5/8/02  11:36 AM

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549

                                    FORM 10-Q

               QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the Quarterly Period Ended March 31, 2002

                          Commission File Number I-4383

                         ESPEY MFG. & ELECTRONICS CORP.
               --------------------------------------------------
               (Exact name of registrant as specified in charter)

        NEW YORK                                14-1387171
------------------------          --------------------------------------
(State of Incorporation)          (I.R.S. Employer's Identification No.)

 233 Ballston  Avenue,  Saratoga  Springs,  New York             12866
--------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code          518-584-4100
                                                     ---------------------------

Number of shares  outstanding  of issuer's  class of common  stock  $.33-1/3 par
value as of May 4, 2002: 1,032,961.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                  YES  [X]              NO [_]


<PAGE>


                         ESPEY MFG. & ELECTRONICS CORP.

                                    I N D E X

PART I     FINANCIAL INFORMATION                                          PAGE

           Item 1     Financial Statements:

                           Consolidated Balance Sheets -
                           March 31, 2002 and June 30, 2001                 1


                           Consolidated Statements of Income -
                           Three and Nine Months Ended
                           March 31, 2002 and 2001                          3


                           Consolidated Statements of Cash Flows -
                           Nine Months Ended March 31, 2002 and 2001        4


                           Notes to Consolidated Financial Statements       5

           Item 2     Management's Discussion and Analysis of
                      Financial Condition and Results of Operations.        6


PART II    OTHER INFORMATION                                                9

           SIGNATURES                                                       9


<PAGE>


                         ESPEY MFG. & ELECTRONICS CORP.

                           Consolidated Balance Sheets

                        March 31, 2002 and June 30, 2001
                      ------------------------------------
                                   A S S E T S

<TABLE>
<CAPTION>

                                                          Unaudited
                                                             2002               2001
                                                           March 31           June 30
                                                         -----------        -----------

<S>                                                      <C>                <C>
CURRENT ASSETS:

Cash and cash equivalents                                $ 9,474,734        $ 5,200,736
Investment securities                                        352,000            737,600
Trade accounts receivable, net                             2,409,848          2,537,310
Other receivables                                             18,347             31,179
                                                         -----------        -----------
                          Total Receivables                2,428,195          2,568,489
                                                         -----------        -----------
Inventories:

        Raw materials and supplies                         1,226,228          1,036,726
        Work-in-process                                    4,400,461          2,658,436
        Costs relating to contracts in
              process, net of advance payments of
              $2,194,269 at March 31, 2002 and
              $289,000 at June 30, 2001                    6,577,601         11,237,515
                                                         -----------        -----------

                          Total Inventories               12,204,290         14,932,677
                                                         -----------        -----------

Deferred income taxes                                        140,569            145,609
Prepaid expenses and other current assets                    247,018            151,880
                                                         -----------        -----------

                          Total Current Assets            24,846,806         23,736,991
                                                         -----------        -----------

Net property, plant and equipment                          3,391,411          3,491,890
                                                         -----------        -----------

                          Total Assets                   $28,238,217        $27,228,881
                                                         ===========        ===========

</TABLE>


See accompanying notes to the consolidated financial statements

                                                                     (Continued)


                                       1


<PAGE>

                         ESPEY MFG. & ELECTRONICS CORP.

                     Consolidated Balance Sheets, Continued

                         March 31,2002 and June 30, 2001

                      ------------------------------------
                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>


                                                                        Unaudited
                                                                           2002                 2001
                                                                         March 31              June 30
                                                                       ------------         ------------

<S>                                                                    <C>                  <C>
CURRENT LIABILITIES:

          Accounts payable                                             $    562,575         $    334,772
          Accrued expenses:
              Salaries, wages and commissions                                84,304              124,081
              Employees' insurance costs                                      6,366               61,798
              Vacation                                                      348,874              345,546
              ESOP payable                                                  404,814                 --
              Dividends payable                                              77,209                 --
              Other                                                          34,022               37,711
          Payroll and other taxes withheld and accrued                       30,423               39,397
          Income taxes payable                                              232,773               61,440
          Deferred income taxes                                              58,752               58,752
                                                                       ------------         ------------
                               Total Current Liabilities                  1,840,112            1,063,497




STOCKHOLDERS' EQUITY:

          Common stock, par value .33-1/3 per share
              Authorized 10,000,000 shares; issued 1,514,937
              shares on March 31, 2002 and June 30, 2001
              Outstanding 1,031,961 and 1,029,461 on
              March 31, 2002 and June 30, 2001, respectively                504,979              504,979

          Accumulated other comprehensive loss                              (40,921)             (50,281)

          Capital in excess of par value                                 10,482,665           10,496,287

          Retained earnings                                              24,797,474           24,607,239
                                                                       ------------         ------------


          Less:  Common stock subscribed                                 (1,675,987)          (1,675,987)

                  Cost of 482,976 and 485,476 shares on
                  March 31, 2002 and June 30, 2001
                  respectively of common stock in treasury               (7,670,105)          (7,716,853)
                                                                       ------------         ------------
                               TOTAL STOCKHOLDERS' EQUITY                26,398,105           26,165,384
                                                                       ------------         ------------
                                        Total Liabilities And
                                        Stockholders' Equity           $ 28,238,217         $ 27,228,881
                                                                       ============         ============

</TABLE>

See accompanying notes to the consolidated financial statements


                                       2


<PAGE>


                         ESPEY MFG. & ELECTRONICS CORP.

                        Consolidated Statements of Income

               Three and Nine Months Ended March 31, 2001 and 2000
             ------------------------------------------------------


<TABLE>
<CAPTION>

                                              Unaudited                               Unaudited
                                            Three Months                             Nine Months
                                       2002              2001                  2002               2001
                                    -----------------------------          -------------------------------

<S>                                 <C>               <C>                  <C>                <C>
Net sales                           $ 4,616,587       $ 4,615,138          $ 14,401,620       $ 12,967,365
Cost of sales                         3,916,571         3,920,377            12,500,450         10,695,335
                                    -----------       -----------           -----------        -----------
         Gross profit                   700,016           694,761             1,901,170          2,272,030

Selling, general and
   administrative expenses              408,350           456,964             1,329,484          1,461,207
                                    -----------       -----------           -----------        -----------
         Operating income               291,666           237,797               571,686            810,823
                                    -----------       -----------           -----------        -----------

Other income

         Interest and
           dividend income               38,179            59,716               153,385            193,462
         Other                          (26,061)            5,575               (13,167)            31,199
                                    -----------       -----------           -----------        -----------
                                         12,118            65,291               140,218            224,661
                                    -----------       -----------           -----------        -----------

Income before income taxes              303,784           303,088               711,904          1,035,484

Provision for income taxes               91,140            97,534               213,571            357,242
                                    -----------       -----------           -----------        -----------


                  Net Income        $   212,644       $   205,554           $   498,333        $   678,242
                                    ===========       ===========           ===========        ===========

Income per share:

Basic and diluted
   income per share                 $       .20       $       .20           $       .48        $       .66
                                    -----------       -----------           -----------        -----------

Weighted average number
   of shares outstanding
         Basic                        1,029,850         1,029,461             1,029,589          1,032,048
         Diluted                      1,034,961         1,032,445             1,034,083          1,034,469
                                    ===========       ===========           ===========        ===========

</TABLE>


See accompanying notes to the consolidated financial statements


                                       3


<PAGE>


                         ESPEY MFG. & ELECTRONICS CORP.
                      Consolidated Statements of Cash Flows
                    Nine Months Ended March 31, 2001 and 2000

<TABLE>
<CAPTION>

                                                                                     Unaudited
                                                                                     March 31,
                                                                              2002              2001
                                                                          -----------         -----------
<S>                                                                       <C>                 <C>
Cash Flows From Operating Activities:

       Net income                                                         $   498,333         $   678,242

       Adjustments to reconcile net income to net cash
       provided by (used in)operating activities:

       Depreciation                                                           392,422             469,121
       (Gain)/loss on disposal of assets                                       27,082             (14,721)
       Deferred Income Tax Benefit                                                872                  --
       Changes in assets and liabilities:
              Decrease in receivables                                         140,292             972,737
              Decrease (Increase) in inventories                            2,728,387            (392,511)
              (Increase) Decrease in prepaid expenses
                  and other current assets                                    (95,138)             46,818
              Increase (Decrease) in accounts payable                         227,803             (25,725)
              Decrease in accrued salaries, wages
                  and commissions                                             (39,777)            (83,945)
              (Decrease)Increase in accrued employee                          (55,432)             71,479
                  insurance costs
              (Decrease) Increase in other accrued expenses                    (3,689)              4,640
              Increase in vacation accrual                                      3,329              42,131
              (Decrease) Increase in payroll & other
                  taxes withheld and accrued                                   (8,974)              4,337
              Increase in income taxes payable                                171,334             166,324
              Increase in ESOP contributions                                  404,814             409,541
                                                                          -----------         -----------
                             Net cash provided by
                             operating activities                           4,391,658           2,348,468
                                                                          -----------         -----------
Cash Flows From Investing Activities:

       Proceeds from maturity of investment securities                        399,128                  --
       Additions to property, plant & equipment                              (330,975)           (450,007)
       Proceeds on sale of assets, net                                         11,950              14,750
                                                                          -----------         -----------
                             Net cash provided by
                             (used in) investing activities                    80,103            (435,257)
                                                                          -----------         -----------
Cash Flows From Financing Activities:

       Dividends on common stock                                             (230,888)           (103,362)
       Purchase of treasury stock                                                   -             (70,891)
       Proceeds from exercise of stock options                                 33,126                   -
                                                                          -----------         -----------
                             Net cash used in
                             financing activities                            (197,762)           (174,253)
                                                                          -----------         -----------
Increase in cash and cash equivalents                                       4,273,999           1,738,958
Cash and cash equivalents, beginning of period                              5,200,735           2,367,191
                                                                          -----------         -----------
Cash and cash equivalents, end of period                                    9,474,734         $ 4,106,149
                                                                          -----------         -----------
Income Taxes Paid            $    42,238                                  $   175,000
                                                                          ===========         ===========
Noncash Financing Activities
       Dividends Payable                                                  $    77,209         $    51,473
                                                                          ===========         ===========

</TABLE>

See accompanying notes to the consolidated financial statements


                                       4


<PAGE>


                         ESPEY MFG. & ELECTRONICS CORP.

                          Notes to Financial Statements

                          -----------------------------

1.   In the  opinion  of  management  the  accompanying  unaudited  consolidated
     financial  statements  contain all  adjustments  (consisting of only normal
     recurring  adjustments)  necessary for a fair  presentation for results for
     such  periods.  The  results  for any  interim  period are not  necessarily
     indicative of the results to be expected for the full fiscal year.  Certain
     information  and  footnote   disclosures  normally  included  in  financial
     statements  prepared  in  accordance  with  generally  accepted  accounting
     principles  have been  condensed  or omitted.  These  financial  statements
     should  be read in  conjunction  with the  Company's  most  recent  audited
     financial statements included in its 2001 Form 10-K.

2.   Other income consists  principally of interest on money market accounts and
     dividends on equity securities.

3.   For purposes of the  statements  of cash flows,  the Company  considers all
     liquid debt instruments with original maturities of three months or less to
     be cash equivalents.

4.   Basic  earnings  per share  excludes  dilution  and is computed by dividing
     income  available to common  stockholders by the weighted average number of
     common  shares  outstanding  for the  period.  Diluted  earnings  per share
     reflects the  potential  dilution  that could occur if  securities or other
     contracts  to issue Common  Stock were  exercised or converted  into Common
     Stock or resulted in the  issuance of Common  Stock that then shared in the
     Income of the Company.

5.   In fiscal 1989 the Company  established  an Employee  Stock  Ownership Plan
     (ESOP) for eligible  non-union  employees.  The ESOP used the proceeds of a
     loan from the Company to purchase  316,224  shares of the Company's  common
     stock  for   approximately   $8.4  million  and  the  Company   contributed
     approximately  $400,000 to the ESOP, which was used by the ESOP to purchase
     an additional 15,000 shares of the Company's common stock.

     As of March 31, 2002 there were 199,876 shares allocated to participants.


6.   Total comprehensive income consists of:


<TABLE>
<CAPTION>

                                                     Three Months Ended                Nine Months Ended
                                                          March 31,                        March 31,
                                                      2002          2001              2002          2001
                                                    --------      --------          --------      --------

<S>                                                 <C>           <C>               <C>           <C>
Net income                                          $212,644      $205,554          $498,333      $678,242

Accumulated other comprehensive income:

Unrealized gain (loss) on
available for sale securities                        (11,440)       26,884             9,360        60,684
                                                    --------      --------         ---------      --------

Total comprehensive income                          $201,204      $232,438          $507,693      $738,926
                                                    ========      ========         =========      ========

</TABLE>


                                       5


<PAGE>


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

Critical Accounting Policies and Estimates

We believe our most critical accounting policies include revenue recognition and
cost estimation on our contracts.

Revenue recognition and cost estimation

A significant portion of our business is comprised of development and production
contracts which are accounted for under the provisions of the American Institute
of  Certified  Public  Accountants  (AICPA)  Statement  of  Position  No.  81-1,
"Accounting for  Performance of  Construction-Type  and Certain  Production-Type
Contracts." Generally revenue on long-term fixed-price contracts are recorded on
a  percentage  of  completion  basis using units of delivery as the  measurement
basis for progress toward completion.

Contract  accounting  requires  judgment relative to estimating costs and making
assumptions  related to technical issues and delivery  schedule.  Contract costs
include material,  subcontract costs, labor and an allocation of indirect costs.
The  estimation  of cost at  completion  of a contract  is  subject to  numerous
variables  involving  contract  costs and  estimates as to the length of time to
complete the contract.  Given the  significance of the estimation  processes and
judgments  described above, it is possible that materially  different amounts of
contract  costs  could be  recorded if  different  assumptions  were used in the
estimation of cost at  completion.  When a change in contract value or estimated
cost is determined, changes are reflected in current period earnings.

Results of Operations

Net  sales  for the nine  months  ended  March  31,  2002,  (fiscal  2002)  were
$14,401,620  as compared  to  $12,967,365  for the same  period in 2001,  an 11%
increase. Net sales for the three months ended March 31, 2002 were $4,616,587 as
compared to $4,615,138  for the same period in 2001.  The Company's  increase in
sales for the three and nine month  periods ended March 31, 2002, as compared to
March 31,  2001,  is due to an  increase  in  antenna,  radar  transmitter,  and
transmitter component shipments.

During the first nine months of fiscal  2002 gross  profits as a  percentage  of
sales  decreased  approximately  4.3% as compared  with the first nine months of
fiscal 2001.  For the three  months  ended March 31, 2002 gross profit  remained
consistent as compared to the same period in 2001.

Net income for the nine months  ended  March 31,  2002 was  $498,333 or $.48 per
share compared to $678,242 or $.66 per share for the corresponding  period ended
March 31, 2001.  For the three months ended March 31, 2002 net income  increased
nominally as compared to the same period in 2001.

The  decrease in gross  profit and net income for the  nine-month  period  ended
March 31, 2002, was a result of the Company investing  engineering  resources in
several new customer  specific  programs and  products.  These  engineering  and
prototype  developmental  expenditures,  which have a negative impact on current
operations,  in management's  estimate,  should improve the operating results of
the Company when future  production  orders are  received.  Gross profit and net
income for the  three-month  period ended March 31, 2002 as compared to the same
period last year remained  relatively  consistent with slight  increases in both
categories.  Management  continues to evaluate the Company's workforce to ensure
that  production  and overall  execution  of the backlog  orders and  additional
anticipated  orders  are  successfully  performed  in a cost  effective  manner.
Employment at March 31, 2002 was 189 people  compared to March 31, 2001 when 217
people were employed.

The backlog at March 31, 2002 was  approximately  $  26,212,000,  an increase of
approximately $1 million from the prior year. Management continues to market the
engineering capabilities and products of the Company. New orders for the quarter
totaled approximately $5 million.


                                       6


<PAGE>


Selling, general and administrative expenses were $1,329,484 for the nine months
ended March 31, 2002, a decrease of $131,723,  or 9.0%,  as compared to the nine
months ended March 31, 2001. Selling,  general and administrative  expenses were
$408,350 for the three  months  ended March 31, 2002, a decrease of $48,614,  or
10.6%,  compared to the three  months  ended  March 31,  2001.  The  decrease is
primarily  due to a decrease in  employees,  selling  expenses and  professional
fees.

Other  income for the three and nine months  ended March 31, 2002  decreased  as
compared to the three and nine months ended March 31, 2001 due to lower interest
income for both periods  associated  with lower  interest rates and a charge for
the loss on disposal of fixed  assets.  The  Company  does not believe  there is
significant risk associated with its investment policy,  since a majority of the
investments are preferred equity securities and a money market account.


Liquidity and Capital Resources

As of March 31, 2002, the Company had working capital of $ 23.0 million compared
to $22.7 million at March 31, 2001. The Company meets its  short-term  financing
needs through cash from  operations and when  necessary,  from its existing cash
and cash equivalents.

The table below presents the summary of cash flow for the periods indicated:

<TABLE>
<CAPTION>
                                                        Nine Months Ended March 31,
                                                       -----------------------------
                                                         2002                 2001
                                                       --------             --------

<S>                                                   <C>                 <C>
Net cash provided by operating activities             $4,391,658          $ 2,348,468
Net cash provided by (used in) investing activities       80,103             (435,257)
Net cash used in financing activities                   (197,762)            (174,253)

</TABLE>


Net cash provided by operating  activities  fluctuates between periods primarily
as a result of  differences  in net  income,  the  timing of the  collection  of
accounts  receivable,  purchase  of  inventory,  level of sales and  payment  of
accounts  payable.  The  decrease in net cash  provided  by (used in)  investing
activities  is due to the maturity of investment  securities  with no offsetting
purchase of new  investments in the prior year. The increase in net cash used in
financing  activities is due to increased  dividend payments offset partially by
decreased treasury stock purchases.

The Company currently  believes that the cash generated from operations and when
necessary,  from  cash  and cash  equivalents,  will be  sufficient  to meet its
long-term funding requirements.  Management if necessary,  has at its disposal a
$3,000,000 line of credit to help fund further growth. For the first nine months
of fiscal 2002 capital expenditures were approximately $331,000.

Since the debt of the Company's  ESOP is not to an outside party the Company has
eliminated from the  Consolidated  Statements of Income the offsetting  items of
interest income and interest expense relating to ESOP.

During the nine months ended March 31, 2002 and 2001, the Company repurchased 0,
and 4,170 shares  respectively,  of its common stock from the Company's ESOP and
through other public  transactions.  As of March 31, 2002,  under existing Board
authorization, $854,859 could be utilized to repurchase shares of company stock.
As of March 31, 2002,  2,500 stock  options were  exercised  under the Company's
existing stock option plan.


                                       7


<PAGE>


CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
                    SECURITIES LITIGATION REFORM ACT OF 1995

It  should  be  noted  that in this  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations are  "forward-looking  statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the  Securities  Exchange Act of 1934,  as amended,  and are made
pursuant to the safe harbor  provisions  of the  Private  Securities  Litigation
Reform  Act of  1995.  The  terms  "believe,"  "anticipate,"  "intend,"  "goal,"
"expect," and similar expressions may identify forward-looking statements. These
forward-looking  statements  represent the  Company's  current  expectations  or
beliefs  concerning  future events.  The matters covered by these statements are
subject to certain risks and  uncertainties  that could cause actual  results to
differ  materially  from  those  set  forth in the  forward-looking  statements,
including  the  Company's  dependence on timely  development,  introduction  and
customer  acceptance  of new  products,  the  impact  of  competition  and price
erosion,  as well as supply and  manufacturing  constraints  and other risks and
uncertainties. The foregoing list should not be construed as exhaustive, and the
Company  disclaims any  obligation  subsequently  to revise any  forward-looking
statements to reflect events or circumstances  after the date of such statements
or to reflect the occurrence of anticipated or unanticipated events. The Company
wishes  to  caution   readers   not  to  place   undue   reliance  on  any  such
forward-looking statements, which speak only as of the date made.


                                      8


<PAGE>


                         ESPEY MFG. & ELECTRONICS CORP.

                    PART II: Other Information and Signatures

Item 4.       Submission of Matters to a Vote of Security Holders

              None

Item 5.       Other Information

              None

Item 6.       Exhibits and Reports on Form 8-K

              None



                               S I G N A T U R E S

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                          ESPEY MFG. & ELECTRONICS CORP.



                                          /s/ Howard Pinsley
                                          --------------------------------
                                          Howard Pinsley, President and
                                          Chief Executive Officer

                                          /s/ David O'Neil
                                          --------------------------------
                                          David O'Neil, Treasurer and
                                          Principal Financial Officer

  May 9, 2002
---------------
     Date