For Immediate Release - January 17, 1996

REDWOOD CITY, CALIFORNIA - CALIFORNIA MICROWAVE, INC. (Nasdaq National Market:CMIC) reported a 39% decrease in net income to $3.6 million, or fully diluted earnings per share of $.23, on a 2% decrease in sales to $116.3 million for its fiscal year 1996 second quarter ended December 31, 1995. Last year's second-quarter net income was $5.9 million, or $.35 per share fully diluted, on sales of $119.1 million. California Microwave reported that new orders booked improved substantially over its first quarterís bookings of $101.4 million, but were down 28% compared to last yearís second quarter. New orders booked were $114.9 million compared to last yearís $159.3 million; period-end backlog was $215.7 million, 90% of which is expected to be delivered within the next 12 months. Last yearís second quarter bookings included a $40 million satellite earth station order from AT&T for Saudi Arabia, California Microwaveís largest order ever received. In fiscal 1996ís second quarter, wireless communications products accounted for 42% of orders and 36% of sales, while satellite systems and products represented 43% of orders and 49% of sales. International orders and sales were 55% and 52%, respectively. R&D, Gross Margins on Target Research and development expenses of 6.5% of total sales continue to be within the companyís stated goal of 6% to 7%. During the quarter, R&D was focused on higher-margin satellite products and microwave radios. Management also indicated that gross margins are holding in the 30% area and the company expects improvement going forward. In May 1995, California Microwave merged with Microwave Networks Incorporated (MNI), a microwave radio company. The merger was accounted for as a pooling of interests, and all financial information has been restated to include MNI. U.S. PCS Outlook In commenting on the quarter, California Microwaveís chairman and chief executive officer, Philip F. Otto, said, "While we are not at all happy about our orders and sales levels, we are seeing encouraging signs that the logjam is beginning to break in the U.S. Personal Communications Services (PCS) market. Key indicators are our PCS supply agreements with Western Wireless Corporation and Pacific Bell Mobile Services, and increased bidding activity, particularly for relocation of existing radio links which, by FCC mandate, must be moved to 6 and 10 GHz to clear the 2 GHz band for PCS. At the risk of repeating ourselves, the build-out of PCS networks is taking far longer than anyone had anticipated." California Microwave, Inc. is the leading U.S. supplier of microwave radios and telecommunications satellite earth stations used in wireless communications. All of the companyís commercial wireless and satellite communications operations are fully certified to the ISO 9001 quality standard. California Microwave operates facilities in seven states and sells into more than 110 countries. The company has shipped over 12,000 digital microwave radios for personal communications. Its strategy calls for significant expansion in the wireless area.