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 February 27, 1998

                                       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


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, as of March 31, 1998.


Common Stock, $.01 par value                              11,908,170 Shares
----------------------------                          --------------------------
           Class                                      Outstanding March 31, 1998

<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                Form 10-Q For the Quarter Ended February 27, 1998


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

PART I.  Financial Information

  Item 1.  Consolidated Financial Statements

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

           Consolidated Statements of Operations
           (Unaudited) - Three and Six Months Ended
           February 27, 1998 and February 28, 1997 ............................4

           Consolidated Balance Sheets - February 27,
           1998 (Unaudited) and August 29, 1997 ...............................5

           Consolidated Statements of Shareholders' Equity
           (Unaudited) - Six Months Ended February 27,
           1998 and February 28, 1997 .........................................6

           Consolidated Statements of Cash Flows
           (Unaudited) - Six Months Ended February 27,
           1998 and February 28, 1997 .........................................7

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

  Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations ............................12-15

PART II. Other Information

  Item 1.  None
  Item 2.  None
  Item 3.  None
  Item 4.  Submission of Matters to a Vote of Security Holders ...............16
  Item 5.  None
  Item 6.  Exhibits and Reports on Form 8-K ..................................16

           Signatures ........................................................17

                                       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  February  27,  1998;  the  consolidated
statements  of  shareholders'  equity as of February  27, 1998 and  February 28,
1997;  the  consolidated  statements of operations  for the three and six months
ended February 27, 1998 and February 28, 1997; and the  consolidated  statements
of cash flows for the six months  ended  February 27, 1998 and February 28, 1997
have been prepared without audit.  The  consolidated  balance sheet as of August
29, 1997 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 August 29, 1997, File No. 0-11003.

     In the opinion of the Company,  the  statements  for the unaudited  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                  Six months ended
                                                    FEBRUARY 27,      February 28,     FEBRUARY 27,      February 28,
                                                        1998              1997             1998              1997
---------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>               <C>              <C>               <C>         
Revenues                                            $ 10,165,264      $ 4,679,310      $ 16,871,284      $ 11,321,973
---------------------------------------------------------------------------------------------------------------------

Operating costs and expenses
    Cost of products sold                              6,472,192        3,328,127        11,003,931         7,747,849
    Selling, general, and administrative               1,194,904        1,051,331         2,245,214         2,036,983
    Research and development                             698,390          436,037         1,368,286         1,002,867
---------------------------------------------------------------------------------------------------------------------

Operating costs and expenses                           8,365,486        4,815,495        14,617,431        10,787,699
---------------------------------------------------------------------------------------------------------------------

Operating income (loss)                                1,799,778         (136,185)        2,253,853           534,274
    Interest expense                                     (62,893)        (143,543)         (138,679)         (325,225)
    Interest income                                      157,922               --           235,556             1,429
---------------------------------------------------------------------------------------------------------------------

Earnings (loss) before income taxes                    1,894,807         (279,728)        2,350,730           210,478

Income tax expense (benefit)                             720,000         (106,000)          893,000            80,000
---------------------------------------------------------------------------------------------------------------------

Net earnings (loss)                                 $  1,174,807      $  (173,728)     $  1,457,730      $    130,478
=====================================================================================================================

Net earnings (loss) per share:
    Basic                                           $        .10      $      (.02)     $        .13      $        .01
    Diluted                                         $        .10      $      (.02)     $        .12      $        .01
=====================================================================================================================

Shares used in per share calculation
    Basic                                             11,826,964        9,114,008        11,586,234         9,014,755
    Diluted                                           12,003,591        9,114,008        11,967,977         9,325,241
=====================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       4
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                      FEBRUARY 27,       August 29,
                                                                          1998              1997
----------------------------------------------------------------------------------------------------
ASSETS                                                                (UNAUDITED)
<S>                                                                   <C>               <C>         
Current assets
    Cash and cash equivalents                                         $  9,707,244      $  2,242,433
    Accounts receivable                                                  3,973,983         4,612,634
    Inventories                                                          8,598,789         9,992,672
    Deferred income taxes                                                1,241,000         1,241,000
    Other                                                                    4,995            21,376
----------------------------------------------------------------------------------------------------

        Total current assets                                            23,526,011        18,110,115

Property and equipment                                                   4,728,140         4,979,856
Capitalized software costs                                               1,551,713         1,701,416
Deferred income taxes                                                           --           553,000
Other assets                                                               111,288           269,566
----------------------------------------------------------------------------------------------------

                                                                      $ 29,917,152      $ 25,613,953
====================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
    Accounts payable                                                  $  1,222,383      $  2,128,941
    Accrued expenses                                                     1,637,505         1,440,945
    Customer deposits                                                    6,953,908         3,458,401
    Current maturities of long-term obligations                            564,692           599,157
----------------------------------------------------------------------------------------------------

       Total current liabilities                                        10,378,488         7,627,444

Long-term obligations, less current maturities                           1,532,853         1,782,460
Convertible debentures                                                          --         1,285,195
Deferred income taxes                                                      340,000                --
----------------------------------------------------------------------------------------------------

       Total liabilities                                                12,251,341        10,695,099
----------------------------------------------------------------------------------------------------

Commitments

Shareholders' equity
     Common stock, $.01 par value, 20,000,000 shares
          authorized; 12,314,575 and 11,363,917 shares issued              123,146           113,639
     Additional paid-in capital                                         19,343,690        18,084,700
     Deficit                                                            (1,419,945)       (2,877,675)
     Less treasury stock, at cost (410,405 and 432,730
          shares)                                                         (381,080)         (401,810)
----------------------------------------------------------------------------------------------------


            Total shareholders' equity                                  17,665,811        14,918,854
----------------------------------------------------------------------------------------------------

                                                                      $ 29,917,152      $ 25,613,953
====================================================================================================
</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 August 30, 1996                9,231,930     $ 92,319     $14,369,157     $(1,068,475)     (470,397)     $(436,785)

    Treasury stock reissued through
       stock options and 401(k) plan              --           --          35,479              --        12,979         12,051

    Issuance of common stock for
       convertible debentures                549,328        5,494       1,703,773              --

    Net earnings for the
       six months                                 --           --              --         130,478            --             --

------------------------------------------------------------------------------------------------------------------------------

BALANCE, at February 28, 1997              9,781,258     $ 97,813     $16,108,409     $  (937,997)     (457,418)     $(424,734)
==============================================================================================================================

BALANCE, at August 29, 1997               11,363,917     $113,639     $18,084,700     $(2,877,675)     (432,730)     $(401,810)

    Treasury stock reissued through
       stock options and 401(k)  plan             --           --          20,670              --        22,325         20,730

    Issuance of common stock for
       convertible debentures                950,658        9,507       1,238,320              --            --             --
    Net earnings for the six months               --           --              --       1,457,730            --             --
------------------------------------------------------------------------------------------------------------------------------

 BALANCE, AT FEBRUARY 27, 1998            12,314,575     $123,146     $19,343,690     $(1,419,945)     (410,405)     $(381,080)
==============================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       6
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                  Six months ended
                                                            FEBRUARY 27,     February 28,
                                                                1998             1997
----------------------------------------------------------------------------------------

CASH PROVIDED (USED) BY OPERATING ACTIVITIES
<S>                                                         <C>              <C>        
    Net earnings                                            $ 1,457,730      $   130,478
    Adjustments to reconcile net earnings to
           cash provided (used) by operating activities
        Depreciation and amortization                           966,135          641,035
        Issuance of treasury stock for
            compensation expenses                                38,682           43,031
        Issuance of convertible debt for interest
            expense                                                  --           33,918
        Inventory reserves                                      350,000               -- 
        Deferred income taxes                                   893,000           72,000
    Changes in assets and liabilities
            Accounts receivable                                 638,651        1,633,154
            Inventories                                       1,043,883        1,125,880
            Other assets                                         16,381           20,478
            Accounts payable and accrued expenses              (709,998)      (1,622,749)
            Customer deposits                                 3,495,507          561,486
----------------------------------------------------------------------------------------

                                                              8,189,971        2,638,711
----------------------------------------------------------------------------------------

CASH PROVIDED (USED) BY INVESTMENT ACTIVITIES
    Property and equipment expenditures                        (246,460)        (400,782)
    Capitalized software additions                             (197,347)        (473,052)
----------------------------------------------------------------------------------------

                                                               (443,807)        (873,834)
----------------------------------------------------------------------------------------

CASH PROVIDED (USED) BY FINANCING ACTIVITIES
    Net change in borrowings under
         revolving line-of-credit                                    --       (1,530,332)
    Repayment of long-term debt and capitalized
        lease obligations                                      (284,072)        (270,729)
    Proceeds from stock options exercised                         2,719            4,500
----------------------------------------------------------------------------------------

                                                               (281,353)      (1,796,561)
----------------------------------------------------------------------------------------

Increase (decrease) in cash and cash equivalents              7,464,811          (31,684)
Cash and cash equivalents, beginning of period                2,242,433          171,687
----------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                    $ 9,707,244      $   140,003
========================================================================================

Supplemental  disclosure  of cash flow  information:
  Cash paid during the six months for:
     Interest                                               $   140,806      $   241,685
     Income taxes                                           $        --      $        --
========================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       7
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



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 August 29, 1997.

          Earnings Per Share

          In February  1997,  the Financial  Accounting  Standards  Board issued
          Statement of Financial  Accounting  Standards  No. 128,  "Earnings Per
          Share". The Statement  simplifies the standards for computing earnings
          per share and improves their comparability to international standards.
          The Company  adopted this  Standard  during the fiscal  quarter  ended
          February 27, 1998 as required and has restated  earnings per share for
          all prior periods presented to conform to this standard.

          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 and  convertible
          debentures.  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 and the if-converted  method to compute the dilutive effect of
          convertible   debentures.   A  reconciliation  of  the  numerator  and
          denominator  of the  basic  and  diluted  net  earnings  per  share is
          presented below (Note 5).

          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  years 1998 and 1997
          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:

                                        FEBRUARY 27,       August 29,
                                            1998              1997
                                        ------------      ------------
                                        (UNAUDITED)

          Accounts receivable - trade   $  4,255,665      $  4,881,565
          Other receivables                   79,571            92,812
                                        ------------      ------------

                                           4,335,236         4,974,377
          Less allowance for
               doubtful accounts            (361,253)         (361,743)
                                        ------------      ------------

                                        $  3,973,983      $  4,612,634
                                        ============      ============

Note 3    Inventories

          Inventories are summarized as follows:

                                        FEBRUARY 27,       August 29,
                                            1998              1997
                                        ------------      ------------
                                        (UNAUDITED)

          Raw material                  $  4,103,027      $  4,550,550
          Work-in-process                  4,061,455         4,051,281
          Finished goods                   2,650,590         3,256,294
                                        ------------      ------------
                                          10,815,072        11,858,125
          Less inventory reserves         (2,216,283)       (1,865,453)
                                        ------------      ------------

                                        $  8,598,789      $  9,992,672
                                        ============      ============

Note 4    Income Taxes

          For the six months  ended  February  27,  1998,  income tax expense of
          $893,000  was  comprised  of a federal and state  deferred  income tax
          expense of $799,000  and $94,000,  respectively.  There was no current
          federal or state  income tax  expense  due to  utilization  of tax net
          operating loss  carryforwards.  Deferred tax assets decreased $893,000
          in the first six months of fiscal  1998.  At February  27,  1998,  the
          Company  had  approximately  $662,000 of federal  net  operating  loss
          carryforwards  which  expire in 2008  through  2012;  and  $137,000 of
          alternative  minimum  tax credits  and  $159,000 of other  federal tax
          credits   expiring   through  2004  available  to  offset  future  tax
          liabilities.

                                       9
<PAGE>

Note 5    Earnings Per Share

The following tables represent required  disclosure of the reconciliation of the
numerators  and  denominators  of the basic and diluted net earnings  (loss) per
share computations.

<TABLE>
<CAPTION>
                                                                           Three months ended
                                      -----------------------------------------------------------------------------------------

                                                     FEBRUARY 27, 1998                              February 28, 1997
                                      ------------------------------------------      -----------------------------------------
                                        EARNINGS                           PER         Earnings                           Per
                                         (LOSS)            SHARES         SHARE         (loss)           Shares          share
                                      (NUMERATOR)      (DENOMINATOR)      AMOUNT      (Numerator)     (Denominator)      amount
                                      -----------      -------------      ------      -----------     -------------      ------
<S>                                    <C>               <C>               <C>         <C>              <C>              <C>    
Net earnings (loss)                    $1,174,807                                      $(173,728)
                                       ==========                                      =========

Basic earnings (loss) per share:
    Net earnings (loss) available
        to common shareholders         $1,174,807        11,826,964        $0.10       $(173,728)       9,114,008        $(0.02)
                                                                           =====                                         ======

Effect of dilutive potential
    common shares:
        Stock options                          --           128,989                           --               --
        Convertible debentures                988            47,639                           --               --
                                       ----------        ----------                    ---------        ---------


Diluted earnings (loss) per share:
    Net earnings (loss) available
        to common shareholders
        plus assumed conversions       $1,175,795        12,003,591        $0.10       $(173,728)       9,114,008        $(0.02)
                                       ==========        ==========        =====       =========        =========        ======


<CAPTION>
                                                                           Six months ended
                                      -----------------------------------------------------------------------------------------

                                                  FEBRUARY 27, 1998                               February 28, 1997
                                      ------------------------------------------      -----------------------------------------
                                                                           PER                                            Per
                                        EARNINGS           SHARES         SHARE        Earnings          Shares          share
                                      (NUMERATOR)      (DENOMINATOR)      AMOUNT      (Numerator)     (Denominator)      amount
                                      -----------      -------------      ------      -----------     -------------      ------
<S>                                    <C>               <C>               <C>         <C>              <C>              <C>    
Net earnings                           $1,457,730                                      $ 130,478
                                       ==========                                      =========

Basic earnings per share:
    Net earnings available
        to common shareholders         $1,457,730        11,586,234        $0.13       $ 130,478        9,014,755        $ 0.01
                                                                           =====                                         ======

Effect of dilutive potential
    common shares:
        Stock options                          --           155,748                           --          310,486
        Convertible debentures              9,156           225,994                           --               --
                                       ----------        ----------                    ---------        ---------

Diluted earnings per share:
    Net earnings available
        to common shareholders
        plus assumed conversions       $1,466,886        11,967,977        $0.12       $ 130,478        9,325,241        $ 0.01
                                       ==========        ==========        =====       =========        =========        ======
</TABLE>

                                       10
<PAGE>


Stock  options  and  shares   calculated  under  the  if-converted   method  for
convertible  debentures which were excluded from the diluted net earnings (loss)
per share calculation due to their anti-dilutive effect are as follows:

<TABLE>
<CAPTION>
                                                       Three months ended                        Six months ended
                                                FEBRUARY 27,           February 28,         FEBRUARY 27,         February 28,
                                                    1998                   1997                 1998                 1997
                                               --------------         -------------        --------------        -----------
<S>                                            <C>                    <C>                  <C>                   <C>        
Common stock options:
    Number of shares                                   48,500               467,637                48,500              4,000
    Range of exercise prices                   $2.44 TO 12.13         $.75 to 12.13        $2.44 TO 12.13        $     12.13

Convertible debentures:
    Common shares calculated under
        the if-converted method                            --             1,154,521                   --             864,950
                                               ==============         =============        ==============        ===========
</TABLE>

                                       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 August 29, 1997 contained in the Company's 1997 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,    material   availability,    new   and   existing
well-capitalized  competitors, and other uncertainties detailed in the Company's
Form  10-K for the  year  ended  August  29,  1997 and from  time to time in the
Company's 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 SIX MONTHS ENDED  FEBRUARY  27, 1998  COMPARED TO THREE AND SIX MONTHS
ENDED FEBRUARY 28, 1997

The operating  results for the three and six month  periods  ended  February 27,
1998 were net  earnings  of  $1,175,000  or $0.10 per share and net  earnings of
$1,458,000  or  $0.12  per  share,  respectively,  compared  to a  net  loss  of
$(174,000) or $(0.02) per share and net earnings of $130,000 or $0.01 per share,
respectively, for the three and six month periods ended February 28, 1997.

REVENUES - The Company's  revenues for the three months ended  February 27, 1998
were  $10,165,000,  up 117.2% from revenues of  $4,679,000  for the three months
ended  February 28, 1997.  Revenues  were  $16,871,000  for the six months ended
February  27, 1998,  up 49.0% from  revenues of  $11,322,000  for the six months
ended February 28, 1997.

Direct Broadcast Satellite (DBS) revenues increased  $4,410,000 or 113.5% in the
second quarter of fiscal 1998 to $8,298,000  from  $3,887,000 in the same period
of fiscal 1997.  The increase  was due to increased  shipments of digital  video
products,  principally to one customer for conversion of their cable  television
broadcast  network from analog to digital  compression  technology.  Telecom and
Customer  Products Group revenues  increased  $1,014,000 or 155.5% in the second
quarter of fiscal 1998 to $1,666,000  from $652,000 in the same period of fiscal
1997.  The  increase  was mainly due to higher  levels of  shipments  of cue and
control equipment to provide local commercial insertion capabilities

                                       12
<PAGE>

to cable  television  headend  systems.  For the three months ended February 27,
1998, one customer accounted for approximately 49.1% of revenues.

For the six months ended February 27, 1998, DBS revenues increased $4,033,000 or
41.9% to $13,652,000 from $9,619,000 for the six months ended February 28, 1997.
The  increase  was  due  to  increased   shipments  of  digital  video  products
principally to one cable  television  broadcast  network  customer.  For the six
months ended  February  27,  1998,  Telecom and Custom  Product  Group  revenues
increased  $1,400,000 or 100.3% to $2,795,000 from $1,395,000 for the six months
ended  February  28,  1997.  The  increase  was mainly  due to higher  levels of
shipments of cue and control  equipment.  The Company's  backlog is comprised of
undelivered,  firm customer orders,  which are scheduled to ship within eighteen
months.  For the six months ended February 27, 1998, one customer  accounted for
approximately 30.5% of revenues. WCI's backlog was approximately  $16,100,000 at
February 27, 1998,  compared to  $19,501,000 at August 29, 1997 and $9,400,00 at
February  28,  1997.   At  February  27,  1998,   one  customer   accounted  for
approximately 58.9% of the backlog.

GROSS PROFIT MARGINS - The Company's gross profit margin  percentages were 36.3%
and 34.8% for the three and six month periods  ended  February 27, 1998 compared
to 28.9% and 31.6% for the three and six month periods ended  February 28, 1997.
Gross profit margin  dollars  increased  $2,342,000 and $2,293,000 for the three
and six month  periods  ended  February  27,  1998 from the same  periods  ended
February 28, 1997. The increases in margin  percentages  and dollars were due to
the  increase in revenues and a mix of higher  margin  products in the three and
six month periods ended February 27, 1998 compared to the same periods of fiscal
1997. Profit margins were adversely  impacted in the three and six month periods
ended February 27, 1998 by inventory  reserve  charges of $300,000 and $350,000,
respectively,  for potentially  slow-moving  inventories of early generations of
digital video  products and a charge of $100,000 for  write-offs of  capitalized
software associated with these products.

SELLING, GENERAL AND ADMINISTRATIVE - Selling, general and administrative (SG&A)
expenses  increased  $144,000 or 13.7% to $1,195,000  for the three months ended
February 27, 1998 from  $1,051,000 for the three months ended February 28, 1997.
For the six months ended February 27, 1998 SG&A expenses  increased  $208,000 or
10.2% to $2,245,000 from $2,037,000 for the same period ended February 28, 1997.
The  increases  for the three and six month  periods  were  mainly due to higher
levels  of  selling  and  marketing  expenses,   incentive   compensation,   and
professional  fees.  As a percentage  of revenues,  SG&A expenses were 11.8% and
13.3% for the three and six month  periods  ended  February 27, 1998 compared to
22.5%  and  18.0%  for the  same  periods  of  fiscal  1997.  The  decreases  in
percentages for the three and six months ended February 27, 1998 compared to the
three and six  months  ended  February  28,  1997 were  primarily  due to higher
revenues.

RESEARCH AND  DEVELOPMENT  - Research and  development  expenditures,  including
capitalized  software  development  costs,  were $789,000 and $1,566,000 for the
three and six month  periods ended  February 27, 1998,  compared to $795,000 and
$1,473,000 for the same periods of fiscal 1997. Capitalized software development
costs  amounted to $90,000  and  $197,000  for the second  quarter and first six
months of fiscal 1998  compared to $359,000 and $469,000 for the same periods of
fiscal 1997. The increase in expenditures  for the six months ended February 27,
1998 was  primarily  due to an  increase  in  engineering  personnel  and higher
depreciation  and  proto-type  material  expenses.  The decreases in capitalized
software  development  costs for the three and six month periods ended  February
27, 1998 were  principally  due to a decrease in  expenditures  associated  with
digital  video  products  and Compel  network  control  software.  Research  and
development expenses, excluding capitalized software expenditures, were $698,000
or 6.9% of revenues  and  $1,368,000  or 8.1% of revenues  for the three and six
months  ended  February  27, 1998  compared to $436,000 or 9.3% of revenues  and
$1,003,000 or 8.9% of revenues for the same periods of fiscal 1997.

                                       13
<PAGE>

The Company remains  committed to such research and development  expenditures as
are  required  to   effectively   compete  and  maintain  pace  with  the  rapid
technological  changes in the communications  industry and to support innovative
engineering and design in its future products. The dollar amount of research and
development  expenditures  in fiscal 1998 is  expected  to increase  compared to
fiscal  1997 and to  decrease as a  percentage  of  revenues  due to an expected
increase in fiscal 1998 revenues.

INTEREST EXPENSE - Interest expense  decreased  $81,000 to $63,000 for the three
months ended February 27, 1998 from $144,000 for the three months ended February
28, 1997. For the six months ended February 27, 1998, interest expense decreased
$186,000 to $139,000 from $325,000 for the same period ended  February 28, 1997.
The  decreases  for the three  and six month  periods  were  primarily  due to a
decrease in the average outstanding balance of the convertible debentures.

INTEREST  INCOME - Interest  income was  $158,000 and $236,000 for the three and
six months,  respectively,  ended February 27, 1998, compared to none and $1,400
for the same  periods  ended  February 28, 1997.  The  increases  are due to the
increase in cash equivalent balances at February 27, 1998, primarily as a result
of an increase in customer deposits.

INCOME TAX  EXPENSES - For the six months ended  February  27, 1998,  income tax
expense of $893,000  was  comprised of a federal and state  deferred  income tax
expense of $799,000 and $94,000,  respectively.  There was no current federal or
state  income  tax  expense  due  to  utilization  of  tax  net  operating  loss
carryforwards.


LIQUIDITY AND CAPITAL RESOURCES
SIX MONTHS ENDED FEBRUARY 27, 1998

During the first six months of fiscal 1998,  operating  activities provided cash
of  $8,190,000.  Increases in customer  deposits  and net earnings  adjusted for
non-cash  expenses  provided cash of $3,495,000  and  $3,706,000,  respectively.
Decreases in inventory and accounts  receivable  provided cash of $1,044,000 and
$639,000 respectively,  while decreases in accounts payable and accrued expenses
used cash of  $710,000.  Cash used by  investing  activities  for  property  and
equipment   expenditures  and  capitalized   software  additions  was  $444,000.
Financing activities used cash of $284,000 for scheduled repayments of long-term
obligations and provided cash of $3,000 from exercise of stock options.

At  February  27,  1998,  no  balances  were  outstanding  under  the  revolving
line-of-credit,  which expires May 4, 1999, or upon demand. Borrowings under the
revolving  line of credit are subject to  availability  advance  formulas of 80%
against eligible accounts receivable;  20% of eligible raw material 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. Approximately, $4,523,000 was available to borrow at February 27,
1998 under the advance formulas.  In addition, at February 27, 1998, the Company
was in compliance with the line-of-credit covenants.

During the first six months of fiscal 1998, $1,285,000 of convertible debentures
were converted into 950,658  shares of common stock.  No convertible  debentures
remained outstanding at February 27, 1998.

The Company  expects that its current cash and cash  equivalents  combined  with
expected  cash flows  from  operating  activities  and the  Company's  available
line-of-credit  will be sufficient to support the  Company's  operations  during
fiscal 1998.

                                       14
<PAGE>

YEAR 2000

The  Company  has  performed a review of its  computer  systems and  products to
identify modifications required to become year 2000 compliant.  The Company does
not believe there is a material cost  associated with these  modifications,  and
currently  expects such  modifications to be completed by December 31, 1998. The
Company is in the process of reviewing the  implications of Year 2000 compliance
issues  associated  with  its  suppliers,   customers,   distributors,   banking
institutions, service providers and others. Any Year 2000 compliance problems by
these  parties  could  result in a  material  adverse  effect  on the  Company's
business, financial condition and results of operations.

                                       15
<PAGE>

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

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

          On January 27, 1998, the Annual Meeting of  Shareholders  was held and
          the following matters were voted upon:

               (1)  The  shareholders  approved  the  election of the  following
                    nominee to the Board of Directors:

                              James H. Morgan, Jr.

                           9,647,759 votes FOR
                             554,809 votes WITHHELD


                    The  terms of office of C.  Troy  Woodbury,  Jr.,  Robert A.
                    Placek and Joe K. Parks  continued  subsequent to the Annual
                    Meeting.

               (2)  The Wegener Corporation 1998 Incentive Plan was approved and
                    adopted with 5,842,424 votes FOR, 712,184 votes AGAINST, and
                    26,491 votes ABSTAINING.

               (3)  The  appointment  of BDO  Seidman,  LLP as auditors  for the
                    Company  for  the  fiscal  year  1998  was   approved   with
                    10,124,597 votes FOR, 36,088 votes AGAINST, and 41,883 votes
                    ABSTAINING.


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

          (a)  Exhibits: 27-Financial Data Schedule

          (b)  Reports on Form 8-K - No  reports  on Form 8-K were filed  during
               the quarter ended February 27, 1998.

                                       16
<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:  April 8, 1998                       By: /s/ Robert A. Placek
                                               -------------------------------
                                                   Robert A. Placek
                                                   President
                                                   (Principal Executive Officer)



Date:  April 8, 1998                       By: /s/ C. Troy Woodbury, Jr.
                                               -------------------------------
                                                   C. Troy Woodbury, Jr.
                                                   Treasurer and Chief
                                                   Financial Officer
                                                   (Principal Financial and
                                                   Accounting Officer)

                                       17