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 March 31, 1997
                         Commission File Number 1-8037




                              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.

     May 9, 1997    12,488,991 (excluding 168,590 shares held in treasury)
       (Date)                     (Number of Shares)

NOTE:  THIS IS PAGE 1 OF A DOCUMENT CONSISTING OF     15    PAGES.

<PAGE>


                              AEROFLEX INCORPORATED

                                AND SUBSIDIARIES


                                      INDEX


                                                              PAGE
                                                              ----

PART I:  FINANCIAL INFORMATION

CONSOLIDATED BALANCE SHEETS
 March 31, 1997 and June 30, 1996                              3-4

CONSOLIDATED STATEMENTS OF OPERATIONS
 Nine Months Ended March 31, 1997 and 1996                      5

CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended March 31, 1997 and 1996                     6

CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months Ended March 31, 1997 and 1996                      7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                     8-10

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS
    Nine and Three Months Ended March 31, 1997 and 1996       11-13

PART II:  OTHER INFORMATION

ITEM 6 Exhibits and Reports on Form 8-K                         14

SIGNATURES                                                      15



                                       -2-

<PAGE>


                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>


                                               March 31,         June 30,
                                                 1997              1996
                                               ---------        ----------   

<S>                                            <C>              <C> 
ASSETS

Current assets:
 Cash and cash equivalents                    $    586,000       $  661,000
  Invested cash                                     69,000             -
 Accounts receivable less allowance for
   doubtful accounts of $417,000 and $354,000   18,028,000       23,336,000
  Income tax refund receivable                        -             926,000
 Inventories                                    22,113,000       16,916,000
  Deferred income taxes                          1,826,000        1,871,000
  Prepaid expenses and other current assets        829,000          554,000
                                               -----------      -----------   
   Total Current Assets                         43,451,000       44,264,000

Invested cash                                      478,000          603,000
Property, plant and equipment, at cost, net     14,404,000       14,854,000
Intangible assets acquired in connection with
  the purchase of businesses, net                8,223,000        8,707,000
Costs in excess of fair value of net assets
  of businesses acquired, net                    9,982,000       10,054,000
Other assets                                     2,682,000        2,687,000
                                              ------------     ------------
                                              $ 79,220,000     $ 81,169,000
                                              ============     ============
<FN>
              See notes to consolidated financial statements
</FN>
</TABLE>

                                    -3-

<PAGE>

                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                   (continued)


<TABLE>
<CAPTION>
                                               March 31,       June 30,
                                                 1997            1996
                                               ---------       ---------

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

Current Liabilities:
  Current portion of long-term debt          $  4,199,000    $  4,259,000
  Accounts payable                              4,312,000       5,243,000
  Accrued expenses and other current 
    liabilities                                 8,539,000       8,256,000
  Income taxes payable                          1,629,000       1,770,000
                                              ------------   ------------
    Total Current Liabilities                  18,679,000      19,528,000
                                              ------------   ------------
Long-term debt                                 17,169,000      20,337,000
                                              ------------   ------------
Deferred income taxes                              31,000         172,000
                                              ------------   ------------
Other long-term liabilities                       279,000         679,000
                                              ------------   ------------
7-1/2% Senior Subordinated Convertible
  Debentures                                    9,981,000       9,981,000
                                              ------------   ------------
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 150,000 shares                         -              -
 Common stock, par value $.10 per share;
  authorized 25,000,000 shares; issued
  12,658,000 and 12,380,000 shares              1,266,000       1,238,000
 Additional paid-in capital                    58,110,000      57,820,000
 Accumulated deficit                          (25,543,000)    (28,004,000)
                                              ------------   ------------
                                               33,833,000      31,054,000

Less:  Treasury stock, at cost (169,000 and
  129,000 shares)                                 752,000         582,000
                                             ------------    ------------
                                               33,081,000      30,472,000
                                             ------------    ------------
                                             $ 79,220,000    $ 81,169,000
                                             ============    ============

<FN>
                 See notes to consolidated financial statements
</FN>
</TABLE>
                                       -4-

<PAGE>

                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                               Nine Months Ended
                                                   March 31,
                                                       
                                             1997               1996
                                             ----               ----

<S>                                       <C>               <C>         
Net Sales                                 $ 64,912,000      $ 44,300,000
Cost of Sales                               43,618,000        30,655,000
                                          ------------       -----------   
  Gross Profit                              21,294,000        13,645,000
Selling, General and Administrative Costs   15,191,000         9,903,000
Special Charge (Note 2)                          -            23,200,000
                                          ------------       -----------   
  Operating Income (Loss)                    6,103,000       (19,458,000)
                                          ------------       -----------   
Other Expense (Income)
  Interest expense                           2,263,000           936,000
  Interest and other income                    (71,000)         (595,000)
                                          ------------       -----------   
  Total Other Expense (Income)               2,192,000           341,000
                                          ------------       -----------   
Income (Loss) Before Income Taxes            3,911,000       (19,799,000)
Provision for Income Taxes                   1,450,000           680,000
                                          ------------       -----------   

Net Income (Loss)                         $  2,461,000      $(20,479,000)
                                          ============      ============  

Net Income (Loss) per Common Share:
 Primary                                     $  .19            $(1.72)
                                             ======            ======
 Fully Diluted                               $  .19                *
                                             ======          
Weighted Average Number of Common
 Shares Outstanding:
  Primary                                   13,181,000        11,876,000
                                           ===========       ===========
  Fully Diluted                             15,001,000             *
                                           ===========      
<FN>
* As a result of the loss, all options, warrants and convertible debentures are
  anti-dilutive.

                 See notes to consolidated financial statements
</FN>
</TABLE>
                                       -5-

<PAGE>


                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                              Three Months Ended
                                                   March 31,

                                              1997               1996
                                             ----               ----
<S>                                       <C>                <C>         
Net Sales                                 $ 22,937,000       $ 15,956,000
Cost of Sales                               15,178,000         10,940,000
                                          ------------       ------------   
  Gross Profit                               7,759,000          5,016,000
Selling, General and Administrative Costs    5,615,000          3,562,000
Special Charge (Note 2)                           -            23,200,000
                                          ------------       ------------   
  Operating Income (Loss)                    2,144,000        (21,746,000)
                                          ------------       ------------   
Other Expense (Income)
  Interest expense                             712,000            320,000
  Interest and other income                    (10,000)          (262,000)
                                          ------------       ------------   
  Total Other Expense (Income)                 702,000             58,000
                                          ------------       ------------   
Income (Loss) Before Income Taxes            1,442,000        (21,804,000)
Provision for Income Taxes                     525,000            280,000
                                          ------------       ------------   
Net Income (Loss)                         $    917,000       $(22,084,000)
                                          ============       ============ 
Net Income (Loss) per Common Share:
  Primary                                    $  .07            $(1.85)
                                             ======            =======
  Fully Diluted                              $  .07                *
                                             ======
Weighted Average Number of Common
 Shares Outstanding:
  Primary                                  12,992,000         11,937,000
                                          ============       ============ 
  Fully Diluted                            14,766,000             *
                                          ============      
<FN>
* As a result of the loss, all options, warrants and convertible debentures are
  anti-dilutive.

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

                                       -6-

<PAGE>


                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                       Nine Months Ended
                                                           March 31,

                                                       1997           1996
                                                       ----           ----
<S>                                                 <C>             <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss)                                  $  2,461,000   $(20,479,000)
 Adjustments to reconcile net income (loss) to net
  cash provided by (used in) operating activities:
   Special charge                                          -         23,200,000
   Depreciation and amortization                       3,292,000      2,159,000
   Deferred income taxes                                 (96,000)      (163,000)
   Other                                                  70,000        (11,000)
 Change in operating assets and liabilities:
   Decrease (increase) in accounts receivable          5,238,000      3,922,000
   Decrease (increase) in inventories                 (5,197,000)    (6,501,000)
   Decrease (increase) in prepaid expenses and
    other assets                                         654,000       (714,000)
   Increase (decrease) in accounts payable, accrued
    expenses and other long-term liabilities          (1,095,000)      (315,000)
   Increase (decrease) in income taxes payable          (208,000)       590,000
                                                     -----------    -----------
NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES                                  5,119,000      1,688,000
                                                     -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Payments for purchases of businesses,
    net of cash acquired                               (162,000)    (34,924,000)
  Capital expenditures                               (2,075,000)       (811,000)
  Proceeds from the sale of property, plant
    and equipment                                          -            313,000
  Decrease in invested cash                              56,000         697,000
  Net cash provided by
   discontinued operations                                 -             79,000
                                                     -----------    ------------
NET CASH PROVIDED BY (USED IN)
 INVESTING ACTIVITIES                                (2,181,000)    (34,646,000)
                                                     -----------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings under debt agreements                      -            27,000,000
  Debt repayments                                    (3,228,000)     (5,022,000)
  Proceeds from exercise of stock options               652,000         427,000
  Purchase of treasury stock                           (437,000)           -
                                                     -----------    ------------
NET CASH PROVIDED BY (USED IN)
 FINANCING ACTIVITIES                                (3,013,000)     22,405,000
                                                     -----------    ------------
NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                  (75,000)    (10,553,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD        661,000      11,330,000
                                                     -----------    -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $  586,000     $   777,000
                                                     ===========    ===========

<FN>
                 See notes to consolidated financial statements

</FN>
</TABLE>
                                       -7-

<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  March  31,  1997  and  the  related  consolidated
     statements of operations for the nine and three months ended March 31, 1997
     and 1996 and the  statements  of cash flows for the nine months ended March
     31, 1997 and 1996 have been prepared by the Company and are  unaudited.  In
     the opinion of management,  all adjustments (which include normal recurring
     adjustments and the adjustments referred to in Note 2) necessary to present
     fairly the  financial  position,  results of  operations  and cash flows at
     March  31,  1997 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, 1996 annual report to
     shareholders. There have been no changes of significant accounting policies
     since June 30, 1996.

     Certain  reclassifications  have been made to previously reported financial
     statements to conform to current classifications.

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

 2.  Acquisition of Business

     MIC
     Effective March 19, 1996, the Company acquired all of the outstanding stock
     of MIC  Technology  Corporation  ("MIC") for  approximately  $36,000,000 of
     cash,  300,000  shares of common  stock and  warrants to  purchase  400,000
     shares of common stock (at exercise  prices ranging from $7.05 to $7.50 per
     share).  The purchase  price was paid with available cash of $9,000,000 and
     borrowings  under the Company's  bank loan  agreement of  $27,000,000.  The
     purchase  agreement  also  provides for a contingent  payment of $4,000,000
     based upon certain operating results.  MIC manufactures high frequency thin
     film circuits and  interconnects  for  miniaturized,  high frequency,  high
     performance  electronic  products  for growing  commercial  markets such as
     wireless  communications,  satellite based communications hardware and high
     technology  military  electronics.  The acquired  company's  net sales were
     approximately $25,000,000 for its fiscal year ended October 31, 1995.

     The  acquisition  was  accounted for as a purchase  and,  accordingly,  the
     acquired  assets and  liabilities  assumed were recorded at their estimated
     fair values at the date of  acquisition.  The operating  results of MIC are
     included in the consolidated  statements of operations from the acquisition
     date.

     The Company  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 as follows:

<TABLE>
<S>                                                  <C>
       Net tangible assets                          $ 6,190,000
       Identifiable intangible assets                 8,453,000
       In-process research and development           23,200,000
                                                    -----------
                                                    $37,843,000
                                                    ===========   
</TABLE>
                                    -8-

<PAGE>


     The  identifiable  intangible  assets which  include  existing  technology,
     customer  relationships  and  assembled  work force will be  amortized on a
     straight-line basis over thirteen 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 was expensed in the third quarter of fiscal 1996.

     Summarized  below are the  unaudited pro forma results of operations of the
     Company as if MIC had been acquired at the beginning of the fiscal  periods
     presented.

<TABLE>
<CAPTION>
                                                       Pro Forma
                                 Pro Forma            Nine Months
                                Year Ended                Ended
                               June 30, 1996          March 31, 1996
                               -------------          -------------- 
                                (in thousands, except per share data)

<S>                             <C>                     <C>     
    Net Sales                   $ 90,097                $ 60,030
    Net Income (Loss)            (19,392)                (22,474)

    Earnings (Loss) Per Share
      Primary                   $  (1.62)               $  (1.83)
      Fully Diluted                 *                        *
<FN>
     * Due to the loss, all options, warrants and convertible debentures are 
anti-dilutive.
</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.

 3.  Bank Loan Agreements
     As of March 15,  1996 the  Company  replaced  a previous  agreement  with a
     revised  revolving  credit and term loan  agreement with two banks which is
     secured  by  substantially  all  of  the  Company's  assets  not  otherwise
     encumbered.   The  agreement  provides  for  a  revolving  credit  line  of
     $22,000,000  and a term loan of  $16,000,000.  The  revolving  credit  line
     expires in March 1999.  The term loan is payable in quarterly  installments
     of $900,000 with final payment on September 30, 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 the
     prime rate (8.5% at March 31, 1997) on the revolving credit  borrowings and
     prime  plus 1/4% on the term loan  borrowings.  The terms of the  agreement
     require  compliance with certain covenants  including minimum  consolidated
     tangible net worth and pre-tax  earnings,  maintenance of certain financial
     ratios,   limitations  on  capital   expenditures   and   indebtedness  and
     prohibition of the payment of cash dividends.

 4.  Inventories
     Inventories consist of the following:

<TABLE>
<CAPTION>
                                           March 31,        June 30,
                                             1997             1996
                                           ---------       ---------
<S>                                      <C>            <C>         
                Raw Materials            $ 11,332,000   $  9,352,000
                Work in Process             8,030,000      5,301,000
                Finished Goods              2,751,000      2,263,000
                                         ------------   ------------
                                         $ 22,113,000   $ 16,916,000
                                         ============   ============
</TABLE>

                                    -9-
<PAGE>

 5. Income Taxes
    At June  30,  1996 the  Company  had net  operating  loss  carryforwards  of
    approximately  $8,000,000  for  Federal  income tax  purposes  which  expire
    through 2006.  The income tax provisions for the nine and three months ended
    March 31, 1996 include  benefits  relating to the  recognition of unrealized
    and realized net operating loss carryforwards.

    The Company is undergoing  routine audits by various  taxing  authorities of
    several  of its  Federal,  state  and  local  income  tax  returns  covering
    different periods from 1993 to 1996.  Management  believes that the probable
    outcome  of  these  various   audits  should  not   materially   affect  the
    consolidated financial statements of the Company.

     6.  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  may 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 early stages of discovery. 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 is not expected to have a materially  adverse
effect on the Company's consolidated financial statements.





                                      -10-

<PAGE>


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


Results of Operations
---------------------
Nine Months  Ended March 31, 1997  Compared to Nine Months  Ended March 31, 1996
--------------------------------------------------------------------------------
Net sales increased to $64,912,000 for the nine months ended March 31, 1997 from
$44,300,000  for the  nine  months  ended  March  31,  1996.  Operating  profits
increased 63% from last year,  exclusive of a one-time  write-off of $23,200,000
in 1996 for in-process  research and development  related to the purchase of MIC
Technology  Corporation  ("MIC"). Net income for the nine months ended March 31,
1997 was  $2,461,000.  The net loss for the comparable  period of the prior year
was $(20,479,000) including the special write-off of $23,200,000.

Net sales in the  electronics  segment  increased  to  $52,591,000  for the nine
months ended March 31, 1997 from $33,186,000 for the nine months ended March 31,
1996  primarily  as a result  of the  acquisition  of MIC in  March  1996 and an
increase in volume of existing microelectronic product sales. Operating profits,
exclusive  of the  special  write-off  of  $23,200,000  in  1996,  increased  by
$2,190,000  as a result of both the  increased  sales  volume and higher  profit
margins in the existing  product lines offset, in part, by the addition of MIC's
selling, general and administrative costs.

Net sales in the isolator products segment increased to $12,321,000 for the nine
months ended March 31, 1997 from $11,114,000 for the nine months ended March 31,
1996.  The  increase  reflects  increased  sales  volume in the  commercial  and
industrial  divisions offset, in part, by decreased sales volume in the military
isolator division.  Operating profits increased by $344,000 primarily due to the
higher sales volume and higher  profit  margins,  offset,  in part, by increased
selling, general and administrative expenses.

Cost of sales as a percentage of sales decreased to 67.2% from 69.2% between the
two periods primarily as a result of increased margins in  microelectronics  and
isolator  products  divisions  during  the nine  months  ended  March 31,  1997.
Selling,  general and  administrative  costs (exclusive of the special charge in
the prior year) as a percentage of sales increased to 23.4% from 22.4% primarily
as a result of the addition of MIC which has a higher S,G&A cost structure than
the balance of the Company.  

Interest  expense for the period  increased to $2,263,000 from $936,000 for
the prior  period  due to  increased  levels of  borrowings  related  to the MIC
acquisition in March 1996.  Interest and other income  decreased to $71,000 from
$595,000 as a result of lower interest income on reduced cash amounts due to the
acquisition of MIC.

The income tax provisions for the two periods  differed from the amount computed
by applying  the U.S.  Federal  income tax rate to income  before  income  taxes
primarily due to state income taxes for the nine months ended March 31, 1997 and
primarily as a result of the tax benefits of loss carryforwards (both unrealized
and  realized)  for the nine months ended March 31,  1996.  The income tax rates
were 37% and 20% for 1997  and  1996,  respectively,  exclusive  of the  special
charge in 1996.

Management  believes that  potential  reductions  in military  spending will not
materially  affect its  operations.  In certain  product areas,  the Company has
suffered  reductions in sales volume due to cutbacks in the military budget.  In
other product areas, the Company has 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 the Company.

                                      -11-

<PAGE>


Three Months Ended March 31, 1997  Compared to Three Months Ended March 31, 1996
--------------------------------------------------------------------------------
Net sales  increased  to  $22,937,000  for the three months ended March 31, 1997
from  $15,956,000 for the three months ended March 31, 1996.  Operating  profits
increased 47% from last year,  exclusive of a one-time  write-off of $23,200,000
in 1996 for in-process  research and development  related to the purchase of MIC
Technology  Corporation  ("MIC").  Net income was  $917,000 for the three months
ended March 31, 1997. The net loss for the  comparable  period in the prior year
was $(22,084,000) including the special charge of $23,200,000.

Net sales in the electronics segment increased to $18,549,000 for the three
months  ended March 31, 1997 from  $11,790,000  for the three months ended March
31, 1996  primarily as a result of the  acquisition  of MIC in March 1996 and an
increase  in  volume  of  existing  microelectronics  product  sales.  Operating
profits, exclusive of the special write-off of $23,200,000 in 1996, increased by
$786,000  as a result of both the  increased  sales  volume  and  higher  profit
margins in existing  product  lines  (specifically  microelectronics)  partially
offset by the addition of MIC's selling, general and administrative costs.

Net sales in the isolator  products segment increased to $4,388,000 for the
three  months  ended March 31, 1997 from  $4,166,000  for the three months ended
March 31, 1996. The increase is  attributable to higher sales volume in both the
commercial and industrial isolator divisions offset, in part, by decreased sales
volume in the  military  isolators  division.  Operating  profits  increased  by
$121,000  primarily  due to the higher sales volume and higher  profit  margins,
offset, in part, by increased selling, general and administrative expenses.

Cost of sales as a percentage of sales decreased to 66.2% from 68.6% between the
two periods  primarily as a result of improved  margins in the  microelectronics
and isolator  products  divisions.  Selling,  general and  administrative  costs
(exclusive of the special charge in 1996) as a percentage of sales  increased to
24.5% from 22.3% primarily as a result of the addition of MIC which has a higher
S,G&A cost structure than the balance of the Company.

Interest expense for the period increased to $712,000 from $320,000 for the
prior  period  due  to  increased  levels  of  borrowings  related  to  the  MIC
acquisition in March 1996.  Interest and other income  decreased to $10,000 from
$262,000 as a result of lower interest income on reduced cash amounts due to the
acquisition of MIC.

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  income  taxes for the three months ended March 31, 1997
and  primarily  as a result  of the tax  benefits  of loss  carryforwards  (both
unrealized  and realized) for the three months ended March 31, 1996.  The income
tax rates  were 36% and 20% for 1997 and 1996,  respectively,  exclusive  of the
special charge in 1996.

Financial Condition
-------------------

The Company's  working  capital at March 31, 1997 was $24,772,000 as compared to
$24,736,000 at June 30, 1996. The current ratio was 2.3 to 1 at both dates.

Cash provided by operating  activities  of  $5,119,000  for the nine months
ended March 31, 1997 was  primarily due to the  continued  profitability  of the
Company and the  collection of  receivables  partially  offset by an increase of
inventory.  Cash  used by  investing  activities  of  $2,181,000  was  comprised
primarily of capital expenditures.

The cash  provided by  operating  activities  net of the cash used by  investing
activities  for the nine  month  period was used to reduce  debt by  $3,228,000.
Management  believes that the revolving  credit and term loan facility,  coupled
with  cash to be  provided  by future  operations,  will be  sufficient  for its
presently  anticipated working capital  requirements,  capital expenditure needs
and the servicing of its debt.

                                   -12-

<PAGE>


Effective March 19, 1996, the Company  acquired all of the outstanding  stock of
MIC  Technology  Corporation  ("MIC")  for  approximately  $36,000,000  of cash,
300,000 shares of common stock and warrants to purchase 400,000 shares of common
stock (at exercise  prices ranging from $7.05 to $7.50 per share).  The purchase
price  was paid with  available  cash of  $9,000,000  and  borrowings  under the
Company's  bank loan  agreement  of  $27,000,000.  The purchase  agreement  also
provides for a contingent  payment of  $4,000,000  based upon certain  operating
results.  MIC manufactures  high frequency thin film circuits and  interconnects
for  miniaturized,  high frequency,  high  performance  electronic  products for
growing  commercial  markets such as wireless  communications,  satellite  based
communications  hardware and high technology military electronics.  The acquired
company's  net sales were  approximately  $25,000,000  for its fiscal year ended
October 31, 1995.

As of March 15, 1996 the Company  replaced a previous  agreement  with a revised
revolving  credit  and term loan  agreement  with two banks  which is secured by
substantially  all  of  the  Company's  assets  not  otherwise  encumbered.  The
agreement provides for a revolving credit line of $22,000,000 and a term loan of
$16,000,000.  The revolving  credit line expires in March 1999. The term loan is
payable in quarterly  installments  of $900,000  with final payment on September
30, 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 the prime  rate  (8.5% at March  31,  1997) on the
revolving credit borrowings and prime plus 1/4% on the term loan borrowings. The
terms of the  agreement  require  compliance  with certain  covenants  including
minimum  consolidated  tangible net worth and pre-tax  earnings,  maintenance of
certain financial ratios,  limitations on capital  expenditures and indebtedness
and prohibition of the payment of cash dividends.

During June 1994, the Company  completed a sale of $10,000,000  principal amount
of 7-1/2% Senior Subordinated  Convertible  Debentures to non-U.S.  persons. The
debentures  are due June 15, 2004 subject to prior sinking fund payments of 10%,
10%, 15% and 15% of the principal  amount on September 15, 2000,  2001, 2002 and
2003,  respectively.  The debentures are convertible  into the Company's  common
stock at a price of $5-5/8 per share.  As of March 31, 1997,  $19,000  principal
amount of debentures was converted.

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 may 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
early stages of discovery.  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
is  not  expected  to  have  a  materially   adverse  effect  on  the  Company's
consolidated financial statements.

The Company's  backlog of orders at March 31, 1997 and 1996 was  $49,000,000 and
$44,000,000, respectively.

At  June  30,  1996  the  Company  had  net  operating  loss   carryforwards  of
approximately  $8,000,000  for  Federal  income  tax  purposes.  The  Company is
undergoing  routine  audits by  various  taxing  authorities  of  several of its
Federal, state and local income tax returns covering different periods from 1993
to 1996.  Management  believes that the probable outcome of these various audits
should  not  materially  affect the  consolidated  financial  statements  of the
Company.


                                   -13-

<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

      None

Item 5.      Other Information

      None

Item 6.      Exhibits and Reports on Form 8-K

     (a)  Exhibits

          Exhibit 11 - Computation of Earnings Per Common Share

          Exhibit 27 - Financial Data Schedule

     (b)  Reports on Form 8-K

          None


                                      -14-

<PAGE>


                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES


                                   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)


May 9, 1997                        By: /s/  Michael Gorin
                                       ------------------------ 
                                       Michael Gorin
                                       President, Chief Financial Officer
                                       and Principal Accounting Officer



                                      -15-