The following is management's discussion and analysis of certain significant factors that have affected the Company's financial condition and operating results for the period included in the consolidated financial statements in Item 1.

Company Overview

PHAZAR CORP's continuing operation is that of its subsidiaries, Antenna Products Corporation, Phazar Antenna Corp., Tumche Corp. and Thirco, Inc. As previously discussed in Item 1, for the purpose of this discussion, all results of Phazar Antenna Corp. are included with the results of Antenna Products Corporation. The management discussion presented in this item relates to the operations of subsidiary units and the associated consolidated financials.

PHAZAR CORP operates as a holding company with Antenna Products Corporation, Phazar Antenna Corp., Tumche Corp. and Thirco, Inc. as its wholly owned subsidiaries. Antenna Products Corporation and Phazar Antenna Corp. are operating subsidiaries with Thirco, Inc. serving as an equipment leasing company to PHAZAR CORP's operating units. Tumche Corp. has no sales or operations. Antenna Products Corporation designs, manufactures and markets antenna systems, towers and communication accessories worldwide. The United States Government, military and civil agencies and prime contractors are Antenna Products Corporation's principal customers. Phazar Antenna Corp. designs and markets fixed and mobile antennas for commercial wireless applications that include cellular, PCS, ISM (instrument scientific medical), AMR (automatic meter reading), wireless internet, wireless local area network, and other WiMax market applications.

PHAZAR CORP is primarily a build-to-order company. As such, most United States government and commercial orders are negotiated firm-fixed price contracts. PHAZAR CORP's sales to major customers at May 31, 2008, as a percentage of total sales were United States Government 24%, Page Iberica, S.A., 12% and General Dynamics 9% and for the nine month period ending February 28, 2009, PHAZAR CORP's sales to major customers as a percentage of sales were United States Government 13%, Halliburton Energy Services 9% and Serco Charleston 8%.

Executive Level Overview

The following table presents selected data of PHAZAR CORP. This historical data should be read in conjunction with consolidated financial statements and the related notes.

                             Three Month Period Ending Nine Month Period Ending
                             February 28, February  29,February 28, February 29,
                             ------------ ------------ ------------ ------------
                                 2009         2008         2009         2008

Net Sales                    $ 1,512,889  $ 3,204,698  $ 5,649,768  $ 6,793,815
Gross Profit Margin %              36.8%        37.7%        33.3%        38.0%

Operating Profit (loss)      $  (383,280) $   443,318  $  (665,282) $   786,570
Operating Profit (loss)
       Margin                     (25.3%)       13.8%       (11.8%)       11.6%

Net income (loss)            $  (241,039) $   334,267  $  (299,950) $   624,733
Net income (loss) per share  $     (0.10) $      0.14  $     (0.13) $      0.27

Total assets                 $ 8,584,265  $ 8,602,062  $ 8,584,265  $ 8,602,062

Long term debt               $         -  $         -  $         -  $         -
Total liabilities            $   612,677  $   564,722  $   612,677  $   564,722

Capital expenditures         $    31,262  $         -  $   207,394  $         -
Dividends                    $         -  $         -  $         -  $         -

Results of Operations

Third Quarter Ended February 28, 2009 ("2009"), Compared to Third Quarter Ended February 29, 2008 ("2008").

PHAZAR CORP's consolidated sales from operations were $1,512,889 for the quarter ended February 28, 2009 compared to sales of $3,204,698 for the third quarter ended February 29, 2008. The Company's sales decreased $1,691,809, or 53% in the third quarter of fiscal year 2009. Much of the 53% decrease in revenues is attributable to the completion of a major antenna project for Page Iberica S.A. totaling approximately one million dollars in the third quarter last year. However, a slow-down in government and government related contracting activity was also a contributing factor in lower revenues for the three month period ended February 28, 2009.

Cost of sales and contracts for the operations were $955,875 for the quarter ended February 28, 2009 compared to $1,995,111 for the third quarter ended February 29, 2008, down $1,039,236, or 52%. As gross profit margins remained relatively constant the decline in cost of sales is directly related to the 53% decline in revenues for the third quarter of 2009.

The gross profit margin for the third quarter of fiscal year 2009 was 36.8% compared to 37.7% for the third quarter of last year.

PHAZAR CORP's operating profit margin for the third quarter of fiscal year 2009 was -25.3% compared to 13.8% in the third quarter of fiscal year 2008.

Discretionary product development spending was $345,363, or 23% of sales, compared to $209,045, or 7% of sales for the comparable period last year. The spending level increased as the Company continues to develop the new mesh radio wireless networking product line.

Sales and administration expenses were higher in the third quarter of the fiscal year 2009, $940,294 versus $766,269 for the third quarter of fiscal year 2008. The $174,025, or 23% increase in sales and administration expense is due to higher compensation costs associated with newly hired employees, incremental research and development costs during the quarter for continued development of our mesh radio wireless network product line and an increase in legal and professional fees primarily associated with the on-going FINRA arbitration claim against UBS Financial Services. Sales and administration expense as a ratio of sales were 62% in the third quarter of this year compared to 24% in the same period last year.

Nine month period ended February 28, 2009 compared to February 29, 2008.

Consolidated sales from operations for PHAZAR CORP were $5,649,768 for the nine month period ended February 28, 2009 compared to sales of $6,793,815 for the same period last year. The Company's sales decreased $1,144,047, or 17% for the nine month period due to lower level of shipments in the antenna product lines.

Cost of sales and contracts for the operations were $3,770,616 for the nine month period ended February 28, 2009 compared to $4,215,311 for nine month period ended February 29, 2008. The Company's cost of sales decreased $444,695, or 11% due to the 17% decline in revenues and a 13% reduction in the gross profit margin percentage.

The gross profit margin for the first nine months of fiscal year 2009 was 33.3% compared to 38.0% for the same period in the prior year due to higher raw material costs on firm fixed price contracts earlier in the year.

Sales and administration expenses were higher in the first nine months of fiscal year 2009, $2,544,434 compared to $1,791,934 in 2008. The $752,500 or 42% increase in sales and administration expense is due to a rise in compensation expense, legal and professional fees primarily associated with the FINRA arbitration claim against UBS Financial Services and incremental research and development costs during the period for continued development of our new mesh radio wireless networking product line.

Other income for the nine month period ended February 28, 2009, is $175,831 up from $130,518 for the same period in the prior year. The increase of $45,313 or 35% is primarily due to interest income on higher level of monies invested in auction rate securities and other investments in certificates of deposits.

The net loss for the nine month period was $299,950, or $0.13 per share compared to net income of $624,733, or $0.27 per share for the comparable period in the prior year. United States Government contracts contain a provision that they may be terminated at any time for the convenience of the Government. In such event, the contractor is entitled to recover allowable costs plus any profits earned to the date of termination. The possibility that Government priorities could change, causing a delay or cancellation of this contract and any potential follow-on work, makes it impossible to accurately predict whether revenues will increase or decrease in the upcoming year.

Sources of Liquidity

Funds generated from operations are the major internal sources of liquidity and are supplemented by funds derived from capital markets, principally bank

facilities. PHAZAR CORP has a $2.0 million revolving note facility with a bank collateralized by the Company's inventory and accounts receivable. The interest rate is established as equal to Wall Street prime and is subject to a loan agreement with restrictive covenants. The most restrictive financial covenant requires the Company to maintain $4.0 million in tangible net worth and to maintain $2.5 million of working capital. At February 28, 2009, the Company had a tangible net worth of $8.0 million and had working capital of $6.8 million. As of February 28, 2009, Antenna Products Corporation had drawn $0 of the $2.0 million line of credit with $2.0 million of the borrowing base available and unused. The revolving credit facility was renewed with a $2.0 million limit on October 3, 2008 for a period of one year. PHAZAR CORP believes that its cash and the credit available at February 28, 2009, are sufficient to fund the Company's operations for at least 12 months.

During October, 2008, the Massachusetts Education Financing Authority announced the redemption of all PHAZAR CORP's $2.65 million long term marketable securities at par plus accrued interest of approximately $36,000. Funding was received during the month of October, with $1 million used to pay off the prior advance from UBS Financial Services, Inc. taken in the form of a margin loan collateralized by the long term marketable securities.

Capital Resources

Management of the operating subsidiaries evaluates the facilities and review equipment requirements for existing and projected contracts on a regular basis. An annual capital plan is generated by management and submitted to the Board of Directors for review and approval. In the third quarter of fiscal year 2009 there were $31,262 of capital expenditures for new and replacement equipment. The Company anticipates that the existing facilities and equipment are adequate to handle the projected business in fiscal year 2009 and intends to limit the 2009 capital program to less than $350,000 for improvements and new equipment.

At February 28, 2009, PHAZAR CORP had cash and cash equivalents of $3.8 million. There are no deferred revenues at February 28, 2009.

Cash Flows

Operating Activities

Cash provided (used) by operating activities for the third quarter of fiscal year 2009 was $(1,109,283) compared to $6,847 for the same period in prior year. Inventories increased to $2,502,826 at February 28, 2009 from $1,777,335 at May 31, 2008 due to normal completion and shipment of orders to customers. The decrease in accounts receivable to $674,477 at February 28, 2009 from $987,258 at May 31, 2008 is due primarily to timing and reduction of shipments. Net income (loss) adjusted for non cash charges was $(2,504) for the nine month period ending February 28, 2009 compared to $815,340 for the same period in the prior year.

Investing Activities

Cash of $2,415,818 was provided in investing activities during the nine month period ending February 28, 2009, which consists of the $2.65 million of redemption of long term marketable securities less capital expenditures of $207,394 and $26,788 for the purchase of treasury stock. Cash was not used in investing activities during the nine month period ending February 29, 2008.

Financing Activities

There were no financing activities requiring cash during the nine month period ending February 28, 2009. The financing activities through the third quarter of fiscal year 2008 consisted primarily of proceeds from the exercise of stock options and the FIT benefit resulting from the exercise of stock options. At February 28, 2009 and February 29, 2008, PHAZAR CORP had no long-term debt outstanding.