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

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

For  the quarterly period ended May 28, 1999

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

For the transition period from ___________________ to_________________

Commission file No. 0-11003

                               WEGENER CORPORATION

             (Exact name of registrant as specified in its charter)

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

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

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

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

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

                               YES  [X]      NO  [ ]

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


Common Stock, $.01 par value                               11,685,868 Shares
----------------------------                           -------------------------
           Class                                       Outstanding June 28, 1999

<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                  Form 10-Q For the Quarter Ended May 28, 1999

                                      INDEX
                                                                         Page(s)
                                                                         -------
PART I.   Financial Information

Item 1.   Consolidated Financial Statements

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

          Consolidated Statements of Operations
          (Unaudited) - Three and Nine Months Ended
          May 28, 1999 and May 29, 1998,...................................... 4

          Consolidated Balance Sheets - May 28,
          1999 (Unaudited) and August 28, 1998 ............................... 5

          Consolidated Statements of Shareholders' Equity
          (Unaudited) - Nine Months Ended May 28,
          1999 and May 29, 1998,.............................................. 6

          Consolidated Statements of Cash Flows
          (Unaudited) - Nine Months Ended May 28,
          1999 and May 29, 1998,.............................................. 7

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

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

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


PART II. Other Information

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

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

                                       2
<PAGE>

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

                INTRODUCTION - CONSOLIDATED FINANCIAL STATEMENTS


     The consolidated  financial  statements  included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
The consolidated  balance sheet as of May 28, 1999; the consolidated  statements
of  shareholders'  equity as of May 28, 1999 and May 29, 1998; the  consolidated
statements  of  operations  for the three and nine months ended May 28, 1999 and
May 29, 1998; and the consolidated  statements of cash flows for the nine months
ended May 28, 1999 and May 29,  1998;  have been  prepared  without  audit.  The
consolidated  balance  sheet  as  of  August  28,  1998  has  been  examined  by
independent  certified  public  accountants.  Certain  information  and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally  accepted  accounting  principles  have been condensed or omitted
pursuant to such rules and  regulations,  although the Company believes that the
disclosures   herein  are  adequate  to  make  the  information   presented  not
misleading. It is suggested that these consolidated financial statements be read
in conjunction  with the financial  statements and the notes thereto included in
the Company's  Annual Report on Form 10-K,  for the fiscal year ended August 28,
1998, File No. 0-11003.

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

                                       3
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                     Three months ended                Nine months ended
                                                  MAY 28,          May 29,          MAY 28,          May 29,
                                                   1999             1998             1999             1998
-------------------------------------------------------------------------------------------------------------
<S>                                           <C>              <C>              <C>              <C>
Revenues                                      $  7,049,500     $  9,856,824     $ 20,541,706     $ 26,728,108
-------------------------------------------------------------------------------------------------------------

Operating costs and expenses
    Cost of products sold                        4,472,989        6,372,206       13,317,249       17,376,137
    Selling, general, and administrative         1,281,114        1,398,765        3,673,863        3,643,979
    Research and development                       789,162          628,856        2,147,282        1,997,142
-------------------------------------------------------------------------------------------------------------

Operating costs and expenses                     6,543,265        8,399,827       19,138,394       23,017,258
-------------------------------------------------------------------------------------------------------------

Operating income                                   506,235        1,456,997        1,403,312        3,710,850
    Interest expense                               (33,130)         (56,873)        (111,513)        (195,552)
    Interest income                                 72,300          144,793          248,217          380,349
-------------------------------------------------------------------------------------------------------------

Earnings before income taxes                       545,405        1,544,917        1,540,016        3,895,647

Income tax expense                                 202,000          589,000          570,000        1,482,000
-------------------------------------------------------------------------------------------------------------

Net earnings                                  $    343,405     $    955,917     $    970,016     $  2,413,647
=============================================================================================================

Net earnings per share
    Basic                                     $        .03     $        .08     $        .08     $        .21
    Diluted                                   $        .03     $        .08     $        .08     $        .20
=============================================================================================================

Shares used in per share
  calculation
    Basic                                       11,764,308       11,920,135       11,905,732       11,697,534
    Diluted                                     11,933,309       12,278,345       12,058,425       12,074,941
=============================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       4
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                         MAY 28,         August 28,
                                                                           1999             1998
---------------------------------------------------------------------------------------------------
ASSETS

Current assets
<S>                                                                   <C>              <C>
    Cash and cash equivalents                                         $  7,767,998     $  6,492,760
    Accounts receivable                                                  5,030,810        5,314,938
    Inventories                                                          6,200,260        7,120,393
    Deferred income taxes                                                1,205,750        1,011,000
    Other                                                                  271,129           23,710
---------------------------------------------------------------------------------------------------

        Total current assets                                            20,475,947       19,962,801

Property and equipment                                                   4,335,904        4,523,297
Capitalized software costs                                               1,115,748        1,211,914
Other assets                                                                31,050          207,002
---------------------------------------------------------------------------------------------------

                                                                      $ 25,958,649     $ 25,905,014
===================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
    Accounts payable                                                  $  1,814,804     $  2,113,205
    Accrued expenses                                                     1,760,119        1,490,041
    Customer deposits                                                      827,963          784,621
    Current maturities of long-term obligations                            618,016          597,664
---------------------------------------------------------------------------------------------------

       Total current liabilities                                         5,020,902        4,985,531

Long-term obligations, less current maturities                             752,245        1,231,338
Deferred income taxes                                                      571,000          608,000
---------------------------------------------------------------------------------------------------

       Total liabilities                                                 6,344,147        6,824,869
---------------------------------------------------------------------------------------------------

Commitments

Shareholders' equity
     Common stock, $.01 par value, 20,000,000 shares
          authorized; 12,314,575 shares issued                             123,146          123,146
     Additional paid-in capital                                         19,470,589       19,407,417
     Retained earnings (deficit)                                           852,524         (117,492)
     Less treasury stock, at cost (588,707 and 358,546
          shares)                                                         (831,757)        (332,926)
---------------------------------------------------------------------------------------------------

            Total shareholders' equity                                  19,614,502       19,080,145
---------------------------------------------------------------------------------------------------

                                                                      $ 25,958,649     $ 25,905,014
===================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       5
<PAGE>

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

<TABLE>
<CAPTION>
                                               Common Stock            Additional      Retained             Treasury Stock
                                               ------------              Paid-in       Earnings             --------------
                                           Shares         Amount         Capital       (Deficit)         Shares        Amount
--------------------------------------------------------------------------------------------------------------------------------

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

    Treasury stock reissued through
       stock options and 401(k) plan             --             --         52,620             --          55,063          51,129
    Issuance of common stock for
       convertible debentures               950,658          9,507      1,238,320             --              --              --
    Net earnings for the nine months             --             --             --      2,413,647              --              --
--------------------------------------------------------------------------------------------------------------------------------

BALANCE, at May 29, 1998                 12,314,575    $   123,146    $19,375,640    $  (464,028)       (377,667)    $  (350,681)
================================================================================================================================

BALANCE, at August 28, 1998              12,314,575    $   123,146    $19,407,417    $  (117,492)       (358,546)    $  (332,926)

    Treasury stock reissued through
       stock options and 401(k) plan             --             --         63,172             --          86,339          80,169

    Treasury stock repurchased                   --             --             --             --        (316,500)       (579,000)
    Net earnings for the nine months             --             --             --        970,016              --              --
--------------------------------------------------------------------------------------------------------------------------------

BALANCE, AT MAY 28, 1999                 12,314,575    $   123,146    $19,470,589    $   852,524        (588,707)    $  (831,757)
================================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       6
<PAGE>

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

<TABLE>
<CAPTION>
                                                                 Nine months ended
                                                              MAY 28,         May 29,
                                                               1999            1998
--------------------------------------------------------------------------------------

CASH PROVIDED (USED) BY OPERATING ACTIVITIES
<S>                                                        <C>             <C>
    Net earnings                                           $   970,016     $ 2,413,647
    Adjustments to reconcile net earnings to
           cash provided by operating activities
        Depreciation and amortization                        1,205,191       1,544,012
        Bad debt allowance                                     125,000          50,000
        Warranty reserves                                      150,000              --
        Inventory reserves                                     250,000         650,000
        Issuance of treasury stock for
            compensation expenses                              130,044          79,756
    Deferred income taxes                                     (231,750)        994,000
    Changes in assets and liabilities
            Accounts receivable                                159,128        (155,779)
            Inventories                                        670,133       1,499,571
            Other assets                                      (156,929)         13,424
            Accounts payable and accrued expenses             (178,323)        491,780
            Customer deposits                                   43,342        (622,747)
--------------------------------------------------------------------------------------

                                                             3,135,852       6,957,564
--------------------------------------------------------------------------------------

CASH (USED) BY INVESTMENT ACTIVITIES
    Property and equipment expenditures                       (533,828)       (351,971)
    Capitalized software additions                            (302,342)       (323,154)
--------------------------------------------------------------------------------------

                                                              (836,170)       (675,125)
--------------------------------------------------------------------------------------

CASH PROVIDED (USED) BY FINANCING ACTIVITIES
    Proceeds from long-term debt                             1,359,508              --
    Purchase of treasury stock                                (579,000)             --
    Repayment of long-term debt and capitalized
        lease obligations                                   (1,818,249)       (422,950)
    Proceeds from stock options exercised                       13,297          24,094
--------------------------------------------------------------------------------------

                                                            (1,024,444)       (398,856)
--------------------------------------------------------------------------------------

Increase (decrease) in cash and cash equivalents             1,275,238       5,883,583
Cash and cash equivalents, beginning of period               6,492,760       2,242,433
--------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                   $ 7,767,998     $ 8,126,016
======================================================================================

Supplemental disclosure of cash flow information:
     Cash paid during the nine months for:
          Interest                                         $   121,586     $   193,995
          Income taxes                                     $   240,000     $        --
======================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       7
<PAGE>

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


NOTE 1    SIGNIFICANT ACCOUNTING POLICIES

          The significant  accounting  policies  followed by the Company are set
          forth  in  Note  1 to the  Company's  audited  consolidated  financial
          statements  included  in the  annual  report on Form 10-K for the year
          ended August 28, 1998.

          Earnings Per Share

          In fiscal 1998, the Company adopted Statement of Financial  Accounting
          Standards  No,  128,   "Earnings  Per  Share"  (SFAS  128).  SFAS  128
          establishes  standards for computing and presenting earnings per share
          (EPS),  and  supersedes  APB  Opinion No. 15. The  Statement  replaces
          primary EPS with basic EPS and requires a dual  presentation  of basic
          and diluted EPS.

          Basic net  earnings  per share is computed by  dividing  net  earnings
          available to common  shareholders  (numerator) by the weighted average
          number of common shares  outstanding  (denominator)  during the period
          and  excludes  the dilutive  effect of stock  options and  convertible
          debentures.  Diluted  net  earnings  per  share  gives  effect  to all
          dilutive  potential  common  shares  outstanding  during a period.  In
          computing  diluted net earnings per share, the average stock price for
          the period is used in  determining  the number of shares assumed to be
          reacquired  under the treasury stock method from the exercise of stock
          options and the if-converted  method to compute the dilutive effect of
          convertible debentures.

          Comprehensive Net Income

          During the first quarter of fiscal 1999, the Company adopted Statement
          of Financial  Accounting  Standards No.130,  "Reporting  Comprehensive
          Income," (SFAS 130) which  establishes  standards for the reporting of
          comprehensive  income  and its  components  in  financial  statements.
          Comprehensive income consists of net income and other gains and losses
          affecting   shareholders'   equity  that,  under  generally   accepted
          accounting principles, are excluded from net income. For the three and
          nine month periods  ending May 28, 1999 and May 29, 1998 the Company's
          net income and total comprehensive income were the same.

          Use of Estimates

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

          Fiscal Year

          The Company uses a fifty-two,  fifty-three  week year. The fiscal year
          ends on the Friday  closest to August 31.  Fiscal  years 1999 and 1998
          contain fifty-three and fifty-two weeks, respectively.

                                       8
<PAGE>

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

NOTE 2    ACCOUNTS RECEIVABLE

          Accounts receivable are summarized as follows:

                                             MAY 28,       August 28,
                                              1999            1998
                                          -----------     -----------
                                          (UNAUDITED)

          Accounts receivable - trade     $ 5,283,060     $ 5,139,414
          Recoverable income taxes                 --         295,000
          Other receivables                   119,132         137,515
                                          -----------     -----------
                                            5,402,192       5,571,929

          Less allowance for
               doubtful accounts             (371,382)       (256,991)
                                          -----------     -----------

                                          $ 5,030,810     $ 5,314,938
                                          ===========     ===========

NOTE 3    INVENTORIES

          Inventories are summarized as follows:

                                             MAY 28,       August 28,
                                              1999            1998
                                          -----------     -----------
                                          (UNAUDITED)

          Raw material                    $ 2,267,502     $ 2,692,937
          Work-in-process                   3,346,600       3,139,249
          Finished goods                    2,284,652       2,727,727
                                          -----------     -----------
                                            7,898,754       8,559,913

          Less inventory reserves          (1,698,494)     (1,439,520)
                                          -----------     -----------

                                          $ 6,200,260     $ 7,120,393
                                          ===========     ===========

NOTE 4    INCOME TAXES

          For the nine months ended May 28, 1999, income tax expense of $570,000
          was  comprised  of a current  federal and state  income tax expense of
          $735,800 and $65,950,  respectively,  and a deferred federal and state
          tax benefit of $211,800  and $19,950,  respectively.  Net deferred tax
          assets increased $231,750 in the first nine months of fiscal 1999.

                                       9
<PAGE>

NOTE 5    EARNINGS PER SHARE

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

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

                                                       MAY 28, 1999                                   May 29, 1998
                                          -------------------------------------      ----------------------------------------
                                                                          PER                                           Per
                                           EARNINGS       SHARES         SHARE         Earnings         Shares         share
                                         (NUMERATOR)   (DENOMINATOR)     AMOUNT      (Numerator)     (Denominator)     amount
                                         -----------   -------------     ------      -----------     -------------     ------
<S>                                        <C>          <C>               <C>          <C>            <C>               <C>
Net earnings                               $343,405                                    $955,917
                                           ========                                    ========

Basic earnings per share:
    Net earnings available
        to common shareholders             $343,405     11,764,308        $0.03        $955,917       11,920,135        $0.08
                                                                          =====                                         =====

Effect of dilutive potential
    common shares:
        Stock options                            --        169,001                           --          358,210
        Convertible debentures                   --             --                           --               --
                                           --------     ----------                     --------       ----------
Diluted earnings per share:
    Net earnings available
        to common shareholders
        plus assumed conversions           $343,405     11,933,309        $0.03        $955,917       12,278,345        $0.08
                                           ========     ==========        =====        ========       ==========        =====

<CAPTION>
                                                                          Nine months ended
                                          -----------------------------------------------------------------------------------

                                                       MAY 28, 1999                                   May 29, 1998
                                          -------------------------------------     -----------------------------------------
                                                                          PER                                           Per
                                           EARNINGS       SHARES         SHARE        Earnings           Shares        share
                                         (NUMERATOR)   (DENOMINATOR)     AMOUNT     (Numerator)      (Denominator      amount
                                         -----------   -------------     ------     -----------      ------------      ------
<S>                                        <C>          <C>               <C>        <C>              <C>               <C>
Net earnings                               $970,016                                  $2,413,647
                                           ========                                  ==========

Basic earnings per share:
    Net earnings available
        to common shareholders             $970,016     11,905,732        $0.08      $2,413,647       11,697,534        $0.21
                                                                          =====                                         =====

Effect of dilutive potential
    common shares:
        Stock options                            --        152,693                           --          226,744
        Convertible debentures                   --             --                        9,156          150,663
                                          ---------     ----------                   ----------       ----------

Diluted earnings per share:
    Net earnings available
        to common shareholders
        plus assumed conversions           $970,016     12,058,425        $0.08      $2,422,803       12,074,941        $0.20
                                           ========     ==========        =====      ==========       ==========        =====
</TABLE>

                                       10
<PAGE>


Options and convertible  debentures excluded from the diluted earnings per share
calculation due to their anti-dilutive effect are as follows:

<TABLE>
<CAPTION>
                                            Three months ended                           Nine months ended
                                  ----------------------------------------     --------------------------------------
                                        MAY 28,               May 29,               MAY 28,              May 29,
                                         1999                   1998                 1999                 1998
                                  ------------------     -----------------     ----------------     -----------------
Common stock options:
<S>                                      <C>               <C>                      <C>               <C>
    Number of shares                     6,000                     26,000           6,000                     48,500
    Range of exercise prices             $1.78             $3.25 to 12.13           $1.78             $2.44 TO 12.13
                                  ==================     =================     ================     =================
</TABLE>

NOTE 6    MAJOR CUSTOMERS

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

                         Three months ended           Nine months ended
                      -----------------------      ------------------------
                       MAY 28        May 29,        MAY 28,        May 29,
                        1999           1998          1999            1998
                      --------      ---------      ---------      ---------

     Customer 1        27.3%          53.8%         23.5%          39.1%
     Customer 2        15.2%           (a)          10.1%           (a)
     Customer 3         (A)            (a)          10.0%           (a)
     Customer 4         (A)            (a)           (A)           10.5%

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

                                       11
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES

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

This information  should be read in conjunction with the consolidated  financial
statements and the notes thereto included in Item 1 of this Quarterly Report and
the audited consolidated financial statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
year ended August 28, 1998 contained in the Company's 1998 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  28,  1998 and from  time to time in the
Company's periodic Securities and Exchange Commission filings.

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


RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED MAY 28, 1999 COMPARED TO THREE AND NINE MONTHS ENDED
MAY 29, 1998

The  operating  results for the three and nine month  periods ended May 28, 1999
were net earnings of $343,000 or $0.03 per share and net earnings of $970,000 or
$0.08 per  share,  respectively,  compared  to  $956,000  or $0.08 per share and
$2,414,000  or $0.20 per  share,  respectively,  for the  three  and nine  month
periods ended May 29, 1998.

REVENUES - The  Company's  revenues for the three months ended May 28, 1999 were
$7,050,000,  down 28.5% from revenues of  $9,857,000  for the three months ended
May 29, 1998.  Revenues were $20,542,000 for the nine months ended May 28, 1999,
down 23.1% from revenues of $26,728,000 for the nine months ended May 29, 1998.

Direct Broadcast  Satellite (DBS) revenues decreased  $3,186,000 or 35.4% in the
third quarter of fiscal 1999 to $5,824,000 from $9,010,000 in the same period of
fiscal 1998. The decrease was due to lower  shipments of digital video products,
principally to one customer for conversion of their cable  television  broadcast
network  from analog to digital  compression  technology.  Telecom and  Customer
Products  Group  revenues  increased  $355,000 or 51.7% in the third  quarter of
fiscal 1999 to $1,042,000  from $687,000 in the same period of fiscal 1998.  The
increase  was  mainly  due to higher  levels  of  shipments  of cue and  control
equipment to provide local commercial insertion capabilities to cable television
headend  systems.  For the  three  months  ended  May 28,  1999,  two  customers
accounted for approximately 27.3% and 15.2% of total revenues.

                                       12
<PAGE>

For the nine months ended May 28, 1999,  DBS revenues  decreased  $5,056,000  or
22.3% to $17,606,000  from  $22,662,000  for the nine months ended May 29, 1998.
The decrease was due to lower shipments of digital video products principally to
one cable television  broadcast network customer.  For the nine months ended May
28, 1999,  Telecom and Custom  Product Group  revenues  decreased  $1,127,000 or
32.4% to $2,355,000  from $3,482,000 for the nine months ended May 29, 1998. The
decrease  was  mainly  due to  lower  levels  of  shipments  of cue and  control
equipment. For the nine months ended May 28, 1999, three customers accounted for
approximately  23.5%,  10.1% and  10.0%,  respectively  of total  revenues.  The
Company's backlog is comprised of undelivered,  firm customer orders,  which are
scheduled to ship within eighteen months.  WCI's total backlog was approximately
$5.3 million at May 28, 1999,  compared to $12.6  million at August 28, 1998 and
$11.5 million at May 29, 1998.

GROSS PROFIT MARGINS - The Company's gross profit margin  percentages were 36.5%
and 35.2% for the three and nine month  periods  ended May 28, 1999  compared to
35.4% and 35.0% for the three and nine month periods  ended May 29, 1998.  Gross
profit margin dollars  decreased  $908,000 and $2,128,000 for the three and nine
month periods  ended May 28, 1999 from the same periods ended May 29, 1998.  The
decreases  in margin  dollars were mainly due to lower sales during the periods.
Gross profit margin  percentages  were favorably  impacted in the three and nine
month  periods  ended  May 28,  1999 by a  product  mix of lower  variable  cost
components  which was offset by higher unit fixed  costs due to the  decrease in
sales volumes. Profit margins in the three and nine month periods of fiscal 1999
included:  1) inventory  reserve  charges of $100,000  and $250,000  compared to
$300,000  and  $650,000  for the same  periods  of fiscal  1998 and 2)  warranty
provisions  of $150,000  and  $150,000  compared to no  provisions  for the same
periods of fiscal 1998. Additionally, the three and nine month periods of fiscal
1999 had no charges for write-offs of capitalized  software compared to $100,000
and $200,000 in the same periods of fiscal 1998.

SELLING, GENERAL AND ADMINISTRATIVE - Selling, general and administrative (SG&A)
expenses decreased $118,000 or 8.4% to $1,281,000 for the three months ended May
28, 1999 from  $1,399,000  for the three months ended May 29, 1998. For the nine
months ended May 28, 1999 SG&A expenses  increased  $30,000 or .8% to $3,674,000
from  $3,644,000  for the same period ended May 29,  1998.  The decrease for the
three months ended May 28, 1999 was due to lower marketing and sales  incentives
expenses which were partially offset by increases in professional fees, bad debt
provisions,  and software  implementation and conversion expenses.  The increase
for the  nine  months  ended  May 28,  1999  was due to  increases  in bad  debt
provisions,  non-employee  administrative  costs,  software  implementation  and
conversion costs which were partially offset by decreases in marketing and sales
incentive  expenses.  As a percentage of revenues,  SG&A expenses were 18.2% and
17.9% for the three and nine month  periods ended May 28, 1999 compared to 14.2%
and 13.6% for the same periods of fiscal 1998. The increases in percentages  for
the three and nine  months  ended May 28,  1999  compared  to the three and nine
months ended May 29, 1998 were primarily due to lower revenues.

RESEARCH AND  DEVELOPMENT  - Research and  development  expenditures,  including
capitalized  software  development  costs,  were $909,000 and $2,449,000 for the
three and nine month  periods  ended May 28,  1999,  compared  to  $755,000  and
$2,320,000 for the same periods of fiscal 1998. Capitalized software development
costs  amounted to $120,000 and  $302,000  for the third  quarter and first nine
months of fiscal 1999  compared to $126,000 and $323,000 for the same periods of
fiscal 1998.  The increase in  expenditures  for the three and nine months ended
May 28, 1999 is primarily due to increases in  engineering  consulting and group
medical  insurance  expenses.  Research  and  development  expenses,   excluding
capitalized  software  expenditures,  were  $789,000  or 11.2% of  revenues  and
$2,147,000 or 10.5% of revenues for the three and nine months ended May 28, 1999
compared to $629,000 or 6.4% of revenues and  $1,997,000 or 7.5% of revenues for
the same periods of fiscal 1998.

                                       13
<PAGE>

INTEREST EXPENSE - Interest expense  decreased  $24,000 to $33,000 for the three
months  ended May 28, 1999 from $57,000 for the three months ended May 29, 1998.
For the nine months ended May 28, 1999,  interest expense  decreased  $84,000 to
$112,000 from $196,000 for the same period ended May 29, 1998. The decreases for
the three and nine month fiscal 1999 periods were primarily due to a decrease in
the average  outstanding  balance of indebtedness and a decrease in the interest
rate on the mortgage debt.

INTEREST  INCOME - Interest  income was $72,000 and  $248,000  for the three and
nine months ended May 28, 1999,  respectively  compared to $145,000 and $380,000
for the same periods ended May 29, 1998. The decreases were due to lower average
cash equivalent balances during the periods and a decrease in investment yields.

INCOME TAX EXPENSES - For the nine months ended May 28, 1999, income tax expense
of $570,000 was comprised of a federal and state  current  income tax expense of
$735,800 and $65,950,  respectively, and a federal and state deferred income tax
benefit of $211,800 and $19,950, respectively. Net deferred tax assets increased
$231,750 in the first nine months of fiscal 1999.

LIQUIDITY AND CAPITAL RESOURCES
NINE MONTHS ENDED MAY 28, 1999

During the first nine months of fiscal 1999,  operating activities provided cash
of $3,136,000.  Net earnings adjusted for non-cash expenses provided  $2,598,000
of cash, while changes in accounts receivable,  inventories and customer deposit
balances  provided  $873,000  of cash.  Changes  in  accounts  payable,  accrued
expenses  and  other  assets  used  $335,000  of cash.  Cash  used by  investing
activities  for property and equipment  expenditures  and  capitalized  software
additions was $836,000. Financing activities used cash of $459,000 for scheduled
repayments of long-term obligations and $579,000 for repurchase of common stock.
Proceeds from stock options exercised provided cash of $13,000.

On January 28, 1999 the Board of Directors  approved a stock repurchase  program
authorizing  the repurchase of up to one million shares of its common stock over
the next twelve months. As of May 28, 1999, the Company had repurchased  316,500
shares of its common stock in open market  transactions  at an average  price of
$1.83.  Subsequent  to the  third  quarter  an  additional  40,000  shares  were
repurchased  bringing the year-to-date total of repurchased shares to 356,500 at
an average price of $1.83.

On August 4, 1998,  WCI amended its  secured  revolving  line of credit and term
loan  facility  ("loan  facility")  with a bank to  provide a maximum  available
credit limit of $10,000,000 (previously  $8,500,000).  The credit limit increase
provides  for  advances  of up to 70% of the  appraised  value of  certain  real
property subject to a sublimit of $1,500,000. The loan facility was also amended
to extend the term through June 21, 2000 or upon demand,  to reduce the interest
rate to the bank's  prime rate (7.75% at May 28,  1999)  (previously  prime plus
1/2% on the revolving  line and prime plus 1 1/2% on the term line) and to amend
the annual  facility fee to $55,000 plus an additional  .75% of  $3,000,000,  if
borrowings exceed $5,500,000  (previously  $85,000).  Advances for real property
are payable in equal principal  installments over 35 months and bear interest at
a fixed annual rate of 250 basis points over the five year U.S. Treasury rate in
effect at the time of  disbursement.  During the first  quarter of fiscal  1999,
$1,360,000  was advanced to pay off the existing  mortgage note balance.  At the
time of disbursement the annual interest rate was set at 6.519%.

The term loan facility  provides for a maximum of $1,000,000  for advances of up
to 80% of the cost of  equipment  acquisitions.  Principal  advances are payable
monthly over sixty months with a balloon payment due at maturity.  The revolving
line of credit is  subject  to  availability  advance  formulas  of 80%  against
eligible accounts receivable; 20% of eligible raw materials inventories;  20% of
eligible  work-in-process  kit inventories;  and 40% to 50% of eligible finished
goods  inventories.  Advances  against  inventory  are  subject to a sublimit of
$2,000,000.  Revolving line of credit advances plus equipment term loan advances
are  subject to a sublimit  of  $8,500,000.  At May 28,  1999,  the  outstanding
balance on real property  advances was $1,088,000.  No balances were outstanding
on the  revolving  line of credit or  equipment  term loan  portions of the loan
facility.  Additionally, at May 28, 1999, approximately $4,617,000 was available
to borrow under the advance formulas.

                                       14
<PAGE>

The Company  expects that its current cash and cash  equivalents  combined  with
expected  cash flows  from  operating  activities  and the  Company's  available
line-of-credit  will be sufficient to support the  Company's  operations  during
fiscal 1999 and 2000.

YEAR 2000

State of Readiness
------------------

Management of the Company has reviewed the Company's current information systems
and has found  them,  with a few minor  exceptions,  to be Year 2000  compliant.
However,  the  Company  is  currently  in the  process  of  replacing  its older
information  systems with new systems that offer easier  access to more data and
are certified to be able to handle the Year 2000 transition.  Conversions to the
new systems  are  expected to be  completed  during the first  quarter of fiscal
2000.

Management  of the Company has reviewed and tested the  Company's  phone,  voice
mail,  e-mail,  and  security  systems  and all  are  believed  to be Year  2000
compliant.  Utility  companies  have been  contacted  and have  reported  to the
Company  that only minor  problems  have been noted in regards to their  billing
software as a result of their Year 2000 testing completed to date.

The Company has requested Year 2000 compliance statements from all major vendors
and service  providers.  There have been no indications  that these parties will
not be Year 2000 compliant. However, there can be no absolute assurances in this
regard and their failure to be compliant  remains a possibility.  If vendors and
service  providers are not Year 2000  compliant,  there can be no assurance that
the Company will be able to find  suitable  alternate  sources and contract with
them on reasonable  terms,  or at all, and such inability  could have a material
adverse impact on the Company's business and results of operations.

All test equipment used in engineering,  service, and manufacturing  departments
has been reviewed and is Year 2000 compliant or not date dependent.

All of the Company's  products have been reviewed for Year 2000 compliance.  All
are compliant  with the exception of certain minor  problems in the schedule and
repetitive  scheduler  programs  of an older  version  of uplink  software.  All
customers  affected by this are being offered a migration path to newer software
which is Year 2000 compliant.

Costs to Address the Year 2000 Issues
-------------------------------------

Management of the Company believes the impact of the Year 2000 transition on the
Company's  internal  systems will not result in material costs to the Company or
have a material adverse impact on future results.

Risks of the Year 2000 Issues
-----------------------------

The main risk to the Company  with  respect to Year 2000 is the failure of major
vendors and service  providers to be Year 2000 compliant.  Failure on their part
could result in delays in obtaining parts,  increased cost of parts, and overall
inability to  manufacture  products in the event of a shutdown of major  utility
providers. Major vendors and service providers have reported to the Company that
they will be Year 2000  compliant.  The Company  cannot  estimate the  financial
impact of any failure to be Year 2000  compliant by such third party vendors and
service providers.

                                       15
<PAGE>

Contingency Plans
-----------------

The Company does not have a contingency plan for Year 2000 compliance because it
does not anticipate that it will fail to be Year 2000 compliant, particularly in
relation to those systems,  software  programs,  and hardware that are under its
control.  However,  there can be no assurances  that all measures being taken to
avoid Year 2000 problems will be effective and as such,  unforeseen issues could
arise that could lead to a material adverse effect upon the Company's  business,
operating results and financial condition.


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

No response to this item is required.

                                       16
<PAGE>

                           PART II. OTHER INFORMATION

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

          (a)  Exhibits: 27-Financial Data Schedule

          (b)  Reports on Form 8-K - No  reports  on Form 8-K were filed  during
               the quarter ended May 28, 1999.

                                       17
<PAGE>

                                   SIGNATURES
                                   ----------

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

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


Date:  July 1, 1999                        By: /s/ Robert A. Placek
                                               --------------------
                                               Robert A. Placek
                                               President
                                               (Principal Executive Officer)



Date:  July 1, 1999                        By: /s/ C. Troy Woodbury, Jr.
                                               -------------------------
                                               C. Troy Woodbury, Jr.
                                               Treasurer and Chief
                                               Financial Officer
                                               (Principal Financial and
                                               Accounting Officer)

                                       18