================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   -----------

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

|_|   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(D)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

             FOR THE TRANSITION PERIOD FROM TO
                                               ------------    ------------

                          COMMISSION FILE NUMBER 1-9078

                                   -----------

                             THE ALPINE GROUP, INC.
             (Exact name of registrant as specified in its charter)

                          DELAWARE                          22-1620387
              (State or other jurisdiction of            (I.R.S. Employer
               incorporation or organization)           Identification No.)
                   ONE MEADOWLANDS PLAZA
                EAST RUTHERFORD, NEW JERSEY                    07073
          (Address of principal executive offices)           (Zip code)

         Registrant's telephone number, including area code 201-549-4400

                                   -----------

      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 by check mark whether the Registrant is an accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X|

      Indicate the number of shares  outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

         CLASS                                    OUTSTANDING AT APRIL 28, 2004

Common Stock, $.10 Par Value                                12,885,633

================================================================================


                                       1
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying  unaudited consolidated financial statements have been prepared
in accordance  with the  requirements  of Section 13 or 15(d) of the  Securities
Exchange  Act of  1934  and,  therefore,  do not  include  all  information  and
footnotes  required by accounting  principles  generally  accepted in the United
States of  America.  However,  in the  opinion of  management,  all  adjustments
(which,  except as disclosed elsewhere herein,  consist only of normal recurring
accruals) necessary for a fair presentation of the results of operations for the
relevant  periods  have been  made.  Results  for the  interim  periods  are not
necessarily  indicative  of the  results  to be  expected  for the  year.  These
financial  statements  should  be  read  in  conjunction  with  the  summary  of
significant  accounting  policies  and the notes to the  consolidated  financial
statements  included in the  Company's  Annual  Report on Form 10-K for the year
ended December 31, 2003.


                                       2
<PAGE>

<TABLE>
<CAPTION>

                     THE ALPINE GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)

                                                                                                  MARCH 31,      DECEMBER 31,
                                                                                                     2004            2003
                                                                                                 ------------------------------
                                     ASSETS
Current assets:
<S>                                                                                                    <C>              <C>
   Cash and cash equivalents.................................................................          $  595           $  465
   Marketable securities, at fair value......................................................           6,608            6,761
   Accounts receivable (less allowance for doubtful accounts of $349 and $308 at
          March 31, 2004 and December 31, 2003 respectively).................................          54,259           34,560
   Inventories, net (Note 4).................................................................          31,273           42,287
   Other current assets......................................................................           3,790            3,761
                                                                                                 ------------------------------
        Total current assets.................................................................          96,525           87,834
Property, plant and equipment, net...........................................................          18,053           17,007
Other long-term assets.......................................................................           2,636            2,947
                                                                                                 ------------------------------
        Total assets.........................................................................        $117,214         $107,788
                                                                                                 ==============================

                                   LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Revolving credit facility (Notes 7).......................................................         $26,801         $ 17,189
   Current portion of long-term debt (Note 8)................................................             137              137
   Accounts payable..........................................................................          20,610           21,853
   Accrued expenses..........................................................................          11,203           12,752
   Deferred income taxes and income taxes payable............................................           8,658            7,644
                                                                                                 ------------------------------
        Total current liabilities............................................................          67,409           59,575

Long-term debt, less current portion (Note 8)................................................           3,791            3,777
Deferred income taxes........................................................................          17,078           17,595
Other long-term liabilities..................................................................           1,633            1,633
Warrant......................................................................................           1,200            1,000
Minority interest in subsidiary..............................................................           2,843            2,686
Mandatorily redeemable series A cumulative preferred stock (18,264 shares issued; 18,159
    and 18,174 outstanding at March 31, 2004 and December 31, 2003 respectively) (Note 9)....           5,658            5,664

Stockholders' equity:
   9% cumulative convertible preferred stock at liquidation value............................             427              427
   Common stock, $.10 par value; (25,000,000 authorized; 22,157,249 and 22,146,884 shares
           issued at March 31, 2004 and December 31, 2003, respectively).....................           2,215            2,214
   Capital in excess of par value............................................................         166,156          165,706
   Accumulated other comprehensive income (loss).............................................              (3)              57
   Accumulated deficit.......................................................................         (56,873)         (58,201)

   Treasury stock, at cost (11,105,598 and 11,109,872 shares at March 31, 2004 and
          December 31, 2003, respectively)...................................................         (93,853)         (93,861)
   Receivable from stockholders..............................................................            (467)            (484)
                                                                                                 ------------------------------
      Total stockholders' equity.............................................................          17,602           15,858
                                                                                                 ------------------------------
        Total liabilities and stockholders' equity...........................................        $117,214         $107,788
                                                                                                 ==============================

                   The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                       3
<PAGE>

<TABLE>
<CAPTION>

                     THE ALPINE GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

                                                                                                        THREE MONTHS ENDED
                                                                                                            MARCH 31,
                                                                                                     -------------------------
                                                                                                          2004          2003
                                                                                                     -------------------------

<S>                                                                                                       <C>         <C>
Net sales.......................................................................................          $88,833     $97,541
Cost of goods sold..............................................................................           74,939      87,810
                                                                                                    --------------------------
   Gross profit.................................................................................           13,894       9,731
Selling, general and administrative expenses....................................................            8,540      11,476
Restructuring and other charges.................................................................            1,748       2,586
                                                                                                    --------------------------
   Operating income (loss)......................................................................            3,606     (4,331)
Interest expense................................................................................            (619)     (1,151)
Other income (expense), net.....................................................................            (100)        (30)
                                                                                                    --------------------------
   Income (loss) before income taxes, minority interest,  and equity in earnings of affiliate...            2,887     (5,512)
Income tax (provision) benefit..................................................................          (1,255)       2,125
                                                                                                    --------------------------

   Income (loss) before minority interest and equity in earnings of affiliate...................            1,632     (3,387)
Minority interest in  income of subsidiary......................................................            (157)          --
Equity in earnings of affiliate.................................................................               --       1,073
                                                                                                    --------------------------


Net income (loss)...............................................................................            1,475     (2,314)
Preferred stock dividends.......................................................................            (147)         (9)
                                                                                                    --------------------------
   Net  income (loss) applicable to common stock................................................          $ 1,328    $(2,323)
                                                                                                    ==========================




Net income (loss) per share of common stock:

   Net income (loss) - basic....................................................................            $0.11     $(0.16)
   Net Income (loss) - diluted..................................................................            $0.06     $(0.16)



Weighted average shares outstanding:
   Basic........................................................................................           12,119      14,931
   Diluted......................................................................................           25,572      14,931


                   The accompanying notes are an integral part of these consolidated financial statements.

</TABLE>


                                       4
<PAGE>


<TABLE>
<CAPTION>

                     THE ALPINE GROUP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)


                                                                                                       THREE MONTHS ENDED
                                                                                                         MARCH 31, 2004
                                                                                                 ----------------------------
                                                                                                     SHARES           AMOUNT
                                                                                                 ----------------------------
<S>                                                                                                       <C>         <C>
9% cumulative convertible preferred stock:
   Balance at beginning of period..............................................................           427         $  427
                                                                                                 ----------------------------
      Balance at end of period.................................................................           427            427
                                                                                                 ----------------------------

Common stock:
   Balance at beginning of period..............................................................    22,146,884        $ 2,214
   Shares issued pursuant to Series A Preferred Stock conversion...............................        10,365              1
                                                                                                 ----------------------------
      Balance at end of period.................................................................    22,157,249        $ 2,215


Capital in excess of par value:
   Balance at beginning of period..............................................................                      165,706
   Compensation expense related to stock options / grants net of vested shares.................                          445
   Shares issued pursuant to Series A Preferred Stock conversion...............................                            5
                                                                                                              ---------------
      Balance at end of period.................................................................                      166,156

Accumulated other comprehensive deficit:
   Balance at beginning of period..............................................................                           57
   Change in unrealized losses on securities, net of tax.......................................                         (60)
                                                                                                              ---------------
      Balance at end of period.................................................................                          (3)
                                                                                                              ---------------
Accumulated deficit:
   Balance at beginning of period..............................................................                     (58,201)
   Net income..................................................................................                        1,475
   Dividends on preferred stock................................................................                        (147)
                                                                                                              ---------------
      Balance at end of period.................................................................                     (56,873)
                                                                                                              ---------------
Treasury stock:
   Balance at beginning of period..............................................................                     (93,861)
   Stock options and grants....................................................................                            8
                                                                                                              ---------------
      Balance at end of period.................................................................                     (93,853)

Receivable from stockholders:
   Balance at beginning of period..............................................................                        (484)
   Forgiveness of officer loans................................................................                           17
                                                                                                              ---------------
      Balance at end of period.................................................................                        (467)
                                                                                                              ---------------
Total stockholders' equity.....................................................................                     $ 17,602
                                                                                                              ===============

                   The accompanying notes are an integral part of these consolidated financial statements.

</TABLE>


                                       5
<PAGE>

<TABLE>
<CAPTION>
                     THE ALPINE GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

                                                                                                            THREE MONTHS ENDED
                                                                                                                 MARCH 31,
                                                                                                 ---------------------------------
                                                                                                             2004            2003
                                                                                                 ---------------------------------
<S>                                                                                                        <C>          <C>
Cash flows from operating activities:
   Net income (loss)..........................................................................             $1,475        $ (2,314)
   Adjustments to reconcile net income (loss) to net cash provided by (used for) operating
      activities:
      Depreciation and amortization...........................................................                252             259
      Amortization of deferred debt issuance costs and accretion of debt discount.............                156             121
      Compensation expense related to stock options and grants................................                462             194
      Gain on sale of fixed assets............................................................               (239)             --
      Minority interest in income of subsidiary...............................................                157              --
      Increase in fair value of warrant.......................................................                200              --
      Equity in earnings of affiliates........................................................                 --          (1,073)
      Change in assets and liabilities:
        Accounts receivable, net..............................................................            (19,699)          8,171
        Inventories, net......................................................................             11,014          16,574
        Other current and non-current assets..................................................                 64          (1,605)
        Accounts payable and accrued expenses.................................................             (2,559)         (2,238)
           Income taxes.......................................................................                497          (2,172)
        Other, net............................................................................                (33)             25
                                                                                                 ---------------------------------
Cash flows provided by (used for) operating activities........................................             (8,253)         15,942
                                                                                                 ---------------------------------
Cash flows from investing activities:
   Capital expenditures.......................................................................             (1,328)         (3,279)
   Proceeds from sale of assets...............................................................                 68           2,850
                                                                                                 ---------------------------------
Cash flows used for investing activities......................................................            (1,260)            (429)
                                                                                                 ---------------------------------
Cash flows from financing activities:
   Borrowings (repayments) under revolving credit facilities, net.............................              9,612         (18,199)
   Repayments of long-term borrowings.........................................................                (31)            (22)
   Other, net.................................................................................                 62              (9)
                                                                                                 ---------------------------------
Cash flows provided by (used for) financing activities........................................              9,643         (18,230)

Net increase (decrease) in cash and cash equivalents..........................................                130          (2,717)
Cash and cash equivalents at beginning of period..............................................                465           8,139
                                                                                                 ---------------------------------
Cash and cash equivalents at end of period....................................................              $ 595          $5,422
                                                                                                 =================================
Supplemental disclosures:
   Cash paid for interest.....................................................................              $ 891          $1,298


   Cash paid for income taxes, net............................................................              $ 772            $245


                  The accompanying notes are an integral part of these consolidated financial statements.

</TABLE>
                                       6
<PAGE>

                     THE ALPINE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004
                                   (UNAUDITED)

1. GENERAL

      BASIS OF PRESENTATION

      The accompanying unaudited consolidated financial statements represent the
accounts  of  The  Alpine  Group,  Inc.  and  the  consolidation  of  all of its
majority-controlled subsidiaries (collectively "Alpine" or the "Company", unless
the context  otherwise  requires).  The Company records all affiliate  companies
with  ownership  of greater  than 20%,  but not  majority-controlled,  using the
equity method of accounting.

      Prior to December 11, 2002,  Alpine's  operations include the consolidated
results of its then controlled subsidiary Superior TeleCom Inc. ("Superior") and
Superior's  then  majority-owned  subsidiary  Superior  Cables  Ltd.  ("Superior
Israel").  As a result of the  vesting  of  certain  Superior  restricted  stock
arrangements in 2002, Alpine's common equity ownership in Superior declined from
50.2% at  December  31, 2001 to 48.9%.  Notwithstanding  the decline in Alpine's
direct  equity  ownership in Superior  through  December 11, 2002,  Alpine had a
controlling  interest  in  Superior  based  on its  additional  indirect  equity
ownership position  (including certain common share voting interests  controlled
by Alpine).  In connection  with Alpine's  acquisition of Superior's  electrical
wire business and DNE Systems Inc. (the "Electrical Acquisition")--(see Note 2),
certain  changes were made with respect to Alpine's  indirect  voting  interests
such that Alpine no longer controlled  Superior.  Additionally,  Alpine acquired
approximately  47% of Superior  Israel from  Superior as part of the  Electrical
Acquisition.  Accordingly,  effective  for  periods  after  December  11,  2002,
Superior and Superior  Israel are  accounted for under the equity method and are
no longer consolidated with Alpine.

      On March 3,  2003,  Superior  and its U.S.  subsidiaries  filed  voluntary
petitions for relief under Chapter 11 of the United States  Bankruptcy  Code. On
October  22,  2003,  Superior's  Joint Plan of  Reorganization,  as amended  and
related  disclosure  statement  was  confirmed  by  order of the  United  States
Bankruptcy  Court for the District of Delaware and became  effective on November
10, 2003 (the "Plan of Reorganization"). The Plan of Reorganization provided for
the  cancellation  of all  equity and debt  interests  held in  Superior  by the
Company.

      As a result of the accumulated net losses incurred by Superior, Alpine had
recorded  losses in excess of its  investment  in Superior of $865.9  million at
December 11, 2002.  This  negative  investment  was  required  under  accounting
principles generally accepted in the United States of America to be reflected in
Alpine's  consolidated  balance sheet,  notwithstanding the fact that Alpine was
not  obligated  to fund any  operating  losses or  deficits  of  Superior.  Upon
implementation  of the Plan of  Reorganization,  Alpine  eliminated its negative
investment in Superior and recognized a corresponding  gain of $865.9 million in
the fourth  quarter of 2003.  This gain was partially  offset by the reversal of
$11.6  million of  accumulated  other  comprehensive  loss  related to  Superior
resulting in a net gain of $854.3 million.

      Alpine  was  incorporated  in New  Jersey  in 1957 and  reincorporated  in
Delaware in 1987. Alpine is a holding company which over the past five years has
held major investments in industrial manufacturing companies.  Subsequent to the
Electrical Acquisition,  Alpine's principal operations consist of Essex Electric
Inc.,  engaged in the  manufacture  and sale of electrical  wire and cable,  DNE
Systems,  Inc., a manufacturer  of  multiplexers  and other  communications  and
electronic products and a 47% equity interest in Superior Israel.

      STOCK-BASED COMPENSATION PLANS

      The  Company  applies  the  intrinsic-value  based  method  of  accounting
prescribed by Accounting  Principles Board (APB) Opinion No. 25,  Accounting for
Stock  Issued to  Employees,  and related  interpretations  including  Financial
Accounting Standards Board (FASB)  Interpretation No. 44, Accounting for Certain
Transactions involving Stock Compensation,  an interpretation of APB Opinion No.
25, issued in March 2000,  to account for its  stock-based  compensation  plans.
Under this method, compensation expense is recorded on the date of grant only if
the current  market price of the underlying  stock exceeded the exercise  price.
Statement of  Financial  Accounting  Standards  (SFAS) No. 123,  Accounting  for
Stock-Based  Compensation,  established  accounting and disclosure  requirements
using  a  fair-value  based  method  of  accounting  for  stock-based   employee
compensation  plans.  As allowed by SFAS No.  123,  the  Company  has elected to
continue  to apply the  intrinsic-value  based  method of  accounting  described
above,  and has adopted only the  disclosure  requirements  of SFAS No. 123. The
following  table  illustrates  the effect on net income (loss) if the fair value
based method had been  applied to all  outstanding  and unvested  awards in each
period.


                                       7
<PAGE>

<TABLE>
<CAPTION>


                                                                                                     THREE MONTHS ENDED
                                                                                                          MARCH 31,
                                                                                               ------------------------------
                                                                                                   2004               2003
                                                                                               ------------------------------

<S>                                                                                               <C>                <C>
Net income (loss), as reported..........................................................          $1,475             $(2,314)
Add stock-based employee compensation expense included
 in reported net income (loss), net of tax..............................................             288                 115
Deduct total stock-based employee compensation expense determined under fair value
    based method for all awards, net of related tax effects.............................            (376)               (168)
                                                                                               ------------------------------
Pro forma net income (loss).............................................................           1,387              (2,367)

Preferred stock dividends                                                                           (147)                 (9)
                                                                                               ------------------------------
  Proforma net income (loss) - applicable to common stock...............................          $1,240             $(2,376)
                                                                                               ==============================

Net income (loss) per share:
   Basic - as reported..................................................................           $0.11              $(0.16)
   Basic - pro forma....................................................................           $0.10              $(0.16)
   Diluted - as reported................................................................           $0.06              $(0.16)
   Diluted - pro forma..................................................................           $0.05              $(0.16)

</TABLE>

      The effects of applying SFAS No. 123 in the pro forma  disclosure  are not
necessarily  indicative of future  amounts,  since the  estimated  fair value of
stock  options is amortized to expense  over the vesting  period and  additional
options  may be granted in future  years.  The fair value for these  options was
estimated at the date of grant using the Black-Scholes option-pricing model with
the following weighted-average  assumptions for the three months ended March 31,
2004 and 2003,  respectively:  dividend  yield of 0% for both periods;  expected
volatility of 97% and 99%, risk-free interest rate of 2.6% for both periods, and
expected life of two years for both periods. The weighted average per share fair
value of options granted (using the Black-Scholes  option-pricing model) for the
three months ended March 31, 2004 and 2003 was $0.92 and $0.49, respectively.  A
total of 112,098 stock options were granted  during the three month period ended
March 31, 2004.

      The Black-Scholes option-pricing model was developed for use in estimating
the fair value of traded  options  which have no  vesting  restrictions  and are
fully  transferable.  In addition,  option valuation models require the input of
highly  subjective  assumptions,  including the expected stock price volatility.
Because the Company's employee and consultant stock options have characteristics
significantly  different from those of traded options and because changes in the
subjective input assumptions can materially affect the fair value estimates,  in
management's  opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

      The Company amortizes the value of the restricted stock grants evenly over
the vesting periods,  based upon the market value of the stock as of the date of
the grant.

      NEW ACCOUNTING STANDARDS

      The Company  adopted SFAS No. 146,  Accounting for Costs  Associated  with
Exit or Disposal  Activities  effective  January 1, 2003. SFAS No. 146 addresses
financial  accounting and reporting for costs  associated  with exit or disposal
activities and nullifies Emerging Issues Task Force (EITF) Issue 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity.  The  provisions of this  Statement are effective for exit or disposal
activities that are initiated after December 31, 2002. The  restructuring  costs
incurred  during  the three  months  ended  March 31,  2004 and 2003,  have been
accounted for in accordance with SFAS No. 146.

      The Company adopted FASB Interpretation No. 45, Guarantor's Accounting and
Disclosure  Requirements  for  Guarantees,   Including  Indirect  Guarantees  of
Indebtedness to Others,  an  interpretation of FASB Statements No. 5, 57 and 107
and a rescission of FASB  Interpretation  No. 34 effective January 1, 2003. This
Interpretation  elaborates on the  disclosures  to be made by a guarantor in its
interim and annual financial  statements about its obligations  under guarantees
issued.  The  Interpretation  also  clarifies  that a  guarantor  is required to
recognize,  at inception of a guarantee,  a liability  for the fair value of the
obligation undertaken. The initial recognition and measurement provisions of the
Interpretation  are  applicable to guarantees  issued or modified after December
31, 2002. Since 1993,  Alpine has been a party to a guaranty of Superior's lease
obligations relating to Superior's  manufacturing facility in Brownwood,  Texas.


                                       8
<PAGE>

The lease  currently  provides  for  monthly  payments  of  $56,000  subject  to
adjustments  for changes in the consumer price index.  The lease term expires in
2018 but may be extended through 2033. As such, the maximum  potential amount of
future  payments  under the  guaranty  through 2018 would be  approximately  $10
million.  Any further  extensions  would amount to a guarantee of  approximately
$0.7  million per year.  Since the  guaranty was not issued prior to and has not
been  modified  after  December 31, 2002, a liability  for the fair value of the
obligation  is not  recorded in the  consolidated  financial  statements.  While
Alpine's  continuing  obligations,  if any, under the guaranty are not free from
doubt,  the Company  believes  the facility  and  underlying  lease are valuable
assets of Superior and expects that Superior  will perform as tenant  thereunder
and continue to pay its obligations.  In addition, Alpine would have a claim for
indemnification  and reimbursement  from Superior in respect of any amounts paid
by Alpine as guarantor.  The Company is not a party to any other  guarantees and
implementation  of  Interpretation  No. 45 did not have a material effect on the
Company's financial statements.

      DERIVATIVES

      All  derivatives are recognized on the balance sheet at fair value. On the
date the derivative  contract is entered,  the Company designates the derivative
as either (i) a fair value hedge of a recognized asset or liability, (ii) a cash
flow hedge of a forecasted  transaction,  (iii) a hedge of a net investment in a
foreign operation, or (iv) a non-designated  derivative instrument.  The Company
has in the past engaged in certain derivatives that are classified as fair value
hedges, cash flow hedges and non-designated  derivative instruments.  Changes in
the fair value of  derivatives  that are designated as fair value hedges and the
underlying  exposure being hedged are adjusted to fair value and are recorded in
the consolidated  statements of operations in the same line item. Changes in the
fair value of cash flow hedges are recorded in accumulated  other  comprehensive
income with any ineffective portion immediately recognized in earnings.  Changes
in the fair value of non-designated derivative contracts are reported in current
earnings.  At December 31, 2003,  the Company had  approximately  $13 million of
copper futures contracts,  representing 12 million copper pounds, outstanding as
non-designated  derivative  instruments.  These  contracts  were entered into to
hedge 12 million copper pounds of inventory purchased in December 2003, for sale
in the first  quarter of 2004.  These  contracts  were recorded at fair value at
December 31, 2003 with any price  fluctuations  reflected in current earnings in
2003 and were liquidated in the first quarter of 2004, when the underlying asset
(i.e. inventory) was sold.

      The Company does not currently utilize any hedging  instruments that would
qualify for hedge accounting treatment.  If such transactions were to arise, the
Company would formally  document all relationships  between hedging  instruments
and hedged items,  as well as the risk  management  objectives  and strategy for
undertaking various hedge transactions.

2. ELECTRICAL ACQUISITION

      On December 11, 2002, Alpine, through Alpine Holdco Inc. ("Alpine Holdco")
a newly formed, wholly-owned subsidiary of Alpine, acquired the following assets
and securities from Superior:  (1) substantially  all of the assets,  subject to
related accounts payable and accrued liabilities,  of Superior's electrical wire
business,  which is currently owned and operated by Essex Electric Inc.  ("Essex
Electric"),  a newly formed, then wholly-owned  subsidiary of Alpine Holdco; (2)
all of the  outstanding  shares of  capital  stock of DNE  Systems,  Inc.  ("DNE
Systems") a manufacturer of multiplexers and other communications and electronic
products;  and (3) all of the  outstanding  shares of capital stock of Texas SUT
Inc. and Superior Cable Holdings (1997) Ltd.,  which together own  approximately
47% of Superior  Israel,  the largest  Israeli-based  producer of wire and cable
products.  This acquisition is referred to as the "Electrical  Acquisition." The
aggregate purchase price was approximately $87.4 million in cash (including $2.5
million of  out-of-pocket  costs) plus the  issuance of a warrant to Superior to
purchase  199  shares of the  common  stock of Essex  Electric.  The  warrant is
recorded as a liability in the  consolidated  balance sheet and is evaluated and
adjusted  to fair  value on a  quarterly  basis,  with $0.2  million  of expense
recorded in other  income  (expense)  for the three months ended March 31, 2004.
The warrant is only exercisable during the 30 day period prior to its expiration
on  December  11,  2007 or upon the  earlier  occurrence  of  certain  specified
transactions  generally involving a change in control of or a sale of the assets
of Alpine Holdco or Essex Electric.

      In  connection  with the  Electrical  Acquisition,  Alpine  Holdco,  Essex
Electric and Superior entered into a Supply and Transitional  Services Agreement
(the  "Transitional   Agreement").   Under  the  Transitional  Agreement,  Essex
Electric, among other things, agreed to purchase from Superior certain specified
quantities of its overall  requirements of copper rod. The specified  quantities
represent  a range  of  Essex  Electric's  estimated  total  annual  copper  rod
requirements for use in its wire manufacturing  process.  The purchase price for
copper rod specified in the Transitional  Agreement was based on the COMEX price
plus an adder to reflect  conversion to copper rod. The  Transitional  Agreement
also provided for  Superior's  provision of certain  administrative  services to
Alpine Holdco and Essex  Electric.  Charges for these  services  were  generally
based on actual usage or an allocated portion of the total cost to Superior.  On
November 7, 2003,  the  Transitional  Agreement was replaced by a new supply and
services  agreement  between  Superior  Essex  Inc.  (the  successor  company to
Superior pursuant to the Plan of Reorganization) and Essex Electric (the "Supply
Agreement").  The Supply Agreement includes the supply by Superior Essex Inc. to
Essex  Electric  of copper  rod,  on  similar  pricing  terms,  for 2004 and the
provision  of certain  specified  administrative  services for a limited time in
2004. The Supply Agreement expires on December 31, 2004 but may be terminated at


                                       9
<PAGE>

any time  prior to that by mutual  consent  of  Superior  Essex  Inc.  and Essex
Electric.  Additionally, the parties may terminate various services provided for
under the  agreement  upon certain  prior notice as provided  therein.  Superior
Essex Inc. may  terminate  its  obligations  to supply  copper rod upon 30 days'
notice given any time after January 1, 2004 if Essex Electric has purchased less
than certain  minimum  quantities  of copper rod,  tested on a quarterly  basis,
specified in the  agreement.  The total cost of copper rod  purchased  under the
Transitional Agreement and the Supply Agreement in the first quarter of 2004 and
2003  was  $15.5  million  and  $38.6  million,  respectively,  and the cost for
administrative  services for the first quarter of 2004 and 2003 was $0.6 million
and $1.3 million, respectively.

3. ASSET SALES

      In  February  2003,  the  Company  sold its  plant in  Lafayette,  Indiana
together with the related equipment and inventory which comprised  substantially
all of its industrial wire business.  The total purchase price was approximately
$12.6  million in cash  which  approximated  the book value of the assets  sold.
Additionally, the Company is leasing its Orleans, Indiana plant to the purchaser
for an annual  rental of $350,000.  The original  lease expired in February 2004
but has been extended on a  month-to-month  basis. The net carrying value of the
Orleans plant was $0.8 million at March 31, 2004.

      In  September  2003,  the Company  sold its plant in  Anaheim,  California
subject to a leaseback  arrangement  which,  at the Company's  option may extend
through  December 31, 2004.  The total gain on the sale was $2.6  million,  $2.0
million of which was  recognized  in 2003,  $0.2 million in the first quarter of
2004 and the remainder will be amortized over the remaining leaseback period.

4. INVENTORIES

      At March 31, 2004 and December 31, 2003,  the  components  of  inventories
were as follows:

                                                MARCH 31,       DECEMBER 31,
                                                  2004              2003
                                           ----------------------------------
                                                    (IN THOUSANDS)

Raw materials..............................        $7,428            $17,890
Work in process............................         8,588              6,803
Finished goods.............................        31,618             26,601
                                           ----------------------------------
                                                   47,634             51,294
LIFO reserve...............................       (16,361)            (9,007)
                                           ----------------------------------
                                                  $31,273            $42,287
                                           ==================================

      Inventories  valued  using the LIFO method  amounted to $42.2  million and
$37.2 million at March 31, 2004 and December 31, 2003, respectively.

5. COMPREHENSIVE INCOME (LOSS)

      The components of  comprehensive  income (loss) for the three months ended
March 31, 2004 and 2003 were as follows:

                                                    THREE MONTHS ENDED
                                                         MARCH 31,
                                           -------------------------------------
                                                     2004                2003
                                                     ----                ----
                                                          (IN THOUSANDS)

Net income (loss)..........................        $1,475            $(2,314)
Change in unrealized
 losses on securities, net of tax                     (60)              (111)
                                           -------------------------------------
Comprehensive income (loss)................        $1,415            $(2,425)
                                           =====================================


                                       10
<PAGE>

6. RESTRUCTURING AND OTHER CHARGES

      During the three month periods ended March 31, 2004 and 2003,  the Company
recorded $1.7 and $2.6 million respectively, of restructuring and other charges.
The first quarter 2004 charges  include $0.6 million  related to the  relocation
and installation of certain  equipment from closed facilities into the Florence,
Alabama  manufacturing  location,  $0.6  million  related  to  freight  costs to
relocate inventory, $0.3 million in facility costs relating to idled warehousing
space and $0.2  million  related to the  wind-down  of other  previously  closed
facilities,  start-up  costs at the Florence  location  and other  miscellaneous
expenses related to the Company's restructuring.

      The following  table  illustrates the  restructuring  reserve and the 2004
related activities:

<TABLE>
<CAPTION>
                                                                         DECEMBER 31,                            MARCH 31,
                                                                            2003       CHARGES     PAYMENTS        2004
                                                              -----------------------------------------------------------
                                                                                          (IN THOUSANDS)

<S>                                                                         <C>          <C>       <C>              <C>
Employee severance.........................................                 $972         $--       $(642)           $330
Facility exit costs........................................                   29         498        (527)             --
Equipment and inventory relocation costs and other costs...                   --       1,249      (1,249)             --
                                                              -----------------------------------------------------------
                                                                          $1,001      $1,747     $(2,418)           $330
                                                              ===========================================================
</TABLE>

7. REVOLVING CREDIT FACILITY

      In connection with the Electrical  Acquisition (see Note 5), Alpine Holdco
entered into a Loan and Security Agreement (the "Loan  Agreement"),  dated as of
December 11, 2002, by and among Alpine Holdco, Essex Electric, DNE Manufacturing
and Service  Company ("DNE  Manufacturing")  and DNE  Technologies,  Inc.  ("DNE
Technologies")  as  borrowers  and DNE  Systems as Credit  party  (such  parties
sometimes  collectively are called "Companies")  certain financial  institutions
party  thereto as lenders,  Congress  Financial  Corporation,  as  documentation
agent, and Foothill Capital Corporation,  as arranger and administrative  agent.
The Revolving Credit Facility was last amended on December 8, 2003.

      The  terms  of  the  Revolving  Credit  Facility  provided  for a  maximum
committed  amount of $100 million at its inception  which, at the request of the
Companies was reduced to $70 million on December 8, 2003. Borrowing availability
is determined by reference to a borrowing base which permits advances to be made
at various net valuation rates against various assets of the Companies. Interest
is  payable  monthly  in cash in  arrears  and is based on,  at Alpine  Holdco's
option,  LIBOR or prime rates plus a fixed margin. The weighted average interest
rate at March 31, 2004 and  December  31, 2003 was 4.6% and 4.5%,  respectively.
The  Revolving  Credit  Facility  also  provides  for  maintenance  of financial
covenants  and ratios  relating to minimum  EBITDA and tangible  net worth,  and
includes  restrictions  on capital  expenditures,  payment of cash dividends and
incurrence of indebtedness.  Alpine Holdco was in compliance with all applicable
covenants at March 31, 2004. Outstanding  obligations under the Revolving Credit
Facility are secured by a lien on all of the Companies'  tangible and intangible
assets,  other than the investment in Superior Israel and certain equipment used
by DNE Systems in connection with its U.S. government contracts. The obligations
under the  Revolving  Credit  Facility  are without  recourse to Alpine.  Unless
previously  accelerated as a result of default,  the Revolving  Credit  Facility
matures in December 2007. However, in accordance with Emerging Issues Task Force
Issue 95-22,  Balance  Sheet  Classification  of  Borrowings  outstanding  under
Revolving Credit Agreements That Include Both a Subjective  Acceleration  Clause
and a Lock-Box Arrangement,  borrowings under the Revolving Credit Facility have
been classified as a current liability.

      The Companies may terminate the Revolving Credit Facility at any time upon
45 days prior written notice and payment of all outstanding borrowings, together
with  unpaid  interest,  and a  termination  fee  equal to 0.75% of the  maximum
committed  amount.  At any time after December 11, 2004, the Companies may, upon
30 days prior written notice,  permanently  reduce the maximum  committed amount
without penalty or premium. At March 31, 2004 and December 31, 2003, outstanding
borrowings  under the  Revolving  Credit  Facility  were $26.8 million and $17.2
million,  respectively.  At March 31, 2004 the  Companies  had $26.5  million of
borrowing availability.  No dividends may be paid by Alpine Holdco without prior
consent of the lenders.


                                       11
<PAGE>

8. LONG-TERM DEBT

      At March 31, 2004 and December 31, 2003,  long-term  debt  consists of the
following:

<TABLE>
<CAPTION>

                                                                               MARCH 31,     DECEMBER 31,
                                                                                  2004            2003
                                                                               -------------------------
                                                                                     (IN THOUSANDS)

<C>                                  <C>                                          <C>            <C>
6% Junior Subordinated Notes, net of $1.2 million discount..............          $3,103         $3,059
Other                                                                                825            855
                                                                               ----------    -----------

                                                                                   3,928          3,914
Less current portion of long-term debt..................................             137            137
                                                                               ----------    -----------

                                                                                  $3,791         $3,777
                                                                               ==========    ===========
</TABLE>


      On August 4, 2003, the Company completed an exchange offer whereby holders
of its common stock exchanged 3,479,656 shares for $4.3 million principal amount
of 6% Junior Subordinated Notes (the "Subordinated Notes") issued by the Company
plus a nominal  amount of cash in lieu of  fractional  notes.  The  Subordinated
Notes were initially recorded at an amount equal to the fair value of the common
stock exchanged  resulting in an initial discount of $1.4 million.  The discount
is being  accreted over the term of the  Subordinated  Notes using the effective
interest rate method.  The  Subordinated  Notes accrue  interest at 6% per annum
payable in cash  semiannually  each  December  31 and June 30. The  Subordinated
Notes are the Company's general unsecured  obligations  subordinated and subject
in  right  of  payment  to all of  the  Company's  existing  and  future  senior
indebtedness,  which excludes trade payables  incurred in the ordinary course of
business.  The Company will be required to repay  one-eighth of the  outstanding
principal  amount of the  Subordinated  Notes  commencing  on June 30,  2007 and
semiannually thereafter, so that all of the Subordinated Notes will be repaid by
December 31, 2010.  The  Subordinated  Notes are  redeemable,  at the  Company's
option,  in whole at any time or in part  from  time to time,  at the  principal
amount to be redeemed plus accrued and unpaid interest thereon to the redemption
date,  together with a premium if the  Subordinated  Notes are redeemed prior to
2007.  In  addition,  the Company  must offer to redeem all of the  Subordinated
Notes at the  redemption  price  then in  effect  in the  event  of a change  of
control.  The  Subordinated  Notes were issued under an indenture which does not
subject the Company to any financial covenants.

      The "Other" debt caption represents two loans established in 1997 and 1999
with Raytheon  Aircraft  Credit  Corporation  to finance the purchase of a 12.5%
interest in each of two aircraft. The loans are,  respectively,  payable monthly
through October 2009 and May 2011.

9. SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK

      On June 23, 2003 the Company completed a private placement of 8,287 shares
of a new issue of Series A Cumulative Convertible Preferred Stock (the "Series A
Preferred  Stock") to its directors and certain officers for a purchase price of
$380 per share, or an aggregate of  approximately  $3.1 million.  Holders of the
Series A Preferred  Stock are entitled to receive,  when,  as and if declared by
the  board of  directors  out of  funds  legally  available  for  payment,  cash
dividends  at an  annual  rate of  $30.40  per  share.  Each  share of  Series A
Preferred  Stock is  convertible  at the option of the holder into 691 shares of
Alpine  common  stock  from and  after  November  11,  2003;  provided  that the
purchasing  officers and directors have agreed not to convert until such time as
they are advised by the Company  that it has a sufficient  number of  authorized
but unissued  shares of common stock of the Company to permit such  conversion..
The Company  may cause  conversion  of the Series A Preferred  Stock into common
stock after March 31, 2004, if the Company's  common stock is then listed on the
New York Stock  Exchange  or the  American  Stock  Exchange  or is traded on the
Nasdaq  National  Market System and the average  closing price of a share of the
Company's  common  stock for any 20  consecutive  trading days equals or exceeds
300% of the  conversion  price then in effect.  The Series A Preferred  Stock is
subject to mandatory  redemption by the Company  ratably on the last day of each
quarter  during the  three-year  period  commencing  on December 31, 2009 at the
liquidation  value  of $380  per  share,  plus  accrued  and  unpaid  dividends.
Additionally, if the Company experiences a change in control it will, subject to
certain  limitations,  offer to redeem  the Series A  Preferred  Stock at a cash
price of $380 per share plus (i)  accrued and unpaid  dividends  and (ii) if the
change of control occurs prior to December 31, 2007, all dividends that would be
payable from the redemption date through December 31, 2007.

         Holders  of the Series A  Preferred  Stock are  entitled  to vote their
shares on an as-converted basis together with the Company's common stockholders.
In  addition,  the  Company  may not (a)  enter  into a  merger,  sale of all or
substantially all of its assets or similar  transaction  without the approval of
holders of at least a majority of the shares of Series A Preferred Stock, or (b)
alter or change the powers,  preferences or special rights  (including,  without
limitation,  those relating to dividends,  redemption,  conversion,  liquidation
preference or voting) of the shares of Series A Preferred  Stock so as to affect
them materially and adversely,  or issue any senior stock,  without the approval


                                       12
<PAGE>

of holders of at least a majority of the shares of Series A Preferred  Stock. In
the event of any  liquidation,  dissolution  or winding up of Alpine,  after the
payment of the liquidation preference in respect of any senior stock, holders of
the Series A Preferred Stock will be entitled to receive the  liquidation  price
of $380 per share plus an amount equal to (a) if the liquidation, dissolution or
winding up occurs  prior to  December  31,  2007,  all  dividends  that would be
payable on a share of Series A  Preferred  Stock  from the date of  liquidation,
dissolution  or winding up through  December  31,  2007 and (b) any  accrued and
unpaid dividends to the payment date,  before any payment is made to the holders
of common stock or any other junior securities, subject to certain exceptions.

         On November 10, 2003, the Company completed the sale of 9,977 shares of
Series A  Preferred  Stock  pursuant  to a rights  offering  to  holders  of the
Company's  common stock.  Holders of the  Company's  common stock were offered a
right to purchase  one share of Series A Preferred  Stock at a price of $380 per
share for each 500 shares of common stock held on September 29, 2003.  The terms
of the Series A Preferred  Stock are the same as that  purchased by the officers
and  directors in the private  placement  discussed in the  preceding  paragraph
except  that the  purchased  shares of Series A  Preferred  stock are  currently
convertible. Total proceeds received from the sale were $3.8 million.

10. INCOME (LOSS) PER SHARE

         The  computation  of basic and diluted  income (loss) per share for the
three months ended March 31, 2004 and 2003 is as follows:

<TABLE>
<CAPTION>

                                                                        THREE MONTHS ENDED MARCH 31,
                                                               2004                                            2003
                                              -----------------------------------------       ------------------------------------
                                               NET INCOME      SHARES      PER SHARE             NET LOSS       SHARES  PER SHARE
                                                                            AMOUNT                                       AMOUNT
                                              -----------------------------------------       ------------------------------------

<S>                                                 <C>        <C>          <C>                   <C>           <C>      <C>
Net income (loss)..........................         $1,475                                         $(2,314)
Less: preferred stock dividends............          (147)                                              (9)
                                              -------------                                    -------------
Basic income (loss) per common share.......         $1,328     12,119       $0.11                  $(2,323)     14,931    $(0.16)

Effect of dilutive securities:
  Restricted stock plans...................                       351
  Stock option plans.......................                       486
  Convertible preferred stock..............            147     12,616
                                              ------------------------
Diluted income (loss) per share                     $1,475     25,572       $0.06                  $(2,323)     14,931    $(0.16)

</TABLE>

      Diluted earnings per share for the three month period ended March 31, 2004
excludes  the effect of 0.2 million  stock  options  and 0.3 million  restricted
stock grants that may be exercised in the future,  because such effects would be
antidilutive.  Stock options  outstanding  with respect to 2.9 million shares of
common stock for the three months ended March 31, 2003 have not been included in
the  computation  of  diluted  earnings  per  share  because  to do so  would be
anti-dilutive for that period.

      The dilutive  impact of the warrant  held by Superior  (to acquire  common
shares of Essex  Electric) is estimated to be minimal for the three months ended
March 31, 2004 and antidilutive for the three months ended March 31, 2003.


                                       13
<PAGE>

11. BUSINESS SEGMENTS

      The  Company's  reportable  segments  consist of  electrical  wire  (Essex
Electric)  and  communications  and  electronic   products  (DNE).  The  Company
evaluates  segment  performance  based on a number of  factors,  with  operating
income  before  restructuring  and  other  charges,  being  the  most  critical.
Operating  results for each of the Company's  reportable  segments are presented
below.  Corporate  and other items shown below are  provided to reconcile to the
Company's consolidated statements of operations and balance sheets.

<TABLE>
<CAPTION>
                                                                             THREE MONTHS ENDED
                                                                                  MARCH 31,
                                                                             2004            2003
                                                                             ----            ----
                                                                                 (IN THOUSANDS)

<S>                                                                          <C>              <C>
Net sales:
   Electrical........................................                        $81,937          $89,353
   DNE...............................................                          6,896            8,188
                                                                      --------------------------------
                                                                             $88,833          $97,541
                                                                      ================================

Operating income (loss):
   Electrical........................................                          4,824          $(2,721)
   DNE...............................................                          1,228            1,492
   Corporate and other...............................                           (699)            (516)
   Restructuring and other charges...................                         (1,747)          (2,586)
                                                                      --------------------------------
                                                                              $3,606         $(4,331)
                                                                      ================================



                                                                          MARCH 31,       DECEMBER 31,
                                                                            2004              2003
                                                                            ----              ----
                                                                                (IN THOUSANDS)
Total assets:
   Electrical...........................................                   $ 95,145            $87,923
   DNE..................................................                     11,756              9,459
   Corporate and other..................................                     10,313             10,406
                                                                     ----------------------------------
                                                                           $117,214           $107,788
                                                                     ==================================

</TABLE>


                                       14
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

      The Alpine Group, Inc. ("Alpine") is a holding company which over the past
five years has owned controlling equity interests in industrial businesses which
have been operated as subsidiaries.  Alpine currently owns  approximately 90% of
Essex Electric Inc. ("Essex Electric"),  which is engaged in the manufacture and
sale of electrical wire and DNE Systems, Inc. ("DNE Systems"), which is involved
in the  manufacture  and  sales of  multiplexers  and other  communications  and
electronic products.

      On December 11, 2002, Alpine's wholly-owned subsidiary, Alpine Holdco Inc.
("Alpine   Holdco")   acquired  these  businesses  from  Superior  TeleCom  Inc.
("Superior")  and all of the  outstanding  shares of capital  stock of Texas SUT
Inc. and Superior Cable Holdings (1997) Ltd.,  which together own  approximately
47% of Superior  Cables Ltd.,  the largest  Israeli  based  producer of wire and
cable products,  which we sometimes refer to as "Superior Israel".  The purchase
included the issuance of a warrant (the  "Warrant")  to Superior to purchase 199
shares of the common stock of Essex  Electric  Inc. We  sometimes  refer to this
acquisition as the "Electrical  Acquisition".  In September 2003,  Alpine Holdco
subscribed  for and  purchased  681 newly issued shares of common stock of Essex
Electric. In October 2003, Superior exercised its rights under a securityholders
agreement to subscribe  for and purchase 169 shares of newly issued common stock
of  Essex  Electric.  As a result  Alpine  Holdco  and  Superior  currently  own
approximately 90% and 10%, respectively, of the total outstanding stock of Essex
Electric.  Superior's  Warrant to purchase  199 shares of the  capital  stock of
Essex Electric currently  represents  approximately 9.9% of the capital stock of
Essex Electric.

IMPACT OF COPPER PRICE FLUCTUATIONS ON OPERATING RESULTS

      Copper  is  one  of the  principal  raw  materials  used  by the  Company.
Fluctuations  in the price of copper affect per unit product pricing and related
revenues.  However,  the  cost  of  copper  has  not had a  material  impact  on
profitability  as the Company,  in most cases,  has the ability to adjust prices
billed for its  products to  properly  match the copper  cost  component  of its
inventory shipped.


                                       15
<PAGE>

RESULTS OF  OPERATIONS--THREE  MONTH  PERIOD ENDED MARCH 31, 2004 AS COMPARED TO
THE THREE MONTH PERIOD ENDED MARCH 31, 2003

      Consolidated  sales  for the  quarter  ended  March 31,  2004  were  $88.8
million,  a decrease of 9%  compared  to sales of $97.5  million for the quarter
ended March 31, 2003. The  comparative  sales decrease is due to lower shipments
of  electrical  wire by  Essex  Electric  resulting  from its  determination  to
consolidate  production  facilities  and reduce  manufacturing  capacity  and to
reduce its exposure to certain  geographic  markets,  distribution  channels and
product lines during this phase of its restructuring and repositioning.

      Essex  Electric  sales declined 8% from $89.3 million to $81.9 million due
to the impact of the  restructuring  program and the sale of its  automotive and
industrial  wire product lines in 2003,  which  contributed  approximately  $8.0
million in sales in the quarter  ended March 31, 2003.  After  adjusting for and
eliminating  the  comparative  difference  in the market price of copper,  Essex
Electric's principal  manufacturing cost item, sales for the quarter ended March
31, 2004  declined  32% from the quarter  ended March 31, 2003 and the volume of
copper equivalent  pounds shipped declined 37%. These  anticipated  declines are
due largely to the impact of the restructuring  and repositioning  program being
implemented at Essex Electric.

      DNE sales  declined from $8.2 million in the first quarter of 2003 to $6.9
million  for the three  months  ended  March 31,  2004,  a  decrease  of 16% due
primarily  to  DNE's  planned  exiting  in  2003  from  contract   manufacturing
activities.

      Gross  profit for the March 31,  2004  quarter  was $13.9  million,  a 43%
increase of $4.2  million as compared  to gross  profit of $9.7  million for the
quarter  ended March 31,  2003.  The gross  profit  margin in the March 31, 2004
quarter was 16%,  compared to a gross profit  margin of 10% for the three months
ended March 31, 2003. The increased  margin  percentage  reflects higher pricing
and product mix changes, along with higher demand levels in the markets in which
Essex Electric  competes,  and improved margins at DNE due to changes in product
mix.

      Selling, general and administrative expense ("SG&A expense") for the three
month  period  ended  March 31,  2004 was $8.5  million,  a decrease  of 26%, as
compared to SG&A  expense of $11.5  million for the three months ended March 31,
2003 due  primarily to cost  reductions  at Essex  Electric in  connection  with
implementation of its restructuring.

      Restructuring  and other charges at Essex Electric of $1.7 million for the
three months ended March 31, 2004 are described in Note 6.

      The Company's  operating  income for the March 31, 2004 three month period
was $3.6 compared to an operating loss of $4.3 million for the  comparable  2003
quarter.  The increase in operating  income is due to higher pricing and product
mix changes at Essex Electric and margin improvements at DNE.

      Interest  expense for the three month period ended March 31, 2004 was $0.6
million, representing a decrease of $0.5 million from the prior year three month
period. The decrease is due to a decrease of approximately  $44.0 million in the
average  borrowings  under the Revolving Credit Facility offset partially by the
interest expense on the 6% Junior Subordinated Notes issued in August 2003.

LIQUIDITY AND CAPITAL RESOURCES

ALPINE HOLDCO

      The Electrical  Acquisition was financed by  approximately  $10 million of
Alpine's cash and cash  equivalents and borrowings by Alpine Holdco under a Loan
and Security Agreement (the "Revolving Credit  Facility"),  dated as of December
11, 2002, by and among Alpine Holdco, Essex Electric,  DNE Manufacturing Company
and DNE  Technologies,  Inc. as borrowers  and DNE Systems as credit party (such
parties sometimes  collectively are called the  "Companies"),  certain financial
institutions  party  thereto as  lenders,  Congress  Financial  Corporation,  as
documentation  agent,  and  Foothill  Capital   Corporation,   as  arranger  and
administrative  agent. Upon  consummation of the acquisition,  approximately $78
million was  outstanding  under the  Revolving  Credit  Facility.  The Revolving
Credit Facility was last amended on December 8, 2003.

      The  terms  of  the  Revolving  Credit  Facility  provided  for a  maximum
committed  amount of $100 million at its inception  which, at the request of the
Companies,   was  reduced  to  $70  million  on  December  8,  2003.   Borrowing
availability  is  determined  by  reference  to a borrowing  base which  permits
advances to be made at various net valuation rates against various assets of the
Companies.  Interest  is payable  monthly in cash in arrears and is based on, at
Alpine Holdco's  option,  LIBOR or prime rate plus a fixed margin.  The weighted
average  interest rate at March 31, 2004 was 4.6%. The Revolving Credit Facility
also provides for  maintenance  of financial  covenants  and ratios  relating to
minimum  EBITDA and tangible net worth,  and  includes  restrictions  on capital
expenditures,   payment  of  cash  dividends  and  incurrence  of  indebtedness.


                                       16
<PAGE>

Outstanding  obligations  under the Revolving  Credit  Facility are secured by a
lien on all of the  Companies'  tangible and intangible  assets,  other than the
investment  in  Superior  Israel and  certain  equipment  used by DNE Systems in
connection  with  its U.S.  government  contracts.  The  obligations  under  the
Revolving  Credit  Facility are without  recourse to Alpine.  Unless  previously
accelerated as a result of default,  the Revolving  Credit  Facility  matures in
five years.  However in accordance  with Emerging Issues Task Force Issue 95-22,
Balance Sheet  Classification  of Borrowings  outstanding under Revolving Credit
Agreements  That Include Both a  Subjective  Acceleration  Clause and a Lock-Box
Arrangement, borrowings under the Revolving Credit Facility have been classified
as a current  liability.  The  Companies  may  terminate  the  Revolving  Credit
Facility  at any time upon 45 days  prior  written  notice  and  payment  of all
outstanding  borrowings,  together with unpaid  interest,  and a termination fee
equal to 0.75% of the maximum  committed  amount. At any time after December 11,
2004, the Companies may, upon 30 days prior written notice,  permanently  reduce
the maximum  committed amount without penalty or premium.  At March 31, 2004 and
December 31, 2003,  outstanding  borrowings  under the Revolving Credit Facility
were  $26.8  million  and $17.2  million,  respectively.  At March 31,  2004 the
Companies had $26.5 million of borrowing availability.  No dividends may be paid
by Alpine  Holdco  without  prior  consent of the lenders.  Alpine Holdco was in
compliance with all applicable covenants at March 31, 2004.

      The Company  estimates  that Alpine Holdco capital  expenditures  for 2004
will  approximate  between  $6 to $8  million.  Alpine  Holdco  has  implemented
restructuring   initiatives  to  rationalize   manufacturing   capacity,   lower
expenditures and reduce working  capital,  which are expected to result in costs
of  approximately  $6  million  during  2004.   Incurrence  of  these  costs  is
permissible  under the terms of the Revolving  Credit  Facility.  Based upon the
amended terms of the Revolving Credit Facility and the projected  performance of
the Companies, Alpine believes that the Companies will be in compliance with the
financial  covenants  provided  for  thereunder.  However,  in the  event of any
noncompliance under the Revolving Credit Facility, Alpine believes that it would
be able to obtain  the  necessary  waivers  from its  lenders.  Furthermore,  if
necessary,  Alpine believes it could obtain  refinancing on terms and conditions
generally  consistent  or in the  aggregate,  similar to those  contained in the
Revolving  Credit Facility.  However,  there can be no assurance that Alpine can
obtain  such  waivers  or  that   alternate   financing   would  be   available.
Additionally,  Alpine  believes that existing  cash and cash  equivalents,  cash
provided by operations and anticipated  working capital reductions together with
borrowings  available under the Revolving  Credit Facility will be sufficient to
meet the capital needs of the Companies the next twelve months.

ALPINE CORPORATE

      On August 4, 2003, the Company completed an exchange offer whereby holders
of its common stock exchanged 3,479,656 shares for $4.3 million principal amount
of 6% Junior Subordinated Notes (the "Subordinated Notes") issued by the Company
plus a nominal  amount of cash in lieu of  fractional  notes.  The  Subordinated
Notes were initially recorded at an amount equal to the fair market value of the
common stock  exchanged  resulting in an initial  discount of $1.4 million.  The
discount is being accreted over the term of the Subordinated Notes using a level
interest method.  The Subordinated Notes accrue interest at 6% per annum payable
in cash  semiannually  each December 31 and June 30. The Subordinated  Notes are
the Company's general unsecured  obligations,  subordinated and subject in right
of payment to all of the  Company's  existing  and future  senior  indebtedness,
which excludes trade payables  incurred in the ordinary course of business.  The
Company will be required to repay one-eighth of the outstanding principal amount
of  the  Subordinated  Notes  commencing  on  June  30,  2007  and  semiannually
thereafter, so that all of the Subordinated Notes will be repaid by December 31,
2010.  As such,  there are no principal  payments due in 2004.  The Company must
offer to redeem all of the  Subordinated  Notes at the redemption  price then in
effect in the event of a change of control.  The Subordinated  Notes were issued
under an indenture that does not subject the Company to any financial covenants.

      On June 23, 2003,  Alpine completed a private placement of 8,287 shares of
a new issue of Series A Cumulative  Convertible  Preferred  Stock (the "Series A
Preferred  Stock") to its directors and certain officers for a purchase price of
$380 per share, or an aggregate of  approximately  $3.1 million.  Holders of the
Series A Preferred  Stock are entitled to receive,  when,  as and if declared by
the  board of  directors  out of  funds  legally  available  for  payment,  cash
dividends  at an  annual  rate of  $30.40  per  share.  Each  share of  Series A
Preferred  Stock is  convertible  at the option of the holder into 691 shares of
Alpine common stock  beginning on November 11, 2003.  However,  the officers and
directors  have agreed not to exercise the  convertible  option until advised by
the Company that it has a sufficient number of authorized but unissued shares of
common  stock to permit such  conversion.  Since the market  price of the common
stock on the  commitment  date  (June  23,  2003)  was  $0.76  per share and the
conversion  price is $0.55 per share,  a beneficial  conversion  feature of $1.2
million  was  recorded  as a  reduction  to the  Mandatory  redeemable  series A
cumulative  preferred stock line of the balance sheet with the offset to capital
in excess of par. The  conversion  feature will be recorded as a dividend at the
time there are a sufficient  number of authorized but unissued  shares of common
stock to permit such conversion.  The Company may cause conversion of the Series
A Preferred Stock into common stock if the Company's common stock is then listed
on the New York Stock  Exchange or the American  Stock  Exchange or is traded on
the Nasdaq  National  Market System and the average  closing price of a share of
the Company's common stock for any 20 consecutive trading days equals or exceeds
300% of the  conversion  price then in effect.  The Series A Preferred  Stock is
subject to mandatory  redemption by the Company  ratably on the last day of each
quarter  during the  three-year  period  commencing  on December 31, 2009 at the
liquidation  value  of $380  per  share,  plus  accrued  and  unpaid  dividends.
Additionally, if the Company experiences a change in control it will, subject to
certain  limitations,  offer to redeem  the Series A  Preferred  Stock at a cash
price of $380 per share plus (i)  accrued and unpaid  dividends  and (ii) if the
change of control occurs prior to December 31, 2007, all dividends that would be
payable from the redemption date through December 31, 2007.


                                       17
<PAGE>

      Holders of the Series A Preferred  Stock are entitled to vote their shares
on an as-converted  basis together with the Company's  common  stockholders.  In
addition,  the  Company  may  not  (a)  enter  into  a  merger,  sale  of all or
substantially all of its assets or similar  transaction  without the approval of
holders of at least a majority of the shares of Series A Preferred Stock, or (b)
alter or change the powers,  preferences or special rights  (including,  without
limitation,  those relating to dividends,  redemption,  conversion,  liquidation
preference or voting) of the shares of Series A Preferred  Stock so as to affect
them materially and adversely,  or issue any senior stock,  without the approval
of holders of at least a majority of the shares of Series A Preferred  Stock. In
the event of any  liquidation,  dissolution  or winding up of Alpine,  after the
payment of the liquidation preference in respect of any senior stock, holders of
the Series A Preferred Stock will be entitled to receive the  liquidation  price
of $380 per share plus an amount equal to (a) if the liquidation, dissolution or
winding up occurs  prior to  December  31,  2007,  all  dividends  that would be
payable on a share of Series A  Preferred  Stock  from the date of  liquidation,
dissolution  or winding up through  December  31,  2007 and (b) any  accrued and
unpaid dividends to the payment date,  before any payment is made to the holders
of common stock or any other junior securities,  subject to certain  exceptions.
Proceeds  from the sale of the  Series A  Preferred  Stock  were  used to reduce
existing indebtedness and for general corporate purposes.

      On November 10, 2003,  the Company  completed  the sale of 9,977 shares of
Series A  Preferred  Stock  pursuant  to a rights  offering  to  holders  of the
Company's  common stock.  Holders of the  Company's  common stock were offered a
right to purchase  one share of Series A Preferred  Stock at a price of $380 per
share for each 500 shares of common stock held on September 29, 2003.  The terms
of the Series A Preferred  Stock are the same as that  purchased by the officers
and directors in the private  placement  discussed  above;  however the Series A
Preferred Stock purchased through the rights offering are currently convertible.
Total  proceeds  received  from the sale were $3.8  million.  The  recording  of
dividends,  if any,  on the Series A Preferred  Stock will reduce the  Company's
earnings per share in the period recorded.  Since the market price of the common
stock on the date of issuance  (November  10,  2003) was $0.92 per share and the
conversion  price is $0.55 per share,  a beneficial  conversion  feature of $2.6
million was  recorded.  This was  recorded  as a dividend  since the shares were
immediately convertible, offset with a credit to Capital in excess of par.

      As of March 31, 2004 Alpine has  unrestricted  cash, cash  equivalents and
marketable  securities  of  approximately  $7.2  million.  Alpine's  current and
anticipated sources of liquidity include existing cash and cash equivalents, and
management  fees from Alpine  Holdco.  Pursuant to a management  agreement  with
Alpine Holdco dated  December 11, 2002, so long as no event of default exists or
is  created by such  payment  under the  Revolving  Credit  Facility,  Alpine is
entitled to receive from Alpine Holdco an annual  management  fee (together with
any unpaid  management  fees from prior years),  which was  increased  from $1.0
million to $1.8 million,  (effective  January 1, 2004) and is reimbursed for all
direct costs incurred by it related to the business of Alpine  Holdco.  Alpine's
ability to receive  distributions  from Alpine  Holdco is  restricted  under the
terms of the  Revolving  Credit  Facility  to a maximum  of $1.8  million of the
aforementioned  management fee, amounts  representing  Alpine's tax liability in
respect of the  operations of Alpine Holdco,  plus $250,000 per year.  Alpine is
also  entitled to be reimbursed  for all direct costs  incurred by it related to
the business of Holdco.

      Since  1993,  Alpine has been a party to a guaranty  of  Superior's  lease
obligations relating to Superior's  manufacturing facility in Brownwood,  Texas.
The lease  currently  provides  for  monthly  payments  of  $56,000  subject  to
adjustments  for changes in the consumer price index.  The lease term expires in
2018 but may be extended through 2033. As such, the maximum  potential amount of
future  payments  under the  guaranty  through 2018 would be  approximately  $10
million.  Any further  extensions  would amount to a guarantee of  approximately
$0.7 million per year. While Alpine's continuing obligations,  if any, under the
guaranty  are not free  from  doubt,  the  Company  believes  the  facility  and
underlying  lease are valuable assets of Superior and expects that Superior will
perform as tenant  thereunder and continue to pay its obligations.  In addition,
Alpine would have a claim for indemnification and reimbursement from Superior in
respect of any amounts paid by Alpine as guarantor.

      Superior  Israel's  operations  are funded and financed  separately,  with
recourse to Superior Israel but otherwise on a non-recourse basis to Alpine.


                                       18
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company's  exposure to market risk primarily relates to interest rates
on long-term debt and copper futures used to minimize the price risk  associated
with copper prices (see  Derivatives).  The cost of copper,  the Company's  most
significant  raw material has been subject to  significant  volatility  over the
past several years. . At December 31, 2003,  the Company had  approximately  $13
million of copper  futures  contracts,  representing  12 million  copper pounds,
outstanding  as  non-designated  derivative  instruments.  These  contracts were
entered  into to hedge 12  million  copper  pounds  of  inventory  purchased  in
December  2003,  for sale in the first  quarter of 2004.  These  contracts  were
recorded  at fair  value  at  December  31,  2003  with any  price  fluctuations
reflected in current  earnings in 2003, and were liquidated in the first quarter
of 2004, when the underlying asset (i.e. inventory) was sold.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Controls and Procedures

      As of the end of the period covered by this Quarterly Report on Form 10-Q,
an evaluation of the  effectiveness of the design and operation of the Company's
disclosure  controls  and  procedures  was carried out by the Company  under the
supervision and with the  participation of the Company's  management,  including
the  Chief  Executive  Officer  and  Chief  Financial  Officer.  Based  on  that
evaluation,  the Chief Executive  Officer and Chief Financial  Officer concluded
that the Company's disclosure controls and procedures have been designed and are
being  operated  in  a  manner  that  provides  reasonable  assurance  that  the
information  required to be disclosed by the Company in reports  filed under the
Securities Exchange Act of 1934, as amended, is recorded, processed,  summarized
and reported  within the time periods  specified in the SEC's rules and forms. A
system of controls,  no matter how well  designed and operated,  cannot  provide
absolute assurance that the objectives of the system of controls are met, and no
evaluation of controls can provide  absolute  assurance  that all control issues
and instances of fraud, if any, within a company have been detected.  There have
been no changes in the Company's internal control over financial  reporting that
occurred during the most recent fiscal quarter that have materially affected, or
are reasonably likely to materially  affect, the Company's internal control over
financial reporting.

-----------

      Except for the historical  information  herein,  the matters  discussed in
this Form 10-Q include  forward-looking  statements that may involve a number of
risks and uncertainties. Actual results may vary significantly based on a number
of  factors,  including,  but not limited  to,  risks in product and  technology
development,  market  acceptance of new products and continuing  product demand,
prediction and timing of customer orders, the impact of competitive products and
pricing, changing economic conditions,  including changes in short-term interest
rates and other risk factors  detailed in the Company's most recent filings with
the Securities and Exchange Commission.


                                       19
<PAGE>

                           PART II. OTHER INFORMATION

       ITEM 6. EXHIBITS

(A)    EXHIBITS

31.1* Certification  of the Company's  Chief  Executive  Officer  pursuant to 18
      U.S.C.   Section  1350,  as  adopted   pursuant  to  Section  302  of  the
      Sarbanes-Oxley Act of 2002.

31.2* Certification  of the Company's  Chief  Financial  Officer  pursuant to 18
      U.S.C.   Section  1350,  as  adopted   pursuant  to  Section  302  of  the
      Sarbanes-Oxley Act of 2002.

32*   Certification of the Company's Chief Executive Officer and Chief Financial
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002.

(B)   REPORTS ON FORM 8-K None

-----------

*        Filed herewith


                                       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.

                                    THE ALPINE GROUP, INC.
Date: May 4, 2004                   By:
                                          /s/ David A. Owen
                                          --------------------------------------
                                          David A. Owen
                                          Chief Financial Officer
                                          (duly authorized officer and principal
                                          financial and accounting officer)


                                       21