Securities and Exchange Commission
                             Washington, D. C. 20549

                                   Form 10-KSB

(Mark One)
    (X)      ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
             ACT OF 1934 (Fee Required)

                     For the fiscal year ended November 30, 2000

    ( )      TRANSITION  REPORT  UNDER  SECTION  13  OR 15 (d) OF THE SECURITIES
             EXCHANGE ACT OF 1934 (No Fee Required)

                      For the transition period from ________ to ________
                               Commission file number 0-5109

                            MICROPAC INDUSTRIES, INC.

          DELAWARE                                                75-1225149
          --------                                                ----------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

905 E. WALNUT STREET                                                 75040
GARLAND, TEXAS                                                     (Zip Code)

                    Issuer's telephone number (972) 272-3571

          Securities to be registered under Section 12 (b) of the Act:

     Title of each class                               Name of each exchange
                                                        on which registered

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

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

          Securities to be registered under Section 12 (g) of the Act:

                           COMMON STOCK $.10 par value
                           ---------------------------

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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
                                                             ---   ---

There  is no  disclosure  of  delinquent  filers  in  response  to  Item  405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB.

              Revenues for its most recent fiscal year: $12,975,000

The aggregate market value of the voting stock held by  non-affiliates  computed
by the average bid and asked prices of such stock, as of a specified date within
the past 60 days, is not determined due to  non-activity  on the market over the
last 5 years.

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

The  number of shares  outstanding  of each of the  issuer's  classes  of common
equity, as of the latest practicable date was 3,627,151 as of November 30, 2000.

                       DOCUMENTS INCORPORATED BY REFERENCE

None

<PAGE>

                                     PART I

Item 1. Business
----------------


INTRODUCTION
------------

Micropac Industries,  Inc. (the "Company")  manufactures and distributes various
types of hybrid microcircuits and optoelectronic components and assemblies.  The
Company's  products are used as components  in a broad range of military,  space
and  industrial  systems,  including  aircraft  instrumentation  and  navigation
systems, power supplies, electronic controls, computers and medical devices.

The business was started in 1963 as a sole proprietorship. On March 3, 1969, the
Company was incorporated  under the name of "Micropac  Industries,  Inc." in the
state of Delaware.  Present  control  succeeded in 1974.  The stock was publicly
held by 591 shareholders on November 30, 2000.

PRODUCTS AND TECHNOLOGIES
-------------------------

The Company's  products are either custom (being  application  specific circuits
designed  and  manufactured  to meet  the  particular  requirements  of a single
customer)  or  standard,   proprietary   components   such  as  catalog   items.
Custom-designed components are estimated to account for approximately 64% of the
Company's  sales for the fiscal year ended  November 30, 2000,  and 50% in 1999;
standard  components  are  estimated  to account  for  approximately  36% of the
Company's  sales for the fiscal year ended November 30, 2000, and 50% for fiscal
1999.

In 2000,  the Company's  investment in technology,  which was expensed,  totaled
approximately   $503,000   ($623,000  in  1999).  The  Company's   research  and
development  expenditures  were directed  primarily  toward  long-term  specific
customer  requirements,   some  of  which  have  future  potential  as  Micropac
proprietary  products,  and product development and improvement  associated with
the Company's space level and other high reliability programs.

SALES, MARKETING AND DISTRIBUTION
---------------------------------

The Company's products are marketed  throughout the United States and in Western
Europe, through a direct technical sales staff, independent  representatives and
independent  stocking  distributors.  Approximately  8% of the sales for  fiscal
years 2000 and 1999 were to international  customers.  Sales to Western European
customers are made by independent  representatives under the coordination of the
Company's office in Bremen, Germany.

CUSTOMERS
---------

The  Company's  major  customers  include   contractors  to  the  United  States
government.  Sales to these  customers  for  Department  of  Defense  (DOD)  and
National  Aeronautics and Space  Administration  (NASA) contracts  accounted for
approximately  62% of the Company's  fiscal net sales in 2000 compared to 72% in
1999.

During 2000, two customers  accounted for more than 10% of the Company's  sales.
Sales to these customers were 28% and 15% respectively of net sales for the year
ended November 30, 2000. In comparison,  two customers accounted for 19% and 12%
sales respectively in 1999.

BACKLOG
-------

At November  30,  2000,  the Company had a backlog of unfilled  orders  totaling
approximately  $5,492,000  compared to approximately  $4,360,000 at November 30,
1999.  The Company  expects to complete  and ship most of its November 30, 2000,
backlog during fiscal 2001.

                                      -2-

<PAGE>

EMPLOYEES
---------

At November 30, 2000, the Company had 138 full-time  employees  (compared to 118
at November 30, 1999), of which 25 were executive and managerial  employees,  30
were   engineers   and   quality-control   personnel,   20  were   clerical  and
administrative  employees,  and  63  were  production  personnel.  None  of  the
Company's employees were covered by collective bargaining agreements.

The Company is an Equal  Opportunity  Employer.  It is the  Company's  policy to
recruit,  hire, train and promote personnel in all job classifications,  without
regard to race, religion,  color,  national origin, sex or age. Above and beyond
non-discrimination, we are committed to an Affirmative Action Program, dedicated
to the hiring,  training,  and advancement  within the Company of minority group
members, women and handicapped individuals.

RISK FACTORS
------------

Pricing  Pressures.  Pricing pressures continue to be experienced by the Company
from some of its OEM customers.  In some cases,  the Company sells product under
agreements with OEMs that require the Company,  at regular intervals,  to review
the pricing structure for possible reduction in selling price for future orders.
This  requires  the Company to improve  its  productivity  and to  approach  its
supplier chain  requesting  similar  pricing  reductions.  If one or both of the
approaches by the Company does not succeed,  product gross margins will decrease
affecting the Company's net earnings.

Limited Insurance  Coverage.  The Company operates  manufacturing  facilities in
Garland,  Texas and Juarez, Mexico. These facilities use industrial machines and
chemicals that could provide risks of personal  injury and/or  property  damage.
There is no assurance that accidents will not occur. If accidents do occur,  the
Company  could  be  exposed  to  substantial  liability  expenses.  The  Company
maintains worker's  compensation  insurance and general liability  insurance for
protection  of its employees and for  protection  of the  Company's  assets.  In
addition to the basic  policies  mentioned,  the Company  maintains  an umbrella
policy  covering  claims up to $10  million  dollars.  The  Company's  financial
position  could be  materially  affected  by claims  not  covered  or  exceeding
coverage currently carried by the Company.

Environmental  Regulations.  The Company is subject to governmental  regulations
pertaining to the use,  storage,  handling and disposal of hazardous  substances
used in connection with its manufacturing activities.  Failure of the Company to
control all  activities  dealing  with  hazardous  chemicals  could  subject the
Company  to  significant  liabilities  or could  cause the  Company to cease its
manufacturing activities.

Product Liability. The use of the Company's products in commercial or government
applications may subject the Company to product liability  claims.  Although the
Company  has not  experienced  any  product  liability  claims,  the sale of any
product  may provide  risk of such  claims.  Product  liability  claims  brought
against  the  Company  could have a  material  adverse  effect on the  Company's
operating results and financial condition.

COMPETITION
-----------

The Company  competes  with two or more  companies  with  respect to each of its
major  products.  Some of these  competitors are larger and have greater capital
resources  than the  Company.  Management  believes  the  Company's  competitive
position to be  favorable;  however,  no assurance can be given that the Company
can compete successfully in the future.

SUPPLY CHAIN
------------

The parts and raw materials for the Company's  products are generally  available
from more than one  source.  Except for  certain  optoelectronic  products,  the
Company does not  manufacture the basic parts or materials used in production of
its  products.  From time to time,  the Company has  experienced  difficulty  in
obtaining  certain  materials  when needed.  The  Company's  inability to secure
materials for any reason could have adverse effects on the Company's  ability to
deliver  products  on a  timely  basis.  The  Company  uses  capacitors,  active
semiconductor  devices  (primarily  in chip form),  hermetic  packages,  ceramic
substrates, resistor inks, conductor pastes, precious metals and other materials
in its manufacturing operations.

                                      -3-

<PAGE>

Item 2. Properties
------------------

The  Company  occupies   approximately  36,000  square  feet  of  manufacturing,
engineering and office space in Garland,  Texas.  The Company owns 31,200 square
feet of that space and leases an  additional  4,800  square  feet.  The  Company
considers its facilities adequate for its current level of operations.

Item 3. Legal Proceedings
-------------------------

The  Company  is  not  involved  in  any  material   current  or  pending  legal
proceedings, other than ordinary routine litigation incidental to its business.

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

No matters were submitted to vote of the Company's  security holders through the
solicitation  of proxies by the Company  during the fourth quarter of the fiscal
year ended November 30, 2000.








                                      -4-

<PAGE>

                                     PART II


Item 5.  Market  for the  Registrant's  Common  Equity and  Related  Stockholder
--------------------------------------------------------------------------------
Matters
-------

On November 30, 2000, there were approximately 591 shareholders of record of the
Company's  common  stock.  No  prices  have  been  presented  since  there is no
established  public trading market for the Company's  common stock. The stock of
the company is closely held and therefore, certain shareholders have the ability
to significantly influence decisions.

On January  10,  2001,  the  Company's  board of  directors  approved a dividend
declaration  of $0.10 per share for  shareholders  on record as of  February  1,
2001.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
-------------

Liquidity and Capital Resources
-------------------------------

The Company  currently  does not have an existing  line of credit with a banking
institution.  The Company expects to generate  adequate  amounts of cash to meet
its  liquidity  needs from the sale of products and services and the  collection
thereof.  If needed,  the Company feels  confident  that a line of credit can be
established.

The Company realized $1,565,000 in cash flows from operations in 2000, primarily
the result of net income before  depreciation  offset by an increase in accounts
receivable.  Accounts  receivable net, increased by approximately  $322,000 when
comparing the results at November 30, 2000,  to November 30, 1999.  The increase
is related to increased  sales in the comparable  fourth quarters of 2000 versus
1999.  Day's sales in receivables  totaled  approximately 43 days as of November
30, 2000, compared to 50 days at November 30, 1999.

The Company used $818,000 in cash for investing activities comprised of $333,000
in  additions to property,  plant and  equipment  and $485,000 in net short term
investments.

The Company at November  30,  2000,  has  approximately  $3,418,000  invested in
short-term  certificates  of deposit,  and  $824,000  invested in a money market
fund. In comparison,  prior year investments  totaled $2,933,000 at November 30,
1999.  On January 15,  2001,  the  Company's  board of  directors  approved  the
repurchase of  approximately  500,000  shares of common stock at $2.50 per share
from a significant individual shareholder who is also a member of management.

Company management believes it will meet its 2001 capital  requirements  through
the use of cash  derived  from  operations  for the  year  and/or  usage  of the
Company's  short-term   investments.   There  were  no  significant  outstanding
commitments for equipment purchases or improvements at November 30, 2000.

Results of Operations 2000 vs. 1999
-----------------------------------

Sales in 2000 were approximately  $12,975,000,  an increase of 13.1% compared to
1999 sales.  The increase in sales is attributed  to increased  bookings for the
Company.  The Company  increased its sales staff in an effort to get  additional
orders and build its backlog of new orders. The Company's backlog as of November
30, 2000, was approximately $5,492,000,  compared to approximately $4,360,000 on
November 30, 1999. New orders for fiscal year 2000 totaled $ 14,200,000.

Cost of sales, as a percentage of net sales, was 67.9% in 2000 compared to 69.7%
in 1999.  The decrease as a percentage of net sales is due to changes in product
mix for the  comparable  years.  Expenses for research and  development  totaled
$503,000  in 2000  compared  to  $623,000  in  1999.  Most of the  research  and
development  expenses were concentrated on expanding the company's line of solid
state relays, power operational amplifiers and optocouplers to include radiation
hardened products, and improving manufacturing processes.

Selling,  general, and administrative  expenses increased approximately $218,000
and totaled 19.3% of net sales in 2000  compared to 19.9% in 1999.  The increase
in dollars is primarily  related to an increased  sales staff and their  related
salaries and to increased  commission  expenses generated by increased sales for
the year.

                                      -5-

<PAGE>

Income  before taxes for fiscal 2000 were  approximately  $1,394,000 or 10.7% of
net sales,  compared to $704,000 or 6.1% of net sales in fiscal 1999. Net income
totaled  approximately  $852,000  or $.23 per  share,  in 2000  versus  1999 net
earnings  of  $643,000 or $.18 per share.  Net income  increased  in 2000 due to
increased   sales  and  a  stable  cost  of  sales  and   selling   general  and
administrative  expenses  when viewed as a  percentage  of net sales,  partially
offset by a higher effective tax rate.

The Company's  backlog as of November 30, 2000,  was  approximately  $5,492,000,
compared to approximately  $4,360,000 on November 30, 1999. New order for fiscal
2000 totaled $14,200,000.

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments  and for Hedging  Activities."  This standard  requires  entities to
recognize all  derivatives  on the statement of financial  position as assets or
liabilities and to measure the  instruments at fair value.  Accounting for gains
and losses  from  changes in those fair  values are  specified  in the  standard
depending on the intended use of the derivative and other criteria. Statement of
Financial  Accountings  Standards No. 133 is effective for us beginning December
1,  2000.  The  company  does  not  currently  have  any  derivative   financial
instruments and therefore, will not be impacted by this pronouncement.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB 101") "Revenue Recognition in Financial  Statements." SAB
101 provides guidance on applying  generally accepted  accounting  principals to
revenue recognition issues in financial  statements.  The company will adopt SAB
101 as required in the fourth  quarter of fiscal 2001.  Management  is currently
evaluating  the impact of SAB 101,  but we believe  that SAB 101 will not have a
significant  effect on our financial  position or results of operations based on
current interpretations.

In September  2000, the FASB reached a consensus on EITF 00-10  "Accounting  for
Shipping and Handling of Merchandise".  This pronouncement  requires the company
to classify billed freight as revenue and freight cost to be recorded as cost of
sales or otherwise  disclosed.  The company will adopt this pronouncement in the
first quarter of fiscal 2001 and does not expect it to have a significant effect
on our financial position or results of operations.

The  foregoing  discussion  contains  forward-looking  statements  that are made
pursuant to the safe harbor  provisions  of the  Private  Securities  Litigation
Reform Act of 1995. Actual results could differ materially. Investors are warned
that forward-looking statements involve risks and unknown factors including, but
not  limited to,  customer  cancellation  or  rescheduling  of orders,  problems
affecting   delivery  of   vendor-supplied   raw   materials   and   components,
unanticipated manufacturing problems and availability of direct labor resources.
The  Company  disclaims  any   responsibility  to  update  the   forward-looking
statements contained herein, except as may be required by law.






                                      -6-

<PAGE>

Item 7.  Financial Statements
-----------------------------

The  financial  statements  listed  below  appear on pages 10 through 17 of this
Report.  The Company is not required to furnish the Supplementary  Data required
by Item 302 of Regulation S-K.

       Page No.
       --------

          10               Report of Independent Public Accountants

          11               Balance Sheets as of
                           November 30, 2000 and 1999

          12               Statements of Income for the years ended
                           November 30, 2000 and 1999

          13               Statements of Shareholders' Equity for the years
                           ended November 30, 2000 and 1999

          14               Statements of Cash Flows for the years ended
                           November 30, 2000 and 1999

         15-18             Notes to Financial Statements for the years ended
                           November 30, 2000 and 1999

Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
--------------------------------------------------------------------------------
Financial Disclosure
--------------------

None






                                      -7-

<PAGE>

                                    PART III


Item 9. Directors & Executive Officers of The Registrant
--------------------------------------------------------

Information  relating to the Company's  Directors and executive  officers is set
forth in the  Company's  definitive  proxy  statement  relating to the Company's
Annual Meeting of  Stockholders  to be held on March 1, 2001. The information in
the proxy is set forth under the heading  "Election of Directors and Information
as to Directors,  Nominees and Executive  Officers." The proxy statement will be
filed with the Securities and Exchange  Commission on or about February 1, 2001,
and such information is incorporated by reference.

Item 10. Executive Compensation
-------------------------------

Information  relating to executive  compensation  is set forth in the  Company's
definitive  proxy  statement   relating  to  the  Company's  Annual  Meeting  of
Stockholders  to be held on March 1, 2001.  The  information in the proxy is set
forth under the heading  "Executive  Compensation."  The proxy statement will be
filed with the Securities and Exchange  Commission on or about February 1, 2001,
and such information is incorporated by reference.

Item 11. Security Ownership of Certain Beneficial Owners & Management
---------------------------------------------------------------------

Information   relating  to  the  ownership  of  certain  beneficial  owners  and
management  of the  Company's  Common  Stock  is  set  forth  in  the  Company's
definitive  proxy  statement   relating  to  the  Company's  Annual  Meeting  of
Stockholders  to be held on March 1, 2001.  The  information in the proxy is set
forth under the heading  "Securities  Ownership of Certain Beneficial Owners and
Management."  The proxy statement will be filed with the Securities and Exchange
Commission on or about February 1, 2001, and such information is incorporated by
reference.

Item 12. Certain Relationships and Related Transactions
-------------------------------------------------------

Information relating to the business  relationships and related transaction with
respect to the Company and certain Directors,  executive officers,  nominees for
election as Directors and  beneficial  owners of its  securities is set forth in
the  Company's  definitive  proxy  statement  relating to the  Company's  Annual
Meeting of Stockholders to be held on March 1, 2001. The proxy statement will be
filed with the Securities and Exchange  Commission on or about February 1, 2001,
and such information is incorporated by reference.

Item 13. Exhibits and Reports on Form 8-K
-----------------------------------------

None




                                      -8-

<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.

                                             MICROPAC INDUSTRIES, INC.



                                             By:   /S/ Nicholas Nadolsky
                                                   -----------------------------
                                                   Nicholas Nadolsky, CEO
                                                   and Chairman of the Board
                                                   (Principal Executive Officer)



                                             By:   /S/ Dave E. Hendon
                                                   -----------------------------
                                                   Dave Hendon, Controller and
                                                   Principal Accounting Officer

Dated:  01/18/2001






Pursuant to the  requirements  of the Securities and Exchange Act of 1934,  this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities indicated on 01/23/2001

/s/ Nicholas Nadolsky                              /s/ H. Kent Hearn
-----------------------------                      -----------------------------
Nicholas Nadolsky, Director                        H. Kent Hearn, Director







                                                   /s/ James K. Murphey
-----------------------------                      -----------------------------
                                                   James K. Murphey, Director






                                      -9-

<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Shareholders of
Micropac Industries, Inc.:

We have audited the accompanying balance sheets of Micropac Industries,  Inc. (a
Delaware  corporation)  as of  November  30,  2000  and  1999,  and the  related
statements of income,  shareholders'  equity,  and cash flows for the years then
ended.  These  financial  statements  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Micropac Industries, Inc. as of
November 30, 2000 and 1999, and the results of its operations and its cash flows
for the years then ended in  conformity  with  accounting  principles  generally
accepted in the United States.

                                                             ARTHUR ANDERSEN LLP

Dallas, Texas,
December 29, 2000 (except with respect to the matters discussed in Note 8, as to
which the date is January 15, 2001)




                                      -10-

<PAGE>
<TABLE>
<CAPTION>

                            MICROPAC INDUSTRIES, INC.
                            -------------------------
                                 BALANCE SHEETS
                                 --------------
                        AS OF NOVEMBER 30, 2000 AND 1999
                        --------------------------------
                    (Dollars in thousands except share data)

                                 ASSETS                            2000        1999
                                 ------                           --------    --------
<S>                                                               <C>         <C>
CURRENT ASSETS:
    Cash and cash equivalents                                     $  1,249    $    502
    Short-term investments                                           3,418       2,933
    Receivables, net of allowance for doubtful accounts
        of  $88 in 2000 and $92 in 1999                              1,901       1,579
    Inventories
        Raw materials and supplies                                   1,123       1,246
        Work-in-process                                              1,031         908
                                                                  --------    --------
                  Total inventories                                  2,154       2,154

    Deferred income taxes                                              200         249
      Prepaid income taxes                                            --           166
    Prepaid expenses and other assets                                   37          57
                                                                  --------    --------
                  Total current assets                               8,959       7,640

PROPERTY, PLANT, AND EQUIPMENT, at cost:
    Land                                                                80          80
    Buildings                                                          498         498
    Facility improvements                                              718         678
    Machinery and equipment                                          4,738       4,476
    Furniture and fixtures                                             380         340
    Construction in progress                                             8          17
                                                                  --------    --------
           Total property, plant, and equipment                      6,422       6,089
    Less- Accumulated depreciation                                  (5,200)     (4,945)
                                                                  --------    --------
        Net property, plant, and equipment                           1,222       1,144
                                                                  --------    --------

                  Total assets                                    $ 10,181    $  8,784
                                                                  ========    ========

                  LIABILITIES AND SHAREHOLDERS' EQUITY
                  ------------------------------------

CURRENT LIABILITIES:
    Accounts payable                                              $    682    $    365
    Accrued compensation                                               246         214
    Accrued professional fees                                           72          75
    Income taxes payable                                               101        --
        Property taxes                                                  69          88
           Commissions payable                                          42          45
        Other accrued liabilities                                      178          49
                                                                  --------    --------
                  Total current liabilities                          1,390         836
                                                                  --------    --------

DEFERRED INCOME TAXES                                                   34          43
COMMITMENTS AND CONTINGENCIES (Note 4)
SHAREHOLDERS' EQUITY:
    Common stock, $.10 par value, authorized 10,000,000 shares,
        3,627,151 outstanding at November 30, 2000 and 1999            363         363
    Paid-in capital                                                    885         885
    Retained earnings                                                7,509       6,657
                                                                  --------    --------
                  Total shareholders' equity                         8,757       7,905
                                                                  --------    --------

                  Total liabilities and shareholders' equity      $ 10,181    $  8,784
                                                                  ========    ========

</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      -11-

<PAGE>
<TABLE>
<CAPTION>


                            MICROPAC INDUSTRIES, INC.
                            -------------------------
                              STATEMENTS OF INCOME
                              --------------------
                 FOR THE YEARS ENDED NOVEMBER 30, 2000 AND 1999
                 ----------------------------------------------
                    (Dollars in thousands except share data)

                                                               2000           1999
                                                           -----------    -----------
<S>                                                        <C>            <C>


NET SALES                                                  $    12,975    $    11,468

COSTS AND EXPENSES:
Cost of sales                                                    8,813          8,001
Research and development                                           503            623
Selling, general, and administrative expenses                    2,502          2,284
Interest income                                                   (237)          (144)
                                                           -----------    -----------

                  Total costs and expenses                      11,581         10,764
                                                           -----------    -----------

INCOME BEFORE INCOME TAXES                                       1,394            704

PROVISION FOR INCOME TAXES:
    Current                                                        502              9
    Deferred                                                        40             52
                                                           -----------    -----------

          Total provision for current and deferred taxes           542             61
                                                           -----------    -----------

NET INCOME                                                 $       852            643
                                                           ===========    ===========

BASIC AND DILUTED EARNINGS PER SHARE                       $       .23            .18
                                                           ===========    ===========

WEIGHTED AVERAGE NUMBER OF SHARES, basic and diluted         3,627,151      3,627,151
                                                           ===========    ===========


</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      -12-

<PAGE>

                            MICROPAC INDUSTRIES, INC.
                            -------------------------
                       STATEMENTS OF SHAREHOLDERS' EQUITY
                       ----------------------------------
                 FOR THE YEARS ENDED NOVEMBER 30, 2000 AND 1999
                 ----------------------------------------------
                             (Dollars in thousands)



                                       Common   Paid-in   Retained
                                        Stock   Capital   Earnings     Total
                                      --------  --------  --------   --------


BALANCE, November 30, 1998            $    363  $    885  $  6,014   $  7,262

    Net income for 1999                   --        --         643        643
                                      --------  --------  --------   --------

BALANCE, November 30, 1999                 363       885     6,657      7,905

    Net income for 2000                   --        --         852        852
                                      --------  --------  --------   --------

BALANCE, November 30, 2000            $    363  $    885  $  7,509   $  8,757
                                      ========  ========  ========   ========







   The accompanying notes are an integral part of these financial statements.

                                      -13-

<PAGE>
<TABLE>
<CAPTION>

                            MICROPAC INDUSTRIES, INC.
                            -------------------------
                            STATEMENTS OF CASH FLOWS
                            ------------------------
                 FOR THE YEARS ENDED NOVEMBER 30, 2000 AND 1999
                 ----------------------------------------------
                             (Dollars in thousands)

                                                                         2000       1999
                                                                         -------    -------
<S>                                                                      <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                           $   852    $   643
    Adjustments to reconcile net income to
        net cash provided by operating activities-
           Depreciation and amortization                                     255        241
           Loss on disposal of equipment                                    --           15
           Deferred tax provision                                             40         52
           Changes in certain current assets and liabilities-
              Increase in receivables, net                                  (322)       (57)
              Decrease in inventories                                       --          787
              Decrease (increase) in prepaid income taxes                    166       (166)
              Decrease (increase) in prepaid expenses and other assets        20        (38)
              Increase in accounts payable                                   317         49
              Increase (decrease) in accrued compensation                     32       (118)
              Increase (decrease) in income taxes payable                    101       (185)
              Increase in all other accrued liabilities                      104         19
                                                                         -------    -------

                  Net cash provided by operating activities                1,565      1,242

CASH FLOWS FROM INVESTING ACTIVITIES:
    Changes in short-term investments                                       (485)      (999)
    Additions to property, plant, and equipment, net                        (333)      (161)
                                                                         -------    -------

                  Net cash used in investing activities                     (818)    (1,160)

CASH FLOWS FROM FINANCING ACTIVITIES                                        --         --
                                                                         -------    -------

NET INCREASE IN CASH                                                         747         82

CASH AND CASH EQUIVALENTS, beginning of year                                 502        420
                                                                         -------    -------

CASH AND CASH EQUIVALENTS, end of year                                   $ 1,249    $   502
                                                                         =======    =======

SUPPLEMENTAL CASH FLOW DISCLOSURES:
    Cash paid for interest                                               $  --      $  --
                                                                         =======    =======
    Cash paid for income taxes, net of refunds received                  $   222    $   362
                                                                         =======    =======

</TABLE>



   The accompanying notes are an integral part of these financial statements.

                                      -14-

<PAGE>

                            MICROPAC INDUSTRIES, INC.
                            -------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

                           NOVEMBER 30, 2000 AND 1999
                           --------------------------


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
     -------------------------------------------

Revenue Recognition
-------------------

Revenues are recorded as  deliveries  are made based upon contract  prices.  Any
losses anticipated on fixed price contracts are provided for currently.

Short Term Investments
----------------------

Short-term investments include certificates of deposits with original maturities
greater than 90 days.  These  investments  are reported at historical cost which
approximates  fair  market  value as of November  30, 2000 and 1999.  All highly
liquid investments with original maturities of 90 days or less are classified as
cash equivalents.

Inventories
-----------

Inventories  are stated at lower of cost or market  value and include  material,
labor and  manufacturing  overhead.  All  inventories  are valued using the FIFO
(first-in, first-out) method of inventory valuation.

Income Taxes
------------

Deferred income taxes are recorded for temporary  differences  between financial
and tax reporting.

Property, Plant, and Equipment
------------------------------

Property, plant, and equipment are carried at cost, and depreciation is provided
using the  straight-line  method at rates based upon the following  useful lives
(in years) of the assets:

     Buildings..................................................15
     Facility improvements....................................8-15
     Furniture and fixtures....................................5-8
     Machinery and equipment..................................5-10

Research and Development Costs
------------------------------

Costs for the design and development of new products are expensed as incurred.

Basic and Diluted Earnings Per Share
------------------------------------

Basic and  diluted  earnings  per share are  computed  based  upon the  weighted
average number of shares outstanding during the year. Diluted earnings per share
considers common stock equivalents to be outstanding.  During 2000 and 1999, the
Company had no common stock equivalents.


                                      -15-

<PAGE>

Use of Estimates
----------------

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

Reclassifications
-----------------

Certain amounts have been reclassified to conform to current year presentation.

2.   NOTES PAYABLE TO BANKS:
     -----------------------

During fiscal 2000 the Company maintained a line of credit agreement with a bank
which  provided a $3 million line of credit.  The interest  rate is equal to the
prime rate less  1/4%.  The line of credit  expired  September  6,  2000.  As of
November 30, 2000,  there was no credit  agreement  with a lending  institution.
During fiscal 1999 the Company had a line of credit  agreement with a bank which
provided a $3 million line of credit.  The interest  rate was equal to the prime
rate less 1/4%, which at November 30, 1999, was 8.5%.

3.   RELATED PARTIES:
     ----------------

The Company  leases a building from the Company's  chairman of the board.  A new
lease was signed on July 1, 1999, for a term of five (5) years, which expires on
June 30, 2004.  The lease was renewed under similar terms and  conditions as the
prior lease. Amounts paid under the lease agreement in 2000 approximated $36,000
and $35,000 in 1999.  Management believes that fees charged under this agreement
were negotiated at arms length and represent market rates.

4.   LEASE COMMITMENTS:
     ------------------

Rent expense for the years ended November 30, 2000 and 1999,  was  approximately
$42,000 for each year.

Future minimum lease payments under  non-cancelable  operating leases for office
and  manufacturing  space  with  remaining  terms  in  excess  of one  year  are
approximately:

                  2001                          $36,000
                  2002                          $36,000
                  2003                          $36,000
                  2004                          $18,000


5.   EMPLOYEE BENEFITS:
     ------------------

The Company  sponsors an Employees'  Profit Sharing Plan and Trust (the "Plan").
Pursuant to section  401(k) of the Internal  Revenue Code, the Plan is available
to  substantially  all employees of the Company.  Employee  contributions to the
Plan are matched by the Company at amounts up to 6% of the participant's salary.
Contributions  made by the  Company  were  approximately  $134,000  in 2000  and
$125,000  in 1999.  Employees  become  vested at 20% after  three years and 100%
after seven years.  The Company  matches 100% of the  employee  contribution  in
anticipation that the employee will be with the Company the full seven years. If
the  employee  leaves the Company  prior to being  fully  vested,  the  unvested
portion of the Company's  contributions  are forfeited and such  forfeitures are
used to lower future Company contributions.

The Company does not offer other post  retirement  benefits to its  employees at
this time.


                                      -16-

<PAGE>
<TABLE>
<CAPTION>

6.   INCOME TAXES:
     -------------

The Company  accounts for its income  taxes  according to Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes."

The income tax provision consisted of the following for the years ended November
30:

                                                           2000         1999
                                                        ----------   ----------
              Current Provision (Benefit) -
                  Federal                               $  406,000   $  (14,000)
                  State                                     96,000       23,000
                                                        ----------   ----------
                                                           502,000        9,000
              Deferred Provision -

                  Federal                                   40,000       52,000
                                                        ----------   ----------

                           Total                        $  542,000   $   61,000
                                                        ==========   ==========


The  provision  for income  taxes  differs  from that  computed  at the  federal
statutory corporate tax rate as follows:

                                                           2000         1999
                                                        ----------   ----------

         Tax at 34% statutory rate                      $  474,000   $  239,000
         State income taxes, net of federal benefit         63,000       15,000
         Non taxable life insurance benefit                   --       (212,000)
         Other                                               5,000       19,000
                                                        ----------   ----------

                  Income tax provision                  $  542,000   $   61,000
                                                        ==========   ==========


The  components  and  changes in  deferred  tax assets and  liabilities  were as
follows:

                                                                       Deferred
                                                                       Provision
                                                  November 30, 2000    (Benefit)      November 30,1999
                                                  -----------------    ---------      ----------------
<S>                                                   <C>              <C>                <C>
         Current Deferred Tax Assets-

              Allowance for doubtful accounts         $   33,000       $   1,000          $  34,000
              Inventory                                  137,000          11,000            148,000
              Accrued liabilities and other               30,000          37,000             67,000
                                                      ----------       ---------          ---------

                  Net current deferred tax            $  200,000       $  49,000          $ 249,000
                                                      ==========                          =========

         Non-current Deferred Tax Liabilities-

              Depreciation and other                  $   34,000       $  (9,000)         $  43,000
                                                      ----------       ---------          ---------

              Net noncurrent deferred tax             $   34,000                          $  43,000
                                                      ==========                          =========

         Deferred tax provision                                        $  40,000
                                                                       =========

</TABLE>



                                      -17-

<PAGE>

7.   SIGNIFICANT CUSTOMER INFORMATION:
     ---------------------------------

The Company's primary line of business relates to the design,  manufacture,  and
sale of hybrid microcircuits and optoelectronic components and assemblies. Sales
result primarily from  subcontracts  with customers for ultimate  production and
delivery  to the United  States  government.  Sales to primary  contractors  for
defense and space related contracts accounted for 62% of total sales in 2000 and
72% of total sales in 1999.  Customer  credit is granted and maintained for both
United States and European customers by the Corporate  Accounting  Department in
Garland,  Texas.  During 2000,  the Company had two customers that accounted for
28% and 15%  respectively  of the Company's  annual sales.  In  comparison,  the
Company had two customers in 1999 that accounted for  approximately  19% and 12%
respectively of the Company's annual sales.

8.   SUBSEQUENT EVENTS
     -----------------

On January  10,  2001,  the  Company's  board of  directors  approved a dividend
declaration  of $0.10 per share for  shareholders  on record as of  February  1,
2001.

On January 15, 2001, the Company's board of directors approved the repurchase of
approximately  500,000  shares at $2.50 per share from a significant  individual
shareholder who is also a member of management.

The Company will fund this dividend and stock repurchase  through cash flow from
operations, existing cash and short-term investments.







                                      -18-

<PAGE>

                             DIRECTORS AND OFFICERS
                             ----------------------
                                NOVEMBER 30, 2000





                                NICHOLAS NADOLSKY
                           Chief Executive Officer and
                              Chairman of the Board


                               HEINZ-WERNER HEMPEL
                             Chief Operating Officer
       Hanseatishe Waren Handelsgesellschaft MBH & Co. KG, Bremen, Germany


                                  H. KENT HEARN
                                   Stockbroker
                          Milkie-Fergerson, Dallas, Tx.


                                JAMES K. MURPHEY
                               Corporate Attorney
                     Glast, Phillips and Murray, Dallas, Tx.


                                   CONNIE WOOD
                      President and Chief Operating Officer





LEGAL COUNSEL                                         TRANSFER AGENT & REGISTRAR
Glast, Phillips and Murray                            Securties Transfer
Dallas, Tx                                            Frisco, Texas


                                      -19-