##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    September 27, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission File Number 1-4817
  
  WHITE ELECTRONIC DESIGNS
    CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Indiana(State or other jurisdiction
    of 
    incorporation or organization)

35-0905052(I.R.S. Employer 
    Identification No.)3601 E. University Drive
    Phoenix, Arizona(Address of principal
    executive offices)

85034(Zip
    Code)   Registrants telephone number, including area code:
    (602) 437-1520
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, stated value $.10 per share

NASDAQ Global Market   Securities registered pursuant to Section 12(g) of the
    Act: None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
 Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





TABLE OF
    CONTENTS
   
 NOTE REGARDING FORWARD-LOOKING STATEMENTS
    AND ASSOCIATED RISKS


3PART I


4ITEM 1


BUSINESS


4ITEM 1A


RISK FACTORS


9ITEM 1B


UNRESOLVED STAFF COMMENTS


18ITEM 2


PROPERTIES


18ITEM 3


LEGAL PROCEEDINGS


19ITEM 4


SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS


19EXECUTIVE OFFICERS OF THE REGISTRANT


19PART II


20ITEM 5


MARKET FOR REGISTRANTS COMMON EQUITY,
    RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES


20ITEM 6


SELECTED CONSOLIDATED FINANCIAL DATA


22ITEM 7


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


23ITEM 7A


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


33ITEM 8


FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


34ITEM 9


CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


34ITEM 9A


CONTROLS AND PROCEDURES


34ITEM 9B


OTHER INFORMATION


35PART III


35ITEM 10


DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE


35ITEM 11


EXECUTIVE COMPENSATION


36ITEM 12


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


36ITEM 13


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


37ITEM 14


PRINCIPAL ACCOUNTANT FEES AND SERVICES


37PART IVITEM 15


EXHIBITS AND FINANCIAL STATEMENT
    SCHEDULES


37SIGNATURES


40EX-10.7EX-10.13EX-21.1EX-23.1EX-23.2EX-31.1EX-31.2EX-32.1EX-32.2   2




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NOTE REGARDING
    FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS  Form 10-K (Form 10-K),
  and/or Form 10-K,
  
    the loss of one or more principal customers or delays or
    cancellations of orders due to the impact of adverse business
    conditions or price competition on one or more principle
    customers;
    the inability to procure required components and raw materials;
    any downturn in the defense, aerospace, semiconductor or other
    markets in which we operate, which could cause a decline in
    selling unit prices or volume;
    reductions in military spending or changes in the acquisition
    requirements for military products;
    the inability to develop, introduce and sell new products or the
    inability to develop new manufacturing technologies;
    the failure of customers to accept our anti-tamper processing or
    the development of improved anti-tamper processing by
    competitors;
    the inability to locate appropriate purchase candidates for our
    discontinued operations being held for sale
    and/or to
    negotiate an appropriate sales price;
    the ability to locate appropriate acquisition candidates,
    negotiate an appropriate purchase price, obtain the necessary
    financing, and integrate into our business the people,
    operations, and products from acquired businesses, or implement
    other strategic alternatives;
    changes or restrictions in the practices, rules and regulations
    relating to sales in international markets; and/or
    changes resulting from severe economic downturns that affect our
    customers, suppliers and lenders.  Form 10-K, Form 10-K
 3




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PART I  ITEM 1
    BUSINESS  GENERAL
          (602) 437-1520. www.whiteedc.com Form 10-K,
  BUSINESS
    SEGMENTS
    DEFENSE
    ELECTRONICS SEGMENT
   4




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
    significant space savings and weight advantages;
    improved electrical performance; and
    improved reliability for harsh requirements.        MARKET CATEGORY



SAMPLE PROGRAMS   Missiles & Ordnance



Advanced Medium Range Air-to-Air Missile (AMRAAM)

Advanced Intercept Missile (AIM) AIM-9X

Tomahawk

Precision Guided Kits (PGK)

Extended Range Guidance Munitions (ERGM)

Patriot Advanced Capability (PAC) PAC3

Excalibur   Communication & Net-Centric



Joint Tactical Radio System (JTRS)

Single Channel Ground and Airborne Radio System
    (SINCGARS)

Combat Survivor Evader Locater (CSEL)   Aircraft



F-35 Joint Strike Fighter

F-18 Hornet

F/A-22 Raptor

V22 Osprey

Euro fighter 2000

AH64 Apache  5




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PRODUCT



SAMPLE APPLICATION   System in package



Counter-measure suite for the F-16 Fighting Falcon   Microprocessor modules



Air-to-air missiles, such as the Sidewinder AIM-9X and
    AIM-120 AMRAAM

Embedded computers used in the Apache Helicopter, Advanced
    Amphibious Assault Vehicle and the Abrams M1A2 Tank   Memory modules



Air-to-air missiles, such as the Sidewinder AIM-9X  and
    AIM-120 AMRAAM

Embedded computers used in the F-22 Raptor and Patriot PAC-3
    Missile System

Radar used in the F/A-18 Hornet

Joint Strike Fighter, F-35

Euro-fighter 2000   Mechanical components



Impulse counters, altitude counters, rounds counters, F-16 trim
    panelAnti-tamper technology



Various military programs   Backlog
    Competition
      SALES,
    MARKETING AND DISTRIBUTION
   6




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PRINCIPAL
    CUSTOMERS
        FOREIGN
    OPERATIONS
    RESEARCH,
    ENGINEERING AND PRODUCT DEVELOPMENT
    
    developing new products;
    improving existing products;
    adapting existing products to new applications; and
    developing prototype components for specific programs.    REGULATORY
    MATTERS
  Government
    Contracting Regulations
     7




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Environmental
    Protection
    International
    Trade Regulations
    RAW
    MATERIALS
   8




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INTELLECTUAL
    PROPERTY
        EMPLOYEES
    FINANCIAL
    INFORMATION BY GEOGRAPHIC SEGMENT
    AVAILABLE
    INFORMATION
  www.whiteedc.com Form 10-K, Form 10-Q, Form 8-K
  ITEM 1A
    RISK
    FACTORS  We are
    subject to various risks associated with our decision to
    streamline our business and dispose of operations classified as
    discontinued operations.
   9




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Current
    economic conditions may adversely affect our industry, business
    and results of operations.
    We are
    dependent on sales to defense-related companies for a large
    portion of our net sales and profits, and changes in military
    spending levels and patterns could negatively affect
    us.
      The
    transition of the U.S. defense industry to purchase commercial
    off-the-shelf products and other trends within our industry
    could negatively affect us.
    The
    competitive bid process for government contracts may negatively
    affect us.
   10




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Our
    goodwill has been impaired and may become impaired in the
    future.
    We
    have made and may make other acquisitions and cannot assure you
    that any future acquisitions will be successful.
  and/or
  
    exposure to unanticipated liabilities of an acquired company;
    the potential loss of key customers or key personnel of an
    acquired company;
    the recording of goodwill and intangible assets that will be
    subject to impairment testing on a regular basis and potential
    periodic impairment charges;
    the diversion of the attention of our management team from other
    business concerns;
    the risk of entering into markets or producing products where we
    have limited or no experience, including the integration of the
    purchased technologies and products with our technologies and
    products; and
    our ability to assess, integrate and implement internal controls
    of an acquired company in accordance with Section 404 of
    the Sarbanes-Oxley Act of 2002.    Our
    customers may cancel their orders, change production quantities
    or delay production at any time, which could materially reduce
    our net sales and operating results.
   11




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We
    have a concentrated customer base and, as a result, our net
    sales could decline significantly if we lose a major
    customer.
    We
    depend on military prime contractors for the sale of our
    products and the failure of these customers to achieve
    significant sales of products incorporating our components would
    reduce our net sales and operating results.
    We
    depend on the continuing trend of outsourcing by prime military
    contractors, which is subject to factors beyond our
    control.
    Our
    failure to comply with United States government laws and
    regulations would reduce our ability to be awarded future
    military business.
    We may
    have an adverse resolution of litigation which may harm our
    operating results or financial condition.
   12




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We may
    fail to meet projected financial results because our net sales,
    gross profits and net income will fluctuate from period to
    period.
    
    our inability to adjust expenses for any particular quarter in
    response to net sales shortfalls because a substantial component
    of our operating expenses are fixed costs;
    the complexity of our manufacturing processes and the
    sensitivity of our production costs to declines in manufacturing
    yields, which make yield problems both possible and costly when
    they occur;
    expenses associated with acquisitions; and
    general economic conditions.    We
    have a lengthy sales cycle, which increases the likelihood that
    our quarterly net sales will fluctuate and which may, in turn,
    adversely affect the market price of our common
    stock.
    Our
    failure to detect defects in our products could materially harm
    our relationship with customers, our reputation and our
    business.
    Our
    operating results could be seriously harmed if the markets in
    which we sell our products do not grow.
   13




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Downturns
    in the defense and aerospace markets could reduce the value of
    our inventories and cause a reduction in our
    profits.
    We are
    dependent on international markets for a large portion of our
    purchases and sales.
      
    fluctuations in foreign currencies, which may adversely affect
    the prices of our products and the prices of raw materials used
    in our products;
    trade disputes;
    changes in regulatory requirements, license requirements,
    tariffs and other trade barriers;
    the possibility of quotas, duties, taxes or other changes or
    restrictions upon the importation or exportation of our products
    implemented by the United States government or foreign
    governments;
    the timing and availability of export or other licenses;
    general political and economic conditions in the countries in
    which we sell our products;
    language and other cultural differences which may inhibit our
    sales and marketing efforts;
    costs of complying with a variety of foreign laws, including
    import or export licensing requirements;
    difficulty of accounts receivable collections;
    increased chances of our intellectual property being infringed
    as a result of the failure of foreign governments to enforce the
    protection of intellectual property rights; and
    public health issues that could disrupt local economies.  If we
    are unable to retain employees with key technical expertise, our
    financial condition and future prospects could be materially
    harmed.
    If we
    are unable to protect our intellectual property or if we are
    found to have infringed third party intellectual property
    rights, our business could be adversely and materially
    affected.
   14




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Our
    business is dependent upon retaining key personnel and
    attracting new employees.
    Our
    failure to comply with environmental regulations could subject
    us to costs and production delays.
    If our
    selling prices decline and we fail to reduce our costs, our
    sales and operating results will decline.
     15




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If we
    fail to develop, introduce and sell new products or fail to
    develop and implement new manufacturing technologies, our
    operating results could be adversely affected.
    
    we fail to complete and introduce new product designs in a
    timely manner;
    we are unable to design and manufacture products according to
    the requirements of our customers;
    our customers do not successfully introduce new systems or
    products incorporating our products;
    market demand for our new products does not develop as
    anticipated;
    we are unable to obtain raw materials in a timely manner or at
    favorable prices;
    we are unable to maintain pricing to sustain or grow our gross
    margins; or
    we fail to anticipate our customers changing needs and
    emerging technological trends.    Increasing
    competition could reduce the demand for our
    products.
    We
    depend on limited suppliers for certain critical raw materials.
    Our inability to obtain sufficient raw materials at favorable
    prices could increase our prices or otherwise harm our
    business.
   16




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Terrorism
    and the global responses to terrorism, the unsettled world
    political situations and perceived nuclear threats increase
    uncertainties with respect to many of our businesses and may
    adversely affect our business and results of
    operations.
      While
    we believe our control systems are effective, there are inherent
    limitations in all control systems, and misstatements due to
    error or fraud may occur and not be detected.
    Our
    Board of Directors is authorized to issue shares of preferred
    stock that could have rights superior to our outstanding shares
    of common stock, and, if issued, could adversely impact the
    value of our common stock.
    
    voting rights, including the right to vote as a class on
    particular matters;
    preferences as to dividends and liquidation rights;
    conversion rights and anti-dilution protections; and
    redemption rights.   17




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Our
    shareholders rights plan may make it more difficult for
    others to obtain control of us.
    Our
    stock price has been volatile.
    
    future announcements concerning our company, our competitors or
    our principal customers, such as quarterly operating results,
    adjustments to previously reported results, changes in earnings
    estimates by analysts, technological innovations, new product
    introductions, governmental regulations, or litigation;
    the liquidity within the market of our common stock;
    sales of common stock by our officers, directors and other
    insiders;
    investor perceptions concerning the prospects of our business;
    market conditions and investor sentiment affecting market prices
    of equity securities of high technology companies in the defense
    electronics industry;
    general economic, political and market conditions, such as
    recessions or international currency fluctuations;
    market reaction to acquisitions, joint ventures or strategic
    investments announced by us or our competitors;
    lawsuits filed against the Company; and
    compliance with the Sarbanes-Oxley Act.  ITEM 1B
    UNRESOLVED
    STAFF COMMENTS    ITEM 2
    PROPERTIES    SquareLocation

Footage


Own/LeasePhoenix, Arizona (Headquarters)


74,000


LeaseFort Wayne, Indiana


75,000


Own*Hillsboro, Oregon


58,000


Lease*Columbus, Ohio


41,000


Own     *
    
    The Hillsboro, Oregon and Columbus, Ohio businesses are now
    included in discontinued operations. We expect to sell the
    building in Columbus, Ohio and either transfer, sublease or
    terminate the lease in Hillsboro, Oregon in connection with the
    sale of the operations. 18




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ITEM 3
    LEGAL
    PROCEEDINGS    ITEM 4
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   EXECUTIVE
    OFFICERS OF THE REGISTRANT    Roger A. Derse, 58
    Office of the President, Vice President and Chief Financial
    Officer, Secretary and Treasurer

Roger A. Dersehas been a member of the Office of the
    President since August 2008 and our Vice President and Chief
    Financial Officer since March 2004. Mr. Derse has over
    25 years experience in finance and accounting. He
    previously served as Consultant/Acting CFO for Vitron
    Manufacturing from 2002 through February 2004 and was Executive
    Vice President and Chief Operating and Financial Officer for
    Nanonics Corporation from 1998 to 2001. He was Chief Financial
    Officer for the White Microelectronics Division of Bowmar
    Instrument Corporation from 1993 to 1997. Mr. Derse holds a
    Bachelor of Science in Industrial Engineering from the
    University of Michigan, a Master in Accounting from the
    University of Arizona, and is a Certified Public Accountant.Dante V. Tarantine, 55
    Office of the President, Executive Vice President, Sales and
    Marketing

Dante V. Tarantinehas been a member of the Office of the
    President since August 2008 and our Executive Vice President,
    Sales and Marketing since June 2008. He served as our Executive
    Vice President, Corporate Strategic Development from July 2007
    to June 2008, our Executive Vice President, Sales and Marketing
    from January 2003 to June 2007 and our Senior Vice President of
    Sales from August 1998 to January 2003. He previously served as
    our Senior Vice President Sales and Marketing from September
    1991 to August 1998 and as Vice President of Marketing for White
    Microelectronics from February 1987 to September 1991.
    Mr. Tarantine holds a Bachelor of Science in Electrical
    Engineering from California State University, Northridge.  19




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PART II  ITEM 5
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Market
    Information
    High


LowYear Ended September 27, 2008First quarter


5.45



4.46Second quarter


5.00



3.99Third quarter


5.39



4.26Fourth quarter


5.25



4.27Year Ended September 29, 2007First quarter


5.84



4.84Second quarter


6.95



5.43Third quarter


6.85



5.66Fourth quarter


6.02



3.50     Issuer
    Purchases of Equity Securities
   20




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5-year
  COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
 Among White Electronic Designs Corporation, The NASDAQ
    Composite Index
 And The S&P Aerospace & Defense Index
  
  *
    
    $100 invested on September 27, 2003 in stock & index
    (including reinvestment of dividends, if any). Fiscal year
    ending Saturday nearest September
    30th.  9/03


9/04


9/05


9/06


9/07


9/08White Electronic Designs Corporation



100.00




45.49




47.44




46.23




48.56




46.51NASDAQ Composite



100.00




107.74




123.03




131.60




158.88




119.05S&P Aerospace & Defense



100.00




133.81




155.16




188.04




249.91




186.37    21




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ITEM 6
    SELECTED
    CONSOLIDATED FINANCIAL DATA  2004-2008
  2008


2007


2006


2005


2004Statement of Operations Data:Net sales

$
56,355


$
52,073


$
48,756


$
48,452


$
47,259Income from continuing operations(1)

$
2,483


$
5,173


$
5,524


$
6,025


$
3,961Income (loss) from discontinued operations


(8,470
)


(2,087
)


489


$
(9,561
)

$
846Net income (loss)

$
(5,987
)

$
3,086


$
6,013


$
(3,536
)

$
4,807Income from continuing operations per common share:Basic

$
0.11


$
0.22


$
0.23


$
0.25


$
0.16Diluted

$
0.11


$
0.21


$
0.22


$
0.24


$
0.16Income (loss) from discontinued operations per common share(2):Basic

$
(0.38
)

$
(0.09
)

$
0.02


$
(0.39
)

$
0.03Diluted

$
(0.38
)

$
(0.09
)

$
0.02


$
(0.39
)

$
0.03Net income (loss) per common share:Basic

$
(0.27
)

$
0.13


$
0.25


$
(0.14
)

$
0.20Diluted

$
(0.27
)

$
0.13


$
0.24


$
(0.14
)

$
0.19Balance Sheet Data (at year end):Total assets

$
111,658


$
124,890


$
130,508


$
121,268


$
124,900Long-term debt

$



$



$



$



$
Shareholders equity

$
98,838


$
106,372


$
110,180


$
104,220


$
107,215   This table should be read in conjunction with the
    Consolidated Financial Statements and the Notes to the
    Consolidated Financial Statements provided elsewhere herein.
    (1)
    
    In fiscal 2008, the Company recorded $2.8 million in
    severance costs related to the departure of the CEO.
    Approximately $1.0 million of these costs were recorded in
    stock compensation expense for accelerated vesting and
    modifications of stock-based compensation. The remainder
    primarily related to cash payments in accordance with his
    severance agreement.(2)
    
    In fiscal 2008, the Company recorded $3.5 million for the
    estimated loss on sale of discontinued operations. This
    consisted of the write-off of existing technology and customer
    relationship intangibles as well as the write-down of certain
    property, plant and equipment and inventory to lower of cost or
    market. In fiscal 2007, the Company recorded a non-cash
    intangible asset impairment charge of $1.4 million related
    to customer relationships. In fiscal 2006, the Company recorded
    a non-cash goodwill impairment charge of approximately
    $0.4 million in connection with its review of goodwill for
    impairment. In fiscal 2005, the Company recorded a non-cash
    goodwill impairment charge of approximately $11.4 million
    in connection with its review of goodwill for impairment. The
    goodwill impairments had no corresponding income tax benefit. 22




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ITEM 7
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K.
  Overview
    Executive
    Summary
  Continuing
    Operations
           23




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Discontinued
    Operations
              
    Pursuit of Circuit Card Assembly (CCA) for military
    customers. Update:Expansion in CCA for defense customers
    continued with several advanced design and development orders as
    well as production orders. Quoting activity for the fourth
    quarter also increased over the third quarter of fiscal 2008.
    Next generation Anti-Tamper (AT) technology.
    Update:AT technology development has continued with
    advances in protection of sensitive data. As this business
    involves classified programs, these programs are generally not
    discussed. Quoting activity increased during the fourth quarter
    over the previous quarter, with several production orders booked.
    Continue the stock repurchase program. Update:In April
    2008, we announced our third repurchase program to acquire up to
    an additional 10%, or approximately 2.2 million shares, of
    the Companys outstanding common stock. The duration of the
    program is twenty-four months and will be funded from available
    working capital. The timing and amount of any purchases under
    this program will depend on market conditions and corporate and
    regulatory considerations. During the third quarter we purchased
    13,179 shares at an average price of $4.73 per share. No
    further purchase activity occurred during the fourth quarter.
    Resumption of the program is under evaluation.
    Pursuing strategic alternatives. Update:The
    Companys previously announced exploration of strategic
    alternatives under the supervision of the independent special
    committee of its Board is actively underway. 24




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The Company continues to work closely with its financial advisor
    Jefferies Quarterdeck, a division of Jefferies Co. to
    identify opportunities to enhance stockholder value. Wilson
    Sonsini Goodrich & Rosati, Professional Corporation,
    is acting as legal advisor.      Results
    of Operations
    Fiscal Year EndedSeptember 27,


September 29,


September 30,2008


2007


2006Net sales


100.0
%


100.0
%


100.0
%Cost of sales


59.4
%


57.1
%


55.8
%Gross profit


40.6
%


42.9
%


44.2
%Operating expenses:Selling, general and administrative


30.6
%


27.0
%


25.6
%Research and development


6.4
%


6.5
%


6.6
%Total operating expenses


37.0
%


33.5
%


32.2
%Operating income


3.6
%


9.4
%


12.0
%Interest income


2.8
%


4.9
%


4.5
%Income from continuing operations, before income taxes


6.4
%


14.3
%


16.5
%Provision for income taxes


(2.0
)%


(4.4
)%


(5.3
)%Income from continuing operations


4.4
%


9.9
%


11.2
%Discontinued operations:Income (loss) from discontinued operations, net of tax


(8.8
)%


(4.0
)%


1.1
%Loss on sale of discontinued operations, net of tax


(6.2
)%






Income (loss) from discontinued operations


(15.0
)%


(4.0
)%


1.1
%Net income (loss)


(10.6
)%


5.9
%


12.3
%   Fiscal
    Year ended September 27, 2008 compared to Fiscal Year ended
    September 29, 2007
  Net
    Sales
   25




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Gross
    Profit
    Selling,
    General and Administrative Expenses
    s
  Research
    and Development Expenses
      Interest
    Income
   26




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Income
    Taxes
    Fiscal
    Year ended September 29, 2007 compared to Fiscal Year ended
    September 30, 2006
  Net
    Sales
      Gross
    Profit
    Selling,
    General and Administrative Expenses
    Research
    and Development Expenses
    Interest
    Income
   27




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Income
    Taxes
    Liquidity
    and Capital Resources
                 28




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Contractual
    Obligations
    Payments Due by Period as of September 27, 2008Less Than








More ThanTotal


1 Year


1 - 3 Years


3 - 5 Years


5 YearsOperating leases(1)

$
6,205


$
856


$
1,760


$
1,837


$
1,752Pension funding(2)


















Total Contractual Obligations

$
6,205


$
856


$
1,760


$
1,837


$
1,752     (1)
    
    We also have the following obligations related to discontinued
    operations: Total  $926, Less than
    1 Year  $721, 1-3 Years  $205.(2)
    
    We are committed to meeting the annual minimum funding
    requirements relating to our pension plan, which covers 28
    active employees at our Fort Wayne, Indiana facility. We
    contributed $0.1 million to the pension plan in fiscal year
    2008. We do not expect minimum funding requirements to be
    material. We may also make contributions to the pension plan in
    excess of the minimum funding requirements during any year. See
    Note 8 to the Consolidated Financial Statements for
    additional information regarding the pension fund. 29




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##### Table of Contents



Off-Balance
    Sheet Arrangements
  Regulation S-K.
  Contingencies
    Critical
    Accounting Policies and Estimates
    Revenue
    Recognition
    Excess
    and Obsolete Inventory
    Accounts
    Receivable and Allowance for Doubtful Accounts
   30




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##### Table of Contents



Defined
    Benefit Plan
    Goodwill
    and Intangible Assets
    Stock-Based
    Compensation Expense
    Income
    Taxes
    Accounting for Uncertainty in Income Taxes
 31




---



##### Table of Contents



Recent
    Accounting Pronouncements
  Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
  Fair Value Measurements No. FAS 157-2,
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities instrument-by-instrument
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements, an amendment of Accounting Research
    Bulletin No. 51
  No. 07-01, Accounting for Collaborative Arrangements
 32




---



##### Table of Contents



No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent
  Disclosures about Derivative Instruments and Hedging
    Activities,
  No. 142-3, Determination of the Useful Life of Intangible Assets (FSP 142-3). FSP 142-3 Goodwill and
    Other Intangible Assets
  14-1, Accounting for Convertible Debt Instruments That May Be
    Settled in Cash upon Conversion (Including Partial Cash
    Settlement) 14-1). 14-1 14-1
  ITEM 7A
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK       33




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##### Table of Contents



ITEM 8
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Regulation S-X Form 10-K.
  ITEM 9
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A
    CONTROLS
    AND PROCEDURES  Evaluation of Disclosure Controls and
    Procedures. Form 10-K Rule 13a-14
  Rule 13a-15(e) Rule 15d-15(e)
  Changes in Internal Control over Financial
    Reporting.
  Managements Report on Internal Control over Financial
    Reporting. Rules 13a-15(f) 15d-15(f).
  Internal Control-Integrated
    Framework
  Form 10-K,
 34




---



##### Table of Contents



Form 10-K.
  ITEM 9B
    OTHER
    INFORMATION  Annual
    Salary Increases
    Name

Title

New SalaryRoger A. Derse

Vice President, Chief Financial Officer, Secretary and Treasurer

$
240,500Dante V. Tarantine

Executive Vice President, Sales and Marketing

$
256,000     Cash
    Bonuses
    Name

Title

BonusRoger A. Derse

Vice President, Chief Financial Officer, Secretary and Treasurer

$
30,000Dante V. Tarantine

Executive Vice President, Sales and  Marketing

$
30,000     Restricted
    Stock Units
   PART III  ITEM 10
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Form 10-K)
  Form 10-K,
 35




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##### Table of Contents



www.whiteedc.com Form 8-K
  ITEM 11
    EXECUTIVE
    COMPENSATION    ITEM 12
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    Equity
    Compensation Plan Information
    Number of SecuritiesRemaining AvailableNumber of Securities





for Future Issuanceto be Issued Upon


Weighted Average


Under EquityExercise of


Exercise Price of


Compensation PlansOutstanding Options


Outstanding Options


(Excluding Securitiesand Restricted Stock


and Restricted Stock


Reflected in Column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved by security holders(1)


1,644,650


$
4.33



590,737Equity compensation plans not approved by security holders(2)


591,270


$
4.77



235,936Total


2,235,920


$
4.44



826,673     (1)
    
    Equity compensation plans approved by security holders include
    the 1994 Flexible Stock Plan, as amended, the 2001 Director
    Stock Plan, the Amendment to the Companys Stock Plan for
    Non-Employee Directors and the 2006 Director Restricted
    Stock Plan.(2)
    
    Equity Compensation Plans not approved by security holders
    include the following plans:  Shokrgozar Plan  During fiscal 2000,
    the Companys Board of Directors approved an independent
    grant to Mr. Shokrgozar for a nonqualified stock option to
    purchase up to 125,000 shares of common stock at an
    exercise price of $2.75 per share, vesting over four years. At
    September 27, 2008, 125,000 shares from this
    independent option right were still under option.  2000 Broad Based Non-Qualified Stock
    Plan
  IDS Plan
 36




---



##### 



ITEM 13
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS    ITEM 14
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   PART IV  ITEM 15
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  (a)(1) Financial Statements
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 Financial Statements

PageReport of Independent Registered Public
    Accounting Firm  Grant Thornton LLP


41Report of Independent Registered Public
    Accounting Firm  PricewaterhouseCoopers LLP


43Consolidated Balance Sheets as of September 27,
    2008 and September 29, 2007


44Consolidated Statements of Operations for the
    years ended September 27, 2008, September 29, 2007 and September
    30, 2006


45Consolidated Statements of Shareholders
    Equity for the years ended September 27, 2008, September 29,
    2007 and September 30, 2006


46Consolidated Statements of Cash Flows for the
    years ended September 27, 2008, September 29, 2007 and September
    30, 2006


47Notes to Consolidated Financial Statements


48    (a)(2) Financial Statement Schedules
  INDEX TO
    FINANCIAL STATEMENT SCHEDULES
  Financial Schedule

PageSchedule II  Valuation and Qualifying Accounts
    and Reserves


74   (a)(3) Exhibits
  ExhibitNumber

Description2
.1

Agreement and Plan of Merger dated May 3, 1998 by and among
    Bowmar Instrument Corporation and Electronic Designs, Inc. and
    Bravo Acquisition Subsidiary, Inc. (incorporated herein by
    reference to Exhibit 2 on Form 8-K filed May 6, 1998).2
.2

Amendment to Agreement and Plan of Merger dated June 9, 1998
    (incorporated herein by reference to Exhibit 2.1A on Form S-4
    filed June 11, 1998, Registration No. 333-56565).2
.3

Second Amendment to Agreement and Plan of Merger dated August
    24, 1998 (incorporated herein by reference to Exhibit 2.1B on
    Form S-4/A, filed September 2, 1998, Registration No. 333-56565).2
.4

Agreement and Plan of Reorganization dated as of January 22,
    2003 by and among White Electronic Designs Corporation, IDS
    Reorganization Corp., and Interface Data Systems, Inc.
    (incorporated herein by reference to Exhibit 2.1 on Form 8-K
    filed January 24, 2003). 37




---



##### Table of Contents



ExhibitNumber

Description2
.5

Agreement and Plan of Reorganization dated January 29, 2001, by
    and among White Electronic Designs Corporation, PV Acquisition
    Corp., Panelview, Inc., Panelview Partners L.P., Randal Barber,
    Gaylene Barber, Marshall R. Moran, John Cochran, Greyson N.
    Barber, and Morgan D. Barber (incorporated herein by reference
    to Exhibit 10.29 on Form 10-Q, filed February 13, 2001).2
.6

Agreement and Plan of Merger dated September 26, 2006, by and
    between Interface Data Systems, Inc. and White Electronic
    Designs Corporation (incorporated herein by reference to Exhibit
    2.6 on Form 10-Q filed February 8, 2007).3
.1

Restated Articles of Incorporation of White Electronic Designs
    Corporation (incorporated herein by reference to Exhibit 3.1 on
    Form 10-K filed December 24, 1998).3
.2

Amended and Restated By-Laws of White Electronic Designs
    Corporation dated December 5, 2007 (incorporated herein by
    reference to Form 8-K filed December 7, 2007).4
.1

Shareholder Rights Agreement, dated December 6, 1996
    (incorporated herein by reference to Exhibit 5(b) on Form
    8-K, filed December 19, 1996).4
.2

Amendment No. 1 to Rights Agreement, dated as of December 6,
    1996 (incorporated herein by reference to Exhibit 4.3 on Form
    S-4, filed June 11, 1998, Registration No. 333-56565).4
.3

Amendment No. 2 to Rights Agreement, effective December 5, 2006
    (incorporated herein by reference to Exhibit 4.3 on Form 10-K,
    filed December 14, 2006).10
.1

Agreement to be Bound by Registration Rights Agreements, dated
    as of May 3, 1998, by and between Bowmar Instrument Corporation
    and Electronic Designs, Inc. (incorporated herein by reference
    to Exhibit 10.1 on Form S-4, filed Jun 11, 1998, Registration
    No. 333-56565).10
.2**

Agreement to be Bound by Severance Agreements and Employment
    Agreement, dated as of May 3, 1998, by and between Bowmar
    Instrument Corporation and Electronic Designs, Inc.
    (incorporated herein by reference to Exhibit 10.2 on Form S-4,
    filed June 11, 1998, Registration No. 333-56565).10
.3**

White Electronic Designs Corporation 1994 Flexible Stock Plan
    (incorporated herein by reference to Exhibit 99 to the
    Registration Statement on Form S-8, filed May 9, 2001,
    Registration No. 333-60544).10
.4**

Amendment to the Bowmar Instrument Corporation 1994 Flexible
    Stock Plan, effective May 7, 2001 (incorporated herein by
    reference to Appendix A to the Companys definitive Proxy
    Statement prepared in connection with the 2001 Annual Meeting of
    Shareholders).10
.5

White Electronic Designs Corporation Rule 10b5-1 Stock Purchase
    Plan, dated June 21, 2006 (incorporated by reference to Exhibit
    10.3 on Form 10-Q, filed August 10, 2006).10
.6

Credit Agreement by and among White Electronic Designs
    Corporation, certain lenders named therein and JPMorgan Chase
    Bank, N.A., dated April 3, 2007 (incorporated by reference to
    Exhibit 10.2 on Form 10-Q, filed May 10, 2007).10
.7*

First Modification Agreement to Revolving Line of Credit
    Agreement with JPMorgan Chase Bank, N.A., dated February 12,
    2008.10
.8

Second Modification Agreement to Revolving Line of Credit
    Agreement with JPMorgan Chase Bank, N.A., dated August 5, 2008
    (incorporated herein by reference to Exhibit 10.1 on Form 10-Q,
    filed August 7, 2008).10
.9**

White Electronic Designs Corporation 2001 Director Stock
    Plan (incorporated herein by reference to Exhibit 99 on Form
    S-8, filed May 9, 2001, Registration No. 333-60536).10
.10**

Amendment to Bowmar Instrument Corporation Stock Option Plan for
    Non-Employee Directors (incorporated herein by reference to
    Appendix D to the Companys definitive Proxy Statement in
    connection with the 2001 Annual Meeting of Shareholders).10
.11**

White Electronic Designs Corporation Stock Option Plan for
    Non-Employee Directors (incorporated herein by reference to
    Exhibit 99 on Form S-8, filed May 9, 2001, Registration No.
    333-60548). 38




---



##### Table of Contents



ExhibitNumber

Description10
.12**

White Electronic Designs Corporation 2000 Broad Based Employee
    Stock Option Plan (incorporated herein by reference to Exhibit
    99 on Form S-8, filed May 9, 2001, Registration No. 333-60542).10
.13***

Severance Agreement and Release of Claims, dated August 28,
    2008, between White Electronic Designs Corporation and Hamid R.
    Shokrgozar (incorporated herein by reference to Exhibit 10.1 on
    Form 8-K, filed August 29, 2008).10
.14**

Non-Qualified Stock Option Agreement between White Electronic
    Designs Corporation and Hamid Shokrgozar dated November 10, 1999
    (incorporated herein by reference to Exhibit 10.42 on Form 10-K
    filed on December 23, 2002).10
.15

Industrial Real Estate Lease dated February 4, 1997 between
    Bowmar Instrument Corp., as tenant, and Allred Phoenix
    Properties, L.L.C., as landlord (incorporated herein by
    reference to Exhibit 10.5 on Form 10-K filed December 29, 2007).10
.16

First Amendment to certain Industrial Real Estate Lease dated
    February 4, 1997 between White Electronic Designs Corporation
    (as successor  in  interest of Bowmar
    Instrument Corp.) and Gus Enterprises  XII, L.L.C.
    (as successor  in  interest of Allred
    Phoenix Properties, L.L.C.) dated November 5, 2004 (incorporated
    herein by reference to Exhibit 10.21 on Form 10-K filed on
    December 16, 2004).10
.17**

White Electronic Designs Corporation 2006 Director
    Restricted Stock Plan, effective March 24, 2006 (incorporated by
    reference to Appendix A to the Companys definitive Proxy
    Statement in connection with the 2006 Annual Meeting of
    Shareholders).10
.18**

First Amendment to 2006 Director Restricted Stock Plan,
    effective August 24, 2006 (incorporated by reference to Exhibit
    99.1 on Form 8-K, filed August 30, 2006).10
.19**

Form of Restricted Stock Agreement to 2006 Director
    Restricted Stock Plan, effective August 24, 2006 (incorporated
    by reference to Exhibit 99.2 on Form 8-K, filed on August 30,
    2006).10
.20**

Change of Control Agreement between Dan V. Tarantine and White
    Electronic Designs Corporation, effective December 13, 2006
    (incorporated herein by reference to Exhibit 10.26 on Form 10-K,
    filed December 14, 2006).10
.21**

Change of Control Agreement between Roger A. Derse and White
    Electronic Designs Corporation, effective December 13, 2006
    (incorporated herein by reference to Exhibit 10.27 on Form 10-K,
    filed December 14, 2006).10
.22**

Form of Restricted Stock Units Award Agreement under the 1994
    Flexible Stock Plan (incorporated herein by reference to Exhibit
    10.19 on Form 10-K, filed December 13, 2007).10
.23**

Form of Performance Share Award Agreement under the 1994
    Flexible Stock Plan (incorporated herein by reference to Exhibit
    10.20 on Form 10-K, filed December 13, 2007).21
.1*

Subsidiaries of White Electronic Designs Corporation.23
.1*

Consent of Grant Thornton LLP.23
.2*

Consent of PricewaterhouseCoopers LLP.31
.1*

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.31
.2*

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.32
.1##

Certification Pursuant to 18 U.S. C. Section 1350, As Adopted
    Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002.32
.2##

Certification Pursuant to 18 U.S. C. Section 1350, As Adopted
    Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith.**
    
    Management compensatory contract, plan or arrangement.##
    
    Furnished herewith. 39




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##### Table of Contents



SIGNATURES       /s/  Roger
    A.
    Derse

/s/  Dante
    V.
    TarantineRoger A. Derse
    Office of the President, Vice President and
    Chief Financial Officer, Secretary and Treasurer

Dante V. Tarantine 
    Office of the President,
    Executive Vice President, Sales and MarketingDate: December 11, 2008

Date: December 11, 2008     /s/  Edward
    A.
    White

/s/  Paul
    D.
    QuadrosEdward A. White
    Chairman of the Board of Directors

Paul D. Quadros
    DirectorDate: December 11, 2008

Date: December 11, 2008/s/  Thomas
    M.
    Reahard

/s/  Thomas
    J.
    ToyThomas M. Reahard
    Lead Director

Thomas J. Toy
    DirectorDate: December 11, 2008

Date: December 11, 2008/s/  Jack
    A.
    HenryJack A. Henry
    DirectorDate: December 11, 2008  40




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Internal Control  Integrated Framework
        Internal Control  Integrated Framework
   41




---



##### Table of Contents



Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement
    No. 109,
    GRANT
    THORNTON LLP
   42




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     , Form 10-K). Form 10-K).
    
   43




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES



CONSOLIDATED
    BALANCE SHEETS  September 27,


September 29,2008


2007(In thousands, exceptshare data)ASSETSCurrent AssetsCash and cash equivalents

$
52,604


$
48,652Accounts receivable, less allowance for doubtful accounts of $74
    and $46


10,508



10,132Inventories


15,359



15,018Prepaid expenses and other current assets


2,027



647Deferred income taxes


2,962



3,235Assets held for sale


12,668



25,331Total Current Assets


96,128



103,015Property, plant and equipment, net


10,137



9,705Deferred income taxes


1,900



1,297Goodwill


1,764



1,764Other assets


67



67Assets held for sale


1,662



9,042Total Assets

$
111,658


$
124,890LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesAccounts payable

$
2,038


$
1,542Accrued salaries and benefits


1,490



947Other accrued expenses


1,260



2,229Deferred revenue


4,016



4,736Liabilities related to assets held for sale


2,327



6,412Total Current Liabilities


11,131



15,866Accrued pension liability


640



271Other liabilities


948



1,090Liabilities related to assets held for sale


101



1,291Total Liabilities


12,820



18,518Commitments and ContingenciesShareholders EquityPreferred stock, 1,000,000 shares authorized, no shares
    issued






Common stock, $0.10 stated value, 60,000,000 shares
    authorized, 25,048,639 and 24,841,586 shares issued


2,504



2,484Treasury stock, 2,464,371 and 1,828,412 shares, at par


(247
)


(183
)Additional paid-in capital


82,608



83,787Retained earnings


14,241



20,228Accumulated other comprehensive income (loss)


(268
)


56Total Shareholders Equity


98,838



106,372Total Liabilities and Shareholders Equity

$
111,658


$
124,890    44




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year EndedSeptember 27,


September 29,


September 30,2008


2007


2006(In thousands, except share and per share data)Net sales

$
56,355


$
52,073


$
48,756Cost of sales


33,458



29,708



27,186Gross profit


22,897



22,365



21,570Operating expenses:Selling, general and administrative


17,250



14,034



12,422Research and development


3,611



3,406



3,221Total operating expenses


20,861



17,440



15,643Operating income


2,036



4,925



5,927Interest income


1,585



2,540



2,180Income from continuing operations before income taxes


3,621



7,465



8,107Provision for income taxes


(1,138
)


(2,292
)


(2,583
)Income from continuing operations


2,483



5,173



5,524Discontinued operations (Note 13):Income (loss) from discontinued operations, net of tax


(4,955
)


(2,087
)


489Loss on sale of discontinued operations, net of tax


(3,515
)






Income (loss) from discontinued operations


(8,470
)


(2,087
)


489Net income (loss)

$
(5,987
)

$
3,086


$
6,013Income from continuing operations per common share:Basic

$
0.11


$
0.22


$
0.23Diluted

$
0.11


$
0.21


$
0.22Income (loss) from discontinued operations per common share:Basic

$
(0.38
)

$
(0.09
)

$
0.02Diluted

$
(0.38
)

$
(0.09
)

$
0.02Net income (loss) per common share:Basic

$
(0.27
)

$
0.13


$
0.25Diluted

$
(0.27
)

$
0.13


$
0.24Weighted average number of common shares and equivalents:Basic


22,509,796



23,574,852



24,488,041Diluted


23,042,748



24,107,677



24,930,939    45




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##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY
  AccumulatedAdditional





Other


TotalCommon Stock


Treasury


Paid-in


Retained


Comprehensive


ShareholdersShares


Amount


Stock


Capital


Earnings


Income (Loss)


Equity(In thousands of dollars, except share data)Balance, October 1, 2005


24,479,276


$
2,448


$
(4
)

$
90,829


$
11,129


$
(182
)

$
104,220Net income


















6,013







6,013Minimum pension liability






















145



145Comprehensive income


























6,158Stock options and warrants exercised


187,114



19







443











462Stock-based compensation expense














373











373Common stock repurchased through common stock purchase plan










(25
)


(1,174
)










(1,199
)Tax benefits related to exercise of stock options














166











166Balance, September 30, 2006


24,666,390



2,467



(29
)


90,637



17,142



(37
)


110,180Net income


















3,086







3,086Comprehensive income


























3,086Stock options and warrants exercised


162,696



16







431











447Restricted stock vested


12,500



1







(1
)










Stock-based compensation expense














397











397Common stock repurchased through common stock purchase plan










(154
)


(7,887
)










(8,041
)Tax benefits related to exercise of stock options and warrants














210











210Adjustment to initially adopt SFAS 158, net of tax






















93



93Balance, September 29, 2007


24,841,586



2,484



(183
)


83,787



20,228



56



106,372Net loss


















(5,987
)






(5,987
)Defined benefit pension plan:Net loss, net of tax






















(102
)


(102
)Net prior service cost, net of tax






















(222
)


(222
)Comprehensive loss


























(6,311
)Stock options exercised


82,053



7







285











292Restricted stock vested


125,000



13







(13
)










Stock-based compensation expense














1,682











1,682Common stock repurchased through common stock purchase plan










(64
)


(3,158
)










(3,222
)Tax benefits related to exercise of stock options














25











25Balance, September 27, 2008


25,048,639


$
2,504


$
(247
)

$
82,608


$
14,241


$
(268
)

$
98,838    46




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##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year EndedSeptember 27,


September 29,


September 30,2008


2007


2006(In thousands)OPERATING ACTIVITIES:Income from continuing operations

$
2,483


$
5,173


$
5,524Adjustments to reconcile income from continuing operations to
    net cash provided by operating activities:Depreciation


2,498



2,284



2,556Deferred income tax


(330
)


(229
)


(1,523
)Loss on disposition of property, plant and equipment


99



26



50Stock-based compensation expense related to employee stock awards


1,682



397



373Tax benefit related to exercise of stock awards


25



210



166Excess tax benefits from stock-based compensation


(16
)


(56
)


(84
)Pension costs


45







Net changes in balance sheet accounts:Accounts receivable


(376
)


(2,091
)


988Inventories


(341
)


(3,971
)


376Prepaid expenses and other current assets


(1,380
)


5,710



(5,687
)Accounts payable


437



(801
)


1,062Accrued expenses and deferred revenue


(1,146
)


(2,251
)


4,031Other long-term liabilities


(142
)


(127
)


215Net cash provided by operating activities


3,538



4,274



8,047INVESTING ACTIVITIES:Acquisition of property, plant and equipment


(2,980
)


(2,083
)


(3,611
)Proceeds from disposition of property, plant, and equipment


10







Net cash used in investing activities


(2,970
)


(2,083
)


(3,611
)FINANCING ACTIVITIES:Common stock issued for exercise of options, warrants and
    restricted stock


292



447



462Repurchase of common stock


(3,222
)


(8,041
)


(1,199
)Excess tax benefits from stock-based compensation


16



56



84Net cash used in financing activities


(2,914
)


(7,538
)


(653
)Net change in cash and cash equivalents from continuing
    operations


(2,346
)


(5,347
)


3,783Cash flows from discontinued operations:Net cash provided by (used in) operating activities


6,558



(3,345
)


1,433Net cash provided by (used in) investing activities


(260
)


1,515



(395
)Net change in cash and cash equivalents from discontinued
    operations


6,298



(1,830
)


1,038Net change in cash and cash equivalents


3,952



(7,177
)


4,821Cash and cash equivalents at beginning of year


48,652



55,829



51,008Cash and cash equivalents at end of year

$
52,604


$
48,652


$
55,829SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for income taxes

$
3,081


$
1,018


$
4,649SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
    ACTIVITIES:Acquisition of property, plant and equipment in accounts payable

$
59


$
131


$
45    47




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    NATURE OF
    OPERATIONS    2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  a.
    Principles
    of Consolidation    b.
    Fiscal
    Year-End    c.
    Accounting
    Estimates    d.
    Reclassifications    e.
    Cash
    and Cash Equivalents    f.
    Accounts
    Receivable   48




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    g.
    Inventories    h.
    Property,
    Plant and Equipment    i.
    Goodwill
    and Other Intangible Assets          j.
    Product
    Warranties   49




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  k.
    Revenue
    Recognition      l.
    Shipping
    Costs    m.
    Research
    and Development    n.
    Income
    Taxes    o.
    Fair
    Value of Financial Instruments   50




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##### Table of Contents



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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  p.
    Earnings
    (Loss) per Share      Fiscal Year Ended September 27, 2008Income from


Loss fromContinuing


DiscontinuedOperations


Operations


Net LossBasic EPSIncome (loss)  (numerator)

$
2,483,000


$
(8,470,000
)

$
(5,987,000
)Weighted average common shares outstanding - (denominator)


22,509,796



22,509,796



22,509,796Earnings (loss) per share  Basic

$
0.11


$
(0.38
)

$
(0.27
)Diluted EPSIncome (loss)  (numerator)

$
2,483,000


$
(8,470,000
)

$
(5,987,000
)Weighted average common shares outstanding


22,509,796



22,509,796



22,509,796Dilutive effect of stock options and restricted stock


532,952







Total diluted shares  (denominator)


23,042,748



22,509,796



22,509,796Earnings (loss) per share  Diluted

$
0.11


$
(0.38
)

$
(0.27
)     Fiscal Year Ended September 29, 2007Income from


Loss fromContinuing


DiscontinuedOperations


Operations


Net IncomeBasic EPSIncome (loss)  (numerator)

$
5,173,000


$
(2,087,000
)

$
3,086,000Weighted average common shares outstanding 
    (denominator)


23,574,852



23,574,852



23,574,852Earnings (loss) per share  Basic

$
0.22


$
(0.09
)

$
0.13Diluted EPSIncome (loss)  (numerator)

$
5,173,000


$
(2,087,000
)

$
3,086,000Weighted average common shares outstanding


23,574,852



23,574,852



23,574,852Dilutive effect of stock options andrestricted stock


532,825







532,825Total diluted shares  (denominator)


24,107,677



23,574,852



24,107,677Earnings (loss) per share  Diluted

$
0.21


$
(0.09
)

$
0.13    51




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fiscal Year Ended September 30, 2006Income from


Income fromContinuing


DiscontinuedOperations


Operations


Net IncomeBasic EPSIncome  (numerator)

$
5,524,000


$
489,000


$
6,013,000Weighted average common shares outstanding 
    (denominator)


24,488,041



24,488,041



24,488,041Earnings per share  Basic

$
0.23


$
0.02


$
0.25Diluted EPSIncome  (numerator)

$
5,524,000


$
489,000


$
6,013,000Weighted average common shares outstanding


24,488,041



24,488,041



24,488,041Dilutive effect of stock options


442,898



442,898



442,898Total diluted shares  (denominator)


24,930,939



24,930,939



24,930,939Earnings per share  Diluted

$
0.22


$
0.02


$
0.24     q.
    Stock-Based
    Compensation  Stock
    Options
   52




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options OutstandingOptions





WeightedAvailable





Averagefor


Options


Exercise PriceGrant


Outstanding


per ShareBalance at September 29, 2007


868



2,198


$
4.86Granted


(210
)


210


$
6.51Other Grants(1)


(210
)





$
Exercised






(82
)

$
3.57Expired


209



(209
)

$
7.13Forfeited


66



(66
)

$
4.94Balance at September 27, 2008


723



2,051


$
4.84       (1)
    
    Certain shares were granted from the 1994 Employee Stock Option
    Plan as restricted stock and performance shares during the
    period. These grants serve to decrease the number of shares
    available for grant, but are not presented as stock option
    activity. Of these grants, 75,000 shares were granted as
    restricted stock and 135,000 shares were granted as
    performance shares. Refer to the sections Restricted
    Stock and Performance Shares for more
    information.            Three Months EndedSeptember 27,


September 29,


September 30,2008


2007


2006Expected options term (years)


6.7



5.1



5.3Risk free interest rate


3.40
%


4.26
%


4.56
%Volatility


47
%


52
%


55
%    53




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Restricted
    Stock
    Number of


Weighted-Restricted


AverageStock


Grant-DateUnits


Fair ValueOutstanding on September 29, 2007


63


$
6.38Granted


112


$
4.43Vested/Issued


(75
)

$
5.19Forfeited





$
Outstanding on September 27, 2008


100


$
5.08       Performance
    Shares
    Weighted-Number of


AveragePerformance


Grant-DateShares


Fair ValueOutstanding on September 29, 2007





$
Granted


135


$
4.64Vested/Issued


(50
)

$
4.64Forfeited





$
Outstanding on September 27, 2008


85


$
4.64     r.
    Newly
    Issued Accounting Standards  Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
  Fair Value Measurements No. FAS 157-2,
 54




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    The
    Fair Value Option for Financial Assets and Financial
    Liabilities instrument-by-instrument
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements, an amendment of Accounting Research
    Bulletin No. 51
  No. 07-01, Accounting for Collaborative Arrangements No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent
  Disclosures about Derivative Instruments and Hedging
    Activities,
 55




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 142-3, Determination of the Useful Life of Intangible Assets (FSP 142-3). FSP 142-3 Goodwill and
    Other Intangible Assets
  14-1, Accounting for Convertible Debt Instruments That May Be
    Settled in Cash upon Conversion (Including Partial Cash
    Settlement) 14-1). 14-1 14-1
  3.
    INVENTORIES    September 27,


September 29,2008


2007Raw materials

$
10,129


$
9,842Work-in-process


4,380



4,064Finished goods


850



1,112Total inventories

$
15,359


$
15,018    56




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  4.
    PROPERTY,
    PLANT AND EQUIPMENT, NET    September 27,


September 29,2008


2007Land

$
247


$
247Buildings and improvements


828



857Machinery and equipment


12,987



11,668Furniture and fixtures


3,792



3,575Leasehold improvements


6,735



6,620Construction in progress


331



1,199Total, at cost


24,920



24,166Less accumulated depreciation


(14,783
)


(14,461
)Property, plant and equipment, net

$
10,137


$
9,705     5.
    OTHER
    ACCRUED EXPENSES    September 27,


September 29,2008


2007Sales commissions

$
469


$
664Warranty reserve


42



61Income taxes






749Other accruals


749



755Total other accrued expenses

$
1,260


$
2,229       Balance of warranty reserve at October 1, 2005

$
155Provision for warranty claims


(37
)Warranty claims charged against the reserve


(70
)Balance of warranty reserve at September 30, 2006


48Provision for warranty claims


18Warranty claims charged against the reserve


(5
)Balance of warranty reserve at September 29, 2007


61Provision for warranty claims


30Warranty claims charged against the reserve


(49
)Balance of warranty reserve at September 27, 2008

$
42  57




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  6.
    LINE OF
    CREDIT    7.
    INCOME
    TAXES    2008


2007


2006CurrentFederal

$
1,296


$
2,322


$
2,611State


72



223



144Total current


1,368



2,545



2,755DeferredFederal


59



(85
)


(45
)State


(289
)


(168
)


(127
)Total deferred


(230
)


(253
)


(172
)Income tax provision from continuing operations

$
1,138


$
2,292


$
2,583     2008


2007


2006Continuing operations

$
1,138


$
2,292


$
2,583Discontinued operations


(3,030
)


(1,722
)


400Total income tax expense (benefit)

$
(1,892
)

$
570


$
2,983  58




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2007


2006Income tax provision at statutory rate

$
1,229


$
2,540


$
2,742State taxes, net of federal benefit


111



343



282Federal and state credits


(204
)


(340
)


(129
)Extraterritorial income exclusion






(17
)


(78
)Manufacturers deduction






(114
)


(84
)Adjustments related to prior year accruals


(114
)


(172
)


(119
)Other


116



52



(31
)Income tax provision

$
1,138


$
2,292


$
2,583     September 27,


September 29,2008


2007Deferred tax assets:Tax credits

$
452


$
247Allowance for doubtful accounts


27



17Inventories


903



911Deferred revenue


1,486



1,755Accrued expenses and other liabilities


1,072



720Pension


132



89Net operating loss carry forwards


596



850Property, plant, and equipment


399



228Deferred tax assets


5,067



4,817Deferred tax liabilities:Property, plant, and equipment


(46
)


(46
)Intangible assets


(6
)


(70
)Other


(153
)


(169
)Deferred tax liabilities


(205
)


(285
)Net deferred tax assets

$
4,862


$
4,532        59




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting for Uncertainty in Income Taxes  an
    Interpretation of FASB Statement No. 109 Accounting for Income Taxes
          Balance at September 30, 2007 (upon adoption)

$
506Additions based on tax positions related to the current year


58Additions for tax positions of prior years


Reductions for tax positions of prior years


Reductions for tax positions due to lapse of statutes of
    limitations


(140
)Settlements


Balance at September 27, 2008

$
424    60




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  8.
    BENEFIT
    PLANS  Defined
    Benefit Plan
    year-by-year
  Employers Accounting for Defined Benefit Pension and
    Other Postretirement Plans, an amendment of FASB Statement Nos.
    87, 88, 106 and 132(R)
   61




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    September 27,


September 29,2008


2007Change in Benefit ObligationBenefit obligation at beginning of year

$
3,298


$
3,317Service cost


51



54Interest cost


206



189Amendments


114



1Actuarial gain


(259
)


(91
)Benefits paid


(203
)


(172
)Benefit obligation at end of year

$
3,207


$
3,298Change in Plan AssetsFair value of plan assets at beginning of year

$
3,027


$
2,888Actual return on plan assets


(362
)


311Employer contributions prior to measurement date


105



Benefits paid


(203
)


(172
)Fair value of plan assets at end of year

$
2,567


$
3,027Funded Status

$
(640
)

$
(271
)Unrecognized actuarial gain






(176
)Unrecognized prior service cost






209Net amount recognized

$
(640
)

$
(238
)Amounts Recognized in the Consolidated Balance SheetsBefore adoption of SFAS No. 158:Accrued benefit liability

$



$
(271
)Intangible asset






33Net amount recognized

$



$
(238
)After adoption of SFAS No. 158:Noncurrent liabilities

$
(640
)

$
(271
)Amount recognized

$
(640
)

$
(271
)Amounts Recognized in Accumulated Other Comprehensive Income
    (Loss)Net loss (gain)

$
126


$
(176
)Prior service cost


274



209Total (before tax)

$
400


$
33    62




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year Ended2008


2007


2006Net periodic benefit costService cost

$
61


$
81


$
89Interest cost


206



189



182Expected return on plan assets


(209
)


(194
)


(189
)Recognized prior service cost


49



36



39Net periodic benefit cost

$
107


$
112


$
121Additional InformationIncrease (decrease) in minimum liability included in accumulated
    other comprehensive loss

$
126


$
(58
)

$
(205
)   2007/2008 2008/2009 2008/2009
    September 27,

September 29,

September 30,2008

2007

2006Discount Rate


6.11
%


5.89
%


5.65
%Expected return on plan assets


7.00
%


7.00
%


7.00
%   2007/2008
  2007/2008
  2007/2008
   63




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2008


2007Cash and cash equivalents

$
103


$
133Fixed income mutual funds


1,092



1,181Equity mutual funds


1,365



1,707Other


7



6Total

$
2,567


$
3,027           PensionPeriod

Benefits2009

$
2162010

$
2232011

$
2472012

$
2492013

$
2662014-2018

$
1,550    64




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    401(k)
    Plan
    9.
    STOCK
    OPTIONS, WARRANTS, AND STOCK PURCHASE PLANS  Stock
    Option Plans
      paid-in-capital
    2008


2007


2006Weighted





Weighted





WeightedShares


Average


Shares


Average


Shares


AverageUnder


Exercise


Under


Exercise


Under


ExerciseOption


Price


Option


Price


Option


PriceBeginning balance outstanding


2,198


$
4.86



2,235


$
4.80



2,208


$
4.70Granted


210


$
6.51



32


$
5.64



220


$
4.86Exercised


(82
)

$
3.57



(43
)

$
2.17



(137
)

$
2.29Expired


(209
)

$
7.13



(9
)

$
5.93



(31
)

$
8.82Forfeited


(66
)

$
4.94



(17
)

$
5.07



(25
)

$
5.15Ending balance outstanding


2,051


$
4.84



2,198


$
4.86



2,235


$
4.80Options exercisable at year end


1,952


$
4.85



2,028


$
4.85



1,985


$
4.77Shares available for future grant


723







868







882Weighted average fair value of all options granted during the
    year





$
1.06






$
2.96






$
2.59  65




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##### Table of Contents



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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options Outstanding


Options ExercisableWeighted-


Weighted-








Weighted-


Weighted-Average


Average








Average


AverageRemaining


Exercise


Aggregate





Remaining


Exercise


AggregateRange of

Number


Contractual


Price per


Intrinsic


Number


Contractual


Price per


IntrinsicExercise Prices

Outstanding


Life (in Years)


Share


Value


Exercisable


Life (in Years)


Share


Value0.0000 - 1.6000


247



0.18


$
1.13







247






$
1.131.6001 - 3.2000


339



1.08


$
2.70







339






$
2.703.2001 - 4.8000


532



3.81


$
4.01







462






$
3.914.8001 - 6.4000


253



5.83


$
5.63







224






$
5.716.4001 - 8.0000


515



4.68


$
6.98







515






$
6.988.0001 - 9.6000


85



4.58


$
8.66







85






$
8.669.6001 - 11.2000


78



2.06


$
10.59







78






$
10.5911.2001 - 12.8000


2



4.92


$
12.19







2






$
12.19Total


2,051



3.36


$
4.84


$
2,154



1,952



3.10


$
4.85


$
2,137     Restricted
    Stock
        Performance
    Shares
   66




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Severance
    Agreement
    
    The Company paid Mr. Shokrgozar a lump-sum $1,600,000
    severance payment, plus any accrued and unused vacation pay less
    required withholdings;
    The Company shall pay for eighteen (18) months of the
    Companys portion of Mr. Shokrgozars COBRA
    premium. Following such period, until December 13, 2010,
    the Company shall pay Mr. Shokrgozar an amount equal to the
    Companys portion of Mr. Shokrgozars COBRA
    premium in order for Mr. Shokrgozar to secure health
    insurance of his choice; provided that such payments shall cease
    if, during the COBRA period or thereafter, Mr. Shokrgozar
    is then covered by reasonably equivalent or superior health
    insurance provided by any subsequent employer. In addition, the
    Company shall continue to provide Mr. Shokrgozar with up to
    $4,000 per year for unreimbursed medical expenses and with the
    auto allowance and the disability and life benefits he is
    receiving from the Company as of the termination date until
    December 13, 2010;
    The Company will reimburse Mr. Shokrgozar for reasonable
    attorneys fees incurred in connection with the Severance
    Agreement, in the maximum amount of $50,000 and the Company will
    provide outplacement services for Mr. Shokrgozar for a
    period not to exceed 18 months in the maximum amount of
    $50,000;
    The Company and Mr. Shokrgozar agreed to the following
    concerning outstanding grants of stock options, restricted stock
    units (RSUs) and performance shares:  
    The following vested stock options: (i) 125,000 shares
    granted on November 10, 1999; (ii) 125,000 shares
    granted on November 10, 1999;
    (iii) 150,000 shares granted on May 16, 2001 and
    (iv) 150,000 shares granted on December 15, 2004
    shall terminate, if not exercised, on their respective
    expiration dates (i.e., November 10, 2009,
    November 10, 2009, May 16, 2011, and December 15,
    2014, respectively); 67




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    The vested stock options to acquire 150,000 shares granted
    on December 3, 1998 would terminate, if not exercised, on
    the 90th day following the termination date;
    The vested stock options to acquire 150,000 shares granted
    on November 30, 2000 terminated on August 28, 2008;
    The Company granted to Mr. Shokrgozar an option to acquire
    150,000 shares of the Companys Common Stock at an
    exercise price of $7.25 per share, an expiration date of
    November 30, 2010, and with such other terms as are
    contained in the Companys standard form of option
    agreement;
    The 50,000 shares of restricted stock granted to
    Mr. Shokrgozar pursuant to that certain Restricted Stock
    Units Award Agreement dated December 12, 2007 vested on
    September 5, 2008;
    One-half (50,000 shares) of the performance shares granted
    to Mr. Shokrgozar pursuant to that certain Performance
    Share Award Agreement dated December 12, 2007 vested on
    September 5, 2008;
    One-half (50,000 shares) of the performance shares granted
    to Mr. Shokrgozar pursuant to that certain Performance
    Share Award Agreement dated December 12, 2007 shall vest if
    the Companys EBITDA for the fiscal year ended in 2009
    equals or exceeds $9,960,000; and
    Any other unvested right to receive Company stock terminated on
    August 28, 2008.  10.
    COMMITMENTS
    AND CONTINGENCIES        11.
    CONCENTRATIONS
    OF CREDIT RISK     68




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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      12.
    SHAREHOLDERS
    RIGHTS PLAN    13.
    DISCONTINUED
    OPERATIONS           69




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##### Table of Contents



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    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year EndedSeptember 27,


September 29,


September 30,2008


2007


2006Commercial Microelectronics:Net sales

$
10,894


$
16,494


$
21,411Cost of sales


9,455



14,297



16,724Gross profit


1,439



2,197



4,687Total operating expenses


1,366



5,842



3,895Income (loss) from operations before income taxes


73



(3,645
)


792Benefit from (provision for) income taxes


96



1,493



(226
)Income (loss) from discontinued operations


169



(2,152
)


566Loss on sale of discontinued operations, net of tax


(1,538
)






Net income (loss)

$
(1,369
)

$
(2,152
)

$
566IED:Net sales

$
9,157


$
11,294


$
9,936Cost of sales


8,339



9,576



8,860Gross profit


818



1,718



1,076Total operating expenses


1,665



2,036



2,440Loss from operations before income taxes


(847
)


(318
)


(1,364
)Benefit from income taxes


195



158



355Loss from discontinued operations


(652
)


(160
)


(1,009
)Loss on sale of discontinued operations, net of tax


(1,977
)






Net loss

$
(2,629
)

$
(160
)

$
(1,009
)DSD:Net sales

$
20,011


$
24,378


$
28,826Cost of sales


16,826



19,739



22,944Gross profit


3,185



4,639



5,882Total operating expenses


8,353



4,485



4,421Income (loss) from operations before income taxes


(5,168
)


154



1,461Benefit from (provision for) income taxes


696



71



(529
)Income (loss) from discontinued operations


(4,472
)


225



932Loss on sale of discontinued operations, net of tax










Net income (loss)

$
(4,472
)

$
225


$
932Total income (loss) from discontinued operations, net of tax

$
(8,470
)

$
(2,087
)

$
489  70




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##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    September 27,


September 29,2008


2007Assets held for sale (current):Accounts receivable, net

$
5,618


$
7,674Inventories


4,607



16,195Deferred income taxes and prepaid expenses


2,443



1,462Total

$
12,668


$
25,331Assets held for sale (long-term):Property, plant and equipment, net

$
1,326


$
2,973Deferred income taxes


286



Goodwill






3,542Intangible assets, net






2,477Other assets


50



50Total

$
1,662


$
9,042Liabilities related to assets held for sale (current):Accounts payable

$
1,418


$
5,176Accrued expenses


856



1,119Deferred revenue


53



117Total

$
2,327


$
6,412Liabilities related to assets held for sale (long-term):Deferred income taxes

$
32


$
1,160Other long-term liabilities

$
69


$
131Total

$
101


$
1,291   14.
    GEOGRAPHICAL
    INFORMATION    2008


2007


2006United States of America

$
39,728


$
33,899


$
31,522Europe and Middle East


8,457



9,279



8,313Asia Pacific


6,544



7,473



7,391Other


1,626



1,422



1,530Total Net Sales

$
56,355


$
52,073


$
48,756  71




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  15.
    SELECTED
    QUARTERLY FINANCIAL DATA (UNAUDITED)  Fiscal 2008Year


Sep 27


Jun 28


Mar 29


Dec 29(In thousand of dollars, except per share data)Net sales

$
56,355


$
14,855


$
14,807


$
14,605


$
12,088Gross profit

$
22,897


$
6,008


$
6,450


$
5,927


$
4,512Income (loss) from continuing operations before income taxes

$
3,621


$
(1,189
)

$
2,165


$
1,973


$
672Income (loss) from continuing operations

$
2,483


$
(1,094
)

$
1,698


$
1,323


$
556Loss from discontinued operations


(8,470
)


(1,536
)


(3,727
)


(2,890
)


(317
)Net income (loss)

$
(5,987
)

$
(2,630
)

$
(2,029
)

$
(1,567
)

$
239Income (loss) from continuing operations per common share:Basic

$
0.11


$
(0.05
)

$
0.08


$
0.06


$
0.02Diluted

$
0.11


$
(0.05
)

$
0.08


$
0.06


$
0.02Loss from discontinued operations per common share:Basic

$
(0.38
)

$
(0.07
)

$
(0.17
)

$
(0.13
)

$
(0.01
)Diluted

$
(0.38
)

$
(0.07
)

$
(0.17
)

$
(0.13
)

$
(0.01
)Net income (loss) per common share:Basic

$
(0.27
)

$
(0.12
)

$
(0.09
)

$
(0.07
)

$
0.01Diluted

$
(0.27
)

$
(0.12
)

$
(0.09
)

$
(0.07
)

$
0.01   72




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fiscal 2007Year


Sep 29


Jun 30


Mar 31


Dec 30(In thousand of dollars, except per share data)Net sales

$
52,073


$
15,101


$
14,224


$
11,945


$
10,803Gross profit

$
22,365


$
6,545


$
6,119


$
5,078


$
4,623Income from continuing operations before income taxes

$
7,465


$
2,685


$
2,522


$
1,240


$
1,018Income from continuing operations

$
5,173


$
1,989


$
1,596


$
848


$
740Income (loss) from discontinued operations


(2,087
)


(1,662
)


(210
)


321



(536
)Net income

$
3,086


$
327


$
1,386


$
1,169


$
204Income from continuing operations per common share:Basic

$
0.22


$
0.09


$
0.07


$
0.04


$
0.03Diluted

$
0.21


$
0.08


$
0.07


$
0.04


$
0.03Income (loss) from discontinued operations per common share:Basic

$
(0.09
)

$
(0.07
)

$
(0.01
)

$
0.01


$
(0.02
)Diluted

$
(0.09
)

$
(0.07
)

$
(0.01
)

$
0.01


$
(0.02
)Net income per common share:Basic

$
0.13


$
0.01


$
0.06


$
0.05


$
0.01Diluted

$
0.13


$
0.01


$
0.06


$
0.05


$
0.01  73




---



##### Table of Contents



Schedule II
  White
    Electronic Designs Corporation and Subsidiaries
    Valuation and Qualifying Accounts and Reserves
    Charged/Balance at


(Credited) to








BalanceBeginning


Costs and








at EndFiscal Year Ended

of Period


Expenses


Other


Deductions


of PeriodAccounts ReceivableSeptember 27, 2008

$
46


$
28


$



$



$
74September 29, 2007

$
52


$
(5
)

$



$
(1
)

$
46September 30, 2006

$
53


$
(1
)

$



$



$
52  74




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description2
.1

Agreement and Plan of Merger dated May 3, 1998 by and among
    Bowmar Instrument Corporation and Electronic Designs, Inc. and
    Bravo Acquisition Subsidiary, Inc. (incorporated herein by
    reference to Exhibit 2 on Form 8-K filed May 6, 1998).2
.2

Amendment to Agreement and Plan of Merger dated June 9, 1998
    (incorporated herein by reference to Exhibit 2.1A on Form S-4
    filed June 11, 1998, Registration No. 333-56565).2
.3

Second Amendment to Agreement and Plan of Merger dated August
    24, 1998 (incorporated herein by reference to Exhibit 2.1B on
    Form S-4/A, filed September 2, 1998, Registration No. 333-56565).2
.4

Agreement and Plan of Reorganization dated as of January 22,
    2003 by and among White Electronic Designs Corporation, IDS
    Reorganization Corp., and Interface Data Systems, Inc.
    (incorporated herein by reference to Exhibit 2.1 on Form 8-K
    filed January 24, 2003).2
.5

Agreement and Plan of Reorganization dated January 29, 2001, by
    and among White Electronic Designs Corporation, PV Acquisition
    Corp., Panelview, Inc., Panelview Partners L.P., Randal Barber,
    Gaylene Barber, Marshall R. Moran, John Cochran, Greyson N.
    Barber, and Morgan D. Barber (incorporated herein by reference
    to Exhibit 10.29 on Form 10-Q, filed February 13, 2001).2
.6

Agreement and Plan of Merger dated September 26, 2006, by and
    between Interface Data Systems, Inc. and White Electronic
    Designs Corporation (incorporated herein by reference to Exhibit
    2.6 on Form 10-Q filed February 8, 2007).3
.1

Restated Articles of Incorporation of White Electronic Designs
    Corporation (incorporated herein by reference to Exhibit 3.1 on
    Form 10-K filed December 24, 1998).3
.2

Amended and Restated By-Laws of White Electronic Designs
    Corporation dated December 5, 2007 (incorporated herein by
    reference to Form 8-K filed December 7, 2007).4
.1

Shareholder Rights Agreement, dated December 6, 1996
    (incorporated herein by reference to Exhibit 5(b) on Form
    8-K, filed December 19, 1996).4
.2

Amendment No. 1 to Rights Agreement, dated as of December 6,
    1996 (incorporated herein by reference to Exhibit 4.3 on Form
    S-4, filed June 11, 1998, Registration No. 333-56565).4
.3

Amendment No. 2 to Rights Agreement, effective December 5, 2006
    (incorporated herein by reference to Exhibit 4.3 on Form 10-K,
    filed December 14, 2006).10
.1

Agreement to be Bound by Registration Rights Agreements, dated
    as of May 3, 1998, by and between Bowmar Instrument Corporation
    and Electronic Designs, Inc. (incorporated herein by reference
    to Exhibit 10.1 on Form S-4, filed Jun 11, 1998, Registration
    No. 333-56565).10
.2**

Agreement to be Bound by Severance Agreements and Employment
    Agreement, dated as of May 3, 1998, by and between Bowmar
    Instrument Corporation and Electronic Designs, Inc.
    (incorporated herein by reference to Exhibit 10.2 on Form S-4,
    filed June 11, 1998, Registration No. 333-56565).10
.3**

White Electronic Designs Corporation 1994 Flexible Stock Plan
    (incorporated herein by reference to Exhibit 99 to the
    Registration Statement on Form S-8, filed May 9, 2001,
    Registration No. 333-60544).10
.4**

Amendment to the Bowmar Instrument Corporation 1994 Flexible
    Stock Plan, effective May 7, 2001 (incorporated herein by
    reference to Appendix A to the Companys definitive Proxy
    Statement prepared in connection with the 2001 Annual Meeting of
    Shareholders).10
.5

White Electronic Designs Corporation Rule 10b5-1 Stock Purchase
    Plan, dated June 21, 2006 (incorporated by reference to Exhibit
    10.3 on Form 10-Q, filed August 10, 2006).10
.6

Credit Agreement by and among White Electronic Designs
    Corporation, certain lenders named therein and JPMorgan Chase
    Bank, N.A., dated April 3, 2007 (incorporated by reference to
    Exhibit 10.2 on Form 10-Q, filed May 10, 2007).10
.7*

First Modification Agreement to Revolving Line of Credit
    Agreement with JPMorgan Chase Bank, N.A., dated February 12,
    2008.10
.8

Second Modification Agreement to Revolving Line of Credit
    Agreement with JPMorgan Chase Bank, N.A., dated August 5, 2008
    (incorporated herein by reference to Exhibit 10.1 on Form 10-Q,
    filed August 7, 2008).10
.9**

White Electronic Designs Corporation 2001 Director Stock
    Plan (incorporated herein by reference to Exhibit 99 on Form
    S-8, filed May 9, 2001, Registration No. 333-60536). 75




---



##### Table of Contents



ExhibitNumber

Description10
.10**

Amendment to Bowmar Instrument Corporation Stock Option Plan for
    Non-Employee Directors (incorporated herein by reference to
    Appendix D to the Companys definitive Proxy Statement in
    connection with the 2001 Annual Meeting of Shareholders).10
.11**

White Electronic Designs Corporation Stock Option Plan for
    Non-Employee Directors (incorporated herein by reference to
    Exhibit 99 on Form S-8, filed May 9, 2001, Registration No.
    333-60548).10
.12**

White Electronic Designs Corporation 2000 Broad Based Employee
    Stock Option Plan (incorporated herein by reference to Exhibit
    99 on Form S-8, filed May 9, 2001, Registration No. 333-60542).10
.13***

Severance Agreement and Release of Claims, dated August 28,
    2008, between White Electronic Designs Corporation and Hamid R.
    Shokrgozar (incorporated herein by reference to Exhibit 10.1 on
    Form 8-K, filed August 29, 2008).10
.14**

Non-Qualified Stock Option Agreement between White Electronic
    Designs Corporation and Hamid Shokrgozar dated November 10, 1999
    (incorporated herein by reference to Exhibit 10.42 on Form 10-K
    filed on December 23, 2002).10
.15

Industrial Real Estate Lease dated February 4, 1997 between
    Bowmar Instrument Corp., as tenant, and Allred Phoenix
    Properties, L.L.C., as landlord (incorporated herein by
    reference to Exhibit 10.5 on Form 10-K filed December 29, 2007).10
.16

First Amendment to certain Industrial Real Estate Lease dated
    February 4, 1997 between White Electronic Designs Corporation
    (as successor  in  interest of Bowmar
    Instrument Corp.) and Gus Enterprises  XII, L.L.C.
    (as successor  in  interest of Allred
    Phoenix Properties, L.L.C.) dated November 5, 2004 (incorporated
    herein by reference to Exhibit 10.21 on Form 10-K filed on
    December 16, 2004).10
.17**

White Electronic Designs Corporation 2006 Director
    Restricted Stock Plan, effective March 24, 2006 (incorporated by
    reference to Appendix A to the Companys definitive Proxy
    Statement in connection with the 2006 Annual Meeting of
    Shareholders).10
.18**

First Amendment to 2006 Director Restricted Stock Plan,
    effective August 24, 2006 (incorporated by reference to Exhibit
    99.1 on Form 8-K, filed August 30, 2006).10
.19**

Form of Restricted Stock Agreement to 2006 Director
    Restricted Stock Plan, effective August 24, 2006 (incorporated
    by reference to Exhibit 99.2 on Form 8-K, filed on August 30,
    2006).10
.20**

Change of Control Agreement between Dan V. Tarantine and White
    Electronic Designs Corporation, effective December 13, 2006
    (incorporated herein by reference to Exhibit 10.26 on Form 10-K,
    filed December 14, 2006).10
.21**

Change of Control Agreement between Roger A. Derse and White
    Electronic Designs Corporation, effective December 13, 2006
    (incorporated herein by reference to Exhibit 10.27 on Form 10-K,
    filed December 14, 2006).10
.22**

Form of Restricted Stock Units Award Agreement under the 1994
    Flexible Stock Plan (incorporated herein by reference to Exhibit
    10.19 on Form 10-K, filed December 13, 2007).10
.23**

Form of Performance Share Award Agreement under the 1994
    Flexible Stock Plan (incorporated herein by reference to Exhibit
    10.20 on Form 10-K, filed December 13, 2007).21
.1*

Subsidiaries of White Electronic Designs Corporation.23
.1*

Consent of Grant Thornton LLP.23
.2*

Consent of PricewaterhouseCoopers LLP.31
.1*

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.31
.2*

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.32
.1##

Certification Pursuant to 18 U.S. C. Section 1350, As Adopted
    Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002.32
.2##

Certification Pursuant to 18 U.S. C. Section 1350, As Adopted
    Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith.**
    
    Management compensatory contract, plan or arrangement.##
    
    Furnished herewith. 76