For Immediate Release - August 14, 1996

REDWOOD CITY, CALIFORNIA - CALIFORNIA MICROWAVE, INC. (Nasdaq National Market:CMIC) reported today net income of $11.6 million, or $.72 per share, on a 2% decrease in sales to $461 million for its fiscal year ended June 30, 1996. This compares to a loss of $7.9 million, or ($.51) per share, on sales of $468 million in fiscal 1995. In the fourth quarter of 1995, the company recorded $40 million of restructuring and other charges. New orders booked in fiscal 1996 decreased 14% to $398 million compared to $463 million in the prior year. Backlog at June 30, 1996, stood at $168 million (95% of which is expected to be delivered over the next 12 months), a 27% decrease from last yearís reported $232 million. Fiscal 1996 fourth quarter results showed net income of $1.5 million, or $.10 per share, on a 15% increase in sales to $129 million, compared to a loss of $25 million or ($1.60) per share on sales of $112 million reported in 1995. New orders booked in the fourth quarter of 1996 increased 24% to $91 million compared to $73 million reported in the prior year. 1996 PROGRESS: Key Executive Positions Filled California Microwaveís top management team was strengthened in 1996 by the addition of a new chief financial officer, corporate controller and human resources officer. Dennis R. Raney joined the company in May as executive vice president and chief financial officer. Raney brought with him 26 years (23 spent at Hewlett Packard) of broad financial experience, including international operations, financial planning, information systems and product introductions, all high-priority areas for California Microwave. Carl Lee joined the company in December as corporate vice president and controller, bringing 21 years public accounting experience, including management consulting partner at Ernst & Young. Lee is leading the development and implementation of new information technology and systems to support California Microwaveís strategic initiatives. Robert Parrish joined the company in January as corporate vice president-human resources, a new position for California Microwave. Parrish has 25 years of HR experience, 16 of them most recently with Hewlett Packard. He is developing strategies for organizational development and staffing, acquisition integration, compensation and benefits, and recruitment. Satellite Profitability Improves During the year, California Microwaveís satellite communications systems integration business enjoyed a significant increase in sales and profitability as a result of new management, restructuring initiatives, and improved bidding practices. Gross Margin: 28.5% This compares with 1995ís gross margin of 26.3%, which would have been 29.5% had the company not recorded, as part of the restructuring and other charges, approximately $15 million to costs of products sold during its FY1995 fourth quarter. Although the satellite area improved its profitability in 1996, that improvement was not sufficient to offset lower sales of high-margin wireless communications products, resulting in a one percentage point reduction in California Microwaveís gross margin. Operational Integration: Management In Place The consolidation of three microwave radio divisions, including manufacturing facilities, was completed by the companyís Microwave Network Systems division. A new, 120,000-square foot factory in Houston is shipping radios for the cellular and Personal Communications Services (PCS) markets. Management of this key division was placed recently under Arthur W. Epley, co-founder of Microwave Networks Incorporated, which California Microwave acquired in 1995. The re-organization is complete, including the staffing of senior positions responsible for operations, sales and product development. R&D: 6.7% of Sales; Key Radios Developed In 1996, the company rolled out its CM6, a high-capacity radio targeted for the PCS 6-GHz relocation market. The companyís next-generation 38-GHz digital microwave radio, the DR-Plus, commenced shipments this year. The DR-Plus is the successor to the DR, which has been used extensively to interconnect base stations in European PCS networks. The company rationalized development of its cellular/PCS radio product line to two basic "platforms," one for long distance and one for short distance. California Microwave signed supply contracts with the major U.S. PCS operators and in fiscal 1996 booked over $15 million in PCS orders, primarily for relocation radios. Otto: 1997: Regaining Momentum "Our highest priority for 1997 is to regain our bookings and profitability momentum," commented California Microwaveís chairman and chief executive officer, Philip F. Otto. "We knew integrating three divisions would be difficult, and it is. Although this integration was strategically necessary, the internal disruption it caused took its toll on our performance this year. Transitioning three former competitors to work together as a team was distracting to our marketing and sales efforts, as was the late roll-out of our DR-Plus radio. We made progress in 1996, and our job now is to finish the integration and expansion of our international sales team and to quickly round out our families of radios for cellular and PCS applications. We put experienced managers into key slots this year, and we will continue to hire people with both operating and global experience who can help achieve our goal of becoming a world-class telecommunications supplier. We expect to see the benefits of completing the integration process, along with increased focus on expense controls, translate into improved profitability in fiscal 1997. California Microwave goes into fiscal 1997 a much stronger company." Forward-Looking Statements Statements made in this press release that are not historical facts, including any statements about expectations for fiscal year 1997 and beyond are forward-looking statements, involving certain risks and uncertainties. Factors that could cause the companyís actual results to differ materially from managementís projections, estimates and expectations include, but are not limited to, delays in the receipt of orders or in the shipment of products, delays in integration of operations of acquired businesses and the other factors referred to in the companyís Securities and Exchange Commission filings, including the S-4 registration statement of the company that became effective May 5, 1995. California Microwave, Inc. is a leader in wireless and satellite communications. It is the number one U.S. supplier of microwave radios and telecommunications satellite earth stations used in wireless communications. The Company operates facilities in seven states and sells into more than 110 countries. Its strategy calls for significant expansion in the wireless area. For further information about California Microwave, its markets and products, please visit us at our new Web site: http://www.calmike.com.