##### 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 April 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)Delaware
(State or Other Jurisdiction of Incorporation or Organization) |  | (Exact Name of Registrant as Specified in Its Charter)Delaware
(State or Other Jurisdiction of Incorporation or Organization)
|77-0407395                                                                                                                    |  | 77-0405693                                                                                                                   
|(I.R.S. Employer Identification No.)811 Hansen Way                                                                            |  | (I.R.S. Employer Identification No.)811 Hansen Way                                                                           
|Palo Alto, California 94303-1110
(650) 846-2900                                                                               |  | Palo Alto, California 94303-1110
(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). 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 April 28, 2003. Communications & Power Industries, Inc.: 1 share of
Common Stock, $.01 par value, at April 28, 2003.





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TABLE OF CONTENTS



|                           |                                                                                               |                                                      |  |  |  |  |  | 
|-------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|                           |                                                                                               | CONSOLIDATED CONDENSED BALANCE SHEETS               
|                           |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS     
|                           |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS     
|                           |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS     
|                           |                                                                                               | CONSOLIDATED CONDENSED BALANCE SHEETS               
|                           |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS     
|                           |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS     
|                           |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS     
|                           |                                                                                               | NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
|                           | 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
|SIGNATURES                
|CERTIFICATION             
|EXHIBIT INDEX             
|EXHIBIT 10.32.1           
|EXHIBIT 99.1              
|EXHIBIT 99.2              
|EXHIBIT 99.3              
|EXHIBIT 99.4              



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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, April 4, 2003 and September 27, 2002                                                            |    |  | 2  | 
|                                                                                              |                                                       | Consolidated Condensed Statements of Operations for the 13-week periods ended April 4, 2003
and March 29, 2002                         |    |  | 3  | 
|                                                                                              |                                                       | Consolidated Condensed Statements of Operations for the 27-week period ended April 4, 2003
and the 26-week period ended March 29, 2002 |    |  | 4  | 
|                                                                                              |                                                       | Consolidated Condensed Statements of Cash Flows for the 27-week period ended April 4, 2003
and the 26-week period ended March 29, 2002 |    |  | 5  | 
|                                                                                              |                                                       | Notes to Consolidated Condensed Financial Statements                                                                                   |    |  | 10 | 
|                                                                                              | COMMUNICATIONS & POWER INDUSTRIES, INC.               |                                                                                                                                        |    |  |   
|                                                                                              |                                                       | Consolidated Condensed Balance Sheets, April 4, 2003 and September 27, 2002                                                            |    |  | 6  | 
|                                                                                              |                                                       | Consolidated Condensed Statements of Operations for the 13-week periods ended April 4, 2003
and March 29, 2002                         |    |  | 7  | 
|                                                                                              |                                                       | Consolidated Condensed Statements of Operations for the 27-week period ended April 4, 2003
and the 26-week period ended March 29, 2002 |    |  | 8  | 
|                                                                                              |                                                       | Consolidated Condensed Statements of Cash Flows for the 27-week period ended April 4, 2003
and the 26-week period ended March 29, 2002 |    |  | 9  | 
|                                                                                              |                                                       | Notes to Consolidated Condensed Financial Statements                                                                                   |    |  | 10 | 
|ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS |                                                       |                                                                                                                                        | 18 | 
|ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |                                                       |                                                                                                                                        | 28 | 
|ITEM 4: CONTROLS AND PROCEDURES                                                               |                                                       |                                                                                                                                        | 28 | 
|PART II: OTHER INFORMATION                                                                    |                                                       |                                                                                                                                        | 29 | 
|SIGNATURES AND CERTIFICATIONS                                                                 |                                                       |                                                                                                                                        | 30 | 

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##### Table of Contents



COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries




CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands - unaudited)

|                                                             |                                   |   |          |         |               |  |         |         |  
|------------------------------------------------------------ | --------------------------------- | - | -------- | ------- | ------------- |  | ------- | ------- | -
|                                                             |                                   |   | April 4, |         | September 27,
|                                                             |                                   |   | 2003     |         | 2002         
|                                                             |                                   |   |          |         |              
|ASSETS                                                      
|Current Assets                                               |                                   |   |          |         |               |  |         |        
|                                                             | Cash and cash equivalents         |   | $        | 19,267  |               |  |         | 2,724   |  
|                                                             | Accounts receivable, net          |   |          | 34,310  |               |  |         | 29,937  |  
|                                                             | Inventories                       |   |          | 35,377  |               |  |         | 39,927  |  
|                                                             | Other current assets              |   |          | 3,559   |               |  |         | 2,637   |  
|                                                             |                                   |   |          |         |               |  |         |         |  
|Total current assets                                         |                                   |   | 92,513   |         |               |  | 75,225  |        
|Property, plant, and equipment, net                          |                                   |   | 53,659   |         |               |  | 55,846  |        
|Goodwill                                                     |                                   |   | 19,149   |         |               |  | 19,149  |        
|Intangibles, net                                             |                                   |   | 1,330    |         |               |  | 1,613   |        
|Debt issue costs, net                                        |                                   |   | 2,938    |         |               |  | 3,329   |        
|                                                             |                                   |   |          |         |               |  |         |         |  
|Total assets                                                 |                                   | $ | 169,589  |         |               |  | 155,162 |        
|                                                             |                                   |   |          |         |               |  |         |         |  
|LIABILITIES, PREFERRED STOCK ANDSTOCKHOLDERS DEFICIT       
|Current Liabilities                                          |                                   |   |          |         |               |  |         |        
|                                                             | Current portion of capital leases |   | $        |        |               |  |         | 45      |  
|                                                             | Mortgage financing                |   |          | 17,500  |               |  |         | 17,750  |  
|                                                             | Accounts payable                  |   |          | 15,055  |               |  |         | 14,111  |  
|                                                             | Accrued expenses                  |   |          | 16,735  |               |  |         | 17,304  |  
|                                                             | Product warranty                  |   |          | 5,073   |               |  |         | 4,823   |  
|                                                             | Income taxes payable              |   |          | 5,900   |               |  |         | 2,959   |  
|                                                             | Accrued dividends payable         |   |          | 12,392  |               |  |         | 9,538   |  
|                                                             | Advance payments from customers   |   |          | 12,081  |               |  |         | 7,594   |  
|                                                             |                                   |   |          |         |               |  |         |         |  
|Total current liabilities                                    |                                   |   | 84,736   |         |               |  | 74,124  |        
|Senior subordinated notes                                    |                                   |   | 100,000  |         |               |  | 100,000 |        
|                                                             |                                   |   |          |         |               |  |         |         |  
|Total liabilities                                            |                                   |   | 184,736  |         |               |  | 174,124 |        
|                                                             |                                   |   |          |         |               |  |         |         |  
|Senior Redeemable Preferred Stock of CPI                     |                                   |   | 28,800   |         |               |  | 28,693  |        
|                                                             |                                   |   |          |         |               |  |         |         |  
|Junior Preferred Stock of CPI                                |                                   |   | 27,308   |         |               |  | 25,449  |        
|                                                             |                                   |   |          |         |               |  |         |         |  
|Commitments and contingencies                                |                                   |   |          |         |               |  |         |        
|Stockholders Deficit                                        |                                   |   |          |         |               |  |         |        
|                                                             | Common stock                      |   |          | 50      |               |  |         | 49      |  
|                                                             | Additional paid-in capital        |   |          | 19,220  |               |  |         | 19,111  |  
|                                                             | Accumulated deficit               |   |          | (89,285 | )             |  |         | (91,041 | )
|                                                             | Stockholder loans                 |   |          | (1,240  | )             |  |         | (1,223  | )
|                                                             |                                   |   |          |         |               |  |         |         |  
|Net stockholders deficit                                    |                                   |   | (71,255  | )       |               |  | (73,104 | )      
|                                                             |                                   |   |          |         |               |  |         |         |  
|Total liabilities, preferred stock and
stockholders deficit |                                   | $ | 169,589  |         |               |  | 155,162 |        
|                                                             |                                   |   |          |         |               |  |         |         |  

See accompanying notes to the unaudited consolidated condensed financial statements.

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##### Table of Contents



COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries




CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands - unaudited)

|                                               |                                   |   |              |       |              |  |        |       | 
|---------------------------------------------- | --------------------------------- | - | ------------ | ----- | ------------ |  | ------ | ----- | 
|                                               |                                   |   | 13-Week      |       | 13-Week     
|                                               |                                   |   | period ended |       | period ended
|                                               |                                   |   | April 4,     |       | March 29,   
|                                               |                                   |   | 2003         |       | 2002        
|                                               |                                   |   |              |       |             
|Sales                                          |                                   | $ | 67,897       |       |              |  | 60,612 |      
|Cost of sales                                  |                                   |   | 47,213       |       |              |  | 47,666 |      
|                                               |                                   |   |              |       |              |  |        |      
|Gross profit                                   |                                   |   | 20,684       |       |              |  | 12,946 |      
|                                               |                                   |   |              |       |              |  |        |      
|Operating costs and expenses:                  |                                   |   |              |       |              |  |        |      
|                                               | Research and development          |   |              | 1,574 |              |  |        | 1,517 | 
|                                               | Selling and marketing             |   |              | 3,845 |              |  |        | 3,639 | 
|                                               | General and administrative        |   |              | 4,264 |              |  |        | 4,556 | 
|                                               |                                   |   |              |       |              |  |        |      
|Total operating costs and expenses             |                                   |   | 9,683        |       |              |  | 9,712  |      
|                                               |                                   |   |              |       |              |  |        |      
|Operating income                               |                                   |   | 11,001       |       |              |  | 3,234  |      
|Interest expense                               |                                   |   | (3,576       | )     |              |  | (3,814 | )    
|                                               |                                   |   |              |       |              |  |        |      
|Income (loss) before taxes                     |                                   |   | 7,425        |       |              |  | (580   | )    
|Income tax expense                             |                                   |   | 3,385        |       |              |  | 1,153  |      
|                                               |                                   |   |              |       |              |  |        |      
|Net income (loss)                              |                                   |   | 4,040        |       |              |  | (1,733 | )    
|Preferred dividends:                           |                                   |   |              |       |              |  |        |      
|                                               | Senior redeemable preferred stock |   |              | 1,452 |              |  |        | 1,292 | 
|                                               | Junior preferred stock            |   |              | 945   |              |  |        | 824   | 
|                                               |                                   |   |              |       |              |  |        |      
|Net income (loss) attributable to common stock |                                   | $ | 1,643        |       |              |  | (3,849 | )    
|                                               |                                   |   |              |       |              |  |        |      

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)

|                                               |                                   |   |              |       |              |  |         |       | 
|---------------------------------------------- | --------------------------------- | - | ------------ | ----- | ------------ |  | ------- | ----- | 
|                                               |                                   |   | 27-Week      |       | 26-Week     
|                                               |                                   |   | period ended |       | period ended
|                                               |                                   |   | April 4,     |       | March 29,   
|                                               |                                   |   | 2003         |       | 2002        
|                                               |                                   |   |              |       |             
|Sales                                          |                                   | $ | 129,523      |       |              |  | 126,840 |      
|Cost of sales                                  |                                   |   | 92,149       |       |              |  | 99,735  |      
|                                               |                                   |   |              |       |              |  |         |      
|Gross profit                                   |                                   |   | 37,374       |       |              |  | 27,105  |      
|                                               |                                   |   |              |       |              |  |         |      
|Operating costs and expenses:                  |                                   |   |              |       |              |  |         |      
|                                               | Research and development          |   |              | 3,019 |              |  |         | 2,772 | 
|                                               | Selling and marketing             |   |              | 7,769 |              |  |         | 7,585 | 
|                                               | General and administrative        |   |              | 8,142 |              |  |         | 9,143 | 
|                                               |                                   |   |              |       |              |  |         |      
|Total operating costs and expenses             |                                   |   | 18,930       |       |              |  | 19,500  |      
|                                               |                                   |   |              |       |              |  |         |      
|Operating income                               |                                   |   | 18,444       |       |              |  | 7,605   |      
|Other income                                   |                                   |   | 267          |       |              |  |        |      
|Interest expense                               |                                   |   | (7,246       | )     |              |  | (8,539  | )    
|                                               |                                   |   |              |       |              |  |         |      
|Income (loss) before taxes                     |                                   |   | 11,465       |       |              |  | (934    | )    
|Income tax expense                             |                                   |   | 4,889        |       |              |  | 1,833   |      
|                                               |                                   |   |              |       |              |  |         |      
|Net income (loss)                              |                                   |   | 6,576        |       |              |  | (2,767  | )    
|Preferred dividends:                           |                                   |   |              |       |              |  |         |      
|                                               | Senior redeemable preferred stock |   |              | 2,854 |              |  |         | 2,486 | 
|                                               | Junior preferred stock            |   |              | 1,859 |              |  |         | 1,620 | 
|                                               |                                   |   |              |       |              |  |         |      
|Net income (loss) attributable to common stock |                                   | $ | 1,863        |       |              |  | (6,873  | )    
|                                               |                                   |   |              |       |              |  |         |      

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)

|                                                 |                                                |   |              |        |              |  |       |         |  
|------------------------------------------------ | ---------------------------------------------- | - | ------------ | ------ | ------------ |  | ----- | ------- | -
|                                                 |                                                |   | 27-Week      |        | 26-Week     
|                                                 |                                                |   | period ended |        | period ended
|                                                 |                                                |   | April 4,     |        | March 29,   
|                                                 |                                                |   | 2003         |        | 2002        
|                                                 |                                                |   |              |        |             
|OPERATING ACTIVITIES                             |                                                |   |              |        |              |  |       |        
|                                                 | Net cash provided by operating activities      |   | $            | 17,941 |              |  |       | 20,579  |  
|                                                 |                                                |   |              |        |              |  |       |         |  
|INVESTING ACTIVITIES                             |                                                |   |              |        |              |  |       |        
|                                                 | Purchase of property, plant and equipment, net |   |              | (918   | )            |  |       | (1,372  | )
|                                                 |                                                |   |              |        |              |  |       |         |  
|                                                 | Net cash used in investing activities          |   |              | (918   | )            |  |       | (1,372  | )
|                                                 |                                                |   |              |        |              |  |       |         |  
|FINANCING ACTIVITIES                             |                                                |   |              |        |              |  |       |        
|                                                 | Repayments on capital leases                   |   |              | (45    | )            |  |       | (520    | )
|                                                 | Payment of debt issue costs                    |   |              | (295   | )            |  |       |        |  
|                                                 | Repayment of revolving credit facility         |   |              |       |              |  |       | (17,787 | )
|                                                 | Repayment of mortgage financing                |   |              | (250   | )            |  |       |        |  
|                                                 | Proceeds from the sale of common stock         |   |              | 110    |              |  |       |        |  
|                                                 |                                                |   |              |        |              |  |       |         |  
|                                                 | Net cash used in financing activities          |   |              | (480   | )            |  |       | (18,307 | )
|                                                 |                                                |   |              |        |              |  |       |         |  
|NET INCREASE IN CASH AND CASH EQUIVALENTS        |                                                |   | 16,543       |        |              |  | 900   |        
|Cash and cash equivalents at beginning of period |                                                |   | 2,724        |        |              |  | 2,903 |        
|                                                 |                                                |   |              |        |              |  |       |         |  
|Cash and cash equivalents at end of period       |                                                | $ | 19,267       |        |              |  | 3,803 |        
|                                                 |                                                |   |              |        |              |  |       |         |  

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)

|                                                                               |                                   |   |          |         |               |  |         |         |  
|------------------------------------------------------------------------------ | --------------------------------- | - | -------- | ------- | ------------- |  | ------- | ------- | -
|                                                                               |                                   |   | April 4, |         | September 27,
|                                                                               |                                   |   | 2003     |         | 2002         
|                                                                               |                                   |   |          |         |              
|ASSETS                                                                         |                                   |   |          |         |               |  |         |        
|Current Assets                                                                 |                                   |   |          |         |               |  |         |        
|                                                                               | Cash and cash equivalents         |   | $        | 19,267  |               |  |         | 2,724   |  
|                                                                               | Accounts receivable, net          |   |          | 34,310  |               |  |         | 29,937  |  
|                                                                               | Inventories                       |   |          | 35,377  |               |  |         | 39,927  |  
|                                                                               | Other current assets              |   |          | 3,559   |               |  |         | 2,637   |  
|                                                                               |                                   |   |          |         |               |  |         |         |  
|Total current assets                                                           |                                   |   | 92,513   |         |               |  | 75,225  |        
|Property, plant, and equipment, net                                            |                                   |   | 40,579   |         |               |  | 42,478  |        
|Goodwill                                                                       |                                   |   | 19,149   |         |               |  | 19,149  |        
|Intangibles, net                                                               |                                   |   | 1,330    |         |               |  | 1,613   |        
|Debt issue costs, net                                                          |                                   |   | 2,920    |         |               |  | 3,259   |        
|Note receivable from parent                                                    |                                   |   | 5,750    |         |               |  | 5,750   |        
|                                                                               |                                   |   |          |         |               |  |         |         |  
|Total assets                                                                   |                                   | $ | 162,241  |         |               |  | 147,474 |        
|                                                                               |                                   |   |          |         |               |  |         |         |  
|LIABILITIES, PREFERRED STOCK ANDSTOCKHOLDERS DEFICIT                          |                                   |   |          |         |               |  |         |        
|Current Liabilities                                                            |                                   |   |          |         |               |  |         |        
|                                                                               | Current portion of capital leases |   | $        |        |               |  |         | 45      |  
|                                                                               | Accounts payable                  |   |          | 15,055  |               |  |         | 14,111  |  
|                                                                               | Accrued expenses                  |   |          | 17,831  |               |  |         | 18,313  |  
|                                                                               | Product warranty                  |   |          | 5,073   |               |  |         | 4,823   |  
|                                                                               | Income taxes payable              |   |          | 6,037   |               |  |         | 2,964   |  
|                                                                               | Accrued dividends payable         |   |          | 12,392  |               |  |         | 9,538   |  
|                                                                               | Advance payments from customers   |   |          | 12,081  |               |  |         | 7,594   |  
|                                                                               |                                   |   |          |         |               |  |         |         |  
|Total current liabilities                                                      |                                   |   | 68,469   |         |               |  | 57,388  |        
|Senior subordinated notes                                                      |                                   |   | 100,000  |         |               |  | 100,000 |        
|Deferred income on sale-leaseback                                              |                                   |   | 7,099    |         |               |  | 7,311   |        
|                                                                               |                                   |   |          |         |               |  |         |         |  
|Total liabilities                                                              |                                   |   | 175,568  |         |               |  | 164,699 |        
|                                                                               |                                   |   |          |         |               |  |         |         |  
|Senior Redeemable Preferred Stock                                              |                                   |   | 28,800   |         |               |  | 28,693  |        
|                                                                               |                                   |   |          |         |               |  |         |         |  
|Commitments and contingencies                                                  |                                   |   |          |         |               |  |         |        
|Stockholders Deficit:                                                         |                                   |   |          |         |               |  |         |        
|                                                                               | Junior preferred stock            |   |          | 2       |               |  |         | 2       |  
|                                                                               | Common stock                      |   |          |        |               |  |         |        |  
|                                                                               | Additional paid-in capital        |   |          | 46,468  |               |  |         | 44,608  |  
|                                                                               | Accumulated deficit               |   |          | (87,357 | )             |  |         | (89,305 | )
|                                                                               | Stockholder loans                 |   |          | (1,240  | )             |  |         | (1,223  | )
|                                                                               |                                   |   |          |         |               |  |         |         |  
|Net stockholders deficit                                                      |                                   |   | (42,127  | )       |               |  | (45,918 | )      
|                                                                               |                                   |   |          |         |               |  |         |         |  
|Total liabilities, senior redeemable
preferred stock and stockholders deficit |                                   | $ | 162,241  |         |               |  | 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
|                                               |                                   |   | April 4,     |       | March 29,   
|                                               |                                   |   | 2003         |       | 2002        
|                                               |                                   |   |              |       |             
|Sales                                          |                                   | $ | 67,897       |       |              |  | 60,612 |      
|Cost of sales                                  |                                   |   | 47,213       |       |              |  | 47,666 |      
|                                               |                                   |   |              |       |              |  |        |      
|Gross profit                                   |                                   |   | 20,684       |       |              |  | 12,946 |      
|                                               |                                   |   |              |       |              |  |        |      
|Operating costs and expenses:                  |                                   |   |              |       |              |  |        |      
|                                               | Research and development          |   |              | 1,574 |              |  |        | 1,517 | 
|                                               | Selling and marketing             |   |              | 3,845 |              |  |        | 3,639 | 
|                                               | General and administrative        |   |              | 4,644 |              |  |        | 4,898 | 
|                                               |                                   |   |              |       |              |  |        |      
|Total operating costs and expenses             |                                   |   | 10,063       |       |              |  | 10,054 |      
|                                               |                                   |   |              |       |              |  |        |      
|Operating income                               |                                   |   | 10,621       |       |              |  | 2,892  |      
|Interest expense                               |                                   |   | (3,074       | )     |              |  | (3,329 | )    
|                                               |                                   |   |              |       |              |  |        |      
|Income (loss) before taxes                     |                                   |   | 7,547        |       |              |  | (437   | )    
|Income tax expense                             |                                   |   | 3,440        |       |              |  | 1,323  |      
|                                               |                                   |   |              |       |              |  |        |      
|Net income (loss)                              |                                   |   | 4,107        |       |              |  | (1,760 | )    
|Preferred dividends:                           |                                   |   |              |       |              |  |        |      
|                                               | Senior redeemable preferred stock |   |              | 1,452 |              |  |        | 1,292 | 
|                                               | Junior preferred stock            |   |              | 945   |              |  |        | 824   | 
|                                               |                                   |   |              |       |              |  |        |      
|Net income (loss) attributable to common stock |                                   | $ | 1,710        |       |              |  | (3,876 | )    
|                                               |                                   |   |              |       |              |  |        |      

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)

|                                               |                                   |   |              |       |              |  |         |       | 
|---------------------------------------------- | --------------------------------- | - | ------------ | ----- | ------------ |  | ------- | ----- | 
|                                               |                                   |   | 27-Week      |       | 26-Week     
|                                               |                                   |   | period ended |       | period ended
|                                               |                                   |   | April 4,     |       | March 29,   
|                                               |                                   |   | 2003         |       | 2002        
|                                               |                                   |   |              |       |             
|Sales                                          |                                   | $ | 129,523      |       |              |  | 126,840 |      
|Cost of sales                                  |                                   |   | 92,149       |       |              |  | 99,735  |      
|                                               |                                   |   |              |       |              |  |         |      
|Gross profit                                   |                                   |   | 37,374       |       |              |  | 27,105  |      
|                                               |                                   |   |              |       |              |  |         |      
|Operating costs and expenses:                  |                                   |   |              |       |              |  |         |      
|                                               | Research and development          |   |              | 3,019 |              |  |         | 2,772 | 
|                                               | Selling and marketing             |   |              | 7,769 |              |  |         | 7,585 | 
|                                               | General and administrative        |   |              | 8,866 |              |  |         | 9,831 | 
|                                               |                                   |   |              |       |              |  |         |      
|Total operating costs and expenses             |                                   |   | 19,654       |       |              |  | 20,188  |      
|                                               |                                   |   |              |       |              |  |         |      
|Operating income                               |                                   |   | 17,720       |       |              |  | 6,917   |      
|Other income                                   |                                   |   | 267          |       |              |  |        |      
|Interest expense                               |                                   |   | (6,198       | )     |              |  | (7,526  | )    
|                                               |                                   |   |              |       |              |  |         |      
|Income (loss) before taxes                     |                                   |   | 11,789       |       |              |  | (609    | )    
|Income tax expense                             |                                   |   | 5,021        |       |              |  | 1,833   |      
|                                               |                                   |   |              |       |              |  |         |      
|Net income (loss)                              |                                   |   | 6,768        |       |              |  | (2,442  | )    
|Preferred dividends:                           |                                   |   |              |       |              |  |         |      
|                                               | Senior redeemable preferred stock |   |              | 2,854 |              |  |         | 2,486 | 
|                                               | Junior preferred stock            |   |              | 1,859 |              |  |         | 1,620 | 
|                                               |                                   |   |              |       |              |  |         |      
|Net income (loss) attributable to common stock |                                   | $ | 2,055        |       |              |  | (6,548  | )    
|                                               |                                   |   |              |       |              |  |         |      

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)

|                                                 |                                                |   |              |        |              |  |       |         |  
|------------------------------------------------ | ---------------------------------------------- | - | ------------ | ------ | ------------ |  | ----- | ------- | -
|                                                 |                                                |   | 27-Week      |        | 26-Week     
|                                                 |                                                |   | period ended |        | period ended
|                                                 |                                                |   | April 4,     |        | March 29,   
|                                                 |                                                |   | 2003         |        | 2002        
|                                                 |                                                |   |              |        |             
|OPERATING ACTIVITIES                             |                                                |   |              |        |              |  |       |        
|                                                 | Net cash provided by operating activities      |   | $            | 17,801 |              |  |       | 20,579  |  
|                                                 |                                                |   |              |        |              |  |       |        
|INVESTING ACTIVITIES                             |                                                |   |              |        |              |  |       |        
|                                                 | Purchase of property, plant and equipment, net |   |              | (918   | )            |  |       | (1,372  | )
|                                                 |                                                |   |              |        |              |  |       |         |  
|                                                 | Net cash used in investing activities          |   |              | (918   | )            |  |       | (1,372  | )
|                                                 |                                                |   |              |        |              |  |       |        
|FINANCING ACTIVITIES                             |                                                |   |              |        |              |  |       |        
|                                                 | Repayments on capital leases                   |   |              | (45    | )            |  |       | (520    | )
|                                                 | Payment of debt issue costs                    |   |              | (295   | )            |  |       |        |  
|                                                 | Repayments on revolving credit facility        |   |              |       |              |  |       | (17,787 | )
|                                                 |                                                |   |              |        |              |  |       |         |  
|                                                 | Net cash used in financing activities          |   |              | (340   | )            |  |       | (18,307 | )
|                                                 |                                                |   |              |        |              |  |       |        
|NET INCREASE IN CASH AND CASH EQUIVALENTS        |                                                |   | 16,543       |        |              |  | 900   |        
|Cash and cash equivalents at beginning of period |                                                |   | 2,724        |        |              |  | 2,903 |        
|                                                 |                                                |   |              |        |              |  |       |         |  
|Cash and cash equivalents at end of period       |                                                | $ | 19,267       |        |              |  | 3,803 |        
|                                                 |                                                |   |              |        |              |  |       |        

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 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:

|                        |                   |      |          |        |               |  |        |        | 
|----------------------- | ----------------- | ---- | -------- | ------ | ------------- |  | ------ | ------ | 
|                        |                   |      | April 4, |        | September 27,
|(In thousands)          |                   | 2003 |          | 2002  
|                        |                   |      |          |       
|Raw materials and parts |                   | $    | 28,525   |        |               |  | 30,638 |       
|Work in process         |                   |      | 3,640    |        |               |  | 6,507  |       
|Finished goods          |                   |      | 3,212    |        |               |  | 2,782  |       
|                        |                   |      |          |        |               |  |        |       
|                        | Total inventories |      | $        | 35,377 |               |  |        | 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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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      |  | 27-Week      |        | 26-Week     
|                           |                               |   | Period Ended |        | Period Ended |  | Period Ended |        | Period Ended
|                           |                               |   | April 4,     |        | March 29,    |  | April 4,     |        | March 29,   
|                           |                               |   | 2003         |        | 2002         |  | 2003         |        | 2002        
|                           |                               |   |              |        |              |  |              |        |             
|Beginning accrued warranty |                               | $ | 5,081        |        |              |  | 4,210        |        |              | $ | 4,823 |        |   |  | 4,225 |       
|                           | Cost of warranty claims       |   |              | (1,428 | )            |  |              | (1,703 | )            |   |       | (2,728 | ) |  |       | (3,394 | )
|                           | Accruals for product warranty |   |              | 1,420  |              |  |              | 1,628  |              |   |       | 2,978  |   |  |       | 3,304  |  
|                           |                               |   |              |        |              |  |              |        |              |   |       |        |   |  |       |       
|Ending accrued warranty    |                               | $ | 5,073        |        |              |  | 4,135        |        |              | $ | 5,073 |        |   |  | 4,135 |       
|                           |                               |   |              |        |              |  |              |        |              |   |       |        |   |  |       |       

4.     Supplemental Cash Flow Information

|                                                |  |              |     |              |  |              |     |              |  |   |     |  |  |   |     | 
|----------------------------------------------- |  | ------------ | --- | ------------ |  | ------------ | --- | ------------ |  | - | --- |  |  | - | --- | 
|                                                |  | Holding      |     | CPI         
|                                                |  |              |     |             
|                                                |  | 27-Week      |     | 26-Week      |  | 27-Week      |     | 26-Week     
|                                                |  | Period Ended |     | Period Ended |  | Period Ended |     | Period Ended
|                                                |  | April 4,     |     | March 29,    |  | April 4,     |     | March 29,   
|(In millions)                                   |  | 2003         |     | 2002         |  | 2003         |     | 2002        
|                                                |  |              |     |              |  |              |     |             
|Cash Payments                                   |  |              |     |              |  |              |     |              |  |   |     |  |  |   |     | 
|Interest payments                               |  | $            | 6.8 |              |  | $            | 8.2 |              |  | $ | 6.1 |  |  | $ | 7.7 | 
|Tax payments                                    |  | $            | 1.9 |              |  | $            | 0.5 |              |  | $ | 1.9 |  |  | $ | 0.5 | 
|Non-cash Financing                              |  |              |     |              |  |              |     |              |  |   |     |  |  |   |     | 
|Unpaid cash
dividends on senior
preferred stock |  | $            | 2.9 |              |  | $            | 2.5 |              |  | $ | 2.9 |  |  | $ | 2.5 | 

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).

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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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
April 4, 2003:  |  |       |         |           |  |        |        |       |  |  |        |   |  |  |         | 
|Revenues from external customers             |  | $     | 57,564  |           |  |        | 10,849 |       |  |  | (516   | ) |  |  | 67,897  | 
|Intersegment product transfers               |  |       | 4,305   |           |  |        |       |       |  |  |       |   |  |  | 4,305   | 
|EBITDA  Holding                             |  |       | 13,567  |           |  |        | 1,086  |       |  |  | (2,055 | ) |  |  | 12,598  | 
|EBITDA  CPI                                 |  |       | 13,567  |           |  |        | 1,086  |       |  |  | (2,563 | ) |  |  | 12,090  | 
|                                            
|For
the 13-Week Period Ended
March 29, 2002: |  |       |         |           |  |        |        |       |  |  |        |   |  |  |         | 
|Revenues from external customers             |  | $     | 47,530  |           |  |        | 11,044 |       |  |  | 2,038  |   |  |  | 60,612  | 
|Intersegment product transfers               |  |       | 2,610   |           |  |        |       |       |  |  | 550    |   |  |  | 3,160   | 
|EBITDA  Holding                             |  |       | 8,116   |           |  |        | (54    | )     |  |  | (1,866 | ) |  |  | 6,196   | 
|EBITDA  CPI                                 |  |       | 8,116   |           |  |        | (54    | )     |  |  | (2,369 | ) |  |  | 5,693   | 
|                                            
|For
the 27-Week Period Ended
April 4, 2003:  |  |       |         |           |  |        |        |       |  |  |        |   |  |  |         | 
|Revenues from external customers             |  | $     | 108,520 |           |  |        | 21,435 |       |  |  | (432   | ) |  |  | 129,523 | 
|Intersegment product transfers               |  |       | 6,512   |           |  |        |       |       |  |  |       |   |  |  | 6,512   | 
|EBITDA  Holding                             |  |       | 23,175  |           |  |        | 2,384  |       |  |  | (3,534 | ) |  |  | 22,025  | 
|EBITDA  CPI                                 |  |       | 23,175  |           |  |        | 2,384  |       |  |  | (4,546 | ) |  |  | 21,013  | 
|                                            
|For
the 26-Week Period Ended
March 29, 2002: |  |       |         |           |  |        |        |       |  |  |        |   |  |  |         | 
|Revenues from external customers             |  | $     | 98,859  |           |  |        | 26,905 |       |  |  | 1,076  |   |  |  | 126,840 | 
|Intersegment product transfers               |  |       | 4,869   |           |  |        |       |       |  |  | 626    |   |  |  | 5,495   | 
|EBITDA  Holding                             |  |       | 16,189  |           |  |        | 227    |       |  |  | (2,755 | ) |  |  | 13,661  | 
|EBITDA  CPI                                 |  |       | 16,189  |           |  |        | 227    |       |  |  | (3,767 | ) |  |  | 12,649  | 

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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)

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

|                              |  |              |        |              |  |              |       |              |  |   |        |  |  |  |       |  
|----------------------------- |  | ------------ | ------ | ------------ |  | ------------ | ----- | ------------ |  | - | ------ |  |  |  | ----- | -
|                              |  | Holding      |        | CPI         
|                              |  |              |        |             
|                              |  | 13-Week      |        | 13-Week      |  | 13-Week      |       | 13-Week     
|                              |  | Period Ended |        | Period Ended |  | Period Ended |       | Period Ended
|                              |  | April 4,     |        | March 29,    |  | April 4,     |       | March 29,   
|(In thousands)                |  | 2003         |        | 2002         |  | 2003         |       | 2002        
|                              |  |              |        |              |  |              |       |             
|Segment EBITDA                |  | $            | 12,598 |              |  |              | 6,196 |              |  | $ | 12,090 |  |  |  | 5,693 |  
|Less:                         |  |              |        |              |  |              |       |              |  |   |        |  |  |  |       |  
|Depreciation and amortization |  |              | 1,597  |              |  |              | 2,962 |              |  |   | 1,469  |  |  |  | 2,801 |  
|Interest expense              |  |              | 3,576  |              |  |              | 3,814 |              |  |   | 3,074  |  |  |  | 3,329 |  
|                              |  |              |        |              |  |              |       |              |  |   |        |  |  |  |       |  
|Income (loss) before taxes    |  | $            | 7,425  |              |  |              | (580  | )            |  | $ | 7,547  |  |  |  | (437  | )
|                              |  |              |        |              |  |              |       |              |  |   |        |  |  |  |       |  

|                              |  |              |        |              |  |              |        |              |  |   |        |  |  |  |        |  
|----------------------------- |  | ------------ | ------ | ------------ |  | ------------ | ------ | ------------ |  | - | ------ |  |  |  | ------ | -
|                              |  | Holding      |        | CPI         
|                              |  |              |        |             
|                              |  | 27-Week      |        | 26-Week      |  | 27-Week      |        | 26-Week     
|                              |  | Period Ended |        | Period Ended |  | Period Ended |        | Period Ended
|                              |  | April 4,     |        | March 29,    |  | April 4,     |        | March 29,   
|(In thousands)                |  | 2003         |        | 2002         |  | 2003         |        | 2002        
|                              |  |              |        |              |  |              |        |             
|Segment EBITDA                |  | $            | 22,025 |              |  |              | 13,661 |              |  | $ | 21,013 |  |  |  | 12,649 |  
|Less:                         |  |              |        |              |  |              |        |              |  |   |        |  |  |  |        |  
|Depreciation and amortization |  |              | 3,314  |              |  |              | 6,056  |              |  |   | 3,026  |  |  |  | 5,732  |  
|Interest expense              |  |              | 7,246  |              |  |              | 8,539  |              |  |   | 6,198  |  |  |  | 7,526  |  
|                              |  |              |        |              |  |              |        |              |  |   |        |  |  |  |        |  
|Income (loss) before taxes    |  | $            | 11,465 |              |  |              | (934   | )            |  | $ | 11,789 |  |  |  | (609   | )
|                              |  |              |        |              |  |              |        |              |  |   |        |  |  |  |        |  

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

|                      |  |              |        |              |  |              |        |              |  |   |         |  |  |  |         | 
|--------------------- |  | ------------ | ------ | ------------ |  | ------------ | ------ | ------------ |  | - | ------- |  |  |  | ------- | 
|                      |  | 13-Week      |        | 13-Week      |  | 27-Week      |        | 26-Week     
|                      |  | Period Ended |        | Period Ended |  | Period Ended |        | Period Ended
|                      |  | April 4,     |        | March 29,    |  | April 4,     |        | March 29,   
|(In thousands)        |  | 2003         |        | 2002         |  | 2003         |        | 2002        
|                      |  |              |        |              |  |              |        |             
|United States         |  | $            | 48,216 |              |  |              | 42,972 |              |  | $ | 86,252  |  |  |  | 92,789  | 
|All foreign countries |  |              | 19,681 |              |  |              | 17,640 |              |  |   | 43,271  |  |  |  | 34,051  | 
|                      |  |              |        |              |  |              |        |              |  |   |         |  |  |  |         | 
|Total Sales           |  | $            | 67,897 |              |  |              | 60,612 |              |  | $ | 129,523 |  |  |  | 126,840 | 
|                      |  |              |        |              |  |              |        |              |  |   |         |  |  |  |         | 

CPI has a single customer that accounts for 10% or more of consolidated sales.
Sales to this customer were $14.2 million and $10.3 million of the Companys
consolidated sales for the 13-week period ended April 4, 2003 and March 29,
2002, respectively. Sales to this customer were $25.7 million and $20.3 million
of the Companys consolidated sales for the 27-week period ended April 4, 2003
and the 26-week period ended March 29, 2002, respectively. A substantial
majority of these sales were VED segment products, but this customer also
purchased satcom equipment products.

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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)

6.     Recent Accounting Pronouncements

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

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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)

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 there are 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.

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 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 April 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 six-month
period ended April 4, 2003.

The following table presents the impact of adopting SFAS No. 142 on net income (loss) if such standard

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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 been in effect for the 13-week and 26-week periods ended March 29, 2002.

|                                  |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|--------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ------ | ------------ |  | - | ----- |  |  |  | ------ | -
|                                  |  | Holding      |       | CPI         
|                                  |  |              |       |             
|                                  |  | 13-Week      |       | 13-Week      |  | 13-Week      |        | 13-Week     
|                                  |  | Period Ended |       | Period Ended |  | Period Ended |        | Period Ended
|                                  |  | April 4,     |       | March 29,    |  | April 4,     |        | March 29,   
|(In thousands)                    |  | 2003         |       | 2002         |  | 2003         |        | 2002        
|                                  |  |              |       |              |  |              |        |             
|Net income (loss) as reported     |  | $            | 4,040 |              |  |              | (1,733 | )            |  | $ | 4,107 |  |  |  | (1,760 | )
|Adjustments:                      |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|Goodwill amortization, net of tax |  |              |      |              |  |              | 321    |              |  |   |      |  |  |  | 321    |  
|                                  |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|Adjusted net income (loss)        |  | $            | 4,040 |              |  |              | (1,412 | )            |  | $ | 4,107 |  |  |  | (1,439 | )
|                                  |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  

|                                  |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|--------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ------ | ------------ |  | - | ----- |  |  |  | ------ | -
|                                  |  | Holding      |       | CPI         
|                                  |  |              |       |             
|                                  |  | 27-Week      |       | 26-Week      |  | 27-Week      |        | 26-Week     
|                                  |  | Period Ended |       | Period Ended |  | Period Ended |        | Period Ended
|                                  |  | April 4,     |       | March 29,    |  | April 4,     |        | March 29,   
|(In thousands)                    |  | 2003         |       | 2002         |  | 2003         |        | 2002        
|                                  |  |              |       |              |  |              |        |             
|Net income (loss) as reported     |  | $            | 6,576 |              |  |              | (2,767 | )            |  | $ | 6,768 |  |  |  | (2,442 | )
|Adjustments:                      |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|Goodwill amortization, net of tax |  |              |      |              |  |              | 642    |              |  |   |      |  |  |  | 642    |  
|                                  |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|Adjusted net income (loss)        |  | $            | 6,576 |              |  |              | (2,125 | )            |  | $ | 6,768 |  |  |  | (1,800 | )
|                                  |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  

Intangible Assets

As of April 4, 2003 and September 27, 2002, the Company had $1.9 million of
intangible assets at cost, with accumulated amortization of $0.6 million and
$0.3 million, respectively. Amortization of intangible assets for the 27-week
period ended April 4, 2003 and the 26-week period ended March 29, 2002 was
approximately $0.3 million and $0.3 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:

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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)

|                                                                              |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|----------------------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ------ | ------------ |  | - | ----- |  |  |  | ------ | -
|                                                                              |  | Holding      |       | CPI         
|                                                                              |  |              |       |             
|                                                                              |  | 13-Week      |       | 13-Week      |  | 13-Week      |        | 13-Week     
|                                                                              |  | Period Ended |       | Period Ended |  | Period Ended |        | Period Ended
|(In thousands)                                                                |  | April 4,     |       | March 29,    |  | April 4,     |        | March 29,   
|                                                                              |  | 2003         |       | 2002         |  | 2003         |        | 2002        
|                                                                              |  |              |       |              |  |              |        |             
|Net income (loss) as reported                                                 |  | $            | 4,040 |              |  |              | (1,733 | )            |  | $ | 4,107 |  |  |  | (1,760 | )
|Deduct:                                                                       |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|Stock-based compensation determined
under fair value based method, net of tax |  |              | 37    |              |  |              | (14    | )            |  |   | 37    |  |  |  | (14    | )
|                                                                              |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|Pro forma net income (loss)                                                   |  | $            | 4,077 |              |  |              | (1,747 | )            |  | $ | 4,144 |  |  |  | (1,774 | )
|                                                                              |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  

|                                                                              |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|----------------------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ------ | ------------ |  | - | ----- |  |  |  | ------ | -
|                                                                              |  | Holding      |       | CPI         
|                                                                              |  |              |       |             
|                                                                              |  | 27-Week      |       | 26-Week      |  | 27-Week      |        | 26-Week     
|                                                                              |  | Period Ended |       | Period Ended |  | Period Ended |        | Period Ended
|(In thousands)                                                                |  | April 4,     |       | March 29,    |  | April 4,     |        | March 29,   
|                                                                              |  | 2003         |       | 2002         |  | 2003         |        | 2002        
|                                                                              |  |              |       |              |  |              |        |             
|Net income (loss) as reported                                                 |  | $            | 6,576 |              |  |              | (2,767 | )            |  | $ | 6,768 |  |  |  | (2,442 | )
|Deduct:                                                                       |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|Stock-based compensation determined
under fair value based method, net of tax |  |              | 68    |              |  |              | (29    | )            |  |   | 68    |  |  |  | (29    | )
|                                                                              |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  
|Pro forma net income (loss)                                                   |  | $            | 6,644 |              |  |              | (2,796 | )            |  | $ | 6,836 |  |  |  | (2,471 | )
|                                                                              |  |              |       |              |  |              |        |              |  |   |       |  |  |  |        |  

For the 13-week and 27-week periods ended April 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 a
prepaid 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.

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COMMUNICATION & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATION & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communication & 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 2002 was comprised of the 52-week
period ended September 27, 2002. The second quarter of fiscal year 2003 and
fiscal year 2002 were both comprised of 13 weeks. The first six months of
fiscal year 2003

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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)

was comprised of a 27-week period ended April 4, 2003 while the first six
months of fiscal year 2002 was comprised of a 26-week period ended March 29,
2002.

Orders during the second quarter of fiscal year 2003 were $89.9 million, as
compared to $65.3 million for the second quarter of fiscal year 2002. The
increase of $24.6 million, or 37.7%, compared to the same quarter of fiscal
year 2002, primarily reflects a higher demand for products in the
communications, radar, and medical markets. Communications orders for the
second quarter of fiscal year 2003 were $25.0 million, an increase of $5.9
million from the second quarter of fiscal year 2002. The increase is due
primarily to the receipt of two large orders from direct-to-home service
suppliers. The increase in communication orders is not expected to be sustained
in the upcoming quarters, as the Company believes that communication companies
will continue to maintain their capital spending at the moderate rates that we
have seen in recent years. Radar orders for the second quarter of fiscal year
2003 were $37.2 million, an increase of $16.4 million from the second quarter
of fiscal year 2002. The increase is due primarily to an increase in spares and
repair orders for logistic agencies. In addition, the Companys annual order
receipt for Aegis VEDs was awarded earlier in fiscal year 2003 compared to
fiscal year 2002. Medical orders increased by $2.5 million to $17.4 million in
the second quarter of fiscal year 2003, as compared to $14.9 million in the
second quarter of fiscal year 2002. Medical orders increased due to a few large
orders for VEDs that are used in cancer therapy systems. Orders in the
Companys remaining market segments were essentially unchanged from the second
quarter of fiscal year 2002.

Orders for the six months ended April 4, 2003 were $165.2 million, an increase
of $28.5 million, or 20.8% from $136.7 million in the comparable period of
fiscal year 2002. The increase primarily reflects a higher demand for products
in the communications, radar, electronic countermeasures and medical markets.
Communication orders have increased $9.0 million from the first six months of
fiscal year 2002 due principally to large orders from direct-to-home service
suppliers. The increase in communication orders is not expected to be sustained
in the upcoming quarters, as the Company believes that communication companies
will continue to maintain their capital spending at the moderate rates that we
have seen in recent years. Radar orders, which have increased by $14.3 million
from fiscal year 2002, have been buoyed by spares and repair orders for
logistics agencies as discussed above. Orders in the electronic countermeasures
market have increased $9.3 million from the first six months of fiscal year
2002 due primarily to timing of order releases from quarter to quarter by OEMs
and government logistics agencies. Annual orders in this market are expected to
be consistent with fiscal year 2002 levels. Medical orders increased by $4.1
million from the first six months of fiscal year 2002, due primarily to a few
large orders in the second quarter for VEDs used in cancer therapy systems.
These increases were offset in part by declines in the industrial and
scientific markets of $3.8 million and $4.4 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 as sales.

As of April 4, 2003, the Company had an order backlog of $180.5 million,
representing approximately eight-and-a-half months of sales, compared to an
order backlog of $158.7 million, or approximately seven-and-a-half months of
sales, as of March 29, 2002. Since the end of fiscal year 2002, order backlog

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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)

has increased by $35.4 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

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

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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)

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, or earlier if an event or circumstance indicates that an
impairment loss has occurred. 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

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

Sales. Sales for the second quarter of fiscal year 2003 were $67.9 million, an
increase of $7.3 million, or 12.0%, from the same period in fiscal year 2002.
The second quarter sales increase is primarily due to increased spending by the
U.S Department of Defense for VEDs that are sold in the radar and electronic
countermeasure markets. In addition, there was also an increase in shipments
of x-ray generators and VEDs for the medical market.

Gross Margin. Gross profit was $20.7 million in the second quarter of fiscal
year 2003, an increase of $7.8 million, or 59.7%, from $12.9 million in the
second quarter of fiscal year 2002. As a percentage of

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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)

sales, gross profit was 30.5% in the second quarter of fiscal year 2003,
compared to 21.4% from the second 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, a favorable
product mix, higher pricing for certain products 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 $9.7 million,
or 14.3 % of sales, for the second quarter of fiscal year 2003 as compared to
$9.7 million, or 16.0 % of sales, for the second quarter of fiscal year 2002.
In absolute dollars, the decrease in goodwill amortization upon adoption of
SFAS No. 142, and elimination of SSPD operating expenses was offset by
increased research and development expenses, insurance costs and employee
performance incentive costs.

Income Tax Expense.Income tax expense for the second quarter of fiscal year
2003 was $3.4 million compared to $1.2 million for the second quarter of fiscal
year 2002. The effective income tax rates were 46% and 199% for the second
quarter of fiscal year 2003 and 2002, respectively. The change in income tax
expense is primarily due to an increase in profitability and the U.S tax
expense related to the sale of the Satcom Division to Canada in fiscal year
2002. In both 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 second quarter of fiscal year 2003 was $12.6 million, or
18.6% of sales, compared to $6.2 million, or 10.2% of sales, for the second
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 (loss), 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 (loss)
before taxes, see footnote 5 of the Financial Statements included in Item 1
above.

Net Income (Loss).Net income was $4.0 million for the second quarter of
fiscal year 2003 compared to a net loss of $1.7 million for the second quarter
of fiscal year 2002. The increase in the Companys net income from the second
quarter of fiscal year 2002 can be attributed to improved operating income as

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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)

discussed above and reduced interest expense resulting from less outstanding
debt, which is offset by an increase in tax expense resulting from the increase
in profitability in fiscal year 2003.

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 second quarter of fiscal year 2003, CPIs
income before taxes was $7.5 million, which was approximately $0.1 million
higher than Holdings income before taxes of $7.4 million. As a result of the
sale-leaseback transaction, operating costs for CPI were approximately $0.4
million higher than those of Holding because of rental payments paid by CPI to
Holding for use of the San Carlos facility offset by amortization of the
deferred gain on the sale-leaseback and additional depreciation on the San
Carlos facility. Interest expense, net, for CPI was approximately $0.5 million
lower than that of Holding. The difference in interest expense primarily
relates to the fact that Holdings interest expense includes interest paid on
the mortgage financing of the San Carlos facility, which is combined with CPIs
interest income on a note receivable from Holding. All other operations data
for CPI is consistent with Holdings operations data for the second quarter of
fiscal year 2003.

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

Sales. Sales for the first six months of fiscal year 2003 were $129.5 million,
an increase of $2.7 million, or 2.1%, from the same period in fiscal year 2002.
The sales increase is primarily due to increased spending by the U.S
Department of Defense for VEDs that are sold in the radar and electronic
countermeasure markets. In addition, there was also an increase in shipments
of x-ray generators and VEDs for the medical market. The increased sales in
these markets was somewhat offset by decreases in sales to the communications,
industrial and scientific market segments.

Gross Margin. Gross profit was $37.4 million in the first six months of fiscal
year 2003 and $27.1 million in the first six months of fiscal year 2002, an
increase of 38.0%. As a percentage of sales, gross profit was 28.9% in the
first six months of fiscal year 2003, compared to 21.4% from the first six
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, a favorable
product mix, higher pricing for certain products, 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 $18.9 million,
or 14.6 % of sales, for the first six months of fiscal year 2003 as compared to
$19.5 million, or 15.4 % of sales, for the first six months of fiscal year
2002. In absolute dollars, the operating expense reduction was primarily due
to the decrease in goodwill amortization upon adoption of SFAS No. 142, the
elimination of SSPD operating expenses, and lower headcount and other cost
saving activities. Research and development, selling and marketing costs,
insurance costs and employee performance incentive costs are higher in the
first six months of fiscal year 2003 compared to the first six months of fiscal
year 2002.

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

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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)

resulting from the insurance companys 2001 demutualization. The Companys
portion of the stock was sold in the second quarter of fiscal year 2003 at an
amount slightly below the recorded value.

Income Tax Expense.Income tax expense for the six months ended April 4, 2003
was $4.9 million compared to $1.8 million for the corresponding period of
fiscal year 2002. The effective income tax rates were 43% and 196% for the
six-month period ended April 4, 2003 and March 29, 2002, respectively. The
change in income tax expense is primarily due to an increase in profitability
and the U.S tax expense related to the sale of Satcom Division to Canada in
fiscal year 2002. Income tax expense included a full valuation allowance on
deferred tax assets because of the uncertainty of realizing the deferred tax
assets for both fiscal year 2003 and 2002.

EBITDA. Earnings before interest, income taxes, depreciation and amortization
(EBITDA) for the first six months of fiscal year 2003 was $22.0 million, or
17.0% of sales, compared to $13.7 million, or 10.8% of sales, for the first six
months of fiscal year 2002. This increase in EBITDA can be attributed
primarily to the improvement in gross margins as discussed above. For a
reconciliation of EBITDA to Income (loss) before income taxes, see footnote 5
of the Financial Statements included in Item 1 above.

Net Income (Loss).Net income was $6.6 million for the first six months of
fiscal year 2003 compared to a net loss of $2.8 million for the first six
months of fiscal year 2002. The increase in the Companys net income from the
first six months of fiscal year 2002 can be attributed to improved operating
income as discussed above and reduced interest expense resulting from lower
outstanding debt, offset by an increase
in tax expense resulting from the increase in profitability in fiscal year
2003.

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 six months of fiscal year 2003, CPIs
income before taxes was $11.8 million, which was approximately $0.3 million
higher than Holdings income before taxes of $11.5 million. As a result of the
sale-leaseback transaction, operating costs for CPI were approximately $0.7
million higher than those of Holding due to rental payments paid by CPI to
Holding for use of the San Carlos facility offset by amortization of the
deferred gain on the sale-leaseback and additional depreciation on the San
Carlos facility. Interest expense, net, for CPI was approximately $1.0 million
lower than that of Holding. The difference in interest expense primarily
relates to the fact that Holdings interest expense includes interest paid on
the mortgage financing of the San Carlos facility, which is combined with CPIs
interest income on a note receivable from Holding. All other operations data
for CPI is consistent with Holdings operations data for the first six months
of fiscal year 2003.

Financial Condition

The Company continues to generate positive cash flow from operating activities
with $17.9 million generated during first six months of fiscal year 2003,
compared to $20.6 million in the first six months of fiscal year 2002. The
decrease in operating cash flow from the first six months of fiscal year 2002
can be attributed primarily to the change in accounts receivable during the
first six months of fiscal year 2002 compared to the same period in the prior
year, offset in part by higher cash generated from operating earnings during
the first six months of fiscal year 2003 compared to fiscal year 2002.

Investing activities were comprised of investment in property, plant and equipment totaling $0.9 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)

for the first six months of fiscal year 2003. Purchases of property, plant
and equipment decreased approximately $0.5 million from the comparable period
of fiscal year 2002. The Company currently anticipates that capital
expenditure requirements for fiscal year 2003 will be approximately $3.5
million, which is similar to the amount spent in fiscal year 2002.

Financing activities during the first six 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
debt issuance costs related to an amendment of the Companys credit facility.

Holdings short-term debt includes mortgage financing of $17.5 million with
respect to Holdings San Carlos property that expires on June 1, 2003.
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. 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, as discussed above, in
that CPIs debt obligations and financing activities do not include $17.5
million of mortgage financing due in 2003. 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 April 4, 2003, the Company had $29.5 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 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

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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)

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 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 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 there are 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.

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

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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)

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

Within 90 days prior to the filing date of this report, management, including
the Companys principal executive officer and principal financial officer,
evaluated 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 is recorded, processed,
summarized and reported within the time periods specified in the SECs rules
and forms.

There were no significant changes in the Companys internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation.

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.

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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

On March 3, 2003, the Company sold and issued an aggregate of 100,000 shares of
the Common Stock, $0.01 par value per share, of Holding to certain key
employees, officers and directors of the Company, for a purchase price of $1.10
per share, pursuant to the Companys 1995 Management Equity Plan. Such shares
of Common Stock were sold in reliance on Rule 701 of the Securities Act of
1933, as amended.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

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

On March 3, 2003 the holders of 3,590,750 shares of Common Stock of Holding
consented in writing to the approval and adoption of an amendment to Holdings
2000 Stock Option Plan (the Plan) to increase the total number of shares of
Common Stock that the Company is authorized to issue pursuant to the Plan from
250,000 to 350,000.

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                                                                                                                                                       |  |  |  | 
|            |  |                                                                                                                                                                   |  |  |  | 
|10.32.1     |  | First Amendment to Communications and Power Industries 2000 Stock Option Plan.                                                                                   
|            |  |                                                                                                                                                                  
|99.1        |  | 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.
|            |  |                                                                                                                                                                  
|99.2        |  | 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.
|            |  |                                                                                                                                                                  
|99.3        |  | 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.    
|            |  |                                                                                                                                                                  
|99.4        |  | 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.    

(b) Reports on Form 8-K:

No reports were filed on Form 8-K during the quarter ended April 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: May 9, 2003                                                            
| |                                           |                                                                                                                                               
| | By:                                       | /s/ Joel Littman

Joel Littman
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
Date: May 9, 2003

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##### Table of Contents






CERTIFICATION

I, O. Joe Caldarelli, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Communications &
Power Industries Holding Corporation;                                                                                                                                                                                                                  
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                      



| | a) |  | designed such disclosure controls and procedures
to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly
during the period in which this quarterly report is being
prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our
conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation
Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or
operation of internal controls which could adversely affect
the registrants ability to record, process, summarize and
report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                  |            |                                                                  
|----------------- | ---------- | -----------------------------------------------------------------
|Date: May 9, 2003 | Signature: | /s/ O. Joe Caldarelli

O. Joe Caldarelli, Chief Executive Officer

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CERTIFICATION

I, Joel A. Littman, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Communications &
Power Industries Holding Corporation;                                                                                                                                                                                                                  
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                      



| | a) |  | designed such disclosure controls and procedures
to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly
during the period in which this quarterly report is being
prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our
conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation
Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or
operation of internal controls which could adversely affect
the registrants ability to record, process, summarize and
report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                  |            |                                                              
|----------------- | ---------- | -------------------------------------------------------------
|Date: May 9, 2003 | Signature: | /s/ Joel A. Littman

Joel A. Littman, Chief Financial Officer

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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.

| |     |                                                                                                                                               
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------
| | CO  | MMUNICATIONS & POWER INDUSTRIES, INC.                                                                                                         
| |     |                                                                                                                                               
| | By: | /s O. Joe Caldarelli

O. Joe Caldarelli
Chief Executive Officer
Date: May 9, 2003                                                             
| |     |                                                                                                                                               
| | By: | /s/ Joel Littman

Joel Littman
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
Date: May 9, 2003

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CERTIFICATION

I, O. Joe Caldarelli, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Communications &
Power Industries, Inc.;                                                                                                                                                                                                                                
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                      



| | a) |  | designed such disclosure controls and procedures
to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly
during the period in which this quarterly report is being
prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our
conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation
Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or
operation of internal controls which could adversely affect
the registrants ability to record, process, summarize and
report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                        



|7. |  | The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                  |            |                                                                  
|----------------- | ---------- | -----------------------------------------------------------------
|Date: May 9, 2003 | Signature: | /s/ O. Joe Caldarelli

O. Joe Caldarelli, Chief Executive Officer

- 34 -



---



##### Table of Contents



CERTIFICATION

I, Joel A. Littman, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Communications &
Power Industries, Inc.;                                                                                                                                                                                                                                
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                      



| | a) |  | designed such disclosure controls and procedures
to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly
during the period in which this quarterly report is being
prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
 Evaluation Date); and                                                                                                 
|
| | c) |  | presented in this quarterly report our
conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation
Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or
operation of internal controls which could adversely affect
the registrants ability to record, process, summarize and
report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                        



|7. |  | The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                  |            |                                                              
|----------------- | ---------- | -------------------------------------------------------------
|Date: May 9, 2003 | Signature: | /s/ Joel A. Littman

Joel A. Littman, Chief Financial Officer

- 35 -



---



##### Table of Contents






EXHIBIT INDEX

|            |  |                                                                                                                                                                   |  |  |  | 
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit No. |  | Description                                                                                                                                                       |  |  |  | 
|            |  |                                                                                                                                                                   |  |  |  | 
|10.32.1     |  | First Amendment to Communications and Power Industries 2000 Stock Option Plan.                                                                                   
|            |  |                                                                                                                                                                  
|99.1        |  | 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.
|            |  |                                                                                                                                                                  
|99.2        |  | 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.
|            |  |                                                                                                                                                                  
|99.3        |  | 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.    
|            |  |                                                                                                                                                                  
|99.4        |  | 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.