<PAGE>   1
================================================================================

                       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 JUNE 30, 2000

                                       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 000-28473

                                 TRUETIME, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


       DELAWARE
    (STATE OR OTHER                                          94-3343279
    JURISDICTION OF                                        (I.R.S. EMPLOYER
    INCORPORATION OR                                      IDENTIFICATION NO.)
     ORGANIZATION)

                                 2835 DUKE COURT

                          SANTA ROSA, CALIFORNIA 95407

                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)


                                 (707) 528-1230

              (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 [ ]

         There were 5,950,000 shares of the Registrant's Common Stock
outstanding as of the close of business on August 1, 2000.

================================================================================

<PAGE>   2
                                 TRUETIME, INC.


<TABLE>
<CAPTION>
                                                                                               PAGE
                                                                                              NUMBER
                                                                                              ------

<S>                                                                                            <C>
PART I.  FINANCIAL INFORMATION

   Item 1.  Financial Statements and Notes                                                          3

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

   Item 3.  Quantitative and Qualitative Disclosure about Market Risk                              15


PART II.  OTHER INFORMATION

   Item 1.  Legal Proceedings                                                                      16

   Item 2.  Changes in Securities and Use of Proceeds                                              16

   Item 3.  Defaults Upon Senior Securities                                                        16

   Item 4.  Submission of Matters to a Vote of Security Holders                                    16

   Item 5.  Other Information                                                                      17

   Item 6.  Exhibits and Reports on Form 8-K                                                       17

</TABLE>


                                       2

<PAGE>   3
                          PART I: FINANCIAL INFORMATION

                     ITEM 1: FINANCIAL STATEMENTS AND NOTES


                        REPORT OF INDEPENDENT ACCOUNTANTS


Board of Directors and Stockholders
TrueTime, Inc.


We have reviewed the accompanying balance sheets of TrueTime, Inc. (the
"Company") as of June 30, 2000 and June 30, 1999, and the related statements of
operations for the three months ended June 30, 2000 and June 30, 1999 and the
nine months ended June 30, 2000 and June 30, 1999, of changes in stockholders'
equity for the nine-month period ended June 30, 2000, and of cash flows for the
nine months ended June 30, 2000 and June 30, 1999. These financial statements
are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States, the objective
of which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying interim financial statements for them to be in
conformity with accounting principles generally accepted in the United States.

We have previously audited, in accordance with auditing standards generally
accepted in the United States the balance sheet as of September 30, 1999, and
the related statements of operations, of changes in stockholders' equity, and of
cash flows for the year then ended (not presented herein) and, in our report
dated November 2, 1999, except for footnote 8, as to which the date is December
1, 1999, we expressed an unqualified opinion on those financial statements. In
our opinion, the information set forth in the accompanying balance sheet as of
September 30, 1999, is fairly stated in all material respects in relation to the
balance sheet from which it has been derived.

San Francisco, California
July 21, 2000

                                       /s/ PricewaterhouseCoopers LLP





                                       3
<PAGE>   4
                                 TrueTime, Inc.
                                 BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                           September 30,          June 30,
                                                                                                   1999              2000
                                                                                                               (unaudited)
<S>                                                                                        <C>                  <C>
ASSETS
     Current assets:
        Cash and cash equivalents....................................................           $ 3,539           $ 9,121
        Receivable from OYO Corporation U.S.A........................................               433                --
        Accounts receivable Trade....................................................             4,281             3,142
        Less allowance...............................................................               (10)              (25)
        Other accounts receivable....................................................                43                --
        Deferred income tax..........................................................               173               190
        Inventories..................................................................             5,064             7,959
        Prepaid expenses and other assets............................................                24             1,086
                                                                                               --------          --------
          Total current assets.......................................................            13,547            21,473

        Property and equipment, net..................................................             1,128             1,682
        Goodwill, net of accumulated amortization of $215 and $234...................               816               797
                                                                                               --------          --------
          Total......................................................................          $ 15,491          $ 23,952
                                                                                               ========          ========

LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
        Trade accounts payable.......................................................             $ 767             $ 734
        Accrued expenses.............................................................             1,971             1,043

          Total current liabilities..................................................             2,738             1,777
                                                                                               --------          --------
     Commitments and contingencies

     Stockholders' equity:
        Preferred stock, $.01 par value, 1,000,000 shares
        authorized, no shares issued and outstanding.................................                --                --
        Common stock, $.01 par value, 20,000,000 authorized;
        4,000,000 and 5,950,000 shares issued and outstanding, respectively..........                40                60
        Additional paid-in capital...................................................             4,690            13,313
        Additional paid-in capital - Warrants and options............................                 -                43
        Retained earnings............................................................             8,023             8,759
                                                                                               --------          --------
          Total stockholders' equity ................................................            12,753            22,175
                                                                                               --------          --------
          Total liabilities and stockholders' equity.................................          $ 15,491          $ 23,952
                                                                                               ========          ========
</TABLE>

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



                                       4

<PAGE>   5


                                 TrueTime, Inc.
                            STATEMENTS OF OPERATIONS
               (in thousands, except share and per share amounts)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                 Three months ended                    Nine months ended
                                                            June 30, 1999      June 30, 2000     June 30, 1999      June 30, 2000
<S>                                                         <C>                <C>               <C>                <C>
Sales......................................................       $ 5,557             $4,940          $ 12,790           $ 15,157

Cost of Sales..............................................         2,466              2,220             6,080              6,750
                                                                    -----              -----             -----              -----

Gross Profit...............................................         3,091              2,720             6,710              8,407

Operating Expenses
              Sales, General and Administrative.............        1,301              1,911             3,530              4,869
              Research & Development........................          502                808             1,596              2,633
                                                                    -----              -----             -----              -----
                Total operating expenses....................        1,803              2,719             5,126              7,502
                                                                    -----              -----             -----              -----

Income from Operations......................................        1,288                  1             1,584                905

Interest Income.............................................           74                146               216                397

Other Income (Expense)......................................            0                (22)                0                (22)
                                                                    -----              -----             -----              -----

Income before taxes.........................................        1,362                125             1,800              1,280

Income taxes................................................          552                 59               729                544
                                                                    -----              -----             -----              -----

Net Income..................................................        $ 810               $ 66           $ 1,071              $ 736
                                                                    =====               ====           =======              =====


Weighted average shares outstanding - Basic ................    4,000,000          5,950,000         4,000,000          5,368,000

Weighted average shares outstanding - Diluted...............    4,000,000          5,950,000         4,000,000          5,550,000

Basic Earnings Per Share....................................        $0.20              $0.01             $0.27              $0.14

Diluted Earnings Per Share..................................        $0.20              $0.01             $0.27              $0.13
</TABLE>

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


                                       5

<PAGE>   6
                                 TrueTime, Inc.
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                      (in thousands, except share amounts)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                             Common Stock          Additional
                                                             ------------             Paid-In     Retained
                                                            Shares      Amount        Capital     Earnings         Total
<S>                                                     <C>              <C>          <C>         <C>           <C>
Stockholders equity as of October 1, 1999...........     4,000,000        $ 40        $ 4,690      $ 8,023      $ 12,753
Issuance of common stock............................     1,500,000          15          6,549                      6,564
Additional paid-in capital - Warrants and options...                                       43                         43
Issuance of options and warrants to underwriters....                                       --                         --
Net income..........................................                                                   452           452
                                                                                                   -------      --------
Stockholders' equity as of December 31, 1999........     5,500,000        $ 55       $ 11,282      $ 8,475      $ 19,812
                                                         =========        ====       ========      =======      ========

Issuance of common stock............................       450,000           5          2,074                      2,079
Net Income                                                                                             218           218
                                                                                                   -------      --------
Stockholders' equity as of March 31, 2000...........     5,950,000        $ 60       $ 13,356      $ 8,693      $ 22,109
                                                         =========        ====       ========      =======      ========
Net Income..........................................                                                    66            66
                                                                                                   =======      ========
Stockholders' equity as of June 30, 2000............     5,950,000        $ 60       $ 13,356      $ 8,759      $ 22,175
                                                         =========        ====       ========      =======      ========
</TABLE>

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


                                       6

<PAGE>   7
                                 TrueTime, Inc.
                            STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                      Nine months ended     Nine months ended
                                                                                          June 30, 1999         June 30, 2000
<S>                                                                                   <C>                   <C>
Cash flows from operating activities:
        Net income..............................................................                 $ 1,071                 $ 736
        Adjustments to reconcile net income to net cash provided by (used in)
        operating activities....................................................
          Deferred income taxes.................................................                     (47)                  (17)
          Depreciation and amortization.........................................                     253                   368
          Compensation expense related to options granted.......................                      --                    43
          Effects of changes in operating assets and liabilities
              Receivables.......................................................                     279                 1,197
              Inventories.......................................................                    (560)               (2,895)
              Prepaid expenses and other current assets.........................                    (136)               (1,062)
              Trade accounts payable............................................                     241                   (33)
              Accrued expenses..................................................                     390                  (928)
                                                                                                  ------                -------

          Net cash provided by (used in) operating activities...................                   1,491                (2,591)
                                                                                                  ------                -------
Cash flows from investing activities:
          Decrease (increase) in receivable from OYO Corporation
          U.S.A.................................................................                  (1,067)                  433
          Capital expenditures..................................................                    (337)                 (903)
                                                                                                  ------               -------

          Net cash used in investing activities.................................                  (1,404)                 (470)
                                                                                                  ------                -------
Cash flows from financing activities
       Proceeds of Initial Public Offering
          Common stock, $.01 par value, 1,950,000 shares........................                      --                    20
          Additional paid in capital, net of commissions........................                      --                 9,047
          Costs of Offering.....................................................                      --                  (424)
                                                                                                                       -------

          Net cash provided by financing activities.............................                      --                 8,643
                                                                                                  ------                -------

Increase in cash and cash equivalents...........................................                      87                 5,582

Cash and cash equivalents, beginning of period..................................                      37                 3,539
                                                                                                  ------               -------

Cash and cash equivalents, end of period........................................                  $  124               $ 9,121
                                                                                                  ======               =======
</TABLE>

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

                                       7

<PAGE>   8
TRUETIME, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1.  BASIS OF PRESENTATION

The balance sheet of TrueTime, Inc. at September 30, 1999 has been derived from
the Company's audited financial statements at that date. The balance sheets at
June 30, 2000, the statements of operations, the statement of changes in
stockholders' equity and the statements of cash flows for the three months and
nine months ended June 30, 2000 and 1999 have been prepared by the Company,
unaudited. In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary to present fairly the financial position,
results of operations and cash flows have been made. The results of operations
for the three months and nine months ended June 30, 2000 and 1999 are not
necessarily indicative of the operating results for a full year of future
operations.

Certain information and footnote disclosures normally included in financial
statements presented in accordance with accounting principles generally accepted
in the United States have been omitted. The accompanying financial statements
should be read in conjunction with the financial statements and notes thereto
contained in the Company's Prospectus dated December 16, 1999.

PricewaterhouseCoopers LLP is not subject to the liability provisions of Section
11 of the Securities Act of 1933 for their report on the unaudited financial
information because that report is not a "report" or a "part" of the
registration statement prepared or certified by PricewaterhouseCoopers LLP
within the meaning of Sections 7 and 11 of the Act.

2.  EARNINGS PER COMMON SHARE

The following table summarizes the calculation of net earnings and weighted
average common shares and common equivalent shares outstanding for purposes of
the computation of earnings per share:

                                 TrueTime, Inc.
                            EARNINGS PER COMMON SHARE

<TABLE>
<CAPTION>
                                                               Three months                              Nine months
                                                       June 30, 1999        June 30, 2000       June 30, 1999        June 30, 2000
<S>                                                    <C>                  <C>                 <C>                  <C>
Net earnings available to common stockholders
(in thousands)......................................       $     810            $      66           $   1,071            $     736
                                                           =========            =========           =========            =========
Weighted average common shares outstanding..........       4,000,000            5,950,000           4,000,000            5,368,000
Weighted average common share equivalents
outstanding.........................................              --                   --                  --              182,000
                                                           ---------            ---------           ---------
Weighted average common shares and common share
equivalents outstanding............................        4,000,000            5,950,000           4,000,000            5,550,000
                                                           =========            =========           =========            =========
Basic earnings per common share....................        $    0.20            $    0.01           $    0.27            $    0.14
                                                           =========            =========           =========            =========
Diluted earnings per common share..................        $    0.20            $    0.01           $    0.27            $    0.13
                                                           =========            =========           =========            =========
</TABLE>

3. INVENTORIES

Inventories consisted of the following (in thousands), net of reserves of $30 at
September 30, 1999 and $130 at June 30, 2000:

<TABLE>
<CAPTION>
                         September 30, 1999          June 30, 2000
<S>                      <C>                         <C>
Finished goods                        $ 948                $ 1,363
Work in process                       1,376                  2,753
Raw material                          2,740                  3,843
                                      -----                  -----
                                    $ 5,064                $ 7,959
                                    =======                =======
</TABLE>

4. INITIAL PUBLIC OFFERING

On November 1, 1999, the Company was reincorporated in Delaware with 4,000,000
shares of common stock outstanding. On December 16, 1999, the Company completed
its Initial Public Offering (the "IPO") in which the Company sold 1,500,000
shares of common stock at $5.00 per share and the Company's owner, OYO
Corporation U.S.A., sold 1,500,000 shares of common stock at $5.00 per share.
The Company received $6,564,118 after commissions of $525,000 and expenses of
$410,882.

                                       8
<PAGE>   9
On January 6, 2000, the Company's underwriters exercised their overallotment
option and purchased 450,000 shares of the Company's common stock at $5.00 per
share. The Company received $2,078,549 after commissions of $157,500 and
expenses of $13,951.

See PART II: OTHER INFORMATION, ITEM 2. Changes in Securities and
             Use of Proceeds.

5.  STOCK OPTIONS

The Company's employees participate in the TrueTime, Inc. Key Employee Stock
Option Plan (the "Employee Plan") and the non-employee directors and consultants
participate in the TrueTime, Inc. 1999 Non-Employee Director Plan (the "Director
Plan"). The Employee Plan covers substantially all eligible employees in the
United States.

The Employee Plan is administered by a committee of no fewer than two persons
appointed by the board. Under the Employee Plan, options to purchase common
stock and restricted stock awards up to an aggregate of 1,500,000 shares of
common stock may be granted by the committee. Under the Director Plan, options
to purchase common stock and restricted stock awards up to an aggregate of
150,000 shares of common stock may be granted.

In connection with its IPO, the Company granted the underwriters a 30-day option
to purchase up to 450,000 additional shares at $5.00 per share to cover
over-allotments. Such option was exercised and the 450,000 additional shares
were issued on January 6, 2000. As additional underwriting compensation, the
Company issued to C.E. Unterberg, Towbin warrants to purchase up to 200,000
shares of common stock at an initial exercise price for each share of $5.50.

A summary of activity with respect to stock options and warrants is as follows:

<TABLE>
<CAPTION>
                                                           Weighted
                                                            Average
                                                           Exercise
                                            Shares            Price
<S>                                      <C>               <C>
Outstanding at October 1, 1999                  --               --
   Granted                               1,460,000            $5.07
   Exercised                                    --               --
   Forfeited                                    --               --
                                       ------------    -------------
Outstanding at December 31, 1999         1,460,000            $5.07
   Granted                                  75,000          $ 11.81
   Exercised                              (450,000)           $5.00
   Forfeited                                (3,200)           $5.00
                                       ------------    -------------
Outstanding at March 30, 2000            1,081,800            $5.40
   Granted                                  52,000            $6.19
   Exercised                                    --               --
   Forfeited                              (101,500)           $5.00
                                       ------------    -------------
Outstanding at June 30, 2000             1,032,300            $5.65
</TABLE>

The following table summarizes information about stock options and warrants
outstanding and exercisable at June 30, 2000:

<TABLE>
<CAPTION>
                               Options/Warrants Outstanding          Options/Warrants Exercisable
                               ----------------------------          ----------------------------
                                            Weighted
                                             Average      Weighted                         Weighted
                                           Remaining       Average                          Average
                                                Term      Exercise                         Exercise
   Exercise Price             Shares      (in years)         Price           Shares           Price
   --------------             ------      ---------          -----           ------           -----
<S>                         <C>            <C>             <C>               <C>            <C>
   $5.00 - $5.50             905,300            6.08        $ 5.11           60,000           $5.00
   $6.19                      52,000            6.08        $ 6.19                0              --
   $11.81                     75,000            6.08        $11.81                0              --
   </TABLE>


                                       9
<PAGE>   10

The Company accounts for these options and warrants in accordance with Statement
of Financial Accounting Standards (FAS) Number 123, Accounting for Stock Based
Compensation. As permitted by FAS 123, the Company has chosen to apply APB
Opinion Number 25, Accounting for Stock Issued to Employees and Related
Interpretations in accounting for stock option plans. Accordingly, no
compensation cost has been recognized for options granted under the plans.

7. INCOME TAXES

Prior to the offering, the Company joined in the consolidated U.S. income tax
return of its parent, OYO Corporation U.S.A., which included all U.S.
subsidiaries of OYO Corporation (Japan) and in the consolidated California state
income tax return, which included all subsidiaries that are included in the
consolidated U.S. income tax return. Federal and state income taxes were
provided by the Company as if it filed separate income tax returns.

After the IPO, the Company is filing independent U.S. income tax and California
and Delaware income tax returns.

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

The following analysis of the financial condition and results of operations of
TrueTime, Inc. should be read in conjunction with the Financial Statements and
Notes related thereto included elsewhere in this Form 10-Q.

GENERAL

         TrueTime designs, develops, manufactures and markets precision time and
precision frequency products that are essential components used in
telecommunications, computer networking, e-commerce, aerospace and various other
commercial markets. Our products use a variety of external timing references,
including most importantly the Global Positioning System, or GPS, together with
advanced electronic circuitry and software to provide high quality signals and
precise time. We offer a wide variety of products, which can be divided into the
following broad categories:

         o precise time and frequency products

         o computer plug-in cards with precise timing capabilities

         o computer network time servers

         o time code products

         o time displays

Our products, incorporated as components in complex systems, allow customers to:

         o improve clarity and quality of voice, video and data in wireline,
           wireless and satellite communications,

         o authenticate the time of stock market and other e-commerce
           transactions,

         o monitor and control the frequency of electric utility power grids to
           prevent power black-outs and quickly locate power line faults,

         o transmit television signals at designated frequencies to meet
           regulatory requirements,

         o meet requirements for secure communications, particularly in national
           defense and security contexts, and

         o time high resolution data collected in military ranges and in space
           launches with a high degree of accuracy.

         During the past decade, we have strived to produce state-of-the-art
precise time and frequency technology. We have developed and implemented five
generations of precision time products based on GPS technology through the use
of our significant technology resources in the areas of GPS, frequency control,
real-time operating systems and computer networking. Our increased

                                       10
<PAGE>   11

investments in research and development have allowed us to develop a new
platform -- a combination of new hardware and software -- for many products,
decrease time to market for new products and improve product quality and
robustness. Our new platform also provides a means through which TrueTime can
enter new markets. Advanced technologies also offer opportunities to reduce
manufacturing costs and support expenses by increasing volumes of common
products.

RESULTS OF OPERATIONS

         The following table sets forth for three months and nine months ended
June 30, 2000 and 1999, the percentage of income statement items to total sales:

<TABLE>
<CAPTION>
                                                                          Three Months Ended                Nine Months Ended
                                                                               June 30,                         June 30,
                                                                         1999            2000            1999           2000
                                                                         ----            ----            ----           ----
<S>                                                                      <C>             <C>             <C>            <C>
Sales............................................................        100.0%           100.0%          100.0%        100.0%
Cost of                                                                   44.4             44.9            47.5           44.5
sales............................................................
Gross profit.....................................................         55.6             55.1            52.5           55.5
Operating expenses:
    Selling, general and administrative..........................         23.4             38.7            27.6           32.1
    Research and development.....................................          9.0             16.4            12.5           17.4
        Total operating expenses.................................         32.4             55.0            40.1           49.5
Income from operations...........................................         23.2              0.1            12.4            6.0
Interest and other income, net...................................          1.3              2.6             1.7            2.5
Income before income taxes.......................................         24.5              2.5            14.1            8.5
Provision for income taxes.......................................          9.9              1.2             5.7            3.6
Net income.......................................................         14.6%             1.3%            8.4%          4.9%
</TABLE>

Three Months and Nine Months Ended June 30, 2000 compared to Three Months and
Nine Months Ended June 30, 1999

         Sales. Sales for the quarter ended June 30, 2000 were $4.9 million, a
decrease of $0.7 million, or 12.5%, from $5.6 million for the quarter ended June
30, 1999. This decrease in sales is attributed to the low level of orders in the
current fiscal year. For the nine months ended June 30, 2000, sales were $15.2
million, an increase of $2.4 million, or 18.7%, from $12.8 million for the nine
months ended June 30, 1999. This increase in sales is attributed to the high
level of orders in the last two quarters of fiscal 1999 and the large amount of
backlog at the beginning of fiscal 2000. The long procurement cycles for
government and institutional orders and the ordering and approval processes for
government orders continue to produce irregular order patterns including the
high level of orders in late fiscal 1999 and lower levels of orders in the first
three quarters of fiscal 2000. This results in shipment and revenue recognition
which are not linear on a quarterly basis.

         Cost of Sales. Cost of sales for the quarter ended June 30, 2000 was
$2.2 million, a decrease of $0.3 million, or 12.0%, from $2.5 million for the
quarter ended June 30, 1999. Cost of sales increased as a percentage of total
sales to 44.9% in the quarter ended June 30, 2000 from 44.4% in the quarter
ended June 30, 1999. Cost of sales for the nine months ended June 30, 2000 was
$6.8 million, an increase of $0.7 million, or 11.5% from $6.1 million in the
nine months ended June 30, 1999. Cost of Sales as a percentage of total sales
decreased to 44.5% of sales in the nine months ended June 30, 2000 from 47.5% of
sales in the nine months ended June 30, 1999. Such percentage decreases are the
result of the efficiencies of the increased sales volumes that enabled the
company to obtain costs of sales closer to its long-term averages.

         Operating Expenses. Operating expenses for the quarter ended June 30,
2000 were $2.7 million, an increase of $0.9 million, or 50.0%, from $1.8 million
for the quarter ended June 30, 1999. Operating costs increased as a percentage
of total sales to 55.0% in the quarter ended June 30, 2000 from 32.4% in the
quarter ended June 30, 1999. Operating expenses for the nine months ended June
30, 2000 were $7.5 million, an increase of $2.4 million, or 47.0% from $5.1
million in the nine months ended June 30, 1999. Operating expenses increased to
49.5% of sales in the nine months ended June 30, 2000 from 40.1% in the nine
months ended June 30, 1999. These percentage increases are the result of
increased investments in the Companies sales, marketing, and research and
development efforts. Higher commission costs, insurance costs, and a one-time
cost related to a senior management change were also incurred during the three
and nine months ended June 30, 2000.

         Interest and Other Income. Interest and Other Income for the quarter
ended June 30, 2000 were $124,000, an increase of


                                       11
<PAGE>   12

$50,000, or 67.6% from $74,000 for the quarter ended June 30, 1999. Interest and
Other Income increased as a percentage of total sales to 2.5% in the quarter
ended June 30, 2000 from 1.3% in the quarter ended June 30, 1999. Interest and
Other Income for the nine months ended June 30, 2000 was $375,000, an increase
of $159,000, or 73.6% from the nine months ended June 30, 1999. Such percentage
increases are the result of increased interest income from increased cash
deposits from the proceeds of the sale of common stock in our initial public
offering and increasing interest rates paid on those cash deposits.

         Income Taxes. Income taxes for the quarter ended June 30, 2000 were
47.2% of income before tax compared to 40.5% of income before tax for the
quarter ended June 30, 1999. Income taxes for the nine months ended June 30,
2000 were 42.5% of income before tax compared to 40.5% of income before tax for
the nine months ended June 30, 1999. Income taxes include federal and state
income taxes and are included on an estimated basis. Our effective income tax
rate differs from the statutory federal rate of 34% primarily as a result of the
effect of California state income taxes.

LIQUIDITY AND SOURCES OF CAPITAL

         TrueTime completed its initial public offering (the "Offering") of its
common stock on December 22, 1999. Gross proceeds to TrueTime were $6,975,000.
Net proceeds after expenses of the Offering were $6,564,000. On January 6, 2000,
the Company's underwriters exercised their overallotment option and purchased an
additional 450,000 shares of the Company's common stock at $5.00 per share.
Gross proceeds to TrueTime were $2,092,500. Net proceeds after expenses were
$2,078,549.

         Net income for the nine months ended June 30, 2000 is $736,000.

         For the nine months ended June 30, 2000, net cash flow excluding
proceeds from the Offering, overallotment option and net income was a decrease
in cash of $3.1 million.

         For the nine months ended June 30, 2000, operating activities excluding
net income used $3.3 million. $2.9 million of this amount was used for increased
inventories, and $1.9 million was used for increased prepaid and accrued
expenses, including insurance prepayments. These expenditures were offset by
$1.6 million in reduced accounts receivables and depreciation and amortization.

         For the nine months ended June 30, 2000, investing activities used $0.5
million. Of that, $0.9 of such amount million was used for capital expenditures,
offset by $0.4 million received from OYO Corporation U.S.A. in settlement of its
accounts with TrueTime following the Offering.

         Total net cash flow for the nine months, including the proceeds of the
Offering, was $5.6 million.

         Previously, TrueTime announced that it will be moving into a new
facility in early Fiscal Year 2001. The Company's portion of the tenant
improvement costs which will be capitalized are now estimated at $900,000.
Further, the new facility will have rental expenses greater than those of the
original facility of about $250,000 per quarter.

RECENT ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standards (SFAS) No. 137, which amended the
effective date of SFAS No. 133 - Accounting for Derivative Instruments and
Hedging Activities, was issued in June 1999. The Company is required to adopt
SFAS No. 133 for the fiscal year ending 2001. This statement establishes
accounting and reporting standards requiring that all derivative instruments be
recorded on the balance sheet as either an asset or a liability, measured at its
fair value. The statement requires that changes in the derivative's fair value
be recognized currently in earnings unless specific hedge accounting criteria
are met and such hedge accounting treatment is elected. The Company is currently
evaluating the effects of this statements on its financial statements.

FORWARD LOOKING STATEMENTS

         This Form 10-Q includes "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. All statements other than statements of historical fact
included herein, including statements regarding potential future products and
markets, the Company's future financial position, business strategy and other
plans and objectives for future operations, are forward-looking statements. We
can give no assurance that such expectations will prove to have been correct,
and actual results may differ materially from such forward-looking statements.
Important factors that could cause actual results to differ materially from the
Company's expectations are disclosed below and in our Registration Statement on
Form S-1 (Reg. No. 333-90269), as amended, filed with Securities and Exchange
Commission, under the heading "Risk Factors" and elsewhere.

                                       12
<PAGE>   13

Further, all written and verbal forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by such factors.

Our business will suffer if we are unable to keep up with rapid technological
change and product obsolescence.

         If we fail to maintain our technological leadership and good reputation
with our customers in the areas of GPS, real-time operating systems and network
technologies, the value of your investment will decrease. The markets for timing
and frequency products are characterized by continual and rapid technological
developments that have resulted in, and will likely continue to result in,
substantial improvements in product function and performance. Our success will
depend on our ability to anticipate changes in technology and industry
requirements and to respond to technological developments on a timely basis,
either internally or through strategic alliances.

         We will likely be constantly threatened by current competitors or new
market entrants who may develop new technologies or products or establish new
standards that could render our products obsolete and unmarketable. Thus, we can
offer no assurances that we will be successful in developing and marketing, on a
timely and cost effective basis, product enhancements or new products that
respond to technological developments, that are accepted in the marketplace or
that comply with industry standards.

We rely on a limited number of suppliers for certain critical components, and we
use a single supplier for virtually all of our GPS-based components, making us
subject to supply and quality control problems.

         Most of our products incorporate certain components or technology
supplied in part by third parties. From time to time, we experience delays and
disruptions in our supply chain, including some such disruptions in recent
periods. To date, these delays and disruptions have not materially adversely
affected our business. Wherever possible, we try to develop multiple sources of
supply, but we do not always succeed. To the extent that we experience
significant supply or quality control problems with our vendors, these problems
can cause us to have difficulty in controlling our quality and can have a
significant adverse effect on our ability to meet future production and delivery
commitments to our customers.

         Currently, Trimble Navigation Limited provides virtually all of a key
component for our GPS-based products. In addition, we believe that Trimble has
begun competing in markets similar to our own. While we have attempted to
address this single-supplier risk by entering into purchase agreements with
Trimble that will secure our supply of the components for the next year or so,
by attempting to establish alternative supply arrangements and by taking steps
to develop our own proprietary products in this area, there can be no assurances
that we will be able to obtain adequate supplies of this component in the
future. If we are unable to obtain adequate supplies of this component for any
reason, we will likely experience delays or reductions in production and
increased expenses while we redesign our GPS-based products or accelerate the
introduction of new GPS-based products that do not use this component. Our
operations will be negatively affected if we experience inadequate supplies of
any key components.

Our trade secrets, trademarks and patents may not be adequate or enforceable and
others may use our proprietary technology.

         Historically, we have not filed patents to protect our intellectual
property. While we hope our intellectual property is adequately protected by our
confidential trade-secret protection plans and programs, we cannot be sure that
our competitors will be prevented from gaining access to our proprietary and
confidential technologies. Furthermore, although we have applied for a patent
related to a computer network timing product, we can offer no assurances that a
patent will be issued for this patent application or other future applications
and, if issued, that any patents will be enforceable. If the protection of our
intellectual property proves to be inadequate or unenforceable, others may use
our proprietary developments without compensation to us and in competition
against us, giving cost advantages to our competitors.

We face the risk of litigation alleging our infringement of other people's
intellectual property rights.

         We do not know of any instances where our products violate the
intellectual property rights of others or inappropriately use their technology.
However, technology-based companies are often very litigious. Therefore, we face
the risk of adverse claims and litigation alleging infringement of other
people's intellectual property rights. These claims could result in costly
litigation and divert management's attention from other matters. Alternatively,
these claims could practically require us to obtain licenses in order to use,
manufacture and sell certain of our products, regardless of the merits of the
infringement claims, in order to maintain business levels or we could otherwise
be excluded from participation in certain markets. We cannot be certain that any
necessary licenses will be available or that, if available, they can be obtained
on reasonable terms acceptable to us.

                                       13
<PAGE>   14

Our competitors may use their greater resources and broader product offerings to
increase competition and reduce our sales and profitability.

         Many of our existing and potential competitors have substantially
greater marketing, financial and technical resources than we have. In addition,
some of our competitors have broader product offerings and manufacture
internally certain critical components of time and frequency products.
Currently, we do not have a complete offering of precise time and frequency
products nor do we manufacture internally certain critical components, placing
us at a disadvantage to some of our competitors. In addition, we believe that
some of our competitors have obtained and maintained business that loses money -
"loss leading" - in order to maintain a competitive advantage with regard to
specific customers or products. If our competitors were to use such tactics in
the future, we would be unable to maintain our market position without incurring
a negative impact on our profitability.

         The race for a leading position in new technological advances is always
very competitive. Advances in technology may reduce the cost for potential
competitors to gain market entry, particularly for less expensive time and
frequency products. We cannot assure you that sales of our products will
continue at current volumes or prices in any event, but especially if our
current competitors or new market entrants introduce new products with better
features, better performance or lower prices or having other characteristics
that are more attractive than our own. Competitive pressures or other factors
also may result in significant price competition that could have a material
adverse effect on our results of operations.

Our industry may not grow as forecasted and our revenues and operating results
may be diminished.

         Our future successful performance is inextricably tied to the growth of
our industry. However, even if our industry grows as forecast, there can be no
assurance that we will be able to grow consistently with our industry.

Our relationships with our sales representatives could be impaired and cause us
to lose orders.

         More than 80% of our orders come through our 44 domestic and worldwide
sales representative offices. Many of these representatives act as relationship
brokers and the loss of any key representatives could have a negative effect on
our sales.

We may be unable to attract and retain key employees, delaying product
development and manufacturing.

         Our success depends upon attracting and retaining highly skilled
professionals. A number of our employees are highly skilled engineers and other
technical professionals, and our failure to continue to attract and retain such
individuals could adversely affect our ability to compete in the industry. In
addition, our success will depend to a significant extent upon the abilities and
efforts of several members of our senior management.

Because many of our key customers are units of the U.S. government and entities
that are dependent upon U.S. government funding for purchases, decreased
government spending could adversely affect our business.

         Our defense, military and aerospace based business depends largely on
U.S. government expenditures, whether directly with us or indirectly with our
customers who contract with the U.S. government. In recent years, units of the
U.S. government have collectively accounted for approximately 21% to 28% of our
annual revenues. There can be no assurances as to whether future governmental
spending will adequately support our business in those areas, and substantial
decreases in government spending or loss of U.S. governmental customers could
materially and adversely affect our operations.

Our market is segmented into a limited number of customer groups, the loss or
change of which could significantly decrease our sales.

         While we sell our products to a large number of individual customers,
the number of customer groups is limited. These groups include
telecommunications, computer networking, aerospace, military, satellite, U.S.
government and power utility customers. The loss, or changes in the purchasing
behavior, of one or more of these groups of customers could cause a material
decrease in the sale of our products.

The failure of GPS and other time and frequency references would cause our
products to fail to perform to specification.

         The time and frequency products that we manufacture rely upon the
availability of highly accurate timing references, primarily GPS operated by the
U.S. Department of Defense, and to a lesser degree, other timing references
operated by the U.S. National Institute of Science and Technology and other
outside signal sources. The failure of these timing references, particularly


                                       14
<PAGE>   15

GPS, would create many problems for our products and our customers and seriously
disrupt the sale of our products.

Our products could fail to perform according to specification or prove to be
unreliable, causing damage to our customer relationships and industry reputation
and resulting in loss of sales.

         Our customers require demanding specifications for product performance
and reliability. Because our precision time and frequency products are complex
and often use state-of-the-art components, processes and techniques, undetected
errors and design flaws may occur. Product defects result in higher product
service and warranty and replacement costs and may cause serious damage to our
customer relationships and industry reputation, all of which will negatively
impact our sales and business.

If we are unable to expand our production capacity to maintain competitive
delivery times, we will likely lose customers.

         Our production capacity and ability to fill orders for our customers on
a timely basis is limited by our equipment, the size of our production
facilities, the ability of our suppliers to meet our needs and our human
resources. These resources in turn are limited by the availability of capital
and the time required to increase capacity, particularly to construct additional
facilities and to hire and train employees. We cannot assure you that we will
have sufficient capital and resources to expand our production capacity and to
maintain delivery times which our customers consider appropriate. Further, an
increase in our delivery times may result in loss of customers.

Our results of operations will be adversely affected if we do not have enough
demand for our products to justify our increased capacity.

         To meet our goals for future growth, we plan to move into new, larger
manufacturing and office facilities in fiscal 2001, using a portion of our
working capital to build out and equip the new facilities. The additional
manufacturing capacity provided by the new facilities and equipment will allow
us to more than double our output given sufficient market demand. However, after
increasing our production capacity, we may find that demand for our products
does not remain sufficiently high for us to realize a satisfactory return on the
capital we have spent to increase capacity.

Fluctuations in quarterly performance can result in increases in our inventory
and related carrying costs, can diminish our operating results and cash flow and
can result in a lower TrueTime stock price.

         Historically, the rate of incoming orders for our products has varied
substantially from quarter to quarter. In past fiscal years, our highest sales
quarter has been as much as 250% of our lowest sales quarter. This quarter to
quarter variation is not seasonal or predictable. We attempt to accurately
forecast orders for our products and commence purchasing and manufacturing prior
to the receipt of such orders. However, it is highly unlikely that we will
consistently accurately forecast the timing and rate of orders. The flow of
orders (or lack thereof) from governmental agencies has been particularly
difficult to forecast in recent periods. This aspect of our business makes our
planning inexact and, in turn, affects our shipments, costs, inventories,
operating results and cash flow for any given quarter. In addition, our
quarterly operating results are affected by competitive pricing, announcements
regarding new product developments and cyclical conditions in the industry.
Accordingly, we may experience wide quarterly fluctuations in our operating
performance and profitability, which may adversely affect our stock price even
if our year to year performance is more stable, which it also may not be. In
addition, many of our products require significant manufacturing time, making it
difficult to increase production on short notice. If we are unable to satisfy
unexpected customer orders, our business and customer relationships could
suffer.

ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         We will be exposed to market risks related to changes in interest rates
in the future. The unused proceeds from our initial public offering are invested
in short term financial instruments, the value of which is subject to interest
rate risk and could fall if interest rates rise. Additionally, while we have no
plans for future borrowings, any future borrowings will likely have a variable
rate component that will fluctuate as interest rates change. If market interest
rates were to increase immediately and uniformly by 10%, there would not be a
material effect on the results of operations or on our balance sheet because we
currently have no debt.



                                       15
<PAGE>   16
                           PART II: OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         From time to time, the Company is a party to legal proceedings arising
in the ordinary course of business. The Company is not currently a party to any
litigation that it believes could have a material adverse effect on the results
of operations or financial condition of the Company.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

         (d) The Company commenced an initial public offering (the "Offering")
of its common stock, par value $.01 per share ("Common Stock") on December 16,
1999 pursuant to a Registration Statement on Form S-1 (Registration No.
333-90269) (the "Registration Statement"), which was declared effective by the
Securities and Exchange Commission on December 16, 1999. The Offering was
terminated upon the sale of all of the securities covered by the Registration
Statement. The managing underwriters in the Offering were C.E. Unterberg,
Towbin, Cruttenden Roth Incorporated and Pennsylvania Merchant Group. In the
Offering, an aggregate of 3,450,000 shares of Common Stock were registered,
1,950,000 for the account of the Company and 1,500,000 for the account of OYO
Corporation U.S.A. ("OYO"). All of the securities registered in the Offering
have been sold at an initial public offering price of $5.00 per share for gross
proceeds to the Company of $9,750,000 and gross proceeds of $7,500,000 to OYO.
From the effective date of the Registration Statement through December 31, 1999,
the Company incurred approximately $935,882 in expenses in connection with the
issuance and distribution of the securities registered in the Offering,
including approximately $229,251 paid to Fulbright & Jaworski L.L.P., counsel to
the Company, and approximately $525,000 paid to C.E. Unterberg, Towbin. In
addition, during the three months ended December 31, 1999, the Company paid
Fulbright & Jaworski L.L.P. approximately $3,682 for services not related to the
Offering. Mr. Charles H. Still, a partner of Fulbright & Jaworski L.L.P., and
Mr. A. Robert Towbin, the Co-Chairman of C.E. Unterberg, Towbin, are each a
director of the Company.

$7,500,000 in gross proceeds of the Offering was received by the Company as of
December 31, 1999. The approximate expenses of the Offering to the Company as of
December 31, 1999 are as follows:

      Underwriting discounts and commissions              $     525,000
      Finders' fees                                                   0
      Expenses paid to or for underwriters                            0
      Other expenses                                            410,882
                                                          -------------
               Total expenses to the Company              $     935,882
                                                          -------------
      Net Offering proceeds to the Company                $   6,564,118
                                                          -------------

An additional $2,250,000 in gross proceeds of the Offering was received on
January 6, 2000. The approximate expenses of the Offering between January 1,
2000 and June 30, 2000 are as follows:

          Underwriting discounts and commissions          $     157,500
          Finders' fees                                               0
          Expenses paid to or for underwriters                        0
          Other expenses                                         13,951
                                                          -------------
               Total expenses to the Company              $     171,451
                                                          -------------
      Net Offering proceeds to the Company                $   2,078,549
                                                          -------------
    As of June 30, 2000, the Company had invested unused net proceeds of the
Offering in the amount of approximately $5,400,000 in short-term money market
investments. The balance of the proceeds had been directly employed in the
Company's working capital.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

    None.

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

    None.


                                       16
<PAGE>   17

ITEM 5.  OTHER INFORMATION.

    None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)      The following exhibits are filed with this Quarterly Report.


<TABLE>
<CAPTION>
 Exhibit Number      Description
 ---------------     ------------
<S>               <C>
   11.1           Statement re Computation of Earnings per Share
   15.1           Awareness Letter of Independent Public Accountants
   27.1           Financial Data Schedule
</TABLE>

(b)      Reports on Form 8-K.

    None.



                                       17

<PAGE>   18
                                   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 hereunto duly authorized.

                             TRUETIME, INC.


                             By: /s/ Elizabeth A. Withers
                                 -----------------------------------------------
                                     Elizabeth A. Withers
                                President and Chief Executive Officer
                                    (Principal Executive Officer)


                             By: /s/ John E. Dutil
                                ------------------------------------------------
                                     John E. Dutil
                                Controller and Acting Vice President
                                of Finance and Administration
                                    (Principal Financial and Accounting Officer)

Date: August 10, 2000


<PAGE>   19
                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
 Exhibit Number      Description
 ---------------     ------------
<S>               <C>
   11.1           Statement re Computation of Earnings per Share
   15.1           Awareness Letter of Independent Public Accountants
   27.1           Financial Data Schedule
</TABLE>