UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

      [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
            EXCHANGE ACT OF 1934

For the quarterly period ended May 28, 2004

                                       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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the ExchangeAct).

                            YES                               NO  X
                                -----                           -----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:


Common Stock, $.01 par value                           12,523,051 Shares
----------------------------                       -------------------------
           Class                                   Outstanding June 30, 2004

<PAGE>

                               WEGENER CORPORATION
                  FORM 10-Q FOR THE QUARTER ENDED MAY 28, 2004

                                      INDEX

PART I.  FINANCIAL INFORMATION

    Item 1.  Consolidated Financial Statements

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

             Consolidated Statements of Operations
             (Unaudited) - Three and Nine Months Ended
             May 28, 2004 and May 30, 2003 ....................................4

             Consolidated Balance Sheets - May 28,
             2004 (Unaudited) and August 29, 2003 .............................5

             Consolidated Statements of Shareholders' Equity
             (Unaudited) - Nine Months Ended May 28,
             2004 and May 30, 2003 ............................................6

             Consolidated Statements of Cash Flows
             (Unaudited) - Nine Months Ended May 28,
             2004 and May 30, 2003 ............................................7

             Notes to Consolidated Financial
             Statements (Unaudited) ........................................8-15

    Item 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations ..........................16-23

    Item 3.  Quantitative and Qualitative Disclosures About Market Risk.......24

    Item 4.  Controls and Procedures..........................................24

PART II. OTHER INFORMATION

    Item 1.   Legal Proceedings...............................................25
    Item 2.   None
    Item 3.   None
    Item 4.   None
    Item 5.   None
    Item 6.   Exhibits and Reports on Form 8-K ...............................25

             Signatures.......................................................26


                                       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 May 28, 2004; the consolidated statements
of shareholders' equity as of May 28, 2004, and May 30, 2003; the consolidated
statements of operations for the three and nine months ended May 28, 2004, and
May 30, 2003; and the consolidated statements of cash flows for the nine months
ended May 28, 2004, and May 30, 2003, have been prepared without audit. The
consolidated balance sheet as of August 29, 2003, has been examined by
independent registered 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,
2003, 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>

<TABLE>
<CAPTION>

                      WEGENER CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                               Three months ended              Nine months ended
                                              MAY 28,        May 30,         MAY 28,         May 30,
                                               2004           2003            2004            2003
------------------------------------------------------------------------------------------------------
<S>                                       <C>             <C>             <C>             <C>
Revenue                                   $  4,777,394    $  6,254,459    $ 14,240,522    $ 15,418,729
------------------------------------------------------------------------------------------------------
Operating costs and expenses
    Cost of products sold                    3,385,022       3,812,723      10,375,171       9,801,488
    Selling, general and administrative      1,150,988       1,592,032       3,650,451       3,753,709
    Research and development                   792,087         654,545       2,307,524       2,064,205
------------------------------------------------------------------------------------------------------
Operating costs and expenses                 5,328,097       6,059,300      16,333,146      15,619,402
------------------------------------------------------------------------------------------------------
Operating income (loss)                       (550,703)        195,159      (2,092,624)       (200,673)
    Interest expense                           (31,374)        (17,996)        (73,949)        (49,965)
    Interest income                             24,436          14,805          38,000          47,717
------------------------------------------------------------------------------------------------------
Earnings (loss) before income taxes           (557,641)        191,968      (2,128,573)       (202,921)

Income tax expense (benefit)                  (201,000)         69,000        (668,000)        (73,000)
------------------------------------------------------------------------------------------------------
Net earnings (loss)                       $   (356,641)   $    122,968    $ (1,460,573)   $   (129,921)
------------------------------------------------------------------------------------------------------
Net earnings (loss) per share:
    Basic                                 $       (.03)   $        .01    $       (.12)   $       (.01)
    Diluted                               $       (.03)   $        .01    $       (.12)   $       (.01)
------------------------------------------------------------------------------------------------------

Shares used in per share calculation
    Basic                                   12,483,348      12,351,158      12,432,246      12,313,314
    Diluted                                 12,483,348      12,488,212      12,432,246      12,313,314
------------------------------------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

</TABLE>


                                       4
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                      MAY 28,        August 29,
                                                       2004            2003
--------------------------------------------------------------------------------
ASSETS                                              (UNAUDITED)

Current assets
    Cash and cash equivalents                      $  2,889,464    $  4,213,252
    Accounts receivable                               2,954,524       3,560,127
    Inventories                                       2,271,921       2,142,835
    Deferred income taxes                             2,111,000       2,109,000
    Other                                               139,113         143,397
--------------------------------------------------------------------------------

         Total current assets                        10,366,022      12,168,611

Property and equipment, net                           2,679,913       2,913,551
Capitalized software costs, net                       1,663,688       1,304,416
Deferred income taxes                                 1,695,000       1,029,000
Other assets, net                                       826,942         752,003
--------------------------------------------------------------------------------
                                                   $ 17,231,565    $ 18,167,581
================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
    Accounts payable                               $  1,216,321    $  1,195,034
    Accrued expenses                                  1,552,276       1,432,749
    Customer deposits                                   295,322         254,667
    Current maturities of long-term obligations              --           4,320
--------------------------------------------------------------------------------

          Total current liabilities                   3,063,919       2,886,770
--------------------------------------------------------------------------------
          Total liabilities                           3,063,919       2,886,770
--------------------------------------------------------------------------------

Commitments and contingencies

Shareholders' equity
    Common stock, $.01 par value; 20,000,000
        shares authorized; 12,523,051 and
        12,381,251 shares respectively,
        issued and outstanding                          125,231         123,813
    Additional paid-in capital                       19,817,059      19,471,069
    Deficit                                          (5,774,644)     (4,314,071)
--------------------------------------------------------------------------------
         Total shareholders' equity                  14,167,646      15,280,811
--------------------------------------------------------------------------------
                                                   $ 17,231,565    $ 18,167,581
================================================================================

         See accompanying notes to consolidated financial statements.


                                       5
<PAGE>

<TABLE>
<CAPTION>
                      WEGENER CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                   (Unaudited)

                                                Common Stock            Additional     Retained               Treasury Stock
                                          ------------------------      Paid-in        Earnings            ---------------------
                                          Shares          Amount        Capital        (Deficit)           Shares         Amount
----------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>          <C>            <C>             <C>                   <C>       <C>
Balance at August 30, 2002               12,314,575   $    123,146   $ 19,513,977    $ (4,401,830)         72,977    $   (156,345)

    Issuance of shares through
       stock options and 401(k) plan         56,676            567        (51,208)             --         (72,977)        156,345
    Net loss for the nine months                 --             --             --        (129,921)             --              --
----------------------------------------------------------------------------------------------------------------------------------
BALANCE at May 30, 2003                  12,371,251   $    123,713   $ 19,462,769    $ (4,531,751)             --    $         --
----------------------------------------------------------------------------------------------------------------------------------

Balance at August 29, 2003               12,381,251   $    123,813   $ 19,471,069    $ (4,314,071)             --    $         --
    Common stock issued through
       stock options                        141,800          1,418        206,190              --              --              --
    Value of stock options granted
       for services                              --             --        139,800              --              --              --
    Net loss for the nine months                 --             --             --      (1,460,573)             --              --
----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT MAY 28, 2004                  12,523,051   $    125,231   $ 19,817,059    $ (5,774,644)             --    $         --
----------------------------------------------------------------------------------------------------------------------------------

</TABLE>
See accompanying notes to consolidated financial statements.


                                       6
<PAGE>

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

                                                           Nine months ended
                                                        MAY 28,         May 30,
                                                         2004            2003
--------------------------------------------------------------------------------
CASH PROVIDED BY OPERATING ACTIVITIES
    Net loss                                         $(1,460,573)   $  (129,921)
    Adjustments to reconcile net loss to
           cash provided by operating activities
        Depreciation and amortization                  1,601,187      1,201,085
        Issuance of treasury and common stock for
            benefit plan                                      --         82,409
        Value of stock options granted
       for services                                      139,800             --
        Provision for bad debts                           30,000         65,000
        Provision for inventory reserves                 225,000        100,000
        Provision (benefit) for deferred income taxes   (668,000)       (73,000)
     Warranty reserves                                        --        (20,000)
    Changes in assets and liabilities
            Accounts receivable                          575,603     (1,261,072)
            Inventories                                 (354,086)     1,160,172
            Other assets                                   4,284       (102,758)
            Accounts payable and accrued expenses        140,814      1,128,748
            Customer deposits                             40,655       (297,873)
--------------------------------------------------------------------------------
                                                         274,684      1,852,790
--------------------------------------------------------------------------------

CASH USED FOR INVESTMENT ACTIVITIES
    Property and equipment expenditures                 (241,750)      (504,222)
    Capitalized software additions                    (1,360,239)      (861,467)
    License agreement,
     patent, and trademark expenditures                 (199,771)      (526,670)
--------------------------------------------------------------------------------
                                                      (1,801,760)    (1,892,359)
--------------------------------------------------------------------------------

CASH PROVIDED BY FINANCING ACTIVITIES
    Repayment of long-term debt                           (4,320)        (4,538)
    Proceeds from stock options exercised                207,608         23,295
--------------------------------------------------------------------------------
                                                         203,288         18,757
--------------------------------------------------------------------------------

Decrease in cash and cash equivalents                 (1,323,788)       (20,812)
Cash and cash equivalents, beginning of period         4,213,252      5,117,756
--------------------------------------------------------------------------------

Cash and cash equivalents, end of period             $ 2,889,464    $ 5,096,944
--------------------------------------------------------------------------------

Supplemental disclosure of cash flow information:
 Cash paid during the nine months for:
          Interest                                   $    73,949    $    49,965
--------------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.


                                       7
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1    DESCRIPTION OF BUSINESS

We design and  manufacture  equipment for receiving and  transmitting  of video,
audio and data  programming  over  satellite,  cable,  broadcast and terrestrial
networks. Applications for our equipment include cable and broadcast television,
high-definition  television,  business  television,  IP data delivery,  business
music,   distance   education,   radio   networks  and   financial   information
distribution.

The  equipment we provide  enables our customers to implement  complex  networks
involving  real time  switching and control to help them achieve their  business
plans.  Using our technologies,  our customers can provide targeted  programming
and advertising capabilities to their clients.

We also make a complete line of signal  processing  equipment  used by the cable
television  industry to provide off-air  digital and high definition  signals to
their  subscribers.  This equipment  receives the signals from local terrestrial
broadcasters and processes them in ways that make these signals  compatible with
existing cable plant infrastructure in wide use today.

Our primary customers are major broadcast  networks,  operators of large private
satellite broadcast networks, and major cable television systems operators.

Our principal sources of revenues are from the sales of satellite communications
equipment.  Embedded in our products is internally developed software of varying
applications. Historically, we have not sold or marketed our software separately
or  otherwise  licensed  our  software  apart  from the  related  communications
equipment.  We operate in one  business  segment,  the  manufacture  and sale of
satellite communications equipment.

NOTE 2   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, 2003.

REVENUE RECOGNITION

The  Company's  revenue  recognition  policies  are  in  compliance  with  Staff
Accounting  Bulletin  No.  101 (SAB  101),  "Revenue  Recognition  in  Financial
Statements,"   as  published  by  the  staff  of  the  Securities  and  Exchange
Commission.  Revenue is recognized when persuasive evidence of an agreement with
the customer exists,  products are shipped or title passes pursuant to the terms
of the agreement with the customer, the amount due from the customer is fixed or
determinable,  collectibility  is  reasonably  assured,  and when  there  are no
significant future performance  obligations.  Service revenues are recognized at
the  time  of   performance.   The  Company   recognizes   revenues  in  certain
circumstances  before delivery has occurred  (commonly  referred to as "bill and
hold"  transactions).  In  such  circumstances,  among  other  things,  risk  of
ownership has passed to the buyer, the buyer has made a written fixed commitment
to purchase the finished  goods,  the buyer has requested the finished  goods be
held for future  delivery as scheduled and designated by them, and no additional
performance  obligations  exist by the  Company.  For  these  transactions,  the
finished goods are segregated from inventory and normal billing and credit terms
are granted.  For the three and nine months ended May 28, 2004,  revenues to one
customer  in  the  amount  of  $1,246,000  and  $3,911,000  respectively,   were
appropriately  recorded  prior to  delivery  as bill and  hold  transactions  in
accordance with the provisions of SAB 101. At May 28, 2004,  accounts receivable
for these revenues  amounted to $1,246,000  and were paid in full  subsequent to
May 28, 2004.

These policies require  management,  at the time of the  transaction,  to assess
whether the  amounts due are fixed or  determinable,  collection  is  reasonably
assured,  and if future  performance  obligations  exist.  These assessments are
based on the terms of the agreement  with the customer,  past history and credit
worthiness of the  customer.  If management  determines  that  collection is not
reasonably assured or future performance  obligations exist, revenue recognition
is deferred until these conditions are satisfied.

The  Company's  principal  sources  of  revenues  are from the sales of  various
satellite  communications  equipment.  Embedded  in the  Company's  products  is
internally developed software of varying applications. Historically, the Company
has not sold or marketed  its  software  separately  or  otherwise  licensed its
software  apart from the related  communications  equipment.  Should the Company
begin to market or sell software whereby it is more than an incidental component
of the  hardware,  the  Company  will  recognize  software  license  revenue  in
accordance with SOP No. 97-2, "Software Revenue  Recognition," as amended by SOP
No. 98-9, "Software Revenue Recognition, with Respect to Certain Transactions."


                                       8
<PAGE>

In accordance with EITF Issue 00-10,  "Accounting for Shipping and Handling Fees
and Costs," the Company included all shipping and handling billings to customers
in revenues, and freight costs incurred for product shipments have been included
in cost of products sold.

EARNINGS PER SHARE

Basic and diluted  net  earnings  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.

STOCK-BASED COMPENSATION

The Company has adopted the disclosure only provisions of Statement of Financial
Accounting Standard (SFAS) No 123, "Accounting for Stock-Based Compensation," as
amended by SFAS No. 148,  "Accounting for Stock-Based  Compensation - Transition
and Disclosure," but applies  Accounting  Principles Board Opinion (APB) No. 25,
"Accounting  for Stock  Issued to  Employees"  and related  interpretations,  in
accounting for its plans.  Under APB No. 25, when the exercise price of employee
stock  options  equals the market price of the  underlying  stock on the date of
grant, no compensation expense is recognized.

The following table includes disclosures required by SFAS No. 123, as amended by
SFAS No. 148, and illustrates the effect on net earnings (loss) and net earnings
(loss)  per share as if the  Company  had  applied  the fair  value  recognition
provisions of SFAS No. 123:

                            Three months ended            Nine months ended
                        --------------------------------------------------------
                          MAY 28,      May 30,          MAY 28,       May 30,
                           2004         2003             2004          2003
--------------------------------------------------------------------------------
Net loss
  As Reported           $(356,641)    $122,968       $(1,460,573)    $(129,921)
  Deduct:
      Compensation cost
  using the fair value
  method, net of tax      (39,384)           -          (101,695)      (47,663)
--------------------------------------------------------------------------------
  Pro Forma             $(396,025)    $122,968       $(1,562,268)    $(177,584)
--------------------------------------------------------------------------------
Loss per share
  As Reported
      Basic               $  (.03)     $   .01         $    (.12)      $  (.01)
      Diluted                (.03)         .01              (.12)         (.01)
  Pro Forma
      Basic                  (.03)         .01              (.13)         (.01)
      Diluted                (.03)         .01              (.13)         (.01)
--------------------------------------------------------------------------------


                                       9
<PAGE>

The fair  value of each  option  was  estimated  on the date of grant  using the
Black-Scholes   option  pricing  model  with  the  following   weighted  average
assumptions:

                             Three months ended           Nine months ended
                           -----------------------------------------------------
                           MAY 28,        May 30,     MAY 28,            May 30,
                            2004            2003        2004              2003
--------------------------------------------------------------------------------
Risk free interest rate      -               -          4.00%             4.84%
Expected term                -               -        2.8 YEARS          3 years
Volatility                   -               -           90%               75%
Expected annual dividends    -               -          NONE               none
--------------------------------------------------------------------------------

The weighted average fair value of options granted was as follows:

                              Three months ended        Nine months ended
                           -----------------------------------------------------
                            MAY 28,        May 30,    MAY 28,         May 30,
                             2004            2003       2004           2003
--------------------------------------------------------------------------------
Per share option value        -               -        $ 1.23          $ .52
Aggregate total               -               -       $474,230         $9,930
--------------------------------------------------------------------------------

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 revenues  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 2004 contains  fifty-three  weeks while
fiscal 2003 contained fifty-two weeks.

NOTE 3   ACCOUNTS RECEIVABLE

Accounts receivable are summarized as follows:

                                          MAY 28,                  August 29,
                                            2004                      2003
--------------------------------------------------------------------------------
                                        (UNAUDITED)


Accounts receivable - trade              $3,272,366                 $3,838,644
Other receivables                            76,843                     76,143
--------------------------------------------------------------------------------
                                          3,349,209                  3,914,787

Less allowance for
    doubtful accounts                      (394,685)                  (354,660)
--------------------------------------------------------------------------------

                                         $2,954,524                 $3,560,127
--------------------------------------------------------------------------------


                                       10
<PAGE>

NOTE 4     INVENTORIES

Inventories are summarized as follows:

                                              MAY 28,          August 29,
                                               2004              2003
--------------------------------------------------------------------------------
                                            (UNAUDITED)

 Raw material                                $2,329,613         $2,347,542
 Work-in-process                              1,199,133            951,078
 Finished goods                               2,210,664          2,334,578
--------------------------------------------------------------------------------
                                              5,739,410          5,633,198
--------------------------------------------------------------------------------

Less inventory reserves                      (3,467,489)        (3,490,363)
--------------------------------------------------------------------------------

                                             $2,271,921         $2,142,835
--------------------------------------------------------------------------------

During the first nine months of fiscal 2004  inventory  reserves were reduced by
inventory  write-offs of $248,000 and  increased by provisions of $225,000.  The
Company's  inventory  reserve of approximately  $3,467,000 at May 28, 2004 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
unsaleable 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 5   OTHER ASSETS

Other assets consisted of the following:

                                                MAY 28, 2004
-----------------------------------------------------------------------------
                            COST                 ACCUMULATED           NET
                                                AMORTIZATION
-----------------------------------------------------------------------------
 License agreements      $   570,000              $(169,329)        $400,671
 Patents                     344,609                      -          344,609
 Trademarks                   71,109                   (503)          70,606
 Loan facility fees           50,000                (45,833)           4,167
 Other                         6,889                      -            6,889
                          $1,042,607              $(215,665)        $826,942


                                            August 29, 2003
-----------------------------------------------------------------------------
                            Cost                 Accumulated           Net
                                                Amortization
-----------------------------------------------------------------------------
 Loan facility fees      $   570,000             $  (82,500)        $487,500
 Patents                     174,369                      -          174,369
 Trademarks                   41,578                      -           41,578
 Loan facility fees           50,000                 (8,333)          41,667
 Other                         6,889                      -            6,889
-----------------------------------------------------------------------------
                         $   842,836             $  (90,833)        $752,003
-----------------------------------------------------------------------------

Amortization expense of other assets for the three and nine months ended May 28,
2004, amounted to $41,000 and $125,000,  respectively.  Amortization  expense of
other  assets for the three and nine  months  ended May 30,  2003,  amounted  to
$40,000 and $92,500, respectively.


                                       11
<PAGE>

The Company conducts an ongoing review of its  intellectual  property rights and
potential  trademarks.  As of May 28, 2004,  the Company  incurred  $329,000 and
$47,000 of legal  expenses  related to the filing of  applications  for  various
patents  and  trademarks,  respectively.  Upon  issuance,  these  costs  will be
amortized  on a  straight-line  basis  over the  lesser of the legal life of the
patents and  trademarks or their  estimated  useful lives.  At May 28, 2004, the
cost of  registered  trademarks  amounted to  $11,000.  License  agreements  are
amortized over their estimated useful life of five years. Loan facility fees are
amortized over twelve months.

NOTE 6    INCOME TAXES

For the nine months ended May 28,  2004,  the income tax benefit of $668,000 was
comprised  of deferred  federal and state  income tax  benefits of $626,000  and
$42,000, respectively. Net deferred tax assets increased $668,000 to $3,806,000,
principally due to an increase in net operating loss  carryforwards in the first
nine  months.  At May 28,  2004,  a valuation  allowance of $98,000 was recorded
related to general  business  and foreign tax credits of $98,000,  which  expire
September 3, 2004. 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 deferred tax assets net of valuation  allowances  will
be realized based on the Company's backlog,  financial projections and operating
history. The amount of the deferred tax assets considered  realizable,  however,
could be further  reduced in the near term if estimates of future taxable income
during the carryforward period are reduced.

At May 28, 2004,  the Company had a federal net operating loss  carryforward  of
approximately  $5,382,000,  which expires  beginning  fiscal 2020 through fiscal
2024.  Additionally,  the Company had  general  business  and foreign tax credit
carryforwards  of $98,000,  expiring in fiscal 2004, which are fully offset by a
valuation  allowance,  an  alternative  minimum tax credit of $138,000 and state
income tax credits of $199,000 expiring in fiscal 2009.

NOTE 7    EARNINGS PER SHARE (UNAUDITED)

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

<TABLE>
<CAPTION>

                                                                            Three months ended
                                       ---------------------------------------------------------------------------------------------
                                                       MAY 28, 2004                                    May 30, 2003
                                       ---------------------------------------------------------------------------------------------
                                                                                                                          Per
                                          EARNINGS          SHARES        PER SHARE        Earnings          Shares       share
                                        (NUMERATOR)      (DENOMINATOR)     AMOUNT         (Numerator)    (Denominator)    amount
                                       -------------     ------------     ---------       -----------    ------------    -------
<S>                                       <C>              <C>               <C>            <C>            <C>              <C>
Net earnings (loss)                       $(356,641)                                        $122,968
                                          =========                                         ========
BASIC EARNINGS PER SHARE:
    Net earnings (loss) available
        to common shareholders            $(356,641)       12,483,348        $(.03)         $122,968       12,351,158       $ .01

Effect of dilutive
 potential common shares:
        Stock options                             -                 -                              -          137,054
                                         ----------------------------                     ---------------------------
DILUTED EARNINGS  PER SHARE:
    Net earnings available
        to common shareholders            $(356,641)       12,483,348        $(.03)         $122,968       12,488,212       $ .01
                                         ============================                     ===========================

</TABLE>

                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                            Nine months ended
                                        --------------------------------------------------------------------------------------------
                                                        MAY 28, 2004                                   May 30, 2003
                                        -----------------------------------------         ------------------------------------------
                                                                           PER                                             Per
                                          EARNINGS          SHARES         SHARE          Earnings          Shares         share
                                        (NUMERATOR)      (DENOMINATOR)     AMOUNT        (Numerator)     (Denominator)     amount
                                        -----------      ------------      -------        ----------      -----------     --------
Net earnings (loss)                     $(1,460,573)                                      $(129,921)
                                        ===========                                       =========
<S>                                     <C>                <C>               <C>          <C>              <C>             <C>
BASIC EARNINGS (LOSS) PER SHARE:
    Net earnings (loss) available
        to common shareholders          $(1,460,573)       12,432,246        $(.12)       $(129,921)       12,313,314      $( .01)

Effect of dilutive potential
    common shares:
        Stock options                             -                 -                             -                 -
                                        -----------------------------                     ---------------------------

DILUTED EARNINGS (LOSS)  PER SHARE:
    Net earnings (loss) available
        to common shareholders          $(1,460,573)       12,432,246        $(.12)       $(129,921)       12,313,314      $( .01)
                                        =============================        ======       ===========================      =======

</TABLE>

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

<TABLE>
<CAPTION>

                                Three months ended                 Nine months ended
                        -------------------------------------------------------------------
                             MAY 28,          May 30,          MAY 28,            May 30,
                              2004              2003             2004              2003
                        -------------------------------------------------------------------
Common stock options:
<S>                        <C>               <C>             <C>                <C>
    Number of shares       1,640,781         761,050         1,640,781          1,303,425
    Exercise price      $ .63 TO $5.63    $1.41 to $5.63   $ .63 TO $5.63    $ .84 to $5.63
                        ===================================================================

</TABLE>

NOTE 8 SEGMENT INFORMATION AND SIGNIFICANT CUSTOMERS (UNAUDITED)

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
                                          -------------------------------       --------------------------------
                                             MAY 28,            May 30,             MAY 28,           May 30,
                                              2004                2003               2004              2003
                                          ----------------------------------------------------------------------
<S>                                        <C>                 <C>               <C>                 <C>
Product Line
    Direct Broadcast Satellite             $4,348,494          $5,826,093        $12,878,456         $14,000,804
    Telecom and Custom Products               301,535             282,334            907,190           1,012,994
    Service                                   127,365             146,032            454,876             404,931
                                          ----------------------------------------------------------------------
                                           $4,777,394          $6,254,459        $14,240,522         $15,418,729
                                          ======================================================================
</TABLE>


                                       13
<PAGE>

<TABLE>
<CAPTION>

Revenues by geographic area are as follows:

                                Three months ended                      Nine months ended
                         ------------------------------------------------------------------------
                            MAY 28,             May 30,            MAY 28,              May 30,
                             2004               2003                2004                 2003
                         ------------------------------------------------------------------------

<S>                      <C>                <C>                <C>                 <C>
Geographic Area
    United States        $4,627,143         $6,028,665         $13,814,369         $14,789,642
    Latin America             3,407             44,807              61,212             196,566
    Canada                  117,341             88,120             230,459             207,835
    Europe                    9,864             21,893              73,035             127,943
    Other                    19,639             70,974              61,447              96,743
                         ------------------------------------------------------------------------
                          $4,777,394        $6,254,459         $14,240,522         $15,418,729
                         ========================================================================

</TABLE>

All of the  Company's  long-lived  assets  are  located  in the  United  States.
Customers  representing 10% or more of the respective  period's  revenues are as
follows:

<TABLE>
<CAPTION>

                                    Three months ended                       Nine months ended
                               ---------------------------------------------------------------------
                                MAY 28,             May 30,              MAY 28,             May 30,
                                  2004                2003                2004                 2003
                               ---------------------------------------------------------------------
               <S>              <C>                 <C>                 <C>                 <C>
                Customer 1       37.0%               31.6%               38.1%               39.1%
                Customer 2       11.9%               26.8%               10.2%               20.4%
                Customer 3       11.3%                (A)                 (A)                 (A)
                Customer 4        (A)                12.2%                (A)                 (A)

</TABLE>

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


NOTE 9    COMMITMENTS

During  the  second  quarter  of  fiscal  2003,  the  Company  entered  into two
manufacturing and purchasing  agreements for certain finished goods inventories.
The  agreement  committed  the Company to purchase  $2,116,000  over an eighteen
month period,  beginning in the third  quarter of fiscal 2003.  During the first
nine months of fiscal 2004,  purchase  commitments were increased by $1,552,000.
At May 28, 2004,  outstanding  purchase  commitments  under these two agreements
amounted  to  $2,441,000.  In  addition,  the  Company  maintains  a  cancelable
manufacturing  and purchasing  agreement of finished goods inventories for which
the Company has firm customer  order  commitments.  The Company had  outstanding
purchase  commitments  under  this  agreement  of  $1,599,000  at May 28,  2004.
Pursuant to the above  agreements,  at May 28, 2004, the Company had outstanding
letters of credit in the amount of $3,678,000.

During the first  quarter of fiscal  2004,  the Company  entered into a two-year
agreement  aggregating  $870,000 for engineering design and software development
services.  At May 28, 2004, the outstanding  commitment  under the agreement was
$616,000.

NOTE 10    GUARANTEES AND WARRANTY LIABILITY

Warranty
The Company  warrants its products for a  twelve-month  period  beginning at the
date of shipment.  The warranty  provides for repair or replacement of defective
products  returned  during the warranty  period at no cost to the customer.  The
Company  expenses  costs for routine  warranty  repairs as incurred.  Additional
provisions are made for non-routine warranty repairs based on estimated costs to
repair at the point in time in which the warranty claim is  identified.  Accrued
warranty  provisions  amounted to $66,000 at May 28, 2004. There were no changes
to the warranty accrual for the three and nine month periods ended May 28, 2004.


                                       14
<PAGE>

Letters of Credit
Wegener  Communications  Inc.,  the  Company's  wholly owned  subsidiary  (WCI),
provides  standby letters of credit to certain  suppliers in the ordinary course
of business  pursuant to  manufacturing  and purchasing  agreements.  At May 28,
2004, outstanding letters of credit amounted to $3,678,000.

Financing Agreements
The Company guarantees the bank loan facility of WCI. The bank facility provides
a maximum  available  credit limit of  $5,000,000.  At May 28, 2004, no balances
were outstanding on the loan facility.

NOTE 11    STOCK OPTIONS

During the first nine  months of fiscal  2004,  options  for  100,000  shares of
common  stock,  exercisable  at $2.39,  were  granted  pursuant to a  consulting
agreement  to  provide  software  development  services.  The fair  value of the
options was measured on the grant date using the  Black-Scholes  option  pricing
model.  As the options were fully vested and  nonforfeitable,  the fair value of
$139,800 was charged to research and development expenses during the nine months
ended May 28,  2004,  in  accordance  with EITF  96-18,  "Accounting  for Equity
Instruments  That are  Issued  to Other  Than  Employees  for  Acquiring,  or in
Conjunction  with Selling,  Goods or Services."  Additionally,  during the first
nine months of fiscal  2004,  other stock  option  activity  included  grants of
options to employees to purchase  368,156 shares at a weighted  average exercise
price of $2.21,  and grants of options to outside  directors to purchase  19,000
shares at a weighted average exercise price of $2.38. Options for 141,800 shares
with exercise  prices  ranging from $.84 to $2.31 were exercised and options for
33,000 shares were forfeited.  At May 28, 2004,  options for 1,640,781 shares of
common stock were  outstanding  with a weighted  average exercise price of $1.90
and with exercise  prices ranging from $.63 to $5.63.  At May 28, 2004,  options
for 485,419  shares of common stock were  available for issuance  under the 1998
Incentive Plan.


                                       15
<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, 2003,  contained in the  Company's  2003 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  August  29,  2003,  and from time to time in the
Company's periodic Securities and Exchange Commission filings.

The Company,  through  Wegener(TM)  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.

OVERVIEW

STRATEGY

We believe  that we have the right  products  for growth in our target  markets,
particularly the iPump(TM) Media Server product line.  However,  to date our new
order bookings and operational  performance  have not met our  expectations  due
primarily to a longer than anticipated  sales cycle for our new products.  While
customer  interest in our new products  remains high, it is difficult to predict
with  certainty the timing of orders and  realization  of revenues.  Due to this
current lack of visibility,  it does not appear that our fourth quarter revenues
will reach a level  sufficient to avoid an operating  loss in the fourth quarter
of this fiscal year.

Our current focus is to increase new order bookings and revenues with respect to
the new  products  we have  released  to the  market.  Based on high  levels  of
customer interest in the iPump Media Server product line, significant numbers of
quotes for the product are  outstanding.  However,  the  conversion of quotes to
orders has been slower  than we  anticipated.  We  continue to believe  that the
iPump  Media  Server  and  supporting  systems  are the best  solutions  for our
customers and anticipate  that orders will increase as the customers  convert to
the new  technology.  Product  acceptance of the DTV 700 series  product line is
underway with major cable Multiple System Operators (MSOs).

Third  party  offshore  contract  manufacturers  are being used for high  volume
products,  such as the  Unity(R)  4600,  iPump  and  other  products  to  secure
competitive product pricing.  Additionally, key partnerships continue to develop
with  complementary  companies in our market space to meet customer  demands for
complete network solutions.  Internally, we continue to focus on maintaining ISO
9001:2000 certification.

The rebranding of our corporate  image was unveiled at the National  Association
of Broadcasters  (NAB) tradeshow in April 2004. We have received a very positive
response from our  customers  and are now  marketing our products  under the new
Wegener brand.


                                       16
<PAGE>

CURRENT DEVELOPMENTS

During  the  third  quarter  of  fiscal  2004,  we  continued   development  and
introduction  of our new  generation of products in the  following  four product
lines. We anticipate the new product  introductions  will drive renewed interest
from enterprise, cable and broadcast customers.

1)    iPump Media  Servers  began  shipping  during the first half of the fiscal
      year.  During the third quarter of fiscal 2004, we introduced new versions
      of iPump products to support the many needs we see for the product family.
      Ascent Media has accepted  the iPump  platform  based on their field tests
      and third quarter shipments  included  additional iPump Servers beyond the
      field test pilot units.

      WEGENER  iPump is a digital  media server that  combines the features of a
      professional satellite television receiver and decoder with the advantages
      of a video  server.  Network  operators can reduce their  satellite  space
      segment by storing  programming in the WEGENER iPump and  scheduling  play
      times for it.  Utilizing  this method,  the  operator can utilize  limited
      satellite time to refresh the programming and play-out  schedules  without
      the necessity to maintain a constant signal on the satellite.

      Simultaneously, content can be transmitted as files, recorded real-time to
      disk, or input via digital video decoder (DVD) reader with the iPump Media
      Server.  File  delivery  can be slower or faster than  real-time  delivery
      depending upon the transfer available bandwidth.

      Spot  segments  can be  played  back  and  switched  into  a live  program
      providing  local and customized  content  insertion.  Spot playback may be
      confirmed  with  an  Internet  Protocol  (IP)  connection  to the  content
      management  system to validate  that a spot has been played on time and at
      the right schedule.  Advanced error detection techniques are combined with
      an IP terrestrial return path to ensure file delivery to an iPump network.
      Customers  are assured that files are  delivered  to targeted  iPump media
      servers.  iPump supports  streaming  video and audio services via routing,
      recording or direct playback from the iPump. Streaming video and audio can
      be  provided to a local area  network  directly  from an iPump.  Streaming
      services can be delivered to multiple end users simultaneously.

         The potential applications for the iPump are:

      Broadcasting
            o     Regional Advertising
            o     Time-Shifted Programming
            o     News Distribution
      Cable Programming
            o     Regional Ad Insertion
            o     Segment Spot Distribution by Group or Region
            o     Video on Demand
      Business Television
            o     Distance Learning, Educational Purposes
            o     Customized Training by Site
            o     Retail Point-of-Sale Displays or Kiosks
            o     Corporate Communications
      Internet and File Delivery
            o     Streaming Media On-Demand
            o     IP Data Distribution
            o     Multi-Format File Distribution

      The recently  introduced  WEGENER iPump 615  Streaming  Media Decoder is a
      peripheral  decoder  for the iPump  6400  Professional  Media  Server.  It
      receives an Internet Protocol stream from the iPump 6400 and outputs audio
      and video.  Utilizing the iPump 6400 and adding iPump 615 units as needed,
      networks  can  serve  multiple  media  programs  simultaneously  to  their
      customers.

      The iPump 615 is  ideally  suited  for  retail  point-of-sale  kiosks  and
      corporate communications.


                                       17
<PAGE>


2)    MediaPlan(R)  i/o and  MediaPlan(R)  CM products,  modules to our patented
      Compel  Control(R)  System,  were introduced  during the first half of the
      fiscal  year.  The  MediaPlan   products  are  crucial  for  customers  in
      controlling iPump Media Servers and are a competitive  advantage for us in
      sales of iPump Media  Servers.  Two iPump  customers are  currently  field
      testing the MediaPlan  products,  and we  anticipate  the field tests will
      convert to MediaPlan orders in the coming months.

      MediaPlan  i/o is a desktop  system to encode,  store,  edit and add files
      with associated  data  (metadata) to media content.  MediaPlan i/o teams a
      professional  video/audio  encoder with a user-friendly  system for adding
      metadata. It also converts analog audio/video to media files.

      MediaPlan  CM is a powerful  content  management  system used for managing
      assets and  delivering  them to  clients.  Operators  can  actively  track
      content  throughout the iPump  network.  Its flexible  metadata  authoring
      tools allow seamless integration to any existing metadata formats.

      WEGENER's new MediaPlan System provides:

      o     Tracking of content and other digital files when stored in the iPump
            Media  Servers  at the edge of the  network,  so  network  operators
            maintain control of the content throughout their networks.

      o     Local management and advanced search of digital files to allow quick
            access to huge libraries of content and digital files.

      o     Attachment  of  metadata  to files,  including  matching of existing
            metadata  templates,  to allow descriptive and control parameters to
            be added to the digital files.

      o     Delivery of the digital files to the iPump Media  Servers  utilizing
            patented Compel Network Control  grouping  functions for delivery to
            targeted users.

      o     Advanced user  permissioning  to allow multiple  users  simultaneous
            access to the system with different views per client.

3)    The Unity 4600  Professional  Receiver  Decoder  began  shipping in volume
      during the first half of the fiscal year. Fox Cable Networks  continued to
      use the  Unity  4600  for new  standard  definition  and  high  definition
      television  networks  throughout  the third  quarter of fiscal 2004 and is
      expected to use the product during the remainder of the fiscal year. HDNet
      and HDNet Movies have transitioned new shipments of receivers to the Unity
      4600 from  legacy  Unity  4422  receivers.  The third  quarter  Unity 4600
      shipments did not contribute significantly to revenues for the quarter.

4)    The DTV 742 product was  introduced to the market during the third quarter
      of fiscal 2004.  Both the DTV 742 and DTV 744 began  shipping to customers
      during the quarter.  Charter,  Time Warner and Adelphia  have all approved
      the DTV 744 for purchase by their affiliates.

      Our  DTV  products  allow  cable  operators  to use  less  rack  space  by
      processing four off-air television signals in a single rack unit. It makes
      local high definition content readily available for insertion into digital
      cable plants.

FINANCIAL POSITION AND LIQUIDITY

      We have no long-term debt or line of credit borrowings  outstanding at May
      28, 2004. Our cash and cash  equivalents  were $2,889,000 at May 28, 2004.
      Our  $5,000,000  bank loan  facility,  which is  subject  to  availability
      advance formulas based on eligible accounts receivable and inventories, is
      currently  being used to support  import  letters of credit  issued to our
      offshore manufacturers,  which at May 28, 2004 amounted to $3,678,000.  At
      May 28, 2004,  approximately  $661,000 net of the  outstanding  letters of
      credit was  available  to borrow under the advance  formulas.  The Company
      believes  that the  loan  facility  along  with  cash and cash  equivalent
      balances  will be sufficient  to support  operations  over the next twelve
      months.  The  Company  expects  bookings  for new  products  to  result in
      increased  revenues during fiscal 2005, which could require an increase in
      the credit limit primarily to support increases in import letter of credit
      balances. While no assurances may be given, WCI believes additional credit
      limits  would be made  available  under  the  existing  line of  credit to
      support borrowing requirements resulting from increased revenues.


                                       18
<PAGE>

Should the  bookings  and  revenue for the new  products  not  materialize,  the
Company is  committed  to  reducing  operating  costs to bring them in line with
revenue levels.

(See  the  Liquidity  and  Capital  Resources  section  on page  22 for  further
discussion.)


RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED MAY 28, 2004 COMPARED TO THREE AND NINE MONTHS ENDED
MAY 30, 2003

The following table sets forth, for the periods indicated, the components of the
results of operations as a percentage of sales:

<TABLE>
<CAPTION>

                                                         Three months ended                      Nine months ended
                                                    -------------------------------------------------------------------
                                                    MAY 28,             May 30,            MAY 28,             May 30,
                                                      2004               2003                2004               2003
                                                    -------------------------------------------------------------------
<S>                                                  <C>                 <C>               <C>                  <C>
     Revenues                                        100.0%              100.0%            100.0%               100.0%
     Cost of products sold                            70.9                61.0              72.9                 63.6
         Gross margin                                 29.1                39.0              27.1                 36.4
     Selling, general, and administrative             24.1                25.5              25.6                 24.3
     Research & development                           16.6                10.5              16.2                 13.4
     Operating income (loss)                         (11.5)                3.1             (14.7)                (1.3)
     Interest expense                                 (0.7)               ( .3)             (0.5)                ( .3)
     Interest income                                   0.5                  .2               0.3                   .3
     Earnings (loss) before income taxes             (11.7)                3.1             (14.9)                (1.3)
     Income tax expense (benefit)                     (4.2)                1.1              (4.7)                ( .5)
     Net earnings (loss)                              (7.5)%               2.0%            (10.3)%               ( .8)%
                                                    ===================================================================

</TABLE>

The  operating  results for the three and nine month periods ended May 28, 2004,
were a net loss of $(357,000) or $(.03) per share and a net loss of $(1,461,000)
or $(.12) per share, compared to net earnings of $123,000 or $ .01 per share and
a net loss of  $(130,000) or $(.01) per share for the same periods ended May 30,
2003.

While we believe  that we have the right  products  for growth in the markets we
serve,  to date  our  bookings  and  operational  performance  have  not met our
expectations  primarily due to a longer than anticipated sales cycle for our new
products.  While  customer  interest in our new  products  remains  high,  it is
difficult to predict with certainty the timing of orders and revenues.  Based on
the current  level of orders for shipment in the fourth  quarter of fiscal 2004,
it does  not  appear  that  our  revenues  in  that  period  will  reach a level
sufficient to avoid an operating loss.

REVENUES - The  Company's  revenues for the three months ended May 28, 2004 were
$4,777,000,  down 23.6% from revenues of  $6,254,000  for the three months ended
May 30, 2003.  Revenues for the nine months ended May 28, 2004 were $14,241,000,
down 7.6% from revenues of  $15,419,000  for the nine months ended May 30, 2003.
Revenues and order backlog are subject to the timing of significant  orders from
customers, and as a result revenue levels may fluctuate from quarter to quarter.

Direct Broadcast Satellite (DBS) revenues (including service revenues) decreased
$1,496,000  or 25.1% in the third  quarter  of fiscal  2004 to  $4,476,000  from
$5,972,000 in the same period of fiscal 2003.  For the nine months ended May 28,
2004 DBS revenues  decreased  $1,072,000 or 7.4% to $13,333,000 from $14,406,000
for the nine months ended May 30, 2003. DBS revenues and bookings were adversely
impacted by delayed purchasing  decisions in the digital satellite  transmission
market and  particularly  by a longer  than  expected  sales cycle for the iPump
Media  Server  and DTV 700 series  products.  The third  quarter of fiscal  2004
included continued shipments of equipment to Autotote Communications for network
upgrades and expansion  and to Ascent Media for new cable  network  applications
and expansion of private video  networks.  Both  customers'  shipments  included
deliveries of iPump Media Servers for their network applications.

Telecom and Custom  Products  Group  revenues  increased  $19,000 or 6.8% in the
third quarter of fiscal 2004 to $302,000 from $282,000 for the comparable period
of fiscal  2003.  For the nine  months  ended May 28,  2004,  Telecom and Custom
Products Group revenues  decreased $106,000 or 10.4% to $907,000 from $1,013,000
for the nine months ended May 30, 2003.

                                       19
<PAGE>

For the three months ended May 28, 2004,  three  customers  accounted for 37.0%,
11.9%, and 11.3% of revenues,  respectively.  For the three months ended May 30,
2003,  three  customers  accounted  for  31.6%,  26.8%,  and 12.2% of  revenues,
respectively.  For the nine months ended May 28, 2004,  two customers  accounted
for 38.1% and 10.2% of revenues, respectively. For the nine months ended May 30,
2003,  two customers  accounted  for 39.1% and 20.4% of revenues,  respectively.
Sales to a relatively small number of major customers have typically comprised a
majority  of the  Company's  revenues  and that trend is  expected  to  continue
throughout  fiscal  2004 and  beyond.  The  Company's  backlog is  comprised  of
undelivered,  firm customer orders,  which are scheduled to ship within eighteen
months. WCI's backlog was approximately $12,900,000 at May 28, 2004, compared to
$12,700,000 at August 29, 2003,  and  $12,300,000 at May 30, 2003. Two customers
accounted  for 74.0 % and 21.2%,  respectively,  of the backlog at May 28, 2004.
The total multi-year backlog at May 28, 2004, was approximately $20,300,000.

GROSS PROFIT MARGINS - The Company's gross profit margin  percentages were 29.1%
and 27.1% for the three and nine month periods  ended May 28, 2004,  compared to
39.0% and 36.4% for the three and nine month periods  ended May 30, 2003.  Gross
profit margin  dollars  decreased  $1,049,000  and decreased  $1,752,000 for the
three and nine month  periods  ended May 28, 2004,  respectively,  from the same
periods  ended May 30,  2003.  For the three and nine months ended May 28, 2004,
gross margin dollars and  percentages  were  unfavorably  impacted  primarily by
lower  revenues,  an increase of $390,000 in capitalized  software  amortization
expense and an increase of $125,000 in inventory reserve  expenses.  The product
mix for the nine months ended May 28, 2004 included  increased  amounts of lower
margin reseller uplink equipment compared to the same period of fiscal 2003. For
the nine months ended May 28, 2004, reseller equipment  comprised  approximately
7.2% of sales  compared to 3.4% for the same period of fiscal 2003.  Capitalized
software  amortization expense increased $140,000 or 61.6% and $390,000 or 63.8%
in the third  quarter and first nine months of fiscal 2004  compared to the same
periods of fiscal 2003.  Profit  margins in the three and nine month  periods of
fiscal 2004 included  inventory reserve charges of $75,000 and $225,000 compared
to none and $100,000 for the same periods of fiscal 2003.

SELLING, GENERAL AND ADMINISTRATIVE - Selling, general and administrative (SG&A)
expenses  decreased  $441,000 or 27.7% to $1,151,000  for the three months ended
May 28, 2004,  from  $1,592,000 for the same period of fiscal 2003. For the nine
months  ended  May  28,  2004,  SG&A  expenses  decreased  $103,000  or  2.8% to
$3,650,000  from $3,754,000 for the same period of fiscal 2003. SG&A expenses in
the third  quarter and first nine months of fiscal  2004  included an  insurance
reimbursement  of $191,000  for a portion of corporate  legal costs  expensed in
fiscal 2003 related to defending  the Company  against an  unsolicited,  hostile
takeover  attempt by Radyne  ComStream,  Inc. SG&A expenses in the third quarter
and first nine months of fiscal 2003  included  $809,000 in corporate  legal and
professional  fees related to  defending  the Company  against the  unsolicited,
hostile   takeover   attempt  by  Radyne   ComStream,   Inc.  and  an  insurance
reimbursement  of $265,000 for a portion of WCI legal costs related to a lawsuit
alleging patent infringement. For the three months ended May 28, 2004, sales and
marketing salary expenses increased $82,000 due to the addition of three people,
marketing expenses increased $106,000 due to increased sales activity related to
new products,  and SG&A overhead expenses increased $59,000. For the nine months
ended May 28, 2004,  sales and marketing  salary  expenses  increased  $241,000,
marketing  expenses  increased  $110,000,  and SG&A overhead expenses  increased
$138,000.  For  the  three  and  nine  months  ended  May  28,  2004,  corporate
professional  fees,  excluding the $191,000 insurance  reimbursement,  increased
$86,000 and $335,000  compared to the same periods of fiscal 2003 (excluding the
2003  takeover  defense costs of  $809,000).  As a percentage of revenues,  SG&A
expenses were 24.1% and 25.6% for the three and nine month periods ended May 28,
2004,  respectively,  compared to 25.5% and 24.3% for the same periods of fiscal
2003.

RESEARCH AND  DEVELOPMENT  - Research and  development  expenditures,  including
capitalized  software  development  costs, were $1,174,000 or 24.6% of revenues,
and $3,668,000 or 25.8% of revenues,  for the three and nine month periods ended
May 28, 2004,  compared to  $1,097,000 or 17.5% of revenues,  and  $2,926,000 or
19.0% of revenues,  for the same periods of fiscal  2003.  Capitalized  software
development  costs amounted to $382,000 and $1,360,000 for the third quarter and
first nine months of fiscal 2004  compared to $442,000 and $861,000 for the same
periods of fiscal 2003. The increases in capitalized software costs in the first
nine months of fiscal 2004 are due to increased  expenditures  on COMPEL network
control software, the iPump Media Server,  UNITY4600 and DTV700 series products.
Research and development expenses,  excluding capitalized software expenditures,
were $792,000 or 16.6% of revenues, and $2,308,000 or 16.2% of revenues, for the
three and nine months ended May 28, 2004, respectively,  compared to $655,000 or
10.5% of revenues,  and  $2,064,000 or 13.4% of revenues for the same periods of
fiscal  2003,  respectively.  The  increases  in expenses for the three and nine
months ended May 28, 2004,  are mainly due to increased  engineering  consulting
expenses,  net  of  amounts  capitalized  as  software  development  costs.  The
expenditures  for research and development for the fourth quarter of fiscal 2004
are expected to be comparable to those of the third quarter.


                                       20
<PAGE>

INTEREST EXPENSE - Interest expense  increased  $13,000 to $31,000 for the three
months ended May 28, 2004 as compared to fiscal 2003.  For the nine months ended
May 28, 2004,  interest expense  increased $24,000 to $74,000 as compared to the
same period in fiscal 2003.  The  increases for the three and nine month periods
in fiscal 2004 were  primarily  due to an  increase  in the average  outstanding
letter of credit commitment balances.

INTEREST INCOME - Interest income was $24,000 and $38,000 for the three and nine
month periods  ended May 28, 2004,  compared to $15,000 and $48,000 for the same
periods ended May 30, 2003. The three and nine month periods ended May 28, 2004,
included  a one time  benefit of $19,000  related to the  collection  of a trade
accounts receivable.

INCOME TAX EXPENSES - For the nine months ended May 28, 2004, income tax benefit
of  $668,000  was  comprised  of a  deferred  federal  and state tax  benefit of
$626,000 and $42,000,  respectively. For the nine months ended May 28, 2004, the
federal  deferred  tax benefit was offset by a  valuation  allowance  of $98,000
related to general  business  and foreign tax credits of $98,000,  which  expire
September 3, 2004. Net deferred tax assets increased  $668,000 in the first nine
months  of  fiscal  2004 to  $3,806,000,  principally  due to  increases  in net
operating  loss  carryforwards  during the period.  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  further  reduced  in the near  term if  estimates  of future
taxable income during the carryforward period are reduced.

CRITICAL ACCOUNTING POLICIES

The Company's  consolidated financial statements are prepared in accordance with
accounting  principles  generally accepted in the United States of America which
require  management to make  estimates and  judgements  that affect the reported
amounts of assets, liabilities, revenues and expenses, as well as disclosures of
contingent assets and liabilities at the date of the financial statements. These
estimates  are  reviewed  on an  ongoing  basis  and  are  based  on  historical
experience  and various  other  assumptions  and factors that are believed to be
reasonable  under the  circumstances,  the  results  of which form the basis for
making  judgements  about the carrying value of assets and liabilities  that are
not readily  apparent from other  sources.  Actual results may differ from these
estimates under different assumptions or future conditions.

We  believe  the  following  critical   accounting   policies  affect  our  more
significant judgements and estimates used in the preparation of our consolidated
financial statements.

REVENUE  RECOGNITION  -  The  Company's  revenue  recognition  policies  are  in
compliance  with Staff  Accounting  Bulletin No. 101,  "Revenue  Recognition  in
Financial  Statements," as published by the staff of the Securities and Exchange
Commission.  Revenue is recognized when persuasive evidence of an agreement with
the customer exists,  products are shipped or title passes pursuant to the terms
of the agreement with the customer, the amount due from the customer is fixed or
determinable,  collectibility  is  reasonably  assured,  and when  there  are no
significant future performance  obligations.  Service revenues are recognized at
the  time  of   performance.   The  Company   recognizes   revenues  in  certain
circumstances  before delivery has occurred  (commonly  referred to as "bill and
hold"  transactions).  In  such  circumstances,  among  other  things,  risk  of
ownership has passed to the buyer, the buyer has made a written fixed commitment
to purchase the finished  goods,  the buyer has requested the finished  goods be
held for future  delivery as scheduled and designated by them, and no additional
performance  obligations  exist by the  Company.  For  these  transactions,  the
finished goods are segregated from inventory and normal billing and credit terms
are granted.  For the three and nine months ended May 28, 2004,  revenues to one
customer  in  the  amount  of  $1,246,000  and  $3,911,000  respectively,   were
appropriately  recorded  prior to  delivery  as bill and  hold  transactions  in
accordance with the provisions of SAB 101. At May 28, 2004,  accounts receivable
for these revenues  amounted to $1,246,000  and were paid in full  subsequent to
May 28, 2004.

These policies require  management,  at the time of the  transaction,  to assess
whether the  amounts due are fixed or  determinable,  collection  is  reasonably
assured,  and if future  performance  obligations  exist.  These assessments are
based on the terms of the agreement  with the customer,  past history and credit
worthiness of the  customer.  If management  determines  that  collection is not
reasonably assured or future performance  obligations exist, revenue recognition
is deferred until these conditions are satisfied.

INVENTORY  RESERVES - Inventories  are valued at the lower of cost (at standard,
which  approximates  actual  cost on a  first-in,  first-out  basis) or  market.
Inventories include the cost of raw materials, labor and manufacturing overhead.
The Company  makes  inventory  reserve  provisions  for obsolete or  slow-moving
inventories as necessary to properly reflect inventory value. These reserves are
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 unsaleable or saleable at reduced prices,  which could require
additional inventory reserve provisions.  At May 28, 2004,  inventories,  net of
reserve provisions, amounted to $2,272,000.


                                       21
<PAGE>

CAPITALIZED   SOFTWARE  COSTS  -  Software  development  costs  are  capitalized
subsequent to  establishing  technological  feasibility.  Capitalized  costs are
amortized  based on the larger of the amounts  computed using (a) the ratio that
current  gross  revenues  for each  product  bears to the total of  current  and
anticipated  future gross  revenues  for that  product or (b) the  straight-line
method over the  remaining  estimated  economic  life of the  product.  Expected
future  revenues and  estimated  economic  lives are subject to revisions due to
market conditions,  technology changes and other factors resulting in shortfalls
of expected revenues or reduced economic lives, which could result in additional
amortization expense or write-offs. At May 28, 2004, capitalized software costs,
net of accumulated amortization, amounted to $1,664,000.

DEFERRED TAX ASSET VALUATION  ALLOWANCE - Deferred tax assets are recognized for
deductible temporary differences,  net operating loss carryforwards,  and credit
carryforwards  if it is more  likely  than  not that  the tax  benefits  will be
realized.  Realization  of the  Company's  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 based on the Company's  backlog,  financial  projections  and operating
history. The amount of the deferred tax assets considered  realizable,  however,
could be reduced if estimates of future taxable  income during the  carryforward
period are reduced. Any reduction in the realizable value of deferred tax assets
would result in a charge to income tax expense in the period such  determination
was made. At May 28, 2004, deferred tax assets amounted to $3,806,000,  of which
approximately  $1,936,000  relates to net  operating  loss  carryforwards  which
expire in fiscal  2020  through  2024,  an  alternative  minimum  tax  credit of
$138,000 and state income tax credits of $199,000 expiring in fiscal 2009.

ACCOUNTS  RECEIVABLE  VALUATION - The Company maintains  allowances for doubtful
accounts for estimated  losses  resulting from the inability of its customers to
make required payments.  If the financial  condition of the Company's  customers
were to  deteriorate,  resulting  in an  impairment  of  their  ability  to make
payments,  additional  allowances would be required.  At May 28, 2004,  accounts
receivable net of allowances for doubtful accounts amounted to $2,955,000.

LIQUIDITY AND CAPITAL RESOURCES
NINE MONTHS ENDED MAY 28, 2004

At May 28, 2004, the Company's  primary  sources of liquidity were cash and cash
equivalents of $2,889,000 and a $5,000,000 bank loan facility,  which is subject
to  availability  advance  formulas  based on eligible  accounts  receivable and
inventories. At May 28, 2004, approximately $661,000, net of outstanding letters
of credit in the amount of $3,678,000, was available to borrow under the advance
formulas.  Cash and cash equivalents  decreased $1,324,000 during the first nine
months of fiscal 2004.

During the first  nine  months of fiscal  2004,  operating  activities  provided
$275,000 of cash. Net loss adjusted for non-cash expenses used $132,000 of cash,
while changes in accounts  receivable  and customer  deposit  balances  provided
$616,000 of cash. Changes in accounts payable and accrued expenses,  inventories
and other assets used $209,000 of cash.  Cash used by investing  activities  was
$242,000 for property and equipment  expenditures,  $1,360,000  for  capitalized
software  additions  and  $200,000 for legal  expenses  related to the filing of
applications for various patents and trademarks.  Financing activities used cash
of $4,300 for  scheduled  repayments  of  long-term  debt.  Proceeds  from stock
options exercised provided $208,000 of cash.

WCI's bank loan facility was renewed  subsequent to May 28, 2004, and provides a
maximum  available  credit limit of $5,000,000  subject to availability  advance
formulas.  The loan  facility  matures on June 30,  2006,  or upon  demand,  and
requires an annual  facility fee of .75% of the maximum  credit limit.  The loan
facility  consists of a term loan and a revolving line of credit with a combined
borrowing limit of $5,000,000,  bearing interest at the bank's prime rate (4.00%
at May 28, 2004).

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,  40% to 50% of eligible finished goods
inventories  and 50% of import letter of credit  commitment  balances.  The loan
facility is secured by a first lien on substantially  all of WCI's assets and is
guaranteed by Wegener Corporation. At May 28, 2004, no balances were outstanding
on the revolving  line of credit or the equipment term loan portions of the loan
facility. The loan facility is currently being used to support import letters of
credit  issued to  offshore  manufacturers,  which at May 28,  2004  amounted to
$3,678,000.  At May 28, 2004, approximately $661,000, net of outstanding letters
of credit, was available to borrow under the advance formulas.


                                       22
<PAGE>

The Company is required  to  maintain a minimum  tangible  net worth with annual
increases  at each fiscal  year end  commencing  with  fiscal year 2005,  retain
certain key  employees,  limit  expenditures  of the Company to  $1,250,000  per
fiscal year,  maintain certain  financial  ratios,  and is precluded from paying
dividends. At May 28, 2004, the Company was in compliance with all loan facility
covenants.  The Company believes that the loan facility along with cash and cash
equivalent  balances  will be  sufficient  to support  operations  over the next
twelve  months.  The  Company  expects  bookings  for new  products to result in
increased  revenues  during fiscal 2005,  which could require an increase in the
credit limit primarily to support increases in import letter of credit balances.
While no assurances may be given, WCI believes additional credit limits would be
made  available  under  the  existing  line  of  credit  to  support   borrowing
requirements resulting from increased revenues.  Should the bookings and revenue
for the new  products  not  materialize,  the Company is  committed  to reducing
operating costs to bring them in line with revenue levels.

During  the  second  quarter  of  fiscal  2003,  the  Company   entered  into  a
manufacturing and purchasing  agreement for certain finished goods  inventories.
The   agreement   committed   the  Company  to  purchase   $2,116,000   over  an
eighteen-month period, beginning in the third quarter of fiscal 2003. During the
first  nine  months of fiscal  2004,  purchase  commitments  were  increased  by
$1,552,000.  At May 28, 2004,  outstanding  purchase commitments under these two
agreements  amounted  to  $4,799,000.  In  addition,  the  Company  maintains  a
cancelable  manufacturing and purchasing agreement of finished goods inventories
for which the  Company  has firm  customer  order  commitments.  The Company had
outstanding  purchase  commitments under this agreement of $1,599,000 at May 28,
2004.  Pursuant  to the above  agreements,  at May 30,  2003,  the  Company  had
outstanding letters of credit in the amount of $3,678,000.

The  Company  has never paid cash  dividends  on its  common  stock and does not
intend  to pay cash  dividends  in the  foreseeable  future . A  summary  of the
Company's long-term contractual obligations as of May 28, 2004 consisted of:

<TABLE>
<CAPTION>

                                                                Payments Due by Period
                                                         Fiscal          Fiscal          Fiscal         Fiscal
Contractual Obligations                   Total           2004          2005-2006      2007-2008         2009
------------------------               -----------------------------------------------------------------------
<S>                                    <C>           <C>                <C>              <C>            <C>
Operating leases                       $   183,000   $     56,000       $121,000         $4,000         $2,000
Purchase commitments                     7,015,000      6,507,000        508,000              -              -
                                       -----------------------------------------------------------------------
Total                                  $ 7,198,000     $6,563,000       $629,000         $4,000         $2,000
                                       =======================================================================
</TABLE>


                                       23
<PAGE>

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
May 28, 2004 subject to variable interest rate fluctuations.

At May 28, 2004, the Company's  cash  equivalents  consisted of bank  commercial
paper in the amount of $2,889,000.  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.

ITEM 4.    CONTROLS AND PROCEDURES

The  Company  carried  out an  evaluation,  under the  supervision  and with the
participation of the Company's management, including the Chief Executive Officer
(CEO) and the Chief Financial  Officer (CFO), of the effectiveness of the design
and operation of the Company's  disclosure controls and procedures as of the end
of the period covered by this report. Based upon that evaluation,  the Company's
CEO and CFO have concluded that the Company's disclosure controls and procedures
(as defined in Rules  13a-15(e) and 15d-15(e) of the Securities  Exchange Act of
1934,  as  amended)  are  effective.  There has been no change in the  Company's
internal control over financial  reporting that has materially  affected,  or is
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.


                                       24
<PAGE>

PART II.  OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS

      Jerry  Leuch,  Plaintiff,  v. Robert A. Placek,  Thomas G. Elliot,  Joe K.
      Parks, C. Troy Woodbury,  Jr.,  Wendell  Bailey,  Ned Mountain and Wegener
      Corporation,  Civil  Action  No.20361-NC  On June 20,  2003,  Jerry  Leuch
      commenced  an action  styled as a direct  class  action  and a  derivative
      action against Robert A. Placek,  Thomas G. Elliot,  Joe K. Parks, C. Troy
      Woodbury, Jr., Wendell Bailey, Ned Mountain and Wegener Corporation in the
      Court of Chancery of the State of Delaware,  In and For New Castle County.
      The  Plaintiff  alleged  that the  individual  defendants  violated  their
      fiduciary  duties due to him and other  shareholders,  the  members of the
      alleged  class,  as  well as  Wegener.  The  relief  sought  by  Plaintiff
      included: a declaration that the Defendants must consider and evaluate all
      bona fide  offers to  purchase  all of the  outstanding  shares of Wegener
      consistent with their fiduciary  duties; a declaration that this action is
      properly styled as a class action; an injunction  against  proceeding with
      any business combination which benefited the individual  defendants and an
      injunction  requiring  that any conflicts of interest be resolved in favor
      of the Wegener shareholders;  and a declaration removing the anti-takeover
      measures enacted by Wegener's Board of Directors.  The Complaint sought an
      award of  Plaintiff's  costs and  attorneys' and other fees. An answer was
      filed by Wegener, denying all substantive allegations in the complaint. On
      January 9, 2004, the Complaint was dismissed without prejudice.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits:

      4.1   Loan and Security  Agreement - Sixth  Amendment dated July 9, 2004,
            by and between  Wegener  Communications,  Inc. and LaSalle  National
            Bank respecting  $5,000,000  combined revolving credit note and term
            note.

      31.1  Certification of Chief Executive Officer  Regarding  Periodic Report
            Containing  Financial  Statements  Pursuant  to  Section  302 of the
            Sarbanes-Oxley Act of 2002.

      31.2  Certification of Chief Financial Officer  Regarding  Periodic Report
            Containing  Financial  Statements  Pursuant  to  Section  302 of the
            Sarbanes-Oxley Act of 2002.

      32.1  Certification of Chief Executive Officer  Regarding  Periodic Report
            Containing  Financial  Statements  Pursuant  to  Section  906 of the
            Sarbanes-Oxley Act of 2002.

      32.2  Certification of Chief Financial Officer  Regarding  Periodic Report
            Containing  Financial  Statements  Pursuant  to  Section  906 of the
            Sarbanes-Oxley Act of 2002.

(b)   Reports on Form 8-K :

      Current  Report on Form 8-K dated  April 13,  2004,  furnishing  its press
      release regarding its results for the second fiscal quarter ended February
      27, 2004.


                                       25
<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 9, 2004             By:   /s/ Robert A. Placek
                                  ----------------------------------------
                                    Robert A. Placek
                                    President
                                    (Principal Executive Officer)



Date: July 9, 2004              By:   /s/ C. Troy Woodbury, Jr.
                                  ----------------------------------------
                                    C. Troy Woodbury, Jr.
                                    Treasurer and Chief
                                    Financial Officer
                                    (Principal Financial and Accounting Officer)


                                       26