UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K
(Mark One)

X    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the fiscal year ended June 30, 1997

__   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 0-6620

                             ANAREN MICROWAVE, INC.
             (Exact name of Registrant as specified in its Charter)

          New York                                       16-0928561
 (State of incorporation)                    (I.R.S Employer Identification No.)

    6635 Kirkville Road                                    13057
  East Syracuse, New York                                (Zip Code)
   (Address of principal
     executive offices)

Registrant's telephone number, including area code:  315-432-8909

Securities Registered Pursuant to Section 12(b) of the Act:  None

Securities Registered Pursuant to Section 12(g) of the Securities Act:

                          Common Stock, $.01 Par Value
                          ----------------------------
                                (Title of Class)

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. ___

     The aggregate market value of the voting stock held by non-affiliates of
the Registrant at September 22, 1997 was approximately $94,648,000.

     The number of shares of Registrant's Common Stock outstanding on
September 22, 1997 was 4,233,442.

                    DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Registrant's Proxy Statement for use in connection with its
1997 Annual Meeting of Shareholders are incorporated into Part III of this
Annual Report on Form 10-K.


                                       1
<PAGE>

                                     PART I

ITEM 1. BUSINESS

GENERAL DEVELOPMENT OF BUSINESS

     Anaren Microwave, Inc. (hereinafter referred to as "Anaren" or "the
Company") was incorporated in 1967 as Micronetics, Inc., a name that changed to
Anaren Microwave, Inc. during 1967.

     Anaren designs, develops, manufactures and markets "RF" Radio Frequency,
microwave components and subsystems for the wireless communications, satellite
communications, and defense electronics markets. The Company utilizes advanced
stripline manufacturing technology to produce components and subsystems for
wireless infrastructure equipment, communications satellites, radar, radar
warning receivers, and radar jammers. The Company's products are used in a wide
array of both commercial and defense applications and vary significantly in
terms of cost and complexity.

     Microwaves are electromagnetic waves similar to ordinary radio waves except
that the wavelengths are very short and the frequency of oscillation is very
high. These high frequencies of oscillation enable microwave signals to carry
large amounts of information. This and other unique properties make them
especially suitable for radar and communications applications and for other
technologies.

     To better serve its emerging commercial markets, the Company reorganized,
during the first quarter of fiscal 1996 into three internal business groups.
These business groups are Defense Electronics (formerly Electronic Warfare),
Satellite Communications (formerly Radar and Telecommunications) and Wireless.
Products in the Defense Electronics business group consist of the Company's line
of military products, which include Digital Frequency Discriminators (DFD's),
Digital RF Memories (DRFM's), ESM receivers and military Microwave Integrated
Circuit components (MIC's). Satellite Communications products consist of signal
distribution networks for phase array antennas and customized commercial
multilayer components such as Butler Matrices and beamforming networks for
commercial telecommunications satellites. Wireless products are microwave
components and assemblies for use in building cellular base station equipment.
These products are a forward evolution of the old military microwave components
and are significantly smaller and lighter, while providing better performance.

     Each business groups is composed of an independent engineering and
marketing/sales team whose purpose is to develop, market and deliver product to
its customers. This action was taken to optimize responsiveness to customer
needs and to provide extended fiscal accountability downward throughout the
organization.

PRODUCTS

     Anaren has a wide range of products covering RF, microwave, and millimeter
wave frequencies for both commercial and defense applications. The Company's
products range from individual components to advanced subsystems that are
integrated vertically within the Company incorporating both wideband signal
processing and advanced stripline technologies. These products are used in land
based communications systems, satellite communications systems, as well as
military ships, aircraft, and land based systems.


                                       2
<PAGE>

     Wireless

     The Company's wireless products utilize advanced multi-layer stripline
technology and include microwave signal distribution components and subsystems,
microwave signal switching networks and antenna feed networks that are used to
split and combine microwave signals within wireless infrastructure systems.
These products include both general use type products developed by the Company
and custom assemblies developed for the applications of specific customers.

     As wireless technologies have moved higher in frequency for spectrum
availability and increased in complexity to support the rapidly increasing
demand for service, demand for Anaren's microwave design and manufacturing
expertise has increased significantly. As a result of recently developed
proprietary manufacturing techniques, Anaren is able to provide very
competitively priced microwave components and assemblies in high volume, meeting
the very challenging price and delivery demands of wireless infrastructure
original equipment manufacturers (OEMs).

     Satellite Communications (formerly Radar and Telecommunications)

     Anaren is a supplier of Passive Antenna Beamforming Networks for
communications satellite applications. Utilizing advanced multi-layer stripline
technology the Company produces Butler Matrices and other beamforming networks
that are compact and light weight for high performance multi-element array
antenna applications. These products determine the number, size and quality of
beams that can be produced from a single antenna array.

     Satellite antenna feed networks are microwave signal distribution networks
comprised of passive signal splitters and combiners. These networks,
traditionally large, complex, and heavy, are widely utilized in modern
communications satellites to allow for multiple beams of differing sizes to be
supported for a single antenna array. Anaren's proprietary stripline technology
and expertise in designing these complex structures has allowed the Company to
rapidly penetrate this growing market. These networks are utilized on the
proposed Low Earth Orbiting (LEO) satellite wireless communications networks as
well as geosynchronous communications satellites.

     Additionally, the Company produces signal distribution networks for land
based phased array antennas. These devices are used to distribute a microwave
signal to each element of a phased array antenna. Phased array antennas are
being utilized increasingly for radar and communications applications in both
commercial and defense applications.

     Defense Electronics (formerly Electronic Warfare)

     The Company produces a wide range of component products utilizing advanced
stripline technology. These products include mixers, couplers, power dividers,
pin attenuators, and correlators that are utilized in a variety of electronic
warfare applications to perform various RF and microwave functions including
signal distribution, signal measurement, and signal frequency conversion.

     The Company is a well known supplier of subsystem products including
Digital Frequency Discriminators (DFD), Digital Radar Frequency Memory (DRFM),
and other custom designed subsystems used in electronic warfare applications.
These products are vertically integrated within the Company utilizing advanced
stripline, Application Specific Integrated Circuits (ASIC), digital and signal
processing technologies.

     DFD products rapidly measure the frequency and other characteristics of
radar signals. This information is used in electronic warfare systems to
identify, classify and/or counter radar systems. DRFM products digitize and
store radar signals and can reproduce them in real time to counter advanced
radar systems. DRFM products are currently the only technology available that


                                       3
<PAGE>

can replicate radar signals with sufficient fidelity to counter today's advanced
coherent radar systems.

MARKETING AND CUSTOMERS

     The Company currently sells its Defense Electronics products to the United
States and foreign governments through prime contractors and by utilizing
independent sales representatives in both the United States and foreign
countries. Satellite Communications products and Wireless products are sold to
satellite and wireless infrastructure original equipment manufacturers through
independent sales representatives in both the United States and foreign
countries. The Company's business group managers and senior engineering
personnel provide technical sales support. Anaren Microwave, Ltd., the Company's
wholly-owned subsidiary in Waterlooville, England is responsible for marketing
and sales in Europe.

     Anaren's principal customers are manufacturers of electronic equipment that
is based on the transmission and reception of RF, microwave, and millimeter wave
signals. The Company supplies a broad base of customers, both commercial and
defense based, with a wide array of applications including cellular, personal
communications systems and wireless local loop communications systems, Low Earth
Orbiting (LEO) and geosynchronous satellite communications systems, radar, radar
warning receivers, radar jamming, and electronic support measures systems.

     During the fiscal year ended June 30, 1997, approximately 16% of the
Company's sales were attributable to contracts with prime contractors to
numerous offices and agencies of the United States government. The Company had
two customers who received shipments in excess of 10% of consolidated net sales.
Approximately 14% of the Company's consolidated net sales resulted from
shipments to Raytheon Company under several contracts, and 11% resulted from
shipments to Motorola, Inc. under several contracts. No one other contract and
no other customer accounted for more than 10% of consolidated net sales.

     During fiscal year 1997, sales to foreign customers, most of which were
prime contractors to foreign governments, accounted for approximately 19% of the
Company's consolidated net sales and included shipments to twenty-one countries.
All the Company's contracts with foreign customers are payable in U.S. dollars.
See note 13 to the consolidated financial statements for the sales to foreign
customers for each of the last three fiscal years.

     Export sales of military reconnaissance systems must be approved by the
United States Department of State. Any tightening of restrictions on the export
of military hardware could adversely affect the Company's sales of defense
electronics products to foreign customers.

     All of the Company's contracts with prime contractors to United States and
foreign governmental departments or their agencies, as well as satellite
communication and wireless infrastructure equipment customer contracts are fixed
price contracts, some of which require delivery over time periods in excess of
one year. With this type of contract, the Company agrees to deliver products at
an agreed upon price except for costs incurred because of change orders issued
by the customer. Some of these contracts contain provisions for escalation due
to inflation incurred between the effective contract date and the delivery date,
and some are subject to various statutes, regulations and provisions governing
defense contracts. All of these contracts contain termination clauses which
allow the customer to terminate the contract for convenience upon proper notice
and payment of predetermined charges.


                                       4
<PAGE>

BACKLOG

     At June 30, 1997, the Company's backlog of orders was $32,827,000 as
compared with $23,287,000 at June 30, 1996. All of the orders included in
backlog are covered by signed contracts, most of which contain customary
provisions permitting termination at any time at the customer's convenience upon
the making of a termination payment to the Company.

     The Company's Defense Electronics products accounted for 57% and 66% of the
backlog at June 30, 1997 and June 30, 1996, respectively; Satellite
Communications products comprised approximately 37% of the backlog in 1997 and
18% of the backlog in 1996 and Wireless products amounted to 6% and 16% of the
backlog at June 30, 1997 and June 30, 1996, respectively. Approximately 82% of
the June 30, 1997 backlog is expected to be recognized as revenue during fiscal
1998.

MANUFACTURING AND ENGINEERING

     The Company's manufacturing operations are vertically integrated from the
production of specialized hybrid circuits to the final assembly of complete
subsystems, such as Digital RF Memories and antenna beamforming networks.

     The Company manufactures its products from standard components as well as
from items which are manufactured by vendors to the Company's specifications. A
majority of the Company's commercial and defense electronics assemblies and
subsystem products contain multi-layer stripline technology which is designed
and tested by the Company's engineers and technicians and is manufactured at the
Company's own facilities.

     The Company utilizes skilled permanent and contract personnel in the
manufacture of its products. Quality assurance checks are performed on purchased
items, work in process, and finished products. Because of the complexity of the
Company's products, final tests are performed on some products by highly skilled
engineers and technicians.

     Most of the Company's contracts for assemblies and subsystems have required
engineering efforts to modify existing Company products to meet a particular
customer's specific technical and installation requirements.

COMPETITION

     The microwave component industry is highly competitive and the Company
competes against many companies, both foreign and domestic, many of which are
larger, have greater financial resources, and are better known than Anaren. The
principal competitive factors in both the domestic and foreign markets are
technical performance, reliability, ability to produce, on time delivery, and
price. Based on a combination of these factors, the Company believes that it
competes favorably in its markets. The Company's most important competitive
attributes are its emphasis on technical superiority and its ability to produce
in quantity to specific delivery schedules. Once a particular supplier's
products have been selected for incorporation in a military radar or commercial
satellite system, further competition by other vendors during the life cycle of
the program typically becomes more limited. Commercial component products for
wireless infrastructure are subject to continuous technological and price
competition from other vendors.

     Major competitors include Amp, Inc., Lockheed Martin, Inc., S. T.
Microwave, Inc., RF Power Inc., Mini Circuits Inc. and Filtronics, Inc. for
Defense Electronics products; Merrimac Industries, Inc. and EMS, Inc. for
Satellite Communications products; Merrimac Industries, Inc. and the in-house
capabilities of the Company's major customers, such as Motorola, Inc., Raytheon
Company, Hughes Space and Communications International, Inc. and Nortel, Inc.,
for wireless products.


                                       5
<PAGE>

RESEARCH, DEVELOPMENT AND NEW PRODUCTS

     The Company believes that its continued success depends in large part on
its ability to develop new products and extend its technology to additional
product applications. The Company's primary efforts in this regard are focused
on development, design, engineering and implementation activities rather than
pure research. Most of the Company's professional staff have been involved at
various times and to varying degrees in these activities. Research and
development expenses were approximately $540,000 in fiscal 1997, $1,185,000 in
fiscal 1996 and $939,000 in fiscal 1995 and were funded solely from the
Company's current operating budget.

     Existing development efforts are focused on (i) the development of advanced
multilayer stripline manufacturing processes for use in low cost light weight
commercial and space applications; (ii) the development of advanced
manufacturing technology to produce millimeter wave stripline structures for
communication satellite applications; (iii) evolutions of current technologies
to aid airborne receiver systems in the location and unambiguous identification
of radar platforms; (iv) variants of existing products for use in additional
cellular and PCS infrastructure applications and on additional military
platforms. The Company believes that it is at the forefront of microwave signal
processing technology in terms of ability to deal with complex signal
environments.

SUPPLIERS

     The raw materials utilized in the Company's various product areas are
equally accessible. The Company purchases most of its raw materials from a
variety of vendors and most of these raw materials are available from a number
of sources. The Company has one vendor from which the Company purchases
approximately 10% of the Company's total raw material purchases, but the Company
believes that substitute sources of supply are readily available for these and
all other products purchased.

EFFECTS OF INFLATION

     The Company does not believe that its operations are materially effected by
inflation. Contract prices for items deliverable over a period in excess of one
year are normally indexed for inflation, thereby offsetting any increase in
operating costs due to inflation.


                                       6
<PAGE>

EMPLOYEES

     As of June 30, 1997, the Company employed 217 persons full time. Of these
employees, approximately 186 comprise the engineering and manufacturing staff,
and approximately 31 are in management and support functions.

EXECUTIVE OFFICERS OF THE REGISTRANT

     The following is a list of the Company's executive officers, their ages and
their positions as of June 30, 1997. Each executive officer is elected for a
term of one year at the reorganizational meeting of the board of directors
following the annual shareholders meeting.

         Name                    Age                        Position
         ----                    ---                        --------
Hugh A. Hair                     62            Chairman &
                                               Chief Executive Officer, Director

Carl W. Gerst, Jr.               60            Vice Chairman, Chief
                                               Technical Officer, Treasurer

Lawrence A. Sala                 34            President, Director

Gert R. Thygesen                 42            Vice President Operations

Joseph E. Porcello               45            Vice President Finance

Stanley S. Slingerland           50            Vice President Human Resources

ITEM 2. PROPERTIES

     The Company's principal facility is a 105,000 square foot building located
in East Syracuse, New York. The plant was constructed during fiscal 1981 and
expanded during fiscal year 1985. This facility houses all of the Company's
marketing, manufacturing, administrative, research and development, systems
design and engineering experimentation activities. The construction of this
facility was originally financed through the issuance of Onondaga County
Industrial Revenue Bonds in the original amount of $5,940,000 (see note 5 to the
consolidated financial statements for information concerning encumbrances on the
facility).

     Anaren Microwave, Ltd., the Company's wholly-owned subsidiary in the United
Kingdom, leases a 20, 000 square foot facility in Frimley, England which
previously housed the administrative, marketing, and manufacturing operations of
that subsidiary prior to the Company's divestiture of its electronic warfare
simulator manufacturing operation in March 1996. Annual rental cost of this
facility is approximately $385,000 and the Company is presently subletting a
portion of the facility for approximately $192,000 annually (see note 11 to the
consolidated financial statements).

The foregoing facilities are regarded by management as adequate for the current
and anticipated short-term future requirements of the Company's business.

ITEM 3.  LEGAL PROCEEDINGS

     There are no material pending legal proceedings against the Company or its
subsidiaries.


                                       7
<PAGE>

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

     During the fourth quarter of the fiscal year covered by this Annual Report
on Form 10-K there were no matters submitted to a vote of security holders.


                                       8
<PAGE>

                                     PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS

     The Company's common stock is traded in the over-the-counter market under
the NASDAQ symbol "ANEN".

     The following table sets forth the range of quarterly high and low sales
prices on the NASDAQ Stock Market for the Company's common stock for the
quarters indicated. Quotations represent prices between dealers and do not
include retail mark-ups, mark- downs or commissions.

                     Fiscal 1996                          Fiscal 1997
                       Quarter                              Quarter
             1st     2nd      3rd     4th          1st   2nd     3rd       4th
High       8-1/2    8-3/8    7-1/4    8-3/4      7-5/8    8      9-1/8    14-1/4

Low        5-1/4     5-1/2   5-1/2    5-3/4      4-1/4    5      6-1/4    7-5/8

     The Company has approximately 610 security holders of record at September
23, 1997.

     The Company has never paid a cash dividend on its common stock and the
Company's Board of Directors has not set a policy with regard to the payment of
dividends.

ITEM 6.  SELECTED FINANCIAL DATA

     The selected financial data set forth below have been derived from the
Company's consolidated financial statements referred to under "Item 14.
Exhibits, Financial Statements and Reports on Form 8-K" of this Annual Report on
Form 10-K and on previously published historical financial statements not
included herein.

     The selected financial data should be read in connection with "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's consolidated financial statements, including the
notes thereto referred to herein.


                                       9
<PAGE>

<TABLE>
<CAPTION>

                                                                                      Selected Financial Data
                                                                                      -----------------------
                                                                                         Fiscal Year Ended
                                                                                         -----------------
                                                                   June 30,      June 30       July 1,      July 2,     June 26,
                                                                     1997         1996          1995         1994         1993
                                                                     ----         ----          ----         ----         ----
                                                                             (In thousands, except per share amounts)
<S>                                                                <C>          <C>           <C>          <C>          <C>     
Summary of Consolidated Statements of Operations:
Net Sales .....................................................    $ 24,227     $ 17,082      $ 17,996     $ 20,237     $ 26,996
                                                                   --------     --------      --------     --------     --------
Costs and Expenses:
     Costs of Sales ...........................................      16,243       11,147        13,081       14,415       19,306
     Marketing, Research and Development ......................       3,711        4,155         3,967        3,490        4,081
     General and Administrative ...............................       2,238        2,075         2,041        2,266        2,399
     Provision for losses on contracts ........................        --           --             300        1,570         --
     Restructuring Costs ......................................        --            810           360         --            452
                                                                   --------     --------      --------     --------     --------
         Total Costs and Expenses .............................      22,192       18,187        19,749       21,741       26,238
                                                                   --------     --------      --------     --------     --------
Operating Income (Loss) .......................................       2,035       (1,105)       (1,753)      (1,504)         758
Interest Expense ..............................................          94          123           213          271          434
Other Income, Primarily Interest ..............................        (114)        (148)         (164)        (298)        (134)
Income (Loss) before income taxes and
  cumulative effect of change in accounting
  principle ...................................................       2,055       (1,080)       (1,802)      (1,477)         458
Income tax Expense (benefit) ..................................        --           --            (330)        (115)         180
                                                                   --------     --------      --------     --------     --------
Income (loss) before cumulative effect
  of change in accounting principle ...........................       2,055       (1,080)       (1,472)      (1,362)         278
Cumulative effect of change in accounting
  for post-retirement benefits ................................        --           --            --           (995)        --
                                                                   --------     --------      --------     --------     --------
         Net Earnings (loss) ..................................    $  2,055     $ (1,080)     $ (1,472)    $ (2,357)    $    278
                                                                   ========     ========      ========     ========     ========
Earnings (loss) Per Common and
  Common Equivalent Share:
     Primary ..................................................    $    .50     $   (.27)     $   (.36)    $   (.53)    $    .06
                                                                   ========     ========      ========     ========     ========
     Assuming Full Dilution ...................................    $    .46     $   (.27)     $   (.36)    $   (.53)    $    .06
                                                                   ========     ========      ========     ========     ========
Shares Used in Computing Earnings (loss) Per
  Common and Common Equivalent Shares:
     Primary ..................................................       4,106        4,057         4,047        4,435        4,530
                                                                   ========     ========      ========     ========     ========
     Assuming Full Dilution ...................................       4,440        4,057         4,047        4,435        4,530
                                                                   ========     ========      ========     ========     ========

                                                                   June 30,      June 30       July 1,      July 2,     June 26,
                                                                     1997         1996          1995         1994         1993
                                                                     ----         ----          ----         ----         ----
                                                                                           (In Thousands)
Consolidated Balance Sheet Data:
Working Capital ...............................................    $ 15,043     $ 12,914      $ 13,258     $ 16,245     $ 17,592
Total Assets ..................................................    $ 25,973     $ 21,793      $ 23,365     $ 27,942     $ 28,470
Long-Term Debt (less current installments) ....................    $    453     $    680      $  1,052     $  1,760     $  2,482
Stockholders' Equity ..........................................    $ 20,327     $ 18,195      $ 18,824     $ 21,679     $ 24,098
                                                                                                                            
</TABLE>


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<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Management's discussion and analysis reviews the Company's operating results for
each of the three years in the period ended June 30, 1997, and its financial
condition at June 30, 1997. This review should be read in conjunction with the
accompanying consolidated financial statements, the related notes to the
consolidated financial statements, and the other information provided in this
annual report Form 10-K. Statements contained in management's discussion and
analysis, other than historical facts, are forward looking statements which are
qualified by the cautionary statement at the end of this discussion.

Results of Operations

     The following table sets forth the Company's net sales by product line for
each of the years in the three year period ended June 30, 1997.

                                              Fiscal Year Ended
                                               (In Thousands)

                                June 30, 1997    June 30, 1996     July 1, 1995
                                -------------    -------------     ------------
 Defense Electronics                 $8,064           $9,343           $14,416
 Satellite Communications             8,518            5,642             3,239
 Wireless                             7,645            2,097               341
                                    -------          -------           -------
                                    $24,227          $17,082           $17,996
                                    =======          =======           =======

     New sales historically associated with particular product lines may not be
indicative of future trends because of the relative size of individual orders
and changes in the Company's emphasis on specific product lines. See "Business -
Company Products" and "Business - Backlog."

     To better serve its emerging commercial markets, the Company reorganized,
during the first quarter of fiscal 1996 into three internal business groups.
These business groups are Defense Electronics (formerly Electronic Warfare),
Satellite Communications (formerly Radar and Telecommunications) and Wireless.
Products in the Defense Electronics business unit consist of the Company's line
of military products, which include Digital Frequency Discriminators (DFD's),
Digital RF Memories (DRFM's), ESM receivers and military Microwave Integrated
Circuit components (MIC's). Satellite Communications products consist of signal
distribution networks for phase array antennas and customized commercial
multilayer components such as Butler matrices and beamforming networks for
commercial telecommunication satellites. Wireless products are microwave
components and assemblies for use in building wireless base station equipment.
These products are a forward evolution of the military microwave components and
are significantly smaller and lighter, while providing better performance.

     Each business group is composed of an independent engineering and
marketing/sales team whose purpose is to develop, market and deliver product to
its customers. This action was taken to optimize responsiveness to customer
needs and to provide extended fiscal accountability downward throughout the
organization.

Fiscal Year 1997 Compared to Fiscal Year 1996

     Consolidated results of operations for fiscal 1997 were highlighted by
significant increases in sales of the Company's commercial products and the
highest net earnings and backlog achieved by the Company in the past ten years.
Net sales for fiscal 1997 were $24,227,000, up


                                       11
<PAGE>

42% from fiscal 1996 net sales of $17,082,000 and the Company recorded net
earnings of $2,055,000 compared to a loss of $1,080,000 for the prior year.

     During fiscal 1997, sales in both the Company's commercial Satellite
Communications group and Wireless group increased substantially over the prior
year's levels, while during this same period, sales of the Defense Electronics
group continued the decline seen over the past five years.

     Sales of Wireless products, which are mainly surface mount and custom
components for use in building cellular base station equipment, increased
$5,548,000 in fiscal 1997, a 265% rise over sales of $2,097,000 in fiscal 1996.
The rise in sales in this product group is currently being fueled by significant
increases in shipments of custom base station components being built for Lucent
Technologies, Inc., Motorola, Inc. and Nortel, Inc. under a number of continuing
contracts with a projected current annual shipment value of over $9,000,000.
Shipments under these contracts totaled over $4,600,000 in fiscal 1997, compared
to less than $200,000 in the previous fiscal year. Additionally, shipments of
off-the-shelf surface mount catalog components, which are used mainly in the
construction of cellular base station amplifiers, rose 80% in fiscal 1997
compared to fiscal 1996, as amplifier manufacturers' demands continue to
increase for these products.

     New orders for Wireless products totaled approximately $6,200,000 during
fiscal 1997, resulting in a firm backlog of $2,060,000 at June 30, 1997, all of
which is expected to ship in the first quarter of fiscal 1998.

     It is typical procedure for the Company's large base station manufacturing
customers to negotiate an annual blanket contract for price and delivery using
an estimated expected annual demand for a particular product. These
manufacturers then provide the Company with a firm purchase order for the
products required on a quarterly, monthly or weekly basis. It has been the
Company's internal policy to only book orders for the Wireless group upon
receipt of these short-term firm purchase orders. In July 1997, the first
quarter of fiscal 1998, the Company recorded firm orders for the Wireless group
totaling over $3,400,000, all of which is scheduled to ship in the first half of
fiscal 1998.

     Sales of Satellite Communications products, which consist of custom
multi-layer components such as butler matrices and beamforming networks for
commercial telecommunications and military communications satellites, rose
$2,876,000 or 51% in fiscal 1997 compared to fiscal 1996. This substantial rise
in shipments is attributed to sales of over $3,800,000 for contract engineering
design work on two beamformers for commercial satellite applications for Space
Systems Loral, Inc. and Martin Marietta Overseas Corp. Sales in fiscal 1996
included approximately $690,000 in billings for initial design work on these two
programs.

     Of the remaining $4,700,000 shipped by this group in fiscal 1997,
approximately $3,200,000 represented production under the final phase of the
$6,000,000 Iridium program and spares production for the Ground Based Radar
military program, both of which are being built for Raytheon Company. These two
programs amounted to over $4,500,000 in sales in fiscal 1996.

     New orders for the Satellite Communications group amounted to $16,545,000
in fiscal 1997 compared to $2,850,000 in the previous fiscal year. The two
largest of these orders were a firm fixed price contract for over $6,000,000
from Martin Marietta Overseas Corp. for the design and production of antenna
beamforming networks for the Asia Cellular Satellite System (ACeS) and a
$3,800,000 contract from Hughes Space and Communications International, Inc. for
the manufacture of microwave signal distribution networks for the ICO system.
The ACeS system is a space based cellular communications system, to serve Asia
via two geosynchronous satellites, while the Hughes ICO program is a medium
earth orbit constellation of 12 satellites to provide world-wide cellular
telephone service starting in 1999.


                                       12
<PAGE>

     Firm backlog for this group was $12,121,000 at June 30, 1997, up 193% over
firm backlog of $4,125,000 at June 30, 1996. Of this amount, approximately
$10,000,000 is expected to ship in fiscal 1998 and the remainder in fiscal 1999.

     Sales of Defense Electronics products fell $1,279,000 to $8,064,000 in
fiscal 1997 compared to $9,343,000 in the previous year. Shipments in this
business area, which include Digital Frequency Discriminators (DFD's), Digital
RF Memories (DRFM's), ESM Receivers and Microwave Integrated Circuit Components
(MIC's), have been declining over the past three years due to the continuing
decline in the overall worldwide defense market. The drop in sales in fiscal
1997 was spread over all the above mentioned product areas in the Defense
Electronics group and was a result of the completion of one of the Company's
remaining large DFD programs in fiscal 1996 and a general 25% decline in demand
for off-the-shelf catalog military MIC's during the last quarter of fiscal 1996
and continuing in fiscal 1997.

     New orders for Defense Electronics products totaled approximately
$11,047,000 in fiscal 1997 and firm backlog for this product area was
$18,646,000 at June 30, 1997. Of this backlog amount, $12,140,000 represented
two orders from the ASPJ Joint Venture Team of ITT Avionics Division of I.T.T.
Industries and Northrop Grumman Corp. for foreign sales of the Airborne Self
Protection Jammer System. These orders should serve to help stabilize sales in
this business area when shipments begin in the first quarter of fiscal 1998.

     Approximately $13,760,000 of the firm backlog of $18,646,000 at June 30,
1997 is expected to ship in fiscal 1998 and the remainder in fiscal 1999.

     Net earnings for fiscal 1997 were $2,055,102, compared to a net loss of
$(1,080,069) for fiscal 1996. The net loss for the prior year included a one
time charge totaling $810,000 to recognize the cost of the divestiture of the
Company's Electronic Warfare Simulator manufacturing operation in England. This
improvement in earnings was a result of the 42% rise in revenues and was
achieved despite a two percentage point decline in gross margins and small
increase in both marketing and general and administrative costs.

     Gross margin on sales for fiscal 1997 was 33% compared to 35% for fiscal
1996. This decline was a direct result of lower margins on initial product runs
of Wireless custom components during the period due to excess scrap costs and
rework costs incurred in repairing production units above normal experience
levels in fiscal 1997. The Company expects that gross margins will improve in
fiscal 1998 with higher production rates and increased experience with high
volume production products.

     Research and development expense was $540,000 for fiscal 1997, down
$645,000 from $1,185,000 for fiscal 1996. This decline resulted from a
significant increase in customer funded engineering design work in both the
Defense Electronics and Satellite Communications groups during the period which
consumed all available engineering resources in these groups. Customer funded
design and development work in fiscal 1997 represented approximately $6,200,000
in sales, a three fold increase over engineering revenues of $2,030,000 in
fiscal 1996. Additionally, the Company is currently participating in a
Technology Reinvestment Program through Raytheon Company, for the Advanced
Research Project Agency of the United States Government. Under this project, the
Company was reimbursed for approximately $339,000 of research and development
costs incurred during fiscal 1997 for investigating the development of
manufacturing processes for thin, multilayer millimeter wave signal distribution
networks. This program is expected to run through all of fiscal 1998 at the rate
of approximately $125,000 per quarter.

     Current internal research and development efforts are being targeted on
adapting existing Company technologies to produce new Satellite and Wireless
products which fit specific customers' requirements. Future research and
development expenditures are expected to rise with 


                                       13
<PAGE>

increasing sales volume and to fluctuate based on identified market
opportunities, customer funding for custom engineering development projects and
the level of government supported research development projects.

     Marketing expense rose 7% in fiscal 1997 compared to fiscal 1996. This
increase was caused mainly by additions to marketing personnel in Europe to
better serve the Company's emerging commercial markets in that part of the
world, a rise in commission expense due to the a 42% increase in sales and a 23%
increase in advertising expenditures targeted mainly for the Company's wide
variety of new commercial Wireless products. Marketing expense is expected to
rise in fiscal 1998 as the Company intends to expand its sales force and
advertising program to further penetrate the wireless base station equipment
market.

     General and administrative expense rose 8%, or $162,000, in fiscal 1997
compared to the prior year. Approximately half of this increase was attributable
to normal increases in payroll costs for existing personnel, while the remaining
increase represents a small increase in personnel, as well as minor increases in
professional services and shareholders expense. General and administrative
expenses are expected to increase modestly in fiscal 1998 as the general level
of Company business continues to rise.

     Interest expense fell 23% in fiscal 1997 compared to fiscal 1996. The
decline in interest expense reflects the continuing reduction in long-term debt
over the past year. During this same period, other income was down 23% due to
lower investable cash balances during the current year compared to the previous
fiscal year.

     Consolidated income tax expense was $0 in fiscal 1997 versus an expected
tax expense of approximately $699,000 based on 34% of income before income
taxes. The difference between the actual tax expense recognized in the financial
statements and the expected tax calculated on net income was due to the
utilization of net operating loss carry forwards and to a decrease in the
deferred tax asset valuation allowance. Under tax accounting rules the company
must assess the realizability of deferred tax assets, considering whether it is
more likely than not that some portion or all of the deferred tax assets will be
realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income in the period in which those temporary
differences become deductible. Management of the Company has considered the
scheduled reversal of deferred tax liabilities and projected future taxable
income in making the assessment of the realizability of the deferred tax asset
balances at June 30, 1997. Based upon the level of historical taxable income and
projections for future taxable income over the periods which the deferred tax
assets are deductible, the Company believes it is more likely than not that it
will realize the benefit of these deductible differences, net of the existing
valuation allowances, at June 30, 1997.

     The Company adopted Statement of Financial Accounting Standard No. 123,
Accounting for Stock-based Compensation (Statement 123), beginning with the
Company's first quarter of fiscal 1997. Upon adoption of Statement 123, the
Company continued to measure compensation expense for its stock-based employee
compensation plans using the intrinsic value method prescribed by APB No. 25,
Accounting for Stock Issued to Employees, and has provided pro forma disclosures
of the effect on net income and earnings per share as if the fair value-based
method prescribed by Statement 123 has been applied in measuring compensation
expense. (See Note 6 of Notes to the Consolidated Financial Statements.)


                                       14
<PAGE>

Fiscal Year 1996 Compared to Fiscal Year 1995

     Consolidated results of operations for fiscal 1996 showed a loss of
slightly less than $1.1 million resulting from poor sales performance by the
Company's English subsidiary and the decision by the Company to close this
European repair facility at Anaren Microwave, Ltd. and liquidate its Electronic
Warfare (EW) Simulator manufacturing operation headquartered there. Net sales
for fiscal 1996 were $17,082,000, down 5% from fiscal 1995 sales levels, while
the net loss for fiscal 1996 was $1,080,000 compared to a net loss of $1,472,000
for the prior year. Included in the fiscal 1996 loss was an $810,000 third
quarter restructuring charge against earnings related to the divestiture of the
Company's EW Simulator manufacturing operation in the United Kingdom.

     During the year ended June 30, 1996, sales in the Satellite Communications
group rose $2,400,000, or 74% over fiscal 1995 levels, while shipments for the
Company's new Wireless group rose $1,750,000 to $2,100,000 compared to only
$340,000 in fiscal 1995. During this same period sales of Defense Electronics
products fell approximately $5,100,000 compared to the previous fiscal year,
resulting in an overall sales decline of $900,000 in fiscal 1996.

     Sales of Satellite Communications products, which consist of customized
commercial multilayer components such as Butler matrices and beamforming
networks for commercial satellites, increased $2,400,000 to $5,640,000 in fiscal
1996 compared to approximately $3,240,000 in fiscal 1995. This increase is
attributable to over $980,000 in shipments in fiscal 1996 under the Army Ground
Based Radar program (GBR) and over $3,550,000 in shipments of satellite
beamforming networks under a $6,000,000 production contract with Raytheon
Company for the Iridium project. These two programs accounted for approximately
$2,500,000 in shipments in fiscal 1995.

     New orders for Satellite Communications products total $2,850,000 during
fiscal 1996 and included initial engineering funding for development of antenna
beamforming networks for satellite telecommunications systems being developed by
TRW, Inc.; Martin Marietta Overseas Corp. and Space Systems Loral, Inc. At June
30, 1996 firm backlog for Satellite Communications products was $4,125,000.

     Sales of Wireless products, which consist of components for use in building
cellular base station equipment, rose from $340,000 in fiscal 1995 to almost
$2,100,000 in fiscal 1996. These sales consisted mainly of catalog microwave
components and pilot production runs of custom components for base station
equipment manufacturers.

     The Wireless business unit received significant initial production orders
totaling over $3,000,000 from Nortel, Inc. and Motorola, Inc. during fiscal 1996
for custom base station components. These orders began initial low level
production runs in the latter part of the fourth quarter of fiscal 1996 and
reached full production at the end of the second quarter of fiscal 1997. Firm
backlog for Wireless products was approximately $3,735,000 at June 30, 1996.

     Sales of Defense Electronics products fell $5,100,000 to $9,343,000 in
fiscal 1996, compared to sales of approximately $14,400,000 in fiscal 1995.
Shipments in this business area, which include Digital Frequency Discriminators
(DFD's), Digital RF Memories (DRFM's), ESM Receivers, Military Simulators and
Microwave Integrated Circuit components (MIC's) have been steadily declining
over the past three fiscal years due to the decline in the overall worldwide
defense market. The drop in sales in fiscal 1996 was spread over all of the
above mentioned product areas, except for MIC's and DRFM's due to the completion
of a number of large DFD programs in the latter part of fiscal 1994 and early
fiscal 1995, and a drop off in new orders for ESM receivers in fiscal 1995.


                                       15
<PAGE>

     During fiscal 1996, the Company received a number of new orders in the
Defense Electronics business area totaling over $18,400,000. The most
significant of these was from the ASPJ Joint Venture Team of I.T.T. Avionics
Division of I.T.T. Industries and Northrop Grumman Corp. for foreign sales of
the Airborne Self Protection Jammer. Firm backlog in this product area at June
30, 1996 was $15,427,000.

     During 1996, the Company booked new orders totaling approximately
$26,700,000 compared to new orders of approximately $15,100,000 for all of
fiscal 1995. Firm backlog for all business lines as of June 30, 1996 stood at
$23,287,000 a 69% increase over firm backlog of $13,800,000 at the end of fiscal
1995.

     The loss for fiscal 1996 was $1,080,069 compared to a loss of $1,471,682
for fiscal 1995. The 1996 fiscal year loss consisted of a $270,000 operating
loss caused by the low level of sales and margins at the Company's European
subsidiary and an $810,000 non-recurring restructuring charge against earnings
recorded in the third quarter required to recognize the divestiture of the
Company's Electronic Warfare (EW) Simulator manufacturing operation in the
United Kingdom.

     This restructuring charge, which included provisions for the write-down of
EW Simulator assets to realizable value, legal and professional fees and costs
to complete an existing EW Simulator contract in excess of expected revenue,
reduced earnings for both the three months ended March 31, 1996 and the year end
June 30, 1996. These actions were necessitated by the severe down sizing of the
military budgets in Europe which resulted in a substantial reduction in new
orders for EW simulators during the past two years and has resulted in ongoing
losses from operations at Anaren Microwave, Ltd. including a $686,000 operating
loss for fiscal 1996. This divestiture allowed the Company to focus its efforts
on its growing domestic operations.

     Gross margin on sales for fiscal 1996 was 35% compared to 27% in fiscal
1995. This substantial improvement was the result of higher sales volume at the
Company's U.S. manufacturing facility which allowed for better absorption of
fixed overhead costs and personnel reductions made in the second quarter of
fiscal 1995 which were specifically targeted at reducing manufacturing overhead
and engineering costs.

     Additionally, during fiscal 1996, approximately $588,000 of costs incurred
in building products for shipment during this period were charged against the
allowance for contract losses established in fiscal 1994 and 1995. These
expenses represent cost overruns incurred on products shipped in the first three
quarters of fiscal 1996 which had previously been identified and provided for
when the allowance was established.

     Research and development expense was $1,185,000 for fiscal 1996, up 26%
from $939,000 for the same period in fiscal 1995. This increase represented the
continuing rise in the prototype development efforts for the Company's new
Wireless commercial product line. Development efforts were being targeted on
adapting existing Company technologies to produce new wireless component
products which fit a specific customer's requirements.

     Marketing expense fell 2% in fiscal 1996 compared to the previous fiscal
year. This decrease was due mainly to the reassignment of marketing personnel to
other functions within the company due to the business group realignment
undertaken in the first quarter of the current year.

     General and administrative expenses rose 1.6% in fiscal 1996 compared to
fiscal 1995. This increase represented normal period to period fluctuation in
expenditures. Fiscal 1996 levels of general and administrative spending reflect
the same level or lower of that experienced by the Company in fiscal 1995.

     Interest expense fell 42% in fiscal 1996 compared to the same period in
fiscal 1995. The decline in interest expense reflects the reduction in long-term
debt over the year. During this same


                                       16
<PAGE>

period, other income fell 10% due to lower investable cash balances during
fiscal 1996 compared to fiscal 1995.

     Consolidated income tax expense was $0 in fiscal 1996 versus an expected
tax benefit of approximately $(367,000) based on 34% of the loss before income
taxes. The primary difference between the actual tax expense recognized in the
financial statements and the expected tax benefit calculated on the loss
incurred was due to the Company's equity in the operating loss of its English
subsidiary which is not subject to U.S. taxation and offset by a decrease in the
deferred tax asset valuation allowance. Under the new tax accounting rules the
Company must assess the realizability of deferred tax assets, considering
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income in the period in which
those temporary differences become deductible. Management of the Company has
considered the scheduled reversal of deferred tax liabilities and projected
future taxable income in making the assessment of the realizability of the
deferred tax asset balances at June 30, 1996.

Liquidity and Capital Resources

     At June 30, 1997, the Company had net working capital of $15,043,000, which
included $3,807,000 in cash and cash equivalents, compared to working capital of
$12,914,000 which included cash and cash equivalents of $1,740,000 at June 30,
1996. Net cash surplus was $2,067,000 for fiscal 1997 compared to a net cash
usage of $400,000 in fiscal 1996. Cash flow was positive in fiscal 1997 due to
the growth in earnings and accounts payable, the receipt of a $321,000 tax
refund from the U.S. government and an increase in advance payments from
customers of over $750,000 during the period.

     Long-term liabilities, which consist of the Company's unfunded liability
for post-retirement health care costs, long-term debt in the form of a term loan
and deferred income taxes, decreased $119,000 and $309,000 in fiscal 1997 and
1996, respectively. The decline in both fiscal years 1997 and 1996 represents
scheduled repayment of debt as the Company, presently, has no plans to fund the
long-term liability recognized for post-retirement healthcare costs. No new
long-term debt, other than the transfer of its term loan to its new bank, was
taken on during this two year period as the Company's cash balances were more
than adequate to fund both long- and short-term cash needs.

     Capital equipment additions in fiscal 1997 amounted to $1,154,000 and
consisted primarily of equipment needed to further automate production for the
Company's new Wireless and Satellite Communications products as well as test and
production equipment required to produce Defense Electronics products for the
initial production of the ASPJ program in the first quarter of fiscal 1998. The
additions were funded entirely by cash generated by operations. Capital
equipment expenditures for fiscal 1998 have been budgeted at approximately
$1,500,000 and will consist, primarily, of additional automated high volume
production equipment to further expand production capacity for the new Wireless
products. These additions will continue to be funded by cash generated from
operations and currently existing cash balances as management believes that
these cash resources will be adequate to meet these financing needs.

     In fiscal 1994, the Company obtained a revolving line of credit with a bank
which provided for principal drawings of up to $3,500,000. This credit agreement
carried interest on outstanding borrowings at the prime rate plus 3/4% and was
secured by all assets of the Company which were not otherwise pledged under
other agreements. This credit facility expired at December 31, 1994. In October
1996, the Company signed an agreement for a new credit facility with a bank
providing for a $3,000,000 working capital revolving line of credit bearing
interest at prime plus 1% maturing on November 30, 1998, and a $907,000 term
loan payable in semi-annual installments of $113,333 through May, 2000, bearing
interest at prime plus 1.25%. The proceeds


                                       17
<PAGE>

of the term loan were used to refinance the existing Onondaga County Industrial
Development Agency Revenue bonds of the Company, while the revolving credit
facility will be used to supplement short-term working capital needs brought
about by the expected growth in production and sales volumes. Borrowings under
the new credit facility are secured by substantially all the assets of the
Company. The terms of the credit facility require the Company to maintain a
minimum tangible net worth, ratio of cash flows to maturities, and leverage
ratio, as defined in the respective agreements. The Company was in compliance
with all restrictions and covenants at June 30, 1997.

     The Company believes that its cash requirements for the foreseeable future
will be satisfied by currently invested cash balances, expected cash flow from
operations and funds available under its credit facilities.

Recently Issued Accounting Pronouncements

Statement of Financial Accounting Standard No. 128, Earnings Per Share
(Statement 128), was issued in February 1997. Statement 128 specifies the
computation, presentation, and disclosure requirements for earnings per share.
Adoption of Statement 128 will be required for the Company beginning in the
second quarter of fiscal 1998. Adoption of Statement 128 is not expected to have
a material effect on the Company's operating results.

Additionally, Statement of Financial Accounting Standard No. 131, Disclosures
About Segments of an Enterprise and Related Information (Statement 131) was
issued in 1997. Statement 131 establishes standards for the reporting of
information about operating segments and related disclosures about products and
services, geographic areas, and major customers. Adoption of Statement 131 will
be required in fiscal 1999 and require interim disclosures beginning in fiscal
2000. Adoption of Statement 131 is not expected to have a material effect on the
Company's financial statement disclosures.

Forward Looking Cautionary Statement

     In an effort to provide investors a balanced view of the Company's current
condition and future growth opportunities, this annual report on Form 10-K
includes comments by the Company's management about future performance. Because
these statements are forward-looking statements, management's forecast involve
risks and uncertainties and actual results could differ materially from those
predicted in the forward looking statements. Among the factors that could cause
actual results to differ materially are the following: general market
conditions, including demand for the Company's products, manufacturing capacity
and the ability to "ramp" to meet anticipated demand, fluctuations yield,
availability of third party supplier parts at reasonable prices, availability of
financial resources to fund anticipated growth, ability to maintain sole
supplier positions with certain defense sectors, successful adaptation of
existing Company technologies to produce new products which meet specific
customer requirements, price pressures, the level of world-wide spending on
military defense products, growth of cellular telephone and satellite
communication systems, acceptance of new products, and actual orders compared to
annual blanket contracts from wireless customers.

     Management believes that the Company has the products, human resources,
facilities, and financial resources to continue its growth, but future revenues,
margins and profits are all influenced by a number of risk factors, including,
but not limited to, those discussed above.


                                       18
<PAGE>

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial statements and financial statement schedules called for by
this item are submitted under "Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K" which information is incorporated herein by reference.

     The unaudited supplementary financial information required by this item is
contained in note 4 to the consolidated financial statements which have been
submitted as a separate section of this report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     None.


                                       19
<PAGE>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

     Information required by this item, other than executive officers which
appears in Part I hereof, is contained in the Registrant's proxy statement to be
filed with respect to the 1997 Annual Meeting of Shareholders and is
incorporated by reference herein.

ITEM 11.  EXECUTIVE COMPENSATION

     Information required by this item is contained in the Registrant's proxy
statement to be filed with respect to the 1997 Annual Meeting of Shareholders
and is incorporated by reference herein.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information required by this item is contained in the Registrant's proxy
statement to be filed with respect to the 1997 Annual Meeting of Shareholders
and is incorporated by reference herein.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information required by this item is contained in the Registrant's proxy
statement to be filed with respect to the 1997 Annual Meeting of Shareholders
and is incorporated by reference herein.


                                       20
<PAGE>

                                     PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

                                                                            Page
                                                                            ----
(a)  1. and 2.   Financial Statements and Schedules:

                 Reference is made to the List of Financial
                 Statements hereinafter contained ..........................  23

     3.          Exhibits:

                 Reference is made to the List of Schedules
                 hereinafter contained .....................................  23

(b)  Current Reports on Form 8-K:

     No Current Reports on Form 8-K were filed by the Company 
     during the last quarter of the fiscal year ended June 30, 1997.

(c)  Exhibits:

     Reference is made to the List of Exhibits hereinafter contained .......  43


                                       21
<PAGE>

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, Anaren Microwave, Inc. has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                    Anaren Microwave, Inc.


                                    S/Hugh A. Hair
                                      ------------------------------------
                                      Chief Executive Officer

                                    S/Carl W. Gerst, Jr.
                                      ------------------------------------
                                      Treasurer

                                    S/Joseph E. Porcello
                                      ------------------------------------
                                      Vice President of Finance/Controller

Date:  September 26, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:


S/Lawrence A. Sala                    S/Abraham Manber
------------------                    ----------------
Director                              Director


S/Dale F. Eck                         S/Herbert I. Corkin
-------------                         -------------------
Director                              Director

Date:  September 26, 1997


                                       22
<PAGE>

                             ANAREN MICROWAVE, INC.
                                AND SUBSIDIARIES

                   Index to Consolidated Financial Statements


Consolidated Financial Statements:

     Independent Auditors' Report

     Consolidated Balance Sheets as of June 30, 1997 and 1996

     Consolidated  Statements of  Operations  for the Years ended June 30, 1997,
        June 30, 1996, and July 1, 1995

     Consolidated  Statements of  Stockholders'  Equity for the Years ended June
        30, 1997, June 30, 1996, and July 1, 1995

     Consolidated  Statements  of Cash Flows for the Years ended June 30,  1997,
        June 30, 1996, and July 1, 1995

     Notes to Consolidated Financial Statements


                                       23
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors
Anaren Microwave, Inc.:

We have audited the consolidated financial statements of Anaren Microwave,  Inc.
and  subsidiaries  as  listed  in the  accompanying  index.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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 consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of Anaren Microwave,
Inc.  and  subsidiaries  as of June 30, 1997 and 1996,  and the results of their
operations and their cash flows for each of the years in the  three-year  period
ended  June  30,  1997,  in  conformity  with  generally   accepted   accounting
principles.



Syracuse, New York 
August 14, 1997


                                       24
<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                           Consolidated Balance Sheets

                             June 30, 1997 and 1996

                    Assets                                 1997          1996
                                                           ----          ----
Current assets:
     Cash and cash equivalents                         $ 3,807,004     1,739,569
     Receivables, less allowance for bad debts of
        $13,000 in 1997 and 1996                         6,717,106     5,167,996
     Refundable income taxes                                  --         320,945
     Inventories (note 2)                                7,736,007     7,210,320
     Prepaid expenses                                      197,152       255,723
     Deferred income taxes (note 9)                        532,054          --
                                                       -----------   -----------
                Total current assets                    18,989,323    14,694,553
Net property, plant and equipment (note 3)               6,969,301     7,054,870
Other assets, net                                           13,919        43,793
                                                       -----------   -----------
                                                       $25,972,543    21,793,216
                                                       ===========   ===========

        Liabilities and Stockholders' Equity

Current liabilities:
     Current installments of long-term debt (note 5)       228,723       394,633
     Accounts payable                                    1,500,863       663,848
     Income taxes payable                                  493,553          --
     Accrued expenses (note 4)                             719,416       471,665
     Customer advance payments                           1,003,539       250,000
                                                       -----------   -----------
                Total current liabilities                3,946,094     1,780,146

Postretirement benefit obligation (note 8)               1,181,276     1,138,215
Long-term debt, less current installments (note 5)         453,335       680,001
Deferred income taxes (note 9)                              64,508          --
                                                       -----------   -----------
                Total liabilities                        5,645,213     3,598,362
                                                       -----------   -----------
Stockholders' equity:
     Common stock of $.01 par value 
        Authorized 12,000,000 shares;
        issued 5,012,116 and 4,992,116
        shares in 1997 and 1996, respectively               50,121        49,921
     Additional paid-in capital                         15,584,262    15,507,088
     Retained earnings                                   6,705,024     4,649,922
                                                       -----------   -----------
                                                        22,339,407    20,206,931
     Less cost of 892,274 treasury shares
        in 1997 and 1996                                 2,012,077     2,012,077
                                                       -----------   -----------
                Total stockholders' equity              20,327,330    18,194,854
                                                       -----------   -----------
Commitments and concentrations (notes 11 and 12)
                                                       $25,972,543    21,793,216
                                                       ===========   ===========

See accompanying notes to consolidated financial statements.


                                       25
<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                      Consolidated Statements of Operations

           Years ended June 30, 1997, June 30, 1996, and July 1, 1995


                                          1997          1996          1995
                                          ----          ----          ----

Net sales                             $ 24,226,792    17,081,901    17,995,752
                                      ------------  ------------  ------------

Costs and expenses:
  Cost of sales                         16,242,884    11,146,510    13,081,115
  Marketing                              3,170,373     2,969,726     3,027,667
  Research and development                 540,189     1,185,168       938,927
  General and administrative             2,237,876     2,075,461     2,041,097
  Provision for losses on contracts           --            --         300,000
  Restructuring (note 10)                     --         810,000       360,000
                                      ------------  ------------  ------------
        Total costs and expenses        22,191,322    18,186,865    19,748,806
                                      ------------  ------------  ------------
        Operating income (loss)          2,035,470    (1,104,964)   (1,753,054)
                                      ------------  ------------  ------------
Other income (expense):
  Interest expense                         (94,086)     (122,759)     (212,588)
  Other, primarily interest income         113,718       147,654       163,960
                                      ------------  ------------  ------------
        Total other income (expense)        19,632        24,895       (48,628)
                                      ------------  ------------  ------------
Income (loss) before income taxes        2,055,102    (1,080,069)   (1,801,682)
Income tax benefit (note 9)                   --            --        (330,000)
                                      ------------  ------------  ------------
        Net income (loss)             $  2,055,102    (1,080,069)   (1,471,682)
                                      ============  ============  ============
Earnings (loss) per common and
  common equivalent share:
     Primary                          $        .50          (.27)         (.36)
                                      ============  ============  ============
     Assuming full dilution           $        .46          (.27)         (.36)
                                      ============  ============  ============
Shares used in computing earnings 
  (loss) per common and common 
  equivalent share:
     Primary                             4,106,245     4,057,300     4,046,729
                                      ============  ============  ============
     Assuming full dilution              4,439,632     4,057,300     4,046,729
                                      ============  ============  ============

See accompanying notes to consolidated financial statements.


                                       26
<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                 Consolidated Statements of Stockholders' Equity

           Years ended June 30, 1997, June 30, 1996, and July 1, 1995


<TABLE>
<CAPTION>
                                           Common Stock           Additional                     Treasury Stock           Total
                                        -------------------        Paid-in      Retained       -------------------    Stockholders'
                                        Shares       Amount        Capital      Earnings       Shares       Amount       Equity
                                        ------       ------       ---------     --------       ------       ------       -------

<S>                                   <C>         <C>            <C>            <C>             <C>       <C>            <C>       
Balance at July 1, 1995               4,850,016   $    48,500    15,057,521     5,729,991       892,274   $(2,012,077)   18,823,935

 Net loss                                  --            --            --      (1,080,069)         --            --      (1,080,069)

 Stock options exercised (note 6)       142,100         1,421       449,567          --            --            --         450,988
                                    -----------   -----------   -----------   -----------   -----------   -----------   -----------

Balance at June 30, 1996              4,992,116        49,921    15,507,088     4,649,922       892,274    (2,012,077)   18,194,854

 Net income                                --            --            --       2,055,102          --            --       2,055,102

 Stock options exercised (note 6)        20,000           200        77,174          --            --            --          77,374
                                    -----------   -----------   -----------   -----------   -----------   -----------   -----------

Balance at June 30, 1997              5,012,116   $    50,121    15,584,262     6,705,024       892,274   $(2,012,077)   20,327,330
                                    ===========   ===========   ===========   ===========   ===========   ===========   ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       27
<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

           Years ended June 30, 1997, June 30, 1996, and July 1, 1995
<TABLE>
<CAPTION>

                                                            1997           1996            1995
                                                            ----           ----            ----
<S>                                                     <C>             <C>            <C>        
Cash flows from operating activities:
     Net income (loss)                                  $ 2,055,102     (1,080,069)    (1,471,682)
     Adjustments to reconcile net income (loss)
        to net cash provided by operating activities:
           Depreciation and amortization                  1,239,864      1,564,466      1,722,686
           Deferred income taxes                           (467,546)          --             --
           Net loss on disposition of Anaren
               Microwave, Ltd. net assets                      --          810,000           --
           Changes in operating assets and
               liabilities, exclusive of disposition
               of Anaren Microwave, Ltd. net assets:
                   Provision for losses on contracts           --         (588,031)      (981,969)
                   Receivables                           (1,549,110)       944,544        947,587
                   Refundable income taxes                  320,945          9,055       (228,810)
                   Inventories                             (525,687)      (748,111)     1,870,386
                   Prepaid expenses                          58,571        (20,676)        55,884
                   Other assets                              29,874         33,969         88,547
                   Accounts payable                         837,015        (41,253)       168,647
                   Income taxes payable                     493,553           --             --
                   Accrued expenses                         247,751       (219,407)       119,120
                   Customer advance payments                753,539        250,000           --
                   Postretirement benefit obligation         43,061         62,381         61,838
                                                        -----------    -----------    -----------
           Net cash provided by operating
              activities                                  3,536,932        976,868      2,352,234
                                                        -----------    -----------    -----------
Net cash used in investing activities
     - capital expenditures                              (1,154,295)    (1,138,571)    (1,296,587)
                                                        -----------    -----------    -----------
Cash flows from financing activities:
     Proceeds from long-term debt                           906,667           --             --
     Principal payments on long-term debt                (1,299,243)      (689,511)      (725,526)
     Net repayments under revolving line of credit             --             --         (363,352)
     Proceeds from the issuance of common stock              77,374        450,988         75,787
     Purchase of treasury stock                                --             --       (1,459,278)
                                                        -----------    -----------    -----------
           Net cash used in financing activities           (315,202)      (238,523)    (2,472,369)
                                                        -----------    -----------    -----------
           Net increase (decrease) in cash and
              cash equivalents                            2,067,435       (400,226)    (1,416,722)

Cash and cash equivalents at beginning of year            1,739,569      2,139,795      3,556,517
                                                        -----------    -----------    -----------

Cash and cash equivalents at end of year                $ 3,807,004      1,739,569      2,139,795
                                                        ===========    ===========    ===========
</TABLE>


See accompanying notes to consolidated financial statements.


                                       28
<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                 June 30, 1997, June 30, 1996, and July 1, 1995

(1) Summary of Significant Accounting Policies

     (a) Principles of Consolidation

         The consolidated  financial  statements  include the accounts of Anaren
           Microwave,  Inc. and its wholly-owned  subsidiaries  ("the Company").
           All  significant  intercompany  balances and  transactions  have been
           eliminated in consolidation.  In fiscal 1996, the Company changed its
           financial reporting period to a calendar month end.

     (b) Operations

         The Company is engaged in the design,  development  and  manufacture of
           microwave signal  processing  devices which receive and analyze radar
           signals  and other  microwave  transmissions.  Its  primary  products
           include  devices  and  systems  used in the  wireless  communications
           market, the satellite  communications market, and defense electronics
           market.

         Anaren Microwave,  Ltd., a wholly-owned subsidiary,  is incorporated in
           England.  As discussed in note 10,  during  fiscal 1996,  the Company
           disposed of substantially  all of the net assets of Anaren Microwave,
           Ltd. and discontinued its manufacturing  operations.  Currently,  the
           Company  continues to maintain its  marketing  function in England to
           serve the European marketplace.

     (c) Sales Recognition

         The Company  recognizes  sales at the time  products are shipped to its
           customers.  Provisions for estimated losses on uncompleted  contracts
           are made in the period in which such losses are determined.

     (d) Cash Equivalents

         Cash  equivalents  of  $3,776,312  and  $1,383,021 at June 30, 1997 and
           1996,  respectively,  consist of  certificates  of deposit  and money
           market  instruments  having  maturities of three months or less. Cash
           equivalents are stated at cost which approximates fair value.

     (e) Inventories

         Inventories  are  stated at the  lower of cost or  market,  cost  being
           determined on a first-in, first-out basis.

     (f) Property, Plant and Equipment

         Property, plant and equipment are stated at cost.  Depreciation of land
           improvements and buildings is calculated by the straight-line  method
           over an estimated  service life of 25 years.  Machinery and equipment
           are  depreciated  primarily  by the  straight-line  method  based  on
           estimated useful lives of 5 to 10 years.


                                       29                            (Continued)
<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(1) Summary of Significant Accounting Policies, Continued

     (g) Earnings Per Share

         Earnings per common and common  equivalent share are computed using the
           weighted  average  number  of  shares  outstanding  adjusted  for the
           incremental  shares  attributed  to  outstanding  options to purchase
           common  stock  pursuant  to the  treasury  stock  method,  unless the
           results would be  anti-dilutive  or not material.  Common  equivalent
           shares consist of outstanding stock options.

     (h) Pension Plan

         The projected unit credit method is utilized for measuring net periodic
           pension costs over the  employees'  service life.  Contributions  are
           intended to provide not only for  benefits  attributed  to service to
           date but also for those expected to be earned in the future, and such
           contributions meet the minimum funding  requirements set forth in the
           Employee Retirement Income Security Act of 1974.

     (i) Research and Development Costs

         Research and development costs are charged to expense as incurred.  The
           Company  receives  fees under a technology  development  contract and
           such fees are  recorded as a reduction  of research  and  development
           costs as work is  performed  pursuant to the related  contract and as
           defined  milestones  are  attained.   In  fiscal  1997,  the  Company
           recognized  product  development fees of $338,939 under the contract,
           which were netted  with  research  and  development  costs.  Prior to
           fiscal  1997,  the Company did not engage in  technology  development
           contracts.

     (j) Income Taxes

         The Company  utilizes the asset and liability  method of accounting for
           income taxes. Under this method,  deferred tax assets and liabilities
           are  recognized  for the  future  tax  consequences  attributable  to
           differences  between  the  financial  statement  carrying  amounts of
           existing assets and  liabilities  and their  respective tax bases and
           operating loss and tax credit carryforwards.  Deferred tax assets and
           liabilities are measured using enacted tax rates.

     (k) Financial Instruments

         The  Company's  financial  instruments,  which  include  cash  and cash
           equivalents,  accounts  receivable,  accounts payable,  and long-term
           debt, are stated at cost which approximates their fair values at June
           30, 1997 and 1996.

     (l) Stock-based Compensation

         The Company adopted Statement of Financial Accounting Standard No. 123,
           Accounting for Stock-based  Compensation  (Statement 123),  beginning
           with the  Company's  first  quarter of fiscal 1997.  Upon adoption of
           Statement 123, the Company continued to measure  compensation expense
           for its stock-based  employee  compensation plans using the intrinsic
           value method prescribed by APB No. 25, Accounting for Stock Issued to
           Employees,  and has provided pro forma  disclosures  of the effect on
           net income and earnings per share as if the fair  value-based  method
           prescribed   by   Statement   123  has  been   applied  in  measuring
           compensation expense.

                                        30                           (Continued)
<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(1) Summary of Significant Accounting Policies, Continued

     (m) Use of Estimates

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

     (n) Recent Pronouncements

         Statement of Financial  Accounting Standard No. 128, Earnings Per Share
           (Statement 128), was issued in February 1997. Statement 128 specifies
           the  computation,   presentation,  and  disclosure  requirements  for
           earnings per share.  Adoption of  Statement  128 will be required for
           the Company beginning in the second quarter of fiscal 1998.  Adoption
           of  Statement  128 is not  expected to have a material  effect on the
           Company's operating results.

         Additionally,  Statement  of  Financial  Accounting  Standard  No. 131,
           Disclosures  About Segments of an Enterprise and Related  Information
           (Statement  131)  was  issued  in  1997.  Statement  131  establishes
           standards for the reporting of information  about operating  segments
           and related  disclosures  about  products  and  services,  geographic
           areas,  and  major  customers.  Adoption  of  Statement  131  will be
           required in fiscal 1999 and require interim disclosures  beginning in
           fiscal  2000.  Adoption of  Statement  131 is not  expected to have a
           material effect on the Company's financial statement disclosures.

(2) Inventories

     Inventories are summarized as follows: 

                                                         1997             1996 
                                                         ----             ----

                  Raw materials                       $ 3,684,807      3,027,700
                  Work-in-process                       3,072,231      3,031,441
                  Finished goods                          978,969      1,151,179
                                                      -----------    -----------

                                                      $ 7,736,007      7,210,320
                                                      ===========    ===========

(3) Property, Plant and Equipment

     Components of property, plant and equipment are as follows:

                                                         1997            1996
                                                         ----            ----

              Land and land improvements              $ 1,362,050      1,362,050
              Buildings                                 5,129,221      5,120,245
              Machinery and equipment                  23,588,902     22,443,583
                                                      -----------    -----------
                                                       30,080,173     28,925,878
              Less accumulated depreciation
                  and amortization                     23,110,872     21,871,008
                                                      -----------    -----------

                                                      $ 6,969,301      7,054,870
                                                      ===========    ===========

                                       31                            (Continued)
<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(4) Accrued Expenses

     Accrued expenses are summarized as follows:

                                                         1997             1996
                                                         ----             ----
                  Compensation                         $313,477          168,901
                  Commissions                           242,005          180,002
                  Other                                 163,934          122,762
                                                       --------        ---------

                                                       $719,416          471,665
                                                       ========        =========

(5) Long-term Debt

     Long-term debt is comprised as follows:

                                                         1997            1996
                                                         ----            ----
              Industrial Development Revenue Bonds     $   --            906,667
              Term loan                                 680,001             --
              Capitalized lease obligations               2,057          167,967
                                                       --------        ---------

                                                        682,058        1,074,634
              Less current installments                 228,723          394,633
                                                       --------        ---------

                                                       $453,335          680,001
                                                       ========        =========

     In August 1985,  Onondaga  County  Industrial  Development  Agency  (OCIDA)
        issued  revenue bonds  bearing  interest at 75% of the prime rate in the
        amount of $3,400,000. The proceeds from the bonds were used to construct
        additions to the Company's  manufacturing  facility and for the purchase
        of additional land and equipment. The related lease agreement, which was
        to mature on May l, 2000,  required  semi-annual  principal  payments of
        $113,333,  plus interest.  In October 1996, the bonds were  extinguished
        with the proceeds of the term loan described below.

     In October  1996,  the  Company  entered  into an  agreement  for a  credit
        facility  providing for (1) a $3,000,000  working capital revolving line
        of credit  bearing  interest  at prime plus 1% (9.5% at June 30,  1997),
        maturing on November 30, 1998,  and (2) a $906,667  term loan payable in
        semi-annual  installments  of  $13,333  through  May  1,  2000,  bearing
        interest at prime plus 1.25% (9.75% at June 30,  1997).  The proceeds of
        the term loan were used to refinance the OCIDA revenue bonds. Borrowings
        under the credit facility are secured by substantially all assets of the
        Company.

     The terms of the credit facility require  maintenance of a minimum tangible
       net worth, ratio of cash flow to current maturities,  and leverage ratio,
       as defined in the  respective  agreement.  The Company was in  compliance
       with all restrictions and covenants at June 30, 1997.

     Maturities of  long-term  debt are  $228,723  in 1998; $226,667 in 1999 and
       2000.

     Cash payments  for interest  were  $92,358,  $110,959  and $186,824  during
       fiscal 1997, 1996 and 1995, respectively.


                                       32                            (Continued)
<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(6) Stock Option Plans

     Under the Company's 1988 Incentive Stock Option Plan (1988 ISO),  1,000,000
       shares of common  stock  were  reserved  for the  granting  of options to
       officers and key employees. Options were granted at the fair market price
       of  shares at the date of grant,  become  exercisable  20% at the date of
       grant and 20% per year thereafter, and must be exercised within ten years
       of the date of grant.  No shares are  available  for grant under the 1988
       plan as of June 30, 1997.

     During fiscal 1996, an Incentive Stock Option Plan (1996 ISO) was approved,
       under which 400,000  shares of common stock were reserved for issuance to
       eligible  employees.  Options  are  granted at a price not less than fair
       market  value of  shares  at the date of grant,  become  exercisable  20%
       twelve  months  from the date of grant and 20% per year  thereafter,  and
       must be exercised within ten years of the date of grant.

     The Company also has a  Non-Statutory  Stock Option Plan (NSO) which allows
       for the granting of options to Board members and nonemployees.  Under the
       Plan,  100,000  shares of common stock were  reserved for the granting of
       options at prices to be determined by the Board (options granted to Board
       members may not be less than the fair market value on the date of grant).
       Options become exercisable  immediately and must be exercised within five
       years of the date of grant.

     Information  for the three years ended June 30, 1997 with  respect to these
       plans are as follows:

<TABLE>
<CAPTION>

                                                                                                       Weighted
                                                      Shares                                            Average
                                        ------------------------------------                          Exercise
                                         ISO            NSO            Total         Option Price        Price
                                         ---            ---            -----         ------------        -----
<S>                                     <C>             <C>           <C>          <C>                    <C> 
   Outstanding at July 2, 1994          621,550         82,500        704,050      $ 1.38 to 6.88         3.78
     Issued                             100,000           --          100,000           4.13              4.13
     Canceled                           (25,930)        (7,500)       (33,430)     $ 1.38 to 6.88         4.70
     Exercised                          (10,800)       (15,000)       (25,800)     $ 1.38 to 4.13         2.97
                                      ---------      ---------     ----------    
                                                                                 
   Outstanding at July 1, 1995          684,820         60,000        744,820      $ 1.38 to 6.88         3.81
     Issued                              68,000           --           68,000      $ 6.50 to 7.50         7.43
     Canceled                           (30,000)          --          (30,000)     $ 1.38 to 6.88         4.90
     Exercised                          (82,100)       (60,000)      (142,100)     $ 1.38 to 6.88         3.19
     Expired                            (12,850)          --          (12,850)     $     6.00             6.00
                                      ---------      ---------     ----------    
                                                                                 
   Outstanding at June 30, 1996         627,870           --          627,870      $ 1.38 to 7.50         4.25
     Issued                              95,000         10,000        105,000      $ 6.50 to 8.25         6.95
     Exercised                          (20,000)          --          (20,000)     $ 1.38 to 7.50         2.97
     Expired                            (31,870)          --          (31,870)     $     6.88             6.88
                                      ---------      ---------     ----------    
                                                                                 
   Outstanding at June 30, 1997         671,000         10,000        681,000      $ 1.38 to 8.25         4.58
                                      =========      =========     ==========    
                                                                                 
   Shares exercisable at                                                         
     June 30, 1997                      461,600         10,000        471,600      $ 1.38 to 8.25         3.86
                                      =========      =========     ==========    
   Shares available for grant at                                                 
     June 30, 1997                      137,000         14,000        151,000    
                                      =========      =========     ==========  
</TABLE>
          
                                                                                
                                       33                            (Continued)
                                                                              
<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(6) Stock Option Plans, Continued

     The  following  table  summarizes  significant  ranges of  outstanding  and
       exercisable options at June 30, 1997:

<TABLE>
<CAPTION>

                                             Options Outstanding                      Options Exercisable
                                  ----------------------------------------         --------------------------
                                                 Weighted
                                                  average         Weighted                           Weighted
            Range of                             remaining         average                            average
            exercise                             life in          exercise                           exercise
             prices               Shares           years            price          Shares              price
             ------               ------           -----            -----          ------              -----
                      
         <S>                       <C>             <C>              <C>              <C>               <C>           
         $ 1.38 to 4.12            205,000         3.25             1.38             205,000           1.38
         $ 4.13 to 6.00            306,000         3.45             5.30             246,000           5.30
         $ 6.01 to 8.25            170,000         8.64             7.13              20,600           7.82
                                 ---------                                         ---------
                                   681,000                                           471,600
                                 =========                                         =========
</TABLE>

     The per share weighted  average fair value of stock options  granted during
       fiscal  year 1997 and 1996 was $4.71 and  $4.94,  respectively.  The fair
       value of  options  at the  date of the  grant  was  estimated  using  the
       Black-Scholes  model with the following weighted average  assumptions for
       the respective fiscal year:

                                                     1997               1996
                                                     ----               ----

              Expected life                           5                  5
              Interest rate                           6.08%              5.63%
              Volatility                             78%                77%
              Dividend yield                          0%                 0%

     Stock based compensation costs would have reduced pretax income by $166,106
       and $67,135 in fiscal 1997 and 1996  ($161,678  and $67,135 after tax and
       $.04 and $.02 per share in fiscal  1997 and  1996,  respectively)  if the
       fair  values  of  options  granted  in that year had been  recognized  as
       compensation  expense on a straight-line basis over the vesting period of
       the grant. The pro forma effect on net income for fiscal 1997 and 1996 is
       not  representative of the pro forma effect on net income in future years
       because  it does not  take  into  consideration  pro  forma  compensation
       expense related to grants made prior to fiscal 1996.


                                      34                             (Continued)


<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(7) Employee Benefit Plans

     The Company has a  non-contributory  defined  benefit pension plan covering
       substantially  all of its  employees.  Benefits under this plan generally
       are  based on the  employee's  years of  service  and  compensation.  The
       following  table sets forth the plan's funded status at June 30, 1997 and
       1996:

<TABLE>
<CAPTION>
                             
                                                                               1997               1996
                                                                               ----               ----
         <S>                                                                <C>                 <C>      
         Actuarial present value of accumulated benefit
              obligation (vested $4,195,715 in 1997 and
              $3,885,557 in 1996)                                           $4,259,753          3,944,861
         Effect of assumed increase in compensation levels                     368,532            341,289
                                                                            ----------        -----------
         Projected benefit obligation for services rendered
              to date                                                        4,628,285          4,286,150
         Plan assets at fair value                                           4,970,705          4,400,776
                                                                            ----------        -----------
         Plan assets in excess of projected
              benefit obligation                                               342,420            114,626
         Unrecognized net gain                                                (501,657)          (270,153)
         Unrecognized prior service cost                                       133,633            151,872
         Unrecognized net transition asset (15 year
              amortization)                                                     56,793             66,259
                                                                            ----------        -----------

         Prepaid pension asset                                              $   31,189             62,604
                                                                            ==========        ===========
</TABLE>

       The following table details the components of net periodic pension cost:

<TABLE>
<CAPTION>

                                                          1997                 1996                1995
                                                          ----                 ----                ----
              <S>                                      <C>                    <C>                 <C>    
              Service cost                             $  140,609             148,893             146,354
              Interest cost                               316,779             292,138             259,167
              Actual return on plan assets               (549,333)           (406,032)           (794,687)
              Net amortization and deferral               223,654             114,897             571,524
                                                       ----------            --------            --------

                  Net periodic pension cost            $  131,709             149,896             182,358
                                                       ==========            ========            ========
</TABLE>

     The projected  benefit  obligation was determined using an assumed discount
       rate of 7.5% and an assumed long-term rate of increase in compensation of
       5.0% for 1997 and  1996.  The  assumed  long-term  rate of return on plan
       assets was 8.0% for 1997 and 1996.

     Plan assets consist  principally of equity securities,  and U.S. government
       and corporate obligations.

     The Company maintains a voluntary contributory salary savings plan to which
       participants may contribute up to 15% of their total compensation. During
       fiscal 1996 and 1995,  the Company  contributed an amount equal to 50% of
       the participants' contribution up to a maximum of 3% of the participants'
       compensation.   In  fiscal  1997,  the  Company  increased  its  matching
       contribution to an amount equal to 50% of the participants'  contribution
       up to a maximum of 5% of the  participants'  compensation.  During fiscal
       1997,  1996 and 1995,  the  Company  contributed  $129,115,  $80,645  and
       $112,255, respectively, to this plan.


                                     35                              (Continued)


<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(8) Postretirement Benefits

     The Company  provides  medical  coverage  for current  and future  eligible
       retirees  of  the  Company  plus  their  eligible  dependents.  Employees
       generally  become eligible for retiree medical  coverage by retiring from
       the  Company  after  attaining  at least age 55 with 15 years of  service
       (active  employees  at June 27,  1993 were  eligible  by  retiring  after
       attaining at least age 55 with 10 years of service). Retirees at June 27,
       1993 pay  approximately  $30 per month for health care  coverage  and the
       Company is responsible  for paying the remaining  costs.  For this group,
       any increase in health care coverage costs for retired  employees will be
       shared by the Company  and  retirees on a  fifty-fifty  basis,  while any
       increase in coverage costs for retiree dependents will be totally paid by
       the retirees.  For eligible  employees  retiring after June 26, 1993, the
       Company contributes a fixed dollar amount towards the cost of the medical
       plan. Any future cost increases for the retiree medical program for these
       participants will be charged to the retiree.

     The  following  table  presents  the  accumulated   postretirement  benefit
       obligation at June 30, 1997 and 1996:

                                                         1997            1996
                                                         ----            ----
         Retirees                                     $  553,511         550,312
         Fully eligible active plan participants         144,310         284,056
         Other active participants                       493,811         295,552
         Unrecognized net gain (loss)                    (10,356)          8,295
                                                      ----------      ----------
                                                   
         Accumulated postretirement benefit        
              obligation                              $1,181,276       1,138,215
                                                      ==========      ==========
                                                 
     The following  table details the components of net periodic  postretirement
       benefit cost:

                                                 1997         1996         1995
                                                 ----         ----         ----

         Service cost                         $ 32,784       29,296       30,522
         Interest cost                          84,744       78,151       71,089
                                              --------     --------     --------

              Net periodic postretirement
                  benefit cost                $117,528      107,447      101,611
                                              ========     ========     ========

     For measurement  purposes,  a 10% annual rate of increase in the per capita
       cost of covered benefits (i.e.,  health care cost trend rate) was assumed
       for fiscal 1997; the rate was assumed to decrease  gradually to 5% by the
       year 2013 and remain at that level thereafter. The health care cost trend
       rate assumption has an effect on the amounts  reported.  However,  as the
       Company  contributes  a fixed  dollar  amount to the plan for the  active
       employee  group,  this impact is minimized.  For example,  increasing the
       assumed health care cost trend rates by one percentage point in each year
       would increase the accumulated  postretirement  benefit  obligation as of
       June 30, 1997 by  approximately  $83,000 and the aggregate of the service
       and interest cost components of net periodic  postretirement benefit cost
       for the year ended June 30, 1997 by approximately $6,300.

     The weighted  average  discount rate used in  determining  the  accumulated
       postretirement benefit obligation was 7.5% at June 30, 1997 and 1996.



                                      36                             (Continued)


<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(9) Income Taxes

     Income tax expense (benefit) consists of:

                                          Current       Deferred        Total
                                          -------       --------        -----
       Year ended June 30, 1997:
            U.S. Federal                $ 450,262       (738,824)      (288,562)
            State                          17,284        271,278        288,562
                                        ---------       --------       --------
       
                                        $ 467,546       (467,546)          --
                                        =========       ========       ========
       
       Year ended June 30, 1996:
            U.S. Federal                $    --             --             --
            State                            --             --             --
                                        ---------       --------       --------
       
                                        $    --             --             --
                                        =========       ========       ========
       
       Year ended July 1, 1995:
            U.S. Federal                $(330,000)          --         (330,000)
            State                            --             --             --
                                        ---------       --------       --------
       
                                        $(330,000)          --         (330,000)
                                        =========       ========       ========

     A reconciliation of the expected consolidated income tax expense (benefit),
       computed by applying the U.S. Federal corporate income tax rate of 34% to
       income (loss) before income taxes, to income tax expense (benefit), is as
       follows:

                                              1997          1996         1995
                                              ----          ----         ----

      Expected consolidated income
           tax expense (benefit)          $   698,735     (367,223)    (612,572)
      State income taxes, net of
           federal income tax benefit         190,451         --           --
      Foreign tax effect, net                 137,722      496,520      198,662
      Change in valuation allowance        (1,060,599)    (140,552)      58,336
      Other, net                               33,691       11,255       25,574
                                          -----------     --------     --------
      
                                          $      --           --       (330,000)
                                          ===========     ========     ========


                                        37                           (Continued)


<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(9) Income Taxes, Continued

     The tax effects of temporary differences that give rise to the deferred tax
       assets  and  deferred  tax  liabilities  at June  30,  1997  and 1996 are
       presented below:

                                                          1997           1996
                                                          ----          ----
     Deferred tax assets:
          Inventories                                 $    53,711        43,425
          Retirement benefits                                --           6,638
          Postretirement benefits                         460,698       443,904
          General business credit carryforwards            30,594        30,594
          Federal net operating loss carryforwards           --         723,565
          State net operating loss carryforwards           36,636       170,717
          State investment tax credit carryforwards       804,631       766,037
          Alternative minimum tax credit
              carryforwards                               491,902       211,952
          Nondeductible reserves                           11,460        11,459
                                                      -----------    ----------
     
                    Total deferred tax assets           1,889,632     2,408,291
     
                    Less valuation allowance              583,104     1,643,703
                                                      -----------    ----------
     
                    Net deferred tax asset              1,306,528       764,588
                                                      -----------    ----------
     
     Deferred tax liabilities:
          Plant and equipment, principally due to
              differences in depreciation                (838,319)     (764,588)
          Retirement benefits                                (663)         --
                                                      -----------    ----------
                    Total deferred tax liabilities       (838,982)     (764,588)
                                                      -----------    ----------
     
                    Net deferred taxes                $   467,546          --
                                                      ===========    ==========
     
     Presented as:
          Current deferred tax asset                      532,054          --
          Long-term deferred tax liability                (64,508)         --
                                                      -----------    ----------
                                                      $   467,546          --
                                                      ===========    ==========


                                       38                            (Continued)


<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(9) Income Taxes, Continued

     The valuation allowance  for  deferred  tax assets as of June 30,  1997 and
        1996 was $583,104 and  $1,643,703,  respectively.  The net change in the
        total valuation allowance for the years ended June 30, 1997 and 1996 was
        a decrease of $1,060,599  and $140,552,  respectively.  In assessing the
        realizability of deferred tax assets, management considers whether it is
        more likely than not that some portion or all of the deferred tax assets
        will not be realized. The ultimate realization of deferred tax assets is
        dependent  upon the  generation  of future  taxable  income  during  the
        periods  in  which  those  temporary   differences   become  deductible.
        Management considers the scheduled reversal of deferred tax liabilities,
        projected future taxable income,  and tax planning  strategies in making
        this assessment.  Based upon the level of historical  taxable income and
        projections  for  future  taxable  income  over the  periods  which  the
        deferred  tax  assets are  deductible,  management  believes  it is more
        likely  than  not  the  Company  will  realize  the  benefits  of  these
        deductible differences, net of the existing valuation allowances at June
        30, 1997.

     At June 30, 1997,  the Company has net  operating  loss  carryforwards  for
        state  income tax  purposes of $403,001  which are  available  to offset
        future state taxable income,  if any, through 2012. The Company also has
        investment  tax credit  carryforwards  for state  income tax purposes of
        $804,631  which are available to reduce  future state income  taxes,  if
        any, through 2006. In addition,  the Company has alternative minimum tax
        credit  carryforwards  of $491,902  which are available to reduce future
        federal regular income taxes, if any, over an indefinite period.

     Cash payments for income taxes were $0 in fiscal 1997 and 1996, and $30,113
        in 1995.

(10) Restructuring

     In fiscal 1995, the Company  implemented cost cutting measures  designed to
        reduce overhead costs and improve operating  efficiencies.  This program
        included  severance of employees and reorganization of the manufacturing
        and  engineering  functions  of  the  Company.  A  restructuring  charge
        amounting to $360,000,  consisting of severance costs, was recognized as
        a result of the restructuring program.

     During  the  third  quarter  of  fiscal  1996,   the  Company   recorded  a
        restructuring  charge of $810,000  resulting from the disposition of the
        net assets of the Company's European subsidiary,  Anaren Microwave, Ltd.
        The  charge  includes  provisions  for the  writedown  of  assets to net
        realizable value,  legal and professional fees, and costs to complete an
        existing  electronic  warfare  simulator  contract in excess of expected
        revenues.


                                        39                           (Continued)
 

<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(11) Commitments

     The Company is obligated  under an operating  lease for a building.  Future
       minimum  payments under the  noncancelable  operating  lease for the next
       five years and thereafter are summarized as follows:

                  Year ending June 30,
                             1998                                   $  384,835
                             1999                                      384,835
                             2000                                      384,835
                             2001                                      384,835
                             2002                                      384,835
                             Thereafter                              4,489,746
                                                                     ---------

                                                                     6,413,921
                  Less amounts representing
                      sublease income                                  336,731
                                                                    ----------
                                                                    $6,077,190
                                                                    ==========

     Rent expense for the years ended June 30,  1997,  June 30, 1996 and July 1,
       1995 was $384,835, $373,531, and $378,483, respectively. Rent expense for
       fiscal  1997 and 1996 was  offset  by  sublease  income of  $125,667  and
       $53,032, respectively.

     The Company maintains a letter of credit arrangement with a bank. Under the
       arrangement,  the  bank  issued a  letter  of  credit  in the  amount  of
       approximately  $600,000 as required under a contract  between the Company
       and a customer.  At June 30, 1997, the Company was required to maintain a
       compensating balance of approximately  $600,000 in support of this letter
       of credit.

     As discussed  in  note 1(i),  the  Company  is  currently  engaged  under a
      technology  development  contract.  Under this  contract,  the  Company is
      committed to provide research and development  services through  September
      1998. Technology development fees and related costs under the contract are
      anticipated  to  aggregate  approximately  $500,000 and $107,000 in fiscal
      1998 and 1999, respectively.

(12) Concentrations

     In 1997, sales to two customers  (approximately  $3,400,000 and $2,700,000,
       respectively)  exceeded 10% of consolidated  net sales. In 1996, sales to
       two customers  (approximately  $4,380,000 and  $1,720,000,  respectively)
       exceeded 10% of consolidated  net sales. In 1995,  sales to two customers
       (approximately  $4,570,000 and $3,020,000,  respectively) exceeded 10% of
       consolidated net sales.


                                       40                            (Continued)


<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(12) Concentrations, Continued

     The Company and  others,  which are  engaged in  supplying  defense-related
       equipment to the United States Government (the  Government),  are subject
       to certain business risks peculiar to the defense industry.  Sales to the
       Government  may be affected by changes in  procurement  policies,  budget
       considerations,   changing  concepts  of  national   defense,   political
       developments abroad and other factors.  Sales to the Government accounted
       for  approximately  16%, 20% and 48% of consolidated  net sales in fiscal
       1997, 1996 and 1995,  respectively.  While management believes there is a
       high probability of continuation of the Company's current defense-related
       programs,  it  continues  to  reduce  its  dependence  on  sales  to  the
       Government through development of its commercial electronic business.

(13) Foreign Operations

     The following table shows financial information about the Company's foreign
       operations:

<TABLE>
<CAPTION>
                                                                 Years ended
`                                               -----------------------------------------------
                                                June 30, 199    June 30, 1996      July 1, 1995
                                                -------------   -------------      ------------
         <S>                                    <C>               <C>              <C>       
         Net sales:
              United States                     $ 24,226,792      15,900,956       14,929,495
              European subsidiary                       --         1,180,945        3,066,257
                                                ------------      ----------       ---------- 
                                                                                
                      Consolidated              $ 24,226,792      17,081,901       17,995,752
                                                ============      ==========       ========== 
                                                                                
         Operating profit (loss):                                               
              United States                     $  2,055,102         392,015       (1,425,730)
              European subsidiary*                      --        (1,496,979)        (327,324)
                                                ------------      ----------       ---------- 
                                                                                
                      Consolidated              $  2,055,102      (1,104,964)      (1,753,054)
                                                ============      ==========       ========== 
</TABLE>

                                                                                
     * Includes  the net loss on  dissolution  of the net assets of  $810,000 in
       fiscal 1996 (see note 10).

<TABLE>
<CAPTION>
                                                                Years ended
                                              ---------------------------------------------
                                              June 30, 1997    June 30, 1996   July 1, 1995
                                              -------------    -------------    ------------
         <S>                                    <C>              <C>              <C>       

         Identifiable assets:
              United States                    $25,972,543      20,674,207       20,941,042
              European subsidiary                     --         1,119,009        2,424,064
                                                ----------     -----------      -----------

                      Consolidated             $25,972,543      21,793,216       23,365,106
                                                ==========     ===========      ===========
</TABLE>

     Sales to customers located outside the United States amounted to $4,701,094
       in 1997, $6,108,024 in 1996 and $9,498,737 in 1995.


                                       41                            (Continued)

<PAGE>

                     ANAREN MICROWAVE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(14) Quarterly Financial Data (Unaudited)

     The  following  table  sets forth  certain  unaudited  quarterly  financial
       information for the years ended June 30, 1997 and 1996, respectively:

<TABLE>
<CAPTION>

                                                                    1997 Quarter Ended
                                                   ----------------------------------------------------
                                                    Sept. 30       Dec. 31       March 31     June 30
                                                    --------       -------       --------     -------

<S>                                                <C>            <C>           <C>           <C>      
Net sales                                          $5,065,641     5,313,722     6,059,502     7,787,927
                                                   ==========     =========     =========     =========
                                                                                             
Cost of sales                                      $3,572,094     3,481,193     3,995,195     5,194,402
                                                   ==========     =========     =========     =========
                                                                                             
Net earnings                                       $  209,528       370,389       464,733     1,010,452
                                                   ==========     =========     =========     =========
                                                                                             
Earnings per common and common equivalent share:                                             
         Primary                                   $      .05           .09           .11           .25
                                                   ==========     =========     =========     =========
         Assuming full dilution                    $      .05           .09           .11           .21
                                                   ==========     =========     =========     =========
</TABLE>

                                                        
<TABLE>
<CAPTION>
                                                                    1996 Quarter Ended
                                                   ----------------------------------------------------
                                                    Sept. 30         Dec. 31       March 31     June 30
                                                    --------         -------       --------     -------             
<S>                                                <C>            <C>           <C>           <C>      
Net sales                                          $4,449,465     4,441,629     4,101,685     4,089,122
                                                   ==========     =========     =========     =========
                                                                                             
Cost of sales                                      $2,808,833     2,745,411     2,913,676     2,678,590
                                                   ==========     =========     =========     =========
                                                                                             
Restructuring                                      $     --            --         810,000          --
                                                   ==========     =========     =========     =========
                                                                                             
Net earnings (loss)                                $   65,947        10,844    (1,197,795)       40,935
                                                   ==========     =========     =========     =========
                                                                                             
Earnings (loss) per common and common                                                        
  equivalent share:                                                                          
         Primary                                   $      .02          --            (.30)          .01
                                                   ==========     =========     =========     =========
         Assuming full dilution                    $      .02          --            (.30)          .01
                                                   ==========     =========     =========     =========
</TABLE>

                                                                          
     As noted in note 1(b) and note 10, during the third quarter ended March 31,
       1996, the Company  recorded a restructuring  charge of $810,000 for costs
       associated  with  the  disposition  of the net  assets  of the  Company's
       European subsidiary.


                                       42
<PAGE>

                              INDEX TO EXHIBITS (1)


Exhibit No.         Description
-----------         -----------

              3.1   Certificate of Incorporation of Registrant and amendments
                    thereof.
                    
                    (i)  Restated Certificate of Incorporation is incorporated
                         by reference to Exhibit 3(a) to Registrant's
                         Registration Statement of Form S-1 (No. 2-42704).
                    
                    (ii) Amendment, filed December 19, 1980, is incorporated by
                         referenced to Exhibit 4.1(ii) to Registrant's
                         Registration Statement of Form S-2 (No. 2-86025).
                    
                    (iii) Amendment, filed March 18, 1985 is incorporated by
                         reference to the identically numbered exhibit to the
                         Registrant's Annual Report on Form 10-K (Commission
                         File No. 0-6620) for the year ended June 30, 1987.
                    
                    (iv) Amendment, filed December 14, 1987, is incorporated by
                         reference to Exhibit 4(a)(iv) to the Registrant's
                         Registration Statement on Form S-8 (33-19618).
                    
a             3.2   Registrant's By-Laws, as amended.
                    
b,c           10.1  Lease Agreement between the Registrant and the Onondaga
                    County Industrial Development Agency, dated June 1, 1980
                    together with Amendment, dated August 21, 1985 to Lease
                    Agreement between the Registrant and the Onondaga County
                    Industrial Development Agency.
               
h,I,k         10.2  Loan Agreement, dated June 15, 1990, by and between Fleet
                    National Bank and the Registrant, as amended by First
                    amendment to loan agreement, dated July 15, 1993, by and
                    between Fleet National Bank and the Registrant, and Second
                    amendment to loan agreement, dated June 24, 1994, by and
                    between Fleet National Bank and the Registrant.

              10.3  Credit Facility Agreement dated as of October 1, 1996
                    between the Company and Manufacturers and Traders Trust
                    Company, together with Term Note and Revolving Credit Note
                    each dated October 1, 1996 executed by the Compamy to
                    Manufacturers and Traders Trust Company and Security
                    Agreement dated Ocyober 1, 1996 between the Company and
                    Manufacturers and Traders Trust Company.

              10.4  Employment Agreement dated as of July 1, 1997 between the
                    Company and Lawrence A. Sala.

              10.5  Consulting Agreement dated as of March 1, 1997 between the
                    Company and Dale F. Eck.

a             10.6  Registrant's Pension Plan and Trust. (2)
                    
j             10.7  Registrant's Incentive Stock Option Plan. (2)
                    
d             10.8  Registrant's Employee Stock Purchase Plan. (2)
                    
e             10.9  Registrant's Non-Statutory Stock Option Plan (2)
                    
f             10.10 Registrant's Severance Compensation Plan (2)

              10.11 Registrant's Management Incentive Plan for 1998 (2)
                    
g             21    Subsidiaries of Registrant
                    
              23    Consent of KPMG Peat Marwick LLP
                    
              27    Financial Data Schedule for the twelve month period ended
                    June 30, 1997, which is submitted electronically to the
                    Securities and Exchange Commission for information only and
                    is not filed.
                   

                                       43
<PAGE>

                            EXHIBIT INDEX (Continued)

a                   Incorporated herein by reference to exhibit 4(b) to the
                    Registrant's Registration Statement on Form S-8
                    (Registration No. 33-19618).

b                   Incorporated herein by reference to exhibit 4.4 to the
                    Registrant's Registration Statement on Form S-2
                    (Registration No. 2-86025)

c                   Incorporated herein by reference to the identically numbered
                    exhibit to the Registrant's Annual Report on Form 10-K for
                    the year ended June 30, 1985.

d                   Incorporated herein by reference from Exhibit No. 4(c) to
                    the Registrant's Registration Statement on Form S-8
                    (Registration No. 33-1768)

e                   Incorporated herein by reference from Exhibit No. 4 to the
                    Registrant's Registration Statement on Form S-8
                    (Registration No. 33-36761).

f                   Incorporated herein by reference to the identically numbered
                    exhibit to the Registrant's Annual Report on Form 10-K for
                    the year ended June 30, 1990.

g                   Incorporated herein by reference to exhibit No. 22 to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    June 30, 1991.

h                   Incorporated herein by reference to exhibit No. 4.6 to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    June 30, 1991.

i                   Incorporated herein by reference to exhibit No. 4.6 to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    June 26, 1993.

j                   Incorporated herein by reference to exhibit to the
                    Registrant's Registration Statement on Form S-8
                    (Registration No. 333-03193)

k                   Incorporated herein by reference to exhibit 4.8 to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    July 2, 1994

                    (1)  The Company's quarterly and annual reports are filed
                         with the Securities and Exchange Commission under file
                         no. 0-6620

                    (2)  Management contract or compensatory plan arrangement.


                                       44