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 December 31, 1999

                          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 February 10, 2000: 1,043,631.

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 -
                          December 31, 1999 and June 30, 1999                 1


                          Consolidated Statements of Income -
                          Three and Six Months Ended
                          December 31, 1999 and 1998                          3


                          Consolidated Statements of Cash Flows -
                          Six Months Ended December 31, 1999 and 1998         4


                          Notes to Consolidated Financial Statements          5

         Item 2           Management's Discussion and Analysis of             7
                          Financial Condition and Results of
                          Operations.

PART II  OTHER INFORMATION                                                    10

                          SIGNATURES                                          11



<PAGE>



                         ESPEY MFG. & ELECTRONICS CORP.

                           Consolidated Balance Sheets

                       December 31, 1999 and June 30, 1999
                      ------------------------------------
                                   A S S E T S

<TABLE>
<CAPTION>
                                                            Unaudited
                                                              1999            1999
                                                           December 31       June 30
                                                           -----------     -----------
CURRENT ASSETS:
<S>                                                       <C>             <C>
         Cash and cash equivalents                        $ 6,782,624     $ 2,364,335

         Investments securities                               663,000       3,674,169

         Trade accounts receivable net of
            $3,000 allowance at December 31, 1999
            and June 30, 1999                               1,939,539       4,440,177
         Other receivables                                      9,614          10,941
                                                          -----------     -----------
                           Total Receivables                1,949,153       4,451,118
                                                          -----------     -----------
         Inventories:

            Raw materials and supplies                        602,182         546,007
            Work-in-process                                 2,104,681       2,639,330
            Costs relating to contracts in
            Process, net of advance payments of
              $775,400 at December 31, 1999 and $0 at
              June 30, 1999                                 9,249,057       7,856,607
                                                          -----------     -----------

                           Total Inventories               11,955,920      11,041,944
                                                          -----------     -----------

         Deferred income taxes                                362,060         327,497
         Prepaid expenses and other current assets            193,216         232,051
                                                          -----------     -----------

                           Total Current Assets            21,905,973      22,091,114
                                                          -----------     -----------

Deferred Income Taxes                                          42,367          42,367

Net Property, Plant and Equipment                           3,396,059       3,261,231
                                                          -----------     -----------

                           Total Assets                   $25,344,399     $25,394,712
                                                          ===========     ===========
</TABLE>


See accompanying notes to the financial statements
                                                                     (Continued)

                                      -1-
<PAGE>
                         ESPEY MFG. & ELECTRONICS CORP.

                     Consolidated Balance Sheets, Continued

                       December 31, 1999 and June 30, 1999
                      ------------------------------------
                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                                                Unaudited
                                                                                  1999             1999
                                                                               December 31        June 30
                                                                              ------------      ------------
CURRENT LIABILITIES:
<S>                                                                          <C>              <C>
         Accounts Payable                                                    $    428,333     $     285,281
         Accrued expenses:
            Salaries, wages and commissions                                       364,540           498,695
            Employees' insurance costs                                             62,318            58,539
            Vacation                                                              216,837           211,162
            ESOP payable                                                          274,078              --
            Other                                                                 12,184             41,251
            Payroll and other taxes withheld
                  and accrued                                                     110,772           116,211
            Income taxes payable                                                   27,597            62,987
                                                                             -------------     ------------
                           TOTAL CURRENT LIABILITIES                            1,496,659         1,274,126
STOCKHOLDERS' EQUITY:

         Common  stock,  par value  .33-1/3  per  share.
         Authorized  10,000,000  shares;
         issued  1,514,937  shares December 31, 1999
         and June 30, 1999. Outstanding  1,048,631  and
         1,063,658 on December 31, 1999 and June 30, 1999,
         respectively                                                             504,979           504,979

         Accumulated other  comprehensive  income,  net of income
         tax benefit of $56,380 and $25,557 at December 31, 1999
         and June 30,1999,
         respectively                                                             (99,620)          (38,175)

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

         Retained earnings                                                     23,175,119        23,193,297
                                                                             -------------      ------------
                                                                               34,076,765        34,156,388

         Less:  Common stock subscribed                                        (2,793,312)       (2,793,312)

            Cost of 466,306 and 451,279 shares
            on December 31, 1999 and June30, 1999
            respectively of common stock
            in treasury                                                        (7,435,713)       (7,242,490)
                                                                             ------------      ------------
                           TOTAL STOCKHOLDERS' EQUITY                          23,847,740        24,120,586
                                                                             ------------      ------------
                                    TOTAL LIABILITIES AND
                                    STOCKHOLDERS' EQUITY                     $ 25,344,399      $ 25,394,712
                                                                             ============      ============


See accompanying notes to the financial statements

                                      - 2 -
<PAGE>


                         ESPEY MFG. & ELECTRONICS CORP.

                        Consolidated Statements of Income

              Three and Six Months Ended December 31, 1999 and 1998
             ------------------------------------------------------




                                                   Unaudited                         Unaudited
                                                  Three Months                      Six Months
                                              1999            1998            1999            1998
                                          ------------------------------------------------------------

<S>                                      <C>             <C>             <C>             <C>
Net Sales                                $ 3,412,424     $ 3,134,377     $ 6,711,404     $ 5,658,362

Cost of sales                              2,918,399       2,508,924       5,803,765       4,634,203
                                         -----------     -----------     -----------     -----------

         Gross profit                        494,025         625,453         907,639       1,024,159

Selling, general and administrative
 expenses                                    533,327         532,737       1,025,951         938,518
                                         -----------     -----------     -----------     -----------
         Operating income (loss)             (39,302)         92,716        (118,312)         85,641
                                         -----------     -----------     -----------     -----------

Other income

         Interest and dividend income        111,922         143,138         202,587         292,241
         Sundry income (loss)                   (528)            255          52,413             270
                                         -----------     -----------     -----------     -----------
                                             111,394         143,393         255,000         292,511
                                         -----------     -----------     -----------     -----------

Income before income taxes                    72,092         236,109         136,688         378,152

Provision for income taxes                    25,000          70,000          50,000         128,000
                                         -----------     -----------     -----------     -----------


                  Net Income             $    47,092     $   166,109     $    86,688     $   250,152
                                         ===========     ===========     ===========     ===========

Income per share:


Basic and dilutive income per share .     $       .04     $       .15      $       .08     $       .23
                                          -----------     -----------      -----------     -----------


Weighted average number of shares
         outstanding ................       1,048,631       1,104,675        1,050,754       1,106,557
                                          ===========     ===========      ===========     ===========
</TABLE>


See accompanying notes to financial statements

                                      - 3 -
<PAGE>


                         ESPEY MFG. & ELECTRONICS CORP.
                      Consolidated Statements of Cash Flows
                 Six Months Ended December 31, 1999 and 1998

<TABLE>
<CAPTION>
                                                                                          Unaudited
                                                                                         December 31,

                                                                                     1999             1998
                                                                                 -----------      -----------
Cash Flows From Operating Activities:
<S>                                                                             <C>               <C>
         Net income                                                             $    86,688       $   250,152

         Adjustments  to reconcile  net income to net
         cash provided by operating activities:

         Depreciation                                                               226,510           216,811
         Changes in assets and liabilities:
                  Decrease (increase) in receivables                              2,501,964          (236,213)
                  Increase in inventories                                          (913,976)       (1,239,360)
                  Decrease (increase) in prepaid expenses and other
                   current assets                                                    38,835          (160,602)
                  Increase in accounts payable                                      143,052           509,921
                  (Decrease)increase in accrued salaries,
                   wages and commissions                                           (134,155)           27,098
                  Increase in accrued employee insurance costs                        3,779             6,916
                  (Decrease)increase in other accrued expenses                      (29,067)            1,701
                  Increase in vacation accrual                                        5,675                 -
                  (Decrease)increase in payroll & other taxes withheld
                   and accrued                                                       (5,439)           58,501
                  Decrease in deferred income taxes                                       -            10,800
                  (Decrease)in income taxes payable                                 (35,390)                -
                  Increase in ESOP contributions                                    274,078           279,331
                                                                                -----------       -----------

                                            Net cash provided by (used in)
                                            operating activities                  2,162,555          (274,944)
                                                                                -----------       -----------
Cash Flows From Investing Activities:

         Proceeds from maturity of investment securities                          2,915,161         6,000,000
         Purchases of investment securities                                              --        (6,011,032)
         Additions to property, plant & equipment                                  (361,342)         (192,516)
                                                                                -----------       -----------
                                            Net cash provided by (used in)
                                            investing activities                  2,553,819          (203,548)
                                                                                -----------       -----------
Cash Flows From Financing Activities:

         Dividends on common stock                                                 (104,862)                -
         Purchase of treasury stock                                                (193,225)         (120,464)
                                                                                -----------       -----------
                                            Net cash used in
                                            financing activities                   (298,085)         (120,464)
                                                                                -----------       -----------
Increase (decrease) in cash and cash equivalents                                  4,418,289          (598,956)

Cash and cash equivalents, beginning of period                                    2,364,335         2,591,739
                                                                                -----------       -----------
Cash and cash equivalents, end of period                                        $ 6,782,624       $ 1,992,783
                                                                                -----------       -----------

Income Taxes Paid                                                               $    80,000       $    -
                                                                                ===========       ===========
</TABLE>
see accompanying notes to the 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 1999 Form 10-K.

2.   The earnings per share  computations  for the six months ended December 31,
       1999 were based on 1,050,754  shares and on 1,106,557 shares for December
       31, 1998.  These  represent the average number of shares  outstanding for
       each respective period.

3.   Other income  consists  principally of interest on Certificates of Deposit,
     Treasury Bills, money market accounts and dividends on equity securities.

4.   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.

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.

     The loan from the Company to the ESOP is repayable in annual

                                      - 5 -
<PAGE>

       installments of $1,039,605,  including  interest,  through June 30, 2004.
       Interest is payable at a rate of 9% per annum.  The Company's  receivable
       from the ESOP is recorded as common stock  subscribed in the accompanying
       balance sheets.

       Each year, the Company will make  contributions to the ESOP which will be
       used to make loan  interest and  principal  payments.  With each loan and
       interest  payment,  a portion of the common  stock will be  allocated  to
       participating  employees.  As of  December  31,  1999 there were  161,125
       shares allocated to participants.

6.   Total comprehensive income consists of:

<TABLE>
<CAPTION>

                                                 Three Months Ended           Six Months Ended
                                                    December 31,                 December 31,
                                                 1999          1998           1999         1998
                                               --------      --------        ------       ------

<S>                                          <C>             <C>            <C>           <C>
Net income                                   $ 47,092        166,109        86,688        250,152

Accumulated other comprehensive income:

Unrealized gain (loss) on
available for sale securities                 (28,165)             -       (61,445)             -
                                             --------       --------      ---------      --------

Total comprehensive income                     18,927        166,109        25,243        250,152
                                             ========       ========      =========      ========

</TABLE>


                                      - 6 -
<PAGE>
7.   Stock Options

       On  October  29,  1999,  the  Board of  Directors  approved,  subject  to
       shareholder  approval,  the 2000 Stock Option Plan (the Plan).  Under the
       Plan and related  incentive  stock  option  agreements,  options  will be
       granted  to  purchase  shares  of  common  stock of the  Company  with an
       exercise  price  not less than the fair  value of a share of such  common
       stock at the date of the grant and vest over a period  not to exceed  ten
       years as will be determined by the Option Committee which will administer
       the Plan.  Non-Qualified  stock options will be issued in accordance with
       the plan.

        The  Company  will apply  Accounting  Principles  Board  Opinion No. 25,
        "Accounting  for Stock Issued to Employees," in accounting for the stock
        option  plans  and  determine   the   necessary  pro  forma   disclosure
        information  required by Statement of Financial Accounting Standards No.
        123  "Accounting  for  Stock-Based  Compensation".  No options have been
        granted  under the plan.  Shareholders  approved  the Plan at the Annual
        Meeting on January 4, 2000.

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

Results of Operation

Net sales for the six months ended December 31, 1999 were $6,711,404 as compared
to $5,658,362  for the same period in 1998. Net sales for the three months ended
December 31, 1999 were  $3,412,424 as compared to $3,134,377 for the same period
in 1998.  The  Company's  increase in sales for the three and six month  periods
ended  December  31, 1999 as  compared  to  December  31, 1998 is largely due to
increased  commercial  power  supply  and radar  test  equipment  sales.  Due to
successful  marketing efforts with new and existing customers the Company should
continue to see increased  net sales levels as backlog  orders are completed and
shipped.

Net income for the six months  ended  December  31, 1999 was $86,688 or $.08 per
share compared to $250,152 or $.23 per share for the corresponding  period ended
December 31, 1998.

During the first six  months of fiscal  2000 gross  profits as a  percentage  of
sales  decreased  approximately  4.5% as  compared  with the first six months of
fiscal 1999.

The primary  reason for the  decrease in gross profit and net income was product
mix,  higher  employee  related  expenses  and an overall  increase  in selling,
general  and  administrative  expenses.   Management  continues  to  expand  the
Company's workforce to ensure that production and overall execution of the large
increase in backlog orders and additional  anticipated  orders are  successfully
performed.  Present  employment  has exceeded 225 people as compared to December
31, 1998 when 175 people were employed.  Several of these  employees  require on
the job training  prior to working at maximum  efficiency.  The benefits of this
training should begin to positively  impact  operations in the fourth quarter of
fiscal 2000.

The Company  continues to  diversify  its customer  base and product  line.  The
backlog at  December  31,  1999 was  approximately  $28,600,000  an  increase of
approximately  62% over the prior year.  The Company  continues  to increase the
backlog while increasing current sales levels.  Management presently anticipates
that the Company  will realize both an increase in revenues and income in fiscal
2000,  however,  there can be no  assurances  made since such a  forward-looking
statement is subject to future events.

Selling,  general and administrative expenses were $1,025,951 for the six months
ended December 31, 1999, an increase of $87,433, or 9.3%, as compared to the six
months ended  December 31, 1998. The increase is primarily due to an increase in
selling  expenses  offset  partially by a decrease in  professional  fees.  This
increase was expected as the Company  continues to add employees to increase and
manage the continued growth in sales and order backlog.

Other  income for the three and six months  ended  December  31,  1999  remained
relatively  the same as compared to the three and six months ended  December 31,
1998. The Company does not believe there is any significant risk associated with
its investment  policy,  since a majority of the  investments are represented by
United States Government Treasury Securities, preferred equity securities, and a
money market account.

Liquidity and Capital Resources

As of December  31,  1999,  the Company  had  working  capital of $20.4  million
compared to $20.6 million at December 31, 1998. The Company meets its short-term
financing  needs  through  cash from  operations  and when  necessary,  from its
existing cash and short term investments.

                                      - 7 -
<PAGE>


The table below presents the summary of cash flow for the periods indicated:
<TABLE>
<CAPTION>

                                                           Six Months Ended December 31,
                                                           -----------------------------
                                                              1999              1998
                                                            --------          --------

<S>                                                       <C>                 <C>
Net cash provided by(used in) operating activities        $ 2,162,555         (274,944)
Net cash provided by(used in) investing activities ..       2,553,819         (203,548)
Net cash (used in) financing activities ..                   (298,086)        (120,464)

</TABLE>



Net cash provided by (used in) 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  increase in net cash  provided  by (used in)  investing
activities  is due to the maturity of investment  securities  with no offsetting
purchase  of new  investments.  The  increase  in net  cash  used  in  financing
activities is due to the quarterly dividend payment and increased 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 is currently analyzing the need for a

line of credit to help fund  further  growth.  For the first half of fiscal 2000
capital expenditures were approximately $361,000.

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  expenses  relating  to ESOP.  The  Company  has
eliminated the offsetting accruals from the Consolidated Balance Sheets.

During the six months  ended  December 31, 1999 the Company  repurchased  15,027
shares of its common  stock from the  Company's  ESOP and through  other  public
transactions.  Under existing  authorizations,  as of December 31, 1999,  57,473
shares  could  be  repurchased  at a price  not to  exceed  $13.50.  Under  this
authorization,  on February 8, 2000 the company  repurchased an additional  5000
shares of common stock.

Year 2000 Issues

The Company's  information  technology systems successfully  completed the "roll
over" to the year 2000. The transition resulted in no adverse or negative impact
on operations.  The company believes that the risk addociated with the year 2000
problem  has been  identified  and  eliminated.  The  Company  will  continue to
evaluate the 2000 readiness of its business  systems and significant  vendors to
ensure a complete  transition through the year 2000. The estimated total cost of
the year 2000 assessment and remediation plan has been less than $25,000.
                                      - 8 -
<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.


                                       -9-
<PAGE>


                         ESPEY MFG. & ELECTRONICS CORP.

                    PART II: Other Information and Signatures

Item 4.   Submission of Matters to a Vote of Security Holders
          None during the quarter

Item-5.   Other Information

          None

Item 6.   Exhibits and Reports on Form 8-K
           (a) Exhibits
               Ex-27 - Financial Data Schedule (for electronic filing only)
           (b) Reports on Form 8-K
               Form 8-k, filed December 21, 1999 reporting  under Items 5 and 7,
               announcing  an  amendment  to  certain  provisions  of the Rights
               Agreeement dated March 31, 1989, as amended February 12, 1999.

                                     - 10 -
<PAGE>



                               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

14 February 2000
 ----------------
     Date

                                     - 11 -