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 __December 31, 1998__.
                                     OR
 ___  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934
 For the transition period from _________ to ______________.
 
 Commission file number ____1-7203____.
 
                             AYDIN CORPORATION                  
_______________________________________________________
      (Exact name of registrant as specified in its charter)
 
     Delaware                                23-1686808  
________________________________  ___________________________
 (State or other jurisdiction of        (I.R.S. Employer
 incorporation or organization           Identification No.)
 
        47 FRIENDS LANE
      NEWTOWN, PENNSYLVANIA                           18940
 _________________________________  __________________________
 (Address of principal executive offices)          (Zip Code)
 
Registrant's telephone number, including area code (215)497-8000

700 DRESHER ROAD,HORSHAM, PENNSYLVANIA 19044
___________________________________________________________
 (Former Name or Former address, if changed since last report)          
 
 Securities registered pursuant to Section 12(b) of the Act:
 
                                    Name of each exchange
      Title of each class            on which registered
 ______________________________     _________________________   
 
    Common Stock, $1 Par Value       New York Stock Exchange   
 
 Securities registered pursuant to Section 12(g) of the Act:
 
                                   NONE
                             _________________
                             (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.  __X__
 
 The aggregate market value of 4,539,006 shares of Common Stock
 held by non-affiliates, computed using the closing price as of
 March 1, 1999, was $58,439,702.
 
 Number of shares of Common Stock outstanding as of March 1,
 1999 5,220,936.
 
 DOCUMENTS INCORPORATED BY REFERENCE
 
Portions of the following documents are incorporated by
 reference:
 
The Registrant's Schedule 14D-9 filed with the Commission on March 
5, 1999 (the "Schedule 14D-9"), including the Information 
Statement Pursuant to Section 14(F) of the Securities Exchange Act 
of 1934 and Rule 14F-1 Thereunder (the "Information Statement") 
filed as Annex A to the Schedule 14D-9 (Part III).
 
<PAGE>
                        INDEX TO FORM 10-K
  ----------------------------------------------------------
This index lists the requirements of Form 10-K and the page number
in this Form 10-K where each item can be found.

         PART I

Item 1  Business............................ 2-5
Item 2  Properties.......................... 6
Item 3  Legal Proceedings................... 6
Item 4  Submission of Matters to a Vote
         of Security Holders................ 6

        PART II

Item 5  Market for the Registrant's Common
         Equity and Related Stockholder
         Matters............................ 7
Item 6  Selected Financial Data............. 8
Item 7  Management's Discussion and
         Analysis of Financial Condition
         and Results of Operation........... 9-12
Item 7A Quantitative and Qualitative
         Disclosures About Market Risk...... 12
Item 8  Financial Statements and
        Supplementary Data.................  13-27
Item 9  Changes In and Disagreements With
         Accountants on Accounting and
         Financial Disclosure............... 27

        PART III

Item 10 Directors and Executive Officers
         of the Registrant................. 28
Item 11 Executive Compensation............. 28
Item 12 Security Ownership of Certain
         Beneficial Owners and Management.. 28
Item 13 Certain Relationships and
         Related Transactions.............. 28

        PART IV

Item 14 Exhibits, Financial Statement
         Schedules and Reports on Form 8-K. 29-30
<PAGE>
 
PART I

ITEM 1.  BUSINESS
(a)  General Development of Business

Aydin Corporation (the "Company" or "Aydin") was incorporated 
under the laws of the State of Delaware in September, 1967.

The Company consists domestically of two major operating and one 
smaller support division, and two foreign operating subsidiaries.  
The Company disposed of its 80% interest in its Argentine 
subsidiary on December 31, 1996 and now owns 19% of that company.  
The divisions and subsidiaries are profit centers each with 
engineering, manufacturing, marketing and accounting functions.

In 1998, the Company sold three operating divisions and shut down 
a fourth.  As of the end of the third fiscal quarter of 1998, the 
Company accounted for its Displays Division (which previously had 
been a major operating division) as a discontinued operation, and 
that division was sold in November 1998.  Earlier in 1998, the 
Company shut down its Raytor Division and sold both its Molded 
Products and West Coast Microwave Components Divisions, all of 
which divisions had been smaller support divisions. Going forward, 
the Company has the following three major operating business 
segments: (1) the Telemetry Division; (2) the Communications 
Division, which includes a UK subsidiary, Aydin Europe Ltd., which 
provides overseas marketing, sales and customer service support 
for the Division; and (3) a wholly-owned Turkish subsidiary, Aydin 
Yazilim ve Elektronik Sanayi A.S., which together with a U.S. 
based program support office forms a Turkish Operations segment. 
In addition, the Company has a support division (Electro Fab) 
which produces printed circuit boards, and is part of the Other 
segment.

(b)  Financial Information About Industry Segments

The Company adopted Statement of Financial Accounting Standards 
No. 131, "Disclosures about Segments of an Enterprise and Related 
Information," ("SFAS 131") during the fourth quarter of 1998.  
Financial information regarding the Company's operating segments 
for the past three fiscal years is set forth under Note N in the 
Notes to Consolidated Financial Statements included under Item 8 
in Part II of this Report on Form 10-K, and such information is 
incorporated herein by reference.

(c)	Narrative Description of Business
				        	        	        
The Company operates predominantly in the electronics 
manufacturing industry, and the information set forth below is 
with respect to the Company's three major business segments.  The 
Company designs, manufactures, and sells products in the three 
major business segments as described below:

	Telemetry Segment
	Aydin Telemetry products are used by space agencies such as 
NASA and in defense and aerospace programs such as aircraft 
and weapons development. These products and systems serve 
aerospace, satellite and commercial aircraft markets in the 
United States and abroad. Aydin designs, manufactures and 
markets an extensive product line and provides turnkey 
systems integration for airborne and ground-based 
applications. These airborne and ground systems gather 
critical information from spacecraft, satellites, aircraft, 
guided weapons and ground vehicles. This equipment 
calibrates, processes and records or transmits information 
by radio or microwave links to a fixed or mobile ground 
station that receives, processes and analyzes the data.

	Communications Segment
	Aydin provides a wide range of data and voice communication 
systems and products for the commercial and military markets 
throughout the world in a variety of public and private 
networks. In addition, Aydin custom-designs complex mission-
critical applications such as right-of-way communications 
for utility, railway and pipeline companies, and the 
establishment of vital links to offshore platforms and 
satellite earth stations. Aydin also provides complete air 
defense communications systems and commercial air traffic 
control solutions.

(page 2)
<PAGE>

	Aydin also manufactures and installs communications products 
used in satellite earth stations, providing both primary and 
back-up links such as Aydin's state-of-the-art Satellite 
TDMA Terminals used for commercial and government networks--
among them AT&T, Sprint and WorldCom, and national telecom 
operations in the UK, France, Germany, Canada, Singapore and 
Brazil.

	Aydin Communications has supplied turnkey telecommunications 
systems to Australia, Thailand, Turkey, Argentina, Zambia, 
Malaysia, Saudi Arabia, Finland and other countries, serving 
infrastructure needs with integrated systems that may 
include line-of-sight radios, satellite earth stations, 
multiplexers, switches, fiber-optic cables, and other 
technology.

	Turkish Operations Segment
	The Turkish Operations Segment produces, installs and 
supports a variety of military communications equipment and 
systems, including the Government of Turkey's critical 
Mobile Air Defense System.  To date, nearly all of this 
segment's business comes from the Turkish government.


The Company's products and systems are sold directly by Company 
sales personnel and manufacturers' representatives.  Sales 
representatives for the Company are located in many cities across 
the United States as well as at key major military bases. With 
respect to exports, sales efforts are conducted by its 
international subsidiaries, its international sales network and 
manufacturers' representatives in many countries.

The Company maintains standard product lines and systems sold by 
catalog, although it generally does not maintain an inventory of 
finished goods.  A portion of current sales is attributable to 
such standard products, modifications thereof and turnkey 
communications systems using these products.  Another portion of 
sales is attributable to special, made-to-order equipment based 
upon a customer's specific requirements.

The Company's customers include U.S. and foreign communications 
and electronic and aerospace firms, electric utilities, regulated 
and unregulated telephone organizations, major transportation 
organizations, other industrial and financial concerns and process 
control companies, research laboratories, universities, large 
defense contractors, foreign governments, the U.S. Government 
through various agencies of the Department of Defense and the 
National Aeronautics and Space Administration.

A breakdown of sales for the last three years including sales to 
major customers who accounted for 10% or more of sales is set 
forth below.  Sales figures for prior years have been restated to 
eliminate sales of discontinued operations:

<TABLE>
<CAPTION>
                                                       1998           1997           1996
<S>                                                <C>            <C>            <C>
U.S. Government Agencies (direct and indirect),
 principally Department of Defense (1)             $ 26,567,000   $ 34,847,000   $ 38,728,000
Export and foreign sales including equipment
 sold to other U.S. companies for export(1)(2)(3)    30,471,000     45,539,000     41,242,000
U.S. commercial and industrial business              20,850,000     14,468,000     14,362,000
                                                   ____________   ____________   ____________
TOTAL NET SALES                                    $ 77,888,000   $ 94,854,000   $ 94,332,000
                                                   ____________   ____________   ____________
                                                   ____________   ____________   ____________
<FN>
(1) The U.S. Government and the Government of Turkey were the only 
customers to whom sales exceeded 10% of consolidated sales during 
any of the past three years.  Sales to the Government of Turkey 
amounted to $ 9,575,000 in 1998, $21,496,000 in 1997,  and 
$15,116,000 in 1996.

(2)	Includes foreign sales of $ 5,699,000 for 1998, $14,918,000 
for 1997, and $18,653,000 for 1996. 

(3)	A breakdown of total export and foreign sales by geographic 
area follows in section (d) below.
</TABLE>

(page 3)
<PAGE>

Raw materials for the Company's business consist of manufactured 
components and parts.  The Company's raw materials are presently 
available in adequate supply on the open market.

The Company holds no material patents, trademarks, licenses, 
franchises or concessions.

The Company's operations are not seasonal to any material extent.

As stated above, although the Company maintains standard product 
lines and systems sold by catalog, it generally does not maintain 
a significant level of finished goods inventory.  However, the 
Company maintains an adequate level of raw materials inventory so 
that it will be able to meet initial delivery requirements of 
customers.  The Company has had no material difficulty in 
obtaining goods from suppliers.  The Company does not provide 
rights to return its products, and generally does not provide 
extended payment terms to customers.

The backlog of unfilled orders at December 31, 1998 was $42 
million as compared to $64 million at December 31, 1997.  
Approximately 20% of the 1998 backlog is not reasonably expected 
to be filled within the current year.

The backlog includes approximately $9 million for a command, 
control and communications project for the Government of Turkey 
for which the work is expected to be completed in 1999.  This 
contract became effective in October, 1990.

All contracts with the U.S. Government and some of the foreign 
governments are subject to cancellation at the convenience of the 
government.  In the event a contract with the U.S. Government is 
so terminated, the Armed Services Procurement Regulations provide 
that the Company shall be reimbursed for expenses incurred and 
shall be entitled to reasonable profits.

The greater portion of the Company's business is obtained by 
competitive bidding, while some is obtained through sole source 
negotiation.  In the domestic marketplace, the Company competes 
with some major U.S. companies from time to time; however, some of 
the competition in the U.S. comes from companies which are similar 
in size or smaller than Aydin. In the international marketplace, 
Aydin competes with major companies in addition to U.S. firms. A 
number of such competitors are larger than Aydin with greater 
financial resources, while some are similar to or smaller than 
Aydin.

Technical capability, reputation, price, ability to meet delivery 
schedules and reliability are the principal competitive factors. 
Depending on the particular product and the requirements of the 
contract documents, the number of firms competing with Aydin 
generally ranges from one to ten.

Estimated amounts spent during 1998, 1997, and 1996 on Company-
sponsored research and development activities, and customer-
sponsored research activities relating to the development of new 
products, services or techniques or the improvement of existing 
products, services or techniques are as follows:

<TABLE>
<CAPTION>
                                       1998        1997       1996
<S>                                 <C>         <C>         <C>
Company-sponsored research and			
development on direct cost basis    $1,502,000  $2,829,000  $8,096,000
	
Customer-sponsored research			
and development activities          $1,252,000  $2,747,000  $2,081,000	
</TABLE>

The Company, along with others, was responsible for the costs of 
cleanup under an order of the State of California at a site leased 
by the Company prior to 1984. Cleanup of the site was completed 
during 1996 and site monitoring over a 30-year period commenced in 
1997.  The estimated site monitoring costs to be expended over the 
remaining 28-year period are $2.9 million, or approximately 
$105,000 per year.  The amount to be paid has been included in the 
accompanying consolidated balance sheet as an other (non current) 
liability discounted at 7% to the expected payment dates. 

(page 4)
<PAGE>

The Company, along with others, has been notified by the EPA that 
it may be a potentially responsible party for the costs of cleanup 
of a waste disposal site. The Company estimates that its ultimate 
liability in this matter could be approximately $153,000 and has 
recorded this liability as of December 31, 1998.

As of year-end 1998, the Company employed approximately 800 
persons, with domestic operations concentrated principally in the 
Philadelphia, Pennsylvania metropolitan area, and most of the 
Company's foreign employees located in Ankara, Turkey.  Employer-
employee relations are considered to be satisfactory.

(d) Financial Information About Foreign and Domestic Operations
    and Export Sales

The Company had no significant foreign operations prior to 1991 
although a $210 million contract from the Government of Turkey 
became effective in October 1990 with approximately 35% of this 
contract being performed by the Company's Turkish subsidiary. The 
remaining backlog on this contract at December 31, 1998 was 
approximately $9 million.  Foreign assets included in the 
consolidated balance sheet amounted to $10.9 million, $18.6 
million, and $17.9 million at December 31, 1998, 1997, and 1996, 
respectively.  Of these amounts, $2.8 million, $5.1 million, and 
$2.5 million at December 31, 1998, 1997, and 1996, respectively, 
are cash and short-term investments of the Company's Turkish 
subsidiary consisting mainly of U.S. dollar denominated interest-
bearing time deposits and Eurobonds.  Foreign sales and pretax 
loss for 1998 were $5.7 million and $7.4 million respectively.  
Most of the loss was from increases in estimated costs at 
completion on the TMRC contract with the Government of Turkey at 
the Turkish subsidiary.  Foreign sales and pretax income for 1997 
amounted to $14.9 million and $2.5 million respectively. Foreign 
sales and pretax income for 1996 amounted to $18.7 million and $.9 
million, respectively. The Company's domestic operations include 
sales derived from customers or projects located in areas of the 
world outside the United States.  Export and foreign sales for 
1998, 1997, and 1996 by geographic area are set forth below:

<TABLE>
<CAPTION>
                                   1998           1997            1996
<S>                            <C>             <C>             <C>
Asia                           $ 3,075,000     $ 2,507,000     $ 3,817,000
Africa                           3,235,000       1,785,000       3,203,000
Europe                          21,024,000      38,019,000      23,507,000
North America                    1,982,000       1,172,000         640,000
South America                    1,116,000       1,821,000       9,733,000
Other                               39,000         235,000         342,000
Total export and foreign sales $30,471,000     $45,539,000     $41,242,000 
</TABLE>

On a percentage basis, export and foreign sales (direct and 
indirect) accounted for approximately 39% of total sales in 1998, 
48% of total sales in 1997, and 44% of total sales in 1996.  A 
majority of such export and foreign sales were in the 
telecommunications field.  Licenses are required from U.S. 
Government agencies for most of the Company's export products.  
The Company and its foreign subsidiaries may be adversely affected 
by certain risks generally associated with foreign contracts and 
operations, including ownership and control limitations, currency 
fluctuations, restrictions on repatriation of profits, difficulty 
in the enforcement of judgments, late delivery penalties, 
potential political or labor instability and general worldwide 
economic conditions.  However, such factors have not had a 
material effect on the Company's operations to date, and 
management believes that the risks involved in such foreign 
business are no greater than the normal risks of any other portion 
of the Company's sales.  The Company has generally been able to 
protect itself against foreign credit risks through contract 
provisions, advance payments and irrevocable letters of credit in 
its favor.  However, it should be noted that foreign contracts are 
sometimes subject to foreign laws.

(page 5)
<PAGE>

ITEM 2.  PROPERTIES
The Company's total plant capacity at December 31, 1998 is 
approximately 298,000 square feet of administrative and production 
facilities, 237,000 of which it owns and the balance of which it 
leases.  Most of the Company's Telemetry Division operations and 
all of its Electro Fab Division operations are housed in owned 
properties.  All foreign facilities are leased.  The Company 
currently plans to sell two buildings containing approximately 
143,000 square feet.  In one of these buildings, the Company's 
109,000 square foot former headquarters building in Horsham, 
Pennsylvania, the Company will lease back approximately 13,000 
square feet for use by the Communications Division.  

All leased properties are held under leases expiring between 
1998 and 2003.  As part of the 1997 restructuring and consolidation,
three Company-owned buildings (258,000 square feet) were sold
during 1997.  The Company recently moved its corporate headquarters 
to Newtown, Pennsylvania, and has sales offices within and outside
the U.S.  The administrative and production facilities occupied by
the Company are well maintained and suitable for its operations,
and include plant area, warehouse space, and management, engineering
and clerical offices. The plants of each of the manufacturing
operations generally contain machine shops, assembly areas, testing
facilities and packing and shipping departments in addition to the
engineering and laboratory areas.


ITEM 3.  LEGAL PROCEEDINGS

As reported in the Registrant's Annual Report on Form 10-K for the 
year ended December 31, 1997, during 1995 a subcontractor to the 
Company in the TMRC program with the Government of Turkey filed a 
demand for arbitration alleging a breach of contract and equitable 
adjustment of $12.4 million. This claim was subsequently amended 
and at December 31, 1997 amounted to $27.8 million. The Company 
had filed a claim against this subcontractor, Loral Defense 
Systems - - Eagan (now Lockheed Martin Tactical Systems, Inc.), 
for an amount in excess of the subcontractor's claim. The 
arbitration hearing was concluded and post-hearing briefs were 
filed in December 1997.

On April 10, 1998, the arbitration panel in that binding 
arbitration proceeding awarded Lockheed Martin approximately $17.2 
million.  On June 8, 1998 the Registrant announced that it had 
reached agreement with Lockheed Martin Corporation regarding 
payment of the arbitration award.  In accordance with that 
agreement, the Registrant made payments to Lockheed Martin over 
the next six months, and in November 1998 paid Lockheed Martin the 
full remaining balance of the arbitration award and accrued 
interest thereon.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders 
during the Fourth Quarter of 1998.

(page 6)
<PAGE>

PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS
The Company has no present plans to pay any cash dividends.  Due 
to the anticipated acquisition of the Company by L-3 
Communications Corporation as described below under Management's 
Discussion And Analysis Of Financial Condition And Results Of 
Operations, it is not expected that the Company will continue to 
be publicly held in the future.  The Company has contractually 
agreed with L-3 Communications Corporation that no dividends would 
be declared or paid by the Company pending the anticipated 
consummation of the acquisition. In addition, certain covenants 
of a Credit Agreement for the funding of a standby Letter of 
Credit currently prohibit the payment of a dividend or other 
distribution on account of the Company's capital stock.

Set forth below are the high and low trading prices for the 
Company's Common Stock for each calendar quarter for 1998 and 
1997.

1998                    High     Low
Fourth Quarter       $ 10.250     $ 7.750
Third Quarter           8.875       7.250
Second Quarter         13.375       8.6875
First Quarter          12.500      10.25
          
1997                    High     Low
Fourth Quarter        $ 14.125    $11.125
Third Quarter           12.625     11.0625
Second Quarter          12.500     10.500
First Quarter           11.625      9.250


As of March 1, 1999, there were approximately 1880 holders of 
record of the Company's Common Stock, and approximately 3,700 
beneficial owners of the Common Stock.

(page 7)
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

($000 omitted except for per share amounts)

<TABLE>
<CAPTION>
                                 1998       1997     1996*     1995      1994
<S>                       
For the Year                    <C>      <C>        <C>      <C>       <C>
Net sales                       $77,888  $ 94,854  $ 94,332  $113,127  $118,453 
Cost of sales                    79,538    68,106    74,796    80,015    85,518 
Income (loss) before
  income taxes                  (20,398)    2,924   (16,620)    6,649     8,189 
Income (loss) after
  taxes-continuing operations   (19,648)    1,806   (12,073)    4,678     6,234 
Income (loss) from
  discontinued operation         (6,659)   (3,498)   (2,707)     (748)   (1,187)
Net income (loss)               (26,307)   (1,692)  (14,780)    3,930     5,047 
Earnings (loss) per share            
  Income (loss) from
     continuing operations        (3.77)     0.34     (2.36)     0.91      1.25 
  Net income (loss)               (5.05)    (0.34)    (2.88)     0.77      1.01 
Cash dividend per share            -            -         -        -         - 
Return on average stockholders'
  equity                           (34%)      (2%)     (15%)        4%        5%
            
At Year End            
Total assets                     $82,125  $111,081  $122,803  $164,337  $164,495 
Working capital                   52,584    76,601    71,158    88,460    85,116 
Long-term debt                       -           -        -        770     1,549 
Stockholders' equity              63,568    89,761    90,672   105,183    99,730 
Stockholders' equity per share     12.18     17.23     17.66     20.58     19.98 

<FN>
* Income (loss) before income taxes and minority interest includes a $3,730,000
  restructuring charge in the third quarter of 1996.
</TABLE>

(page 8)
<PAGE>

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

Results of Operations

1998 versus 1997

For 1998, the Company reported a net loss of $26.3 million, or 
$5.05 per share, compared to a net loss of $1.7 million, or $.34 
per share, for 1997.  The 1998 loss primarily reflects the first 
quarter loss of $24.1 million, or $4.64 per share, driven largely 
by an arbitration award in April 1998 to Lockheed Martin 
Corporation, and a $6.7 million loss from discontinued operations 
related to the Displays Division which was sold in the fourth 
quarter, partly offset by a $5.6 million gain on the sale of the 
West Coast Microwave Components Division which was also sold in 
the fourth quarter.  The 1998 loss from continuing operations was 
$19.6 million, or $3.77 per share, compared to 1997 income from 
continuing operations of $1.8 million, or $.34 per share.  1997 
figures have been restated to reflect the Displays Division as a 
discontinued operation.

Net sales from continuing operations for the full year were $77.9 
million compared to $94.9 million for 1997, a decline of $17.0 
million or 18%.  The decrease year to year relates primarily to a 
$12.4 million decrease in sales of the Company's Turkish 
operations segment, most of which relates to the TMRC contract 
with the government of Turkey, and a $3.4 million decrease in 
Telemetry Division sales for the year.  The 1997 sales reflected 
significant activity on a subcontract which was completed in that 
year, and the TMRC contract is winding down as it approaches 
completion.  The Company believes that the decrease in Telemetry 
Division sales is reflective of the impact on the Company's 
business from the April arbitration award to Lockheed Martin and 
management turnover which took place in 1998.  With the 
satisfaction of the Company's obligations to Lockheed Martin in 
November, the disruption caused by this award has been resolved, 
and the Company is now working aggressively to rebuild its 
backlog. 

Cost of sales for 1998 includes a $19.8 million charge 
representing the April 1998 arbitration award to Lockheed Martin, 
related interest, and an increase in other estimated completion 
costs on the TMRC contract.  Cost of sales as a percentage of 
sales, without this $19.8 million charge, was 77% for 1998 
compared to 72% for 1997.  The increased cost of sales percentage 
was primarily the result of: (a) the Company's decision to 
relinquish its position regarding collectible revenues under a 
contract with the U.S. Government ($1.6 million); (b) an increase 
in litigation contingency reserves related to several outstanding 
claims against the Company ($.9 million); and (c) the write-off of 
certain West Coast Microwave Components Division assets not 
included with the sale of that Division which had negligible value 
after the sale ($.6 million).

Backlog at December 31, 1998 amounted to $42 million compared to 
$71 million at December 31, 1997 (before restatement for the 
discontinued operation).  Of this $29 million decrease, 
approximately $13 million is the result of the disposition in 1998 
of four Divisions included in the year end 1997 backlog.  The 
Company believes that a significant factor in the remainder of the 
backlog decline was the impact of the April 1998 arbitration award 
to Lockheed Martin.  With the satisfaction of the obligations to 
Lockheed Martin in November 1998, the disruption caused by this 
award has been resolved.  The Company is working aggressively to 
rebuild its backlog and in this regard booked two contracts 
amounting to $18 million in January 1999.

The Company's Turkish operations segment operates in a highly 
inflationary economy with corresponding declines in the Turkish 
currency versus the U.S. dollar.  The Company protected itself 
against these conditions by including clauses in its TMRC contract 
that escalate contract values from a predetermined base price by 
the percentage increase in Turkish inflation.  This does not 
protect the Company from the contractual consequences of 
performance delays, however.  To date, the TMRC contract has 
represented the vast majority of revenues of this segment. 

Selling, general and administrative, and research and development 
costs decreased in 1998 by $.9 million to $23.0 million from $23.9 
million in 1997. The 1998 costs included $1.8 million of additions 
to reserves with respect to various employee claims against the 
Company.

(page 9)
<PAGE>

The 1998 restructuring charge of $1.5 million was the result of 
decisions in the first quarter of 1998 to close the Raytor 
Division ($.9 million) and downsize the Corporate staff ($.6 
million) in line with expected declines in backlog and sales 
levels.  The restructuring was completed in the third quarter.  Of 
the total charge of $1.5 million, approximately $.6 million was 
for cash outlays and $.9 million was for non-cash asset write-
offs.  The major charges consisted of: severance benefits for 60 
employees ($.6 million); facility exit costs ($.2 million); and 
write-offs of inventory, equipment and receivables ($.7 million).

Environmental remediation costs amounted to $.5 million for 1998 
compared to $2.6 million for 1997.  The 1997 cost represented the 
write-off in 1997 of an expected insurance recovery of cleanup 
costs under an order of the State of California at a site leased 
by the Company prior to 1984.  The write-off was caused by the 
reversal by a California appellate court in April 1997 of the 
lower court's previous declaratory judgment decision against the 
Company's insurer. The 1998 cost represents an increase to the 
accrual for estimated site monitoring costs over a 30-year period 
at this site.  Site cleanup was completed in 1996 and site 
monitoring commenced in 1997.

Gains on sale of facilities/divisions relate to two company-owned 
buildings sold in 1997 and two divisions (West Coast Microwave 
Components and Molded Devices) sold in 1998.  A third division 
(Displays) was sold in 1998 and is accounted for in the 
discontinued operations categories of the financial statements.

The income tax recovery for 1998 resulted primarily from federal 
refund claims for prior year taxes and a 1998 decrease in deferred 
taxes partially offset by foreign taxes.  The net recovery of 
$750,000 was limited compared to the $20.4 million pre-tax loss 
from continuing operations because net operating loss carrybacks 
have been exhausted.   The 1997 tax provision of $1.1 million 
resulted from the effects of foreign income taxes in excess of tax 
benefits on U.S. losses.

The loss from operations of the discontinued division (Displays) 
was $4.1 million for 1998 and $4.6 million for 1997.  The 1998 
loss covers the first nine months of 1998.  The loss from the sale 
of the division ($2.6 million) includes $1.2 million of operating 
losses during the fourth quarter phase-out period and a $1.4 
million loss on the sale of the division in November 1998.  The 
loss on the sale of the division includes accruals of $570,000 at 
December 31, 1998 for estimated costs in connection with the sale.

1997 versus 1996

Net sales for 1997 of $94.9 million were essentially flat compared 
to 1996 sales of $94.3 million. Sales related to the Turkish 
subsidiary were up $7.9 million from 1996 primarily because of 
significant activity on a subcontract completed in 1997, partially 
offset by delays on the TMRC program.  There were no 1997 sales 
from the Argentine subsidiary, which was sold on December 31, 
1996, compared to 1996 sales of $9.3 million. Sales from all other 
business areas were essentially unchanged from 1996.

Backlog at December 31, 1997 amounted to $71 million compared to 
$84 million at December 31, 1996. Most of the decrease was from 
the TMRC contract, which was nearing completion. Backlog from 
other business was essentially flat. 

Cost of sales as a percentage of sales was 71.8% in 1997 compared 
to 79.3% in 1996. The improvement resulted from 1996 delays on the 
TMRC program and another large program which was corrected during 
1997, and cost savings achieved as a result of the 1996 
restructuring plan.

Selling, general, and administrative and research and development 
costs decreased by $7.9 million from 1996. Of this decrease, $2.4 
million was for 1996 expenses of the Argentine subsidiary, which 
was sold on December 31, 1996. Approximately $900,000 of this 
decrease was from lower bad debt expense compared to 1996 when 
there was $1 million of bad debt write-offs involving mostly 
foreign receivables. The 1996 level of write-offs was abnormally 
high compared to prior experience and consisted mostly of three 
well known foreign government related enterprises including one 
for approximately $400,000 which was a customer of the Argentine 
subsidiary.  The balance of the decrease reflected cost reductions 
pursuant to the Company's 1996 restructuring plan including 
pruning of certain product lines and a more focused targeting in 
1997 of research and development projects to the Company's core 
businesses. A significant amount was spent in 1996 on wireless 
local loop development projects.  A significant amount was also 
spent in 1996 on automatic vehicle location development projects, 
which have been discontinued. 

Interest income (net of interest expense) for 1997 amounted to 
$918,000 compared to net interest expense of $189,000 in 1996. 
This favorable swing of $1.1 million resulted from IRS interest 
income in 1997 on income tax refunds compared

(page 10)
<PAGE>

to IRS interest expense in 1996 on taxes owed. The favorable swing 
also reflects the lower level of short-term bank debt during 1997 
compared to 1996. 

The 1997 income tax provision of $1.1 million on the pre-tax loss 
of $574,000 resulted from the effects of foreign income taxes in 
excess of tax benefits on U.S. losses.

Financial Condition, Liquidity and Capital Resources

On March 1, 1999 the Company announced that it had entered into a 
definitive merger agreement with L-3 Communications Corporation 
("L-3") providing for the acquisition by L-3 of all of the 
outstanding common shares of the Company at $13.50 per share in 
cash.  The transaction was unanimously approved by the Company's 
Board of Directors.  The merger agreement with L-3 provides for a 
wholly owned subsidiary of L-3 to commence a cash tender offer to 
acquire all of the Company's outstanding shares at $13.50 per 
share, which tender offer was commenced on March 5, 1999.  
Consummation of the tender offer is conditioned on, among other 
things, the valid tender of such number of shares as would 
represent at least a majority of the Company's outstanding shares 
on a fully diluted basis, and receipt of regulatory approvals.  
The tender offer is not subject to financing.  Following 
completion of the tender offer, L-3 will be entitled to designate 
a majority of the Board of Directors of the Company.  The parties 
will complete a second-step cash merger at $13.50 per share as 
promptly as practicable following completion of the tender offer.  
Upon consummation of the merger, the Company will cease to be a 
publicly held company.

Liquidity at year-end 1998 has improved since December 31, 1997, 
despite the Company paying off the full $17.2 million arbitration 
award won by Lockheed Martin Corporation in April 1998, plus 
approximately $.6 million of related interest.  The funds used to 
pay Lockheed Martin were generated in part from the sale of three 
divisions during 1998 for a total of $15.6 million.  The Company 
had no long-term debt at December 31, 1998 or 1997, and only 
$133,000 of short-term debt at the end of 1998 which has been 
subsequently paid off.  The total cash balance at December 31, 
1998 was $9.5 million, of which $5.9 million was unrestricted 
cash, compared to $3.9 million of unrestricted cash at December 
31, 1997.  Subsequent to December 31, 1998 the cash balance had 
grown to approximately $16 million as of March 26, 1999.

At December 31, 1998 the Company had outstanding approximately 
$14.2 million of letters of credit (issued by banks to the 
Company's customers) with no currently available credit line for 
increasing this balance.  These letters of credit are liquidated 
in the ordinary course of business as customer collections are 
made or contract  milestones achieved against the contracts to 
which the letters of credit pertain.  New letter of credit 
collateral requirements will be funded with cash payments by the 
Company for the near term.

The Company currently has no bank borrowing lines available to it.  
The Company believes that cash provided by operations will be 
sufficient for the Company's cash requirements in 1999.

Sources of cash from operations during 1998 included a $12.5 
million decline in unbilled revenue resulting from improved 
performance in meeting target shipping dates.  This was the 
primary reason that cash used by operating activities was $8.3 
million for 1998 while the net loss for the year was $26.3 
million.  Other sources of cash from operations included $1.8 
million of net income tax refunds (U.S. refunds less foreign 
payments).  The decrease in unbilled revenue reflects shipment 
delays from year-end 1997 on a few programs which moved deliveries 
and billings into 1998, improved performance in 1998 in meeting 
shipment targets, and a lower level of sales and backlog in 1998 
versus 1997.

Other significant changes in balance sheet accounts from a year 
ago are: (1) a $2.8 million decrease in inventories of which $1.3 
million relates to the divisions disposed of during 1998 and $1.5 
million relates to improved inventory control and a lower volume 
of business in the remaining operations; (2) prepaid expenses and 
other declined by $4.1 million primarily because of the refund of 
U.S. income taxes which were included in prepaid expenses at year 
end 1997;  (3) accounts payable declined by $2.8 million primarily 
because of a lower level of purchases in 1998, more current vendor 
payments and $.4 million of payables pertaining to the divisions 
disposed of in 1998; (4) accrued liabilities-other increased by 
$3.5 million primarily because of $1.3 million of increases in 
reserves for potential contract price adjustments and litigation 
matters and $1.2 million of liabilities at year end 1998 related 
to the disposition of divisions during 1998; and (5) accrued and 
deferred income taxes (current and non-current) decreased by $3.0 
million primarily because of foreign tax payments and exchange 
gains and a recovery of U.S. taxes. 

The balance sheet at December 31, 1997 has been restated to 
reclassify $8.0 million of net assets (current plus non-current) 
of the Displays Division at that time into a discontinued 
operations classification.  The Division was sold in November 1998 
for approximately $6.4 million.  The operating results and balance 
sheet items of the Division for the

(page 11)
<PAGE>

current and prior periods are shown in the financial statements in 
the discontinued operations classification.

The Company's U.S. Government contracts are subject to audit by 
the government and price adjustment under certain circumstances.  
The Company also has receivables due from the U.S. Government on 
certain contracts whose collectability is dependent on the Company 
prevailing in its positions.  Management believes it has 
sufficient reserves to cover such matters.  However, unfavorable 
outcomes could have a material impact on future results of 
operations.

The Company is currently in the process of evaluating the impact 
of the "Year 2000" issue on the Company's operations, suppliers 
and customers in preparation for its intended issuance of "Year 
2000 Compliance Statements" to its customers. The Company's 
various Divisions are testing their respective systems (both 
information technology and non-information technology systems) and 
products, and they are communicating with their key suppliers to 
obtain appropriate assurances and/or Compliance Statements, as may 
apply, with respect to the suppliers being Year 2000 prepared and 
their products being Year 2000 compliant.  To date, nothing has 
come to the attention of the Company that would materially impact 
the results of operations of the Company.  The costs of addressing 
the Year 2000 issue have not been material to date, and at present 
the Company does not anticipate that they will be material.  The 
Company has not yet developed a contingency plan with respect to 
possible Year 2000 problems and has not yet determined whether 
such a contingency plan is necessary.

Based on present backlog and projected cash flows, the Company 
anticipates financing its near-term capital needs from internal 
sources.

In 1997, cash used by operating activities amounted to $7.0 
million.  In addition to the $1.7 million net loss, other primary 
reasons included a $5.5 million decrease in accounts payable which 
became more current at year end 1997 than at year end 1996 and a 
$4.5 million increase in inventories and unbilled revenue caused 
mainly by delays in shipments on several large programs in 1997.  
Also during 1997, three company-owned facilities were sold for 
proceeds of $11.5 million.  

Other significant changes in balance sheet accounts at year end 
1997 compared to year end 1996 included:  (1) a $6.8 million 
decline in the net book value of property, plant and equipment 
from the sale of facilities as noted above, including the sale of 
former Displays Division facilities which have been classified in 
the discontinued operations category in the financial statements; 
(2) a $2.5 million decrease in other assets resulting from the 
write-off of an anticipated insurance recovery as explained above 
in the discussion of 1998 results of operations; and (3) a $2.2 
million decrease in deferred income taxes (non-current portion) 
because of book versus tax timing differences in connection with 
the sale of facilities in 1997.
  

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET 
RISK

Not Applicable.

(page 12)
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONSOLIDATED STATEMENTS OF OPERATIONS
_____________________________________________________________
<TABLE>
<CAPTION>
                                                Year Ended December 31,                      
                                             1998           1997           1996
<S>                                     <C>             <C>           <C>
Net sales                               $ 77,888,000    $ 94,854,000  $ 94,332,000 
Costs and expenses                                            
  Cost of sales                                            
    Contract arbitration and related      19,814,000         -               -   
    Other                                 59,724,000      68,106,000    74,796,000 
  Selling, general and administrative     21,496,000      21,101,000    24,141,000 
  Research and development                 1,502,000       2,829,000     8,096,000 
  Interest expense (income), net            (701,000)       (918,000)      189,000 
  Restructuring costs                      1,548,000         -           3,730,000 
  Environmental remediation costs            511,000       2,612,000         -   
  Gain on sale of facilities                   -          (1,800,000)        -   
  Gain on sale of divisions               (5,608,000)        -               -   
                                         __________________________________________
  Total costs and expenses                98,286,000      91,930,000   110,952,000 
Income (loss) from continuing operations                                            
before income taxes                      (20,398,000)      2,924,000   (16,620,000)
                                            
Income tax provision (recovery)             (750,000)      1,118,000    (4,547,000)
                                          __________________________________________
                                                  
Income (loss) from continuing operations (19,648,000)      1,806,000   (12,073,000)
                                            
Discontinued operations                                            
  Loss from operations of discontinued
     division                             (4,069,000)     (4,572,000)   (2,707,000)
  Gain (loss) on disposal of discontinued
     division                             (2,590,000)      1,074,000         -   
                                          __________________________________________

  Total loss from discontinued operation  (6,659,000)     (3,498,000)   (2,707,000)
                                            
Net loss                                $(26,307,000)    $(1,692,000) $(14,780,000)
                                          __________________________________________
                                          __________________________________________
                                            
Earnings (loss) per common and common                                             
equivalent share-                                            
     Continuing operations-                                            
           Basic                        $      (3.77)     $     0.35   $     (2.36)
           Fully diluted                $      (3.77)     $     0.34   $     (2.36)
                                          __________________________________________
                                          __________________________________________

     Discontinued operation-                                            
           Basic                        $      (1.28)     $    (0.68)  $     (0.52)
           Fully diluted                $      (1.28)     $    (0.68)  $     (0.52)
                                          __________________________________________
                                          __________________________________________

     Net income (loss)                                            
           Basic                        $      (5.05)     $    (0.33)  $     (2.88)
           Fully diluted                $      (5.05)     $    (0.34)  $     (2.88)
                                          __________________________________________
                                     __________________________________________
</TABLE>
(page 13)
<PAGE>

CONSOLIDATED BALANCE SHEETS
_____________________________________________________________
<TABLE>
<CAPTION>
                                                                   December 31,
                                                            __________________________
                                                               1998           1997
<S>                                                        <C>           <C>
Assets          
Current assets          
    Cash and cash equivalents                              $  5,861,000  $   3,883,000 
    Restricted cash and investment securities                 3,589,000      6,102,000 
    Accounts receivable, net of allowances for doubtful          
        accounts of $681,000 (1998) and $616,000 (1997)      21,738,000     21,511,000 
    Unbilled revenue                                         26,128,000     39,079,000 
    Inventories, net of obsolesence allowances of          
        $176,000 (1998) and $566,000 (1997)                  10,361,000     13,121,000 
    Prepaid expenses and other                                1,378,000      5,472,000 
    Net current assets of discontinued operation                 -           7,344,000 
                                                            __________________________
         Total Current Assets                                69,055,000     96,512,000 
          
Property, Plant and Equipment, at cost,          
    net of accumulated depreciation and amortization of          
    $20,903,000 (1998) and $42,099,000 (1997)                12,587,000     13,857,000 
Other assets                                                    483,000         89,000 
Net equipment of discontinued operation                               0        623,000 
          
Total Assets                                                $82,125,000   $111,081,000 
                                                            __________________________
                                                            __________________________
          
Liabilities and Stockholders' Equity          
Current Liabilities          
    Short-term bank debt                                    $   133,000   $    200,000 
    Accounts payable                                          4,859,000      7,662,000 
    Accrued liabilities:          
         Compensation                                         3,370,000      3,746,000 
         Other                                                5,448,000      1,972,000 
Contract billings in excess of recognized revenues            2,279,000      2,462,000 
Accrued and deferred income taxes                               382,000      3,869,000 
                                                            __________________________
     Total Current Liabilities                               16,471,000     19,911,000 
          
Deferred Income Taxes                                           905,000        461,000 
Other Liabilities                                             1,181,000        948,000 
Stockholders' Equity:          
    Common stock, par value$1--authorized,          
         7,500,000 shares; issued and outstanding,          
         1998-5,220,900 shares; 1997-5,208,800 shares         5,221,000      5,209,000 
    Additional paid-in capital                                3,243,000      3,141,000 
    Retained earnings                                        55,104,000     81,411,000 
                                                            __________________________
        Total Stockholders' Equity                           63,568,000     89,761,000 
                                                            __________________________
          
Total Liabilities and Stockholders' Equity                  $82,125,000   $111,081,000 
                                                            __________________________
                                                            __________________________
</TABLE>
(page 14)
<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
_____________________________________________________________
<TABLE>
<CAPTION>
                                                           Year Ended December 31,                      
                                                    ______________________________________
                                                      1998           1997         1996
                                                    ______________________________________
<S>                                                <C>           <C>          <C>
Operating Activities               
  Net loss                                         $(26,307,000) $(1,692,000) $(14,780,000)
  Adjustments to reconcile net income (loss) to net               
      cash provided (used) by operating activities:               
         Loss from discontinued operation             4,069,000    4,572,000     2,707,000 
         Loss (gain) from disposal of discontinued
             operation                                2,590,000   (1,074,000)         -   
         Gain on sale of divisions                   (5,608,000)          
         Depreciation and amortization                1,985,000    2,873,000     3,008,000 
         Deferred income taxes                          573,000    4,116,000    (3,891,000)
         Gain on sale of facilities                       -       (1,800,000)     (216,000)
         Environmental remediation costs                  -        2,612,000    (2,612,000)
  Changes in other operating assets and 
     liabilities, net:               
         Accounts receivable                         (1,506,000)     641,000    25,937,000 
         Unbilled revenue                            12,490,000   (1,086,000)    8,872,000 
         Contract billings in excess of  
            recognized revenues                        (183,000)     184,000     (565,000)
         Inventories                                  1,503,000   (3,417,000)   5,837,000 
         Prepaid expenses and other                   3,983,000      701,000   (4,807,000)
         Accounts payable                            (2,412,000)  (5,549,000)  (13,176,000)
         Accrued liabilities                          3,730,000      142,000    (1,496,000)
         Other long-term liabilities                    233,000     (186,000)    1,134,000 
         Accrued income taxes                        (3,616,000)  (6,918,000)   (5,141,000)
         Other                                         (547,000)     (81,000)      327,000 
                                                    ______________________________________
         Net cash provided (used) by continuing
             operations                              (9,023,000)  (5,962,000)    1,138,000 
         Net cash provided (used) by discontinued
             operations                                 685,000     (996,000)     (945,000)
                                                    ______________________________________
  Cash provided (used) by operating activities       (8,338,000)  (6,958,000)      193,000 
               
Investing Activities               
  Proceeds from sale of facilities                         -       8,896,000     1,159,000 
  Proceeds from sale of divisions                     9,202,000         -             -   
  Purchase of property, plant, and equipment         (1,410,000)  (3,133,000)     (880,000)
  Equipment purchases of discontinued operation         (36,000)     (67,000)     (187,000)
                                                    ______________________________________
  Cash provided by investing activities               7,756,000    5,696,000        92,000 
               
Financing Activities               
  Principal payments on long-term debt                     -             -      (1,112,000)
  Proceeds from exercise of stock options               114,000       781,000      269,000 
  Net short-term borrowings                             (67,000)   (2,600,000)  (2,686,000)
                                                    ______________________________________
  Cash provided (used) by financing activities           47,000    (1,819,000)  (3,529,000)
               
Decrease in cash and cash equivalents                  (535,000)   (3,081,000)  (3,244,000)
               
Cash and cash equivalents at beginning of year        9,985,000    13,066,000   16,310,000 
                                                    ______________________________________
               
Cash and cash equivalents at end of year            $ 9,450,000   $ 9,985,000  $13,066,000 
                                                    ______________________________________
                                                    ______________________________________
</TABLE>
(page 15)
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
_____________________________________________________________

Note A--- Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the 
Company and its wholly-owned subsidiaries. All significant inter-
company transactions and balances are eliminated in consolidation.

Contract Accounting
Revenue on long-term type contracts which are greater than  
$100,000 is generally recorded on the percentage-of-completion 
method. For such contracts, a portion of the total contract price 
is included in sales in the proportion that costs incurred to date 
bear to total estimated costs at completion. The impact of 
periodic revisions in costs and estimated profit is reflected in 
the accounting period in which the facts become known.
For all other contracts, revenue is recognized upon completion of 
the contract or upon shipment of identifiable units.
The entire amount of ultimate losses estimated to be incurred upon 
completion of contracts is charged to income when such losses 
become known.

Contract progress billings are based upon contract provisions for 
customer advance payments, contract costs incurred, and completion 
of specified contract objectives. Progress billing balances at 
December 31, 1998 and 1997 amounted to $2,092,000  and $3,096,000, 
respectively.  Progress billings are netted against unbilled 
revenue on the consolidated balance sheet. Contracts may provide 
for customer retainage of a portion of amounts billed until 
contract completion. All contract retainage of $370,000 at 
December 31, 1998 matures in 1999. Contract retainage is included 
on the consolidated balance sheet as part of accounts receivable. 
Substantially all of the accounts receivable and unbilled revenue 
balances at December 31, 1998 are expected to be collected during 
1999, although collection of the unbilled revenue is dependent 
upon the Company meeting performance milestones.

Use of Estimates
In preparing its financial statements in accordance with generally 
accepted accounting principles, management is required to make 
estimates and assumptions that affect the reported amounts of 
assets and liabilities and disclosure of contingent assets and 
liabilities at the date of the financial statements and revenues 
and expense during the reported periods. Actual results could 
differ from those estimates.  One such area where the use of 
estimates could have a significant impact on future results is 
estimated costs at completion and, in some cases, contract value 
on the Company's larger long-term type contracts.  During  1998 
and 1997, changes to these estimates on the Company's larger long-
term type contracts had no negative significant aggregate impact, 
except for the TMRC contract with the Government of Turkey.  For 
TMRC, there was a negative impact in 1998 of approximately $21.5 
million pre-tax resulting from increases of  estimates of costs to 
complete the contract.  Of this amount, approximately $19.8 
million resulted from the arbitration award to Lockheed Martin and 
other contract costs (described in Note B) booked in the first 
quarter and $1.7 million related to subsequent increases to  
estimated costs at completion.   Other areas where use of 
estimates could have a significant impact on future results are 
inventory obsolescence, accounts receivable bad debts, warranties, 
claims and litigation.

Cash and Cash Equivalents
The Company considers all highly-liquid investments with a 
maturity of three months or less when purchased to be cash 
equivalents. Cash equivalent balances at December 31, 1998 and 
1997 amounted to $5,861,000 and $3,883,000, respectively. All of 
this cash and cash equivalents is in high quality banks.
Restricted cash and investment securities at December 31, 1998 and 
1997 represents interest bearing cash collateral required to be 
maintained against letters of credit. Approximately $2.8 million 
of the Company's total cash (restricted and non-restricted) 
balances at December 31, 1998 were in foreign banks in Turkey.  
Almost all of this cash in Turkey is in  dollar denominated 
instruments. As a result, there is no material effect of exchange 
rate changes on cash balances.  At December 31. 1997 restricted 
cash and investment securities included $4 million of foreign 
corporate bonds which were sold in 1998 at no material gain or 
loss.

Inventories
Inventories are valued at the lower of cost or market. Cost is 
determined using the first-in, first-out (FIFO) and average cost 
method which approximates FIFO.

(page 16)
<PAGE>
Fair Value of Financial Instruments
The Company's financial instruments include cash equivalents and 
receivables.  The carrying amounts of these instruments 
approximate their market value.

Depreciation and Amortization
Depreciation is provided by the straight-line method over the 
estimated useful lives of the depreciable assets. Amortization of 
leasehold improvements under operating leases is provided over the 
terms of the related leases or the asset lives, if shorter.  
Buildings are depreciated over lives ranging up to 35 years. 
Machinery and equipment is depreciated over useful lives ranging 
from 3 to 5 years. Accelerated methods are used for tax purposes.
Advertising, Research and Development Costs and Interest Expense
The Company expenses advertising costs and research and 
development costs as incurred. Advertising costs were $333,000, 
$489,000 and $441,000 for 1998, 1997 and 1996, respectively.  
Interest expense for the years 1998, 1997 and 1996 amounted to 
$380,000, $114,000 and $988,000, respectively.  Interest paid for 
the years 1998, 1997 and 1996 amounted to $1,079,000, $164,000 and 
$1,417,000, respectively.

Income Taxes
The Company accounts for income taxes on the liability method in 
accordance with Statement of Financial Accounting Standards (SAS) 
No. 109, "Accounting for Income Taxes."

Foreign Currency Translation
Balance sheet accounts of the Company's United Kingdom  subsidiary 
(most of which business was sold during 1998 as part of the 
discontinued Displays Division described in Note C) were 
translated from the local currency into U.S. dollars at year-end 
rates while income and expenses were translated at the weighted 
average exchange rate for the year. The resulting unrealized net 
translation losses were shown as a separate component of 
stockholders' equity in years prior to 1998.  These translation 
losses became realized in 1998 and were written off as part of the 
loss on the sale of the discontinued operation.  The translation 
effects of the Turkish subsidiary are reflected in the statements 
of operations because of the high inflation in the Turkish 
economy. Pretax income includes foreign currency translation 
losses relating to the Turkish subsidiary of $148,000 for 1998 and 
$428,000 for 1997, and a foreign currency gain of $274,000 for 
1996.

Earnings (Loss) Per Common and Common Equivalent Share
The Company has adopted the provisions of Statement of Financial 
Accounting Standards No. 128, "Earnings per Share" (SFAS 128).   
Basic earnings per share excludes dilution and is computed by 
dividing income available to common shareholders by the weighted-
average common shares outstanding during the period.  Diluted 
earnings per share takes into account the potential dilution that 
could occur if securities or other contracts to issue common stock 
were exercised and converted into common stock.  Weighted average 
shares outstanding for 1998, 1997 and 1996 were 5,215,331, 
5,151,600 and 5,123,622, respectively.

The number of shares to be purchased  from outstanding stock 
options were not included in the computation of 1998, 1997 or 1996 
diluted loss per share.  The number of shares and the 
corresponding weighted average exercise prices for each period are 
shown in Note I.  Also, warrants for 200,000 shares at a weighted 
exercise price of $12.65 were not included in the computation of 
loss per share for these periods.

Warranty Costs
The usual warranty period on the Company's contracts and products 
is one year, which is provided for in warranty accruals.

Long-Lived Assets
The Company continually reviews long-lived assets to assess 
recoverability from future operations using undiscounted cash 
flows.  Impairments would be recognized in operating results if a 
permanent dimunition in value had occurred.

New Accounting Standards
The Financial Accounting Standards Board (FASB) issued Statement 
of Financial Accounting Standards (SFAS) No. 130, "Reporting 
Comprehensive Income" which the Company adopted in 1998 with no 
resulting material impact on the financial statements.  

In June 1997, the FASB issued SFAS  No. 131, "Disclosures about 
Segments of an Enterprise and Related Information," which was 
adopted  in 1998.  See note N for this disclosure.

(page 17)
<PAGE>

Reclassifications
Certain reclassifications, none of which affected net income, have 
been made to prior years' amounts in order to conform to the 
current year's presentation.

NOTE B---CONTRACT ARBITRATION
As previously reported, the Company previously submitted to 
arbitration its dispute with a subcontractor (Lockheed Martin 
Tactical Systems, Inc.) on the TMRC contract with the Government 
of Turkey.   On April 10, 1998, the arbitration panel awarded 
Lockheed $17,162,000  plus interest.  As of December 31, 1998, the 
award and interest was paid in full.  The consolidated statement 
of operations caption "Cost of  sales-contract arbitration and 
related" includes this charge as well as other related costs on 
the TMRC contract.

NOTE C---SALE OF DIVISIONS
In November  1998, the Company sold its Displays Division business 
segment pursuant to a plan adopted in the third quarter 1998.  The 
current and prior period results of the Division are reported in 
the accompanying financial statements in the discontinued 
operations categories.  Prior period operations have been 
reclassified as  discontinued operations.   The Division was sold 
for a cash payment of approximately $6.4 million.  The sale 
resulted in a loss of $1,390,000, and an operating loss of 
$1,200,000 (pre-tax and after tax) was incurred during the fourth 
quarter phase out period.  These losses included accruals of 
$570,000 at December 31, 1998 for estimated costs in connection 
with the sale, including severance, employee incentives and legal 
fees. The net assets sold consisted primarily of inventories and 
accounts receivable.  Summarized results of the Displays Division 
for the three year period ended December 31, 1998 were as follows:

<TABLE>
<CAPTION>
                                            1998         1997         1996
                                        _______________________________________
<S>                                     <C>          <C>           <C>
Net sales                               $13,326,000  $20,517,000   $22,246,000 
Costs and expenses                       17,395,000   24,015,000    25,385,000
                                        _______________________________________
Loss before income taxes                 (4,069,000)  (3,498,000)   (3,139,000)
Provision (benefit) for income taxes           -           -          (432,000)
                                        _______________________________________
               
Net loss from discontinued operations    (4,069,000)  (3,498,000)   (2,707,000)
Loss from sale of discontinued
       operations                        (2,590,000)       -              -
                                        _______________________________________
               
Total loss related to discontinued 
       operations                       $(6,659,000) $(3,498,000)  $(2,707,000)
                                        _______________________________________
                                        _______________________________________
</TABLE>

In October 1998, the Company sold the West Coast Microwave 
Division component of its Communications segment for a cash 
payment of approximately $8.8  million.  The sale resulted in a 
gain of $5.6 million (pre-tax and after tax) which is reported in 
the accompanying statement of operations.  

NOTE D-INVENTORIES
Inventories consist of:

<TABLE>
<CAPTION>
                        1998              1997
<S>                 <C>              <C>
Raw materials       $ 4,810,000      $ 6,711,000 
Work in process       4,593,000        5,716,000 
Finished product        958,000          694,000 
                    ____________________________
                    $10,361,000      $13,121,000 
                    ____________________________
                    ____________________________
</TABLE>

(page 18)
<PAGE>

NOTE E-PROPERTY, PLANT, AND EQUIPMENT
The Company's investment in property, plant, and equipment is 
shown below.

<TABLE>
<CAPTION>
                            1998              1997
<S>                     <C>              <C>
Land                    $ 1,456,000      $  1,456,000 
Buildings                 9,511,000        10,641,000 
Machinery and equipment  22,523,000        43,859,000
                        _____________________________ 
                         33,490,000        55,956,000 
Less accumulated
 depreciation and
 amortization            20,903,000        42,099,000 
                        _____________________________ 
                        $12,587,000      $ 13,857,000 
                        _____________________________ 
                        _____________________________ 


Note F-CREDIT ARRANGEMENTS
At December 31, 1998, $7.2 million of letters of credit were 
outstanding for various foreign contracts under a credit line 
which is renewable annually.  The letters of credit have been 
issued to foreign entities principally  to guarantee performance 
under contracts or the return of advance payments.  The Company's 
real estate has been pledged as security against these letters of 
credit which carry a commission rate of 1.5% annually. The Company 
is in default of certain financial covenants against this 
agreement. The bank has placed a prospective $5 million limit on 
this credit line.  As a result, new letters of credit cannot be 
issued until existing ones are liquidated to bring the current 
balance under $5 million.

Also at December 31, 1998 there was a $7 million of letter of 
credit balance open with a foreign bank for the completion  of the 
company's TMRC contract with the government of turkey.  Cash 
collateral of $2.5 million was on deposit with this bank at 
December 31, 1998 as security for this letter of credit which 
carries a commission rate of .8%. This letter of credit was 
originally $49 million in 1990.   The letter of credit has been 
liquidated in the past based on collections against the contract.  
The customer is currently requesting that further liquidation of 
the balance ($7 million) be based on progress by the Company in 
satisfying certain remaining contractual obligations rather than 
collections against the contract.  The Company is currently 
seeking an appropriate source to establish a replacement letter of 
credit along the lines requested by the customer.

In addition, there was an outstanding letter of credit against a 
foreign contract at December 31, 1998 for approximately $1 million 
which was 100% secured with cash collateral.

The weighted average interest rates on short-term borrowings 
outstanding at December 31, 1998 and 1997 were 10% and 10.5%, 
respectively.  Subsequent to year end, all short-term borrowings 
were paid off. 

Note G-ENVIRONMENTAL REMEDIATION
The Company, along with others, was responsible for the costs of 
cleanup under an order of the State of  California at a site 
leased by the Company prior to 1984.  Cleanup of the site was 
completed during 1996 and site monitoring over a thirty (30) year 
period commenced in 1997.  The estimated site monitoring costs to 
be expended over the remaining 28 year period are $2.9 million, or 
approximately $105,000 per year.  The amount to be paid has been 
included in the accompanying consolidated balance sheet as an 
other (non current) liability discounted at 7% to the expected  
payment dates.  

The December 31, 1996 balance sheet included an other (non 
current) asset of $2.6 million representing an expected insurance 
recovery based on a declaratory judgment in favor of the Company 
by the State of California.  The declaratory judgment was reversed 
in April 1997 resulting in a  $2.6 million write-off in 1997. 

(page 19)
<PAGE>

NOTE H-STOCKHOLDERS' EQUITY
The changes in common stock, additional paid-in capital, and 
retained earnings during the years 1996, 1997, and 1998 were as 
follows:


</TABLE>
<TABLE>
<CAPTION>
                                            Common         Additional     
                                             Stock          Paid-In           Retained 
                                            Par $1          Capital           Earnings
<S              >                           <C>              <C>              <C>
Balance, January 1, 1996               
    (5,112,127 common shares)               $5,112,000      $2,188,000        $97,883,000 
Issuance of 21,273 shares on exercise of 
    stock options                               21,000         237,000               -
Tax benefit related to shares acquired by
   employees under stock options                   -            11,000               -
Net loss                                           -                -         (14,780,000)
                                            ______________________________________________
               
Balance, December 31, 1996                
    (5,133,400 common shares)                5,133,000        2,436,000        83,103,000 
Issuance of 75,400 shares on exercise of
    stock options                               76,000          699,000               -
Tax benefit related to shares acquired by
    employees under stock options                  -              6,000                -
Net loss                                           -                -          (1,692,000)
                                            ______________________________________________

Balance, December 31, 1997                                                          
    (5,208,800 common shares)                5,209,000        3,141,000        81,411,000 
Issuance of 1,136 shares pursuant to a
     stock grant                                 1,000           18,000              -
Issuance of 11,000 shares in payment of
     employee bonuses                           11,000           84,000              -
Net loss                                            -               -         (26,307,000)
                                            ______________________________________________
               
Balance, December 31, 1998               
    (5,220,936 common shares)               $5,221,000       $3,243,000       $55,104,000
                                            ______________________________________________
                                            ______________________________________________
</TABLE>

NOTE I-STOCK OPTIONS AND WARRANTS
Pursuant to stock option plans, the Company has granted certain 
officers, directors, and key employees options to purchase shares 
of its common stock. Options granted under the plans must have an 
option price determined by the Board of Directors, but in any 
event, not less than the fair market value of the stock on the 
date of grant. Generally, options become exercisable one-fourth 
annually beginning one year after grant, on a cumulative basis, 
and expire ten years after grant. Prior to April 1997, the 
expiration was five years after grant.

There is no charge to income with respect to stock options under 
the plans. A summary of the changes in options during 1996, 1997, 
and 1998 follows:

<TABLE>
<CAPTION>
                                Shares Under  Weighted Average  Shares Available
                                    Option     Exercise Price    for Option
                                  ________________________________________
<S>                               <C>            <C>             <C>
At January 1, 1996                 258,663       $  12.02          91,022 
Options granted:               
  Option plan                      378,000       $  10.39        (378,000)
Options exercised                  (10,275)      $  12.69            - 
Options cancelled                 (113,300)      $   9.89         113,300 
Authorization of 1996 options            -       $     -          500,000 
Cancellations of authorizations          -       $     -          (70,000)
                                  ________________________________________
               
At December 31, 1996               513,088       $  10.81         256,322 
Options granted:               
  Option plan                      124,450       $  11.73        (124,450)
Options exercised                  (17,500)      $  10.31            - 
Options cancelled                 (123,925)      $  11.46         123,925 
Cancellations of authorizations                        -          (10,000)
                                  ________________________________________
               
At December 31, 1997               496,113       $  10.89         245,797 
Options granted:               
  Option plan                      325,400       $   9.25        (325,400)
Options cancelled                 (396,963)      $  10.85         396,963
Cancellations of authorizations                                    (9,322)
                                  ________________________________________
               
At December 31, 1998               424,550       $   9.67         308,038
                                  ________________________________________
                                  ________________________________________
</TABLE>

The following table summarizes information concerning currently 
outstanding and exercisable stock options:

<TABLE>
<CAPTION>
                     Total Shares Under Option              Shares Exercisable
---------------------------------------------------------------------------------
                           Weighted-Average    Weighted-               Weighted-
   Range of                    Remaining         Average                 Average
   Exercise      Number       Contractual       Exercise      Number    Exercise
    Price      Outstanding    Life (Years)        Price    Exercisable    Price
---------------------------------------------------------------------------------
<S>              <C>             <C>            <C>         <C>         <C>
 $8.00-$12.00    411,300          9.2            $ 9.54       30,431     $10.30
---------------------------------------------------------------------------------
$12.01-$16.75     13,250          8.7            $13.59        8,770     $13.30
                -----------                                 ----------           
                 424,550                                      39,201
---------------------------------------------------------------------------------
</TABLE>

The Company has adopted only the disclosure provisions of 
Financial Accounting Standard No. 123,  "Accounting for Stock -
Based Compensation" (FAS 123).  It applies APB Opinion No. 25,  
Accounting for Stock Issued to Employees, and related 
interpretations in accounting for its plans and does not recognize 
compensation expense for its stock-based compensation plans other 
than restricted stock.  If the Company had elected to recognize 
compensation expense based upon the fair value at the grant date 
for awards under these plans consistent with the methodology 
prescribed by FAS 123, the Company's net income and earnings per 
share would be reduced to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                 1998          1997         1996
<S>            <C>           <C>           <C>          <C>
NET LOSS       As reported   $(26,307,000) $(1,692,000) $(14,780,000)
               Pro-forma     $(27,366,000) $(2,452,000) $(15,128,000)
LOSS PER SHARE As reported   $     ( 5.05) $    ( 0.34) $      (2.88)
               Pro-forma     $      (5.25) $     (0.48) $      (2.95)
</TABLE>

These pro forma amounts may not be representative of future 
disclosures because they do not take into effect pro forma  
compensation expense related to grants made before 1995.  The fair 
value of each option grant is estimated on the date of grant using 
the Black-Sholes options-pricing model with the following 
weighted-average assumptions used for grants in 1998, 1997 and 
1996, respectively: dividend yield of 0 percent for all years; 
expected volatility of 27.9, 27.9 and 27.3 percent; risk-free 
interest rates of 5.36, 6.08 and 6.23 percent; and expected lives 
of 5 to 10 years. In May 1997, the Company issued warrants with three year 
expiration dates for 200,000 shares of its common stock at 
exercise prices of $12.10 and $13.20 per share.  These warrants 
remain outstanding and have had no impact on the Company's 
earnings per share calculations.

(page 21)
<PAGE>

Note J-Taxes on Income
The provision (recovery) for income taxes is shown below. The 
recoveries shown on the current lines for each year represent tax 
loss carrybacks to earlier years, utilization of foreign tax 
credits, and other items.

<TABLE>
<CAPTION>
                                    Federal       State       Foreign       Total
<S>                              <C>           <C>          <C>           <C>
1998                
Current                          $  (693,000)           0   $  516,000   $  (177,000)
Deferred                            (573,000)           0            0      (573,000)
                                 ____________________________________________________
                                 $(1,266,000)           0   $  516,000   $  (750,000)
                                 ____________________________________________________
                                 ____________________________________________________
1997                
Current                          $(4,466,000)  $ (622,000)  $2,417,000   $(2,671,000)
Deferred                           3,161,000      622,000        -         3,783,000 
Charge equivalent to tax
  benefit related to shares
  acquired under stock options         6,000           -         -             6,000
                                 ____________________________________________________
                                 $(1,299,000)  $       -    $2,417,000   $ 1,118,000 
                                 ____________________________________________________
                                 ____________________________________________________
1996                
Current                          $(4,587,000)  $  (3,000)   $3,923,000   $  (667,000)
Deferred                              21,000    (344,000)   (3,568,000)   (3,891,000)
Charge equivalent to tax
  benefit related to shares
  acquired under stock options        11,000                                  11,000
                                 ____________________________________________________
                                 $(4,555,000)  $ (347,000)  $  355,000   $(4,547,000)
                                 ____________________________________________________
                                 ____________________________________________________
</TABLE>

The components of deferred income tax balances follow.

<TABLE>
<CAPTION>
                                        Year Ended December 31,
                                _______________________________________
                                     1998         1997          1996
<S>                            <C>            <C>          <C>
Federal net operating loss
   carryforward                 $  4,984,000  $     -      $      -   
Valuation reserve against
   net operating loss             (4,984,000)       -             -   
Contract accounting                  835,000    1,350,000     2,271,000 
Excess of tax over book 
   depreciation                    1,306,000    1,357,000     2,755,000 
Inventory valuation                 (163,000)    (613,000)     (829,000)
State deferred taxes                    -            -         (211,000)
Environmental clean-up              (402,000)    (322,000)      503,000 
Other, net                        (1,099,000)    (722,000)      344,000 
                                _______________________________________
Total deferred liability        $    477,000  $ 1,050,000  $  4,833,000
                                _______________________________________
                                _______________________________________
</TABLE> 

A reconciliation between the federal statutory rate and the 
effective income tax rate (computed by dividing income taxes by 
income before income taxes) is as follows:

<TABLE>
<CAPTION>
                                                 Year Ended December 31,
                                                 1998      1997     1996
<S>                                             <C>       <C>      <C>
Federal statutory rate                          (34.0%)   (34.0%)  (34.0%)
State income taxes net of federal tax benefit        0    (32.8)    (0.50)
Benefit from non-taxable FSC income                  0    (29.2)    (1.00)
Effects of higher foreign income taxes,
 including dividends of a foreign subsidiary
 and foreign tax credits                          13.6    286.8      6.1
Valuation allowance due to net operating loss     18.4       -        -
Other, net                                        ( .8)     4.0      2.0
                                                ___________________________
Effective income tax rate                         (2.8%)  194.8%   (27.40%)
                                                ___________________________
                                                ___________________________
</TABLE>

Income tax refunds, net of payments, amounted to $1,802,000 in 
1998.  Income tax payments, net of refunds, amounted to  
$6,989,000 in 1996 and $383,000 in 1997. 

At December 31, 1998 the Company had available approximately $14.7 
million of unused net operating losses which expire in 20 years 
and approximately $2.1 million of unused foreign tax credits which 
expire in 2002. Pre-tax income from foreign operations is shown 
under Note K below.

(page 23)
<PAGE>

NOTE K-NATURE OF OPERATIONS, EXPORT SALES, MAJOR CUSTOMERS, AND 
FOREIGN OPERATIONS              
The Company designs, engineers, manufactures, markets, 
distributes, and installs technologically advanced communications 
products and systems which are sold worldwide.  Aydin generates 
approximately 30% of its sales from standard products and systems 
and the balance of its sales from custom-designed systems and 
equipment based on customers' specific requirements. Aydin offers 
a broad range of products due to its ability to combine analog 
microwave engineering methods with digital techniques and 
software.

Export sales by geographic area are as follows:

<TABLE>
<CAPTION>
                        1998         1997        1996
<S>                 <C>          <C>          <C>
Asia                $ 3,075,000  $ 2,507,000  $ 3,817,000 
Africa                3,235,000    1,785,000    3,203,000 
Europe               15,425,000   18,992,000    8,588,000 
North America         1,982,000    1,172,000      640,000 
South America         1,116,000    1,821,000      433,000 
Other                    39,000      235,000      342,000
                    _____________________________________ 
Total export sales  $24,872,000  $26,512,000  $17,023,000 
                    _____________________________________ 
                    _____________________________________ 
</TABLE>

The U.S. Government and the Government of Turkey were the only 
customers to whom sales exceeded 10% of consolidated sales during 
any of the past three years. Sales to U.S. Government agencies, 
principally the Department of Defense, amounted to $26,567,000, 
$34,847,000, and $38,728,000 in 1998, 1997 and 1996, respectively. 
Sales to the Government of Turkey amounted to $9,575,000, 
$21,496,000 and $15,116,000 in 1998, 1997 and 1996, respectively. 
Foreign assets included in the consolidated balance sheet amounted 
to $10.9 million and $18.6 million at December 31, 1998 and 1997, 
respectively. Of these amounts, $2.8 million and $5.1 million, at 
December 31, 1998 and 1997, respectively, are cash and short-term 
investments of the Company's Turkish subsidiary consisting 
primarily of U.S. dollar denominated interest-bearing time 
deposits. Foreign sales and pretax loss for 1998 were $5.7 million 
and $7.4 million, respectively. Most of the loss was from 
increases in estimated costs at completion on the TMRC contract 
with the Government of Turkey at the Turkish subsidiary.  Foreign 
sales and pretax income for 1997 amounted to $14.9 million and 
$2.5 million, respectively, of which substantially all of the 
income was from the Turkish subsidiary. Foreign sales and pretax 
income for 1996 amounted to $18.7 million and $.9 million, 
respectively, of which substantially all of the income was from 
the Turkish subsidiary. The 1996 results included an Argentine 
subsidiary in which a majority interest  was disposed of on 
December 31, 1996. 

NOTE L-RESTRUCTURING COSTS
During the first quarter of 1998 the Company recorded a 
restructuring charge of $1.5 million as a result of a decision to 
close the Raytor Division ($961,000) and downsize the corporate 
staff ($587,000) in line with expected declines in backlog and 
sales levels.  The restructuring was completed during the third 
quarter.  Of the total charge of $1.5 million, approximately $.6 
million was for cash outlays and $.9 million was for non-cash 
asset write-offs.  The major charges consisted of: severance 
benefits for 60 employees ($.6 million); facility exit costs ($.2 
million); and write-offs of inventory, equipment, and receivables 
($.7 million).

During the third quarter of 1996, the Company recorded a charge of 
$3.7 million to consolidate and restructure its domestic 
operations.  Approximately $1.5 million of this charge was for 
cash outlays and $2.2 million was for non-cash asset write-offs.  
The restructuring was completed during the third quarter of 1997.  
The major charges consisted of: severance benefits for 150 
terminated employees ($.6 million); loss on sale of a product line 
($.5 million); inventory write-offs ($1 million) and capital 
equipment write-offs ($.3 million); and write-off of goodwill in 
connection with the sale of a product line ($.4 million).

Note M-COMMITMENTS AND CONTINGENCIES
The Company's U.S. Government contracts are subject to audit by 
the government and price adjustment under certain circumstances.  
The Company also has receivables due from the US Government on 
certain contracts whose collectability is dependent on the Company 
prevailing in its positions.  Management believes it has 
sufficient reserves to cover such matters.  However, unfavorable 
outcomes could have a material impact on future results of 
operations.

Future annual minimum rental payments required under operating 
leases that have lease terms in excess of one year at December 31, 
1998 are $45,000 for each of the years 1999 through 2003.

(page 24)
<PAGE>
 
NOTE N-SEGMENT REPORTING
Aydin adopted SFAS No. 131, Disclosures about Segments of an 
Enterprise and Related Information, during the fourth quarter of 
1998.  SFAS No. 131 established standards for reporting 
information about the operating segments in annual financial 
statements and requires selected information about operating 
segments in interim financial reports issued to stockholders.  
Operating segments are defined as components of an enterprise 
about which separate financial information is available that is 
evaluated regularly by the chief operating decision maker in 
deciding how to allocate resources and in assessing performance.  
The Company's current chief operating decision maker is the 
President and Chief Operating Officer, formerly it was the Chief 
Executive Officer. The operating segments are managed separately 
by operating unit heads reporting to the chief operating decision 
maker.

The Company's reportable operating segments include the Telemetry 
Division, the Communications Division and  the Turkish Operations.  
The Telemetry segment designs, manufactures and markets components 
and systems worldwide for flight and ground testing for military 
and commercial applications. The Communications segment designs, 
manufactures and markets data and voice communication systems and 
products worldwide for commercial and military markets.  The 
Turkish segment consists of the 100% owned Turkish subsidiary 
(Aydin Yazilim) and includes a US support program office. This 
segment designs, manufactures and markets a range of 
communications products.  This segments main area of business is 
the design and manufacture of a command, control and 
communications system (the TMRC program) for the Turkish military.  
The other segment manufactures and markets printed circuit boards 
used in commercial products.

The accounting policies used for the operating segments are the 
same as those described in the summary of significant accounting 
policies in Note A.

<TABLE>
<CAPTION> 
                                        Communi-     Turkish        
                           Telemetry    cations     Operations     Other       Total
<S>                      <C>          <C>          <C>          <C>         <C>
1998                    
Net sales from external
  Customers              $43,818,000  $16,434,000  $ 9,575,000  $3,013,000  $72,840,000
Net sales-intersegment                     69,000                1,014,000    
Depreciation                 572,000      468,000      383,000     124,000    1,547,000
Interest income                                        577,000                  577,000
Interest expense                                                                      0
Pre-tax income (loss)      1,460,000     (134,000) (22,122,000)    436,000  (20,360,000)
Segment assets            33,531,000   20,003,000   19,252,000   2,018,000   74,804,000
Capital expenditures         335,000      368,000      392,000     306,000    1,401,000
                    
1997                    
Net sales from external
  Customers              $47,249,000  $13,073,000  $21,966,000  $3,113,000  $85,401,000 
Net sales-intersegment         -             -             -     1,644,000     
Depreciation                 633,000      844,000      433,000      70,000    1,980,000 
Interest income                4,000         -         232,000         -        236,000 
Interest expense               -               -             -         -            - 
Pre-tax income (loss)      3,223,000   (4,289,000)   3,258,000     847,000    3,039,000 
Segment assets            36,860,000   22,188,000   26,866,000   1,798,000   87,712,000 
Capital expenditures     $   920,000  $ 1,059,000  $   250,000  $  149,000  $ 2,378,000 
                    
1996                    
Net sales from external
   Customers             $41,002,000  $11,786,000  $16,055,000   $2,851,000  $71,694,000 
Net sales-intersegment                     32,000      110,000    1,475,000     
Depreciation                 580,000      674,000      389,000       62,000    1,705,000 
Interest income                1,000          -        264,000         -         265,000 
Interest expense                -             -            -           -            - 
Pre-tax income (loss)      6,886,000  (13,982,000)   1,211,000      596,000   (5,289,000)
Segment assets            24,572,000   19,608,000   27,595,000     1,511,000  73,286,000 
Capital expenditures     $   486,000  $   917,000  $   482,000   $   112,000 $ 1,997,000 
</TABLE>

A reconciliation of the totals reported for the operating segments to the 
applicable lines in the consolidated financial statements is as follows:

(page 25)
<PAGE>

<TABLE>
<CAPTION>

                                     Disposed Divisions
                                   ___________________________
                      Reportable                Accounted for        
                        Segment               as Discontinued   Eliminations  Consolidated
                         Total         Total    Operation         & Corporate    Total
                                                     (A)    
<S>                   <C>          <C>          <C>            <C>           <C>
1998                    
Net sales from
  external customers  $72,840,000  $20,345,000  $(13,326,000)  $(1,971,000)  $ 77,888,000
Depreciation            1,547,000      407,000      (174,000)       31,000      1,811,000
Interest income           577,000                                  504,000      1,081,000
Interest expense                0                                  380,000        380,000
Pre-tax income (loss) (20,360,000)  (6,718,000)    6,659,000        21,000    (20,398,000)
Segment assets         74,804,000      846,000                   6,475,000     82,125,000
Capital expenditures    1,401,000      135,000      ( 36,000)      (90,000)     1,410,000
                    
1997                    
Net sales from
  external customers  $85,401,000  $30,270,000  $(20,517,000)  $  (300,000)  $ 94,854,000 
Depreciation            1,980,000      861,000      (464,000)       32,000      2,409,000 
Interest income           236,000            -              -      796,000      1,032,000 
Interest expense              -              -              -      114,000        114,000 
Pre-tax income (loss)   3,039,000   (4,772,000)     3,498,000    1,159,000      2,924,000 
Segment assets         87,712,000   15,231,000     (8,940,000)  17,078,000    111,081,000 
Capital expenditures    2,378,000      668,000        (67,0000     154,000      3,133,000 
                    
1996                    
Net sales from
  external customers  $71,694,000  $46,906,000  $(22,246,000)  $(2,022,000)  $ 94,332,000 
Depreciation            1,705,000    1,283,000      (512,000)       20,000      2,496,000 
Interest income           265,000       17,000              -      517,000        799,000 
Interest expense              -              -              -      988,000        988,000 
Pre-tax income (loss)  (5,289,000) (12,245,000)     3,139,000   (2,225,000)   (16,620,000)
Segment assets         73,286,000   36,676,000    (11,961,000)  24,802,000    122,803,000 
Capital expenditures    1,997,000      359,000       (187,000)    (1,289,000)     880,000 
</TABLE>

(A) Represents amount pertaining to the Displays Division sold in
    November 1998. These amounts have been included in the discontinued 
    operations classifications in the financial statements.
(page 25)
<PAGE>

Report of Independent Certified Public Accountants

Board of Directors
Aydin Corporation


We have audited the consolidated balance sheets of Aydin 
Corporation and subsidiaries as of December 31, 1998 and 1997 and 
the related consolidated statements of operations and cash flows 
for each of the three years in the period ended December 31, 1998. 
These consolidated financial statements are the responsibility of 
the Company's management. Our responsibility is to express an 
opinion on these financial statements based on our audits.

We conducted our audits in accordance with 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 consolidated 
financial position of Aydin Corporation and subsidiaries as of 
December 31, 1998 and 1997 and the consolidated results of their 
operations and their consolidated cash flows for each of the three 
years in the period ended December 31, 1998, in conformity with 
generally accepted accounting principles.

/s/ Grant Thornton LLP

Philadelphia, Pennsylvania
February 19, 1999


(page 26)
<PAGE>

Quarterly Financial Data

($000 omitted except for per share amounts)

<TABLE>
<CAPTION>
                                1st       2nd       3rd       4th      Year
<S>                          <C>       <C>       <C>       <C>       <C>
1998        
Net sales                    $ 20,839  $ 23,569  $ 20,803  $ 12,677  $ 77,888 
Cost of sales                  37,813    15,949    14,596    11,180    79,538 
Income (loss) before
  income taxes                (23,948)    1,937     1,470       143   (20,398)
Income (loss) after taxes-
  continuing operations       (23,168)    1,907     1,470       143   (19,648)
Income (loss) from
  discontinued operation         (978)   (1,691)   (3,990)        -    (6,659)
Net income (loss)            $(24,146)  $   216  $ (2,520) $    143  $(26,307)
Earnings (loss) per share:        
  Income (loss) from
     continuing operations   $  (4.45)  $  0.37  $   0.28  $   0.03  $  (3.77)
  Net income (loss)          $  (4.64)  $  0.04  $  (0.48) $   0.03  $  (5.05)
        
1997        
Net sales                    $ 22,896   $ 25,738 $ 21,006  $ 25,214  $ 94,854 
Cost of sales                  16,500     18,937   14,910    17,759    68,106 
Income (loss) before 
  income taxes                 (2,376)     2,285    1,781     1,234     2,924 
Income (loss) after taxes-
  continuing operations        (3,127)     1,868    1,634     1,431     1,806 
Income (loss) from
  discontinued operation       (1,142)    (1,608)     260    (1,008)   (3,498)
Net income (loss)            $ (4,269)  $    260 $  1,894  $    423  $ (1,692)
Earnings (loss) per share:        
  Income (loss) from
     continuing operations   $  (0.61)  $   0.36 $   0.31  $   0.28  $   0.34 
  Net income (loss)          $  (0.83)  $   0.05 $   0.36  $   0.08  $  (0.34)
<FN>
Note-the first two quarters of 1998 and all of the 1997 quarters 
have been restated to reflect the discontinued operation 
treatment in the third quarter of 1998 of the sale of the 
Displays Division.  First quarter 1998 reflects a $20.3 million 
charge included in cost of sales from an arbitration award 
related to the TMRC contract.  Fourth quarter 1998 reflects a 
gain of $5.6 million relating to the sale of a division.
</TABLE>


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

None.

(page 27)
<PAGE>

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated by reference is the information under the heading, 
"Right to Designate Directors; the Parent Designees" on pages A-1 
to A-2 of the Information Statement, the information under the 
heading, "Directors and Executive Officers of the Company" on 
pages A-2 to A-3 of the Information  Statement, the information 
under the heading, "Directors and Executive Officers of Parent, 
Purchaser and Holdings" on pages A-11 to A-13 of the Information 
Statement, and the information under the heading,  "Compliance 
With Section 16(A) of the Exchange Act" on page A-10 of the 
Information Statement.

ITEM 11.  EXECUTIVE COMPENSATION
Incorporated by reference is the information under the heading 
"Compensation of Directors" on page A-4 of the Information 
Statement, and under the headings "Summary Compensation Table,"  
"Stock Option Grants 1998," "Aggregated Option/SAR Exercises in 
Last Fiscal Year and For Year-End Option/SAR Values," "Employment 
Contracts and Termination of Employment and Change in Control 
Agreements," and "Common Stock Performance" on pages A-7 to A-11 
of the Information Statement. 

Compensation Committee Interlocks and Insider Participation
Mr. I. Gary Bard, a director of the Company, was Chairman and 
Chief Executive Officer of the Company until October 19, 1998, and 
while serving as such officer also served as a member of the 
Executive Compensation Committee and voted on the compensation 
recommendations of such Committee for other executive officers of 
the Company.  Pursuant to his employment agreement with the 
Company, Mr. Bard had received a bonus of 20,000 shares of the 
Company's Common Stock in consideration of his execution of such 
agreement, and a loan sufficient to pay all income taxes payable 
with respect to the issuance to him of such stock.  The loan 
carries interest at the lesser of 10% or the prime rate.  The 
largest amount of such indebtedness outstanding at any time during 
1998 was $87,614; the loan was repaid in full after December 31, 
1998.

Mr. John Vanderslice was a director and the President and Chief 
Operating Officer of the Company until his resignation from all 
such positions in September 1998.  While serving as such officer 
Mr. Vanderslice voted, as a director, on the compensation 
recommendations of the Executive Compensation Committee for other 
executive officers of the Company.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND 
          MANAGEMENT
Incorporated by reference is the information under the headings, 
"Agreements with Parent or the Purchaser" and "Agreements with 
Executive Officers, Directors or Affiliates of the Company" on 
pages 1-12 of the Schedule 14D-9, information under the heading 
"Right to Designate Directors; the Parent Designees" on pages A-1 
to A-2 of the Information Statement, and information under the 
headings "Stock Ownership of Certain Beneficial Holders" and 
"Security Ownership of Management" on pages A-5 to A-6 of the 
Information Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth in the second paragraph under Item 11 of 
this Report on Form 10-K is incorporated herein by reference.

(page 28)
<PAGE>

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
         FORM 8-K
The Company files as part of this report the following documents:

(a)	1.	Financial Statements
		The following is a list of the Consolidated Financial 
Statements of Aydin Corporation and Subsidiaries which are 
set forth in Item 8 - "Financial Statements and 
Supplementary Data":

		Consolidated Statements of Operations for the years ended 
December 31, 1998, 1997 and 1996.
		Consolidated Balance Sheets, as of December 31, 1998 and 
1997.
		Consolidated Statements of Cash Flows for the years ended 
December 31, 1998, 1997 and 1996.
		Notes to Consolidated Financial Statements.
		Report of Independent Certified Public Accountants.

	2.	Schedules
		The following is a list of the Schedules of Aydin 
Corporation and Subsidiaries filed as part of this report:

		Schedule II - Valuation and Qualifying Accounts

		Report of Independent Auditors

		All other schedules not listed above are omitted because 
they are inapplicable or are not required.

	3.	Exhibits
		The following is a list of Exhibits filed as part of this 
report:

	2(i)	Agreement and Plan of Merger, dated as of March 1, 
1999, by and among L-3 Communications Corporation, 
Angel Acquisition Corporation, and the Company 
(filed as Exhibit 99.2 to Registrant's Schedule 14D-
9 on March 5, 1999 and incorporated herein by 
reference)

		3(i)	Restated Certificate of Incorporation (filed as 
Exhibit No. 3(i) to Registrant's Annual Report on 
Form 10-K for the year ended December 31, 1994 and 
incorporated herein by reference).

	3(ii)	By-laws, as amended (i) on October 19, 1998 to 
eliminate that provision of Article V, Section 6 
which required that the Chairman of the Board serve 
as the Company's Chief Executive Officer, and (ii) 
on December 30, 1998 to modify Article III, Section 
1 to reduce the number of Directors which shall 
constitute the whole Board from six to five. 

		10.1	Employment Agreement, I. Gary Bard (filed as Exhibit 
No. 10.1 to Registrant's Quarterly Report on Form 10-
Q for the quarter ended September 28, 1996 and 
incorporated herein by reference).

	10.2	Form of Retention Agreement between the Company and 
certain key employees, including James R. Henderson 
and Gene S. Schneyer (filed as Exhibit 99.4 to 
Registrant's Schedule 14D-9 on March 5, 1999 and 
incorporated herein by reference).

		10.3	The 1994 Incentive Stock Option Plan, as amended 
(filed as Exhibit No. 10.5 to Registrant's Annual 
Report on Form 10-K for the year ended 
December 31, 1996 and incorporated herein by 
reference).

		10.4	The 1996 Equity Incentive Plan, as amended (filed as 
Exhibit No. 10.5 to Registrant's Annual Report on 
Form 10-K for the year ended December 31, 1997 and 
incorporated herein by reference).
	
		10.5	Amended and Restated Warrant of Registrant issued to 
I. Gary Bard to purchase up to 133,334 shares of 
Common Stock (filed as Exhibit No. 10.7 to 
Registrant's Annual Report on Form 10-K for the year 
ended December 31, 1997 and incorporated herein by 
reference).

(page 29)
<PAGE>


10.6 Amended and Restated Warrant of Registrant issued to 
John F. Vanderslice to purchase up to 66,666 shares of Common 
Stock (filed as Exhibit No. 10.8 to Registrant's Annual Report 
on Form 10-K for the year ended December 31, 1997 and 
incorporated herein by reference).

		21	Subsidiaries of Registrant

		23	Consent of Independent Auditors

		27	Financial Data Schedule (electronic filing only)

		99	Independent Auditors' Report

	All other exhibits not listed above are omitted because 
      they are inapplicable.

(b)	Reports on Form 8-K
	No reports on Form 8-K were filed during the Fourth Quarter
      of 1998.

(page 30)
<PAGE>

<TABLE>
<CAPTION>
                                          AYDIN CORPORATION
                            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 FOR THE YEARS 1998, 1997, AND 1996
 
       COLUMN A                          COLUMN B         COLUMN C          COLUMN D      COLUMN E
 DESCRIPTION                         Balance at        ADDITIONS          Deductions-   Balance at
                                     Beginning   Charged to  Charged to    Describe    End of Period
                                     of Period   Costs and   Other Accounts
                                                 Expenses    - Describe
<S>                                  <C>         <C>          <C>         <C>           <C>
Year 1998
_________
  Deducted from asset accounts:
   Allowance for doubtful accounts   $  616,000  $  541,000               $  476,000(1) $  681,000
   Raw materials inventory reserve      566,000           0                  390,000(2)    176,000
                                     __________   __________               __________    __________
                    Totals           $1,182,000  $  541,000               $  572,000    $  616,000

Year 1997
_________
  Deducted from asset accounts:
   Allowance for doubtful accounts   $  942,000  $  246,000               $  572,000(1) $  616,000
   Raw materials inventory reserve    1,514,000     445,000                1,393,000(2)    566,000
                                     __________   __________               __________    __________
                    Totals           $2,456,000  $  691,000               $1,965,000    $1,182,000
 
Year 1996
_________
  Deducted from asset accounts:
   Allowance for doubtful accounts   $  259,000  $1,037,000               $  354,000(1) $  942,000
   Raw materials inventory reserve    1,062,000   3,542,000                3,090,000(2)  1,514,000
                                     __________  __________                ____________  __________
                    Totals           $1,321,000  $4,579,000               $3,444,000    $2,456,000
  
<FN>
 (1) Uncollectible accounts written off, net of recoveries. The
     increase in 1997 write-offs reflects primarily foreign
     receivables provided for in 1996.
 (2) Obsolete inventory written off.
</TABLE>
 
(page 31)
<PAGE>
                               SIGNATURES
 
Pursuant to the requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
 
                                       Aydin Corporation     
        

          
Dated: __March 29, 1999__   By: ____/s/ Gene S. Schneyer_____  
                                        Gene S. Schneyer 
                                        Vice President, Secretary
                                        And General Counsel
 
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.
 
 
 By: ___/s/ James R. Henderson____    Dated: __March 29, 1999__
     James R. Henderson 
     President, Chief Operating Officer,
     Treasurer and Chief Financial Officer

By: __/s/ Herbert Welber_________    Dated: __March 29, 1999__
     Herbert Welber
     Controller and Assistant Treasurer
     Principal Accounting Officer
 
 By: _/s/ Warren G. Lichtenstein__    Dated: __March 29, 1999__
     Warren G. Lichtenstein 
     Chairman of the Board and Director
 
 By: __/s/ I. Gary Bard___________    Dated: __March 29, 1999__
	I. Gary Bard	Director
	
 By: __/s/ Keith Lane-Zucker______    Dated: __March 29, 1999__
	Keith Lane-Zucker	Director
	
 By: __/s/ Mark Schwarz____________   Dated: __March 29, 1999__
	Mark Schwarz	Director

 By: __/s/ Harry D. Train, II______   Dated: __March 29, 1999__
	Harry D. Train, II 	Director

<PAGE>
                                    EXHIBIT INDEX
Exhibit No.     Description of Exhibit

2(i)     Agreement and Plan of Merger, dated as of March 1, 1999,
         by and among L-3 Communications Corporation, Angel 
         Acquisition Corporation, and the Company (filed as 
         Exhibit 99.2 to Registrant's Schedule 14D-9 on March 5, 
         1999 and incorporated herein by reference)

3(i)     Restated Certificate of Incorporation (filed as Exhibit 
         No. 3(i) to Registrant's Annual Report on Form 10-K for 
         the year ended December 31, 1994 and incorporated herein 
         by reference).

3(ii)    By-laws, as amended (i) on October 19, 1998 to eliminate 
         that provision of Article V, Section 6 which required 
         that the Chairman of the Board serve as the Company's 
         Chief Executive Officer, and (ii) on December 30, 1998 
         to modify Article III, Section 1 to reduce the number of 
         Directors which shall constitute the whole Board from 
         six to five.

10.1	  Employment Agreement, I. Gary Bard (filed as Exhibit No. 
        10.1 to Registrant's Quarterly Report on Form 10-Q for 
        the quarter ended September 28, 1996 and incorporated 
        herein by reference).

10.2    Form of Retention Agreement between the Company and
        certain key employees, including James R. Henderson and 
        Gene S. Schneyer (filed as Exhibit 99.4 to Registrant's 
        Schedule 14D-9 on March 5, 1999 and incorporated herein by 
        reference).

10.3    The 1994 Incentive Stock Option Plan, as amended (filed
        as Exhibit No. 10.5 to Registrant's Annual Report on Form 
        10-K for the year ended December 31, 1996 and 
        incorporated herein by reference).

10.4    The 1996 Equity Incentive Plan, as amended (filed as
        Exhibit No. 10.5 to Registrant's Annual Report on 
        Form 10-K for the year ended December 31, 1997 and 
        incorporated herein by reference).

10.5    Amended and Restated Warrant of Registrant issued to
        I. Gary Bard to purchase up to 133,334 shares of Common
        Stock (filed as Exhibit No. 10.7 to Registrant's Annual
        Report on Form 10-K for the year ended December 31, 1997
        and incorporated herein by reference).

10.6    Amended and Restated Warrant of Registrant issued to
        John F. Vanderslice to purchase up to 66,666 shares of
        Common Stock (filed as Exhibit No. 10.8 to Registrant's 
        Annual Report on Form 10-K for the year ended 
        December 31, 1997 and incorporated herein by reference).

21     Subsidiaries of Registrant

23     Consent of Independent Auditors

27     Financial Data Schedule (electronic filing only)

99     Independent Auditors' Report

<PAGE>
                                               Exhibit 3(ii)

	AYDIN CORPORATION
	BY-LAWS
	(Last Amended December 30, 1998)
	*******

	ARTICLE I
	OFFICERS
	Section 1.	The registered office shall be in the City of Dover, 
County of Kent, State of Delaware.
	Section 2.	The corporation may also have offices at such other 
places both within and without the State of Delaware as the Board 
of Directors may from time to time determine or the business of the 
corporation may require.

	ARTICLE II
	MEETINGS OF STOCKHOLDERS
	Section 1.	All meetings of the stockholders for the election of 
Directors shall be held in the City of Fort Washington, State of 
Pennsylvania, at such place as may be fixed from time to time by 
the Board of Directors, or at such other place either within or 
without the State of Delaware as shall be designed from time to 
time by the Board of Directors and stated in the notice of the 
meeting.  Meetings of stockholders for any other purpose may be 
held at such time and place, within or without the State of 
Delaware, as shall be stated in the notice of the meeting or in a 
duly executed waiver of notice thereof.
	Section 2.	Annual meetings of stockholders shall be held on the 
third Thursday of April if not a legal holiday, and if a legal 
holiday, then on the next secular day following at 3:00 P.M. or at 
such other date and time as shall be designated from time to time 
by the Board of Directors and stated in the notice of the meeting, 
at which they shall elect by a plurality vote a board of Directors, 
and transact such other business as may properly be brought before 
this meeting.
	Section 3.	Written notice of the annual meeting stating the 
place, date and hour of the meeting shall be given to each 
stockholder entitled to vote at such meeting not less than ten nor 
more than fifty days before the date of the meeting.
	Section 4.	The officer who has charge of the stock ledger of 
the corporation shall prepare and make, at least ten days before 
every meeting of stockholders, a complete list of the stockholders 
entitled to vote at the meeting, arranged in alphabetical order, 
and showing the address of each stockholder and the number of 
shares registered in the name of each stockholder.  Such list shall 
be open to the examination of any stockholder, for any purpose 
germane to the meeting, during ordinary business hours, for a 
period of at least ten days prior to the meeting, either at a place 
within the city where the meeting is to be held, which place shall 
be specified in the notice of the meeting, or, if not so specified, 
at the place where the meeting is to be held.  The list shall also 
be produced and kept at the time and place of the meeting during 
the whole time thereof, and may be inspected by any stockholder who 
is present.
	Section 5.	Special meetings of the stockholders, for any 
purpose or purposes, unless otherwise prescribed by statute or by 
the certificate of incorporation, may be called by the Chairman of 
the Board and shall be called by the Chairman of the Board or 
Secretary at the request in writing of a majority of the Board of 
Directors, or at the request in writing of stockholders owning a 
majority in amount of the entire capital stock of the corporation 
issued and outstanding and entitled to vote.  Such request shall 
state the purpose or purposes of the proposed meeting.
	Section 6.	Written notice of a special meeting stating the 
place, date and hour of the meeting and the purpose or purposes for 
which the meeting is called, shall be given not less than ten nor 
more than fifty days before the date of the meeting, to each 
stockholder entitled to vote at such meeting.
	Section 7.	Business transacted at any special meeting of 
stockholders shall be limited to the purposes stated in the notice.
	Section 8.	The holders of a majority of the stock issued and 
outstanding and entitled to vote thereat, present in person or 
represented by proxy, shall constitute a quorum at all meeting of 
the stockholders for the transaction of business except as 
otherwise provided by statute or by the certificate of 
incorporation.  If, however, such quorum shall not be present or 
represented at any meeting of the stockholder, the stockholders 
entitled to vote thereat, present in person or represented by 
proxy, shall have power to adjourn the meeting from time to time, 
without notice other than announcement at the meeting, until a 
quorum shall be present or represented.  At such adjourned meeting 
at which a quorum shall be present or represented any business may 
be transaction which might have been transacted at the meeting as 
originally notified.  If the adjournment is for more than thirty 
days, or if after the adjournment a new record date is fixed for 
the adjourned meeting, a notice of the adjourned meeting shall be 
given to each stockholder of record entitled to vote at the 
meeting.
	Section 9.	When a quorum is present at any meeting, the vote of 
the holder of a majority of the stock having voting power present 
in person or represented by proxy shall decide any question brought 
before such meeting, unless the question is one upon which by 
express provision of the statutes or of the certificate of 
incorporation, a different vote is required in which case such 
express provision shall govern and control the decision of such 
question.
	Section 10.	Each stockholder shall at every meeting of the 
stockholders be entitled to one vote in person or by proxy for each 
share of the capital stock having voting power held by such 
stockholder, but no proxy shall be voted on after three years from 
its date, unless the proxy provides for a longer period.
	Section 11.	Whenever the vote of stockholders at a meeting 
thereof is required or permitted to be taken for or in connection 
with any corporate action, by any provision of the statutes, the 
meeting and vote of stockholders may be dispensed with if all of 
the stockholder who would have been entitled to vote upon the 
action if such meeting were held shall consent in writing to such 
corporate action being taken; or if the certificate of 
incorporation authorizes the action to be taken with the written 
consent of the holders of less than all of the stock who would have 
been entitled to vote upon the action if a meeting were held, then 
on the written consent of the stockholders having not less than 
such percentage of the total number of votes as may be authorized 
in the certificate of incorporation; provided that in no case shall 
the written consent be by the holders of stock having less than the 
minimum percentage of the total vote required by statute for the 
proposed corporate action, and provided that prompt notice must be 
given to all stockholders of the taking of corporate action without 
a meeting and by less than unanimous written consent.

	ARTICLE III
	DIRECTORS
	Section 1.	The number of Directors which shall constitute the 
whole Board shall be five (5).  The Directors shall be elected at 
the annual meeting of the stockholders, except as provided in 
Section 2 of this Article, and each Director elected shall hold 
office until his successor is elected and qualified.  Directors 
need not be stockholders.
	Section 2.	Vacancies and newly created directorships resulting 
from any increase in the authorized number of Directors may be 
filled by a majority of the Directors then in office, though less 
than a quorum, or by a sole remaining director, and the Directors 
so chosen shall held office until the next annual election and 
until their successors are duly elected and shall qualify, unless 
sooner displaced.  If their are no Directors in office, then an 
election of Directors may be held in the manner provided by 
statute.  If, at the time of filling any vacancy or any newly 
created directorship, the Directors then in office shall constitute 
less than a majority of the whole board (as constituted immediately 
prior to any such increase), the Court of Chancery may, upon 
application of any stockholder or stockholders holding at least ten 
percent of the total number of the shares at the time outstanding 
having the right to vote for such Directors, summarily order an 
election to be held to fill any such vacancies or newly created 
directorships, or to replace the Directors chosen by the Directors 
then in office.
	Section 3.	The business of the corporation shall be managed by 
its Board of Directors which may exercise all such powers of the 
corporation and do all such lawful acts and things as are not by 
statute or by the Certificate of Incorporation or by these by-laws 
directed or required to be exercised or done by the stockholders.

	MEETING OF THE BOARD OF DIRECTORS
	Section 4.	The Board of Directors of the corporation may hold 
meetings, both regular and special, either within or without the 
State of Delaware.
	Section 5.	The first meeting of each newly elected Board of 
Directors shall be held at such time and place as shall be fixed by 
the vote of the stockholders at the annual meeting and no notice of 
such meeting shall be necessary to the newly elected Directors in 
order legally to constitute the meeting, provided a quorum shall be 
present.  In the event of the failure of the stockholders to fix 
the time or place of such first meeting of the newly elected Board 
of Directors, or in the event such meeting is not held at the time 
and place so fixed by the stockholders, the meeting may be held at 
such time and place as shall be specified in a notice given as 
hereinafter provided for special meetings of the Board of 
Directors, or as shall be specified in a written waiver signed by 
all of the Directors.
	Section 6.	Regular meetings of the Board of Directors may be 
held without notice at such time and at such place as shall from 
time to time be determined by the Board.
	Section 7.	Special meetings of the Board may be called by the 
Chairman of the Board on one day's notice to each director, either 
personally, by telephone, by mail or by telegram; special meetings 
shall be called by the Chairman of the Board or Secretary in like 
manner and on like notice on the written request of two directors.
	Section 8.  At all meetings of the Board, a majority of the 
directors shall constitute a quorum for the transaction of business 
and the act of a majority of the directors present at any meeting 
at which there is a quorum shall be the act of the Board of 
Directors, except as may be otherwise specifically provided by 
statute or by the certificate of incorporation.  If a quorum shall 
not be present at any meeting of the Board of Directors the 
directors present thereat may adjourn the meeting from time to 
time, without notice other than announcement at the meeting, until 
a quorum shall be present.
	Section 9.	Unless otherwise restricted by the certificate of 
incorporation or these by-laws, any action required or permitted to 
be taken at any meeting of the Board of Directors or of any 
committee thereof may be taken without a meeting, if all members of 
the Board or committee, as the case may be, consent thereto in 
writing, and the writing or writings are filed with the minutes of 
proceedings of the Board or committee.

	COMMITTEES OF DIRECTORS
	Section 10.	The Board of Directors may, by resolution 
passed by a majority of the whole board, designate one or more 
committees, each committee to consist of two or more of the 
directors of the corporation.  The board may designate one or more 
directors as alternate members of any committee, who may replace 
any absent or disqualified member at any meeting of the committee.  
Any such committee, to the extent provided in the resolution, shall 
have and may exercise the powers of the Board of Directors in the 
management of the business and affairs of the corporation, and may 
authorize the seal of the corporation to be affixed to all papers 
which may require it; provided, however, that in the absence or 
disqualification of any member of such committee or committees, the 
member of members thereof present at any meeting and not 
disqualified from voting, whether or not he or they constitute a 
quorum, may unanimously appoint another member of the Board of 
Directors to act at the meeting in the place of any such absent or 
disqualified member.  Such committee or committees shall have such 
name or names as may be determined from time to time by resolution 
adopted by the Board of Directors.
	Section 11.	Each committee shall keep regular minutes of 
its meetings and report the same to the Board of Directors when 
required.

	COMPENSATION OF DIRECTORS
	Section 12.	The Directors may be paid their expenses, if 
any, of attendance at each meeting of the Board of Directors and 
may be paid a fixed sum for attendance at each meeting of the Board 
of Directors or a stated salary as Director.  No such payment shall 
preclude any Director from serving the corporation in any other 
capacity and receiving compensation therefor.  Members of special 
or standing committees may be allowed like compensation for 
attending committee meetings.

	ARTICLE IV
	NOTICES
	Section 1.	Whenever, under the provisions of the statutes or of 
the Certificate of Incorporation or of these by-laws, notice is 
required to be given to any Director or stockholder, it shall not 
be construed to mean personal notice, but such notice may be given 
in writing, by mail, addressed to such Director or stockholder, at 
his address as it appears on the records of the corporation, with 
postage thereon prepaid, and such notice shall be deemed to be 
given at the time when the same shall be deposited in the United 
States mail.  Notice to Directors may also be given by telegram, or 
by telephone.
	Section 2.	Whenever any notice is required to be given under 
the provisions of the statutes or of the Certificate of 
Incorporation or of these by-laws, a waiver thereof in writing, 
signed by the person or persons entitled to said notice, whether 
before or after the time stated therein, shall be deemed equivalent 
thereto.

	ARTICLE V
	OFFICERS
	Section 1.	The officers of the corporation shall be chosen by 
the Board of Directors and shall be a Chairman of the Board, a 
President, an Executive Vice President, a Secretary and a 
Treasurer.  The Board of Directors may also choose additional Vice 
Presidents, and one or more Assistant Secretaries and Assistant 
Treasurers.  Any number of offices may be held by the same person, 
unless the certificate of incorporation of these by-laws otherwise 
provide.
	Section 2.	The Board of Directors at its first meeting after 
each annual meeting of stockholders shall choose a Chairman of the 
Board, a President, an Executive Vice President, a Secretary and a 
Treasurer, and may choose additional Vice Presidents, and one or 
more Assistant Secretaries and Assistant Treasurers.
	Section 3.	The Board of Directors may appoint such other 
officers and agents as it shall deem necessary who shall hold their 
offices for such terms and shall exercise such powers and perform 
such duties as shall be determined from time to time by the Board.
	Section 4.	The salaries of all officers and agents of the 
corporation shall be fixed by the Board of Directors.
	Section 5.	The officers of the corporation shall hold office 
until their successors are chosen and qualified.  Any officer 
elected or appointed by the Board of Directors may be removed at 
any time by the affirmative vote of a majority of the Board of 
Directors.  Any vacancy occurring in any office of the corporation 
shall be filled by the Board of Directors.

	CHAIRMAN OF THE BOARD
	Section 6.	The Chairman of the Board, subject to the control of 
the Board of Directors, shall have the general direction and 
supervision over the business and affairs of the corporation.  He 
shall preside at all meetings of the stockholders and of the Board 
of Directors and shall be an ex officio member of all committees 
and shall see that all orders and resolutions of the Board of 
Directors are carried into effect.  He shall participate in 
determining the policies to be followed by the corporation and 
shall perform such other duties as the Board of Directors shall 
from time to time request.

	THE PRESIDENT
	Section 7.	The President shall undertake such duties as may be 
delegated to him by the Chairman of the Board and shall also have 
such other powers and duties as the Board of Directors may from 
time to time determine.  In the absence of the Chairman of the 
Board or in the event of his inability or refusal to act, the 
President shall perform the duties of the Chairman of the Board, 
and when so acting, shall have all the powers of and be subject to 
all the restrictions upon the Chairman of the Board.

	THE VICE PRESIDENTS
	Section 8.	In the absence of the President or in the event of 
his inability or refusal to act, the Executive Vice President, (or 
in the event of the absence or inability of or refusal to act by 
the Executive Vice President and in the further event there be more 
than one Vice President, the Vice Presidents in the order 
designated, or in the absence of any designation, then in the order 
of their election) shall perform the duties of the President, and 
when so acting, shall have all the powers of and be subject to all 
the restrictions upon the President.  Such powers of and 
restrictions upon the President shall include the performance of 
the duties of the Chairman of the Board in the further event that 
the Chairman is absent or is unable or refuses to act.  Vice 
Presidents shall perform such other duties and have such other 
powers as the Board or Directors may from time to time prescribe.

	THE SECRETARY AND ASSISTANT SECRETARY
	Section 9.	The Secretary shall attend all meetings of the Board 
of Directors and all meetings of the stockholders and record all 
the proceedings of the meetings of the corporation and of the Board 
of Directors in a book to be kept for that purpose and shall 
perform like duties for the standing committees when required.  He 
shall give, or cause to be given, notice of all meetings of the 
stockholders and special meetings of the Board of Directors, and 
shall perform such other duties as may be prescribed by the Board 
of Directors or Chairman of the Board, under whose supervision he 
shall be.  He shall have custody of the corporate seal of the 
corporation and he, or an Assistant Secretary, shall have authority 
to affix the same to any instrument requiring it and when so 
affixed, it may be attested by his signature or by the signature of 
such Assistant Secretary.  The Board of Directors may give general 
authority to any other officer to affix the seal of the corporation 
and to attest the affixing by his signature.
	Section 10.	The Assistant Secretary, or if there be more 
than one, the Assistant Secretaries in the order determined by the 
Board of Directors (or if there is no such determination, then in 
the order of their election), shall, in the absence of the 
Secretary or in the event of his inability or refusal to act, 
perform the duties and exercise the powers of the Secretary and 
shall perform such other duties and have such other powers as the 
Board of Directors may from time to time prescribe.

	THE TREASURER AND ASSISTANT TREASURERS
	Section 11.	The Treasurer shall have the custody of the 
corporate funds and securities and shall keep full and accurate 
accounts if receipts and disbursements in books belonging to the 
corporation and shall deposit all moneys and other valuable effects 
in the name and to the credit of the corporation in such 
depositories as may be designated by the Board of Directors.
	Section 12.	He shall disburse the funds of the corporation 
as may be ordered by the Board of Directors, taking proper vouchers 
for such disbursements, and shall render to the Chairman of the 
Board and the Board of Directors, at its regular meetings, or when 
the Board of Directors so requires, an account of all his 
transactions as Treasurer and of the financial conditions of the 
corporation.
	Section 13.	If required by the Board of Directors, he shall 
give the corporation a bond (which shall be renewed every six 
years) in such  sum and with such surety or sureties as shall be 
satisfactory to the Board of Directors for the faithful performance 
of the duties of his office and for the restoration to the 
corporation, in case of his death, resignation, retirement or 
removal form office, of all books, papers, vouchers, money and 
other property of whatever kind in his possession or under his 
control belonging to the corporation.
	Section 14.	The Assistant Treasurer, or if there shall be 
more than one, the Assistant Treasurers in the order determined by 
the Board of Directors (or if there be no such determination, then 
in the order of their election), shall, in the absence of the 
Treasurer or in the event of his inability or refusal to act, 
perform the duties and exercise the powers of the Treasurer and 
shall perform such other duties and have such other powers as the 
Board of Directors may from time to time prescribe.

	ARTICLE VI
	CERTIFICATES OF STOCK
	Section 1.	 Every holder of stock in the corporation shall be 
entitled to have a certificate, signed by, or in the name of the 
corporation by, the Chairman or Vice Chairman of the Board of 
Directors, the President or a Vice President and the Treasurer or 
an Assistant Treasurer, or the Secretary or an Assistant Secretary 
of the corporation, certifying the number of shares owned by him in 
the corporation.
	Section 2.	Where a certificate is countersigned (1) by a 
transfer agent other than the corporation or its employee, or, (2) 
by a registrar other than the corporation or its employee, the 
signatures of the officers of the corporation may be facsimiles.  
In case any officer who has signed or whose facsimile signature has 
been placed upon a certificate shall have ceased to be such officer 
before such certificate is issued, it may be issued by the 
corporation with the same effect as if he were such officer at the 
date of issue.

	LOST CERTIFICATES
	Section 3.	The Board of Directors may direct a new certificate 
or certificates to be issued in place of any certificate or 
certificates theretofore issued by the corporation alleged to have 
been lost, stolen or destroyed, upon the making of an affidavit of 
that fact by the person claiming the certificate of stock to be 
lost, stolen or destroyed.  When authorizing such issue of a new 
certificate or certificates, the Board of Directors may, in its 
discretion and as a condition precedent to the issuance thereof, 
require the owner of such lost, stolen or destroyed certificate or 
certificates, or his legal representative, to advertise the same in 
such manner as it shall require and/or to give the corporation a 
bond in such sum as it may direct as indemnity against any claim 
that may be made against the corporation with respect to the 
certificate alleged to have been lost, stolen or destroyed.

	TRANSFERS OF STOCK
	Section 4.	Upon surrender to the corporation or the transfer 
agent of the corporation of a certificate for shares duly endorsed 
or accompanied by proper evidence of succession, assignment or 
authority to transfer, it shall be the duty of the corporation to 
issue a new certificate to the person entitled thereto, cancel the 
old certificate and record the transaction upon its books.

	FIXING RECORD DATE
	Section 5.	In order that the corporation may determine the 
stockholders entitled to notice of or to vote at any meeting of 
stockholders or any adjournment thereof, or to express consent to 
corporate action in writing without a meeting, or entitled to 
receive payment of any dividend or other distribution or allotment 
of any rights, or entitled to exercise any rights in respect of any 
change, conversion or exchange of stock or for the purpose of any 
other lawful action, the Board of Directors may fix, in advance, a 
record date, which shall not be more than sixty nor less than ten 
days before the date of such meeting, nor more than sixty days 
prior to any other action.  A determination of stockholders of 
record entitled to notice of or to vote at a meeting of 
stockholders shall apply to any adjournment of the meeting; 
provided, however, that the Board of Directors may fix a new record 
date for the adjourned meeting.

	REGISTERED STOCKHOLDERS
	Section 6.	The corporation shall be entitled to recognize the 
exclusive right of a person registered on its books as the owner of 
shares to receive dividends, and to vote as such owner, and to hold 
liable for calls and assessments a person registered on its books 
as the owner of shares, and shall not be bound to recognize any 
equitable or other claim to or interest in such share or shares on 
the part of any other person, whether or not it shall have express 
or other notice thereof, except as otherwise provided by the laws 
of Delaware.

	ARTICLE VII
	GENERAL PROVISIONS
	DIVIDENDS
	Section 1.	Dividends upon the capital stock of the corporation, 
subject to the provisions of the Certificate of Incorporation, if 
any, may be declared by the Board of Directors at any regular or 
special meeting, pursuant to law.  Dividends may be paid in cash, 
in property, or in shares of the capital stock, subject to the 
provisions of the Certificate of Incorporation.
	Section 2.	Before payment of any dividend, there may be set 
aside out of any funds of the corporation available for dividends 
such sum or sums as the Directors from time to time, in their 
absolute discretion, think proper as a reserve or reserves to meet 
contingencies, or for equalizing dividends, or for repairing or 
maintaining any property of the corporation, or for such other 
purpose as the Directors shall think conducive to the interest of 
the corporation, and the Directors may notify or abolish any such 
reserve in the manner in which it was created.

	ANNUAL REPORT
	Section 3.	(a)	The Board of Directors shall present at each 
annual meeting, and at any special meeting of the stockholders when 
called for by vote of the stockholders, a full and clear statement 
of the business and condition of the corporation.
			(b)	On or before 120 days from the close of each 
fiscal year, the Board of Directors shall cause to be delivered to 
each stockholder of record an audited statement of financial 
condition of the corporation as at the close of such fiscal year, 
together with a statement of operations, including profit and loss 
for such fiscal year.  For the purposes of subsection (b), it will 
be sufficient if such report is mailed in the ordinary course of 
business to those shareholder of record as at the date on which the 
record of shareholders has been taken for the purpose of the annual 
meeting, pursuant to Section 5 of ARTICLE VI of these by-laws.

	CHECKS
	Section 4.	All checks or demands for money and notes of the 
corporation shall be signed by such officer or officers or such 
other person or persons as the Board of Directors may from time to 
time designate.

	FISCAL YEAR
	Section 5.	The fiscal year of the corporation shall be fixed by 
resolution of the Board of Directors.

	SEAL
	Section 6.	The corporate seal shall have inscribed thereon the 
name of the corporation, the year of its organization and the words 
"Corporate Seal, Delaware."

The seal may be used by causing it or a facsimile thereof to be 
impressed or affixed or reproduced or otherwise.

	INDEMNIFICATION
	Section 7.	(a)	Directors, Officers and Employees of the 
Corporation.  Every person now or hereafter serving as a Director, 
Officer or Employee of the Corporation shall be indemnified and 
held harmless by the corporation from and against any and all loss, 
cost, liability and expense that may be imposed upon or incurred by 
him in connection with or resulting from any claim, action, suit, 
or proceeding, civil or criminal, in which he may become involved, 
as a party or otherwise, by reason of his being or having been a 
director, officer or employee of the corporation, whether or not he 
continues to be such at the time such loss, cost, liability or 
expense shall have been imposed or incurred.  As used herein, the 
term "loss, cost, liability and expense" shall include, but shall 
not be limited to, counsel fees and disbursements and amounts of 
judgments, fines or penalties against, and amounts paid in 
settlement by, any such director, officer or employee; provided, 
however that no such director, officer or employee shall be 
entitled to claim such indemnity:  (1) with respect to any matter 
as to which there shall have been a final adjudication that he has 
committed or allowed some act or omission, (a) otherwise than in 
good faith in what he considers to be the best interests of the 
corporation, and (b) without reasonable cause to believe that such 
act or omission was proper and legal; or (2) in the event of a 
settlement of such claim, action, suit, or proceeding unless (a) 
the court having jurisdiction thereof shall have approved of such 
settlement with knowledge of the indemnity provided herein, or (b) 
a written opinion of independent legal counsel, selected by or in 
manner determined by the Board of Directors, shall have been 
rendered substantially concurrently with such settlement, to the 
effect that it was not probable that the matter as to which 
indemnification is being made would have resulted in a final 
adjudication as specified in clause (1) above and that the said 
loss, cost, liability or expense may properly be borne by the 
corporation.  A conviction or judgment (whether based on a plea of 
guilty or nolo contendere or its equivalent, or after trial) in a 
criminal action, suit or proceeding shall not be deemed an 
adjudication that such director, officer or employee has committed 
or allowed some act or omission as hereinabove provided if 
independent legal counsel, selected as hereinabove set forth, shall 
substantially concurrently with such conviction or judgement give 
to the corporation a written opinion that such director, officer or 
employee was acting in good faith in what he considered to be the 
best interests of the corporation or was not without reasonable 
cause to believe that such act or omission was proper and legal.
		(b)	Directors, Officers and Employees of Subsidiaries.  
Every person (including a director, officer or employee of the 
corporation) who at the request of the corporation acts as a 
director, officer or employee of any other corporation in which the 
corporation owns shares of stock or of which it is a creditor shall 
be indemnified to the same extent and subject to the same 
conditions that the directors, officers, and employees of the 
corporation are indemnified under the preceding paragraph, except 
that the amount of such loss, cost, liability or expense paid to 
any such director, officer or employee shall be reduced by and to 
the extent  of any amounts which may be collected by him from such 
other corporation.
		(c)	Miscellaneous.  The provisions of this section shall 
cover claims, actions, suits and proceedings, civil or criminal, 
whether now pending or hereafter commenced and shall be retroactive 
to cover acts or omissions or alleged acts or omissions which 
heretofore have taken place.  In the event of death of any person 
having a right of indemnification under the provisions of this 
section, such right shall inure to the benefit of his heirs, 
executors, administrators and personal representatives.  If any 
part of this section should be found to be invalid or ineffective 
in any proceeding, the validity and effect of the remaining 
provisions shall not be affected.
		(d)	Indemnification Not Exclusive.  The foregoing right 
of indemnification shall not be deemed exclusive of any other right 
to which those indemnified may be entitled, and the corporation may 
provide additional indemnity and rights to its directors, officers 
or employees.

	ARTICLE VIII
	AMENDMENTS
	Section 1.	These by-laws may be altered or repealed at any 
regular meeting of the stockholders or of the Board of Directors or 
at any special meeting of the stockholders or of the Board of 
Directors if notice of such alteration or repeal be contained in 
the notice of such special meeting.

<PAGE>
                                                Exhibit 21

                       SUBSIDIARIES OF REGISTRANT

<TABLE>
<CAPTION>
NAME (and name under which      JURISDICTION        PERCENTAGE
they do business-same)          OF INCORPORATION    OWNED
--------------------------      -----------------   ----------
<S>                            <C>                <C>
Aydin Europe Limited            United Kingdom       100%
Aydin, S.A.                     Argentina             19%
Aydin Foreign Sales Limited     Guam                 100%
Aydin Investments, Inc.         Delaware             100%
Aydin Yazilim ve Elektronik
 Sanayi A.S.                    Turkey               100% (1)

<FN>                                             
--------------
(1)  Ninety nine (99%) percent of the 100% is owned by
     registrant's wholly owned subsidiary, Aydin Investments,
     Inc.
</TABLE>
<PAGE>
                                              Exhibit 23

CONSENT OF INDEPENDENT AUDITORS

We have issued our reports dated February 19, 1999, accompanying 
the consolidated financial statements and schedules in the Annual 
Report of Aydin Corporation and Subsidiaries on Form 10-K for the 
year ended December 31, 1998.  We hereby consent to the 
incorporation by reference of said reports in the Registration 
Statements of Aydin Corporation and Subsidiaries on Forms S-8 
Registration Statement Numbers 333-31263, 33-61537, 33-53549, 33-
34863, 33-22016, 33-14284, 2-97645, 2-93603, 2-77623 and 2-64093.

/s/ Grant Thornton LLP

Philadelphia, Pennsylvania
March 26, 1999

<PAGE>
                                               Exhibit 99

Report of Auditors on Schedules


Board of Directors
Aydin Corporation


	In connection with our audit of the consolidated financial 
statements of Aydin Corporation and Subsidiaries referred to in 
our report dated February 19, 1999, which is included in Part II 
of this form, we have also audited Schedule II for each of the 
three years in the period ended December 31, 1998.  In our 
opinion, this schedule presents fairly, in all material respects, 
theinformation required to be set forth therein.

/s/ Grant Thornton LLP

Philadelphia, Pennsylvania
February 19, 1999