generally  allow  unlimited  returns of
products that we discontinue. Accordingly, the timing and amount of revisions to
our  estimates  for sales  returns is largely  influenced  by our  decisions  to
discontinue  product  lines and our ability to predict the  inventory  levels of
such products at our largest distributors. Revisions to these estimates have the
effect of increasing or decreasing the reported  amount of revenue in the period
in which the revisions are made. We generally do not accept product returns from
our direct dealers unless the product is damaged.

                                       10
<PAGE>
EXCESS AND OBSOLETE INVENTORY

     We  record  our  inventory  at the  lower  of cost  or  market  value.  Our
assessment of market value is determined by, among other things,  historical and
forecasted  sales  activity,  the  condition of specific  inventory  items,  and
competitive pricing considerations.  When the assessed market value is less than
the historical cost, provision is made in the financial statements to write-down
the carrying amount of the respective inventory items to market value. If actual
results are less favorable than our original  assumptions for determining market
value, additional inventory write-downs may be required.

     The  above  listing  is not  intended  to be a  comprehensive  list  of our
accounting policies. See our audited consolidated financial statements and notes
thereto  included in our Annual Report on Form 10-K for the year ended  December
31, 2002, which contains accounting  policies and other disclosures  required by
generally accepted accounting principles in the United States of America.

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated the percentage of
total revenue  represented by certain  revenue and expense items.  The table and
the  discussion  below  should  be read in  conjunction  with  the  consolidated
financial statements and notes thereto that appear elsewhere in this report.

<TABLE>
<CAPTION>
                                                   Three Months Ended    Six Months Ended
                                                        June 30,             June 30,
                                                    ----------------     ----------------
                                                     2003      2002       2003      2002
                                                    ------    ------     ------    ------
<S>                                                 <C>       <C>        <C>       <C>
Revenue ........................................     100.0%    100.0%     100.0%    100.0%
Cost of goods sold .............................      66.3      63.4       65.7      63.8
                                                    ------    ------     ------    ------
Gross margin ...................................      33.7      36.6       34.3      36.2

Operating expenses:
Engineering and product development ............       5.0       6.0        5.6       5.8
Selling, general, and administrative ...........      23.0      25.0       24.5      25.8
                                                    ------    ------     ------    ------
                                                      28.0      31.0       30.1      31.6

Operating income ...............................       5.7       5.6        4.2       4.6

Interest expense, net ..........................       0.3       0.3        0.2       0.3
                                                    ------    ------     ------    ------
Pretax income ..................................       5.4       5.3        4.0       4.3
Income tax expense .............................       2.1       2.1        1.6       1.7
                                                    ------    ------     ------    ------
Income before change in accounting principle ...       3.3       3.2        2.4       2.6
Change in accounting principle .................        --        --         --      (6.9)
                                                    ------    ------     ------    ------
Net income (loss) ..............................       3.3%      3.2%       2.4%     (4.3)%
                                                    ======    ======     ======    ======
</TABLE>

QUARTER ENDED JUNE 30, 2003 COMPARED WITH QUARTER ENDED JUNE 30, 2002

REVENUE

     Revenue  for the  three-month  period  ended June 30,  2003  totaled  $10.2
million,  an increase of 8.0%,  from revenue of $9.5 million for the same period
of 2002. Sales to our supply house customers  accounted for  approximately  $6.3
million of our total  revenue  during the second  quarter of 2003  compared with
$5.6  million in the 2002 second  quarter.  The  increase in sales to our supply
house customers in 2003 is principally related to sales of our new STS telephone
system  that  we  introduced  in  January  2003.  The  STS  product  line  is  a
full-featured  telephone  system designed and priced to capture a larger portion
of the small business  telephone  system market.  While the STS telephone system
has been accepted well into the marketplace,  sales of this product have had the
effect of reducing the level of sales of similar  products  that we sell through
supply  houses.  We expect  this  trend to  continue  as we focus our  marketing
efforts on the STS.

                                       11
<PAGE>
     Sales through our INFINITE  direct dealer program  totaled $3.7 million for
the most recent  quarter  compared  with $3.4 million for the same period a year
ago.  During 2003,  we continued  our program to focus on selling to fewer,  but
larger and  better-established,  dealers who are more  effective  at selling our
larger systems.

GROSS MARGIN

     Our gross margin was  approximately  $3.4 million and $3.5 million for each
of the quarterly periods ended June 30, 2003 and 2002,  respectively.  Our gross
margin as a  percentage  of total  revenue  decreased  to 33.7% during 2003 from
36.6% during 2002. The decrease in our gross margin  percentage during 2003 is a
direct result of the product mix of sales to our supply house  customers  with a
heavier  emphasis of sales of our new STS telephone  system,  which  generates a
lower  overall  gross  margin  percentage  than most of our other  products.  In
addition,  our gross margin  percentage has declined during the first six months
of 2003 as a result of our efforts to  rationalize  our product lines and reduce
inventory levels.

ENGINEERING AND PRODUCT DEVELOPMENT

     Engineering  and product  development  expenditures  decreased  slightly to
$517,000  during the second  quarter of 2003 from $569,000 in the same period of
2002.  We continue to invest in the  development  of our next  generation IP Key
Telephone  System,  the  convergence  of and  enhancements  to our  existing Key
Telephone Systems, and enhancements to our voice processing products.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

     Selling,  general,  and administrative  expenses decreased slightly to $2.3
million in the  second  quarter  of 2003 from  approximately  $2.4 in the second
quarter of 2002.

INTEREST EXPENSE

     Interest expense decreased slightly to $27,000 during the second quarter of
2003 from $28,000 for the same period a year ago.

INCOME TAXES

     We provided for federal and state  income taxes using an effective  rate of
39.7% during the most recent quarter compared with an effective rate of 39.5% in
the same period in 2002.

SIX MONTHS ENDED JUNE 30, 2003 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2002

REVENUE

     Revenue for the six-month period ended June 30, 2003 totaled $19.3 million,
an increase of 5.6%,  from revenue of $18.2 million for the same period of 2002.
Sales to our supply house customers accounted for approximately $11.3 million of
our total  revenue  during the first half of 2003 compared with $10.4 million in
the same period of 2002. The increase in sales to our supply house  customers in
2003 is  principally  related to sales of our new STS  telephone  system that we
introduced in January 2003.  The STS product line is a  full-featured  telephone
system  designed  and priced to capture a larger  portion of the small  business
telephone  system market.  While the STS telephone system has been accepted well
into the marketplace,  sales of this product have had the effect of reducing the
level of sales of similar products that we sell through supply houses. We expect
this trend to continue as we focus our marketing efforts on the STS.

     Sales through our INFINITE  direct dealer program  totaled $7.6 million for
the first six months of 2003 compared with $7.1 million the same period of 2002.
During 2003, we continued  our program to focus on selling to fewer,  but larger
and  better-established,  dealers who are more  effective  at selling our larger
systems.

GROSS MARGIN

     Our gross margin was  approximately  $6.6 million for each of the six-month
periods ended June 30, 2003 and 2002.  Our gross margin as a percentage of total
revenue  decreased to 34.4% during 2003 from 36.2% during 2002.  The decrease in

                                       12
<PAGE>
our gross margin percentage during 2003 is a direct result of the product mix of
sales to our supply house customers with a heavier  emphasis of sales of our new
STS telephone  system,  which generates a lower overall gross margin  percentage
than most our other  products.  In  addition,  our gross margin  percentage  has
declined  during  the first six  months  of 2003 as a result of our  efforts  to
rationalize our product lines and reduce inventory levels.

ENGINEERING AND PRODUCT DEVELOPMENT

     Engineering and product  development  expenditures were  approximately $1.1
million in the first six months of 2003 and 2002.  We  continue to invest in the
development of our next generation IP Key Telephone  System,  the convergence of
and enhancements to our existing Key Telephone Systems,  and enhancements to our
voice processing products.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

     Selling,  general,  and  administrative  expenses also remained constant at
$4.7 million for the respective six months periods of 2003 and 2002.

INTEREST EXPENSE

     Interest expense decreased  slightly to $52,000 for the first six months of
2003 from $59,000 for the same period a year ago.

INCOME TAXES

     We provided for federal and state  income taxes using an effective  rate of
39.8% during the first half of 2003  compared  with 39.7% for the same period of
2002.

LIQUIDITY AND CAPITAL RESOURCES

     Our net working capital position was approximately $7.2 million at June 30,
2003  compared  with $8.1 million at December 31, 2002. We had a cash balance of
$135,000  at June 30,  2003  compared  with a cash  balance  of $1.1  million at
December 31, 2002. Factors that decreased our cash position during the first six
months of 2003  included an increase in accounts  receivable of $625,000 and the
pay down of accounts  payable and accrued  liabilities of $786,000 and $111,000,
respectively. We also used approximately $242,000 during the first six months of
2003 for the purchase of property and  equipment  and spent  approximately  $2.1
million for the repurchase of stock pursuant to our self-tender  offer.  Sources
of cash included  positive  income from  operations,  reductions in inventory of
$222,000 and other  current  assets of  $160,000,  and the receipt of a $300,000
income  tax  refund.  During  the first six  months  of 2003,  we also  borrowed
$487,000 on our revolving line of credit and $1.0 million on our term loan.

     Our accounts  receivable days sales outstanding,  calculated on a quarterly
basis, were  approximately 64 days as of June 30, 2003 compared to 70 days as of
December 31, 2002. The timing of payments received from our largest distributors
and the  linearity  of our  revenue  streams  during the  quarter  significantly
influence  our  days  sales  outstanding  and our  liquidity.  Our  two  largest
distributors  comprised 57% of our total accounts receivable as of June 30, 2003
and 43% as of December  31,  2002.  An increase  in  concentration  from our two
largest  distributors  generally  has the  effect of  increasing  our days sales
outstanding while a more linear revenue stream during the quarter has the effect
of reducing our receivable days sales outstanding.

     Our inventory  turnover,  measured in terms of days sales  outstanding on a
quarterly  basis,  was 71 days as of June  30,  2003  compared  to 87 days as of
December 31, 2002. The decrease in inventory days outstanding is a direct result
of a higher volume of sales in the second  quarter 2003 compared with the fourth
quarter of 2002 and our efforts to rationalize  our product lines. We expect our
inventory turnover to improve as we continue to rationalize our product lines.

     Trade payables and accrued  liabilities,  including payables to third-party
and related-party manufacturers,  were approximately $5.9 million as of June 30,
2003 compared with $6.8 million as of December 31, 2002.  The level of our trade
payables and accrued  liabilities  between periods is largely  influenced by the
timing of payments  we make to our largest  suppliers  for  inventory  items and

                                       13
<PAGE>
payments to cover payroll and customer rebates.  We generally pay trade payables
within 45 days  from the  invoice  date,  except  for  payments  to our  largest
supplier, which are 60 days from the invoice date.

     We had a $15.0  million  credit  facility  with  General  Electric  Capital
Corporation that expired in April 2003. The line of credit bore interest at 2.5%
over the 30-day  commercial  paper rate.  Advances under the line of credit were
based upon  eligible  accounts  receivable  and  inventory  of our wholly  owned
subsidiary   Vodavi   Communications   Systems,   Inc.,   and  were  secured  by
substantially  all of  our  assets.  The  revolving  line  of  credit  contained
covenants that are customary for similar credit  facilities and also  prohibited
our  operating  subsidiaries  from paying  dividends to our Company  without the
consent of GE Capital.

     In  April  2003,  we  entered  into  a  credit   agreement   with  Comerica
Bank-California  of a size  that  is  more  reflective  of the  current  capital
requirements of our business.  The credit  agreement  establishes a $5.0 million
revolving line of credit and a $1.0 million term loan. Advances under the credit
facility are based upon eligible accounts receivable and inventory of our wholly
owned  subsidiary  Vodavi  Communications  Systems,  Inc.  and  are  secured  by
substantially all of our assets. The credit facility contains covenants that are
customary  for  similar  credit  facilities  and also  prohibits  our  operating
subsidiaries  from  paying  dividends  to our  Company  without  the  consent of
Comerica.

     The $5.0  million  revolving  line of credit bears  interest at  Comerica's
prime rate, or 4.0% at June 30, 2003, and requires  monthly payments of interest
only with all unpaid  principal  and accrued  interest due at its  expiration in
April  2005.  If we are  unable to reduce the  principal  balance on the line of
credit to zero for at least thirty consecutive days during any fiscal year, then
any remaining  balance will be converted  into a term loan, or term balance,  as
defined in the agreement.  In addition to interest on the term balance,  we will
be required to make monthly  payments of principal  in an amount  sufficient  to
fully amortize the term balance over a thirty-six month period.

     The $1.0  million  term loan was  available  to us only for the  purpose of
acquiring  our  common  stock.  Advances  on the  term  loan  bear  interest  at
Comerica's  prime rate plus  0.5%,  or 4.5% at June 30,  2003.  In  addition  to
interest  on the term loan,  we will be  required  to make  monthly  payments of
principal  in an  amount  sufficient  to fully  amortize  the term  loan  over a
sixty-month  period  with all  unpaid  principal  and  accrued  interest  due in
thirty-six months, or by June 2006.

     In May 2003, we commenced a  self-tender  offer to purchase up to 1,000,000
shares of our common stock for $2.40 per share. On June 13, 2003, we repurchased
829,199  shares of our common  stock at $2.40 per share  pursuant  to the tender
offer. The purchase price of approximately $2.1 million, which includes offering
costs of  approximately  $73,000,  is recorded as reductions to common stock and
additional paid in capital in the accompanying  consolidated balance sheet as of
June 30, 2003. The repurchase was funded through  advances on our revolving line
of credit and term loan.


     We  have  no  special  purpose  entities  or off  balance  sheet  financing
arrangements,  commitments, or guarantees other than certain long-term operating
lease agreements for our office and warehouse facilities and short-term purchase
commitments to our  third-party  suppliers.  The following  table sets forth all
known  commitments  as of June 30, 2003 and the year in which those  commitments
become due or are expected to be settled (IN THOUSANDS):

                                                         Accounts
                              Credit                     Payable &
              Operating    Facility and    Purchase       Accrued
Year            Leases      Term Loan     Commitments   Liabilities     Total
              ----------    ----------    -----------   -----------   ----------
2003          $      548    $      587    $    5,391    $    5,865    $   12,391
2004               1,095           200            --            --         1,295
2005                 881           200            --            --         1,081
2006                 818           500            --            --         1,318
2007                 785            --            --            --           785
Thereafter         3,142            --            --            --         3,142
              ----------    ----------    ----------    ----------    ----------
Total         $    7,269    $    1,487    $    5,391    $    5,865    $   20,012
              ==========    ==========    ==========    ==========    ==========

     From time to time we are subject to certain asserted and unasserted  claims
encountered in the normal course of business.  We believe that the resolution of
these matters will not have a material adverse effect on our financial  position

                                       14
<PAGE>
or results of operations.  We cannot provide  assurance,  however,  that damages
that result in a material adverse effect on our financial position or results of
operations will not be imposed in these matters.

     We believe that our working capital and credit facilities are sufficient to
fund our capital needs during the next 12 months.  Although we currently have no
acquisition targets, we intend to continue to explore acquisition  opportunities
as they arise and may be required to seek additional  financing in the future to
meet such opportunities.

INTERNATIONAL MANUFACTURING SOURCES

     We currently  obtain a substantial  majority of our products  under various
manufacturing  arrangements  with  third-party  manufacturers in South Korea and
Thailand,  including LGE who owns  approximately  25% of our outstanding  common
stock. We face risks associated with international  manufacturing sources. For a
more  detailed   discussion  of  these  risks,   please  see  Item  1,  "Special
Considerations"  included  in our annual  report on form 10-K for the year ended
December 31, 2002.

IMPACT OF RECENTLY ISSUED STANDARDS

In 2001, the FASB issued SFAS No. 141, ACCOUNTING FOR BUSINESS COMBINATIONS, and
SFAS No. 142, GOODWILL AND OTHER INTANGIBLE  ASSETS.  These statements  modified
accounting  for  business  combinations  after June 30,  2001 and  affected  the
Company's treatment of goodwill and other intangible assets effective January 1,
2002. The statements  require that goodwill  existing at the date of adoption be
reviewed for possible impairment and that impairment tests be performed at least
annually,  with  impaired  assets  written-down  to  fair  value.  Additionally,
existing  goodwill  and  intangible  assets  must  be  assessed  and  classified
consistent  with the  statements'  criteria.  Intangible  assets with  estimated
useful lives will continue to be amortized over those periods.  Amortization  of
goodwill and intangible assets with indefinite lives will cease.

The Company  determined  that upon  adoption of these  statements  on January 1,
2002,  the $1.6  million  carrying  amount of the  goodwill  as of that date was
impaired.  The  goodwill  impairment  was  recognized  in  2002 as a  change  in
accounting principle, net of $375,000 of income taxes.

In October  2001,  the FASB issued SFAS No. 144  "Accounting  for  Impairment or
Disposal of Long-Lived Assets".  SFAS No. 144 addresses financial accounting and
reporting for the  impairment or disposal of long-lived  assets.  This statement
also extends the reporting  requirements to report  separately,  as discontinued
operations,  components  of an entity that have  either been  disposed of or are
classified as held-for-sale. We adopted the provisions of SFAS No. 144 effective
January 1, 2002.  The adoption of this  statement did not have any impact on our
financial condition or results from operations.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities." SFAS No. 146 requires companies to recognize
costs associated with exit or disposal  activities when they are incurred rather
than at the date of a  commitment  to an exit or  disposal  plan.  SFAS No.  146
replaced  EITF Issue No.  94-3,  "Liability  Recognition  for  Certain  Employee
Termination  Benefits  and Other  Costs to Exit an Activity  (including  Certain
Costs Incurred in a Restructuring),"  and applies to exit or disposal activities
initiated after December 31, 2002. The  requirements of SFAS No. 146 will not be
required unless and until the Company has a future exit or disposal activity.

In November 2002, the FASB issued FASB  Interpretation  Number 45,  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantee of the Indebtedness of Others". This Interpretation  elaborates on the
disclosures  to be made by a  guarantor  in its  interim  and  annual  financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize,  at the inception of a
guarantee,  a  liability  for the fair  value of the  obligation  undertaken  in
issuing  the  guarantee.   The  initial   recognition  and  initial  measurement
provisions in this  interpretation  apply to guarantees issued or modified after
December  31,  2002.  We  have  adopted  the   disclosure   provisions  of  this
interpretation.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensations  - A  Transition  and  Disclosure - an Amendment to SFAS No. 123."
SFAS No. 148 amends SFAS No. 123, "Accounting for Stock-Based Compensation",  to
provide alternative methods of transition for an entity that voluntarily changes
to  the  fair  value  based  method  of  accounting  for  stock-based   employee
compensation.  It also amends the  disclosure  provisions  of that  Statement to

                                       15
<PAGE>
require  prominent  disclosure  about the effects on  reported  net income of an
entity's  accounting  policy  decisions  with  respect to  stock-based  employee
compensation.  Finally,  this  statement  amends APB  Opinion  No. 28,  "Interim
Financial  Reporting",  to require  disclosure  about  those  effects in interim
financial information.  We have adopted the disclosure  requirements of SFAS No.
148 as of December 31, 2002.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

This report contains forward-looking statements,  including statements regarding
our business  strategies,  our  business,  and the industry in which we operate.
These forward-looking statements are based primarily on our expectations and are
subject  to a number of risks and  uncertainties,  some of which are  beyond our
control.  Actual  results  could  differ  materially  from  the  forward-looking
statements  as a result of numerous  factors,  including  those set forth in our
Form 10-K for the year ended December 31, 2002, as filed with the Securities and
Exchange Commission.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We  do  not  participate  in  any  activities   involving  derivative  financial
instruments  or  other  financial  and  commodity  instruments.  We do not  hold
investment  securities that would require  disclosure of market risk. Our market
risk  exposure  is  limited to  interest  rate risk  associated  with our credit
facility.  We incur  interest at a variable rate of prime on advances made under
our  revolving  line of credit and prime plus 0.5% on our term loan. At June 30,
2003 we had a term loan balance of $1.0 million and had  outstanding  borrowings
on the line of credit of approximately $487,000.

ITEM 4. CONTROLS AND PROCEDURES

We have evaluated,  with the  participation  of our Chief Executive  Officer and
Chief  Financial  Officer,  the  effectiveness  of our  disclosure  controls and
procedures as of June 30, 2003.  Based on this  evaluation,  our Chief Executive
Officer and Chief  Financial  Officer have each  concluded  that our  disclosure
controls  and  procedures  are  effective  to ensure  that we  record,  process,
summarize,  and  report  information  required  to be  disclosed  by  us in  our
quarterly  reports  filed  under the  Securities  Exchange  Act  within the time
periods specified by the Securities and Exchange  Commission's  rules and forms.
During the  quarterly  period  covered by this  report,  there have not been any
changes in our internal  controls over financial  reporting that have materially
affected,  or is reasonably  likely to materially  affect,  our internal control
over financial reporting.

                                       16
<PAGE>
                           PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

     Not applicable.

Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     Not applicable.

Item 3. DEFAULTS UPON SENIOR SECURITIES

     Not applicable.

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

     Not applicable.

Item 5. OTHER INFORMATION

     Not applicable.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

     Exhibits:

     Exhibit 31.1   --   Certification  of Chief Executive  Officer  pursuant to
                         Rule 13a-14(a) and Rule  15d-14(a),  promulgated  under
                         the Securities Exchange Act of 1934, as amended.

     Exhibit 31.2   --   Certification  of Chief Financial  Officer  pursuant to
                         Rule 13a-14(a) and Rule  15d-14(a),  promulgated  under
                         the Securities Exchange Act of 1934, as amended.

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

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

     Reports on Form 8-K:

     On April 29, 2003, the Registrant  filed a Form 8-K reporting the financial
     results of its first quarter of fiscal 2003.

                                       17
<PAGE>
                                   SIGNATURES

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


                                        VODAVI TECHNOLOGY, INC.


Dated: July 25, 2003                    /s/ Gregory K. Roeper
                                        ----------------------------------------
                                        Gregory K. Roeper
                                        President and Chief Executive Officer
                                        (Principal Executive Officer)


Dated: July 25, 2003                    /s/ David A. Husband
                                        ----------------------------------------
                                        David A. Husband
                                        Chief Financial Officer and Vice
                                        President - Finance (Principal Financial
                                        and Accounting Officer)

                                       18