UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   -----------


                                    FORM 10-Q

                                   -----------

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

For the quarter ended            September 30, 2000
                     --------------------------------------
Commission File Number 000-02324

                                   -----------

                              AEROFLEX INCORPORATED


             (Exact name of Registrant as specified in its Charter)

             DELAWARE                                     11-1974412
  (State or other jurisdiction                          (I.R.S. Employer
of incorporation or organization)                      Identification No.)

      35 South Service Road
         Plainview, N.Y.                                     11803
(Address of principal executive offices)                   (Zip Code)
                                 (516) 694-6700
              (Registrant's telephone number, including area code)

                                   -----------


 *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,  and (2) has been  subject to such filing
requirements for the past 90 days.

                          Yes         X          No
                                  --------             --------
  Indicate the number of shares  outstanding of each of the issuer's  classes of
common stock as of the latest practicable date.

November 9, 2000    28,863,607 shares (excluding 2,194  shares held in treasury)
--------------------------------------------------------------------------------
    (Date)                                   (Number of Shares)

<PAGE>
                              AEROFLEX INCORPORATED

                                AND SUBSIDIARIES


                                      INDEX
                                      -----




                                                                            PAGE
                                                                            ----
PART I:  FINANCIAL INFORMATION
------   ---------------------

CONSOLIDATED BALANCE SHEETS
 September 30, 2000 and June 30, 2000                                        3-4

CONSOLIDATED STATEMENTS OF EARNINGS
 Three Months Ended September 30, 2000 and 1999                              5

CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three Months Ended September 30, 2000 and 1999                              6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                  7-12

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS
    Three Months Ended September 30, 2000 and 1999                         13-17

PART II:  OTHER INFORMATION
-------   -----------------

ITEM 4 Submission of Matters to a Vote of Security Holders                  18

ITEM 6 Exhibits and Reports on Form 8-K                                     18

SIGNATURES                                                                  19















                                       -2-
<PAGE>
                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                           September 30,       June 30,
                                               2000              2000
                                           -------------       --------
                                            (Unaudited)
                                                    (In thousands)

ASSETS
------
<S>                                           <C>               <C>
Current assets:
 Cash and cash equivalents                    $ 41,807          $ 54,710
  Marketable securities                         30,656            11,512
 Accounts receivable, less allowance for
   doubtful accounts of $514,000 and $509,000   41,784            51,086
 Inventories                                    40,189            37,367
  Deferred income taxes                          5,386             5,317
  Prepaid expenses and other current assets      3,808             2,814
                                              --------          --------
   Total current assets                        163,630           162,806

Property, plant and equipment, net              54,439            52,222
Intangible assets acquired in connection with
  the purchase of businesses, net               12,652            12,839
Cost in excess of fair value of net assets
  of businesses acquired, net                   13,468            13,380
Deferred income taxes                            5,560             3,093
Other assets                                     4,613             4,367
                                              --------          --------
   Total assets                               $254,362          $248,707
                                              ========          ========


<FN>
                 See notes to consolidated financial statements.
</FN>
                                      -3-
</TABLE>
<PAGE>

                            AEROFLEX INCORPORATED
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                   (continued)

<TABLE>
<CAPTION>

                                                September 30,       June 30,
                                                    2000             2000
                                                -------------       --------
                                                 (Unaudited)
                                                         (In thousands)


LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                <C>               <C>

Current liabilities:
  Current portion of long-term debt                $  1,643          $  1,566
  Accounts payable                                    8,941             9,489
  Accrued expenses and other current liabilities     16,623            17,847
                                                   --------          --------
    Total current liabilities                        27,207            28,902

Long-term debt                                       12,915            12,983
Other long-term liabilities                           5,014             4,890
                                                   --------          --------
    Total liabilities                                45,136            46,775
                                                   --------          --------
Stockholders' equity:
 Preferred Stock, par value $.10 per share;
  authorized 1,000,000 shares:
   Series A Junior Participating Preferred
   Stock, par value $.10 per share,
   authorized 40,000; none issued                      -                 -
 Common Stock, par value $.10 per share;
  authorized 40,000,000 shares; issued
  28,166,000 and 27,835,000 shares                    2,817             2,783
 Additional paid-in capital                         192,291           190,168
 Accumulated other comprehensive income                  50                82
 Retained earnings                                   14,082             8,979
                                                   --------          --------
                                                    209,240           202,012

 Less:  Treasury stock, at cost (2,000 and
  13,000 shares)                                         14                80
                                                   --------          --------
    Total stockholders' equity                      209,226           201,932
                                                   --------          --------
    Total liabilities and stockholders' equity     $254,362          $248,707
                                                   ========          ========
<FN>
                 See notes to consolidated financial statements.
</FN>
</TABLE>

                                       -4-

<PAGE>
                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>

                                              Three Months Ended
                                                September 30,
                                              ------------------
                                            2000               1999
                                        ------------      ---------------
                                                    (Unaudited)
                                       (In thousands, except per share data)
<S>                                        <C>               <C>
Net sales                                  $ 50,228          $ 42,072
Cost of sales                                31,141            26,933
                                           --------          --------
  Gross profit                               19,087            15,139
                                           --------          --------
Selling, general and administrative costs     9,368             7,330
Research and development costs                2,965             2,430
                                           --------          --------
                                             12,333             9,760
                                           --------          --------
  Operating income                            6,754             5,379
                                           --------          --------
Other expense (income)
  Interest expense                              340               612
  Other expense (income)                     (1,107)              262
                                           --------          --------
    Total other expense (income)               (767)              874
                                           --------          --------
Income before income taxes                    7,521             4,505
Provision for income taxes                    2,550             1,575
                                           --------          --------
Income before cumulative effect
  of a change in accounting                   4,971             2,930
Cumulative effect of a change
  in accounting, net of tax (Note 4)            132              -
                                           --------          --------
Net income                                 $  5,103          $  2,930
                                           ========          ========
Net income per common share (1):
  Basic
    Income before cumulative effect            $.09              $.06
    Cumulative effect of a change
      in accounting                             -                 -
                                           --------          --------
    Net income                                 $.09              $.06
                                           ========          ========
  Diluted
    Income before cumulative effect            $.09              $.06
    Cumulative effect of a change
      in accounting                             -                 -
                                           --------          --------
    Net income                                 $.09              $.06
                                           ========          ========
Weighted average number of
  common shares outstanding:
    Basic                                    56,064            46,464
                                           ========          ========
    Diluted                                  59,466            49,704
                                           ========          ========
<FN>
(1)  All share and per share data have been  restated to reflect a 2-for-1 stock
     split declared and payable in November 2000.


                 See notes to consolidated financial statements.
</FN>
</TABLE>

                                       -5-

<PAGE>
                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                    Three Months Ended
                                                       September 30,
                                                    ------------------
                                                   2000            1999
                                                   ----            ----
                                                         (Unaudited)
                                                       (In thousands)

<S>                                               <C>             <C>
Cash Flows From Operating Activities:
 Net income                                       $ 5,103         $  2,930
 Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
   Depreciation and amortization                    2,514            2,265
   Amortization of deferred gain                     (242)            (147)
   Deferred income taxes                             (236)               8
   Other, net                                          77              118
 Change in operating  assets and  liabilities,
   net of effects from  purchase of
   businesses:
   Decrease (increase) in accounts receivable       9,456             (466)
   Decrease (increase) in inventories              (2,821)            (690)
   Decrease (increase) in prepaid expenses
    and other assets                               (1,148)            (963)
   Increase (decrease) in accounts payable, accrued
    expenses and other liabilities                 (1,733)          (3,900)
   Increase (decrease) in income taxes payable      2,745            1,487
                                                  -------         --------
Net Cash Provided By Operating Activities          13,715              642
                                                  -------         --------
Cash Flows From Investing Activities:
  Payment for purchase of businesses, net of
    cash acquired                                    (271)            -
  Capital expenditures                             (3,896)          (1,687)
  Purchase of marketable securities               (19,171)            -
  Other, net                                         -                  12
                                                  -------         --------
Net Cash Used In Investing Activities             (23,338)          (1,675)
                                                  -------         --------
Cash Flows From Financing Activities:
  Borrowings under debt agreements                    292             -
  Debt repayments                                    (283)          (1,578)
  Proceeds from the exercise of stock options
    and warrants                                      921              805
  Amounts paid for withholding taxes on stock
    option exercises                               (4,979)             (41)
  Withholding taxes collected for stock option
    exercises                                         769               40
                                                  -------         --------
Net Cash Used In Financing Activities              (3,280)            (774)
                                                  -------         --------
Net Increase (Decrease) In Cash
  And Cash Equivalents                            (12,903)          (1,807)
Cash And Cash Equivalents At Beginning Of Period   54,710            2,714
                                                  -------         --------
Cash And Cash Equivalents At End Of Period        $41,807         $    907
                                                  =======         ========
<FN>
                 See notes to consolidated financial statements.
</FN>
</TABLE>

                                       -6-
<PAGE>
                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation
     ---------------------

     The  consolidated  balance sheet of Aeroflex  Incorporated and Subsidiaries
     ("the  Company")  as of  September  30, 2000 and the  related  consolidated
     statements  of earnings for the three months ended  September  30, 2000 and
     1999 and the  consolidated  statements  of cash flows for the three  months
     ended September 30, 2000 and 1999 have been prepared by the Company and are
     unaudited.  In the opinion of management,  all  adjustments  (which include
     normal  recurring  adjustments)  necessary to present  fairly the financial
     position,  results of  operations  and cash flows at September 30, 2000 and
     for all periods presented have been made. Certain  information and footnote
     disclosures   normally  included  in  financial   statements   prepared  in
     accordance with generally accepted accounting principles have been omitted.
     It is suggested  that these  consolidated  financial  statements be read in
     conjunction with the financial statements and notes thereto included in the
     Company's June 30, 2000 annual report to  shareholders.  There have been no
     changes of significant  accounting  policies  since June 30, 2000.  Certain
     reclassifications   have  been  made  to  previously   reported   financial
     statements to conform to current classifications.

     Results of  operations  for the three  month  periods  are not  necessarily
     indicative of results of operations for the corresponding years.

2.   Acquisition of Businesses
     -------------------------

     Amplicomm
     ---------

     Effective  September 7, 2000, Aeroflex  Amplicomm,  Inc.  ("Amplicomm") was
     formed as a wholly-owned  subsidiary of the Company. On September 20, 2000,
     Amplicomm acquired certain equipment and intellectual property from a third
     party for approximately  $300,000,  entered into employment agreements with
     this third  party's  former owners and issued 25% of the stock of Amplicomm
     to  them.  Amplicomm  designs  and  develops  fiber  optic  amplifiers  and
     modulator drivers used by manufacturers of advanced fiber optic systems. On
     a pro forma  basis,  had the  Amplicomm  acquisition  taken place as of the
     beginning of the periods presented, results of operations for those periods
     would not have been materially affected.

     Europtest
     ---------

     Effective  September  1, 1998,  the  Company  acquired  90% of the stock of
     Europtest,  S.A.  (France) for  approximately  $1.1  million.  The purchase
     agreement  also  requires  that the Company  purchase the  remaining 10% of
     Europtest pro rata over a three-year period at prices determined based upon
     net sales of Europtest products.  In October 1999, the Company purchased an
     additional 3.4% of Europtest's stock for approximately  $54,000.  Europtest
     develops  and  sells  specialized   software-driven   test  equipment  used
     primarily in cellular, satellite and other communications applications. The
     acquired  company's net sales were  approximately $1.9 million for the year
     ended March 31, 1998. On a pro forma basis,  had the Europtest  acquisition
     taken  place as of the  beginning  of the  periods  presented,  results  of
     operations for those periods would not have been materially  affected.  The
     purchase  price has been allocated to the assets  acquired and  liabilities
     assumed based on their fair values.

                                       -7-
<PAGE>
3.   Earnings Per Share
     ------------------

     In  accordance  with  Statement of Financial  Accounting  Standards No. 128
     "Earnings Per Share", net income per common share ("Basic EPS") is computed
     by dividing net income by the weighted  average common shares  outstanding.
     Net income per common share,  assuming dilution ("Diluted EPS") is computed
     by dividing net income by the weighted  average  common shares  outstanding
     plus potential dilution from the exercise of stock options and warrants.

A reconciliation of the numerators and denominators of the Basic EPS and Diluted
EPS calculations is as follows:

<TABLE>
<CAPTION>
                                                      Three Months
                                                   Ended September 30,
                                                   ------------------
                                                    2000          1999
                                                    ----          ----
                                            (In thousands, except per share data)

<S>                                               <C>          <C>
Income before cumulative effect
  of a change in accounting                       $ 4,971      $ 2,930
Cumulative effect of a change in
  accounting, net of tax                              132         -
                                                  -------      -------
Net income                                        $ 5,103      $ 2,930
                                                  =======      =======
Computation of Adjusted Weighted
  Average Shares Outstanding (1):
Weighted average shares outstanding                56,064       46,464
Add: Effect of dilutive options and
  warrants outstanding                              3,402        3,240
                                                  -------      -------
Weighted average shares and common
  share equivalents used for computation
  of diluted earnings per common share             59,466       49,704
                                                  =======      =======
Income per share - Basic (1):
  Income before cumulative effect                    $.09         $.06
  Cumulative effect of a change in
    accounting                                        -            -
                                                  -------      -------
  Net income                                         $.09         $.06
                                                  =======      =======
Income per share - Diluted (1):
  Income before cumulative effect                    $.09         $.06
  Cumulative effect of a change in
    accounting                                        -            -
                                                  -------      -------
  Net income                                         $.09         $.06
                                                  =======      =======
<FN>
(1)  All share and per share data have been  restated to reflect a 2-for-1 stock
     split declared and payable in November 2000.
</FN>
</TABLE>

4.   Accounting for Derivative Instruments and Hedging Activities
     ------------------------------------------------------------

     Effective July 1, 2000, the Company  adopted SFAS No. 133,  "Accounting for
     Derivative  Instruments and Hedging Activities," as amended. This statement
     requires  companies to record derivatives on the balance sheet as assets or
     liabilities at their fair value.  In certain  circumstances  changes in the
     value  of such  derivatives  may be  required  to be  recorded  as gains or
     losses.  The impact of this statement did not have a material effect on the
     Company's consolidated  financial statements.  The cumulative effect of the
     adoption of this  accounting  policy was a $132,000,  net of tax, credit in
     the quarter ended  September 30, 2000 which  represents the net of tax fair
     value of certain interest rate swap agreements at July 1, 2000.


                                     -8-
<PAGE>
5.   Comprehensive Income
     --------------------

     The net of tax  components  of  comprehensive  income for the three  months
     ended September 30, 2000 and 1999 are as follows:
<TABLE>
<CAPTION>
                                                        Three Months
                                                     Ended September 30,
                                                     ------------------
                                                    2000              1999
                                                    ----              ----
   <S>                                            <C>              <C>

   Net income                                     $ 5,103          $ 2,930

   Unrealized gain on interest rate swap
     agreement                                         60             -

   Unrealized investment gain                         (46)            -

   Foreign currency translation adjustment            (46)            -
                                                  -------          -------
   Total comprehensive income                     $ 5,071          $ 2,930
                                                  =======          =======
</TABLE>

6.   Bank Loan Agreements
     --------------------

     As of February 25, 1999, the Company  replaced a previous  agreement with a
     revised revolving credit,  term loan and mortgage  agreement with two banks
     which is secured by substantially all of the Company's assets not otherwise
     encumbered.  The  agreement  provided for a revolving  credit line of $23.0
     million,  a term loan of $20.0  million  and a  mortgage  on its  Plainview
     property for $4.5 million.  The revolving  credit loan facility  expires in
     December  2002.  The term loan was fully  paid with the  proceeds  from the
     Company's  sale of its  Common  Stock in May  2000.  The  interest  rate on
     borrowings  under this agreement is at various rates depending upon certain
     financial ratios, with the current rate substantially  equivalent to 30-day
     LIBOR  (approximately  6.6%  at  September  30,  2000)  plus  1.50%  on the
     revolving  credit  borrowings.  The Company paid a facility fee of $100,000
     and is  required to pay a  commitment  fee of .25% per annum of the average
     unused  portion  of the credit  line.  The  mortgage  is payable in monthly
     installments  of  approximately  $26,000  through  March 2008 and a balloon
     payment of $1.6  million in April 2008.  The  Company  has entered  into an
     interest rate swap agreement for the outstanding  amount under the mortgage
     agreement at  approximately  7.6% in order to reduce the interest rate risk
     associated with these borrowings.

     The  terms of the  agreement  require  compliance  with  certain  covenants
     including  minimum  consolidated  tangible  net worth and pretax  earnings,
     maintenance   of  certain   financial   ratios,   limitations   on  capital
     expenditures  and  indebtedness  and  prohibition  of the  payment  of cash
     dividends.  In connection with the purchase of certain materials for use in
     manufacturing,  the  Company  has a letter of credit  of $2.0  million.  At
     September  30,  2000,  the  Company's  available  unused line of credit was
     approximately $21.0 million after consideration of the letter of credit.

7.   Inventories
     -----------

     Inventories consist of the following:
<TABLE>
<CAPTION>
                                    September 30,       June 30,
                                        2000              2000
                                    ------------        -------
                                            (In thousands)
                    <S>               <C>                <C>
                    Raw Materials     $ 21,271           $ 20,392
                    Work in Process     14,711             12,783
                    Finished Goods       4,207              4,192
                                      --------           --------
                                      $ 40,189           $ 37,367
                                      ========           ========
</TABLE>

                                      -9-
<PAGE>
8.   Income Taxes
     ------------

     The Company is undergoing  routine audits by various taxing  authorities of
     several of its state and local  income tax returns  covering  periods  from
     1994 to 1996.  Management  believes  that  the  probable  outcome  of these
     various  audits should not  materially  affect the  consolidated  financial
     statements of the Company.

     The Company  recorded  credits of $5.1 million and  $129,000 to  additional
     paid-in  capital during the three months ended September 30, 2000 and 1999,
     respectively,  in connection  with the tax benefit  related to compensation
     deductions on the exercise of stock options and warrants.

9.   Contingencies
     -------------

     A subsidiary of the Company whose operations were  discontinued in 1991, is
     one of several  defendants  named in a personal injury action  initiated in
     August 1994, by a group of plaintiffs.  The plaintiffs are seeking  damages
     which cumulatively exceed $500 million. The complaint alleges,  among other
     things,  that the plaintiffs  suffered injuries from exposure to substances
     contained in products sold by the subsidiary to one of its customers.  This
     action is in the discovery  stage.  Based upon  available  information  and
     considering  its various  defenses,  together  with its  product  liability
     insurance,  in the opinion of management of the Company, the outcome of the
     action against its subsidiary will not have a materially  adverse effect on
     the Company's consolidated financial statements.

10.  Business Segments
     -----------------

     The  Company's  business  segments  and  major  products  included  in each
     segment, are as follows:

   Microelectronics:                       Test, Measurement and
   a)Microelectronic Modules                   Other Electronics:
   b)Thin Film Interconnects               a)Instrument Products
   c)Integrated Circuits                   b)Motion Control Systems

   Isolator Products

<TABLE>
<CAPTION>
                                                     For The Three Months Ended
                                                           September 30,
                                                     --------------------------
     Business Segment Data:                            2000               1999
                                                       ----               ----
                                                             (In thousands)
     <S>                                             <C>                <C>
     Net sales:
       Microelectronics                              $ 32,049           $ 25,036
       Test, Measurement and
         Other Electronics                             13,469             12,543
       Isolator Products                                4,710              4,493
                                                     --------           --------
         Net sales                                   $ 50,228           $ 42,072
                                                     ========           ========
     Operating income:
       Microelectronics                               $ 7,927           $  4,935
       Test, Measurement and
         Other Electronics                                182                843
       Isolator Products                                  495                528
       General corporate expenses                      (1,850)              (927)
                                                     --------           --------
                                                        6,754              5,379

       Interest expense                                  (340)              (612)
       Other income  (expense), net                     1,107               (262)
                                                     --------           --------
         Income before income taxes                  $  7,521           $  4,505
                                                     ========           ========
</TABLE>
                                  -10-
<PAGE>
11.  Subsequent Events
     -----------------
     Stock Split
     -----------

     On November 2, 2000, the Company's Board of Directors  authorized a 2-for-1
     stock split of the Common Stock, effective November 16, 2000. The share and
     per share amounts in these consolidated financial statements give effect to
     the stock split.

     Acquisition of Businesses
     -------------------------

     Altair
     ------

     On October 16, 2000, the Company  issued 275,000  (before the 2-for-1 stock
     split  declared in November  2000)  shares of its common  stock for all the
     outstanding common stock of Altair Aerospace Corporation ("Altair"). Altair
     designs and develops  advanced  object-oriented  control  systems  software
     based upon a proprietary software engine. This business combination will be
     accounted for as a  pooling-of-interests  and,  accordingly,  the Company's
     historical  consolidated  financial  statements presented in future reports
     will be restated  to include the  accounts  and  results of  operations  of
     Altair.

     The following  unaudited pro forma data summarizes the combined  results of
     operations of the Company and Altair as if the pooling-of-interests  method
     of  accounting  had been applied for the periods  presented.  There were no
     adjustments to conform the  accounting  methods of Altair with those of the
     Company.
<TABLE>
<CAPTION>
                                                Pro Forma
                                            Three Months Ended
                                               September 30,
                                            ------------------
                                            2000          1999
                                            ----          ----
                                    (In thousands, except per share data)

   <S>                                    <C>             <C>
   Net Sales                              $ 51,127        $ 42,634
   Income before cumulative effect
     of a change in accounting               5,099           2,832

   Income before cumulative effect
     of a change in accounting
     per share (1):
       Basic                                $.09            $.06
       Diluted                               .08             .06
<FN>
(1)  Per share amounts have been restated to reflect the 2-for-1 stock split.
</FN>
</TABLE>
     RDL
     ---

     On October 23, 2000, the Company  acquired all of the outstanding  stock of
     RDL,  Inc.  ("RDL")  for $14.0  million of  available  cash.  RDL  designs,
     develops  and  manufactures  advanced  commercial  communications  test and
     measurement  products and defense  subsystems.  The acquired  company's net
     sales were approximately $15.0 million for the year ended March 31, 2000.


                                      -11-

<PAGE>
     The  Company had  commissioned  an  independent  asset  valuation  study of
     acquired  tangible and identifiable  intangible  assets to serve as a basis
     for  allocation  of the purchase  price.  Based on this study,  the Company
     allocated the purchase price,  including acquisition costs of approximately
     $100,000, as follows:
<TABLE>
<CAPTION>

                                                     (In thousands)
        <S>                                             <C>
        Net tangible assets                             $ 7,959
        Existing technology                               2,500
        Excess costs over fair value of net assets
          acquired                                        2,141
        In-process research and development               1,500
                                                        -------
                                                        $14,100
                                                        =======
</TABLE>

     The  existing  technology  and costs in excess of fair  value of net assets
     will be amortized on a straight-line  basis over 7 years based on the study
     described above. The acquired  in-process  research and development was not
     considered  to have reached  technological  feasibility  and, in accordance
     with generally accepted  accounting  principles,  the value of such will be
     expensed in the second quarter of fiscal 2001.

     Summarized  below are the  unaudited pro forma results of operations of the
     Company as if RDL had been acquired at the beginning of the fiscal  periods
     presented.  The $1.5  million  write-off  has not been  included in the pro
     forma amounts in order to provide  comparability  to the respective  actual
     results.
<TABLE>
<CAPTION>
                                                  Pro Forma
                                             Three Months Ended
                                                September 30,
                                             ------------------
                                             2000          1999
                                             ----          ----
                                      (In thousands, except per share data)

     <S>                                    <C>            <C>
     Net Sales                              $54,768        $45,475
     Income before cumulative effect
       of a change in accounting              4,806          2,654

     Income before cumulative effect
       Of a change in accounting per
       share (1):
       Basic                                  $.09           $.06
       Diluted                                 .08            .05
<FN>
(1)  Per share amounts have been restated to reflect the 2-for-1 stock split.
</FN>
</TABLE>
     The pro forma  financial  information  presented  above is not  necessarily
     indicative of either the results of operations that would have occurred had
     the acquisition taken place at the beginning of the periods presented or of
     future operating results of the combined companies.



                                    -12-
<PAGE>
                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

     We use our advanced  design,  engineering  and  manufacturing  abilities to
produce microelectronic, integrated circuit, interconnect and testing solutions.
Our products are used in fiber optic,  broadband  cable,  wireless and satellite
communications  markets.  We also design and manufacture  motion control systems
and  shock  and  vibration  isolation  systems  which  are used for  commercial,
industrial  and defense  applications.  Our  operations  are grouped  into three
segments:

      -- microelectronics
      -- test, measurement and other electronics
      -- isolator products

     Our  consolidated  financial  statements  include the  accounts of Aeroflex
Incorporated  and  all  of  our  subsidiaries.   All  of  our  subsidiaries  are
wholly-owned, except for Europtest, S.A. which is 93.4% owned by us and Aeroflex
Amplicomm, Inc., which is 75% owned by us.

     Our microelectronics segment has been designing,  manufacturing and selling
state-of-the-art  microelectronics  for the electronics  industry since 1974. In
January 1994, we acquired  substantially  all of the net operating assets of the
microelectronics  division  of Marconi  Circuit  Technology  Corporation,  which
manufactures  a wide variety of  microelectronic  assemblies.  In March 1996, we
acquired MIC Technology  Corporation which designs,  develops,  manufactures and
markets microelectronics  products in the form of passive thin film circuits and
interconnects.   Effective  July  1,  1997,  MIC  Technology   acquired  certain
equipment,  inventory,  licenses  for  technology  and  patents of two of Lucent
Technologies'  telecommunications  component units - multi-chip modules and film
integrated  circuits.  These  units  manufacture   microelectronic  modules  and
interconnect  products.  In February  1999,  we acquired all of the  outstanding
stock of UTMC  Microelectronic  Systems,  Inc.  consisting of UTMC's  integrated
circuit business. In September 2000, we acquired all of the net operating assets
of  AmpliComm,  Inc.,  which  designs and develops  fiber optic  amplifiers  and
modulator drivers used by manufacturers of advanced fiber optic systems.

     Our  test,  measurement  and  other  electronics  segment  consists  of two
divisions:  (1)  instruments  and (2) motion  control  products,  including  the
following product lines:

     --   Comstron, a leader in radio frequency and microwave technology used in
          the  manufacture of fast  switching  frequency  signal  generators and
          components,  which we acquired in November 1989. Comstron is currently
          an operating division of Aeroflex Laboratories,  Incorporated,  one of
          our wholly-owned subsidiaries;

     --   Lintek,  a leader in high speed  instrumentation  antenna  measurement
          systems, radar systems and satellite test systems which we acquired in
          January 1995;

                                      -13-
<PAGE>
     --   Europtest, S.A. (France), of which we acquired 90% effective September
          1, 1998, under a purchase  agreement which requires us to purchase the
          remaining 10% of Europtest pro rata over a three-year period at prices
          determined  based  upon net sales of  Europtest  products.  In October
          1999, we purchased an additional  3.4%.  Europtest  develops and sells
          specialized   software-   driven  test  equipment  used  primarily  in
          cellular, satellite and other communications applications.

     --   Altair,    which   we    acquired   on   October   16,   2000   in   a
          pooling-of-interests business combination. Altair designs and develops
          advanced   object-oriented  control  systems  software  based  upon  a
          proprietary software engine.

     --   RDL, which we acquired on October 23, 2000. RDL designs,  develops and
          manufactures  advanced commercial  communications test and measurement
          products and defense subsystems.

     --   Our  motion  control  products   division  has  been  engaged  in  the
          development and manufacture of  electro-optical  scanning devices used
          in infra-red night vision since 1975.  Additionally,  it is engaged in
          the design,  development  and  production  of  stabilization  tracking
          devices and systems and magnetic  motors used in satellites  and other
          high reliability applications.

   Our isolator products segment has been designing,  developing,  manufacturing
and selling  severe  service shock and vibration  isolation  systems since 1961.
These devices are primarily  used in defense  applications.  In October 1983, we
acquired  Vibration  Mountings & Controls,  Inc.,  which  manufactures a line of
off-the-shelf  rubber and spring  shock,  vibration  and  structure  borne noise
control  devices used in commercial  and  industrial  applications.  In December
1986,  we acquired  the  operating  assets of Korfund  Dynamics  Corporation,  a
manufacturer of an industrial line of heavy duty spring and rubber shock mounts.

   Our revenue is recognized  based upon shipments or billings.  We record costs
on our long-term  contracts  using  percentage-of-completion  accounting.  Under
percentage of  completion  accounting,  costs are  recognized on revenues in the
same relation that total  estimated  manufacturing  costs bear to total contract
value.  Estimated costs at completion are based upon  engineering and production
estimates.  Provisions for estimated losses or revisions in estimated profits on
contracts-in-process  are  recorded  in the  period  in  which  such  losses  or
revisions are first determined.

   Approximately  32% of our  sales  for  fiscal  2000 and 41% of our  sales for
fiscal 1999 were to agencies of the United States Government or to prime defense
contractors  or  subcontractors  of the United  States  Government.  Our overall
dependence  on the  military has been  declining  due to a focusing of resources
towards developing standard products for commercial markets.

   We believe that potential  reductions in defense spending will not materially
affect our operations.  In certain product areas, we have suffered reductions in
sales volume due to cutbacks in the military budget.  In other product areas, we
have  experienced  increased  sales volume due to a  realignment  of  government
spending towards upgrading existing systems instead of purchasing completely new
systems.  The  overall  effect  of the  cutbacks  and  realignment  has not been
material to our operations.
                                    -14-
<PAGE>
Three Months Ended  September 30, 2000 Compared to Three Months Ended  September
30, 1999

   Net Sales.  Net sales  increased  19.4% to $50.2 million for the three months
ended September 30, 2000 from $42.1 million for the three months ended September
30, 1999. Net sales in the  microelectronics  segment  increased  28.0% to $32.0
million for the three months ended September 30, 2000 from $25.0 million for the
three months ended September 30, 1999 due to increased sales volume in both thin
film  interconnects  and  microelectronic   modules.  Net  sales  in  the  test,
measurement and other  electronics  segment  increased 7.4% to $13.5 million for
the three  months  ended  September  30,  2000 from $12.5  million for the three
months ended  September  30, 1999  primarily  due to  increased  sales volume in
frequency  synthesizers  (primarily  shipments  of the  new  FS-1000  for use in
commercial  communications test systems) offset, in part, by reductions in sales
in high  speed  automatic  test  systems  (primarily  due to the  completion  of
satellite payload test equipment for Hughes Space and Communications). Net sales
in the isolator  products  segment  increased 4.8% to $4.7 million for the three
months  ended  September  30, 2000 from $4.5  million for the three months ended
September 30, 1999.

   Gross Profit.  Cost of sales  includes  materials,  direct labor and overhead
expenses such as engineering labor, fringe benefits,  allocable occupancy costs,
depreciation and manufacturing  supplies.  Gross profit increased 26.1% to $19.1
million for the three months ended September 30, 2000 from $15.1 million for the
three months ended September 30, 1999.  Gross margin  increased to 38.0% for the
three  months  ended  September  30, 2000 from 36.0% for the three  months ended
September 30, 1999. The increases were primarily a result of the increased sales
volume  in both  the  microelectronics  segment  and in  frequency  synthesizers
offset, in part, by reduced margins in high speed automatic test systems.

   Selling,   General   and   Administrative   Costs.   Selling,   general   and
administrative costs include office and management salaries, fringe benefits and
commissions.  Selling,  general and administrative costs increased 27.8% to $9.4
million (18.7% of net sales) for the three months ended  September 30, 2000 from
$7.3 million (17.4% of net sales) for the three months ended September 30, 1999.
The increase was primarily due to both higher  corporate  expenses and increased
expenses in MIC Technology as a result of their increased growth.

   Research and  Development  Costs.  Research  and  development  costs  include
material, engineering labor and allocated overhead. Our self-funded research and
development  costs  increased  22.0% to $3.0 million (5.9% of net sales) for the
three months ended  September 30, 2000 from $2.4 million (5.8% of net sales) for
the three months ended  September  30, 1999.  The increase was  primarily due to
increased costs in high speed automatic test systems.

   Other Expense (Income).  Interest expense decreased to $340,000 for the three
months  ended  September  30,  2000 from  $612,000  for the three  months  ended
September 30, 1999, primarily due to reduced levels of borrowings.  Other income
of $1.1 million for the three months ended September 30, 2000 consists primarily
of $1.2  million of  interest  income  offset by a $72,000  decrease in the fair
value of our interest  rate swap  agreements.  Other expense of $262,000 for the
three months ended September 30, 1999 consisted  primarily of a $300,000 expense
for the settlement of a lawsuit and $33,000 of interest income.  Interest income
increased due to increased levels of cash  equivalents.  The decreased levels of
borrowings and the increased  levels of cash  equivalents  resulted from the net
proceeds of $68.5  million from stock issued in a public  offering  completed in
May 2000.

                                   -15-
<PAGE>
   Provision for Income Taxes.  Income taxes increased 61.9% to $2.6 million (an
effective  income tax rate of 33.9%) for the three  months ended  September  30,
2000 from $1.6  million  (an  effective  income tax rate of 35.0%) for the three
months ended  September 30, 1999. The income tax provisions for the two quarters
differed from the amount  computed by applying the U.S.  Federal income tax rate
to income before income taxes  primarily due to state and local income taxes and
research and development credits.

Liquidity and Capital Resources

   As of  September  30, 2000,  we had $136.4  million in working  capital.  Our
current  ratio was 6.0 to 1 at September  30, 2000.  As of February 25, 1999, we
replaced a previous  agreement with a revised  revolving  credit,  term loan and
mortgage  agreement with two banks which is secured by substantially  all of our
assets not otherwise  encumbered.  The agreement provided for a revolving credit
line of $23.0  million,  a term  loan of $20.0  million  and a  mortgage  on our
Plainview property for $4.5 million.  The revolving credit loan facility expires
in  December  2002.  The term loan was fully paid in May 2000 with the  proceeds
from the sale of our Common Stock.  The interest  rate on borrowings  under this
agreement is at various rates depending upon certain financial ratios,  with the
current rate  substantially  equivalent to 30-day LIBOR  (approximately  6.6% at
September 30, 2000) plus 1.50% on the revolving credit borrowings.  The mortgage
is payable in monthly  installments of approximately  $26,000 through March 2008
and a balloon  payment of $1.6  million in April 2008.  We have  entered into an
interest  rate swap  agreement  for the  outstanding  amount  under the mortgage
agreement  at  approximately  7.6% in order to  reduce  the  interest  rate risk
associated with these borrowings.

   The  terms  of  the  agreement  require  compliance  with  certain  covenants
including  minimum   consolidated   tangible  net  worth  and  pretax  earnings,
maintenance of certain financial ratios, limitations on capital expenditures and
indebtedness  and  prohibition of the payment of cash  dividends.  In connection
with the  purchase  of certain  materials  for use in  manufacturing,  we have a
letter of credit of $2.0 million.

   Our  backlog of orders was $132.6  million at  September  30,  2000 and $93.6
million at September 30, 1999.

   For the three months ended  September 30, 2000, our operations  provided cash
of  $13.7  million  from  our  continued  profitability  and the  collection  of
receivables.  For the three  months ended  September  30,  2000,  our  investing
activities   used  cash  of  $23.3   million   primarily  for  the  purchase  of
available-for-sale  securities  in the amount of $19.2  million  and for capital
expenditures in the amount of $3.9 million. For the three months ended September
30, 2000, our financing  activities used cash of $3.3 million  primarily for the
withholding  taxes paid on the exercise of stock options offset, in part, by the
exercise  from and taxes  withheld  on the  exercise  of such stock  options and
warrants.

   We believe that existing cash,  cash  equivalents  and marketable  securities
coupled with  internally  generated  funds and available lines of credit will be
sufficient for our working capital  requirements,  capital expenditure needs and
the servicing of our debt for at least the next twelve months.  At September 30,
2000, our available unused line of credit was $21.0 million after  consideration
of the letter of credit.

                                    -16-
<PAGE>

Market Risk

We are  exposed to market risk  related to changes in interest  rates and, to an
immaterial  extent,  to foreign currency  exchange rates. Most of our debt is at
fixed  rates of  interest  or at a  variable  rate  with an  interest  rate swap
agreement  which  effectively  converts the  variable  rate debt into fixed rate
debt. Therefore,  if market interest rates increase by 10 percent from levels at
September 30, 2000, the effect on our net income would not be material.  Most of
our invested cash and  marketable  securities are at variable rates of interest.
If market  interest  rates  decrease by 10 percent from levels at September  30,
2000,  the  effect  on our net  income  would be a  reduction  of  approximately
$290,000.

Forward-Looking Statements

   All  statements  other than  statements of  historical  fact included in this
Report on Form 10-Q, including without limitation statements under "Management's
Discussion  and  Analysis of  Financial  Condition  and  Results of  Operations"
regarding our financial position,  business strategy and plans and objectives of
our management for future operations, are forward-looking  statements. When used
in this Report on Form 10-Q, words such as "anticipate,"  "believe," "estimate,"
"expect,"  "intend"  and  similar  expressions,  as  they  relate  to us or  our
management,   identify  forward-  looking   statements.   Such   forward-looking
statements  are based on the beliefs of our  management,  as well as assumptions
made by and information  currently  available to our management.  Actual results
could  differ  materially  from  those   contemplated  by  the   forward-looking
statements,  as a result  of  certain  factors,  including  but not  limited  to
competitive  factors  and  pricing  pressures,  changes in legal and  regulatory
requirements,  technological change or difficulties,  product development risks,
commercialization  difficulties and general economic conditions. Such statements
reflect our current views with respect to future events and are subject to these
and  other  risks,  uncertainties  and  assumptions  relating  to our  financial
condition, results of operations, growth strategy and liquidity.


                                    -17-
<PAGE>
                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES
                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

        None

Item 2. Changes in Securities

        None

Item 3. Defaults upon Senior Securities

        None

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

     The Registrant held its Annual Meeting of Stockholders on November 2, 2000.

     A.   Three  Directors were elected at the Annual Meeting to serve until the
          Annual Meeting of  Stockholders  in 2003. The names of these Directors
          and votes cast in favor of their  election and shares  withheld are as
          follows:
<TABLE>
<CAPTION>
           Name                              Votes For      Votes Withheld
           ----                              ---------      --------------
          <S>                                <C>            <C>
           Harvey R. Blau                    23,961,601     529,895
           Ernest E. Courchene, Jr.          23,961,601     529,895
           John S. Patton                    23,961,601     529,895
</TABLE>
     B.   The  Stockholders   approved  to  amend  the  article  FOURTH  of  the
          Certificate  of  Incorporation  to increase  the number of  authorized
          shares of the Company from 41,000,000 to 81,000,000; 22,706,691 shares
          were voted in favor of this proposal,  1,771,147  shares voted against
          the proposal and 13,658 shares abstained from voting.

     C.   The  Stockholders  approved a proposal to adopt the 2000 Key  Employee
          Stock  Option  Plan as set forth in Exhibit B to the proxy  statement;
          19,170,712  shares  were  voted in favor of this  proposal,  1,980,136
          shares voted  against the proposal and 40,765  shares  abstained  from
          voting.

Item 5.   Other Information

          None

Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits

               Exhibit 3.1 - Certificate of Incorporation, as amended
               Exhibit 27 - Financial Data Schedule

          (b)  Reports on Form 8-K

               None

                                    -18-
<PAGE>
                                 SIGNATURES


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.


                                        AEROFLEX INCORPORATED
                                             (REGISTRANT)



November 10, 2000                By:  s/Michael Gorin
                                      -------------------------------
                                        Michael Gorin
                                   President, Chief Financial Officer
                                     and Principal Accounting Officer


                                      -19-