<PAGE>   1




                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-Q

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

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1997

                         COMMISSION FILE NUMBER: 0-4384

                             MICRODYNE CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
 <S>                                             <C>
 MARYLAND                                                               52-0856493
 (State or other jurisdiction of                 (IRS Employer Identification No.)
 incorporation or organization)

 3601 EISENHOWER AVENUE, ALEXANDRIA, VA                                      22304
 (Address of principal executive office)                                (Zip Code)
</TABLE>

                                 (703) 329-3700
              (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 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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
                          
<TABLE>
 <S>                                        <C>
             CLASS                          OUTSTANDING AT DECEMBER 31, 1997
------------------------------              --------------------------------
 Common stock, $.10 par value                          13,031,081
</TABLE>





                               Page 1 of 11 pages
                        Exhibit Index appears on page 11
<PAGE>   2

                             MICRODYNE CORPORATION


                                     INDEX


<TABLE>
<CAPTION>
                                                                   PAGE NUMBER
<S>                                                                   <C>

PART I - FINANCIAL INFORMATION

Item 1.    Consolidated Financial Statements

           Statements of Earnings
           Three months ended December 31, 1997
           and December 29, 1996                                       3

           Balance Sheets
           December 31, 1997 and September 28, 1997                    4

           Statements of Cash Flows
           Three months ended December 31, 1997
           and December 29, 1996                                       5

           Notes to Consolidated Financial
           Statements                                                  6

Item 2.    Management's Discussion and Analysis of
           Financial Condition and Results of
           Operations                                                  8


PART II - OTHER INFORMATION

Item 6.    Exhibits and Reports.                                      11

SIGNATURES                                                            11
</TABLE>





                                       2
<PAGE>   3
                             MICRODYNE CORPORATION
                      CONSOLIDATED STATEMENTS OF EARNINGS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                  Quarter Ended
                                                                         December 29,      December 31,
                                                                              1996              1997
                                                                       -----------          -----------
                                                                                  (In thousands)
<S>                                                                  <C>                   <C>
Revenue:
   Product                                                               $   4,690           $    5,707
   Service                                                                   3,971                6,978
                                                                        -----------         ------------
       Total revenue                                                         8,661               12,685
                                                                        
Cost of products sold and service provided:                             
   Product                                                                   1,918                2,651
   Service                                                                   2,849                4,956
                                                                        -----------         ------------
Total cost of products sold and service provided                             4,767                7,607
                                                                        -----------         ------------
     Gross profit                                                            3,894                5,078
                                                                        
Operating expenses:                                                     
     Selling, general and administrative expense                             1,810                2,425
     Research and development                                                  359                  397
                                                                        -----------         ------------
             Total operating expenses                                        2,169                2,822
                                                                        -----------         ------------
                                                                        
Earnings from continuing operations                                          1,725                2,256
Other expense, net                                                            (373)                (228)
                                                                        -----------         ------------
             Earnings from continuing operations                        
                   before income taxes                                       1,352                2,028
                                                                        
Provision for income taxes:                                                   (514)                 -
                                                                        -----------         ------------
                                                                        
             Net earnings from continuing operations                     $     838           $    2,028
                                                                        -----------         ------------
                                                                        
Loss from discontinued operations,  net of tax effect                         (228)                 -
                                                                        -----------         ------------
                                                                        
Net earnings                                                             $     610           $    2,028
                                                                        ===========         ============
                                                                        
                                                                        
Basic earnings per share, continuing operations                          $    0.07           $     0.16
                                                                        
Basic loss per share, discontinued operations                                (0.02)                -
                                                                        -----------         ------------
                                                                                                    -
Basic earnings per share                                                 $    0.05           $     0.16
                                                                        ===========         ============
                                                                        
Weighted average shares outstanding, basic                                  12,837               12,966
                                                                        
Diluted earnings per share, continuing operations                        $    0.06           $     0.15
                                                                        
Diluted loss per share, discontinued operations                              (0.01)                 -
                                                                        -----------         ------------
Diluted earnings per share                                               $    0.05           $     0.15
                                                                        ===========         ============
                                                                        
Weighted average shares outstanding, diluted                               13,070                13,390
</TABLE>



   The notes on the following pages are an integral part of these statements





                                       3
<PAGE>   4
                             MICRODYNE CORPORATION
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                    September 28,     December 31,
                                                                          1997             1997
                                                                        ------           ------
                                                                       (audited)       (unaudited)
                                                                            (In thousands)
<S>                                                                 <C>                  <C>
ASSETS                                                                                  
CURRENT ASSETS                                                                          
   Cash                                                                  $   1,056        $    710
   Accounts receivable, net                                                 17,327          20,317
   Inventories                                                               4,560           4,265
   Income tax receivable                                                     1,022           1,022
   Prepaid expenses and deposits                                               391             696
   Current assets of discontinued operations                                 2,442             722
   Deferred income tax asset                                                 4,056           4,056
                                                                      ------------        --------
       Total current assets                                                 30,854          31,788
                                                                                        
PROPERTY AND EQUIPMENT, net                                                  3,225           4,657
DEFERRED INCOME TAX ASSET                                                      123             123
NONCURRENT ASSETS                                                                       
       OF DISCONTINUED OPERATIONS                                              112              32
OTHER ASSETS                                                                   227              84
                                                                      ------------        --------
                                                                                        
       Total assets                                                        $34,541        $ 36,684
                                                                      ============        ========
                                                                                        
LIABILITIES AND STOCKHOLDERS' EQUITY                                                    
CURRENT LIABILITIES                                                                     
      Current maturities of long-term obligations                          $ 2,040          10,179
      Accounts payable - trade                                               3,094           3,179
      Accrued liabilities                                                    6,135           6,297
      Current liabilities of discontinued operations                         5,172           2,328
                                                                       -----------        --------
         Total current liabilities                                          16,441          21,983
                                                                                        
LONG-TERM OBLIGATIONS, net of current maturities                             9,698           3,904

COMMITMENTS AND CONTINGENCIES                                                  -               -
STOCKHOLDERS' EQUITY                                                                    
     Common stock, $.10 par value, authorized 50,000,000,                               
        shares 12,904,313 shares, issued and outstanding at                             
        September 28, 1997 and 13,031,081 shares issued and                             
        outstanding at December 31, 1997                                     1,290           1,303
     Additional paid-in capital                                             10,332          10,686
     Retained deficit                                                      (3,220)          (1,192)
                                                                       -----------        --------
         Total stockholders' equity                                          8,402          10,797
                                                                       -----------        --------
                                                                                        
         Total liabilities and stockholders' equity                        $34,541         $36,684
                                                                       ===========        ========
</TABLE>





   The notes on the following pages are an integral part of these statements





                                       4
<PAGE>   5
                             MICRODYNE CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                December 29,     December 31,
                                                                                   1996              1997
                                                                               -------------    --------------
                                                                                           (In thousands)
<S>                                                                               <C>               <C>
Increase (decrease) in Cash:


Cash flows from operating activities:

    Net income                                                                        610             2,028
    Adjustments to reconcile net income to net cash
       from operating activities:
           Depreciation and amortization                                              144               284
           Loss on discontinued operations                                            228             -
           Changes in assets and liabilities,
               net of effect of discontinued operations
               Increase in accounts receivable                                     (1,568)           (2,990)
               (Increase) decrease in inventories                                    (198)              295
               Decrease in prepaid expenses                                           208                12
               (Increase) decrease in other assets                                    (15)              143
               Decrease in income tax receivable                                      725             -
               (Increase) in deferred income tax asset                               (762)            -
               Increase in accounts payable and other accruals                        286               247
                                                                                 ---------         ---------
                 Net cash (used in) provided by continuing operations                (342)               19
                 Net cash (used in) provided by discontinued operations             4,691            (1,044)
                                                                                 ---------         ---------
                                                                                    4,349            (1,025)
Cash flows from investing activities:
    Additions to property and equipment                                               (78)           (1,716)
                                                                                 ---------         ---------
                 Net cash used in investing activities                                (78)           (1,716)
Cash flows from financing activities:
    (Payments) borrowings on bank debt                                             (4,186)            1,805
    Proceeds from issuance of long-term obligations                                 -                 1,227
    Payments on notes payable                                                        (876)             (687)
    Issuance of common stock                                                          103                50
                                                                                 ---------         ---------
                 Net cash provided by (used in) financing activities               (4,959)            2,395
Net decrease in Cash                                                                 (688)             (346)
Cash at beginning of period                                                         1,791             1,056
                                                                                 ---------         ---------
Cash at end of period                                                             $ 1,103           $   710
                                                                                 =========         =========

</TABLE>

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





                                       5
<PAGE>   6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  The interim financial information is unaudited. In the opinion of
    management, financial statements included in this report reflect all normal
    recurring adjustments which Microdyne Corporation (the "Company" or
    "Microdyne") considers necessary for a fair presentation of the results of
    operations for the interim periods covered and of the financial position of
    the Company at the date of the interim balance sheet. The results for
    interim periods are not necessarily indicative of the results for the
    entire year. In addition, preparation of financial statements in
    conformance with generally accepted accounting principles 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 the reported
    amounts of revenues and expenses during the reporting period. Actual
    results could differ from these estimates.

         The accompanying unaudited financial statements have been prepared in
    accordance with the instructions for Form 10-Q, and therefore footnote
    disclosures normally accompanying financial statements have been
    substantially omitted.  These condensed financial statements should be read
    in conjunction with complete disclosures accompanying the financial
    statements contained in the Company's most recent Annual Report on Form
    10-K.

         The provision for income taxes presented in the Statements of
    Operations is based upon the estimated effective tax rate at fiscal
    year-end, and is largely determined by management's estimate as of the
    interim date of projected taxable income for the entire fiscal year. In the
    first quarter of fiscal 1998, the Company reduced its valuation allowance
    against deferred tax assets by approximately $770,000 based upon a
    re-evaluation of its continuing operations and the level of first quarter
    earnings.

2.  During the first quarter of 1998, Microdyne adopted Statement of Financial
    Accounting Standards No. 128 ("SFAS 128"), "Earnings Per Share," which is
    effective for periods ending after December 15, 1997. This Statement
    establishes standards for computing and presenting earnings per share
    ("EPS") and applies to entities with publicly held common stock or
    potential common stock.  This Statement simplifies the standards for
    computing earnings per share previously found in APB Opinion No. 15,
    "Earnings per Share," and makes them comparable to international EPS
    standards. It replaces the presentation of primary EPS with a presentation
    of basic EPS. It also requires dual presentation of basic and diluted EPS
    on the face of the income statement for all entities with complex capital
    structures and requires a reconciliation of the numerator and denominator
    of the basic EPS computation to the numerator and denominator of the
    diluted EPS computation. Basic EPS excludes dilution and is computed by
    dividing income available to common stockholders by the weighted-average
    number of common shares outstanding for the period.  Diluted EPS reflects
    the potential dilution that could occur if securities or other contracts to
    issue common stock were exercised or converted into common stock or
    resulted in the issuance of common stock that then shared in the earnings
    of the entity. Diluted EPS is computed similarly to fully diluted EPS
    pursuant to Opinion 15. This Statement requires restatement of all
    prior-period EPS data presented.

          The company has disclosed basic and diluted earnings per share on the
    income statement. The quarterly earnings per share for the three month
    period ended December 29, 1996 on the face of the financial statements have
    been restated to reflect the requirements of SFAS 128.  The adoption of
    SFAS 128 had no effect on the assets, liabilities, stockholder's equity or
    income of the Company.

3.  During the Company's first quarter of fiscal year 1998, Microdyne entered
    into an agreement with Mellon U.S. Leasing ("Mellon") whereby Microdyne
    sold and then leased back from Mellon certain fixed assets of the Company's
    outsourcing Support Services Division. The value of the assets sold and
    subsequently leased back was approximately $1.2 million. No profit or loss
    was realized on the sale, and therefore no profit or loss will be amortized
    over the life of the lease. The leased assets have been included with other
    property, plant and equipment on the December 31, 1997 Balance Sheet. The
    lease obligation has been accounted for as a capital lease and is included
    with current maturities and non-current maturities of long term obligations
    on the December 31, 1997 Balance Sheet.

4.  During the first quarter of 1998, Microdyne amended the agreement which
    governs the terms of the Company's Line of Credit with Crestar Bank ("the
    Line of Credit"). This agreement was disclosed in footnote G to the
    financial statements filed with the Company's Fiscal 1997 Annual Report on
    Form 10K. The new amendment extends the applicable date of certain of the
    terms of the Line of Credit. Under the terms stipulated under the Line of
    Credit, as amended, the amount available on this line of credit is 
    calculated as the lesser of:  the Borrowing Base or $12.0 million as of 
    September 15, 1997 and until March 31, 1998, and $9.0 million thereafter 
    until October 30, 1998.





                                       6
<PAGE>   7
5.  The Company operates in two business segments: aerospace telemetry and
    outsourced services. Information about the Company's operations in the
    segments for the three month periods ended December 28, 1996 and December
    31, 1997 is as follows

<TABLE>
<CAPTION>
                                                 Aerospace       Outsourced
                                                 Telemetry         Support        Corporate       Consolidated
In Thousands of Dollars                          Division         Services         and Other         Total
-----------------------------------------        ----------      -----------      ----------      -------------
<S>                                               <C>               <C>              <C>            <C>
Net sales to unaffiliated customers
-----------------------------------
First Quarter, Fiscal 1997                         4,786            3,875                -           8,661
First Quarter, Fiscal 1998                         7,271            5,414                -          12,685

Pretax earnings from continuing operations
------------------------------------------
First Quarter, Fiscal 1997                         1,309              846             (803)          1,352
First Quarter, Fiscal 1998                         1,948              724             (644)          2,028

Identifiable assets
-------------------
As of September 28, 1997                          21,028            4,258            6,701          31,987
As of December 31, 1997                           23,633            5,294            7,003          35,930
</TABLE>


         The consolidated total for identifiable assets above excludes assets of
    the discontinued Networking Products Division. As of September 28, 1997 and
    December 31, 1997 the discontinued operations of the Networking Products
    Division had identifiable assets totaling approximately $2,554,000 and
    $754,000 respectively.
           
6.  As of October 1, 1997, Microdyne entered into an agreement with an officer
    of the company.  Under the terms of the agreement, the officer exchanged a
    $317,000 note receivable for 116,702 shares of the Company's stock. The
    shares were available to the officer pursuant to the exercise of stock
    options granted under the Company's stock option plans. The note receivable
    bears interest at the rate of 6% annually and is to be paid in full no
    later than October 1, 2000. The note and accrued interest remain
    outstanding as of December 31, 1997.

7.  On December 29, 1997, Microdyne changed its fiscal year from a 52/53 week
    fiscal year ending on the Sunday closest to September 30 to a calendar year
    ending on September 30.  As a result, the Company's 1998 fiscal year will
    now end on September 30, 1998, rather than on September 27, 1998.





                                       7
<PAGE>   8
PART 1. - FINANCIAL INFORMATION

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

    Year-on-year sales from continuing operations increased in the first
quarter of fiscal 1998 by $4.0 million, or 46% from the first quarter of fiscal
1997. Net earnings from continuing operations increased $1.2 million, or 142%
during the same period.  The increase in revenue is a result of the continued
strength in Aerospace Telemetry and outsourcing Support Services operations.
The increase in earnings reflects an overall growth in the company's revenues
over the first quarter of the prior fiscal year as well as the Company's
efforts to reduce sales, general and administrative ("SG&A") costs as a
percentage of revenue and an overall reduction in interest expense.

    The Company believes demand for its Aerospace Telemetry products is strong
and that such demand should continue. Aerospace Telemetry revenues increased
52% over the same quarter of the prior fiscal year. Aerospace Telemetry saw
both its systems integration services and its product sales increase by $1.3
million and $1.2 million, respectively, over the first quarter of 1997.  The
Aerospace Telemetry Division continued on its scheduled progress toward
completing the requirements of the Company's contract with Italian Ministry of
Defense, currently valued at $11.0 million, with an expected completion date no
later than the third quarter of fiscal year 1998.

    Outsourcing Support Services revenue continues to meet the Company's
expectations.  Compared to the first quarter of fiscal year 1997, the
outsourcing Support Services Division experienced a 40% increase in sales. This
increase is the result of both an increase in revenues from existing business
of $0.4 million as well as additional revenue of $1.2 million generated by the
new outsourcing facility in Southern California.   The new outsourcing
facility, which provides telephone technical support and warranty repair work
from one location in Southern California, was opened in September 1997.
Microdyne also signed a contract with a new customer to provide telephone
technical support and warranty work from this facility beginning in October
1997.

                                  RISK FACTORS

   The information included in this Management's Discussion and Analysis, and
elsewhere in the Form 10Q, contains forward-looking statements that involve
risks and uncertainties.  Important factors that could cause actual results to
differ materially include: rapid changes in products and technology that may
displace products sold by Microdyne; the competitive industries within which
Microdyne operates; the Company's success in identifying, acquiring and
incorporating commercially successful technology, products or businesses, and
in identifying and taking advantage of growth opportunities; the effect on cash
flow and liquidity of differences between the expected and the actual timing of
collection of accounts receivable;  uncertainty associated with  certain future
events outside of Microdyne's control which could affect the adequacy of the
amount of the loss estimated for the disposal of the Networking Products
Division; dependence upon a limited customer base at outsourcing Support
Services Division and several large customers at Aerospace Telemetry;  limited
product lines and service offerings relative to other suppliers; contractual
agreements between Microdyne and other companies; the discontinued Networking
Products Division's reliance upon distributors to continue to sell networking
products; fluctuations in the Company's quarterly results of operations and the
timing of orders from customers; and the Company's relationships with sources
of external financing; and the risk factors listed from time to time in the
Company's SEC filings, including but not limited to the Annual Report on Form
10-K for the year ended September 28, 1997. In addition, any shortfall in
revenue or earnings from the levels expected by securities analysts could have
an immediate and significant effect on the trading price of Microdyne's common
stock in any given period.





                                       8
<PAGE>   9
                              RESULTS OF OPERATIONS

Quarter Ended December 31, 1997 Compared to Quarter Ended December 29, 1996

            Consolidated revenue from continuing operations for the first
quarter of fiscal year 1997 increased to $12.7 million from $8.7 million in the
first quarter of fiscal year 1996, an increase of 46%. Both the Aerospace
Telemetry Division and the outsourcing Support Services Division had overall
increases in sales from both established and new sources of revenue.

            First quarter 1998 Aerospace Telemetry revenue increased 52% to $7.3
million from $4.8 million in the first quarter of fiscal 1997. The division's
revenue reflect a changing mix of product sales and system integration sales in
1998 compared to the year-earlier period. Systems integration sales represented
21% of 1998 first quarter sales compared to 4% during the same period in fiscal
year 1997. In the first fiscal quarter of 1998, system sales increased to $1.5
million from $0.2 million during the same period in 1997. First quarter 1998
Aerospace Telemetry product sales increased to $5.7 million from $4.5 million in
1997.

            Outsourcing Support Services revenue increased 39% to $5.4 million
in the first quarter of 1998 from $3.9 million in 1997. The increase in revenues
reflect continued demand for established support services as well as demand for
the services provided under the new contract for outsourced technical support
and warranty work at the Company's outsourcing facility in Southern California.
As noted previously, the new outsourcing facility generated $1.2 million in
revenue during the first quarter of 1998. The facility was not in operation
during the first fiscal quarter of 1997.

            Gross profit from continuing operations increased 31% to $5.1
million in 1998 from $3.9 million in 1997. As a percentage of continuing
operations sales, gross profit decreased to 40% in 1998 from 45% in 1997. The
dollar increase in gross profit was the result of higher sales at both Aerospace
Telemetry and Outsourcing Support Services. The decrease in gross margin as a
percentage of sales reflects a higher percentage of Aerospace Telemetry system
integration services sales, as noted above, which typically carry lower margins
than product sales, and a lower overall margin at outsourcing Support Services.
The lower overall margin at outsourcing Support Services is the result of higher
fixed costs at its new telephone technical support facility thereby increasing
the per unit cost of providing services. As the facility increases the volume of
its services, the per unit fixed costs are expected to decrease.

            As a percentage of sales, SG&A decreased to 19% in the first quarter
of 1998 from 21% in 1997. The decrease in SG&A expense as a percentage of
revenue reflects corporate cost control. In dollar terms, SG&A expense increased
to $2.4 million in 1998 from $1.8 million in the first quarter of 1997. The
increase in SG&A is the result of: higher sales commissions at Aerospace
Telemetry as a result of increased sales as well as higher infrastructure and
administrative costs at the outsourcing Support Services Division resulting from
its expanded activities. Research and Development expense was $397,000 in the
first quarter of 1998, compared to $359,000 in the first quarter of 1997,
reflecting Aerospace Telemetry's continued efforts to improve and develop new
products and services.

            Interest and other expenses were 39% lower in 1998 than in 1997. The
reduction to $228,000 in 1998 from $373,000 in 1997, reflected the overall
reduction in outstanding debt held by Microdyne in the first quarter of fiscal
year 1998 as compared to the same period in 1997.

            Microdyne's income tax expense during the first fiscal quarter of
1998 was offset by an adjustment to the Company's deferred tax asset valuation
account, resulting in no tax provision for the quarter. The deferred tax assets,
as shown on the Balance Sheets, are net of valuation adjustments of $8.2 million
as of December 31, 1997, and $9.0 million as of September 28, 1997.

            During the first quarter of 1998, Microdyne had $1.9 million in
expenses, net of income, which were offset against its reserve for discontinued
operations. Based on its current experience, Microdyne believes that the $4.8
million reserve set up in June 1997 for the discontinuance of its Networking
Products Division is adequate.

                         LIQUIDITY AND CAPITAL RESOURCES

            During the past three years, Microdyne has financed its operations
principally through internally generated funds. However, Microdyne has secured
external financing in connection with acquisitions and repurchases of common
stock.

            External financing has been primarily provided through bank
borrowings. As of December 31, 1998, Microdyne had $8.2 million of bank debt
under a revolving line of credit facility. On December


                                      9
<PAGE>   10
31, 1997, Microdyne had $0.7 million in cash and $2.7 million available for
borrowing under its revolving credit facility.  Microdyne is required to repay
its bank borrowings by October 30, 1998, unless such agreements are renewed.
Microdyne believes that based on its current forecast of cash generation, it
will meet that schedule. In addition, Microdyne plans for the previously
mentioned borrowing agreements to be renewed or replaced within the current
fiscal year.

    In April 1996, Microdyne utilized cash and notes to purchase from Novell,
Inc. ("Novell") the exclusive, royalty-free perpetual right to market certain
hardware and related technology which were previously sold by Microdyne under
license from Novell, and to convert certain accounts payable into notes
payable.  As of December 31, 1997, notes payable due Novell totaled $4.7
million, of which $1.7 million has been classified as a short-term obligation
and $3.0 million as a long-term obligation on the December 31, 1997 Balance
Sheet.

    During the first fiscal quarter of 1998, net cash used in operations was
$1.0 million, primarily due to cash used in discontinued operations of $1.0
million.  The increases in accounts receivable was mostly offset by increases
in accounts payable, accrued expenses, earnings from continuing operations and
a reduction in inventory.  The increases in accounts receivable reflect a
buildup of unbilled accounts receivable for both of the operating divisions.
This trend in accounts receivable is expected to continue as Microdyne's
outsourcing Support Services and Aerospace Telemetry systems integration
revenue increases. The increase in accounts payable reflect Microdyne's
increased level of business in its operating divisions. Cash used in investing
activities was $1.7 million, which primarily relates to additional equipment
for the outsourcing Support Services Division's TTS facility in California.
Microdyne has no material commitments for future capital expenditures.  Cash
provided by financing activities was $2.4 million, representing the increase in
bank borrowings and cash proceeds from the sale lease-back transaction.

    Microdyne believes its available cash, funds generated from operations, and
funds available under its credit facility should be sufficient to finance its
continuing operations in fiscal 1998. In addition, Microdyne may from time to
time consider the acquisition of businesses, products, or technologies that may
require additional funds.





                                       10
<PAGE>   11
PART II. - OTHER INFORMATION

Item 6.  Exhibits and Reports.

(a) See exhibit index

(b) No form 8-K was filed during the quarter ended December 31, 1997.

                                  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.


                                           MICRODYNE CORPORATION
                                           ---------------------
                                           Registrant


Date: February  10, 1998                   /s/ Michael E. Jalbert
      ---------------------                ---------------------------
                                               Michael E. Jalbert
                                               Chief Executive Officer
                                               [Duly Authorized Officer]



Date: February  10, 1998                   /s/ Massoud Safavi
      ---------------------                -------------------
                                               Massoud Safavi
                                               Chief Financial Officer
                                               [Principal Financial Officer]





                                       11
<PAGE>   12
                                Exhibit Index
                                -------------

<TABLE>
<CAPTION>
Exhibit                Description                   Sequential Page No.
-------                -----------                   -------------------
<S>               <C>                                <C>
10.40             Eighth Amendment                   Filed with this Form 10-Q
                  to Credit Agreement                
                  dated as of December               
                  24, 1997, between Microdyne         
                  and Crestar Bank                   
                                                     
10.41             Master Lease Agreement             Filed with this Form 10-Q
                  dated as of December 23, 1997      
                  between Mellon US Leasing,          
                  and Microdyne                      

27                Financial Data Schedule            Filed with this Form 10-Q
</TABLE>