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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


(Mark One)

[X]  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the quarterly period ended September 30, 1996.

                                       OR

[ ]  Transition  report  pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934 
     For the transition period from ___________________ to  ___________________.


                         Commission File Number: 0-8574

                          MICROWAVE POWER DEVICES, INC.
             (Exact name of registrant as specified in its charter)

                   Delaware                                     13-3622306
          (State or other jurisdiction of                     (IRS Employer
           incorporation or organization)                   Identification No.)

                              49 Wireless Boulevard
                         Hauppauge, New York 11788-3935
          (Address of principal executive offices, including zip code)

                                 (516) 231-1400
              (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                   Yes X .   No_____.


As of  November  12,  1996,  there were  10,375,000  shares  outstanding  of the
registrant's Common Stock, $.01 par value.

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<PAGE>



                          MICROWAVE POWER DEVICES, INC.

                                      INDEX




PART I -- FINANCIAL INFORMATION                                         Page No.
-------------------------------                                         --------

ITEM 1.   Consolidated Financial Statements
          Consolidated Balance Sheets --
          September 30, 1996 and December 31, 1995 ...................     3

          Consolidated Statements of Operations --
          Three and nine months ended September 30, 1996 and 1995 ....     4

          Consolidated Statements of Cash Flows --
          Nine months ended September 30, 1996 and 1995 ..............     5

          Notes to Consolidated Financial Statements .................     6


ITEM 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations ..................................     7



PART II -- OTHER INFORMATION

ITEM 6.   Exhibits and Reports on Form 8-K ...........................    12



SIGNATURES ...........................................................    13



                                     Page 2
<PAGE>




PART I -- FINANCIAL INFORMATION

ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS.

<TABLE>

                  MICROWAVE POWER DEVICES, INC. and SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)
<CAPTION>

                                                                                                      September 30,     December 31,
                                                                                                          1996             1995
                                                                                                       ----------      -------------
                                                                                                       (unaudited)

                                        ASSETS
CURRENT ASSETS:     
<S>                                                                                                      <C>               <C>   
     Cash and cash equivalents .................................................................         $    385          $    388
     Accounts receivable, net of allowance for doubtful accounts of $67 ........................            6,576             9,426
     Inventories, net ..........................................................................           17,474            18,912
     Prepaid expenses and other current assets .................................................              603               480
     Deferred income taxes .....................................................................              926             2,515
                                                                                                         --------          --------
          Total current assets .................................................................           25,964            31,721
PROPERTY, PLANT AND EQUIPMENT, net .............................................................            8,132             8,364
INTANGIBLE ASSETS, net .........................................................................              346               382
DEFERRED INCOME TAXES - LONG-TERM ..............................................................            5,377              --
INVESTMENT IN MARKETABLE SECURITIES AND OTHER LONG
   TERM ASSETS .................................................................................              902               760
                                                                                                         --------          --------
                                                                                                         $ 40,721          $ 41,227
                                                                                                         ========          ========

                         LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
     Current portion of long-term debt .........................................................         $     45          $     40
     Accounts payable ..........................................................................            6,004             4,883
     Accrued liabilities .......................................................................            3,198             2,269
                                                                                                         --------          --------
          Total current liabilities ............................................................            9,247             7,192
                                                                                                         --------          --------
DEFERRED INCOME TAXES ..........................................................................              416               416
                                                                                                         --------          --------

LONG-TERM DEBT .................................................................................           12,758             9,678
                                                                                                         --------          --------
SHAREHOLDERS' EQUITY:
     Preferred stock, $.01 par value; 5,000,000 shares authorized; no shares
        issued or outstanding ..................................................................             --                --
     Common stock, $.01 par value; 25,000,000 shares authorized; 10,375,000
        shares issued and outstanding ..........................................................              104               104
     Additional paid-in capital ................................................................           23,276            23,276
     Notes receivable from shareholders ........................................................             (225)             (225)
     Retained earnings (accumulated deficit) ...................................................           (4,855)              786
                                                                                                         --------          --------
          Total shareholders' equity ...........................................................           18,300            23,941
                                                                                                         --------          --------
                                                                                                         $ 40,721          $ 41,227
                                                                                                         ========          ========
</TABLE>



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




                                     Page 3
<PAGE>

<TABLE>



                  MICROWAVE POWER DEVICES, INC. and SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)
                                   (unaudited)


<CAPTION>

                                                                  For the Three Months Ended            For the Nine Months Ended
                                                                  --------------------------            --------------------------
                                                                September 30,     September 30,      September 30,     September 30,
                                                                    1996               1995               1996               1995
                                                                -------------     -------------      -------------     -------------
                                                           

<S>                                                               <C>                <C>                <C>                <C>     
NET SALES ..............................................          $ 11,449           $  7,010           $ 33,727           $ 14,742
COST OF SALES ..........................................            13,882              5,142             31,251             10,955
                                                                  --------           --------           --------           --------
          Gross profit (deficit) .......................            (2,433)             1,868              2,476              3,787
                                                                  --------           --------           --------           --------
OPERATING EXPENSES:
     General and administrative ........................               720                736              2,488              2,306
     Selling ...........................................               885                762              2,923              2,554
     Research and development ..........................             1,832              1,317              5,795              2,621
                                                                  --------           --------           --------           --------
                                                                     3,437              2,815             11,206              7,481
                                                                  --------           --------           --------           --------
          Loss from operations .........................            (5,870)              (947)            (8,730)            (3,694)
INTEREST EXPENSE, net ..................................               291                425                670                947
OTHER EXPENSE, net .....................................                 4                 12                  3                 52
                                                                  --------           --------           --------           --------
          Loss before income taxes .....................            (6,165)            (1,384)            (9,403)            (4,693)
BENEFIT FOR INCOME TAXES ...............................            (2,466)              (553)            (3,761)            (1,877)
                                                                  --------           --------           --------           --------
          Net loss .....................................          $ (3,699)          $   (831)          $ (5,642)          $ (2,816)
                                                                  ========           ========           ========           ========



PER SHARE INFORMATION:
     Net loss per common share .........................          $  (0.36)          $  (0.11)          $  (0.54)          $  (0.38)
                                                                  ========           ========           ========           ========
     Weighted average common shares
             outstanding ...............................            10,375              7,500             10,375              7,500
                                                                  ========           ========           ========           ========
</TABLE>



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






                                     Page 4
<PAGE>



<TABLE>

                  MICROWAVE POWER DEVICES, INC. and SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<CAPTION>

                                                                                               For the Nine Months Ended
                                                                                             ------------------------------
                                                                                             September 30,    September 30,
                                                                                                 1996            1995
                                                                                                 ----            ----
<S>                                                                                             <C>           <C>     
OPERATING ACTIVITIES:
     Net loss ............................................................................      $(5,642)      $(2,816)
     Adjustments to reconcile net loss to net cash used in operating activities:
          Depreciation and amortization ..................................................          893           702
          Deferred income taxes ..........................................................       (3,788)       (1,902)
          Loss on sale of property, plant and equipment ..................................            3            23
          Loss on sale of investment in marketable securities ............................            0            28
     Changes in operating assets and liabilities:
          Accounts receivable ............................................................        2,849           745
          Inventories ....................................................................        1,439        (9,765)
          Prepaid expenses and other assets ..............................................         (271)       (1,176)
          Accounts payable and accrued liabilities .......................................        2,110         5,537
                                                                                                -------       -------
               Net cash used in operating activities .....................................       (2,407)       (8,624)
                                                                                                 -------       -------
INVESTING ACTIVITIES:
          Purchases of property, plant and equipment .....................................         (702)       (1,230)
          Proceeds from sale of property, plant and equipment ............................           15             8
          Investment in marketable securities ............................................            5             7
                                                                                                -------       -------
               Net cash used in investing activities .....................................         (682)       (1,215)
                                                                                                -------       -------
FINANCING ACTIVITIES:
          Proceeds from long-term debt ...................................................            0           804
          Principal payments of long-term debt ...........................................          (40)          (40)
          Net proceeds from revolving line of credit .....................................        3,126         4,873
          Deferred financing costs .......................................................            0           (26)
          Advances from affiliates, net ..................................................            0         4,335
                                                                                                -------       -------
               Net cash provided by financing activities .................................        3,086         9,946
                                                                                                -------       -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .........................................           (3)          107
CASH AND CASH EQUIVALENTS, beginning of year .............................................          388           410
                                                                                                -------       -------
CASH AND CASH EQUIVALENTS, end of period .................................................      $   385       $   517
                                                                                                =======       =======


SUPPLEMENTAL DATA:
     Cash paid for interest ..............................................................      $   748       $   839
                                                                                                =======       =======
     Cash paid for income taxes ..........................................................      $    17       $    22
                                                                                                =======       =======
</TABLE>


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





                                     Page 5
<PAGE>




                  MICROWAVE POWER DEVICES, INC. and SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               September 30, 1996
                 (in thousands, except share and per share data)
                                   (unaudited)



     1.  Reference  is made to the Notes to  Consolidated  Financial  Statements
contained in the  Company's  December 31, 1995  audited  consolidated  financial
statements  included in the Company's  1995 Annual Report and the Company's 1995
Annual  Report on Form 10-K filed with the SEC on April 1, 1996.  In the opinion
of  Management,  the interim  unaudited  financial  statements  included  herein
reflect all adjustments  necessary,  consisting of normal recurring adjustments,
for a fair  presentation  of such  data on a basis  consistent  with that of the
audited data  presented  therein.  The  consolidated  results of operations  for
interim periods are not necessarily indicative of the results to be expected for
a full year.

     2.  Earnings  per share for the three and nine months ended  September  30,
1996 do not  include  the impact of  outstanding  options as the effect of their
inclusion would be anti-dilutive.

     3. The following stock options were granted,  canceled or exercised  during
the third quarter of 1996 under either the 1995 or 1996 Stock Option Plans:

          Granted        Canceled                      Exercised
          -------        --------                      ---------
          None           4,875     @    $ 8.00         None
                         2,500     @    $10.75






                                     Page 6
<PAGE>




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


Overview
     Microwave Power Devices,  Inc. ("Microwave Power Devices" or the "Company")
commenced  operations  in  1967.  During  the past 29  years,  the  Company  has
designed,  manufactured  and marketed high power,  solid-state,  radio frequency
("RF") and  microwave  power  amplifiers  and related  subsystems  for military,
medical, satellite and, most recently, wireless telecommunications applications.

     The Company has historically been dependent upon the military market as its
principal source of revenue. In 1992, as the military market was declining,  the
Company  increased  the scope of its  business and entered  commercial  markets,
thereby  broadening its product  offerings.  The Company now develops  precision
high-power amplifiers for a variety of commercial uses.

     The Company is devoting  significant  resources to increase its  commercial
product offerings, particularly for the wireless telecommunications market. As a
result, the Company's  research and development  expenses have increased because
customer-funding of product developments costs, which is typical in the military
market, is less prevalent in commercial markets.



Forward-Looking Statements
     Certain  information  contained  in this  Quarterly  Report  on Form  10-Q,
including,  without  limitation,  information  appearing  under  Part I, Item 2,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations," are  forward-looking  statements (within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities  Exchange Act of
1934).  Factors set forth in the  Company's  Annual  Report on Form 10-K,  filed
April 1, 1996,  under Item 1,  "Business - Risk  Factors,"  together  with other
factors that appear with the  forward-looking  statements,  or in the  Company's
other  Securities and Exchange  Commission  filings,  including its Registration
Statement  on Form S-1 dated  September  29, 1995,  could  affect the  Company's
actual results and could cause the Company's actual results to differ materially
from those expressed in any forward-looking statements made by, or on behalf of,
the Company in this Quarterly Report on Form 10-Q.




Results of Operations --
Third Quarters Ended September 30, 1996 and September 30, 1995

     Net Sales. Net sales increased by 63% to $11.4 million in the third quarter
of 1996 from $7.0 million in the third quarter of 1995.  This sales increase was
predominantly  due  to  higher  shipments  to  two  wireless  telecommunications
original  equipment   manufacturers   ("OEMs")  and  shipments  to  a  satellite
communications  OEM.  Sales  of  commercial  products  increased  by 68% to $8.0
million in the third  quarter of 1996 from $4.8 million in the third  quarter of
1995,  representing  70% and 69%,  respectively,  of net sales in such  periods.
Sales of military products increased by 53% to $3.4 million in the third quarter
of 1996 from $2.2  million in the third  quarter of 1995,  representing  30% and
31%, respectively, of net sales in such periods.

     International  sales  increased by 75% to $6.9 million in the third quarter
of 1996 from $3.9  million  in the third  quarter of 1995,  totaling  61% of net
sales in the third quarter of 1996 compared to 56% in the third quarter of 1995.
The increase in  international  sales was  predominantly  due to higher  foreign
military   business  for  Republic's   products  and  higher  foreign   wireless
telecommunications  OEM  business.  In the  third  quarter  of 1996,  sales to a
foreign  commercial OEM (Customer A) and a domestic  commercial OEM (Customer B)
accounted for 40% and 16%,  respectively,  of the  Company's  net sales.  In the
third  quarter  of 1995,  sales to a  foreign  wireless  telecommunications  OEM
(Customer A) accounted for 50% of the Company's net sales.



                                     Page 7
<PAGE>



     Gross Profit (Deficit). Gross profit decreased by 230% to $(2.4) million in
the third  quarter of 1996 from $1.9 million in the third  quarter of 1995.  The
Company's  gross profit  margin  (gross  profit as a  percentage  of sales) also
decreased  to  (21.3)%  in the third  quarter  of 1996  from  26.6% in the third
quarter of 1995. This decrease was primarily due to a $4.9 million  write-off of
wireless multi-channel  work-in-process inventory caused by currently diminished
demand for these  particular  products and, to a lesser  extent,  a $0.7 million
write-off  of wireless  single  channel  work-in-process  inventory  caused by a
domestic commercial OEM's decision to internally  manufacture amplifiers for the
production  portion of the PCS-TDMA program.  In addition,  the third quarter of
1996  was also  adversely  affected  by the  overall  low  gross  profit  margin
obtainable on Cellular-CDMA  multi-channel amplifiers,  low gross profit margins
experienced  on various  military  OEM  contracts,  higher  commercial  warranty
expenses (as a percentage of net sales) and low gross profit margins experienced
on various other commercial OEM contracts.

     Certain of the Company's  inventory costing techniques involve developing a
standard cost which estimates the average,  or standard,  cost per unit over the
extended life cycle of a product.  Such costs  include  labor,  material,  other
direct costs and related overheads. If the extended life cycle of a product does
not  materialize  or if  there  can  be no  reasonable  certainty  that  product
maturation  will take  place  within  the near  future,  further  write-offs  of
work-in-process  inventory would be required as a re-evaluation  of the standard
cost for that product  would be  necessary.  Such  write-offs  could  materially
adversely affect the Company's gross profit and results of operations.

     There can be no assurances  that gross profit will improve.  If the Company
is not able to reduce  its  production  costs to the extent  anticipated,  or to
introduce  new  products  with higher  margins,  and if average  selling  prices
decline beyond current  expectations,  the Company's gross profit and results of
operations could be materially  adversely  affected.  The Company's gross profit
may also be affected by a variety of other factors, including the mix of systems
and equipment  sold;  production,  reliability  or quality  problems;  and price
competition.

     General and Administrative  Expenses.  General and administrative  expenses
remained  relatively  stable at $0.7 million in both the third  quarters of 1996
and 1995, representing 6.3% and 10.5%, respectively,  of net sales. The decrease
in general and administrative expenses as a percentage of net sales was directly
attributable  to the overall sales volume growth in the third quarter of 1996 as
compared to the third quarter of 1995.

     Selling Expenses.  Selling expenses increased by 16% to $0.9 million in the
third  quarter  of  1996  from  $0.8  million  in the  third  quarter  of  1995,
representing 7.7% and 10.9%, respectively, of net sales. The increase in selling
expenses resulted primarily from higher accrued warranty expenses.  The decrease
in selling  expenses as a percentage of net sales was directly  attributable  to
the overall  sales volume growth in the third quarter of 1996 as compared to the
third quarter of 1995.

     Research  and  Development  Expenses.  Research  and  development  expenses
increased by 39% to $1.8 million in the third  quarter of 1996 from $1.3 million
in the third quarter of 1995, representing 16.0% and 18.7%, respectively, of net
sales. The increase in research and development expenses resulted primarily from
higher wireless  telecommunications  product  development.  The Company believes
that  the   continued   introduction   of  new  products  is  essential  to  its
competitiveness  and is  committed  to  continued  investment  in  research  and
development.

     Interest Expense.  Interest expense decreased by 32% to $0.3 million in the
third quarter of 1996 from $0.4 million in the third quarter of 1995,  primarily
reflecting loan repayments, in the latter part of 1995, to the Company's largest
stockholder  and its  affiliates  (through the  utilization  of a portion of the
proceeds from the Company's initial public offering).

     Provision for Income Taxes.  The Company's  effective tax rate for both the
third  quarters  of 1996 and 1995 was  40.0%.  This rate was due to the net loss
anticipated  for the full year 1996 and  incurred  for the full year  1995,  the
benefit of which the Company expects to utilize to offset future taxable income,
as  prescribed  by FAS 109.  There can be no  assurances  that the Company  will
experience taxable income in the future.




                                     Page 8
<PAGE>




Nine Months Ended September 30, 1996 and September 30, 1995

     Net Sales.  Net sales  increased by 129% to $33.7 million in the first nine
months of 1996 from $14.7  million in the first nine months of 1995.  This sales
increase   was   predominantly   due  to  higher   shipments   to  two  wireless
telecommunications  OEMs  and,  to a lesser  extent,  shipments  to a  satellite
communications OEM. This is in line with the Company's  transition from military
dependence  to a dual  supplier of commercial  and military  products.  Sales of
commercial  products increased by 174% to $24.9 million in the first nine months
of 1996 from $9.1 million in the first nine months of 1995, representing 74% and
62%,  respectively,  of net sales in such  periods.  Sales of military  products
increased  by 57% to $8.8  million  in the first  nine  months of 1996 from $5.6
million  in  the  first  nine  months  of  1995,   representing   26%  and  38%,
respectively, of net sales in such periods.

     International  sales  increased by 244% to $16.2  million in the first nine
months of 1996 from $4.7 million in the first nine months of 1995,  totaling 48%
of net sales in the first nine months of 1996  compared to 32% in the first nine
months of 1995. The increase in  international  sales was  predominantly  due to
higher foreign wireless telecommunications OEM business and, to a lesser extent,
higher  foreign  military  business for Republic's  products.  In the first nine
months of 1996,  sales to a foreign  commercial  OEM (Customer A) and a domestic
commercial  OEM  (Customer B) accounted  for 39% and 17%,  respectively,  of the
Company's  net  sales.  In the first  nine  months  of 1995,  sales to a foreign
wireless  telecommunications  OEM  (Customer  A)  and  a  domestic  medical  OEM
(Customer C)  accounted  for 27% and 15%,  respectively,  of the  Company's  net
sales.

     Gross  Profit.  Gross profit  decreased by 35% to $2.5 million in the first
nine  months of 1996 from $3.8  million  in the first nine  months of 1995.  The
Company's  gross profit  margin  (gross  profit as a  percentage  of sales) also
decreased  to 7.3% in the first nine months of 1996 from 25.7% in the first nine
months of 1995.  This decrease was primarily due to a $4.9 million  write-off of
wireless multi-channel  work-in-process inventory caused by currently diminished
demand for these  particular  products,  a $1.0  million  write-off  of wireless
multi-channel  work-in-process  inventory  related  to the  cancellation  of the
remainder  of the  AirNet  contract  (caused  by the  Company's  failure to meet
product  specifications  within a given time frame) and a $0.7 million write-off
of  wireless  single  channel  work-in-process  inventory  caused by a  domestic
commercial  OEM's  decision  to  internally   manufacture   amplifiers  for  the
production portion of the PCS-TDMA program.  In addition,  the first nine months
of 1996 was also adversely  affected by low gross profit margins  experienced on
various military OEM contracts,  the overall low gross profit margin  obtainable
on Cellular-CDMA  multi-channel amplifiers,  higher commercial warranty expenses
(as a  percentage  of net sales) and low gross  profit  margins  experienced  on
various other commercial OEM contracts.

     Certain of the Company's  inventory costing techniques involve developing a
standard cost which estimates the average,  or standard,  cost per unit over the
extended life cycle of a product.  Such costs  include  labor,  material,  other
direct costs and related overheads. If the extended life cycle of a product does
not  materialize  or if  there  can  be no  reasonable  certainty  that  product
maturation  will take  place  within  the near  future,  further  write-offs  of
work-in-process  inventory would be required as a re-evaluation  of the standard
cost for that product  would be  necessary.  Such  write-offs  could  materially
adversely affect the Company's gross profit and results of operations.

     Certain of the purchase orders or contracts comprising backlog at September
30, 1996 set forth product  specifications  not yet achieved by the Company that
would require the Company to complete additional product development. Failure to
develop products meeting such  specifications  could lead to the cancellation of
the related purchase orders or contracts.  The reduction,  delay or cancellation
of orders or contracts from one or more  significant  customer would  materially
adversely  affect the  Company's  business,  financial  condition and results of
operations.

     There can be no assurances  that gross profit will improve.  If the Company
is not able to reduce  its  production  costs to the extent  anticipated,  or to
introduce  new  products  with higher  margins,  and if average  selling  prices
decline beyond current  expectations,  the Company's gross profit and results of
operations could be materially  adversely  affected.  The Company's gross profit
may also be affected by a variety of other factors, including the mix of systems
and equipment  sold;  production,  reliability  or quality  problems;  and price
competition.



                                     Page 9
<PAGE>




     General and Administrative  Expenses.  General and administrative  expenses
increased  by 8% to $2.5  million  in the  first  nine  months of 1996 from $2.3
million  in the  first  nine  months  of  1995,  representing  7.4%  and  15.6%,
respectively,  of net sales. The increase in general and administrative expenses
was primarily the result of higher costs associated with being a public company.
The decrease in general and administrative expenses as a percentage of net sales
was directly  attributable  to the overall sales volume growth in the first nine
months of 1996 as compared to the first nine months of 1995.

     Selling Expenses.  Selling expenses increased by 14% to $2.9 million in the
first nine  months of 1996 from $2.6  million in the first nine  months of 1995,
representing 8.6% and 17.3%, respectively, of net sales. The increase in selling
expenses  resulted  primarily from higher sales  representative  commissions and
higher  accrued  warranty  expenses  partially  offset by lower  bid &  proposal
expenses and lower advertising  expenses.  The decrease in selling expenses as a
percentage  of net sales was directly  attributable  to the overall sales volume
growth in the first nine  months of 1996 as compared to the first nine months of
1995.

     Research  and  Development  Expenses.  Research  and  development  expenses
increased  by 121% to $5.8  million in the first  nine  months of 1996 from $2.6
million  in the  first  nine  months  of 1995,  representing  17.2%  and  17.8%,
respectively,  of net  sales.  This  increase  resulted  primarily  from  higher
wireless  telecommunications product development and, to a lesser extent, higher
military   product   development.   The  Company  believes  that  the  continued
introduction  of  new  products  is  essential  to  its  competitiveness  and is
committed to continued investment in research and development.

     Interest Expense.  Interest expense decreased by 29% to $0.7 million in the
first nine  months of 1996 from $0.9  million in the first nine  months of 1995,
primarily  reflecting  a loan  repayment,  in the  latter  part of 1995,  to the
Company's  largest  stockholder  (through  the  utilization  of a portion of the
proceeds from the Company's  initial public  offering)  and, in addition,  lower
borrowings against the Company's credit facility.

     Provision for Income Taxes.  The Company's  effective tax rate for both the
first  nine  months of 1996 and 1995 was 40%.  This rate was due to the net loss
anticipated  for the full year 1996 and  incurred  for the full year  1995,  the
benefit of which the Company expects to utilize to offset future taxable income,
as  prescribed  by FAS 109.  There can be no  assurances  that the Company  will
experience taxable income in the future.



Liquidity and Capital Resources

     In the fourth  quarter of 1995,  the  Company  successfully  completed  its
initial  public  offering  ("IPO")  raising  net  proceeds  to  the  Company  of
approximately  $20.4  million from the  Company's  sale of  2,875,000  shares of
Common Stock, including the underwriters'  over-allotment option. Since the IPO,
the Company has financed its operations and met its capital requirements through
the following two sources: (i) cash provided by operating activities; and (ii) a
credit facility with Fleet Capital Corporation.

     The Fleet Capital  credit  facility  consists of a revolving line of credit
and an equipment lease line of credit.  These  components of the credit facility
bear  interest  at annual  rates equal to the prime rate plus 1.0% and the prime
rate plus 1.25%,  respectively,  and mature in April 1999.  Aggregate borrowings
under the  revolving  line of credit are limited by a borrowing  base,  which is
calculated as the sum of 85% of eligible accounts receivable,  35% to 50% of raw
materials and  work-in-process  inventories  and 65% of eligible  finished goods
inventory (with borrowings based on aggregate eligible inventory limited to $6.0
million).  The credit  facility is subject to  customary  covenants,  including,
among other things, limitations with respect to incurring indebtedness,  payment
of dividends and affiliate  advances,  and  provisions for  maintaining  certain
financial ratios. On November 8, 1996, the Company and Fleet Capital amended the
loan  agreement  to  provide  for a waiver of all  financial  covenants  for the
quarter ended September 30, 1996. In addition, this amendment included revisions
to the following  terms of the Fleet  Capital  credit  facility:  (i) the credit
facility  was  reduced  from  $12.0  million  to  $8.4  million,  (ii)  the  50%
calculation used for wireless  work-in-process  inventory,  when determining the
borrowing base, will be reduced by 1% per week for the next fifteen  consecutive
weeks until 35% is reached, (iii) the aggregate eligible inventory limit 



                                    Page 10
<PAGE>




of $6.0 million,  used when  determining  the borrowing base, will be reduced by
$0.04 million per week for the next eight  consecutive weeks until $5.68 million
is reached.

     Operating  activities used net cash of $2.4 million and $8.6 million in the
first nine  months of 1996 and 1995,  respectively.  From  December  31, 1995 to
September 30, 1996,  accounts receivable and inventory decreased by $2.8 million
and $1.4 million,  respectively,  while accounts payable and accrued liabilities
increased by $2.1 million. The decrease in accounts receivable was primarily due
to a more  linear  level of monthly  shipments  in the third  quarter of 1996 as
compared to the  significant  increase in shipments  that  occurred  late in the
fourth  quarter of 1995, as well as the normal  collection of  receivables.  The
decrease  in  inventory  was  predominantly  due  to  a  reduction  in  wireless
work-in-process  inventory  primarily  related to the above referenced  wireless
multi-channel  write-offs  partially  offset  by an  increase  in  wireless  raw
material/component  inventory.  The  increase  in  accounts  payable and accrued
liabilities  was primarily due to a temporary  slowing of vendor payments as the
Company balanced cash  disbursements  against its credit facility  availability.
Investing activities, which consisted primarily of equipment acquisitions,  used
net cash of $0.7  million and $1.2  million in the first nine months of 1996 and
1995,  respectively.  Financing  activities,  which  consisted  primarily of net
proceeds  from the revolving  line of credit and net advances  from  affiliates,
provided  net cash of $3.1  million and $9.9 million in the first nine months of
1996 and 1995, respectively.

     Capital  expenditures  were $0.7 million and $1.2 million in the first nine
months of 1996 and 1995, respectively.  These expenditures were funded primarily
through cash provided by the Company's credit facility.  Principal  expenditures
for the first nine months of 1996 included  engineering and  manufacturing  test
equipment,   the   expansion  of  the  Company's   parking  area,   construction
work-in-progress  for the  proposed  facility  expansion  (currently  on  hold),
personal computer  upgrades,  sales  demonstration  equipment and a new wireless
telecommunications  trade show booth. The Company  anticipates making additional
capital expenditures of $0.3 million during the remainder of 1996, including the
purchase of additional  engineering and manufacturing  test equipment as well as
continued upgrades to its CAE/CAD systems.

     As of September 30, 1996, the Company had working capital of  approximately
$16.7 million,  compared to approximately $24.5 million as of December 31, 1995.
Working capital as of September 30, 1996 included approximately $6.6 million and
$17.5 million in accounts receivable and inventory,  respectively. The Company's
current ratio (ratio of current assets to current  liabilities)  as of September
30, 1996 was 2.8:1,  compared  with a current  ratio of 4.4:1 as of December 31,
1995.  As of September 30, 1996,  the Company's  debt to equity ratio was 0.7:1,
compared with a debt to equity ratio of 0.4:1 as of December 31, 1995.

     The Company believes that cash generated from operations, amounts available
under its credit  facility,  and/or third party  financing will be sufficient to
fund necessary capital  expenditures and to provide adequate working capital for
at least  the next 12  months.  There  can be no  assurance,  however,  that the
Company  will not require  additional  financing  prior to such date to fund its
operations,  and,  if  required,  that  such  financing  will  be  available  on
commercially  reasonable terms. In addition,  the Company may require additional
financing after such date to fund its operations.



                                    Page 11
<PAGE>



PART II -- OTHER INFORMATION
----------------------------


ITEM 6. Exhibits and Reports on Form 8-K.
     (a)Exhibit 27.1     Financial Data Schedule.

     (b)No reports on Form 8-K have been filed during the quarter for which
        this report is filed.





                                    Page 12
<PAGE>




SIGNATURES


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



                                   MICROWAVE POWER DEVICES, INC.
                                    (Registrant)


Dated:   November 12, 1996         /s/ Edward J. Shubel
       ---------------------       --------------------
                                   By: Edward J. Shubel
                                       President and CEO


Dated:   November 12, 1996         /s/ Paul E. Donofrio
       ---------------------       --------------------
                                   By: Paul E. Donofrio
                                   Vice President Finance/CFO
                                  (Principal Financial and Accounting Officer)