FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

(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 1, 2001

                                       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 No. 0-11003

                               WEGENER CORPORATION

             (Exact name of registrant as specified in its charter)

         DELAWARE                                                81-0371341
(State of incorporation)                                      (I.R.S. Employer
                                                             Identification No.)

11350 TECHNOLOGY CIRCLE, DULUTH, GEORGIA                         30097-1502
(Address of principal executive offices)                         (Zip Code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (770) 623-0096

                  REGISTRANT'S WEB SITE: HTTP://WWW.WEGENER.COM

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

                            YES [X]           NO [ ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock:

Common Stock, $.01 par value                              12,044,987  Shares
----------------------------                           -------------------------
           Class                                       Outstanding, July 9, 2001

<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                  Form 10-Q For the Quarter Ended June 1, 2001


                                      INDEX
                                                                         Page(s)
                                                                         -------

PART I.   Financial Information

Item 1.   Consolidated Financial Statements

          Introduction ........................................................3

          Consolidated Statements of Operations
          (Unaudited) - Three and Nine Months Ended
          June 1, 2001, and June 2, 2000 ......................................4

          Consolidated Balance Sheets - June 1,
          2001, (Unaudited) and September 1, 2000 .............................5

          Consolidated Statements of Shareholders' Equity
          (Unaudited) - Nine Months Ended June 1,
          2001, and June 2, 2000 ..............................................6

          Consolidated Statements of Cash Flows
          (Unaudited) - Nine Months Ended June 1,
          2001, and June 2, 2000...............................................7

          Notes to Consolidated Financial
          Statements (Unaudited) ...........................................8-11

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations .............................12-16

Item 3.   Quantitative and Qualitative Disclosures About Market Risk..........16


PART II.  Other Information

Item 1.   None
Item 2.   None
Item 3.   None
Item 4.   None
Item 5.   None
Item 6.   Exhibits and Reports on Form 8-K ...................................17

          Signatures .........................................................18

                                       2
<PAGE>

PART I. FINANCIAL INFORMATION                       Item 1. Financial Statements
-----------------------------                       ----------------------------

                INTRODUCTION - CONSOLIDATED FINANCIAL STATEMENTS

     The consolidated  financial  statements  included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
The consolidated  balance sheet as of June 1, 2001; the consolidated  statements
of  shareholders'  equity as of June 1, 2001, and June 2, 2000; the consolidated
statements of operations  for the three and nine months ended June 1, 2001,  and
June 2, 2000; and the consolidated  statements of cash flows for the nine months
ended June 1, 2001,  and June 2, 2000;  have been prepared  without  audit.  The
consolidated  balance  sheet as of  September  1,  2000,  has been  examined  by
independent  certified  public  accountants.  Certain  information  and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally  accepted  accounting  principles  have been condensed or omitted
pursuant to such rules and  regulations,  although the Company believes that the
disclosures   herein  are  adequate  to  make  the  information   presented  not
misleading. It is suggested that these consolidated financial statements be read
in conjunction  with the financial  statements and the notes thereto included in
the Company's Annual Report on Form 10-K, for the fiscal year ended September 1,
2000, File No. 0-11003.

     In the opinion of the Company,  the  unaudited  statements  for the interim
periods  presented  include all  adjustments,  which were of a normal  recurring
nature,  necessary  to present a fair  statement  of the results of such interim
periods.  The results of operations  for the interim  periods  presented are not
necessarily indicative of the results of operations for the entire year.

                                       3
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                 Three months ended                Nine months ended
                                               JUNE 1,          June 2,          JUNE 1,          June 2,
                                                2001             2000             2001             2000
-----------------------------------------------------------------------------------------------------------
<S>                                         <C>              <C>              <C>              <C>
Revenues                                    $  5,364,599     $  4,585,371     $ 14,128,390     $ 18,769,890
-----------------------------------------------------------------------------------------------------------

Operating costs and expenses
    Cost of products sold                      3,983,713        4,380,015       11,497,420       13,677,581
    Selling, general, and administrative       1,358,731         (218,840)       3,933,098        5,814,841
    Research and development                     687,543          844,330        2,224,511        2,294,803
-----------------------------------------------------------------------------------------------------------

Operating costs and expenses                   6,029,987        5,005,505       17,655,029       21,787,225
-----------------------------------------------------------------------------------------------------------

Operating loss                                  (665,388)        (420,134)      (3,526,639)      (3,017,335)
    Interest expense                             (16,792)         (21,357)         (40,654)         (69,289)
    Interest income                                3,343          108,159           58,958          306,099
-----------------------------------------------------------------------------------------------------------

Loss before income taxes                        (678,837)        (333,332)      (3,508,335)      (2,780,525)

Income tax (benefit)                            (243,000)        (142,000)      (1,262,000)      (1,021,000)
-----------------------------------------------------------------------------------------------------------

Net loss                                    $   (435,837)    $   (191,332)    $ (2,246,335)    $ (1,759,525)
===========================================================================================================

Net loss per share
    Basic                                   $      (0.04)    $      (0.02)    $      (0.19)    $      (0.15)
    Diluted                                 $      (0.04)    $      (0.02)    $      (0.19)    $      (0.15)
===========================================================================================================

Shares used in per share
  calculation
    Basic                                     11,943,294       11,836,065       11,892,499       11,793,858
    Diluted                                   11,943,294       11,836,065       11,892,499       11,793,858
===========================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       4
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                          JUNE 1,       September 1,
                                                           2001             2000
------------------------------------------------------------------------------------
ASSETS                                                  (UNAUDITED)

Current assets
<S>                                                    <C>              <C>
    Cash and cash equivalents                          $    590,448     $  2,072,853
    Accounts receivable                                   3,927,011        4,110,827
    Inventories                                           9,311,762       10,106,776
    Deferred income taxes                                 1,881,000        1,858,000
    Other                                                   166,148           62,573
------------------------------------------------------------------------------------

         Total current assets                            15,876,369       18,211,029

Property and equipment, net                               3,882,915        4,207,183
Capitalized software costs, net                             974,577        1,209,139
Deferred income taxes                                     1,704,000          465,000
Other assets                                                 51,689           54,311
------------------------------------------------------------------------------------

                                                       $ 22,489,550     $ 24,146,662
------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
    Accounts payable                                   $  1,816,683     $  2,781,470
    Accrued expenses                                      3,450,696        2,533,262
    Customer deposits                                     3,100,684        2,076,361
    Current maturities of long-term obligations             172,943          539,628
------------------------------------------------------------------------------------

          Total current liabilities                       8,541,006        7,930,721

Long-term obligations, less current maturities                   --           38,843
------------------------------------------------------------------------------------

          Total liabilities                               8,541,006        7,969,564
------------------------------------------------------------------------------------

Commitments and contingencies

Shareholders' equity
    Common stock, $.01 par value; 20,000,000 shares
        authorized; 12,314,575 shares issued                123,146          123,146
    Additional paid-in capital                           19,993,682       20,324,568
    Deficit                                              (5,479,444)      (3,233,109)
    Less treasury stock, at cost                           (688,840)      (1,037,507)
------------------------------------------------------------------------------------

         Total shareholders' equity                      13,948,544       16,177,098
------------------------------------------------------------------------------------

                                                       $ 22,489,550     $ 24,146,662
------------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       5
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                 Common Stock           Additional                            Treasury Stock
                                                 ------------            Paid-in                              --------------
                                            Shares         Amount        Capital         Deficit          Shares          Amount
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>            <C>            <C>             <C>             <C>             <C>
BALANCE, at September 3, 1999              12,314,575   $    123,146   $ 19,492,570    $     95,781         632,459    $   (931,728)

    Treasury stock reissued through
       stock options and 401(k) plan               --             --        193,554              --        (228,167)        211,863
    Treasury stock repurchased                     --             --             --              --          99,000        (398,470)
    Value of stock options granted for
       services                                    --             --        101,094              --              --              --
    Value of stock
       option compensation                         --             --        449,000              --              --              --
    Net loss for the nine months                   --             --             --      (1,759,525)             --              --
-----------------------------------------------------------------------------------------------------------------------------------

BALANCE, at June 2, 2000                   12,314,575   $    123,146   $ 20,236,218    $ (1,663,744)        503,292    $ (1,118,335)
===================================================================================================================================

BALANCE, at September 1, 2000              12,314,575   $    123,146   $ 20,324,568    $ (3,233,109)        481,471    $ (1,037,507)

    Treasury stock reissued through
       stock options and 401(k) plan               --             --       (210,368)             --        (161,804)        348,667
    Value of stock options granted for
       services                                    --             --        222,282              --              --              --
    Value of stock
       option compensation                         --             --       (342,800)             --              --              --
    Net loss for the nine months                   --             --             --      (2,246,335)             --              --
-----------------------------------------------------------------------------------------------------------------------------------

BALANCE, AT JUNE 1, 2001                   12,314,575   $    123,146   $ 19,993,682    $ (5,479,444)        319,667    $   (688,840)
===================================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       6
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               Nine months ended
                                                            JUNE 1,          June 2,
                                                             2001             2000
-------------------------------------------------------------------------------------

CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
<S>                                                     <C>              <C>
    Net loss                                            $ (2,246,335)    $ (1,759,525)
    Adjustments to reconcile net loss to
         cash provided by (used for) operating
         activities
      Depreciation and amortization                        1,293,003        1,287,370
      Issuance of treasury stock for
         compensation expenses                               138,299          142,384
      Non-cash variable stock
        option compensation                                 (480,800)         629,000
      Other non-cash expenses                                222,282          101,094
      Bad debt allowance                                      95,000           45,000
      Warranty reserves                                           --           50,000
      Inventory reserves                                     575,000          600,000
      Deferred income taxes                               (1,262,000)        (407,000)
      Changes in assets and liabilities
         Accounts receivable                                  88,816       (1,659,982)
         Inventories                                         220,014       (2,415,683)
         Other assets                                       (127,984)         102,437
         Accounts payable and accrued expenses                90,647        2,624,549
         Customer deposits                                 1,024,323        1,128,001
-------------------------------------------------------------------------------------

                                                            (369,735)         467,645
-------------------------------------------------------------------------------------

CASH USED BY INVESTMENT ACTIVITIES
    Property and equipment expenditures                     (431,277)        (872,075)
    Capitalized software additions                          (275,865)        (541,060)
-------------------------------------------------------------------------------------

                                                            (707,142)      (1,413,135)
-------------------------------------------------------------------------------------

CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
    Purchase of treasury stock                                    --         (398,470)
    Repayment of long-term debt and capitalized
        lease obligations                                   (423,642)        (463,173)
    Proceeds from long-term debt                              18,114               --
    Proceeds from stock options exercised                         --          263,033
-------------------------------------------------------------------------------------

                                                            (405,528)        (598,610)
-------------------------------------------------------------------------------------

Decrease in cash and cash equivalents                     (1,482,405)      (1,544,100)
Cash and cash equivalents, beginning of period             2,072,853        8,858,591
-------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                $    590,448     $  7,314,491
=====================================================================================

Supplemental disclosure of cash flow information:
    Cash paid (refunded) during the nine months for:
       Interest                                         $     40,654     $     69,289
       Income taxes                                     $   (106,536)    $     38,500
=====================================================================================
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       7
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


NOTE 1    SIGNIFICANT ACCOUNTING POLICIES

          The significant  accounting  policies  followed by the Company are set
          forth  in  Note  1 to the  Company's  audited  consolidated  financial
          statements  included  in the  annual  report on Form 10-K for the year
          ended September 1, 2000.

          EARNINGS PER SHARE

          Basic and  diluted  net  earnings  (loss) per share were  computed  in
          accordance with Statement of Financial  Accounting  Standards No. 128,
          "Earnings  Per  Share".  Basic net  earnings  per share is computed by
          dividing net earnings available to common shareholders  (numerator) by
          the weighted average number of common shares outstanding (denominator)
          during the period and excludes the dilutive  effect of stock  options.
          Diluted net earnings per share gives effect to all dilutive  potential
          common shares  outstanding  during a period.  In computing diluted net
          earnings per share,  the average stock price for the period is used in
          determining  the number of shares  assumed to be reacquired  under the
          treasury stock method from the exercise of stock options.

          USE OF ESTIMATES

          The  preparation of financial  statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions  that  affect  the  reported  amounts  of assets  and
          liabilities,  the disclosure of contingent  assets and  liabilities at
          the date of the  financial  statements  and the  reported  amounts  of
          revenue and expenses during the reporting period. Actual results could
          vary from these estimates.

          FISCAL YEAR

          The Company uses a fifty-two,  fifty-three  week year. The fiscal year
          ends on the Friday  closest to August  31.  Fiscal  year 2001 and 2000
          each contain fifty-two weeks.

                                       8
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2    ACCOUNTS RECEIVABLE

          Accounts receivable are summarized as follows:

                                            JUNE 1,        September 1,
                                             2001              2000
                                         -----------------------------
                                          (UNAUDITED)

          Accounts receivable - trade    $  3,491,295     $  3,474,717
          Recoverable income taxes            552,464          659,000
          Other receivables                   143,988          142,688
                                         -----------------------------
                                            4,187,747        4,276,405

          Less allowance for
               doubtful accounts             (260,736)        (165,578)
                                         -----------------------------

                                         $  3,927,011     $  4,110,827
                                         =============================



NOTE 3    INVENTORIES

          Inventories are summarized as follows:

                                            JUNE 1,       September 1,
                                             2001             2000
                                         -----------------------------
                                          (UNAUDITED)

          Raw material                   $  3,068,244     $  4,176,521
          Work-in-process                   7,583,891        5,539,578
          Finished goods                    2,066,121        3,835,171
                                         -----------------------------
                                           12,718,256       13,551,270

          Less inventory reserves          (3,406,494)      (3,444,494)
                                         -----------------------------

                                         $  9,311,762     $ 10,106,776
                                         =============================

During the first nine months of fiscal 2001 inventory reserves were increased by
charges to cost of sales of $575,000 and were reduced by inventory write-offs of
$613,000. The Company's inventory reserve of approximately $3,406,000 at June 1,
2001,  is to provide for items that are  potentially  slow  moving,  excess,  or
obsolete. Changes in market conditions, lower than expected customer demand, and
rapidly changing  technology could result in additional obsolete and slow-moving
inventory that is not saleable or saleable at reduced prices. No estimate can be
made of a range of amounts of loss from obsolescence that is reasonably possible
should the Company's sales efforts not be successful.

NOTE 4    INCOME TAXES

For the nine months ended June 1, 2001, the income tax benefit of $1,262,000 was
comprised of a deferred  federal and state income tax benefit of $1,192,000  and
$70,000,  respectively. Net deferred tax assets increased $1,262,000 principally
due to an increase in net operating  loss  carryforwards  during the  nine-month
period  ended June 1, 2001.  Realization  of deferred tax assets is dependent on
generating  sufficient future taxable income prior to the expiration of the loss
and  credit  carryforwards.  Although  realization  is not  assured,  management
believes it is more likely than not that all of the deferred tax

                                       9
<PAGE>

assets will be  realized.  The amount of the tax assets  considered  realizable,
however, could be reduced in the near term if estimates of future taxable income
during the carryforward period are reduced.

NOTE 5    EARNINGS PER SHARE

Due to the net loss for all periods,  basic and diluted  loss per share  amounts
are the  same.  The  calculation  of loss  per  share  is  subject  to  rounding
differences.

Stock options  excluded from the diluted  earnings (loss) per share  calculation
due to their anti-dilutive effect are as follows:

<TABLE>
<CAPTION>
                                                Three months ended                Nine months ended
                                          -----------------------------------------------------------------
                                             JUNE 1,          June 2,          JUNE 1,           June 2,
                                              2001             2000             2001              2000
                                          -----------------------------------------------------------------
<S>                                       <C>               <C>              <C>               <C>
          Common stock options:
              Number of shares              1,200,800        1,268,500        1,200,800         1,268,500
              Range of exercise prices    $.63 TO $5.63     $.75 to 5.63     $.63 TO $5.63     $.75 to 5.63
                                          -----------------------------------------------------------------
</TABLE>

NOTE 6    SEGMENT INFORMATION AND SIGNIFICANT CUSTOMERS

In  accordance  with  Statement  of  Financial  Accounting  Standards  No.  131,
Disclosure about Segments of an Enterprise and Related Information,  the Company
operates  within  a  single  reportable  segment,  the  manufacture  and sale of
satellite communications equipment.

In this single operating  segment the Company has three sources of revenues,  as
follows:

<TABLE>
<CAPTION>
                                                  Three months ended              Nine months ended
                                             ------------------------------------------------------------
                                                JUNE 1,         June 2,         JUNE 1,         June 2,
                                                 2001            2000            2001            2000
                                             ------------------------------------------------------------

          Product Line
<S>                                          <C>             <C>             <C>             <C>
              Direct Broadcast Satellite     $  4,923,762    $  3,619,556    $ 12,066,716    $ 16,281,911
              Telecom and Custom Products         314,919         846,086       1,649,586       2,168,501
              Service                             125,918         119,729         412,088         319,478
                                             ------------------------------------------------------------

                                             $  5,364,599    $  4,585,371    $ 14,128,390    $ 18,769,890
                                             ------------------------------------------------------------
</TABLE>

Revenues by geographic areas are as follows:

<TABLE>
<CAPTION>
                                                  Three months ended              Nine months ended
                                             ------------------------------------------------------------
                                                JUNE 1,         June 2,         JUNE 1,         June 2,
                                                 2001            2000            2001            2000
                                             ------------------------------------------------------------
<S>                                          <C>             <C>             <C>             <C>
          Geographic Area
              United States                  $  5,053,165    $  4,383,880    $ 11,594,244    $ 15,887,249
              Latin America                       102,011          27,318       1,193,058       1,956,406
              Canada                               13,949           7,844          66,790          28,876
              Europe                              158,556         151,839       1,000,790         504,365
              Other                                36,918          14,490         273,508         392,994
                                             ------------------------------------------------------------

                                             $  5,364,599    $  4,585,371    $ 14,128,390    $ 18,769,890
                                             ------------------------------------------------------------
</TABLE>

All of the Company's long-lived assets are located in the United States.

                                       10
<PAGE>

     Customers  representing 10% or more of the respective periods' revenues are
as follows:

                           Three months ended              Nine months ended
                          ------------------------------------------------------
                          JUNE 1,         June 2,        JUNE 1,         June 2,
                           2001            2000           2001            2000
                          ------------------------------------------------------

          Customer 1       40.2%            (a)           19.6%            (a)
          Customer 2        (A)             (a)            (A)            19.4%
          Customer 3        (A)            14.4%          10.8%            (a)
          Customer 4       17.6%            (a)            (A)             (a)
          Customer 5        (A)            15.3%           (A)             (a)

          (a) Revenues for the period were less than 10% of total revenues.

NOTE 7    COMMITMENTS

During  the  second  quarter  of  fiscal  2001,  the  Company   entered  into  a
manufacturing and purchasing  agreement for certain finished goods  inventories.
The  agreement  is a  firm  commitment  by  the  Company  to  purchase,  over  a
twelve-month period, amounts ranging from approximately $2,565,000 to $3,287,000
depending on actual products  purchased.  Pursuant to the agreement,  at June 1,
2001, the Company had outstanding purchase commitments of $1,175,000. Subsequent
to June 1, 2001,  the Company  committed to an additional  $608,000 of inventory
purchases. In addition, the Company entered into a cancelable  manufacturing and
purchasing  agreement of finished  goods  inventories  for which the Company has
firm customer order commitments. As of June 1, 2001, the Company had issued firm
purchase  commitments of approximately  $981,000  deliverable over the next four
months.  Subsequent  to June 1, 2001,  the Company  committed  to an  additional
$973,000 of inventory  purchases  deliverable during the first quarter of fiscal
2002.  Pursuant  to the above  agreements,  at June 1,  2001,  the  Company  had
outstanding letters of credit in the amount of $2,156,000. Subsequent to June 1,
2001,  the  Company  issued  additional  letters  of  credit  in the  amount  of
$1,580,000.

                                       11
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES

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

This information  should be read in conjunction with the consolidated  financial
statements and the notes thereto included in Item 1 of this Quarterly Report and
the audited consolidated financial statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
year ended  September 1, 2000  contained in the Company's  2000 Annual Report on
Form 10-K.

Certain  statements  contained in this filing are  "forward-looking  statements"
within the meaning of the Private Securities Litigation Reform Act of 1995, such
as  statements  relating  to  financial  results,  future  business  or  product
development  plans,  research  and  development  activities,  capital  spending,
financing  sources  or  capital   structure,   the  effects  of  regulation  and
competition,  and are thus  prospective.  Such  forward-looking  statements  are
subject to risks,  uncertainties  and other  factors  which could  cause  actual
results to differ  materially  from future results  expressed or implied by such
forward-looking  statements.  Potential risks and uncertainties include, but are
not limited to, economic  conditions,  customer plans and  commitments,  product
demand,  governmental regulation,  rapid technological developments and changes,
performance  issues with key  suppliers  and  subcontractors,  delays in product
development   and  testing,   availability   of  materials,   new  and  existing
well-capitalized  competitors, and other uncertainties detailed in the Company's
Form  10-K for the year  ended  September  1,  2000 and from time to time in the
Company's periodic Securities and Exchange Commission filings.

The  Company,  through  Wegener  Communications,   Inc.  (WCI),  a  wholly-owned
subsidiary,  designs and manufactures  communications transmission and receiving
equipment for the business broadcast,  data communications,  cable and broadcast
radio and television industries.


RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED JUNE 1, 2001 COMPARED TO THREE AND NINE MONTHS ENDED
JUNE 2, 2000

The  operating  results for the three and nine month  periods ended June 1, 2001
were  a net  loss  of  $(436,000)  or  $(0.04)  per  share  and a  net  loss  of
$(2,246,000)  or $(0.19)  per  share,  respectively,  compared  to a net loss of
$(191,000)  or $(0.02) per share and a net loss of  $(1,760,000)  or $(0.15) per
share, respectively, for the three and nine month periods ended June 2, 2000.

Excluding the effects of variable stock option  compensation,  operating results
for the three and nine month  periods  ended  June 1,  2001,  were a net loss of
$(434,000)  or $(0.04) per share and a net loss of  $(2,554,000)  or $(0.21) per
share, respectively, compared to a net loss of $(1,643,000) or $(0.14) per share
and a net loss of $(1,357,000) or $(0.12) per share, respectively, for the three
and nine month periods ended June 2, 2000.

REVENUES - The  Company's  revenues for the three months ended June 1, 2001 were
$5,365,000, up 17.0% from revenues of $4,585,000 for the three months ended June
2, 2000.  Revenues were $14,128,000 for the nine months ended June 1, 2001, down
24.7% from revenues of $18,770,000 for the nine months ended June 2, 2000.

                                       12
<PAGE>

Direct Broadcast  Satellite (DBS) revenues increased  $1,304,000 or 36.0% in the
third quarter of fiscal 2001 to $4,924,000 from $3,620,000 in the same period of
fiscal 2000. The increase was mainly due to increased shipments of digital video
products to one customer representing initial shipments of receivers and network
control  equipment for  conversion  of their  broadcast  television  network and
add-on  shipments of receivers for their cable television  network.  Telecom and
Custom Products Group revenues  decreased $531,000 or 62.8% in the third quarter
of fiscal 2001 to $315,000 from $846,000 in the same period of fiscal 2000.  The
decrease was mainly due to lower levels of shipments of cable television headend
products to  distributors  as a result of a slowdown in  purchases  by the major
cable  television  operators.  For the three  months  ended  June 1,  2001,  two
customers accounted for 40.2% and 17.6% of revenues, respectively. For the three
months ended June 2, 2000, two other customers  accounted for 14.4% and 15.3% of
revenues, respectively.

For the nine months ended June 1, 2001,  DBS revenues  decreased  $4,215,000  or
25.9% to $12,067,000  from  $16,282,000  for the nine months ended June 2, 2000.
The decrease  reflected a decline in shippable  order backlog for the nine month
period  which was  adversely  impacted by delayed  purchasing  decisions  in the
digital  satellite   transmission   market,   increased   pricing   competition,
industry-wide new product  introductions  which resulted in an expanded range of
choices  available  to  customers,  and  delayed  product  introductions  by the
Company.  For the nine months  ended June 1, 2001,  Telecom and Custom  Products
Group revenues decreased $519,000 or 23.9% to $1,650,000 from $2,169,000 for the
nine  months  ended June 2, 2000.  For the nine months  ended June 1, 2001,  two
customers accounted for 19.6% and 10.8% of revenues,  respectively. For the nine
months ended June 2, 2000,  one customer  accounted  for 19.4% of revenues.  The
Company's backlog is comprised of undelivered,  firm customer orders,  which are
scheduled  to ship within  eighteen  months.  WCI's  backlog  was  approximately
$21,300,000  at June 1, 2001,  compared to $9,210,000 at September 1, 2000,  and
$11,400,000 at June 2, 2000.  Management  foresees both  increased  revenues and
improved  operating results for the fourth quarter of fiscal year 2001. With the
increase  in the  backlog  going into  fiscal  2002,  management  believes  that
revenues for fiscal 2002 should increase over revenues for fiscal 2001.

GROSS PROFIT MARGINS - The Company's gross profit margin  percentages were 25.7%
and 18.6% for the three and nine month periods  ended June 1, 2001,  compared to
4.5% and 27.1% for the three and nine month  periods  ended June 2, 2000.  Gross
profit margin dollars increased $1,176,000 for the three month period ended June
1, 2001, and decreased  $2,461,000 for the nine month period ended June 1, 2001,
from the same periods  ended June 2, 2000.  The  increase in margin  dollars and
percentages  for the three months  ended June 1, 2001,  was mainly due to higher
revenues during the period,  lower unit fixed overhead costs, product mix, and a
lower  charge  to  inventory  reserves.  The  decreases  in margin  dollars  and
percentages  for the nine  months  ended June 1, 2001,  were mainly due to lower
revenues  during the period which resulted in higher unit fixed overhead  costs.
Profit  margins in the three and nine  month  periods  of fiscal  2001  included
inventory  reserve  charges of $150,000  and  $575,000  compared to $500,000 and
$600,000 for the same periods of fiscal 2000. Management  anticipates that gross
profit  margins  will  improve  during the fourth  quarter of fiscal 2001 due to
product mix and an expected increase in revenues.

SELLING,  GENERAL AND  ADMINISTRATIVE - For the three months ended June 1, 2001,
selling,  general and  administrative  (SG&A)  expenses  increased  $1,578,00 to
$1,359,000  from a benefit of $(219,000) for the same period ended June 2, 2000.
For the nine months ended June 1, 2001,  SG&A expenses  decreased  $1,882,000 or
32.4% to $3,933,000  from $5,815,000 for the same period ended June 2, 2000. The
three month  increase and nine month  decrease  were  primarily  due to variable
stock option  accounting  and lower SG&A operating  costs.  For the three months
ended  June 1, 2001,  variable  stock  option  compensation  expense  was $3,000
compared to a benefit of $2,289,000 for the three months ended June 2, 2000. For
the nine  months  ended June 1, 2001,  SG&A  included  a variable  stock  option
benefit of $481,000 compared to an expense of $629,000 for the nine months ended
June 2, 2000.

                                       13
<PAGE>

Excluding  the effect of variable  stock  option  compensation,  SG&A  decreased
$715,000  or  34.5% to  $1,355,000  from  $2,070,000  and  $772,000  or 14.9% to
$4,414,000  from  $5,186,000  in the three and nine month  periods ended June 1,
2001,  compared  to the same  periods  ending  June 2, 2000.  Decreases  in SG&A
expenses  for the three  months  ended June 1, 2001,  reflected  cost  reduction
efforts  which  resulted in lower  personnel,  travel,  marketing,  and facility
expenses.   Other  decreases  included  lower  software   implementation  costs,
provisions  for  multi-state  sale and use taxes,  and a benefit of a settlement
from a software  vendor related to  installation of the Company's new management
information  and  accounting  system.  For the nine  months  ended June 1, 2001,
additional  decreases  included lower outside sales agent commissions which were
offset by increased  investor relations  expenses.  As a percentage of revenues,
SG&A  expenses,  excluding  variable stock option  compensation,  were 25.3% and
31.2% for the three and nine month periods ended June 1, 2001, compared to 45.1%
and 27.6% for the same periods of fiscal 2000.

RESEARCH AND  DEVELOPMENT  - Research and  development  expenditures,  including
capitalized  software  development  costs,  were $788,000 and $2,500,000 for the
three and nine month  periods  ended  June 1, 2001,  compared  to  $996,000  and
$2,836,000 for the same periods of fiscal 2000. Capitalized software development
costs  amounted to $101,000 and  $276,000  for the third  quarter and first nine
months of fiscal 2001  compared to $152,000 and $541,000 for the same periods of
fiscal 2000.  The decrease in  capitalized  software  costs are due to decreased
expenditures on COMPEL network control software and software associated with new
digital  video  products.  The decrease in  expenditures  for the three and nine
months  ended June 1, 2001,  was  primarily  due to a  decrease  in  engineering
consulting expenses and proto-type expenses.  Research and development expenses,
excluding capitalized software expenditures,  were $688,000 or 12.8% of revenues
and  $2,225,000 or 15.7% of revenues for the three and nine months ended June 1,
2001,  compared  to $844,000 or 18.4% of  revenues  and  $2,295,000  or 12.2% of
revenues for the same periods of fiscal 2000. The  expenditures for research and
development  for the fourth quarter of fiscal 2001 are expected to continue at a
rate similar to that of the previous quarters of fiscal 2001.

INTEREST  EXPENSE - Interest  expense  decreased $4,000 to $17,000 for the three
months ended June 1, 2001, from $21,000 for the three months ended June 2, 2000.
For the nine months ended June 1, 2001,  interest expense  decreased  $28,000 to
$41,000 from $69,000 for the same period ended June 2, 2000.  The  decreases for
the three and nine month periods in fiscal 2001 were primarily due to a decrease
in the average outstanding balance of indebtedness.

INTEREST  INCOME - Interest income was $3,000 and $59,000 for the three and nine
months  ended June 1, 2001,  compared  to  $108,000  and  $306,000  for the same
periods  ended June 2, 2000.  The  decrease  for the three and nine months ended
June 1, 2001, was mainly due to lower average cash  equivalent  balances for the
periods.

INCOME TAX EXPENSES - For the nine months ended June 1, 2001, income tax benefit
of  $1,262,000  was  comprised  of a deferred  federal  and state tax benefit of
$1,192,000  and  $70,000,   respectively.  Net  deferred  tax  assets  increased
$1,262,000 in the first nine months of fiscal 2001.  Realization of deferred tax
assets is dependent on generating  sufficient future taxable income prior to the
expiration of the loss and credit  carryforwards.  Although  realization  is not
assured, management believes it is more likely than not that all of the deferred
tax assets will be realized. The amount of the tax assets considered realizable,
however, could be reduced in the near term if estimates of future taxable income
during the carryforward period are reduced.

                                       14
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
NINE MONTHS ENDED JUNE 1, 2001

During the first nine months of fiscal 2001,  operating activities used $370,000
of cash.  Net losses  adjusted for non-cash  expenses  used  $1,666,000 of cash,
while changes in accounts receivable,  inventories,  customer deposits, accounts
payable,  and accrued  expenses  provided  $1,424,000 of cash.  Changes in other
assets,  used $128,000 of cash.  Cash used by investing  activities for property
and equipment  expenditures  and  capitalized  software  additions was $707,000.
Financing activities used cash of $424,000 for scheduled repayments of long-term
obligations and provided $18,000 of cash from borrowings.

During the second  quarter,  WCI's  existing  bank loan facility was amended and
renewed for a three-year  period. The loan facility provides a maximum available
credit limit of  $10,000,000  with  sublimits as defined and matures on June 21,
2003, or upon demand.  Annual  facility fees are $27,500 plus an additional .50%
of $3,000,000 if borrowings,  at any time, exceed $5,500,000.  The loan facility
consists  of 1) a term  loan and a  revolving  line of  credit  with a  combined
borrowing limit of $8,500,000,  bearing  interest at the bank's prime rate (7.0%
at June 1, 2001) and 2) a real estate advance facility with a maximum  borrowing
limit of  $1,500,000  bearing  interest at a fixed rate of 225 basis points over
the five year U.S. Treasury rate.

The term loan facility  provides for a maximum of $1,000,000  for advances of up
to 80% of the cost of  equipment  acquisitions.  Principal  advances are payable
monthly over sixty months with a balloon payment due at maturity.  The revolving
line of credit is  subject  to  availability  advance  formulas  of 80%  against
eligible accounts receivable; 20% of eligible raw materials inventories;  20% of
eligible  work-in-process  kit inventories;  and 40% to 50% of eligible finished
goods  inventories.  Advances  against  inventory  are  subject to a sublimit of
$2,000,000.  The real estate advance  portion of the loan facility  provides for
advances of up to 70% of the appraised value of certain real property.  Advances
for real  property  are payable in 35 equal  principal  payments  with a balloon
payment due at maturity.  At June 1, 2001, previous outstanding balances on real
property advances aggregated  $155,000,  and no balances were outstanding on the
revolving  line of credit or equipment  term loan portions of the loan facility.
Additionally,  at June 1, 2001, approximately $1,823,000 was available to borrow
under the advance formulas.

The Company is required  to  maintain a minimum  tangible  net worth with annual
increases  at each fiscal  year end  commencing  with  fiscal year 1997,  retain
certain key employees, limit expenditures of Wegener Corporation to $600,000 per
fiscal year, and is precluded from paying  dividends.  At September 1, 2000, the
Company was in  violation  of the  tangible  net worth and  Wegener  Corporation
annual spending limit covenants with respect to which the bank granted a waiver.
As a result  of the  covenant  violations,  the bank has the  right to amend any
terms of the loan facility and may  accelerate  maturity.  The Company  believes
that it will be  necessary  to borrow on the line of credit  during  fiscal year
2001 and that the existing  facility will be  sufficient to support  fiscal 2001
operations.  While no assurances may be given, the Company believes that it will
continue to be able to obtain waivers prior to requiring any future borrowing on
the line of  credit.  However,  if the  Company  is unable  to meet the  minimum
tangible  net worth  covenant  or obtain a waiver,  it may be required to obtain
other debt or equity  financing,  and no assurance can be given that the Company
would in such event be able to secure new financing.

During  the  second  quarter  of  fiscal  2001,  the  Company   entered  into  a
manufacturing and purchasing  agreement for certain finished goods  inventories.
The  agreement  is a  firm  commitment  by  the  Company  to  purchase,  over  a
twelve-month period, amounts ranging from approximately $2,565,000 to $3,287,000
depending on actual products  purchased.  Pursuant to the agreement,  at June 1,
2001, the Company had outstanding purchase commitments of $1,175,000. Subsequent
to June 1, 2001, the

                                       15
<PAGE>

Company committed to an additional $608,000 of inventory purchases. In addition,
the Company entered into a cancelable  manufacturing and purchasing agreement of
finished  goods  inventories  for  which the  Company  has firm  customer  order
commitments.  As  of  June  1,  2001,  the  Company  had  issued  firm  purchase
commitments of  approximately  $981,000  deliverable  over the next four months.
Subsequent to June 1, 2001, the Company  committed to an additional  $973,000 of
inventory  purchases  deliverable  during  the first  quarter  of  fiscal  2002.
Pursuant to the above  agreements,  the Company at June 1, 2001, had outstanding
letters of credit in the amount of  $2,156,000.  Subsequent to June 1, 2001, the
Company issued additional letters of credit in the amount of $1,580,000.


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's exposure to market rate risk for changes in interest rates relates
primarily to its  revolving  line of credit and cash  equivalents.  The interest
rate on  certain  advances  under  the line of  credit  and term  loan  facility
fluctuates with the bank's prime rate.  There were no borrowings  outstanding at
June 1, 2001 subject to variable interest rate fluctuations.

The  Company's  cash  equivalents  consist of a repurchase  agreement and a bank
certificate of deposit.  The cash equivalents have maturities of less than three
months and therefore are subject to minimal market risk.

The Company does not enter into derivative financial instruments.  All sales and
purchases are denominated in U.S. dollars.

                                       16
<PAGE>

PART II.  OTHER INFORMATION


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

          (a.) Exhibits:  None

          (b.) Reports on Form 8-K - No  reports  on Form 8-K were filed  during
               the quarter ended June 1, 2001.

                                       17
<PAGE>

                                   SIGNATURES
                                   ----------

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

                                        WEGENER CORPORATION
                                        -------------------
                                            (Registrant)


Date:  July 13, 2001                    By: /s/ Robert A. Placek
                                            ------------------------------------
                                            Robert A. Placek
                                            President
                                            (Principal Executive Officer)



Date:  July 13, 2001                    By: /s/ C. Troy Woodbury, Jr.
                                            ------------------------------------
                                            C. Troy Woodbury, Jr.
                                            Treasurer and Chief
                                            Financial Officer
                                            (Principal Financial and
                                            Accounting Officer)

                                       18