For Immediate Release - February 12, 1997

Redwood City, California - California Microwave, Inc. (CMIC-Nasdaq) announced that the comprehensive business review discussed in its January 14 press release has led to a refocusing of the company's Microwave Network Systems (MNS) and Satellite Transmission Systems (STS) operations. As a result, the company is recording inventory write-downs, warranty and other charges totaling $39 million, before income tax benefits, in its fiscal 1997 second quarter and expects to record restructuring charges of $8 million, before income tax benefits, in its third quarter ending March 31. California Microwave also expects that relocation and retention costs of $2 million to $3 million resulting from the restructuring will be charged as ordinary operating expenses in the coming three quarters. The company expects to pay no income taxes in fiscal 1997, and expects to receive a tax refund of approximately $9 million in fiscal 1998 due to tax-loss carryback provisions. Second Quarter Results California Microwave reported that, including the effect of the write-downs, it had incurred a net loss of $25 million, or ($1.57) per share, on sales of $117 million for its second quarter ended December 31, 1996. This compares to net income of $3.6 million, or $.23 per share, on sales of $116 million reported for the same period last year. Without the inventory, warranty and other charges, California Microwave's fiscal 1997 second quarter net income would have been $971,000, or $.06 per share. New orders booked in the second quarter of fiscal 1997 decreased 8% to $106 million compared to $115 million booked last year. Actions Taken Most of California Microwave's units are already consistently profitable. In response to operating disappointments at the remaining units, California Microwave made several significant management changes, initiated a search for a new CEO, established a new board executive committee, initiated a comprehensive business review, retained J. P. Morgan to aid in the review, and is strengthening its operational management and controls. The actions being taken are intended to restore overall profitability to the MNS and STS operations by refocusing on core competencies, narrowing product lines and reducing costs. California Microwave believes that these actions to cut expenses and to focus the development and production capacity of its business units on sharply defined objectives will result in a competitive cost structure and improved gross margins. Microwave Network Systems, Satellite Transmission Systems Tightly Refocused MNS will focus on the two markets offering the best opportunities for its products and capabilities, the PCS relocation market in the U.S. and cellular providers in developing countries. These markets will be addressed by two separate operations under experienced MNS managers. STS will focus on its historically successful strengths in systems integration and network configuration. STSÌ satellite earth station products will be transferred to California MicrowaveÌs EFData operation. The largest portion of the inventory write-down relates to the decisions at MNS and STS to more sharply define their markets and to focus on the products appropriate for those markets. The largest element of the remaining write-down is a product warranty reserve at MNS. The restructuring in the third quarter includes closing MNS facilities in California and Illinois and a reduction of over 20% in the MNS work force. Cautionary Statement: Statements made in this press release that are not historical facts, including any statements about expectations for the balance of fiscal year 1997, involve certain risks and uncertainties. Factors that could cause the company's actual results to differ materially from management's projections, estimates and expectations include, but are not limited to, delays in the receipt of orders or in the shipment of products, delays in implementing the company's restructuring plan, delays in transitioning from older to newer products, and the other factors described in the company's Form 10-K annual report for its fiscal year ended June 30, 1996. California Microwave, Inc. is a leading U.S. supplier of satellite earth station and microwave radio infrastructure products, installed in more than 110 countries.

CALIFORNIA MICROWAVE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share amounts)

	Three Months Ended Dec. 31				Six Months Ended December 31
	1996	1995	% Change		1996	1995	% Change
Net Sales	$117,089	$116,289		+1	$220,781	$ 232,052		-5
Cost of products sold	124,992	82,159		+52	202,101	163,149		+24
Gross margin	(7,903)	34,130		NM	18,680	68,903		-73
Expenses
Research & Development	7,891	7,532		+5	15,756	14,698		+7
Marketing & administration	22,723	19,255		+18	42,476	37,293		+14
Amortization of intangible assets	540	547		-1	1,080	1,094		-1
Total expenses	31,154	27,334		+14	59,312	53,085		+12
Operating income (loss)	(39,057)	6,796		NM	(40,632)	15,818		NM
Interest expense net	(1,459)	(1,094)		+33	(2,811)	(2,137)		+32
Gain on sale of subsidiary	2,744	-		NM	2,744	-		NM
Income (loss) before income taxes	(37,772)	5,702		NM	(40,699)	13,681		NM
Provision for (benefit from) income taxes	(12,377)	2,054		NM	(13,431)	4,926		NM
Net income (loss)	$ (25,395)	$ 3,648		NM	$(27,268)	$ 8,755		NM
Net income (loss) per share	$(1.57)	$0.23		NM	$(1.69)	$0.54		NM
Average shares and equivalents (thousands)	16,145	16,129		--	16,139	16,230		--
Bookings	$106,199	$114,861		-8	$211,265	$216,253		-2
Backlog	158,933	215,747		-26	158,933	215,747		-26