Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

This report contains forward-looking statements. These statements relate to future events or the Company's future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "except," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the Company, nor any other person, assumes responsibility for the accuracy and completeness of the forward-looking statements. The Company is under no obligation to update any of the forward-looking statements after the filing of this Quarterly Report on Form 10-Q to conform such statements to actual results or to changes in its expectations.

The following discussion should be read in conjunction with the Company's financial statements and the related notes and other financial information appearing elsewhere in this Form 10-Q. Readers are also urged to carefully review and consider the various disclosures made by the Company which attempt to advise interested parties of the factors which affect the Company's business, including without limitation the disclosures made under the caption "Management's Discussion and Analysis and Plan of Operation," under the caption "Risk Factors," and the audited financial statements and related notes included in the Company's Annual Report filed on Form 10-K for the year ended October 31, 2008 and other reports and filings made with the Securities and Exchange Commission.

Critical Accounting Policies

The financial statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of these financial statements requires the Company's management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and related notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. The Company's significant accounting policies are summarized in Note 1 to the financial statements contained in its Annual Report on Form 10-K filed for the fiscal year ended October 31, 2008.

Executive Overview

The Company markets connectors and cables to numerous industries for use in thousands of products, primarily for the wireless marketplace. In addition, to a limited extent, the Company also markets wireless products that incorporate connectors and cables. Since sales of RF connectors and cable assemblies represented 87% of the Company's net sales during the three month period ended January 31, 2009, the Company's results of operations and liquidity are principally dependent upon the results of its RF connector and cable operations.

Liquidity and Capital Resources

Management believes that existing current assets and the amount of cash it anticipates it will generate from current operations will be sufficient to fund the anticipated liquidity and capital resource needs of the Company for at least twelve months. The Company does not, however, currently have any commercial banking arrangements providing for loans, credit facilities or similar matters should the Company need to obtain additional capital. Management's beliefs that its existing assets and the cash expected to be generated from operations will be sufficient during the current fiscal year are based on the following:

· As of January 31, 2009, the amount of cash and cash equivalents was equal to $1,159,785 in the aggregate and the Company had $5,791,324 of investments in certificates of deposit.

· As of January 31, 2009, the Company had $15,720,320 in current assets, and $960,256 in current liabilities.

· As of January 31, 2009, the Company had no outstanding indebtedness (other than accounts payable, accrued expenses and income taxes payable).

The Company does not anticipate needing material additional capital equipment in the next twelve months as it purchased most of the necessary additions during the first quarter of fiscal 2009. In the past, the Company has financed some of its equipment and furnishings requirements through capital leases. No additional capital equipment purchases have been currently identified that would require significant additional leasing or capital expenditures during the next twelve months. Management also believes that based on the Company's current financial condition, the absence of outstanding bank debt and recent operating results, the Company would be able to obtain bank loans to finance its expansion, if necessary, although there can be no assurance any bank loan would be obtainable or, if obtained, would be on favorable terms or conditions.

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The Company recognized net income of $162,439 for the three months ended January 31, 2009. However, because the Company used $213,466 to pay income taxes, $111,041 to further reduce its accounts payable, and $330,804 for prepaid expenses and deposits, which outlays were partially offset by increased collections of its accounts receivable and a decrease in its inventory levels, the Company had a negative cash outlay of $58,924 in operating activities during the three months ended January 31, 2009. The Company liquidated $2,572,386 short term investments which consist mainly of Certificates of Deposit during the January 31, 2009 quarter and invested $1,500,000 of those funds in other Certificates of Deposit. As a result of these investment activities, the Company realized $957,661 from investing activities. During the fiscal quarter, the Company also used $799,790 of its funds to repurchase some of its outstanding common stock for a total of ($705,010) pursuant to the publicly announced stock repurchase program, and to pay dividends ($94,780). As a result, the Company's overall cash position increased by $98,947 during the three months ended January 31, 2009.

Trade accounts receivable (net of allowances for doubtful accounts) at January 31, 2008 decreased approximately 8%, or by $171,671 to $1,899,678 compared to the October 31, 2008 balance of $2,071,349. The decrease in accounts receivable is due to improved receivables management and collection efforts by the Company.

Inventories at January 31, 2009 decreased 3%, or $170,558 to $5,779,150 compared to $5,949,708 at October 31, 2008. The decrease in inventories is due to decreased sales during the three months ended January 31, 2008. We adjusted our inventory purchases to reflect the decrease in actual and anticipated sales.

Other current assets, including prepaid expenses and deposits, increased $330,840 to $548,283 as of January 31, 2009, from $217,443 on October 31, 2008 mainly as a result of the renewal of certain insurance contracts as well as the addition of prepaid inventory purchases.

Accounts payable at January 31, 2009 decreased $111,040 to $218,469 from $329,509 on October 31, 2008. The change in accounts payable is related to a decrease in sales and a decrease in the purchase of inventories during the current period.

Net cash provided by investing activities was $957,661 for the three months ended January 31, 2009 and was attributable to the purchase of $1,500,000 of available-for-sale securities, the sale of $2,572,386 of available-for-sale securities, and $114,725 of capital expenditures.

Net cash used in financing activities was $799,790 for the three months ended January 31, 2009, and was attributable to the purchase of $705,010 of treasury stock and $94,780 to pay cash dividends.

As of January 31, 2009, the Company had a total of $1,159,785 of cash and cash equivalents compared to a total of $1,060,838 of cash and cash equivalents as of October 31, 2008. However, the amount of short term investments in short-term investments decreased by $1,072,387 to $5,791,324 from $6,863,711 on October 31, 2008 due to certain of the Company's Certificates of Deposit maturing. Collectively, the amount of cash and available-for-sale securities that the Company held on January 31, 2009 decreased by $973,440 from the amount held on October 31, 2008 due to the cash flows from operations and cash flows from investing activities during the fiscal quarter ended January 31, 2009. The Company had working capital of $14,760,064 and a current ratio of approximately 16:1.

Results Of Operations

Three Months Ended 2009 vs. Three Months Ended 2008

Net sales in the current fiscal quarter ended January 31, 2009, decreased 6%, or $243,983 to $3,582,583 from $3,826,566 in the comparable fiscal quarter of prior year, due to decreased sales of the Company's connectors and radio modems. Sales decreased from the prior year's period due to current negative economic conditions, which caused some of the Company's distributors to carry lower inventory levels and in turn resulted in lower sales to these distributors in the first quarter of fiscal 2009.

The decrease in domestic sales was partially offset by increased foreign sales. Foreign sales during the fiscal quarter ended January 31, 2009 increased by $149,924 to $809,350 compared to foreign sales of $659,426 during the fiscal quarter ended January 31, 2008. Foreign sales represented approximately 23% and 17% of the Company's net sales during the fiscal quarters ended January 31, 2009 and 2008, respectively. The increase in foreign sales is primarily due to cable assembly sales to one major international customer in Israel.

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The Company's gross profit as a percentage of sales decreased 3% to 46% during the current fiscal quarter compared to 49% in the comparable fiscal quarter of prior year. The Company operates in three segments. Although the gross profit margin of the RF Connector and Cable Assembly segment decreased slightly (by 1%), the principal decreases in gross profits occurred in the RF Wireless segment and in the Bioconnect segment. The gross profit margin of the RF Wireless segment decreased 18% to 29% compared with 47% in the prior comparable quarter. This was due to a decrease in sales of wireless radio modems, which caused net sales to decrease by $165,624 to $181,169 from $346,793 in the prior comparable period. The Company was unable to reduce its fixed cost of goods in the RF Wireless segment to match the decrease in sales in that segment. The gross profit margin of the Medical Cabling and Interconnector segment decreased by 12% to 10% compared with 22% in the prior comparable quarter. This was due to an increase in sales of $70,753 from the prior comparable quarter offset by an increase of $89,808 in cost of goods sold from the prior comparable quarter. During the first quarter of fiscal 2009, the Company's fixed component cost of labor was higher than in the prior comparable quarter of fiscal 2008, which caused a decrease in gross margins in its segments. The increase in sales was primarily attributable to increased sales to one customer, while the increase in cost of goods sold was due to the fact that manufacturing labor costs increased from prior comparable quarter. Sales of the RF Connector and Cable assembly segment accounted for approximately 87% of the Company's total sales and 81% of the total cost of goods sold in the current three month period, compared to 86% of the Company's total sales and 83% of the total cost of goods sold in the comparable quarter of prior year.

Engineering expenses decreased 5%, or $16,666, to $255,726 from $272,392 in the comparable quarter of the prior year due to a decrease in contract labor and stock option expense.

Selling and general expenses decreased 6% or $82,752 to $1,248,791 from $1,331,543 in the comparable quarter of the prior fiscal year. The decrease in selling and general expenses was due primarily to a decrease in accounting and legal fees and stock option expense from the comparable period in 2008 and to other cost cutting initiatives that the Company commenced implementing as a result of future market uncertainties.

Other income for the first quarter of 2009 increased $12,642 over the same period in the prior year due to higher investment interest income reflecting an increase in interest rates attributable to the mix of the Company's investment portfolio.

As a result of the decrease in revenues and the decrease in gross profit as a percentage of sales, income before the provision for income taxes during the fiscal quarter ended January 31, 2009 decreased by $113,326 to $223,518. Income before provision for income taxes for the fiscal quarter ended January 31, 2008 was $336,844.

The provision for income taxes during the first quarter of 2009 was $61,078 (or an effective tax rate of approximately 27%), compared to $154,603 in the first quarter ended January 31, 2008 (or an effective tax rate of approximately 46%). The significant decrease in the tax rate in the first quarter of 2009 is the result of the Company recognized a one time tax benefit of approximately $32,000 that related to a domestic product activity adjustment. Without this adjustment, the effective tax rate for the three months ended January 31, 2009 would have been closer to the projected effective rate of 39.3% for fiscal 2009.

The combination of an overall decrease in sales compared to prior period, and a decrease in gross margins resulted in a $225,387 decrease in gross profits. The decrease in gross profits was offset slightly by decreases in engineering and selling and general expenses. As a result, the Company's operating income for the first fiscal quarter of 2009 decreased $125,969 to $141,169 from prior comparable quarter. Operating income for the three months ended January 31, 2008 was $267,138. The decrease in operating income was partially offset by higher interest income and lower income taxes. Accordingly, net income for the fiscal quarter ended January 31, 2009 was $162,439 compared to $182,241 for the same period last year.