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, 2001
                        ----------------------------
                        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 14, 2001    59,721,308 shares (excluding 4,388 shares held in treasury)
--------------------------------------------------------------------------------
    (Date)                            (Number of Shares)

NOTE:  THIS IS PAGE 1 OF A DOCUMENT CONSISTING OF    21    PAGES.
                                                    ----
<PAGE>


                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES


                                      INDEX
                                      -----

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

CONSOLIDATED BALANCE SHEETS
 September 30, 2001 and June 30, 2001                           3-4

CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended September 30, 2001 and 2000                  5

CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three Months Ended September 30, 2001 and 2000                  6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                      7-14

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS
    Three Months Ended September 30, 2001 and 2000             15-19

PART II:  OTHER INFORMATION                                     20
-------   -----------------

SIGNATURES                                                      21





























                                       -2-

<PAGE>


                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                            September 30,       June 30,
                                               2001               2001
                                            ------------        --------
                                            (Unaudited)
                                                    (In thousands)
ASSETS
------
<S>                                           <C>               <C>
Current assets:
 Cash and cash equivalents                    $ 66,650          $ 69,896
 Marketable securities                           9,139            12,012
 Accounts receivable, less allowance for
   doubtful accounts of $668,000 and $459,000   40,515            49,409
 Inventories, net                               49,426            48,423
 Deferred income taxes                           7,197             7,148
 Prepaid expenses and other current assets       4,213             2,583
                                              --------          --------
   Total current assets                        177,140           189,471

Property, plant and equipment, net              60,842            62,137
Intangible assets with definite lives           16,562            20,286
Goodwill                                        22,929            21,006
Deferred income taxes                           10,031             8,538
Other assets                                    10,059             8,814
                                              --------          --------
   Total assets                               $297,563          $310,252
                                              ========          ========
</TABLE>












              See notes to consolidated financial statements.

                                    -3-
<PAGE>
                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                   (continued)

<TABLE>
<CAPTION>
                                                 September 30,       June 30,
                                                     2001             2001
                                                 -------------       --------
                                                 (Unaudited)
                                                       (In thousands)

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S>                                                <C>               <C>
Current liabilities:
  Current portion of long-term debt                $  1,766          $  1,905
  Accounts payable                                    7,950            16,794
  Accrued expenses and other current liabilities     15,170            18,398
                                                   --------          --------
    Total current liabilities                        24,886            37,097

Long-term debt                                       11,104            11,428
Other long-term liabilities                           7,030             6,606
                                                   --------          --------
    Total liabilities                                43,020            55,131
                                                   --------          --------
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 80,000; none issued                    -                  -
  Common Stock, par value $.10 per share;
    authorized 80,000,000 shares; issued
    59,682,000 and 59,674,000 shares                  5,968             5,967
  Additional paid-in capital                        219,357           219,278
  Accumulated other comprehensive income (loss)        (140)             (154)
  Retained earnings                                  29,372            30,044
                                                   --------          --------
                                                    254,557           255,135

  Less:  Treasury stock, at cost (4,000 and
  4,000 shares)                                          14                14
                                                   --------          --------
    Total stockholders' equity                      254,543           255,121
                                                   --------          --------
    Total liabilities and stockholders' equity     $297,563          $310,252
                                                   ========          ========
</TABLE>




                 See notes to consolidated financial statements.

                                     -4-
<PAGE>
                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                              Three Months Ended
                                                September 30,
                                              ------------------
                                             2001              2000
                                           --------          --------
                                                        (Restated, Note 3)
                                                   (Unaudited)
                                       (In thousands, except per share data)
<S>                                        <C>               <C>
Net sales                                  $ 39,490          $ 51,127
Cost of sales                                26,418            31,662
                                           --------          --------
  Gross profit                               13,072            19,465
                                           --------          --------
Selling, general and administrative costs     9,787             9,465
Research and development costs                4,546             3,024
                                           --------          --------
                                             14,333            12,489
                                           --------          --------
  Operating income (loss)                    (1,261)            6,976
                                           --------          --------
Other expense (income)
  Interest expense                              337               370
  Other expense (income)                       (576)           (1,108)
                                           --------          --------
    Total other expense (income)               (239)             (738)
                                           --------          --------
Income (loss) before income taxes            (1,022)            7,714
Provision (benefit) for income taxes           (350)            2,625
                                           --------          --------
Income (loss) before cumulative effect
  of a change in accounting                    (672)            5,089
Cumulative effect of a change
  in accounting, net of tax (Note 2)             -                132
                                           --------          --------
Net income (loss)                          $   (672)         $  5,221
                                           ========          ========
Net income (loss) per common share (1):
  Basic
    Income (loss) before cumulative effect   $(.01)            $ .09
    Cumulative effect of a change
      in accounting                             -                 -
                                             ------            -----
    Net income (loss)                        $(.01)            $ .09
                                             =====             =====
  Diluted (2)
    Income (loss) before cumulative effect   $(.01)            $ .09
    Cumulative effect of a change
      in accounting                            -                   -
                                             ------            -----
    Net income (loss)                        $(.01)            $ .09
                                             =====             =====
Weighted average number of
  common shares outstanding:
    Basic                                    59,789            56,614
                                           ========          ========
    Diluted (2)                              59,789            60,016
                                           ========          ========
<FN>
(1)  All share and per share  data for 2000  have  been  restated  to  reflect a
     2-for- 1 stock split declared and paid in November 2000.

(2)  As a result of the loss for the three months ended  September 30, 2001, all
     options are anti-dilutive.
</FN>
</TABLE>

                 See notes to consolidated financial statements.

                                       -5-

<PAGE>
                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                     Three Months Ended
                                                        September 30,
                                                     ------------------
                                                     2001          2000
                                                     ----          ----
                                                            (Restated, Note 3)
                                                         (Unaudited)
                                                       (In thousands)
<S>                                               <C>             <C>
Cash Flows From Operating Activities:
 Net income (loss)                                $   (672)       $   5,221
 Adjustments to reconcile net income (loss) to net
  cash provided by (used in) operating activities:
   Depreciation and amortization                     3,051            2,518
   Amortization of deferred gain                      (127)            (242)
   Tax benefit from stock option
     exercises (Note 8)                                -              2,745
   Deferred income taxes                              (350)            (161)
   Other, net                                          227               77
 Change in operating assets and liabilities:
   Decrease (increase) in accounts receivable        8,685            9,812
   Decrease (increase) in inventories               (1,003)          (2,821)
   Decrease (increase) in prepaid expenses
    and other assets                                (2,876)          (1,147)
   Increase (decrease) in accounts payable,
    accrued expenses and other liabilities         (11,575)          (1,870)
                                                  --------         --------
Net Cash Provided By (Used In) Operating
 Activities                                         (4,640)          14,132
                                                  --------         --------
Cash Flows From Investing Activities:
  Payment for purchase of businesses, net of
    cash acquired                                     -                (271)
  Capital expenditures                              (1,073)          (3,896)
  Purchase of marketable securities                   -             (19,171)
  Proceeds from sale of marketable securities        2,882             -
                                                  --------         --------
Net Cash Provided By (Used In) Investing
 Activities                                          1,809          (23,338)
                                                  --------         --------
Cash Flows From Financing Activities:
  Borrowings under debt agreements                    -                 292
  Debt repayments                                     (463)            (651)
  Proceeds from the exercise of stock options
    and warrants                                        48              921
  Amounts paid for withholding taxes on stock
    option exercises                                   (14)          (4,979)
  Withholding taxes collected for stock option
    exercises                                           14              769
                                                  --------         --------
Net Cash Provided By (Used In) Financing
 Activities                                           (415)          (3,648)
                                                  --------         --------
Net Increase (Decrease) In Cash
  And Cash Equivalents                              (3,246)         (12,854)
Cash And Cash Equivalents At Beginning Of Period    69,896           54,732
                                                  --------         --------
Cash And Cash Equivalents At End Of Period        $ 66,650         $ 41,878
                                                  ========         ========
<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, 2001 and the  related  consolidated
     statements of operations for the three months ended  September 30, 2001 and
     2000 and the  consolidated  statements  of cash flows for the three  months
     ended September 30, 2001 and 2000 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, 2001 and
     for all periods presented have been made. Certain  information and footnote
     disclosures   normally  included  in  financial   statements   prepared  in
     accordance  with  accounting  principles  generally  accepted in the United
     States  of  America  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, 2001 annual
     report  to  shareholders.   There  have  been  no  changes  of  significant
     accounting  policies  since June 30,  2001,  except as disclosed in Note 2.
     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.   Recent Accounting Pronouncements
     --------------------------------

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

     Effective  July  1,  2000,  the  Company  adopted  Statement  of  Financial
     Accounting   Standards   ("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.

     Accounting for Business Combinations, Goodwill and Other Intangible Assets
     --------------------------------------------------------------------------

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
     No. 141,  "Business  Combinations,"  and SFAS No. 142,  "Goodwill and Other
     Intangible  Assets." SFAS No. 141 specifics criteria that intangible assets
     acquired in a business  combination must meet to be recognized and reported
     apart from  goodwill.  SFAS No. 142 requires that  goodwill and  intangible
     assets with  indefinite  useful lives no longer be  amortized,  but instead
     tested for impairment at least  annually in accordance  with the provisions
     of SFAS No. 142. This  pronouncement  also requires that intangible  assets
     with estimable  useful lives be amortized over their  respective  estimated
     useful lives and reviewed for impairment in accordance with SFAS No. 121.

     The Company has adopted the  provisions of SFAS Nos. 141 and 142 as of July
     1, 2001.  The Company has  evaluated  its  existing  intangible  assets and
     goodwill that were acquired in prior purchase business combinations and has
     reclassified  $3.0  million  net  carrying  value of  intangible  assets to
     goodwill  in order  to  conform  to the new  criteria  in SFAS No.  141 for
     recognition apart from goodwill. In connection with this  reclassification,
     the  Company has also  reduced  goodwill  for the amount of deferred  taxes


                                       -7-
<PAGE>
     previously recorded on the reclassified intangible assets that is no longer
     required.  The Company has also  reassessed  the useful  lives and residual
     values  of all  intangible  assets  acquired,  and has  determined  that no
     amortization period adjustments were necessary.

     The Company will be required to test goodwill for  impairment in accordance
     with the  provisions of SFAS No. 142 by December 31, 2001.  Any  impairment
     loss will be  measured  as of the date of adoption  and  recognized  as the
     cumulative  effect of a change in accounting  principle as of July 1, 2001.
     Because of the  extensive  effort  needed to comply with  adopting SFAS No.
     142, it is not practicable to reasonably  estimate whether the Company will
     be  required  to  recognize  any  transitional  impairment  losses  as  the
     cumulative effect of a change in accounting principle.

     The components of amortized intangible assets are as follows:
<TABLE>
<CAPTION>
                                      As of September 30, 2001
                                   ------------------------------
                                   Gross Carrying    Accumulated
                                       Amount        Amortization
                                   --------------    ------------
                                           (In thousands)
     <S>                           <C>               <C>

     Existing technology           $  21,413         $   5,593
     Tradenames                        1,000               258
                                   ---------         ---------
         Total                     $  22,413         $   5,851
                                   =========         =========
</TABLE>

The  aggregate  amortization  expense for the  amortized  intangible  assets was
$685,000 for the three months ended September 30, 2001.


The carrying amount of goodwill is as follows:
<TABLE>
<CAPTION>
                          Balance as                          Balance as of
                          of July 1,   Adjustment  Adjustment  September 30,
                             2001       (Note a)    (Note b)       2001
                          ----------   ----------  ---------- --------------
                                            (In thousands)
     <S>                  <C>         <C>         <C>           <C>

     Microelectronic
       Solutions Segment   $  9,268    $  2,913    $ (1,116)     $ 11,065
     Test Solutions
       Segment               10,949         126        -           11,075
     Isolator Products
       Segment                  789        -           -              789
                           --------    --------    --------      --------
         Total             $ 21,006    $  3,039    $ (1,116)     $ 22,929
                           ========    ========    ========      ========
<FN>
Note a -  Reclassification  from  intangible  assets in accordance with SFAS No.
          141.

Note b -  Reversal  of  deferred  taxes  payable,   previously  recorded,   for
          reclassified intangible assets.
</FN>
</TABLE>

Goodwill  (including  intangible  assets  reclassified to goodwill in accordance
with SFAS No. 141)  amortization  for the three months ended  September 30, 2000
was $265,000 and generated a tax benefit of $36,000.  The following  table shows
the results of operations as if SFAS No. 141 was applied to prior periods:

                                     -8-
<PAGE>
<TABLE>
<CAPTION>
                                                 For the three months
                                                  ended September 30,
                                                 --------------------
                                                 2001             2000
                                                 ----             ----
                                       (In thousands, except per share amounts)

     <S>                                         <C>            <C>
     Net income (loss), as reported              $(672)         $ 5,221
     Add Back: Goodwill
       amortization, net of tax                    -                229
                                                 -----          -------
     Adjusted net income (loss)                  $(672)         $ 5,450
                                                 =====          =======
     Income (loss) per share - Basic
       Net income (loss), as reported            $(.01)          $  .09
       Goodwill amortization, net of tax           -                .01
                                                 -----          -------
       Adjusted net income (loss)                $(.01)          $  .10
                                                 =====          =======
     Income (loss) per share - Diluted
       Net income (loss), as reported            $(.01)          $  .09
       Goodwill amortization, net of tax           -               -
                                                 -----          -------
       Adjusted net income (loss)                $(.01)          $  .09
                                                 =====          =======
</TABLE>

     Accounting for the Impairment of Long-Lived Assets
     --------------------------------------------------

     In  October  2001,  the  FASB  issued  SFAS  No.  144,  Accounting  for the
     Impairment of Long-Lived Assets,  which addresses financial  accounting and
     reporting for the impairment or disposal of long-lived  assets. The Company
     will  adopt SFAS No. 144  effective  July 1, 2002 and does not expect  such
     adoption  to  have  a  material  impact  on  its   consolidated   financial
     statements.

3.   Acquisition of Businesses
     -------------------------

     TriLink
     -------

     Effective March 23, 2001, the Company acquired all of the outstanding stock
     of TriLink  Communications  Corp.  ("TriLink")  for 1.1  million  shares of
     Aeroflex common stock. TriLink designs, develops,  manufactures and markets
     fiber optic components for the communications  industry,  including Lithium
     Niobate modulators and optical switches.

     The Company  evaluated the acquired  tangible and  identifiable  intangible
     assets  to  serve as a basis  for  allocation  of the  purchase  price.  In
     accordance  with SFAS No. 141, the Company  allocated  the purchase  price,
     including acquisition costs of approximately $300,000, as follows:
<TABLE>
<CAPTION>
                                                           (In thousands)
               <S>                                             <C>
               Net tangible assets                             $ 1,171
               Identifiable intangible assets
                    - existing technology                        6,000
               Deferred income taxes on identifiable
                 intangible assets                              (2,400)
               Excess costs over fair value of net assets
                 acquired                                        5,926
               In-process research and development               1,000
                                                               -------
                                                               $11,697
                                                               =======
</TABLE>
     The existing  technology is being amortized on a straight-line basis over 6
     years. The acquired  in-process research and development was not considered
     to  have  reached   technological   feasibility  and,  in  accordance  with
     accounting  principles  generally accepted in the United States of America,
     the value of such was expensed in the quarter  ended March 31, 2001. At the
     acquisition date, TriLink was conducting design,  development,  engineering
     and  testing  activities  associated  with  the  completion  of  its  10 GB
     modulator.

                                     -9-
<PAGE>

     Summarized  below are the  unaudited pro forma results of operations of the
     Company as if TriLink  had been  acquired  at the  beginning  of the fiscal
     period  presented.  The $1.0 million write-off has not been included in the
     September  30, 2000 pro forma income in order to provide  comparability  to
     the respective historical period.
<TABLE>
<CAPTION>
                                             Pro Forma
                                          Three Months Ended
                                          September 30, 2000
                                          ------------------
                                 (In thousands, except per share data)
     <S>                                      <C>

     Net Sales                                $ 51,180
     Income before cumulative effect
       of a change in accounting                 4,649

     Income before cumulative effect
      of a change in accounting per share:
         Basic                                   $ .08
         Diluted                                 $ .08
</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 period presented or of
     future operating results of the combined companies.

     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.

     The Company  evaluated the acquired  tangible and  identifiable  intangible
     assets  to  serve as a basis  for  allocation  of the  purchase  price.  In
     accordance  with SFAS No. 141, the Company  allocated  the purchase  price,
     including acquisition costs of approximately $100,000, as follows:
<TABLE>
<CAPTION>
                                                       (In thousands)
          <S>                                             <C>

          Net tangible assets                             $ 6,774
          Existing technology                               2,970
          Excess costs over fair value of net assets
            acquired                                        2,856
          In-process research and development               1,500
                                                          -------
                                                          $14,100
                                                          =======
</TABLE>

     The existing  technology is being amortized on a straight-line basis over 7
     years. The acquired  in-process research and development was not considered
     to  have  reached   technological   feasibility  and,  in  accordance  with
     accounting  principles  generally accepted in the United States of America,
     the value of such was expensed in the quarter  ended  December 31, 2000. At
     the acquisition date, RDL was conducting design,  development,  engineering
     and testing  activities  associated  with the completion of its defense and
     commercial product lines representing next-generation technologies.

     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 period
     presented.  The  $1.5  million  write-off  has  not  been  included  in the
     September  30, 2000 pro forma income in order to provide  comparability  to
     the respective historical period.

                                      -10-
<PAGE>
<TABLE>
<CAPTION>
                                               Pro Forma
                                            Three Months Ended
                                            September 30, 2000
                                            ------------------
                                    (In thousands, except per share data)
     <S>                                         <C>

     Net sales                                   $ 55,667
     Income before cumulative effect
       of a change in accounting                    4,872

     Income before cumulative effect
       of a change in accounting per share:
         Basic                                     $ .09
         Diluted                                     .08
</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 period presented or of
     future operating results of the combined companies.

     Altair
     ------

     On October 16, 2000, the Company issued 550,000 shares(after adjustment for
     the two-for-one stock split effective in November 2000) 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  has  been  accounted  for  as  a   pooling-of-interests   and,
     accordingly,  for  all  periods  prior  to the  business  combination,  the
     Company's historical  consolidated  financial statements have been restated
     to include the accounts and results of operations  of Altair.  The acquired
     company's  net sales were  approximately  $3.0  million  for the year ended
     December 31, 2000.

     For  periods   preceding  the  combination,   there  were  no  intercompany
     transactions  which  required  elimination  from the combined  consolidated
     results of operations  and there were no  adjustments  necessary to conform
     the accounting practices of the two companies.

     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.

4.   Earnings Per Share
     ------------------

     In accordance with SFAS No. 128 "Earnings Per Share," net income (loss) per
     common share ("Basic EPS") is computed by dividing net income (loss) by the
     weighted  average common shares  outstanding.  Net income (loss) 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.

                                    -11-
<PAGE>
     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,
                                              -------------------
                                              2001          2000
                                              ----          ----
                                       (In thousands, except per share data)

<S>                                         <C>           <C>
Income (loss) before cumulative effect
  of a change in accounting                 $  (672)      $  5,089
Cumulative effect of a change in
  accounting, net of tax                       -               132
                                            -------       --------
Net income (loss)                           $  (672)      $  5,221
                                            =======       ========
Computation of Adjusted Weighted
  Average Shares Outstanding:
Weighted average shares outstanding          59,789         56,614
Add: Effect of dilutive options and
  warrants outstanding                          -    (1)     3,402
                                            -------       --------
Weighted average shares and common
  share equivalents used for computation
  of diluted earnings per common share       59,789         60,016
                                            =======       ========
Income (loss) per share - Basic:
  Income (loss) before cumulative effect      $(.01)          $.09
  Cumulative effect of a change in
    accounting                                  -              -
                                              -----           ----
  Net income (loss)                           $(.01)          $.09
                                              =====           ====
Income (loss) per share - Diluted:
  Income (loss) before cumulative effect      $(.01)          $.09
  Cumulative effect of a change in
    accounting                                  -              -
                                              -----           ----
  Net income (loss)                           $(.01)          $.09
                                              =====           ====
<FN>
(1)  As a result of the loss for the three months ended  September 30, 2001, all
     options are anti-dilutive.
</FN>
</TABLE>
     Stock Split
     -----------

     On  November  2,  2000,  the  Company's  Board of  Directors  authorized  a
     two-for-one 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.

                                      -12-
<PAGE>
5.   Comprehensive Income (Loss)
     --------------------------

     The components of comprehensive income (loss) are as follows:
<TABLE>
<CAPTION>
                                                 Three Months
                                               Ended September 30,
                                               -------------------
                                             2001              2000
                                             ----              ----
                                                  (In thousands)
     <S>                                     <C>               <C>

     Net income (loss)                       $  (672)          $ 5,221

     Unrealized gain (loss) on
       interest rate swap
       agreements, net of tax                   (125)               60

     Unrealized investment
       gain (loss), net of tax                     6               (46)

     Foreign currency
       translation adjustment                    133               (46)
                                             -------           -------
     Total comprehensive income (loss)       $  (658)          $ 5,189
                                             =======           =======
</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 prime
     (6.0% at  September  30,  2001) 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 fair market value of the interest  rate swap  agreement was $254,000 as
     of September 30, 2001 in favor of the banks.

     The terms of the loan 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,  2001,  the  Company's  available  unused line of credit was
     approximately  $20.4 million after  consideration of this and other letters
     of credit.

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

     Inventories, net, consist of the following:
<TABLE>
<CAPTION>
                                     September 30,       June 30,
                                        2001              2001
                                                    (In thousands)
<S>                                   <C>                <C>

                    Raw Materials     $ 30,179           $ 28,999
                    Work in Process     12,993             13,071
                    Finished Goods       6,254              6,353
                                      --------           --------
                                      $ 49,426           $ 48,423
                                      ========           ========
</TABLE>

                                      -13-
<PAGE>
8.   Income Taxes
     ------------

     The Company is undergoing  routine audits by various taxing  authorities of
     several of its Federal and state income tax returns  covering  periods from
     1997 to 2000.  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 $14,000 and $5.1  million to  additional
     paid-in  capital during the three months ended September 30, 2001 and 2000,
     respectively,  in connection  with the tax benefit  related to compensation
     deductions on the exercise of stock options.

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:

     Microelectronic Solutions:              Test Solutions:
     a)Microelectronic Modules               a)Instrument Products
     b)Thin Film Interconnects               b)Motion Control Systems
     c)Integrated Circuits

     Isolator Products
<TABLE>
<CAPTION>
                                                     For The Three Months Ended
                                                            September 30,
                                                     --------------------------
     Business Segment Data:                             2001              2000
                                                        ----              ----
                                                             (In thousands)
     <S>                                             <C>                <C>
     Net sales:
       Microelectronic Solutions                     $  22,213          $  32,273
       Test Solutions                                   12,935             14,144
       Isolator Products                                 4,342              4,710
                                                     ---------          ---------
         Net sales                                   $  39,490          $  51,127
                                                     =========          =========
     Operating income (loss):
       Microelectronic Solutions                     $   1,105          $   8,100
       Test Solutions                                   (1,886)               231
       Isolator Products                                   536                495
       General corporate expenses                       (1,016)            (1,850)
                                                     ---------          ---------
                                                        (1,261)             6,976

       Interest expense                                   (337)              (370)
       Other income (expense), net                         576              1,108
                                                     ---------          ---------
         Income (loss) before income taxes           $  (1,022)         $   7,714
                                                     =========          =========
</TABLE>
                                      -14-
<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:

     --   microelectronic solutions
     --   test solutions
     --   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 96.8%  owned by us,  and
Aeroflex Amplicomm, Inc., which is 75% owned by us.

     Our microelectronic solutions 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 operating assets of
AmpliComm, Inc., which designs and develops fiber optic amplifiers and modulator
drivers used by manufacturers of advanced fiber optic systems. In March 2001, we
acquired TriLink Communications Corp. which designs, develops,  manufactures and
markets  fiber  optic  components  for the  communications  industry,  including
Lithium Niobate modulators and optical switches.

     Our test solutions  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;

                                      -15-
<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 each of
          March  2001  and  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 merged with in October 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 in October  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  generally  recognized  based  upon  shipments.   Revenues
associated   with  certain   long-term   contracts  are  recognized   under  the
units-of-delivery  method which  includes  shipments and progress  billings,  in
accordance  with  Statement of Position  81-1  "Accounting  for  Performance  of
Construction-Type and Certain Production-Type Contracts." 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  29% of our  sales for  fiscal  2001 and 33% of our sales for
fiscal 2000 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.

                                      -16-
<PAGE>

Three Months Ended  September 30, 2001 Compared to Three Months Ended  September
30, 2000


     Net Sales.  Net sales decreased 22.8% to $39.5 million for the three months
ended September 30, 2001 from $51.1 million for the three months ended September
30, 2000. Net sales in the microelectronic  solutions segment decreased 31.2% to
$22.2  million for the three months ended  September 30, 2001 from $32.3 million
for the three months ended  September 30, 2000 due primarily to decreased  sales
volume  in thin film  interconnects.  Net  sales in the test  solutions  segment
decreased  8.5% to $12.9  million for the three months ended  September 30, 2001
from $14.1 million for the three months ended  September 30, 2000  primarily due
to lower volume in frequency  synthesizers  partially  offset by increased sales
volume in satellite test  equipment and the  acquisition of RDL in October 2000.
Net sales in the  isolator  products  segment  were $4.3  million  for the three
months  ended  September  30, 2001 and $4.7  million for the three  months ended
September 30, 2000.

     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 decreased 32.8% to $13.1
million for the three months ended September 30, 2001 from $19.5 million for the
three months ended September 30, 2000.  Gross margin  decreased to 33.1% for the
three  months  ended  September  30, 2001 from 38.1% for the three  months ended
September 30, 2000. The decreases were primarily a result of the decreased sales
volume in both the microelectronic  solutions and test solutions  segments.  The
gross profit  margin also  decreased in both the  microelectronic  solutions and
test  solutions  segments  due to the  fixed  nature  of some of the  labor  and
overhead costs.

     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 3.4% to $9.8
million (24.8% of net sales) for the three months ended  September 30, 2001 from
$9.5 million (18.5% of net sales) for the three months ended September 30, 2000.
The  increase  was  primarily  due to the  addition  of the  expenses of RDL and
TriLink partially offset by lower corporate expenses.

     Research and  Development  Costs.  Research and  development  costs include
material, engineering labor and allocated overhead. Our self-funded research and
development  costs  increased 50.3% to $4.5 million (11.5% of net sales) for the
three months ended  September 30, 2001 from $3.0 million (5.9% of net sales) for
the three months ended September 30, 2000. The increase was primarily due to the
addition of the  expenses of RDL and  increased  efforts in the  development  of
proprietary integrated circuits utilized in broadband communications.

     Other  Expense  (Income).  Interest  expense  decreased to $337,000 for the
three months ended  September  30, 2001 from $370,000 for the three months ended
September 30, 2000, primarily due to reduced levels of borrowings.  Other income
of $576,000 for the three months ended September 30, 2001 consists  primarily of
$763,000 of interest  income offset by a $198,000  decrease in the fair value of
our interest  rate swap  agreements.  Other income of $1.1 million for the three
months ended September 30, 2000 consisted  primarily of $1.2 million of interest
income offset by a $72,000  decrease in the fair value of our interest rate swap
agreements. Interest income decreased primarily due to the lower market interest
rates.

                                      -17-
<PAGE>

     Provision  (Benefit) for Income Taxes.  The income tax benefit was $350,000
(an effective income tax rate of 34.3%) for the three months ended September 30,
2001 and the income tax provision was $2.6 million (an effective income tax rate
of 34.0%)  for the three  months  ended  September  30,  2000.  The  income  tax
provision  (benefit) for the two periods  differed  from the amount  computed by
applying the U.S.  Federal  income tax rate to income (loss) before income taxes
primarily  due to state and local  income  taxes and  research  and  development
credits.

Liquidity and Capital Resources

     As of September 30, 2001,  we had $152.3  million in working  capital.  Our
current  ratio was 7.1 to 1 at September  30, 2001.  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 prime (6.0% at September 30, 2001) 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 loan 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 $116.7  million at September  30, 2001 and $132.8
million at September 30, 2000.

     For the three months ended  September 30, 2001, our operations used cash of
$4.6 million primarily to reduce accounts payable and accrued expenses offset in
part by collections  of  receivables.  For the three months ended  September 30,
2001, our investing activities provided cash of $1.8 million - $2.9 million from
the sale of marketable  securities  partially  offset by $1.1 million of capital
expenditures.  For the three months ended  September  30,  2001,  our  financing
activities used cash of $415,000 primarily for debt repayments.

     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 the foreseeable future. Our cash, cash equivalents
and marketable securities are available to fund acquisitions and other potential
large cash needs that may arise.  At September 30, 2001,  our  available  unused
line of credit was $20.4 million after  consideration  of this and other letters
of credit.

                                      -18-
<PAGE>

Market Risk

     We are exposed to market risk related to changes in interest  rates and, to
an immaterial  extent,  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% from  levels at
September  30, 2001,  the effect on our net income (loss) 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% from levels at September 30,
2001, the effect on our net income (loss) would be a reduction of  approximately
$164,000 per year.

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.


                                      -19-
<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 8, 2001.

     A.   Three  Directors were elected at the Annual Meeting to serve until the
          Annual Meeting of  Stockholders  in 2004. 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>
           Paul Abecassis                    54,368,632         501,807
           Leonard J. Borow                  46,190,074       8,680,365
           Milton Brenner                    54,355,004         515,435
</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  81,000,000  to  111,000,000;  41,301,620
          shares were voted in favor of this  proposal,  5,162,053  shares voted
          against the proposal and 61,228 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 3.2  - Amended and Restated By-Laws
          Exhibit 10.1 - Amendment  No.  3  to  Employment  Agreement  between
                         Aeroflex Incorporated and Harvey R. Blau dated November
                         8, 2001
          Exhibit 10.2 - Amendment  No.  3  to  Employment  Agreement  between
                         Aeroflex Incorporated and Michael Gorin dated November
                         8, 2001
          Exhibit 10.3 - Amendment  No.  3  to  Employment  Agreement  between
                         Aeroflex Incorporated and Leonard Borow dated November
                         8, 2001

     (b)  Reports on Form 8-K

          None

                                      -20-
<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 14, 2001                By: s/Michael Gorin
                                     ----------------------------------
                                     Michael Gorin
                                     President, Chief Financial Officer
                                     and Principal Accounting Officer





                                      -21-