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                      December 31, 1995
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.

  February 7, 1996        11,884,319 (excluding 75,772 shares held in treasury)
____________________      _____________________________________________________ 
      (Date)                             (Number of Shares)

 NOTE:  THIS IS PAGE 1 OF A DOCUMENT CONSISTING OF   14   PAGES.

<PAGE>


                      AEROFLEX INCORPORATED
                         AND SUBSIDIARIES


                              INDEX

<TABLE>
<CAPTION>
                                                             PAGE
                                                             ---- 
PART I:  FINANCIAL INFORMATION
------   --------------------- 
<S>                                                           <C>

CONSOLIDATED BALANCE SHEETS
 December 31, 1995 and June 30, 1995                          3-4

CONSOLIDATED STATEMENTS OF EARNINGS
 Six Months Ended December 31, 1995 and 1994                    5

CONSOLIDATED STATEMENTS OF EARNINGS
 Three Months Ended December 31, 1995 and 1994                  6

CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months Ended December 31, 1995 and 1994                    7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                     8-9

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS
    Six and Three Months Ended December 31, 1995 and 1994    10-12


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

ITEM 1 Legal Proceedings                                        13

ITEM 6 Exhibits and Reports on Form 8-K                         13

SIGNATURES                                                      14

</TABLE>



                               
<PAGE>


                           AEROFLEX INCORPORATED
                             AND SUBSIDIARIES

                        CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>


                                           December 31,        June 30,
                                               1995              1995
                                           -------------     -----------  
<S>                                        <C>                <C>

 
ASSETS

Current assets:
 Cash and cash equivalents                   $  9,576,000        $ 11,330,000
 Current portion of invested cash                    -                635,000
 Accounts receivable less allowance for
   doubtful accounts of $519,000 and $437,000  17,090,000          18,898,000
 Inventories (Note 5)                          15,878,000          12,330,000
 Deferred income taxes                            630,000             467,000
 Prepaid expenses and other current assets      1,209,000             605,000
                                             ------------        ------------
   Total Current Assets                        44,383,000          44,265,000
                                               
Invested cash                                     658,000             677,000
Property, plant and equipment, at cost, net    12,518,000          13,859,000
Costs in excess of fair value of net assets
  of businesses acquired, net                  10,208,000          10,297,000
Deferred income taxes                             589,000             589,000
Other assets                                    2,220,000           2,249,000
                                             ------------        ------------ 
                                             $ 70,576,000        $ 71,936,000
                                             ============        ============   
<FN>

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

<PAGE>


                           AEROFLEX INCORPORATED
                             AND SUBSIDIARIES

                        CONSOLIDATED BALANCE SHEETS
                                (continued)

<TABLE>
<CAPTION>

                                              December 31,     June 30,
                                                  1995            1995
                                              ------------     ---------  

<S>                                           <C>               <C>

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Current portion of long-term debt           $    412,000   $  1,936,000
  Accounts payable                               3,900,000      3,343,000
  Accrued expenses and other current liabilities 4,448,000      6,916,000
  Income taxes payable                             901,000        537,000
                                              ------------   ------------
    Total Current Liabilities                    9,661,000     12,732,000
                                              ------------   ------------
Long-term debt (Note 3)                          1,651,000      1,851,000
                                              ------------   ------------ 
Other long-term liabilities                        956,000      1,009,000
                                              ------------   ------------ 
7-1/2% Senior Subordinated Convertible
  Debentures (Note 4)                            9,990,000     10,000,000 
                                              ------------   ------------

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
  11,960,000 and 11,818,000 shares               1,196,000       1,182,000
 Additional paid-in capital                     56,408,000      56,101,000
 Accumulated deficit                            (8,979,000)    (10,584,000)
                                              ------------    ------------   
                                                48,625,000      46,699,000

Less:  Treasury stock, at cost (76,000 and
  92,000 shares)                                   307,000         355,000
                                              ------------    ------------ 

                                                48,318,000      46,344,000
                                              ------------    ------------ 
                                              $ 70,576,000    $ 71,936,000
                                              ============    ============ 
<FN>

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

<PAGE>
                   

                           AEROFLEX INCORPORATED
                             AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF EARNINGS

<TABLE>
<CAPTION>
                                               Six Months Ended
                                                 December 31,
                                               -----------------  
                                             1995               1994
                                             ----               ----
<S>                                        <C>                <C>
 
Net Sales                                 $ 28,344,000       $ 29,848,000
Cost of Sales                               19,715,000         20,411,000
                                          ------------       ------------
  Gross Profit                               8,629,000          9,437,000
Selling, General and Administrative Costs    6,341,000          6,858,000
                                          ------------       ------------
  Operating Income                           2,288,000          2,579,000
                                          ------------       ------------
Other Expense (Income)
  Life insurance proceeds                         -            (2,000,000)
  Interest expense                             616,000            784,000
  Interest and other income                   (333,000)          (324,000)
                                          ------------       ------------
  Total Other Expense (Income)                 283,000         (1,540,000)
                                          ------------       ------------  
Income Before Income Taxes                   2,005,000          4,119,000
Provision for Income Taxes (Note 6)            400,000            320,000
                                          ------------       ------------   
Net Income                                $  1,605,000       $  3,799,000
                                          ============       ============
Net Income per Common Share
 Primary                                     $ .13             $ .31
                                             =====             ===== 
 Fully Diluted                               $ .13             $ .30
                                             =====             =====

Weighted Average Number of Common
 Shares Outstanding

  Primary                                   12,671,000        12,339,000
                                          ============      ============
  Fully Diluted                             14,459,000        14,135,000
                                          ============      ============

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



<PAGE>


                           AEROFLEX INCORPORATED
                             AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF EARNINGS

<TABLE>
<CAPTION>

                                              Three Months Ended
                                                 December 31,

                                             1995               1994
                                             ----               ----
<S>                                          <C>                <C>

Net Sales                                 $ 15,195,000       $ 15,821,000
Cost of Sales                               10,635,000         10,769,000
                                          ------------       ------------
  Gross Profit                               4,560,000          5,052,000
Selling, General and Administrative Costs    3,163,000          3,537,000
                                          ------------       ------------
  Operating Income                           1,397,000          1,515,000
                                          ------------       ------------

Other Expense (Income)
  Life insurance proceeds                         -            (2,000,000)
  Interest expense                             313,000            397,000
  Interest and other income                   (163,000)          (161,000)
                                          ------------       ------------
  Total Other Expense (Income)                 150,000         (1,764,000)
                                          ------------       ------------ 
Income Before Income Taxes                   1,247,000          3,279,000
Provision for Income Taxes (Note 6)            249,000            195,000
                                          ------------       ------------

Net Income                                $    998,000       $  3,084,000
                                          ============       ============

Net Income per Common Share:
 Primary                                     $ .08             $ .25
                                             =====             =====
 Fully Diluted                               $ .08             $ .23
                                             =====             =====

Weighted Average Number of Common
 Shares Outstanding

  Primary                                  12,626,000         12,325,000
                                         ============       ============    
  Fully Diluted                            14,402,000         14,103,000
                                         ============       ============ 
 

<FN>

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



<PAGE>


                           AEROFLEX INCORPORATED
                             AND SUBSIDIARIES

                   CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                   Six Months Ended
                                                      December 31,
                                                   ----------------- 

                                                   1995           1994
                                                   ----           ----
<S>                                            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                    $  1,605,000   $  3,799,000
 Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
   Depreciation and amortization                  1,547,000      1,561,000
   Deferred income taxes                           (163,000)        35,000
   Other                                             89,000         36,000
 Change in operating assets and liabilities:
   Decrease (increase) in accounts receivable     1,713,000      3,841,000
   Decrease (increase) in inventories            (3,548,000)      (668,000)
   Decrease (increase) in prepaid expenses and
    other assets                                   (803,000)      (595,000)
   Increase (decrease) in accounts payable, accrued
    expenses and other long-term liabilities     (1,610,000)    (2,771,000)
   Increase (decrease) in income taxes payable      364,000       (374,000)
                                               ------------   ------------  

NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES                              (806,000)     4,864,000 
                                               ------------   ------------ 

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net cash provided by (used in)
   discontinued operations                           94,000       501,000
  Proceeds from sale of property, plant
    and equipment                                   313,000       450,000
  Decrease (increase) in invested cash              653,000       174,000
  Capital expenditures                             (643,000)   (1,671,000)
                                               ------------  ------------ 



NET CASH PROVIDED BY (USED IN)
 INVESTING ACTIVITIES                               417,000      (546,000)
                                               ------------  ------------ 
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings under debt agreements                     -          292,000
  Net debt repayments                            (1,725,000)     (587,000)
  Proceeds from the exercise of stock options       360,000         -
                                               ------------  ------------                                                  

NET CASH PROVIDED BY (USED IN)
 FINANCING ACTIVITIES                            (1,365,000)     (295,000)
                                               ------------  ------------ 

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                           (1,754,000)     4,023,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF  
  PERIOD                                         11,330,000      8,238,000
                                               ------------   ------------ 
CASH AND CASH EQUIVALENTS AT END OF PERIO D    $  9,576,000   $ 12,261,000
                                               ============   ============
<FN>
              See notes to consolidated financial statements
</FN>
</TABLE>

<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  December  31,  1995 and the  related  consolidated
     statements of earnings for the six and three months ended December 31, 1995
     and 1994 and the statements of cash flows for the six months ended December
     31, 1995 and 1994 have been prepared by the Company and are  unaudited.  In
     the opinion of  management,  all  adjustments  (which  include  only normal
     recurring  adjustments) necessary to present fairly the financial position,
     results of  operations  and cash  flows at  December  31,  1995 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, 1995 annual report to  shareholders.  There have been no
     changes of significant accounting policies since June 30, 1995.

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

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

 2.  Acquisition of Business
     -----------------------
     In  January  1995,  the  Company  acquired  substantially  all of  the  net
     operating  assets of Lintek,  Inc.  ("Lintek") for $537,000 plus contingent
     consideration  based on the next five  years'  earnings  to a maximum of an
     additional  $675,000.  As of December 31, 1995,  an  additional  $63,000 of
     consideration  was earned.  Such  amount was  recorded as cost in excess of
     fair  value  of  net  assets  acquired  as  will  any  further   contingent
     consideration  paid. Lintek designs,  develops and manufactures radar cross
     section and antenna pattern measurement systems for commercial and military
     applications, as well as surface penetrating radars. The acquired Company's
     net sales were  approximately  $2,600,000  for the year ended  December 31,
     1994. On a pro forma basis,  had the Lintek  acquisition  taken place as of
     the beginning of the periods  presented,  results of  operations  for those
     periods would not have been materially affected.

     The acquisition has been accounted for as a purchase and, accordingly,  the
     acquired  assets  and  liabilities  assumed  have  been  recorded  at their
     estimated fair values at the date of acquisition.  The operating results of
     the  acquired  company  are  included  in the  consolidated  statements  of
     earnings from the acquisition date.

 3.  Revolving Credit Agreements
     ---------------------------
     As of April 11,  1994 the  Company  replaced  a previous  agreement  with a
     revised  revolving  credit and term loan  agreement with two banks which is
     secured by accounts receivable,  inventory and the Company's  stockholdings
     in certain of its  subsidiaries.  The  agreement  provides  for a revolving
     credit line of $16,000,000 and a term loan of $4,000,000. The term loan was
     repaid  during  the third  quarter of fiscal  1995.  The  interest  rate on
     borrowings  under this agreement is at various rates depending upon certain
     financial  ratios,  with the present rate  substantially  equivalent to the
     prime rate (8.5% at December 31, 1995). The terms of the agreement  require
     compliance with certain covenants  including minimum  consolidated  working
     capital and tangible net worth,  maintenance of certain  financial  ratios,
     limitations on capital expenditures and lease commitments,  and prohibition
     of the payment of cash dividends.



                                

<PAGE>


 4.  Senior Subordinated Convertible Debentures
     ------------------------------------------

     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 and are convertible into the
     Company's  common  stock at a price of $5-5/8 per share.  The net  proceeds
     from the offering were used initially to retire  certain bank  indebtedness
     and for general  working  capital with excess  proceeds placed in temporary
     short term bank related  investments.  In October 1995,  $10,000  principal
     amount of debentures was converted.

 5.  Inventories
     -----------
     Inventories consist of the following:

<TABLE>
<CAPTION>


                                    December 31,          June 30,
                                        1995                1995
                                    ------------        ------------  
<S>                                 <C>                 <C>


                   Raw Materials    $ 7,402,000        $ 5,509,000
                   Work in Process    4,845,000          3,398,000
                   Finished Goods     3,631,000          3,423,000
                                    -----------        -----------        
                                    $15,878,000        $12,330,000
                                    ===========        ===========
</TABLE>

 6. Income Taxes
    ------------
    At June  30,  1995 the  Company  had net  operating  loss  carryforwards  of
    approximately  $14,000,000  for Federal  income tax  purposes  which  expire
    through 2006.  The income tax  provisions for the six and three months ended
    December 31, 1995 and 1994 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 state and local income tax returns covering different periods
    from 1991 to 1993.  Management  believes that the probable  outcome of these
    various  audits  should not  materially  affect the  consolidated  financial
    statements of the Company.

 7. 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.  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.

 8. Life Insurance Proceeds
    -----------------------
    During the quarter ended December 31, 1994, the Company received  $2,000,000
    of insurance proceeds on the death of the former chairman.

<PAGE>

                           AEROFLEX INCORPORATED

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


Results of Operations
---------------------
Six Months  Ended  December 31, 1995  
Compared to Six Months Ended  December 31, 1994
-----------------------------------------------

Net sales  decreased to  $28,344,000  for the six months ended December 31,
1995 from  $29,848,000  for the six months ended  December 31, 1994.  Net income
decreased  to  $1,605,000  for the six  months  ended  December  31,  1995  from
$3,799,000  for the  comparable  period in the prior year,  primarily due to the
receipt in the prior year of $2,000,000 of life insurance proceeds.

Net sales in the electronics segment decreased to $21,396,000 for the six months
ended December 31, 1995 from  $22,985,000  for the six months ended December 31,
1994  primarily  as a result  of lower  sales  volume  of  microelectronics  and
electronic systems offset, in part, by the increased volume of stabilization and
tracking devices and the acquisition of Lintek, Inc. in January, 1995. Operating
profits  decreased by $400,000 as a result of the lower sales  volume  partially
offset by decreased selling, general and administrative costs.

Net sales in the isolator  products segment  increased to $6,948,000 for the six
months ended December 31, 1995 from $6,863,000 for the six months ended December
31, 1994.  The increase  reflects  higher sales volume of  commercial  isolators
partially  offset by  decreased  sales  volume of military  isolators  caused by
delays in the  transition  of this  product  line from our  former  Puerto  Rico
subsidiary to our New Jersey facility.  Operating  profits increased by $212,000
primarily due to reduced selling,  general and administrative  costs as a result
of the consolidation of certain operations of the Puerto Rican facility into the
Company's other facilities.

Cost of sales as a percentage of sales increased to 69.6% from 68.4% between the
two periods primarily as a result of inefficiencies in the final production runs
of military  isolators in the Company's Puerto Rican facility and start-up costs
of the transition to the New Jersey facility. Selling general and administrative
costs  decreased to  $6,341,000  from  $6,858,000  primarily as a result of cost
savings from the  consolidation  of certain  operations of the Company's  Puerto
Rican facility into the Company's other facilities.

Interest expense  decreased to $616,000 from $784,000 due to decreased levels of
borrowings. Interest and other income increased to $333,000 from $324,000.

The income tax  provisions  for the six months ended  December 31, 1995 and 1994
were less than the amounts computed by applying the U.S. Federal income tax rate
to income before income taxes  primarily as a result of the tax benefits of loss
carryforwards  (both unrealized and realized) and, for the period ended December
31, 1994, because of the non-taxable life insurance proceeds of $2,000,000.

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.





<PAGE>


Three Months Ended December 31, 1995 
Compared to Three Months Ended December 31, 1994
------------------------------------------------

Net sales  decreased to $15,195,000 for the three months ended December 31,
1995 from  $15,821,000  for the three months ended December 31, 1994. Net income
decreased  to  $998,000  for the  three  months  ended  December  31,  1995 from
$3,084,000  for the  comparable  period in the prior year  primarily  due to the
receipt in the prior year of $2,000,000 of life insurance proceeds.

Net sales in the  electronics  segment  decreased to  $11,552,000  for the three
months  ended  December  31, 1995 from  $12,345,000  for the three  months ended
December  31,  1994  primarily  as a result of lower sales  volume of  frequency
synthesizers and electronic  systems partially offset by the increased volume of
stabilization  and tracking devices and sales of radar cross section and antenna
pattern  measurement  systems as a result of the acquisition of Lintek,  Inc. in
January 1995.  Operating  profits decreased by $169,000 as a result of the lower
sales volume,  partially offset by decreased selling, general and administrative
costs.

Net sales in the isolator products segment increased to $3,643,000 for the three
months  ended  December  31, 1995 from  $3,476,000  for the three  months  ended
December 31, 1994. The increase is primarily attributable to higher sales volume
of  commercial  isolators  partially  offset by lower  sales  volume of military
isolators  caused by  delays in the  transition  of this  product  line from our
former Puerto Rico  subsidiary  to our New Jersey  facility.  Operating  profits
increased by $189,000 due to reduced selling,  general and administrative  costs
as a result of the  consolidation  of certain  operations  of the  Puerto  Rican
facility into the Company's other facilities.

Cost of sales as a percentage of sales increased to 70.0% from 68.1% between the
two  periods  as a result  of  inefficiencies  in the final  production  runs of
military  isolators in the Company's Puerto Rican facility and start-up costs of
the transition to the New Jersey facility.  Selling,  general and administrative
costs  decreased to  $3,163,000  from  $3,537,000  primarily as a result of cost
savings from the  consolidation  of certain  operations of the Company's  Puerto
Rican facility into the Company's other facilities.

Interest expense  decreased to $313,000 from $397,000 due to decreased levels of
borrowings. The income tax provisions for the three month periods ended December
31,  1995 and 1994 were less than the  amounts  computed  by  applying  the U.S.
Federal  income tax rate to income before income taxes  primarily as a result of
the tax benefits of loss  carryforwards  (both unrealized and realized) and, for
the period ended December 31, 1994,  because of the  non-taxable  life insurance
proceeds of $2,000,000.

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

The Company's  working  capital at December 31, 1995 was $34,722,000 as compared
to $31,533,000  at June 30, 1995.  The current ratio  increased to 4.6 to 1 from
3.5 to 1 at June 30, 1995.

Cash used in operating  activities of $806,000 for the six months ended December
31, 1995 was due to increased  levels of  inventories  and reductions in accrued
expenses  which were offset,  in part,  by the  continued  profitability  of the
Company and the collection of receivables. Cash provided by investing activities
of $417,000 was  comprised  primarily of the sale of marketable  securities  and
property,  plant and equipment  partially offset by capital  expenditures.  Cash
used in financing  activities was primarily for the repayment of certain debt of
the Company's  Puerto Rico  subsidiary.  Management  believes that the revolving
credit and term loan facility, coupled with cash provided by operations, will be
sufficient for its presently anticipated working capital  requirements,  capital
expenditure needs, restructuring costs and the servicing of its debt.



<PAGE>


In March  1995,  the  Company  adopted a plan to  consolidate  its Puerto  Rican
manufacturing  operations  into  its  existing  facilities  in New  York and New
Jersey.  The Company has ceased  manufacturing  operations  in Puerto  Rico.  In
connection with this  restructuring,  the Company  recorded a charge to earnings
totalling   $1,669,000  in  the  third  and  fourth  quarters  of  fiscal  1995,
representing  costs for abandonment of leasehold  improvements,  severance costs
for approximately 100 employees,  lease termination costs,  write-down of excess
equipment and other related costs.  Of this amount  approximately  $597,000 were
non-cash costs and approximately $100,000 remains unpaid.

As of April 11, 1994, the Company  entered into a revised  revolving  credit and
term loan  agreement  with two banks  which is secured by  accounts  receivable,
inventory,  the Company's  stockholdings  in certain of its subsidiaries and the
Company's principal  operating facility.  The agreement provides for a revolving
credit  line of  $16,000,000  and a term loan of  $4,000,000.  The term loan was
repaid during the third  quarter of fiscal 1995. As of December 31, 1995,  there
were  no  borrowings  under  this  agreement.  See  Note 3 to  the  Consolidated
Financial Statements.

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. In October 1995,  $10,000 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. 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 December 31, 1995 and 1994 was  $39,900,000
and $31,600,000, respectively.

At  June  30,  1995  the  Company  had  net  operating  loss   carryforwards  of
approximately  $14,000,000  for  Federal  income tax  purposes.  The  Company is
undergoing  routine audits by various taxing authorities of several of its state
and local  income tax  returns  covering  different  periods  from 1991 to 1993.
Management believes that the probable outcome of these various audits should not
materially affect the consolidated financial statements of the Company.





<PAGE>


                           AEROFLEX INCORPORATED
                             AND SUBSIDIARIES

                        PART II - OTHER INFORMATION


Item 1. Legal Proceedings

      Old Corp.  (formerly  Filtron Co., Inc.) a subsidiary of the Company whose
      operations  were   discontinued  in  October  1991,  was  one  of  several
      defendants  named in a  personal  injury  action  instituted  recently  by
      several  plaintiffs in the Supreme Court of the State of New York,  County
      of Kings.  According to the allegations of the Amended Verified Complaint,
      the plaintiffs,  who are current or former  employees of a company to whom
      Old Corp.  sold RFI  filters/capacitors,  and their wives,  are seeking to
      recover,  respectively,  directly and derivatively, on diverse theories of
      negligence,   strict  liability  and  breach  of  warranty,  for  injuries
      allegedly  suffered from exposure to a liquid  substance or material which
      Old Corp.  incorporated for a period of time in the RFI filters/capacitors
      which  it   manufactured.   The  plaintiffs  are  seeking   damages  which
      cumulatively  may exceed $500 million.  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.

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



<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)



February 7, 1996                   By:      /s/ Michael Gorin
                                        --------------------------
                                            Michael Gorin
                                    President and Chief Financial Officer