##### Table of Contents



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 July 4, 2003                                            



Or

|  |  |                                                                                          
|- |  | -----------------------------------------------------------------------------------------
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
| 
|  |  | For the transition period from __________ to __________                                  



|                                                                                   |  |                                                                                   
|---------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------
|Commission file number: 33-96858-01                                                |  | Commission file number: 33-96858                                                  
|COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION                              |  | COMMUNICATIONS & POWER INDUSTRIES, INC.                                           
|(Exact Name of Registrant as Specified in Its Charter)                             |  | (Exact Name of Registrant as Specified in Its Charter)                            
|Delaware                                                                           |  | Delaware                                                                          
|(State or Other Jurisdiction of Incorporation or Organization)                     |  | (State or Other Jurisdiction of Incorporation or Organization)                    
|77-0407395                                                                         |  | 77-0405693                                                                        
|(I.R.S. Employer Identification No.)                                               |  | (I.R.S. Employer Identification No.)                                              
|811 Hansen Way                                                                     |  | 811 Hansen Way                                                                    
|Palo Alto, California 94303-1110                                                   |  | Palo Alto, California 94303-1110                                                  
|(650) 846-2900                                                                     |  | (650) 846-2900                                                                    
|(Address of Principal Executive Offices and Telephone Number,
Including Area Code) |  | (Address of Principal Executive Offices and Telephone Number,
Including Area Code)

Indicate by check mark whether each 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 o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes o No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding for each of the registrants classes
of Common Stock, as of the latest practicable date: Communications & Power
Industries Holding Corporation: 5,008,172 shares of Common Stock, $.01 par
value, at August 4, 2003. Communications & Power Industries, Inc.: 1 share of
Common Stock, $.01 par value, at August 4, 2003.





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TABLE OF CONTENTS



|                              |                                                                                               |                                                       |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ----------------------------------------------------- |  |  |  |  |  | 
|PART I: FINANCIAL INFORMATION
|                              | ITEM 1: CONSOLIDATED CONDENSED FINANCIAL STATEMENTS                                          
|                              |                                                                                               | COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
|                              |                                                                                               | CONSOLIDATED CONDENSED BALANCE SHEETS                
|                              |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS      
|                              |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS      
|                              |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS      
|                              |                                                                                               | COMMUNICATIONS & POWER INDUSTRIES, INC.              
|                              |                                                                                               | CONSOLIDATED CONDENSED BALANCE SHEETS                
|                              |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS      
|                              |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS      
|                              |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS      
|                              | ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                              | ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                              | ITEM 4: CONTROLS AND PROCEDURES                                                              
|PART II: OTHER INFORMATION   
|                              | ITEM 1. LEGAL PROCEEDINGS.                                                                   
|                              | ITEM 2: CHANGES IN SECURITIES                                                                
|                              | ITEM 3. DEFAULTS UPON SENIOR SECURITIES.                                                     
|                              | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                                 
|                              | ITEM 5. OTHER INFORMATION.                                                                   
|                              | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.                                                    
|SIGNATURES                   
|EXHIBITS INDEX               
|EXHIBIT 10.13                
|EXHIBIT 31.1                 
|EXHIBIT 31.2                 
|EXHIBIT 31.3                 
|EXHIBIT 31.4                 
|EXHIBIT 32.1                 
|EXHIBIT 32.2                 
|EXHIBIT 32.3                 
|EXHIBIT 32.4                 



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##### Table of Contents



COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

|                                                                                              |                                                       |                                                                                                                                      |    |  |    | 
|--------------------------------------------------------------------------------------------- | ----------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------ | -- |  | -- | 
|PART I: FINANCIAL INFORMATION                                                                 |                                                       |                                                                                                                                      |    | 
|ITEM 1: CONSOLIDATED
    CONDENSED FINANCIAL STATEMENTS                                       |                                                       |                                                                                                                                      |    | 
|                                                                                              | COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION |                                                                                                                                      |    |  |   
|                                                                                              |                                                       | Consolidated Condensed Balance Sheets, July 4, 2003 and September 27, 2002                                                           |    |  | 2  | 
|                                                                                              |                                                       | Consolidated Condensed Statements of Operations for the 13-week periods ended July 4, 2003
and June 28, 2002                         |    |  | 3  | 
|                                                                                              |                                                       | Consolidated Condensed Statements of Operations for the 40-week period ended July 4, 2003
and the 39-week period ended June 28, 2002 |    |  | 4  | 
|                                                                                              |                                                       | Consolidated Condensed Statements of Cash Flows for the 40-week period ended July 4, 2003
and the 39-week period ended June 28, 2002 |    |  | 5  | 
|                                                                                              |                                                       | Notes to Consolidated Condensed Financial Statements                                                                                 |    |  | 10 | 
|                                                                                              | COMMUNICATIONS & POWER INDUSTRIES, INC.               |                                                                                                                                      |    |  |   
|                                                                                              |                                                       | Consolidated Condensed Balance Sheets, July 4, 2003 and September 27, 2002                                                           |    |  | 6  | 
|                                                                                              |                                                       | Consolidated Condensed Statements of Operations for the 13-week periods ended July 4, 2003
and June 28, 2002                         |    |  | 7  | 
|                                                                                              |                                                       | Consolidated Condensed Statements of Operations for the 40-week period ended July 4, 2003
and the 39-week period ended June 28, 2002 |    |  | 8  | 
|                                                                                              |                                                       | Consolidated Condensed Statements of Cash Flows for the 40-week period ended July 4, 2003
and the 39-week period ended June 28, 2002 |    |  | 9  | 
|                                                                                              |                                                       | Notes to Consolidated Condensed Financial Statements                                                                                 |    |  | 10 | 
|ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS |                                                       |                                                                                                                                      | 19 | 
|ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |                                                       |                                                                                                                                      | 29 | 
|ITEM 4: CONTROLS AND PROCEDURES                                                               |                                                       |                                                                                                                                      | 29 | 
|PART II: OTHER INFORMATION                                                                    |                                                       |                                                                                                                                      | 30 | 
|SIGNATURES                                                                                    |                                                       |                                                                                                                                      | 32 | 

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COMMUNICATIONS & POWER
INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands-unaudited)

|                                                             |                                   |   |         |         |               |  |         |         |  
|------------------------------------------------------------ | --------------------------------- | - | ------- | ------- | ------------- |  | ------- | ------- | -
|                                                             |                                   |   | July 4, |         | September 27,
|                                                             |                                   |   | 2003    |         | 2002         
|                                                             |                                   |   |         |         |              
|ASSETS                                                      
|Current Assets                                               |                                   |   |         |         |               |  |         |        
|                                                             | Cash and cash equivalents         |   | $       | 28,447  |               |  |         | 2,724   |  
|                                                             | Accounts receivable, net          |   |         | 37,113  |               |  |         | 29,937  |  
|                                                             | Inventories                       |   |         | 34,551  |               |  |         | 39,927  |  
|                                                             | Other current assets              |   |         | 2,706   |               |  |         | 2,637   |  
|                                                             |                                   |   |         |         |               |  |         |        
|Total current assets                                         |                                   |   | 102,817 |         |               |  | 75,225  |        
|Property, plant, and equipment, net                          |                                   |   | 52,584  |         |               |  | 55,846  |        
|Goodwill                                                     |                                   |   | 19,149  |         |               |  | 19,149  |        
|Intangibles, net                                             |                                   |   | 1,235   |         |               |  | 1,613   |        
|Debt issue costs, net                                        |                                   |   | 2,632   |         |               |  | 3,329   |        
|                                                             |                                   |   |         |         |               |  |         |        
|Total assets                                                 |                                   | $ | 178,417 |         |               |  | 155,162 |        
|                                                             |                                   |   |         |         |               |  |         |        
|LIABILITIES, PREFERRED STOCK AND                            
|STOCKHOLDERS DEFICIT                                       
|Current Liabilities                                          |                                   |   |         |         |               |  |         |        
|                                                             | Current portion of capital leases |   | $       |        |               |  |         | 45      |  
|                                                             | Mortgage financing                |   |         | 17,500  |               |  |         | 17,750  |  
|                                                             | Accounts payable                  |   |         | 14,507  |               |  |         | 14,111  |  
|                                                             | Accrued expenses                  |   |         | 21,149  |               |  |         | 17,304  |  
|                                                             | Product warranty                  |   |         | 5,068   |               |  |         | 4,823   |  
|                                                             | Income taxes payable              |   |         | 3,619   |               |  |         | 2,959   |  
|                                                             | Accrued dividends payable         |   |         | 13,894  |               |  |         | 9,538   |  
|                                                             | Advance payments from customers   |   |         | 10,986  |               |  |         | 7,594   |  
|                                                             |                                   |   |         |         |               |  |         |        
|Total current liabilities                                    |                                   |   | 86,723  |         |               |  | 74,124  |        
|Senior subordinated notes                                    |                                   |   | 100,000 |         |               |  | 100,000 |        
|                                                             |                                   |   |         |         |               |  |         |        
|Total liabilities                                            |                                   |   | 186,723 |         |               |  | 174,124 |        
|                                                             |                                   |   |         |         |               |  |         |        
|Senior Redeemable Preferred Stock of CPI                     |                                   |   | 28,854  |         |               |  | 28,693  |        
|                                                             |                                   |   |         |         |               |  |         |        
|Junior Preferred Stock of CPI                                |                                   |   | 28,287  |         |               |  | 25,449  |        
|                                                             |                                   |   |         |         |               |  |         |        
|Commitments and contingencies                                |                                   |   |         |         |               |  |         |        
|Stockholders Deficit                                        |                                   |   |         |         |               |  |         |        
|                                                             | Common stock                      |   |         | 50      |               |  |         | 49      |  
|                                                             | Additional paid-in capital        |   |         | 19,220  |               |  |         | 19,111  |  
|                                                             | Accumulated deficit               |   |         | (83,469 | )             |  |         | (91,041 | )
|                                                             | Stockholder loans                 |   |         | (1,248  | )             |  |         | (1,223  | )
|                                                             |                                   |   |         |         |               |  |         |        
|Net stockholders deficit                                    |                                   |   | (65,447 | )       |               |  | (73,104 | )      
|                                                             |                                   |   |         |         |               |  |         |        
|Total liabilities, preferred stock and
stockholders deficit |                                   | $ | 178,417 |         |               |  | 155,162 |        
|                                                             |                                   |   |         |         |               |  |         |        

See accompanying notes to the unaudited consolidated condensed financial statements.

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSEDSTATEMENTS OF OPERATIONS
(in thousands  unaudited)

|                                               |                                   |   |              |       |              |  |        |       | 
|---------------------------------------------- | --------------------------------- | - | ------------ | ----- | ------------ |  | ------ | ----- | 
|                                               |                                   |   | 13-Week      |       | 13-Week     
|                                               |                                   |   | period ended |       | period ended
|                                               |                                   |   | July 4,      |       | June 28,    
|                                               |                                   |   | 2003         |       | 2002        
|                                               |                                   |   |              |       |             
|Sales                                          |                                   | $ | 70,721       |       |              |  | 64,792 |      
|Cost of sales                                  |                                   |   | 47,273       |       |              |  | 48,128 |      
|                                               |                                   |   |              |       |              |  |        |      
|Gross profit                                   |                                   |   | 23,448       |       |              |  | 16,664 |      
|                                               |                                   |   |              |       |              |  |        |      
|Operating costs and expenses:                  |                                   |   |              |       |              |  |        |      
|                                               | Research and development          |   |              | 1,695 |              |  |        | 1,584 | 
|                                               | Selling and marketing             |   |              | 3,963 |              |  |        | 4,097 | 
|                                               | General and administrative        |   |              | 4,455 |              |  |        | 4,807 | 
|                                               |                                   |   |              |       |              |  |        |      
|Total operating costs and expenses             |                                   |   | 10,113       |       |              |  | 10,488 |      
|                                               |                                   |   |              |       |              |  |        |      
|Operating income                               |                                   |   | 13,335       |       |              |  | 6,176  |      
|Interest expense                               |                                   |   | (3,591       | )     |              |  | (4,228 | )    
|                                               |                                   |   |              |       |              |  |        |      
|Income before taxes                            |                                   |   | 9,744        |       |              |  | 1,948  |      
|Income tax expense                             |                                   |   | 1,393        |       |              |  | 2,987  |      
|                                               |                                   |   |              |       |              |  |        |      
|Net income (loss)                              |                                   |   | 8,351        |       |              |  | (1,039 | )    
|Preferred dividends:                           |                                   |   |              |       |              |  |        |      
|                                               | Senior redeemable preferred stock |   |              | 1,502 |              |  |        | 1,310 | 
|                                               | Junior preferred stock            |   |              | 979   |              |  |        | 853   | 
|                                               |                                   |   |              |       |              |  |        |      
|Net income (loss) attributable to common stock |                                   | $ | 5,870        |       |              |  | (3,202 | )    
|                                               |                                   |   |              |       |              |  |        |      

See accompanying notes to the unaudited consolidated condensed financial statements.

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands  unaudited)

|                                               |                                   |   |              |        |              |  |         |        | 
|---------------------------------------------- | --------------------------------- | - | ------------ | ------ | ------------ |  | ------- | ------ | 
|                                               |                                   |   | 40-Week      |        | 39-Week     
|                                               |                                   |   | period ended |        | period ended
|                                               |                                   |   | July 4,      |        | June 28,    
|                                               |                                   |   | 2003         |        | 2002        
|                                               |                                   |   |              |        |             
|Sales                                          |                                   | $ | 200,244      |        |              |  | 191,632 |       
|Cost of sales                                  |                                   |   | 139,422      |        |              |  | 147,863 |       
|                                               |                                   |   |              |        |              |  |         |       
|Gross profit                                   |                                   |   | 60,822       |        |              |  | 43,769  |       
|                                               |                                   |   |              |        |              |  |         |       
|Operating costs and expenses:                  |                                   |   |              |        |              |  |         |       
|                                               | Research and development          |   |              | 4,714  |              |  |         | 4,356  | 
|                                               | Selling and marketing             |   |              | 11,732 |              |  |         | 11,682 | 
|                                               | General and administrative        |   |              | 12,597 |              |  |         | 13,950 | 
|                                               |                                   |   |              |        |              |  |         |       
|Total operating costs and expenses             |                                   |   | 29,043       |        |              |  | 29,988  |       
|                                               |                                   |   |              |        |              |  |         |       
|Operating income                               |                                   |   | 31,779       |        |              |  | 13,781  |       
|Other income                                   |                                   |   | 267          |        |              |  |        |       
|Interest expense                               |                                   |   | (10,837      | )      |              |  | (12,767 | )     
|                                               |                                   |   |              |        |              |  |         |       
|Income before taxes                            |                                   |   | 21,209       |        |              |  | 1,014   |       
|Income tax expense                             |                                   |   | 6,282        |        |              |  | 4,820   |       
|                                               |                                   |   |              |        |              |  |         |       
|Net income (loss)                              |                                   |   | 14,927       |        |              |  | (3,806  | )     
|Preferred dividends:                           |                                   |   |              |        |              |  |         |       
|                                               | Senior redeemable preferred stock |   |              | 4,356  |              |  |         | 3,796  | 
|                                               | Junior preferred stock            |   |              | 2,838  |              |  |         | 2,473  | 
|                                               |                                   |   |              |        |              |  |         |       
|Net income (loss) attributable to common stock |                                   | $ | 7,733        |        |              |  | (10,075 | )     
|                                               |                                   |   |              |        |              |  |         |       

See accompanying notes to the unaudited consolidated condensed financial statements.

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COMMUNICATIONS & POWER
INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(in thousands  unaudited)

|                                                    |                                                |   |              |        |              |  |       |         |  
|--------------------------------------------------- | ---------------------------------------------- | - | ------------ | ------ | ------------ |  | ----- | ------- | -
|                                                    |                                                |   | 40-Week      |        | 39-Week     
|                                                    |                                                |   | period ended |        | period ended
|                                                    |                                                |   | July 4,      |        | June 28,    
|                                                    |                                                |   | 2003         |        | 2002        
|                                                    |                                                |   |              |        |             
|OPERATING ACTIVITIES                                |                                                |   |              |        |              |  |       |        
|                                                    | Net cash provided by operating activities      |   | $            | 27,572 |              |  |       | 36,517  |  
|                                                    |                                                |   |              |        |              |  |       |         |  
|INVESTING ACTIVITIES                                |                                                |   |              |        |              |  |       |        
|                                                    | Purchase of property, plant and equipment, net |   |              | (1,325 | )            |  |       | (2,144  | )
|                                                    |                                                |   |              |        |              |  |       |         |  
|                                                    | Net cash used in investing activities          |   |              | (1,325 | )            |  |       | (2,144  | )
|                                                    |                                                |   |              |        |              |  |       |         |  
|FINANCING ACTIVITIES                                |                                                |   |              |        |              |  |       |        
|                                                    | Repayments on capital leases                   |   |              | (45    | )            |  |       | (858    | )
|                                                    | Payment of debt issue costs                    |   |              | (339   | )            |  |       | (101    | )
|                                                    | Repayment of revolving credit facility         |   |              |       |              |  |       | (13,608 | )
|                                                    | Repayment of senior term loan                  |   |              |       |              |  |       | (20,000 | )
|                                                    | Repayment of mortgage financing                |   |              | (250   | )            |  |       | (250    | )
|                                                    | Proceeds from the sale of common stock         |   |              | 110    |              |  |       |        |  
|                                                    |                                                |   |              |        |              |  |       |         |  
|                                                    | Net cash used in financing activities          |   |              | (524   | )            |  |       | (34,817 | )
|                                                    |                                                |   |              |        |              |  |       |         |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVLENTS |                                                |   | 25,723       |        |              |  | (444  | )      
|Cash and cash equivalents at beginning of period    |                                                |   | 2,724        |        |              |  | 2,903 |        
|                                                    |                                                |   |              |        |              |  |       |         |  
|Cash and cash equivalents at end of period          |                                                | $ | 28,447       |        |              |  | 2,459 |        
|                                                    |                                                |   |              |        |              |  |       |         |  

See accompanying notes to the unaudited consolidated condensed financial statements.

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COMMUNICATIONS & POWER
INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries
Holding Corporation)

CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousandsunaudited)

|                                                                               |                                   |   |         |         |               |  |         |         |  
|------------------------------------------------------------------------------ | --------------------------------- | - | ------- | ------- | ------------- |  | ------- | ------- | -
|                                                                               |                                   |   | July 4, |         | September 27,
|                                                                               |                                   |   | 2003    |         | 2002         
|                                                                               |                                   |   |         |         |              
|ASSETS                                                                        
|Current Assets                                                                 |                                   |   |         |         |               |  |         |        
|                                                                               | Cash and cash equivalents         |   | $       | 28,447  |               |  |         | 2,724   |  
|                                                                               | Accounts receivable, net          |   |         | 37,113  |               |  |         | 29,937  |  
|                                                                               | Inventories                       |   |         | 34,551  |               |  |         | 39,927  |  
|                                                                               | Other current assets              |   |         | 2,706   |               |  |         | 2,637   |  
|                                                                               |                                   |   |         |         |               |  |         |        
|Total current assets                                                           |                                   |   | 102,817 |         |               |  | 75,225  |        
|Property, plant, and equipment, net                                            |                                   |   | 39,643  |         |               |  | 42,478  |        
|Goodwill                                                                       |                                   |   | 19,149  |         |               |  | 19,149  |        
|Intangibles, net                                                               |                                   |   | 1,235   |         |               |  | 1,613   |        
|Debt issue costs, net                                                          |                                   |   | 2,593   |         |               |  | 3,259   |        
|Note receivable from parent                                                    |                                   |   | 5,750   |         |               |  | 5,750   |        
|                                                                               |                                   |   |         |         |               |  |         |        
|Total assets                                                                   |                                   | $ | 171,187 |         |               |  | 147,474 |        
|                                                                               |                                   |   |         |         |               |  |         |        
|LIABILITIES, PREFERRED STOCK AND                                              
|STOCKHOLDERS DEFICIT                                                         
|Current Liabilities                                                            |                                   |   |         |         |               |  |         |        
|                                                                               | Current portion of capital leases |   | $       |        |               |  |         | 45      |  
|                                                                               | Accounts payable                  |   |         | 14,507  |               |  |         | 14,111  |  
|                                                                               | Accrued expenses                  |   |         | 22,340  |               |  |         | 18,313  |  
|                                                                               | Product warranty                  |   |         | 5,068   |               |  |         | 4,823   |  
|                                                                               | Income taxes payable              |   |         | 3,615   |               |  |         | 2,964   |  
|                                                                               | Accrued dividends payable         |   |         | 13,894  |               |  |         | 9,538   |  
|                                                                               | Advance payments from customers   |   |         | 10,986  |               |  |         | 7,594   |  
|                                                                               |                                   |   |         |         |               |  |         |        
|Total current liabilities                                                      |                                   |   | 70,410  |         |               |  | 57,388  |        
|Senior subordinated notes                                                      |                                   |   | 100,000 |         |               |  | 100,000 |        
|Deferred income on sale-leaseback                                              |                                   |   | 6,993   |         |               |  | 7,311   |        
|                                                                               |                                   |   |         |         |               |  |         |        
|Total liabilities                                                              |                                   |   | 177,403 |         |               |  | 164,699 |        
|                                                                               |                                   |   |         |         |               |  |         |        
|Senior Redeemable Preferred Stock                                              |                                   |   | 28,854  |         |               |  | 28,693  |        
|                                                                               |                                   |   |         |         |               |  |         |        
|Commitments and contingencies                                                  |                                   |   |         |         |               |  |         |        
|Stockholders Deficit:                                                         |                                   |   |         |         |               |  |         |        
|                                                                               | Junior preferred stock            |   |         | 2       |               |  |         | 2       |  
|                                                                               | Common stock                      |   |         |        |               |  |         |        |  
|                                                                               | Additional paid-in capital        |   |         | 47,446  |               |  |         | 44,608  |  
|                                                                               | Accumulated deficit               |   |         | (81,270 | )             |  |         | (89,305 | )
|                                                                               | Stockholder loans                 |   |         | (1,248  | )             |  |         | (1,223  | )
|                                                                               |                                   |   |         |         |               |  |         |        
|Net stockholders deficit                                                      |                                   |   | (35,070 | )       |               |  | (45,918 | )      
|                                                                               |                                   |   |         |         |               |  |         |        
|Total liabilities, senior redeemable
preferred stock and stockholders deficit |                                   | $ | 171,187 |         |               |  | 147,474 |        
|                                                                               |                                   |   |         |         |               |  |         |        

See accompanying notes to the unaudited consolidated condensed financial
statements.

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COMMUNICATIONS & POWER
INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries
Holding Corporation)

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands  unaudited)

|                                               |                                   |   |              |       |              |  |        |       | 
|---------------------------------------------- | --------------------------------- | - | ------------ | ----- | ------------ |  | ------ | ----- | 
|                                               |                                   |   | 13-Week      |       | 13-Week     
|                                               |                                   |   | period ended |       | period ended
|                                               |                                   |   | July 4,      |       | June 28,    
|                                               |                                   |   | 2003         |       | 2002        
|                                               |                                   |   |              |       |             
|Sales                                          |                                   | $ | 70,721       |       |              |  | 64,792 |      
|Cost of sales                                  |                                   |   | 47,273       |       |              |  | 48,128 |      
|                                               |                                   |   |              |       |              |  |        |      
|Gross profit                                   |                                   |   | 23,448       |       |              |  | 16,664 |      
|                                               |                                   |   |              |       |              |  |        |      
|Operating costs and expenses:                  |                                   |   |              |       |              |  |        |      
|                                               | Research and development          |   |              | 1,695 |              |  |        | 1,584 | 
|                                               | Selling and marketing             |   |              | 3,963 |              |  |        | 4,097 | 
|                                               | General and administrative        |   |              | 4,823 |              |  |        | 5,154 | 
|                                               |                                   |   |              |       |              |  |        |      
|Total operating costs and expenses             |                                   |   | 10,481       |       |              |  | 10,835 |      
|                                               |                                   |   |              |       |              |  |        |      
|Operating income                               |                                   |   | 12,967       |       |              |  | 5,829  |      
|Interest expense                               |                                   |   | (3,093       | )     |              |  | (3,731 | )    
|                                               |                                   |   |              |       |              |  |        |      
|Income before taxes                            |                                   |   | 9,874        |       |              |  | 2,098  |      
|Income tax expense                             |                                   |   | 1,252        |       |              |  | 3,150  |      
|                                               |                                   |   |              |       |              |  |        |      
|Net income (loss)                              |                                   |   | 8,622        |       |              |  | (1,052 | )    
|Preferred dividends:                           |                                   |   |              |       |              |  |        |      
|                                               | Senior redeemable preferred stock |   |              | 1,502 |              |  |        | 1,310 | 
|                                               | Junior preferred stock            |   |              | 979   |              |  |        | 853   | 
|                                               |                                   |   |              |       |              |  |        |      
|Net income (loss) attributable to common stock |                                   | $ | 6,141        |       |              |  | (3,215 | )    
|                                               |                                   |   |              |       |              |  |        |      

See accompanying notes to the unaudited consolidated condensed financial statements.

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COMMUNICATIONS & POWER
INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries
Holding Corporation)

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands  unaudited)

|                                               |                                   |   |              |        |              |  |         |        | 
|---------------------------------------------- | --------------------------------- | - | ------------ | ------ | ------------ |  | ------- | ------ | 
|                                               |                                   |   | 40-Week      |        | 39-Week     
|                                               |                                   |   | period ended |        | period ended
|                                               |                                   |   | July 4,      |        | June 28,    
|                                               |                                   |   | 2003         |        | 2002        
|                                               |                                   |   |              |        |             
|Sales                                          |                                   | $ | 200,244      |        |              |  | 191,632 |       
|Cost of sales                                  |                                   |   | 139,422      |        |              |  | 147,863 |       
|                                               |                                   |   |              |        |              |  |         |       
|Gross profit                                   |                                   |   | 60,822       |        |              |  | 43,769  |       
|                                               |                                   |   |              |        |              |  |         |       
|Operating costs and expenses:                  |                                   |   |              |        |              |  |         |       
|                                               | Research and development          |   |              | 4,714  |              |  |         | 4,356  | 
|                                               | Selling and marketing             |   |              | 11,732 |              |  |         | 11,682 | 
|                                               | General and administrative        |   |              | 13,689 |              |  |         | 14,985 | 
|                                               |                                   |   |              |        |              |  |         |       
|Total operating costs and expenses             |                                   |   | 30,135       |        |              |  | 31,023  |       
|                                               |                                   |   |              |        |              |  |         |       
|Operating income                               |                                   |   | 30,687       |        |              |  | 12,746  |       
|Other income                                   |                                   |   | 267          |        |              |  |        |       
|Interest expense                               |                                   |   | (9,291       | )      |              |  | (11,257 | )     
|                                               |                                   |   |              |        |              |  |         |       
|Income before taxes                            |                                   |   | 21,663       |        |              |  | 1,489   |       
|Income tax expense                             |                                   |   | 6,273        |        |              |  | 4,983   |       
|                                               |                                   |   |              |        |              |  |         |       
|Net income (loss)                              |                                   |   | 15,390       |        |              |  | (3,494  | )     
|Preferred dividends:                           |                                   |   |              |        |              |  |         |       
|                                               | Senior redeemable preferred stock |   |              | 4,356  |              |  |         | 3,796  | 
|                                               | Junior preferred stock            |   |              | 2,838  |              |  |         | 2,473  | 
|                                               |                                   |   |              |        |              |  |         |       
|Net income (loss) attributable to common stock |                                   | $ | 8,196        |        |              |  | (9,763  | )     
|                                               |                                   |   |              |        |              |  |         |       

See accompanying notes to the unaudited consolidated condensed financial statements.

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COMMUNICATIONS & POWER
INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries
Holding Corporation)

CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(in thousands  unaudited)

|                                                     |                                                |   |              |        |              |  |       |         |  
|---------------------------------------------------- | ---------------------------------------------- | - | ------------ | ------ | ------------ |  | ----- | ------- | -
|                                                     |                                                |   | 40-Week      |        | 39-Week     
|                                                     |                                                |   | period ended |        | period ended
|                                                     |                                                |   | July 4,      |        | June 28,    
|                                                     |                                                |   | 2003         |        | 2002        
|                                                     |                                                |   |              |        |             
|OPERATING ACTIVITIES                                 |                                                |   |              |        |              |  |       |        
|                                                     | Net cash provided by operating activities      |   | $            | 27,388 |              |  |       | 36,166  |  
|                                                     |                                                |   |              |        |              |  |       |         |  
|INVESTING ACTIVITIES                                 |                                                |   |              |        |              |  |       |        
|                                                     | Purchase of property, plant and equipment, net |   |              | (1,325 | )            |  |       | (2,144  | )
|                                                     |                                                |   |              |        |              |  |       |        
|                                                     | Net cash used in investing activities          |   |              | (1,325 | )            |  |       | (2,144  | )
|                                                     |                                                |   |              |        |              |  |       |         |  
|FINANCING ACTIVITIES                                 |                                                |   |              |        |              |  |       |        
|                                                     | Repayments on capital leases                   |   |              | (45    | )            |  |       | (858    | )
|                                                     | Payment of debt issue costs                    |   |              | (295   | )            |  |       |        |  
|                                                     | Repayments from senior term loan               |   |              |       |              |  |       | (20,000 | )
|                                                     | Repayments on revolving credit facility        |   |              |       |              |  |       | (13,608 | )
|                                                     |                                                |   |              |        |              |  |       |        
|                                                     | Net cash used in financing activities          |   |              | (340   | )            |  |       | (34,466 | )
|                                                     |                                                |   |              |        |              |  |       |         |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                |   | 25,723       |        |              |  | (444  | )      
|Cash and cash equivalents at beginning of period     |                                                |   | 2,724        |        |              |  | 2,903 |        
|                                                     |                                                |   |              |        |              |  |       |        
|Cash and cash equivalents at end of period           |                                                | $ | 28,447       |        |              |  | 2,459 |        
|                                                     |                                                |   |              |        |              |  |       |         |  

See accompanying notes to the unaudited consolidated condensed financial statements.

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

NOTES TO CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS
(unaudited)



|1. |  | Basis of Presentation
|-- |  | ---------------------

The accompanying unaudited consolidated condensed financial statements of
Communications & Power Industries Holding Corporation (Holding) and
Communications & Power Industries, Inc. (CPI, both companies together
referred to as the Company) have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in annual financial statements have been
condensed or omitted and, accordingly, these financial statements should be
read in conjunction with the financial statements and the notes thereto
contained in the Companys Annual Report on Form 10-K for the fiscal year ended
September 27, 2002. Management believes that these unaudited interim condensed
financial statements contain all adjustments, all of which are of a normal
recurring nature, necessary to present fairly the financial position of the
Company, and its results of operations and cash flows for the interim period
presented. The results for the interim periods reported are not necessarily
indicative of the results for the complete fiscal year 2003.



|2. |  | Inventories
|-- |  | -----------

Inventories are stated at the lower of average cost or market (net realizable
value). The main components of inventories are as follows:

|                        |                   |      |         |        |               |  |        |        | 
|----------------------- | ----------------- | ---- | ------- | ------ | ------------- |  | ------ | ------ | 
|                        |                   |      | July 4, |        | September 27,
|(In thousands)          |                   | 2003 |         | 2002  
|                        |                   |      |         |       
|Raw materials and parts |                   | $    | 27,852  |        |               |  | 30,638 |       
|Work in process         |                   |      | 4,285   |        |               |  | 6,507  |       
|Finished goods          |                   |      | 2,414   |        |               |  | 2,782  |       
|                        |                   |      |         |        |               |  |        |       
|                        | Total inventories |      | $       | 34,551 |               |  |        | 39,927 | 
|                        |                   |      |         |        |               |  |        |       



|3. |  | Accrued Warranty
|-- |  | ----------------

The Companys products are generally warranted for a variety of periods,
typically one to three years or a predetermined product usage life. The
Company assesses the adequacy of its preexisting warranty liabilities and
adjusts the balance based on actual experience and changes in future
expectations. The following table reconciles the changes in the Companys
accrued warranty:

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##### Table of Contents



COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

|                           |                               |      |              |        |              |      |              |        |              |   |       |        |   |  |       |        |  
|-------------------------- | ----------------------------- | ---- | ------------ | ------ | ------------ | ---- | ------------ | ------ | ------------ | - | ----- | ------ | - |  | ----- | ------ | -
|                           |                               |      | 13-Week      |        | 13-Week      |      | 40-Week      |        | 39-Week     
|                           |                               |      | Period Ended |        | Period Ended |      | Period Ended |        | Period Ended
|                           |                               |      | July 4,      |        | June 28,     |      | July 4,      |        | June 28,    
|(In thousands)             |                               | 2003 |              | 2002   |              | 2003 |              | 2002  
|                           |                               |      |              |        |              |      |              |       
|Beginning accrued warranty |                               | $    | 5,073        |        |              |      | 4,135        |        |              | $ | 4,823 |        |   |  | 4,225 |       
|                           | Cost of warranty claims       |      |              | (1,235 | )            |      |              | (1,344 | )            |   |       | (3,963 | ) |  |       | (4,738 | )
|                           | Accruals for product warranty |      |              | 1,230  |              |      |              | 1,676  |              |   |       | 4,208  |   |  |       | 4,980  |  
|                           |                               |      |              |        |              |      |              |        |              |   |       |        |   |  |       |       
|Ending accrued warranty    |                               | $    | 5,068        |        |              |      | 4,467        |        |              | $ | 5,068 |        |   |  | 4,467 |       
|                           |                               |      |              |        |              |      |              |        |              |   |       |        |   |  |       |       



|4. |  | Supplemental Cash Flow Information
|-- |  | ----------------------------------

|                                                |  |              |     |              |  |              |     |              |  |   |     |  |  |   |     | 
|----------------------------------------------- |  | ------------ | --- | ------------ |  | ------------ | --- | ------------ |  | - | --- |  |  | - | --- | 
|                                                |  | Holding      |     | CPI         
|                                                |  |              |     |             
|                                                |  | 40-Week      |     | 39-Week      |  | 40-Week      |     | 39-Week     
|                                                |  | Period Ended |     | Period Ended |  | Period Ended |     | Period Ended
|                                                |  | July 4,      |     | June 28,     |  | July 4,      |     | June 28,    
|(In millions)                                   |  | 2003         |     | 2002         |  | 2003         |     | 2002        
|                                                |  |              |     |              |  |              |     |             
|Cash Payments                                   |  |              |     |              |  |              |     |              |  |   |     |  |  |   |     | 
|Interest payments                               |  | $            | 7.1 |              |  | $            | 9.0 |              |  | $ | 6.2 |  |  | $ | 8.3 | 
|Tax payments                                    |  | $            | 5.1 |              |  | $            | 0.7 |              |  | $ | 5.1 |  |  | $ | 0.7 | 
|Non-cash Financing                              |  |              |     |              |  |              |     |              |  |   |     |  |  |   |     | 
|Unpaid cash
dividends on senior
preferred stock |  | $            | 4.4 |              |  | $            | 3.8 |              |  | $ | 4.4 |  |  | $ | 3.8 | 



|5. |  | Segments and Related Information
|-- |  | --------------------------------

The Company has two reportable segments: vacuum electronic devices (VEDs) and
satcom equipment. Management evaluates performance and allocates resources
based on earnings before income taxes, interest, depreciation and amortization
(EBITDA), which the Company believes investors use as an important measure to
analyze its performance.

Summarized financial information concerning the Companys reportable segments
is shown in the following table. Included in the Other column is financial
information for the Companys Solid State Products Division, which was sold in
September 2002, and did not meet the quantitative thresholds to be reported
separately, and certain unallocated corporate-level operating expenses.
Intersegment product transfers are recorded at cost.

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##### Table of Contents



COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

|                                            |  |       |         |           |  |        |        |       |  |  |        |   |  |  |         | 
|------------------------------------------- |  | ----- | ------- | --------- |  | ------ | ------ | ----- |  |  | ------ | - |  |  | ------- | 
|                                            |  |       |         |           |  | Satcom |        |       |  |  |        |   |  | 
|(In thousands)                              |  | VEDs |         | Equipment |  | Other  |        | Total
|                                            |  |       |         |           |  |        |        |      
|For the 13-Week Period Ended
July 4, 2003:  |  |       |         |           |  |        |        |       |  |  |        |   |  |  |         | 
|Revenues from external
customers            |  | $     | 55,887  |           |  |        | 13,955 |       |  |  | 879    |   |  |  | 70,721  | 
|Intersegment
product transfers              |  |       | 5,400   |           |  |        |       |       |  |  |       |   |  |  | 5,400   | 
|EBITDA  Holding                            |  |       | 15,644  |           |  |        | 1,439  |       |  |  | (2,172 | ) |  |  | 14,911  | 
|EBITDA  CPI                                |  |       | 15,644  |           |  |        | 1,439  |       |  |  | (2,667 | ) |  |  | 14,416  | 
|For the 13-Week Period Ended
June 28, 2002: |  |       |         |           |  |        |        |       |  |  |        |   |  |  |         | 
|Revenues from external
customers            |  | $     | 54,103  |           |  |        | 10,015 |       |  |  | 674    |   |  |  | 64,792  | 
|Intersegment product transfers              |  |       | 3,531   |           |  |        |       |       |  |  | 229    |   |  |  | 3,760   | 
|EBITDA  Holding                            |  |       | 11,535  |           |  |        | 541    |       |  |  | (3,315 | ) |  |  | 8,941   | 
|EBITDA  CPI                                |  |       | 11,535  |           |  |        | 541    |       |  |  | (3,642 | ) |  |  | 8,434   | 
|For the 40-Week Period Ended
July 4, 2003:  |  |       |         |           |  |        |        |       |  |  |        |   |  |  |         | 
|Revenues from external
customers            |  | $     | 164,407 |           |  |        | 35,390 |       |  |  | 447    |   |  |  | 200,244 | 
|Intersegment product transfers              |  |       | 11,912  |           |  |        |       |       |  |  |       |   |  |  | 11,912  | 
|EBITDA  Holding                            |  |       | 38,819  |           |  |        | 3,823  |       |  |  | (5,706 | ) |  |  | 36,936  | 
|EBITDA  CPI                                |  |       | 38,819  |           |  |        | 3,823  |       |  |  | (7,213 | ) |  |  | 35,429  | 
|For the 39-Week Period Ended
June 28, 2002: |  |       |         |           |  |        |        |       |  |  |        |   |  |  |         | 
|Revenues from external
customers            |  | $     | 152,962 |           |  |        | 36,920 |       |  |  | 1,750  |   |  |  | 191,632 | 
|Intersegment product transfers              |  |       | 8,400   |           |  |        |       |       |  |  | 855    |   |  |  | 9,255   | 
|EBITDA  Holding                            |  |       | 27,724  |           |  |        | 768    |       |  |  | (5,890 | ) |  |  | 22,602  | 
|EBITDA  CPI                                |  |       | 27,724  |           |  |        | 768    |       |  |  | (7,409 | ) |  |  | 21,083  | 

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##### Table of Contents



COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

A reconciliation of EBITDA from reportable segments to Income before taxes is
as follows:

|                              |  |              |        |               |  |              |       |               |  |   |        |  |  |  |       | 
|----------------------------- |  | ------------ | ------ | ------------- |  | ------------ | ----- | ------------- |  | - | ------ |  |  |  | ----- | 
|                              |  | Holding      |        | CPI          
|                              |  |              |        |              
|                              |  | 13-Week      |        | 13-Week       |  | 13-Week      |       | 13-Week      
|                              |  | Period Ended |        | Period Ended  |  | Period Ended |       | Period Ended 
|(In thousands)                |  | July 4, 2003 |        | June 28, 2002 |  | July 4, 2003 |       | June 28, 2002
|                              |  |              |        |               |  |              |       |              
|Segment EBITDA                |  | $            | 14,911 |               |  |              | 8,941 |               |  | $ | 14,416 |  |  |  | 8,434 | 
|Less:                         |  |              |        |               |  |              |       |               |  |   |        |  |  |  |       | 
|Depreciation and
amortization |  |              | 1,576  |               |  |              | 2,765 |               |  |   | 1,449  |  |  |  | 2,605 | 
|Interest expense              |  |              | 3,591  |               |  |              | 4,228 |               |  |   | 3,093  |  |  |  | 3,731 | 
|                              |  |              |        |               |  |              |       |               |  |   |        |  |  |  |       | 
|Income before taxes           |  | $            | 9,744  |               |  |              | 1,948 |               |  | $ | 9,874  |  |  |  | 2,098 | 
|                              |  |              |        |               |  |              |       |               |  |   |        |  |  |  |       | 

|                              |  |              |        |               |  |              |        |               |  |   |        |  |  |  |        | 
|----------------------------- |  | ------------ | ------ | ------------- |  | ------------ | ------ | ------------- |  | - | ------ |  |  |  | ------ | 
|                              |  | Holding      |        | CPI          
|                              |  |              |        |              
|                              |  | 40-Week      |        | 39-Week       |  | 40-Week      |        | 39-Week      
|                              |  | Period Ended |        | Period Ended  |  | Period Ended |        | Period Ended 
|(In thousands)                |  | July 4, 2003 |        | June 28, 2002 |  | July 4, 2003 |        | June 28, 2002
|                              |  |              |        |               |  |              |        |              
|Segment EBITDA                |  | $            | 36,936 |               |  |              | 22,602 |               |  | $ | 35,429 |  |  |  | 21,083 | 
|Less:                         |  |              |        |               |  |              |        |               |  |   |        |  |  |  |        | 
|Depreciation and
amortization |  |              | 4,890  |               |  |              | 8,821  |               |  |   | 4,475  |  |  |  | 8,337  | 
|Interest expense              |  |              | 10,837 |               |  |              | 12,767 |               |  |   | 9,291  |  |  |  | 11,257 | 
|                              |  |              |        |               |  |              |        |               |  |   |        |  |  |  |        | 
|Income before taxes           |  | $            | 21,209 |               |  |              | 1,014  |               |  | $ | 21,663 |  |  |  | 1,489  | 
|                              |  |              |        |               |  |              |        |               |  |   |        |  |  |  |        | 

Sales by geographic area to unaffiliated customers (based on the location of
customer) are as follows:

|                      |  |              |        |               |  |              |        |               |  |   |         |  |  |  |         | 
|--------------------- |  | ------------ | ------ | ------------- |  | ------------ | ------ | ------------- |  | - | ------- |  |  |  | ------- | 
|                      |  | 13-Week      |        | 13-Week       |  | 40-Week      |        | 39-Week      
|                      |  | Period Ended |        | Period Ended  |  | Period Ended |        | Period Ended 
|(In thousands)        |  | July 4, 2003 |        | June 28, 2002 |  | July 4, 2003 |        | June 28, 2002
|                      |  |              |        |               |  |              |        |              
|United States         |  | $            | 48,132 |               |  |              | 42,289 |               |  | $ | 134,384 |  |  |  | 135,078 | 
|All foreign countries |  |              | 22,589 |               |  |              | 22,503 |               |  |   | 65,860  |  |  |  | 56,554  | 
|                      |  |              |        |               |  |              |        |               |  |   |         |  |  |  |         | 
|Total Sales           |  | $            | 70,721 |               |  |              | 64,792 |               |  | $ | 200,244 |  |  |  | 191,632 | 
|                      |  |              |        |               |  |              |        |               |  |   |         |  |  |  |         | 

CPI has a single customer that accounts for 10% or more of consolidated sales.
Sales to this customer were $14.6 million and $14.2 million of the Companys
consolidated sales for the 13-week period ended July 4, 2003 and June 28, 2002,
respectively. Sales to this customer were $40.3 million and $34.4 million of
the Companys consolidated sales for the 40-week period ended July 4, 2003 and
the 39-week period ended June 28, 2002, respectively. A substantial majority
of these sales were VED segment products, but this customer also purchased
satcom equipment products.



|6. |  | Recent Accounting Pronouncements
|-- |  | --------------------------------

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

The Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement
Obligations, in August 2001, and SFAS No. 144, Accounting for the Impairment
or Disposal of Long-lived Assets, in October 2001. SFAS No. 143 is effective
for fiscal years beginning after June 15, 2002 and requires that the fair value
of an asset retirement obligation be recorded as a liability in the period in
which it incurs the obligation. SFAS No. 144 is effective for fiscal years
beginning after December 15, 2001. It provides a single accounting model for
long-lived assets to be disposed of and replaces SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of.
The Company adopted these Statements on September 28, 2002. The adoption did
not have a material impact on the Companys consolidated financial position or
results of operations.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.
This Statement rescinds SFAS No. 4, Reporting Gains and Losses from
Extinguishment of Debt, and an amendment of that Statement, SFAS No. 64,
Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements. This
Statement amends SFAS Statement No. 13, Accounting for Leases, to eliminate
an inconsistency between the required accounting for sale-leaseback
transactions and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transactions. This
Statement also amends other existing authoritative pronouncements to make
various technical corrections, clarify meanings, or describe their
applicability under changed conditions. The provisions of SFAS No. 145 are
effective in fiscal years beginning after May 15, 2002, with early adoption
permitted and, in general, are to be applied prospectively. The Company adopted
this Statement on September 28, 2002. The adoption did not have a material
impact on the Companys consolidated financial position or results of
operations.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit and Disposal Activities. SFAS No. 146 requires that a liability for
a cost associated with an exit or disposal activity be recognized and measured
initially at fair value only when the liability is incurred. SFAS No. 146 will
be applied prospectively for exit and disposal activities initiated after
December 31, 2002. Adoption of this Statement did not have a material impact on
the Companys consolidated financial position or results of operations.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure  an Amendment of SFAS 123. SFAS No.
148 provides additional transition guidance for those entities that elect to
voluntarily adopt the accounting provisions of FASB Statement No. 123,
Accounting for Stock-Based Compensation. Since the Company intends to
continue to apply the intrinsic value method of accounting for stock-based
compensation, the adoption of SFAS No. 148 will not have an effect on its
financial condition or results of operations. However, the Company has provided
the additional disclosures required by SFAS No. 148 beginning in the second
quarter of fiscal year 2003.

In November 2002, the FASB issued Interpretation No. 45 (FIN 45),
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. FIN 45 requires a guarantor to
include disclosure of certain obligations, and if applicable, at the inception
of the guarantee, recognize a liability for the fair value of other certain
obligations undertaken in issuing a

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

guarantee. The recognition requirement is effective for guarantees issued or
modified after December 31, 2002. The adoption of FIN 45 did not have a
material impact on the Companys consolidated results of operations or
financial position.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities. FIN 46 provides guidance for
determining when an entity that is the primary beneficiary of a variable
interest entity or equivalent structure should consolidate the variable
interest entity into the entitys financial statements. The consolidation
provisions of FIN 46 apply immediately to variable interest entities created
after January 31, 2003 and to existing entities in the first interim or annual
reporting period beginning after June 15, 2003. The Company does not believe
that it has any variable interests that would qualify as a variable interest
entity and therefore does not expect adoption of FIN 46 to have an effect on
its consolidated results of operations or financial position.

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS 149 amends and clarifies
financial accounting and reporting for derivative instruments and for hedging
activities under SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities. This Statement will be applied prospectively for contracts
entered into or modified after June 30, 2003 and hedging relationships
designated after June 30, 2003. The Company does not expect adoption of SFAS
No. 149 to have a material impact on the Companys consolidated results of
operations or financial position.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. SFAS No. 150
requires that certain financial instruments with characteristics of both
liabilities and equity, be classified as liabilities in statements of financial
position. The financial instruments affected include mandatorily redeemable
stock, certain financial instruments that require or may require the issuer to
buy back some of its shares in exchange for cash or other assets and certain
obligations that can be settled with shares of stock. SFAS No. 150 is
effective for all financial instruments entered into or modified after May 31,
2003 and must be applied to existing financial instruments at the beginning of
the first fiscal period beginning after June 15, 2003. The Company will adopt
SFAS No. 150 in its fourth quarter beginning July 5, 2003. The Company is
currently analyzing this Statement and has not yet determined its impact on the
Companys consolidated results of operations or financial position.



|7. |  | Goodwill and Other Intangible Assets
|-- |  | ------------------------------------

In June 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS
No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. SFAS No. 141 also specifies the criteria intangible assets
acquired in a purchase method business combination must meet to be recognized
and reported apart from goodwill. SFAS No. 142 requires that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead be reviewed for impairment annually, or more frequently if certain
indicators arise. SFAS No. 142 also requires that intangible assets with
definite useful lives be amortized over their respective estimated lives and be
reviewed for impairment. The Company adopted

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

the provisions of SFAS No. 141 and SFAS No. 142 and ceased amortization of its
goodwill, beginning in fiscal year 2003.

Upon adoption of SFAS No. 142, the Company performed a transitional goodwill
impairment evaluation to assess whether goodwill was impaired as of the date of
adoption. Based on the results of the first step of the transitional goodwill
impairment test, it was determined that no potential impairment exists. As a
result, the Company has recognized no transitional impairment loss in
connection with the adoption of SFAS No. 142. Also upon adoption of SFAS No.
142, as required by SFAS No. 141, the Company reassessed the useful lives and
residual values of all intangible assets acquired in purchase business
combinations, and no significant changes were deemed necessary.

Goodwill

As of July 4, 2003 and September 27, 2002, the Company had $19.1 million of
goodwill, $13.4 million of which has been allocated to the VED segment and $5.7
million of which has been allocated to the satcom equipment segment. There were
no changes in the carrying amount of goodwill for the quarter or nine-month
period ended July 4, 2003.

The following table presents the impact of adopting SFAS No. 142 on net income
(loss) if such standard had been in effect for the 13-week and 39-week periods
ended June 28, 2002.

|                                  |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|--------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ------ | ------------ |  | - | ----- |  |  |  | ------ | -
|                                  |  | Holding      |       | CPI         
|                                  |  |              |       |             
|                                  |  | 13-Week      |       | 13-Week      |  | 13-Week      |        | 13-Week     
|                                  |  | Period Ended |       | Period Ended |  | Period Ended |        | Period Ended
|(In thousands)                    |  | July 4,      |       | June 28,     |  | July 4,      |        | June 28,    
|                                  |  | 2003         |       | 2002         |  | 2003         |        | 2002        
|                                  |  |              |       |              |  |              |        |             
|                                  |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|Net income (loss) as reported     |  | $            | 8,351 |              |  |              | (1,039 | )            |  | $ | 8,622 |  |  |  | (1,052 | )
|Adjustments:                      |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|Goodwill amortization, net of tax |  |              |      |              |  |              | 232    |              |  |   |      |  |  |  | 232    |  
|                                  |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|Adjusted net income (loss)        |  | $            | 8,351 |              |  |              | (807   | )            |  | $ | 8,622 |  |  |  | (820   | )
|                                  |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  

|                                  |  |              |        |              |  |              |        |              |  |   |        |  |  |  |        |  
|--------------------------------- |  | ------------ | ------ | ------------ |  | ------------ | ------ | ------------ |  | - | ------ |  |  |  | ------ | -
|                                  |  | Holding      |        | CPI         
|                                  |  |              |        |             
|                                  |  | 40-Week      |        | 39-Week      |  | 40-Week      |        | 39-Week     
|                                  |  | Period Ended |        | Period Ended |  | Period Ended |        | Period Ended
|(In thousands)                    |  | July 4,      |        | June 28,     |  | July 4,      |        | June 28,    
|                                  |  | 2003         |        | 2002         |  | 2003         |        | 2002        
|                                  |  |              |        |              |  |              |        |             
|Net income (loss) as reported     |  | $            | 14,927 |              |  |              | (3,806 | )            |  | $ | 15,390 |  |  |  | (3,494 | )
|Adjustments:                      |  |              |        |              |  |              |        |              |  |   |        |  |  |  |        |  
|Goodwill amortization, net of tax |  |              |       |              |  |              | 695    |              |  |   |       |  |  |  | 695    |  
|                                  |  |              |        |              |  |              |        |              |  |   |        |  |  |  |        |  
|Adjusted net income (loss)        |  | $            | 14,927 |              |  |              | (3,111 | )            |  | $ | 15,390 |  |  |  | (2,799 | )
|                                  |  |              |        |              |  |              |        |              |  |   |        |  |  |  |        |  

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

Intangible Assets

As of July 4, 2003 and September 27, 2002, the Company had $1.9 million of
intangible assets at cost, with accumulated amortization of $0.7 million and
$0.3 million, respectively. Amortization of intangible assets for the 40-week
period ended July 4, 2003 and the 39-week period ended June 28, 2002 was
approximately $0.4 million and $0.4 million, respectively. Amortization
expense for these intangible assets is projected to be approximately $0.4
million per year through fiscal year 2006.



|8. |  | Stock-Based Compensation Plans
|-- |  | ------------------------------

The Company accounts for stock-based compensation in accordance with Accounting
Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations including FASB Interpretation No. 44,
Accounting for Certain Transactions involving Stock Compensation an
interpretation of APB Opinion No. 25 issued in March 2000. Since the exercise
price of options granted under such plans is generally equal to the market
value on the date of grant, no compensation cost has been recognized for grants
under the Companys stock option plan. If compensation cost for the Companys
stock-based compensation plan had been determined consistent with SFAS No. 123,
Accounting for Stock-Based Compensation, the Companys net income (loss)
would have changed to the pro forma amounts indicated below:

|                                                                              |  |              |       |              |  |              |        |              |  |   |       |   |  |  |        |  
|----------------------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ------ | ------------ |  | - | ----- | - |  |  | ------ | -
|                                                                              |  | Holding      |       | CPI         
|                                                                              |  |              |       |             
|                                                                              |  | 13-Week      |       | 13-Week      |  | 13-Week      |        | 13-Week     
|                                                                              |  | Period Ended |       | Period Ended |  | Period Ended |        | Period Ended
|(In thousands)                                                                |  | July 4,      |       | June 28,     |  | July 4,      |        | June 28,    
|                                                                              |  | 2003         |       | 2002         |  | 2003         |        | 2002        
|                                                                              |  |              |       |              |  |              |        |             
|Net income (loss) as reported                                                 |  | $            | 8,351 |              |  |              | (1,039 | )            |  | $ | 8,622 |   |  |  | (1,052 | )
|Deduct:                                                                       |  |              |       |              |  |              |        |              |  |   |       |   |  |  |        |  
|Stock-based compensation
determined under fair value
based method, net of tax |  |              | (6    | )            |  |              | (10    | )            |  |   | (6    | ) |  |  | (10    | )
|                                                                              |  |              |       |              |  |              |        |              |  |   |       |   |  |  |        |  
|Pro forma net income (loss)                                                   |  | $            | 8,345 |              |  |              | (1,049 | )            |  | $ | 8,616 |   |  |  | (1,062 | )
|                                                                              |  |              |       |              |  |              |        |              |  |   |       |   |  |  |        |  

|                                                                              |  |              |        |              |  |              |        |              |  |   |        |  |  |  |        |  
|----------------------------------------------------------------------------- |  | ------------ | ------ | ------------ |  | ------------ | ------ | ------------ |  | - | ------ |  |  |  | ------ | -
|                                                                              |  | Holding      |        | CPI         
|                                                                              |  |              |        |             
|                                                                              |  | 40-Week      |        | 39-Week      |  | 40-Week      |        | 39-Week     
|                                                                              |  | Period Ended |        | Period Ended |  | Period Ended |        | Period Ended
|(In thousands)                                                                |  | July 4,      |        | June 28,     |  | July 4,      |        | June 28,    
|                                                                              |  | 2003         |        | 2002         |  | 2003         |        | 2002        
|                                                                              |  |              |        |              |  |              |        |             
|Net income (loss) as reported                                                 |  | $            | 14,927 |              |  |              | (3,806 | )            |  | $ | 15,390 |  |  |  | (3,494 | )
|Deduct:                                                                       |  |              |        |              |  |              |        |              |  |   |        |  |  |  |        |  
|Stock-based compensation
determined under fair value
based method, net of tax |  |              | 62     |              |  |              | (36    | )            |  |   | 62     |  |  |  | (36    | )
|                                                                              |  |              |        |              |  |              |        |              |  |   |        |  |  |  |        |  
|Pro forma net income (loss)                                                   |  | $            | 14,989 |              |  |              | (3,842 | )            |  | $ | 15,452 |  |  |  | (3,530 | )
|                                                                              |  |              |        |              |  |              |        |              |  |   |        |  |  |  |        |  

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

For the 40-week period ended July 4, 2003, the positive deduction for
stock-based compensation determined under the fair value method is due to the
actual forfeiture rate exceeding the estimated forfeiture rate for employee
stock options granted in prior periods.



|9. |  | Amendment to Credit Facility
|-- |  | ----------------------------

In December 2002, the Company amended its credit facility to increase the
maximum amount of its revolving credit line by $20.0 million (the amount of the
term loan formerly outstanding under the same credit facility) from $41.0
million to $61.0 million and to extend the expiration date from December 22,
2004 to May 31, 2005. The credit facility continues to be secured by
substantially all of the assets of CPI and guaranteed by Holding and all of
CPIs subsidiaries. Availability under the revolving credit facility continues
to be based upon eligible receivables, machinery and equipment and certain real
estate.



|10. |  | Mortgage Refinancing
|--- |  | --------------------

Effective June 1, 2003, Holdings mortgage financing of $17.5 million was
refinanced. Under the terms of the refinancing, the loan was extended until
January 31, 2004. The mortgage bears interest at a rate of LIBOR plus 4.25%.

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)




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

Cautionary Statements Regarding Forward-Looking Statements

This document contains forward-looking statements that relate to future events
or the Companys future financial performance. In some cases, you can identify
forward-looking statements by terminology such as may, will, should,
except, plan, anticipate, believe, estimate, predict, potential
or continue, the negative of such terms or other comparable terminology.
These statements are only predictions. Actual events or results may differ
materially.

Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance or achievements. Moreover, neither
the Company nor any other person assumes responsibility for the accuracy and
completeness of the forward-looking statements. All written and oral
forward-looking statements made in connection with this report which are
attributable to the Company or persons acting on the Companys behalf are
expressly qualified in their entirety by the risk factors and other
cautionary statements included herein. The Company is under no duty to update
any of the forward-looking statements after the date of this report to conform
such statements to actual results or to changes in the Companys expectations.

The information in this report is not a complete description of the Companys
business or the risks associated with an investment in the Companys
securities. We urge you to carefully review and consider the various
disclosures made by the Company in this report and in the Companys other
reports filed with the Securities and Exchange Commission (SEC).

Overview

The following discussion reflects the condensed consolidated results of
Holding, which are materially consistent with those of CPI except as identified
below and should be read in conjunction with the condensed consolidated
financial statements and notes thereto:

The Company serves the communications, radar, electronic countermeasures,
industrial, medical and scientific markets. In addition, the Company divides
the communications market into applications for ground-based satellite uplinks
for military and commercial uses (satcom) and broadcast sectors. The Company
defines and discusses its orders and sales trends by the end markets to more
clearly relate its business to outside investors. Internally, however, the
Company is organized into five operating units that are differentiated based on
products. Four of these operating units comprise the Companys vacuum
electronic device (VED) segment. The Company also has a satellite
communications equipment segment. Segment data is included in Note 5 of the
Notes to Consolidated Condensed Financial Statements.

The Companys fiscal years are the 52- or 53-week periods which end on the
Friday nearest September 30. Fiscal year 2003 will be comprised of the 53-week
period ended October 3, 2003, and fiscal year

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

2002 was comprised of the 52-week period ended September 27, 2002. The third
quarters of fiscal year 2003 and fiscal year 2002 were both comprised of 13
weeks. The first nine months of fiscal year 2003 was comprised of a 40-week
period ended July 4, 2003 while the first nine months of fiscal year 2002 was
comprised of a 39-week period ended June 28, 2002.

Orders during the third quarter of fiscal year 2003 were $70.9 million,
compared to $55.2 million for the third quarter of fiscal year 2002. The
increase of $15.7 million, or 28.4%, compared to the same quarter of fiscal
year 2002, primarily reflects a higher demand for products in the
communications, radar, electronic countermeasures and medical markets.
Communications orders for the third quarter of fiscal year 2003 were $19.9
million, an increase of $3.9 million from the third quarter of fiscal year
2002. The increase in communications orders is due primarily to an increase in
satcom orders during the quarter. Radar orders for the third quarter of fiscal
year 2003 were $30.3 million, an increase of $2.4 million from the third
quarter of fiscal year 2002. The increase in radar orders is due primarily to
an increase in spares and repair orders for logistic agencies. Electronic
countermeasures orders for the third quarter of fiscal year 2003 were $8.8
million, an increase of $6.6 million from the third quarter of fiscal year
2002. Electronic countermeasures orders increased because of two large orders
that totaled over $6 million; one order was a follow-on contract for
transmitter products and the other order was for VEDs. Medical orders for the
third quarter of fiscal year 2003 were $7.7 million, an increase of $2.9
million from the third quarter of fiscal year 2002. Medical orders increased
due to higher demand for power grid tube, X-Ray generator, and power supply
products used in medical imaging. Orders in the Companys remaining markets
were essentially unchanged from the third quarter of fiscal year 2002.

Orders for the nine months ended July 4, 2003 were $236.1 million, an increase
of $44.2 million, or 23.0%, from $191.9 million in the comparable period of
fiscal year 2002. The increase primarily reflects the higher demand for
products in the communications, radar, electronic countermeasures and medical
markets. Communication orders increased by $12.8 million from the first nine
months of fiscal year 2002. The increase in communication orders is principally
due to large orders from direct-to-home service suppliers. The Company does
not expect that the higher communications order levels will be sustained in the
upcoming quarters because communication companies will likely maintain their
capital spending at moderate rates that we have seen in recent years. Radar
orders, which have increased by $16.8 million from the first nine months of
fiscal year 2002, have been buoyed by spares and repair orders for logistics
agencies. Orders in the electronic countermeasures market have increased $15.9
million from the first nine months of fiscal year 2002 due primarily to higher
demands from logistic agencies for spares and repairs to support defense system
usage as well as the two large electronic countermeasure orders described
above. Medical orders increased by $7.0 million from the first nine months of
fiscal year 2002, due primarily to an increase in orders for VEDs used in
cancer therapy systems and magnetic resonance imaging, and X-Ray generator and
power supply products used in X-Ray imaging. These order increases were offset
in part by declines in the industrial and scientific markets of $3.6 million
and $4.7 million, respectively, from the comparable period of fiscal year 2002.
The decline in these markets compared to fiscal year 2002 can be attributed to
significant one-time orders received by the Company in fiscal year 2002.
Overall, incoming order levels fluctuate significantly on a quarterly basis,
and a particular quarters order rate may not be indicative of future order
levels. In addition, the Companys sales are highly dependent upon
manufacturing scheduling, performance and shipments and, accordingly, it is not
possible to accurately predict when these orders will be recognized

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

as sales.

As of July 4, 2003, the Company had an order backlog of $181.5 million,
representing approximately eight and-a-half months of sales, compared to an
order backlog of $149.0 million, or approximately seven months of sales, as of
June 28, 2002. Since the end of fiscal year 2002, order backlog has increased
by $36.4 million from $145.1 million at September 27, 2002.

Critical Accounting Policies

Management is required to make judgments, assumptions and estimates in
preparing its financial statements and related disclosures in conformity with
accounting principles generally accepted in the United States. The Companys
significant accounting policies are described in Note 2 to the Consolidated
Financial Statements in the Annual Report on Form 10-K for the fiscal year
ended September 27, 2002. The following critical accounting policies are those
policies that management believes affect its more significant estimates and
assumptions used in preparation of its consolidated financial statements.

Revenue Recognition

The estimated sales values of performance under certain contracts to commercial
customers and U. S. Government fixed-price and fixed-price incentive contracts
are recognized under the percentage of completion method of accounting. When
applying the percentage of completion method, the Company relies on estimates
of total expected contract revenue and costs. Recognized revenues and profit
are subject to revisions as the contract progresses towards completion.
Revisions in profit estimates are charged to income in the period in which they
become determinable. Sales under cost-reimbursement contracts, primarily for
research and development efforts, are recorded as costs are incurred and
include estimated earned fees in the proportion that costs incurred to date
bear to total estimated costs. The fees under certain U.S. Government
contracts may be increased or decreased in accordance with cost or performance
incentive provisions which measure actual performance against established
targets or other criteria. Such incentive fee awards or penalties are included
in revenue at the time the amounts can be reasonably determined.

Allowance for Doubtful Accounts

The Company monitors the creditworthiness of its customers based on a variety
of factors, including the length of time the receivables are past due, the
financial health of the customer, economic conditions and historical
experience. If collectibility is considered uncertain, then the Company will
record a reserve to reduce the receivable to the amount considered collectable.
If circumstances change, then further adjustments could be required.

Warranty Reserves

The Companys products are generally subject to warranties, and the Company
provides for the estimated future costs of repair, replacement or customer
accommodation at the time of sale as an additional cost of product.
Managements estimates are based on historical costs for warranty and are
adjusted when circumstances indicate that future costs are expected to vary
from historical levels. If actual product failure rates or material usage
incurred differs from the Companys estimates, then revisions to the estimated
warranty liability would be required.

Inventory Valuation

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

Inventories are stated at the lower of average cost or market (net realizable
value). The carrying value of inventory is reduced for estimated obsolescence
or unmarketability based upon assumptions about future demand, market
conditions, product lifecycles and product pricing. If the Companys
assumptions were to be substantially different than estimated, further
adjustments could be required. While these estimates require management to make
assumptions and judgments, management believes its understanding of the markets
and customers the Company serves, as well as the mature nature of many of the
products the Company manufactures, provides it with the ability to make
reliable estimates. Management also evaluates the carrying value of inventory
for lower of cost or market on an individual product or contract basis.
Analyses are performed based on the estimated costs at completion and if
necessary, a provision is recorded to properly reflect the inventory value of
the products or contracts at the lower of cost or net realizable value (selling
price less estimated cost of disposal). If actual contract costs were to be
substantially higher than estimated, further provisions could be required.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, excluding intangible assets which are
covered by SFAS No. 142, for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of long-lived assets is measured by comparison of
its carrying amount to future net cash flows expected to be generated from the
operation and sale of long-lived assets. If such assets are considered to be
impaired, the Companys carrying value is reduced to its estimated fair value.
Adverse changes in the customers and markets served by the Company could result
in future impairments of long-lived assets.

Goodwill Impairment

Goodwill represents the excess of the purchase price over the fair value of the
net assets acquired. The Company performed a goodwill impairment test in the
first quarter of fiscal year 2003, upon adoption of SFAS No. 142. The Company
plans to perform another goodwill impairment test during the fourth quarter of
the 2003 fiscal year. Goodwill and certain other corporate assets and
liabilities are assigned to the reporting units which are consistent with the
Companys operating divisions. The fair value of the reporting units are then
compared to the carrying value to determine if there is any potential
impairment. The process of evaluating potential impairment is subjective and
requires judgments regarding revenue forecasts, discount rates, and weighted
average cost of capital among other things. Adverse changes in the industries
served by the Company, customer demand or other market conditions could result
in future impairments of goodwill.

Results of Operations

Third Quarter of Fiscal Year 2003 Compared to the Third Quarter of Fiscal Year 2002

Sales. Sales for the third quarter of fiscal year 2003 were $70.7 million, an
increase of $5.9 million, or 9.1%, from the same period in fiscal year 2002.
The third quarter sales increase is primarily due to increased spending in the
communications market by direct-to-home service providers and increased demand
for power grid tube and X-Ray generator products for the medical market.

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

Gross Margin. Gross profit was $23.4 million in the third quarter of fiscal
year 2003, an increase of $6.8 million, or 40.7%, from $16.7 million in the
third quarter of fiscal year 2002. As a percentage of sales, gross profit was
33.2% in the third quarter of fiscal year 2003, compared to 25.7% in the third
quarter of fiscal year 2002. The increase in gross profit as a percentage of
sales resulted primarily from gains in production efficiencies from the
increase in sales volume, resolution of technical problems, favorable product
mix, improved pricing for certain products and completion of contracts with
lower pricing in prior periods. In addition, gross profit for fiscal year 2003
does not include lower margin products from the Solid State Products Division
(SSPD) that was sold in September of 2002.

Operating Costs and Expenses. Operating costs and expenses were $10.1 million,
or 14.3% of sales, for the third quarter of fiscal year 2003, compared to $10.5
million or 16.2% of sales for the third quarter of fiscal year 2002. The $0.4
million decrease in operating expenses is primarily due to the elimination of
goodwill amortization expense in fiscal year 2003, upon adoption of SFAS No.
142, and elimination of operating expenses from the SSPD Division that was sold
in September 2002.

Income Tax Expense.Income tax expense for the third quarter of fiscal year
2003 was $1.4 million, compared to $3.0 million for the third quarter of fiscal
year 2002. The effective income tax rates were 14% and 153% for the third
quarter of fiscal year 2003 and 2002, respectively. The change in income tax
expense is primarily due to utilization of net operating loss carryforwards,
which had a valuation allowance, and the sale of the Satcom manufacturing
division to Communications & Power Industries Canada Inc. in fiscal year 2002.
For fiscal years 2003 and 2002, income tax expense included a full valuation
allowance on deferred tax assets because of the uncertainty of realizing
deferred tax assets.

EBITDA. Earnings before interest, income taxes, depreciation and amortization
(EBITDA) for the third quarter of fiscal year 2003 was $14.9 million or 21.1%
of sales, compared to $8.9 million, or 13.8% of sales, for the third quarter of
fiscal year 2002. This increase in EBITDA can be attributed primarily to the
improvement in gross margins as discussed above. While management considers
EBITDA to be an important measure of comparative operating performance, it
should be considered in addition to, but not as a substitute for or superior
to, operating income, net earnings (loss), cash flow and other measures of
financial performance prepared in accordance with accounting principles
generally accepted in the United States. EBITDA does not reflect cash available
to fund cash requirements, and the items excluded from EBITDA, such as
depreciation and amortization, are significant components in assessing the
Companys financial performance. Other significant uses of cash flows are
required before cash will be available to the Company, including debt service,
taxes and cash expenditures for various long-term assets. The Company believes
that EBITDA is also used by some investors as a measure of its ability to
service indebtedness. The Companys calculation of EBITDA may be different from
the calculation used by other companies and, therefore, comparability may be
limited. For reconciliation of EBITDA to income before taxes, see Note 5 of the
Notes to Consolidated Condensed Financial Statements.

Net Income (Loss).Net income was $8.4 million for the third quarter of fiscal
year 2003, compared to a net loss of $1.0 million for the third quarter of
fiscal year 2002. The increase in the Companys net income from the third
quarter of fiscal year 2002 can be attributed to improved operating income, as
discussed above, reduced interest expense resulting from less outstanding debt
and the realization of tax benefits from net operating losses and credit
carryforwards that were reserved in prior years.

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

Differences between Holding and CPI. CPIs operating results differ from those
of Holding due to a sale-leaseback transaction between CPI and Holding which
took place in December 2000. In the third quarter of fiscal year 2003, CPIs
income before taxes was $9.9 million, which was approximately $0.2 million
higher than Holdings income before taxes of $9.7 million. As a result of the
sale-leaseback transaction, operating costs for CPI were approximately $0.4
million higher than those of Holding primarily because of rental payments paid
by CPI to Holding for use of the San Carlos facility. Interest expense, net,
for CPI was approximately $0.5 million lower than that of Holding. The
difference in interest expense related to Holdings interest expense on the San
Carlos facility mortgage and on the note payable to CPI from the sale-leaseback
transaction. All other operations data for CPI is consistent with Holdings
operations data for the third quarter of fiscal year 2003.

First Nine Months of Fiscal Year 2003 Compared to the First Nine Months of
Fiscal Year 2002

Sales. Sales for the first nine months of fiscal year 2003 were $200.2
million, an increase of $8.6 million, or 4.5%, from the same period in fiscal
year 2002. The sales increase is primarily due to increased spending by the
United States Department of Defense for VEDs that are sold in the radar and
electronic countermeasure markets and increases in shipments of power grid
tubes, X-ray generators and VED products for the medical market. The increased
sales in these markets was somewhat offset by decreases in sales to the
communications and industrial market segments.

Gross Margin. Gross profit was $60.8 million in the first nine months of
fiscal year 2003, compared to $43.8 million in the first nine months of fiscal
year 2002, an increase of 39.0%. As a percentage of sales, gross profit was
30.4% in the first nine months of fiscal year 2003, compared to 22.8% from the
first nine months of fiscal year 2002. The increase in gross profit as a
percentage of sales resulted primarily from gains in production efficiencies
from the increase in sales volume and cost reduction programs, a favorable
product mix, improved pricing for certain products and completion of contracts
with lower pricing in prior periods, and production efficiencies in CPIs
Satcom operation resulting from its relocation in 2001 and 2002 to Ontario,
Canada. In addition, gross profit for fiscal year 2003 does not include lower
margin products from the Solid State Products Division (SSPD) that was sold in
September of 2002.

Operating Costs and Expenses. Operating costs and expenses were $29.0 million,
or 14.5% of sales, for the first nine months of fiscal year 2003, compared to
$30.0 million, or 15.6% of sales, for the first nine months of fiscal year
2002. The $1.0 million decrease in operating expenses is primarily due to the
elimination of goodwill amortization expense in fiscal year 2003, upon adoption
of SFAS No. 142, and the elimination of operating expenses from the SSPD
Division that was sold in September 2002.

Other Income. Other income of $0.3 million in the first nine months of fiscal
year 2003 represents the Companys portion of the fair value of stock received
from its life and disability insurance provider resulting from the insurance
companys 2001 demutualization.

Income Tax Expense.Income tax expense for the nine months ended July 4, 2003
was $6.3 million, compared to $4.8 million for the corresponding period of
fiscal year 2002. The effective income tax rates were 30% and 475% for the
nine months ended July 4, 2003 and June 28, 2002, respectively. The change in
income tax expense is primarily due to utilization of net operating loss
carryforwards, which

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

had a valuation allowance, and the sale of the Satcom manufacturing division to
Communications & Power Industries Canada Inc. in fiscal year 2002. For fiscal
years 2003 and 2002, income tax expense included a full valuation allowance on
deferred tax assets because of the uncertainty of realizing the deferred tax
assets.

EBITDA. Earnings before interest, income taxes, depreciation and amortization
(EBITDA) for the first nine months of fiscal year 2003 was $36.9 million or
18.4% of sales, compared to $22.6 million, or 11.8% of sales, for the first
nine months of fiscal year 2002. This increase in EBITDA can be attributed
primarily to the improvement in gross margins as discussed above. While
management considers EBITDA to be an important measure of comparative operating
performance, it should be considered in addition to, but not as a substitute
for or superior to, operating income, net earnings (loss), cash flow and other
measures of financial performance prepared in accordance with accounting
principles generally accepted in the United States. EBITDA does not reflect
cash available to fund cash requirements, and the items excluded from EBITDA,
such as depreciation and amortization, are significant components in assessing
the Companys financial performance. Other significant uses of cash flows are
required before cash will be available to the Company, including debt service,
taxes and cash expenditures for various long-term assets. The Company believes
that EBITDA is also used by some investors as a measure of its ability to
service indebtedness. The Companys calculation of EBITDA may be different from
the calculation used by other companies and, therefore, comparability may be
limited. For a reconciliation of EBITDA to income before taxes, see Note 5 of
the Notes to Consolidated Condensed Financial Statements.

Net Income (Loss).Net income was $14.9 million for the first nine months of
fiscal year 2003, compared to a net loss of $3.8 million for the first nine
months of fiscal year 2002. The increase in the Companys net income from the
first nine months of fiscal year 2002 can be attributed to improved operating
income as discussed above and reduced interest expense resulting from lower
outstanding debt and the realization of tax benefits from net operating losses
and credit carryforwards that were reserved in prior years.

Differences between Holding and CPI. CPIs operating results differ from those
of Holding due to a sale-leaseback transaction between CPI and Holding which
took place in December 2000. In the first nine months of fiscal year 2003,
CPIs income before taxes was $21.7 million, which was approximately $0.5
million higher than Holdings income before taxes of $21.2 million. As a
result of the sale-leaseback transaction, operating costs for CPI were
approximately $1.1 million higher than those of Holding primarily due to rental
payments paid by CPI to Holding for use of the San Carlos facility. Interest
expense, net, for CPI was approximately $1.5 million lower than that of
Holding. The difference in interest expense related to Holdings interest
expense on the San Carlos facility mortgage and on the note payable to CPI from
the sale-leaseback transaction. All other operations data for CPI is
consistent with Holdings operations data for the first nine months of fiscal
year 2003.

Financial Condition

The Company continues to generate positive cash flow from operating activities
with $27.6 million generated during first nine months of fiscal year 2003,
compared to $36.5 million in the first nine months of fiscal year 2002. In the
first nine months of fiscal year 2003, the Company generated $18.7 million

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

more in operating cash flow from net income (loss) than for the same period in
fiscal year 2002. The decrease in operating cash flow in the first nine months
fiscal year 2003 compared to the same period in 2002 is primarily due to the
significant reduction in accounts receivable and inventory in fiscal year 2002.

Investing activities were comprised of investment in property, plant and
equipment totaling $1.3 million for the first nine months of fiscal year 2003.
Purchases of property, plant and equipment decreased approximately $0.8 million
from the comparable period of fiscal year 2002. The Company currently
anticipates that capital expenditure requirements for fiscal year 2003 will be
approximately $3.0 million, which is approximately $0.4 million less than the
amount spent in fiscal year 2002.

Financing activities during the first nine months of fiscal year 2003 were
primarily related to a principal payment of $0.3 million made on the mortgage
financing held by Holding related to the San Carlos facility and $0.3 million
for debt issuance costs related to an amendment of the Companys credit
facility, as noted in Note 9 of the Notes to Consolidated Condensed Financial
Statements, and extension of the due date on the San Carlos facility mortgage,
from June 1, 2003 to January 31, 2004, as noted in Note 10 of the Notes to the
Consolidated Condensed Financial Statements.

Holdings short-term debt includes mortgage financing of $17.5 million with
respect to Holdings San Carlos facility. Restrictions in the Companys Senior
Subordinated Notes Indenture and in the Companys credit facility prohibit CPI
from distributing cash to Holding to satisfy this obligation. The mortgage due
date was extended from June 1, 2003 to January 31, 2004 as noted in Note 10 to
the Consolidated Condensed Financial Statements. Management expects to either
refinance this obligation or to consummate a sale or other transaction with
respect to the San Carlos property. Holding has entered into an agreement for
the sale of the property. In addition to customary closing and due diligence
conditions, the sale of the property is contingent upon completion of
environmental remediation and demolition of existing structures, to be agreed
upon by the parties. The purchaser has not completed or approved its due
diligence investigations of the property, and there is no assurance that it
will do so or that the other conditions to closing will be satisfied.

In connection with the sale of the Companys Solid State Products Division
(SSPD) in September 2002 to KMIC Technology, Inc., a company owned by the
former management of SSPD, the Company was required to provide a $100,000
letter of credit as a partial guarantee for the new companys leased
facilities. The letter of credit guarantee expires in November 2003.

CPIs financial condition differs from that of Holding in that CPIs debt
obligations and financing activities do not include $17.5 million of mortgage
financing due in January 2004. This mortgage financing resulted from Holdings
purchase of the San Carlos facility from CPI in a sale-leaseback transaction
which took place in December 2000. In connection with the sale-leaseback
transaction, CPI entered into a non-cancelable lease with Holding for the San
Carlos real property for a term of twenty years and a fixed annual rent of
$2.45 million.

As of July 4, 2003, the Company had $28.4 million available under its revolving
line of credit. However, there can be no assurance that the combination of cash
generated by operations, borrowing availability from the Companys credit
facility and additional collateral-based financing will be sufficient to meet
the Companys cash requirements. If the Company is unable to satisfy such cash
requirements from these

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

sources, the Company will adopt one or more alternatives, such as reducing
or delaying capital expenditures, reducing discretionary costs, and attempting
to negotiate an increase to the Companys borrowing capacity under its line of
credit.

Recent Accounting Pronouncements

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit and Disposal Activities. SFAS No. 146 requires that a liability for
a cost associated with an exit or disposal activity be recognized and measured
initially at fair value only when the liability is incurred. SFAS No. 146 will
be applied prospectively for exit or disposal activities initiated after
December 31, 2002. Adoption of this Statement did not have a material impact on
the Companys consolidated financial position or results of operations.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure  an Amendment of FASB Statement No.
123. SFAS No. 148 provides additional transition guidance for those entities
that elect to voluntarily adopt the accounting provisions of SFAS No. 123,
Accounting for Stock-Based Compensation. Since the Company intends to
continue to apply the intrinsic value method of accounting for stock-based
compensation, the adoption of SFAS No. 148 will not have an effect on its
financial condition or results of operations. However, the Company has provided
the additional disclosures required by SFAS No. 148 beginning in the second
quarter of fiscal year 2003.

In November 2002, the FASB issued FIN 45, Guarantors Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. FIN 45 requires a guarantor to include disclosure of
certain obligations, and if applicable, at the inception of the guarantee,
recognize a liability for the fair value of other certain obligations
undertaken in issuing a guarantee. The recognition requirement is effective for
guarantees issued or modified after December 31, 2002. The adoption of FIN 45
did not have a material impact on the Companys consolidated results of
operations or financial position.

In January 2003, the FASB issued FIN 46, Consolidation of Variable Interest
Entities. FIN 46 provides guidance for determining when an entity that is the
primary beneficiary of a variable interest entity or equivalent structure
should consolidate the variable interest entity into the entitys financial
statements. The consolidation provisions of FIN 46 apply immediately to
variable interest entities created after January 31, 2003 and to existing
entities in the first interim or annual reporting period beginning after June
15, 2003. The Company does not believe that it has any variable interests that
would qualify as a variable interest entity and therefore does not expect
adoption of FIN 46 to have an effect on its consolidated results of operations
or financial position.

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS 149 amends and clarifies
financial accounting and reporting for derivative instruments and for hedging
activities under SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities. This Statement will be applied prospectively for contracts
entered into or modified after June 30, 2003 and hedging relationships
designated after June 30, 2003. The

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

Company does not expect adoption of SFAS No. 149 to have a material impact on
the Companys consolidated results of operations or financial position.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. SFAS No. 150
requires that certain financial instruments, with characteristics of both
liabilities and equity, be classified as liabilities in statements of financial
position. The financial instruments affected include mandatorily redeemable
stock, certain financial instruments that require or may require the issuer to
buy back some of its shares in exchange for cash or other assets and certain
obligations that can be settled with shares of stock. SFAS No. 150 is
effective for all financial instruments entered into or modified after May 31,
2003 and must be applied to existing financial instruments at the beginning of
the first fiscal period beginning after June 15, 2003. The Company will adopt
SFAS No. 150 in its fourth quarter beginning July 5, 2003. The Company is
currently analyzing this Statement and has not yet determined its impact on the
Companys consolidated results of operations or financial position.

Risk Factors

You should carefully consider the various risks and uncertainties that impact
the Companys business and the other information in this report and the
Companys other filings with the SEC before you decide to invest in the Company
or to maintain or increase your investment. Such risks and uncertainties
include, but are not limited to, the following: product demand and market
acceptance risks; the effect of general economic conditions; the impact of
competitive products and pricing; new product development and
commercialization; technological difficulties and the ability to increase
margins; production interruptions due to power shutdowns and volatility in
energy costs; U.S. Government export policies; changes in Governmental
appropriations, national defense policies and availability of Government funds;
changes in environmental regulation and legislation; availability of certain
critical materials and raw material price fluctuations; the Companys
significant leverage; the Companys ability to generate the significant amount
of cash needed to service its debt; and the Companys ability to obtain
financing in the future. Any of the foregoing factors could cause the
Companys business, results of operations, or financial condition to suffer,
and actual results could differ materially from those expected.

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)




ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Companys market risk disclosures set forth in its Annual Report on Form
10-K for the fiscal year ended September 27, 2002, have not changed materially.




ITEM 4: CONTROLS AND PROCEDURES

Management, including the Companys principal executive officer and principal
financial officer, has evaluated, as of the end of the period covered by this
report, the effectiveness of the design and operation of the Companys
disclosure controls and procedures with respect to the information generated
for use in this report. Based upon, and as of the date of that evaluation, the
principal executive officer and principal financial officer concluded that the
disclosure controls and procedures were effective to provide reasonable
assurances that information required to be disclosed in the reports filed or
submitted under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
SECs rules and forms.

In designing and evaluating the disclosure controls and procedures, management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable, not absolute, assurance of achieving the
desired control objectives and management necessarily was required to apply its
judgment in evaluating the cost-benefit relationship of possible controls and
procedures. Based upon the above evaluation, management believes that its
controls do provide such reasonable assurances.

There have been no changes in the Companys internal control over financial
reporting that occurred during the Companys most recent fiscal quarter that
have materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)




PART II: OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS.

None.




ITEM 2: CHANGES IN SECURITIES

None.




ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.




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

None.




ITEM 5. OTHER INFORMATION.

None.




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



|(a) |  | The following exhibits are being filed as part of this report:
|--- |  | --------------------------------------------------------------

|            |  |                                                                                                                                                                  
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                      
|            |  |                                                                                                                                                                  
|10.13       |  | Second Modification Agreement, dated May 30, 2003, by and between
Holding and Wells Fargo Bank, National Association.                                            
|            |  |                                                                                                                                                                  
|31.1        |  | Certification of the Chief Executive Officer of Holding pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|            |  |                                                                                                                                                                  
|31.2        |  | Certification of the Chief Financial Officer of Holding pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|            |  |                                                                                                                                                                  
|31.3        |  | Certification of the Chief Executive Officer of CPI pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.                                                   
|            |  |                                                                                                                                                                  
|31.4        |  | Certification of the Chief Financial Officer of CPI pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.                                                   
|            |  |                                                                                                                                                                  
|32.1        |  | Certification of the Chief Executive Officer of Holding pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|            |  |                                                                                                                                                                  
|32.2        |  | Certification of the Chief Financial Officer of Holding Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|            |  |                                                                                                                                                                  
|32.3        |  | Certification of the Chief Executive Officer of CPI pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.    
|            |  |                                                                                                                                                                  
|32.4        |  | Certification of the Chief Financial Officer of CPI pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.    

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COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)



|(b) |  | Reports on Form 8-K:                                                    
|--- |  | ------------------------------------------------------------------------
|   
|    |  | No reports were filed on Form 8-K during the quarter ended July 4, 2003.

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SIGNATURES

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

| |  |                                                       |  |                                                                                                                                
| |  | ----------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------
| |  | COMMUNICATIONS & POWER INDUSTRIES HOLDING
CORPORATION
| |  |                                                       |  |                                                                                                                                
| |  | By:                                                   |  | /s/ O. Joe Caldarelli                                                                                                          
| |  |                                                       |  |                                                                                                                                
| |  |                                                       |  | O. Joe Caldarelli
Chief Executive Officer
Date: August 8, 2003                                                                 
| |  |                                                       |  |                                                                                                                                
| |  | By:                                                   |  | /s/ Joel Littman                                                                                                               
| |  |                                                       |  |                                                                                                                                
| |  |                                                       |  | Joel Littman
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
Date: August 8, 2003

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SIGNATURES

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

| |  |                                         |  |                                                                                                                                
| |  | --------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------
| |  | COMMUNICATIONS & POWER INDUSTRIES, INC.
| |  |                                         |  |                                                                                                                                
| |  | By:                                     |  | /s/ O. Joe Caldarelli                                                                                                          
| |  |                                         |  |                                                                                                                                
| |  |                                         |  | O. Joe Caldarelli
Chief Executive Officer
Date: August 8, 2003                                                                 
| |  |                                         |  |                                                                                                                                
| |  | By:                                     |  | /s/ Joel Littman                                                                                                               
| |  |                                         |  |                                                                                                                                
| |  |                                         |  | Joel Littman
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
Date: August 8, 2003

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EXHIBIT INDEX

|            |  |                                                                                                                                                                  
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                      
|            |  |                                                                                                                                                                  
|10.13       |  | Second Modification Agreement, dated May 30, 2003, by and between
Holding and Wells Fargo Bank, National Association.                                            
|            |  |                                                                                                                                                                  
|31.1        |  | Certification of the Chief Executive Officer of Holding pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.                                               
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|31.2        |  | Certification of the Chief Financial Officer of Holding pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.                                               
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|31.3        |  | Certification of the Chief Executive Officer of CPI pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.                                                   
|            |  |                                                                                                                                                                  
|31.4        |  | Certification of the Chief Financial Officer of CPI pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.                                                   
|            |  |                                                                                                                                                                  
|32.1        |  | Certification of the Chief Executive Officer of Holding pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|            |  |                                                                                                                                                                  
|32.2        |  | Certification of the Chief Financial Officer of Holding Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|            |  |                                                                                                                                                                  
|32.3        |  | Certification of the Chief Executive Officer of CPI pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.    
|            |  |                                                                                                                                                                  
|32.4        |  | Certification of the Chief Financial Officer of CPI pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.