UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended May 31, 1999
                                       OR

     |_|  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: 0-1460

                              ANDERSEN GROUP, INC.
             (Exact name of Registrant as specified in its charter)

     DELAWARE                                     06-0659863

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



     515 Madison Avenue, New York, New York 10022

     (Address of principal executive offices) (Zip Code)

     (212) 826-8942
 (Registrant's telephone number, including area code)


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____


             As of July 8, 1999, there were 1,932,116 shares of the Registrant's
$.01 par value common stock outstanding.

Title                                                        Outstanding

Common Stock, $0.01 par value per share      Authorized 6,000,000 shares;
                                             Issued 1,958,478









                              ANDERSEN GROUP, INC.
                                    FORM 10-Q

                                TABLE OF CONTENTS


                                                                        Page No.

Part I - Financial Information

         Item 1 - Financial Statements:

                  Consolidated Balance Sheets
                           May 31, 1999 and February 28, 1999                  3

                  Consolidated Statements of Operations for the
                           Three Months Ended May 31, 1999 and 1998            4

                  Consolidated Statements of Cash Flows for the
                           Three Months Ended May 31, 1999 and 1998            5

                  Notes to Consolidated Financial Statements                   6

         Item 2 - Management's Discussion and Analysis of
                           Financial Condition and Results of Operations       8

         Item 3 - Quantitative and Qualitative Disclosures About Market Risk  10


Part II - Other Information

         Item 1 - Legal Proceedings                                           11

         Item 4 - Submission of Matters to a Vote of Security Holders         11

         Item 6 - Exhibits and Reports on Form 8-K                            12


Signatures                                                                    13







<PAGE>


Part I.  Financial Information
Item 1.  Financial Statements
<TABLE>
<S><C>                                                                <C>   <C>                      <C>  <C>
                              ANDERSEN GROUP, INC.
                           Consolidated Balance Sheets
                                 (In thousands)

                                                                             May 31, 1999                February 28, 1999
                                                                             ------------                -----------------
ASSETS                                                                       (Unaudited)
Current assets:
   Cash and cash equivalents                                                   $ 3,125                        $ 2,541
   Marketable securities                                                         6,382                          6,014
   Accounts and other receivables less
     allowances of $118 and $110                                                 4,620                          4,098
   Inventories                                                                   6,495                          7,821
   Prepaid expenses and other assets                                               121                            100
                                                                               -------                        -------

     Total current assets                                                       20,743                         20,574


Property, plant and equipment, net                                               9,132                          9,305
Prepaid pension expense                                                          5,058                          5,033
Investments                                                                        206                            206
Other assets                                                                     2,157                          2,001
                                                                               -------                        -------

                                                                               $37,296                        $37,119
                                                                               =======                        =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current maturities of long-term debt                                         $ 443                          $ 443
   Short-term borrowings                                                        1,353                          2,356
   Accounts payable                                                             1,480                            659
   Other current liabilities                                                    1,263                          1,501
   Deferred income taxes                                                          885                            582
                                                                               ------                         ------

     Total current liabilities                                                  5,424                          5,541

Long-term debt, less current maturities                                         3,700                          3,729
Subordinated note payable, net of unamortized discount                          7,336                          7,329
Other liabilities                                                               1,944                          1,902
Deferred income taxes                                                           2,189                          2,189
                                                                               ------                         ------

     Total liabilities                                                         20,593                         20,690
                                                                               ------                         ------

Commitments and contingencies

Stockholders' equity:
   Cumulative convertible preferred stock                                       4,769                         4,769
   Common stock                                                                    20                            20
   Treasury stock                                                                (121)                         (142)
    Receivable from officer                                                      (250)                         (250)
   Additional paid-in capital                                                   5,332                         5,339
   Retained earnings                                                            6,953                         6,693
                                                                              -------                        ------

     Total stockholders' equity                                                16,703                        16,429
                                                                              -------                       -------

                                                                              $37,296                       $37,119

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


<PAGE>

<TABLE>
<S><C>                                                                     <C>                     <C>


                              ANDERSEN GROUP, INC.
                      Consolidated Statements of Operations
                      (In thousands, except per share data)
                                   (unaudited)

                                                                                        Three months ended
                                                                            May 31, 1999          May 31, 1998
                                                                            ------------          ------------
Revenues:
   Net sales                                                                    $ 7,298            $ 7,685
   Investment and other income                                                      903                146
                                                                                -------            -------

                                                                                  8,201              7,831
                                                                                -------            -------

Costs and expenses:
   Cost of sales                                                                  4,953              5,170
   Selling, general and administrative                                            1,696              1,624
   Research and development                                                         572                487
   Interest expense                                                                 388                461
                                                                                -------             ------

                                                                                  7,609              7,742
                                                                                -------             ------

Income before income taxes                                                          592                 89
Income tax expense                                                                  236                 36
                                                                                -------             ------

Net income                                                                          356                 53
Preferred dividends                                                                 (96)              (103)
                                                                                -------             ------

Income (loss) applicable to common shares                                         $ 260              ($ 50)
                                                                                =======             ======

Earnings (loss) per common share:
   Basic                                                                          $0.13             ($0.03)
                                                                                =======             ======

   Diluted                                                                       $ 0.13             ($0.03)
                                                                                =======             ======


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

<PAGE>
<TABLE>
<S> <C>                                                          <C>                           <C>

                              ANDERSEN GROUP, INC.
                      Consolidated Statements of Cash Flows
                                 (In thousands)
                                   (unaudited)
                                                                                                  Three months ended
                                                                         May 31, 1999              May 31, 1998
                                                                         ------------              ------------


Cash flows from operating activities:
Net income                                                                    $ 356                     $ 53

Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
     Depreciation, amortization and accretion                                   358                      367
     Deferred income taxes                                                      303                     (158)
     Pension income                                                             (25)                     (70)
     Net (gains) losses from marketable securities
       and investments                                                         (645)                     229
     Purchases of marketable securities                                        (113)                  (1,405)
     Proceeds from sales of marketable securities                               390                      570

Changes in operating assets and liabilities:
     Accounts and other receivables                                            (522)                    (718)
     Inventories                                                              1,326                    2,568
     Prepaid expenses and other assets                                          (66)                     (18)
     Accounts payable                                                           821                     (305)
     Accrued liabilities and other long-term obligations                       (241)                    (112)
                                                                            -------                   ------

     Net cash provided by operating activities                                1,942                     1,001
                                                                           --------                   -------

Cash flows from investing activities:
     Purchases of property and equipment                                       (244)                    (343)
     Proceeds from sale of Ultrasonics segment                                    -                    2,400
                                                                             ------                   ------

     Net cash (used in) provided by investing activities                       (244)                   2,057
                                                                             ------                   ------

Cash flows from financing activities:
     Principal payments on long-term debt                                       (29)                     (52)
     Repayment of short-term debt, net                                       (1,003)                  (1,231)
     Stock options exercised                                                      -                       23
     Net sale (purchase) of treasury stock                                       14                      (42)
     Preferred dividends paid                                                   (96)                    (112)
                                                                             ------                    ------

     Net cash used in financing activities                                   (1,114)                  (1,414)
                                                                            -------                   ------

     Net increase in cash and cash equivalents                                  584                    1,644

     Cash and cash equivalents - beginning of period                          2,541                    2,516
                                                                            -------                   ------

     Cash and cash equivalents - end of period                              $ 3,125                   $4,160
                                                                            =======                   ======


   See accompanying notes to consolidated financial statements.

</TABLE>


<PAGE>


ANDERSEN GROUP, INC.
Notes to Consolidated Financial Statements

(1)      Accounting Policies

         The accompanying  interim financial statements and related notes should
be read in conjunction  with the Consolidated  Financial  Statements of Andersen
Group, Inc. and related notes as contained in the Annual Report on Form 10-K for
the fiscal  year ended  February  28,  1999.  The interim  financial  statements
include all adjustments  (consisting only of normal  recurring  adjustments) and
accruals necessary in the judgment of management for a fair presentation of such
statements.  In addition,  certain reclassifications have been made to the prior
period  financial  information  so  that  it  conforms  to  the  current  period
presentation.

(2)      Marketable Securities

         Marketable securities consisted of the following (in thousands):

<TABLE>
<S> <C>                                           <C>                                <C>
                                                    May 31, 1999                     February 28, 1999
                                                    ------------                     -----------------
Common stock of savings banks                          $5,484                             $5,362
F M Emerging Russia Fund                                  508                                294
Portfolio of Ukraine stocks                               258                                108
Common stock of Bank Handlowy                             258                                217
Renaissance Russian Bond Fund                              78                                 98
Valuation reserve - foreign investments                  (204)                               (65)
                                                       -------                             ------

                                                       $6,382                             $6,014
                                                      =======                            =======

At May 31, 1999, the valuation reserve includes  approximately $101,000 relating
to the  Company's  investment  in the FM  Emerging  Russia  Fund to provide  for
liquidity and volatility concerns.  At February 28, 1999, this fund was recorded
at 10% of its original cost as a result of a  significant  decline in the market
value for Russian  securities  and increased  liquidity  concerns as a result of
market conditions for these securities.  Accordingly, no amount was reflected as
a  valuation  reserve at that date.  The  remaining  valuation  reserve has been
established  for the portfolio of Ukrainian  common stock and for the investment
in Bank Handlowy, which is a financial institution based in Poland.

(3)      Inventories

         Inventories consisted of the following (in thousands):

                                                    May 31, 1999                     February 28, 1999
                                                    ------------                     -----------------
Raw material                                           $ 1,096                            $ 3,498
Work in process                                          4,720                              4,661
Finished goods                                           3,727                              2,710
                                                       -------                            -------
                                                         9,543                             10,869
LIFO Reserve                                             3,048                              3,048
                                                       -------                            -------
                                                       $ 6,495                            $ 7,821
                                                       =======                            =======
</TABLE>
(4)      Income Taxes

         Income tax expense  represents an estimate of the effective  income tax
rate for the current fiscal year.


(5)      Earnings Per Share

         Earnings per share are computed based on the weighted average number of
common and common  equivalent shares  outstanding.  Diluted net income per share
assumes full conversion of all  convertible  securities into common stock at the
later of the beginning of the year or date of issuance, unless antidilutive. For
the  three-month  period ended May 31, 1999, the effect of such  conversions has
been antidilutive.

(6)      Business Segments and Export Sales

       During the three months ended May 31, 1999,  the Company  operated in two
segments,  Electronics,  which  comprises the operations of The J.M. Ney Company
(J.M. Ney), and Corporate, which includes the Company's investments, real estate
and corporate administrative activities. Operating income consists of net sales,
investment  and  other  income,  less  cost of sales and  selling,  general  and
administrative  expenses directly allocated to the industry segments.  Corporate
revenues  consist of investment and other income not  attributable  to J.M. Ney.
Corporate  identifiable  assets  include  marketable  securities  and short-term
investments, and assets not directly attributable to J.M. Ney.

Summarized  financial  information  for  business  segments  is as  follows  (in
thousands):
<TABLE>
<S> <C>                                                <C>                           <C>
Three months ended:                                       May 31, 1999                May 31, 1998
                                                          ------------                ------------

Revenues:
  Electronics                                                $7,366                      $7,661
  Corporate                                                     835                         170
                                                             ------                      ------
                                                             $8,201                      $7,831
                                                             ------                      ------
Operating income (loss):
  Electronics                                                $  686                      $1,036
  Corporate                                                     294                        (486)
                                                             ------                       -----
                                                             $  980                       $ 550
                                                             ------                       -----
Interest expense:
  Electronics                                                $  269                       $ 342
  Corporate                                                     119                         119
                                                             ------                       -----
                                                             $  388                       $ 461
                                                             ------                       -----
Depreciation, amortization and accretion:
  Electronics                                                $  328                       $ 331
  Corporate                                                      30                          36
                                                             ------                       -----
                                                             $  358                       $ 367
                                                             ------                       -----
Capital expenditures:
  Electronics                                                $  244                       $ 335
  Corporate                                                       -                           8
                                                             ------                       -----
                                                             $  244                       $ 343
                                                             ------                       -----

As of:                                                    May 31, 1999             February 28, 1999
                                                          ------------             -----------------
Identifiable assets:
  Electronics                                               $25,707                     $25,900
  Corporate                                                  11,589                      11,219
                                                            -------                     -------
                                                            $37,296                     $37,119
                                                            -------                     -------
</TABLE>
     Export  sales  for the  three  months  ended  May 31,  1999 and  1998  were
$1,165,000  and  $1,091,000,  respectively.  Such sales were made  primarily  to
customers in Europe and the Pacific Rim.

During the three months ended May 31, 1999,  sales to a customer  accounted  for
19.1% of net sales.  During the three  months  ended May 31,  1998 sales to this
customer  and  another  customer  accounted  for 12.0%  and 10.3% of net  sales,
respectively.

(7)      Related Party Transactions

         At May 31, 1999,  the Company held a $200,000  note  receivable  due in
January 2001, and a $50,000 demand note receivable,  both of which bear interest
at 7% per annum. The receivables arose in the prior fiscal year for the purchase
of 62,500  shares of the Company's  common stock by an executive  officer of the
Company.  These amounts are presented in the Stockholders' Equity section of the
Consolidated Balance Sheet.



     Item 2.  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations

For the three  months  ended May 31,  1999,  the  Company  recorded  net  income
applicable to common  shareholders  of $260,000,  or $0.13 per share,  basic and
diluted.  During the prior fiscal year's first quarter,  the Company  reported a
net loss applicable to common shareholders of $50,000, or $0.03 per share, basic
and diluted.


REVENUES
Total revenue for the quarter ended May 31, 1999 of $8,201,000  represent a 4.7%
increase over revenues for the comparable  period in the prior fiscal year. This
increase was due to a $757,000  increase in Investment  and Other Income,  which
was  partially  offset by a 5.0%  decline in sales from The J.M. Ney Company (JM
Ney).

Lower sales to JM Ney's former dental affiliate as a result of the expiration in
November  1998 of a  three-year  exclusive  manufacturing  agreement,  and lower
billings for tooling dies,  contributed  to the lower sales.  Sales of all other
products increased slightly, although, a portion of the increase reflects higher
selling  prices for products  containing  palladium.  During the first  quarter,
palladium  prices  averaged  approximately  $346 per troy ounce,  compared  with
approximately  $314 per troy ounce during the prior fiscal year's first quarter.
During the most recent quarter,  products sold by JM Ney contained approximately
6,250 troy ounces of palladium.

Investment and other income totaled  $903,000 for the three months ended May 31,
1999,  as compared to a net of $146,000 of such income for the quarter ended May
31, 1998.  Significant  components of these revenues  during each period were as
follows (in thousands):
<TABLE>
<S> <C>                                                     <C>                                <C>
                                                                            Three Months ended
                                                               May 31, 1999                     May 31, 1998
                                                               ------------                     ------------
Net gains from domestic investment portfolio                       $ 379                           $ 334
Net gains (losses) from Russian and
  Eastern European portfolio                                         266                            (561)
Interest and dividends                                                43                              82
Rental income                                                        116                             132
Other, net                                                            99                             159
                                                                   -----                           -----

                                                                   $ 903                           $ 146
                                                                   =====                           =====

</TABLE>

The  domestic  and  foreign  portfolio  gains are  comprised  of $85,000 of
realized gains and $560,000 of changes in unrealized gains. Other income for the
three month periods  ended May 31, 1999 and 1998  includes  $52,000 and $85,000,
respectively,  of  precious  metal  hedging  financing  charges by JM Ney to its
refining customers.  During the most recent quarter,  the cost of financing such
hedging program, particularly for palladium, decreased, and accordingly, charges
to customers also were reduced.

COST OF SALES
Cost of sales during the three months  ended May 31, 1999  represented  67.9% of
net sales,  versus costs of sales during the prior fiscal  year's first  quarter
which were 67.3% of net sales.  The modest  decline in the average  gross margin
from 32.7% to 32.1% was the result of higher palladium prices, which were passed
on in the form of higher selling prices, but without the same degree of mark-up,
lower pension income,  and a higher mix of materials  product line sales,  which
generally  have  lower  average   margins.   Increased   margins  from  refining
transactions contributed to reducing the effect of other factors.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling,  general and administrative expenses for the three months ended May 31,
1999  totaled  $1,696,000,  which is an increase  of 4.4% from the prior  fiscal
year's first  quarter,  which is  consistent  with general  wage  increases  and
increases in ongoing costs added during the prior year.


RESEARCH AND DEVELOPMENT EXPENSES
Research, development and engineering expenses during the three months ended May
31, 1999 totaled  $572,000,  which  represents a 17.5%  increase  from the prior
year. Additional engineering positions to expand JM Ney's technical capabilities
contributed to the overall increase.

INTEREST EXPENSE
Interest  expense  during the three months ended May 31, 1999 totaled  $388,000,
which is 15.8%  lower than the costs  incurred  during the first  quarter of the
prior fiscal year.  Lower interest  costs from the Company's 10 1/2%  debentures
are a result of the annual  redemption  in October as well as lower  lease rates
for palladium hedges factored into the decline in this expense.

INCOME TAX EXPENSE  Income  taxes have been  accrued  based upon  estimated
effective  tax  rates.  As a result of this  increase  in  unrealized  gains and
recognition  for book  purposes  of  previously  taxed  income,  $303,000 of the
estimated provision in the current quarter has been recorded to deferred taxes.

LIQUIDITY AND CAPITAL RESOURCES
At May 31, 1999,  the  Company's  consolidated  cash and  marketable  securities
totaled  $9,507,000,  which is a 9.8%  increase  from  February 28, 1999 levels.
Reduction  in JM Ney's  inventory  levels  and  increases  in the  values of the
Company  portfolio of marketable  securities  contributed  to  increasing  these
current assets.  In addition,  short-term  borrowing was reduced by more than $1
million from seasonal inventory reductions.

As a result of covenants contained in its borrowing  agreements,  JM Ney is
restricted from paying dividends or otherwise  transferring funds to the Company
outside the ordinary course of business except as defined in certain  covenants.
At May  31,  1999,  JM  Ney's  working  capital  was  $9,152,000,  or  60.0%  of
consolidated  net  current  assets,  and  its  net  worth,  net of a $4  million
subordinated  note payable to the Company,  totaled  $7,241,000  or 43.5% of the
Company's consolidated total.

FORWARD-LOOKING STATEMENTS
This report contains forward-looking  statements,  which are subject to a number
of risks and  uncertainties  that may cause actual results to differ  materially
from  expectations.  Those  uncertainties  include,  but are not  limited to the
following:

The Company has expanded its investment and business  development  activities in
Russia  and  Eastern  Europe.  Economic  and  political  developments  in  these
countries  could  significantly  impact  both the  return  on and the  return of
capital employed in these regions.  The price and volatility of precious metals,
particularly  palladium  and gold,  could impact the market for many of JM Ney's
products, as users substitute less expensive materials.

YEAR 2000 ISSUE
The Year 2000 problems stem from three main issues: two-digit date storage, leap
year calculations, and special meanings for dates (i.e., 9/9/99). There is not a
simple solution to the Year 2000 issue due to the fact that the use of dates for
calculations is pervasive  throughout software and the use of these calculations
is not standardized.

STATE OF READINESS
The Company has formalized a comprehensive  Year 2000 plan that  encompasses its
products, vendors, customers, manufacturing equipment, technical infrastructure,
facilities,  telecommunications,  and business systems. The plan consists of the
following phases: inventory, assessment,  remediation,  testing, implementation,
and  contingency  plan for each area. The plan also contains the cost associated
with  providing  Year 2000  solutions for each area. The Company's plan has been
viewed  favorably by a Year 2000 consulting firm, which reviewed each element of
the plan.

The Company has completed the process of identifying and assessing the extent to
which  the Year  2000  issue  will  affect  its  products,  vendors,  customers,
manufacturing     equipment,      technical     infrastructure,      facilities,
telecommunications,  and business  systems.  To date,  most of the financial and
operational  effort  has  been  expended  in  implementing  Year  2000-compliant
solutions for JM Ney's enterprise resource planning (ERP) systems, and technical
infrastructure.  This effort was completed in October,  1998. The Company is now
in  the  process  of   remediation,   testing,   and   implementation   of  Year
2000-compliant solutions for its manufacturing equipment,  facilities,  and some
minor  business  systems.  These  processes  are  scheduled  to be  complete  by
September 1999.

COSTS
Through  May 31,  1999  approximately $650,000  has been  expended  on Year 2000
project,  including  approximately  $41,000  expended  in the first  quarter  of
FY2000.  Additional  Year 2000  expenses to be incurred  have been  estimated to
total  approximately  $150,000.  However,  there  can be no  assurance  that the
Company  will not  incur any  unanticipated  costs in  completing  its Year 2000
compliance  project,  due to  the  difficulty  in  determining  remediation  for
non-compliant manufacturing equipment.

RISKS
The  Company  views  its  greatest  area of  exposure  as being  the  degree  of
compliance of some of JM Ney's manufacturing equipment.  There are machines that
do not have blueprints,  and  information  regarding  the  programmable  logic
controls  is not  always  easy to  obtain.  These  same  machines  do not have a
mechanism to change the date,  nor do they  display or print a date.  These same
reasons  could be a positive  indicator  to  support  the idea that they are not
date-sensitive  machines.  JM Ney  will be  performing  extensive  tests  on all
manufacturing  equipment during the second fiscal quarter of FY2000. Other risks
relate  to  the  degree  of  readiness  of  the  Company's  vendors,  suppliers,
customers, and other third parties. Any failure by these parties to ensure their
Year 2000 compliance could have an adverse effect on our position.

CONTINGENCY
The Company will continue to develop its contingency  strategies for every area.
Special attention will be paid to the manufacturing and third party disciplines.

The Company is evaluating  the  responses  from its  single-source  and critical
suppliers,  and will be  requesting  updates  from these  suppliers  as the year
progresses. Additional, or second sources will be identified for those suppliers
who fail to provide sufficient Year 2000 information or who are not compliant by
September 1999.

Based upon a comprehensive  review of exposure areas,  the Company believes that
manufacturing and other operational and administrative activities will not be at
significant risk due to the Year 2000 problem.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The  Company  and JM Ney are  exposed  to  market  risk from  changes  in equity
security prices, certain commodity prices,  interest rates and from factors that
impact equity investments in Russia, the Ukraine and Poland, as discussed in the
Company's  Annual Report on Form 10-K for the year ended  February 28, 1999. The
following information is presented to update the status of the identified risks.

EQUITY SECURITIES RISK
At May 31,  1999,  the  Company's  portfolio of savings bank stocks had a market
value of  $5,484,000,  part of which has been  pledged as security  for a margin
loan of $1,353,000.

FOREIGN INVESTMENT RISK
The Company has a trading portfolio of Russian, Ukrainian and Polish investments
with market values  totaling  $624,000 and a net reported value of $441,000.  In
addition, as a result of the receipt of an additional in a series of anticipated
liquidating  distributions,  JM Ney's investment in a Russian bond fund has been
reduced to approximately $78,000.

COMMMODITY RATE RISK
During the quarter  ended May 31, 1999,  the market price for gold declined from
$287 per troy ounce to $268 per troy ounce,  while the market price of palladium
declined from $351 per ounce to $338 per ounce, although it ranged in price from
a high of $384 to a low of $285 per  ounce.  Such  fluctuations  impact  selling
prices and can affect reported profitability.

INTEREST RATE RISK
The  interest  cost of JM Ney's  use of  precious  metal  hedges  in the form of
consignment borrowing in recent years has experienced significant  fluctuations.
During the first quarter,  the interest costs of such arrangements fell from 38%
per annum to 5% per annum. During the quarter, JM Ney also reduced surcharges to
its customers  that were  instituted to offset the cost of hedging the purchases
of precious metals from refining customers.

Part II.  Other Information

Item 1.  Legal Proceedings

     Morton  International,  Inc. v. A.E.  Staley Mfg.  Co. et al. and  Velsicol
Chemical Corp. v. A.E. Staley Mfg. Co. et al

As originally  reported in the Company's  Form 10-K for the year ended  February
28, 1997, in July 1996,  two companion  lawsuits were filed in the United States
District  Court for the District of New Jersey,  by various owners and operators
of  the  Ventron-Velsicol  Superfund  Site  (Site).  The  lawsuits,  which  were
subsequently  consolidated,  were filed  under the  Comprehensive  Environmental
Resource Compensation and Liability Act (CERCLA),  the Resource Conservation and
Recovery Act, the New Jersey Spill Act and New Jersey common law,  alleging that
the  defendants  (over 100  companies,  including  J.M. Ney) were  generators of
certain  wastes  allegedly  processed at the site. The lawsuits seek recovery of
costs incurred and a declaration of future liability for costs to be incurred by
the owners and operators in studying and remediating the Site.

Based on preliminary  disclosure of  information  relating to the claims made by
plaintiffs and defendants,  J.M. Ney, which produced and refined precious metals
used  in  dental  amalgams,  is one of the  smaller  parties  to  have  had  any
transactions  with one of the  plaintiff's  predecessors  in interest.  However,
under both CERCLA and the New Jersey Spill Act, a party is jointly and severally
liable,  unless  there  is a basis  for  divisibility.  At this  time,  there is
insufficient  information  to determine the  appropriate  allocation of costs as
between or among the defendant  group, if liability to the generator  defendants
is ultimately proven.  Moreover,  because of the incomplete status of discovery,
the Company is unable to predict the probable  outcome of the  lawsuit,  whether
favorable or unfavorable,  and has no basis to ascertain a range of loss, should
any  occur,   with  respect  to  an  outcome  that  might  be  characterized  as
unfavorable.

The Company continues to investigate whether any liability,  which may accrue at
some  future  date,  may be  subject to  reimbursement  in whole or in part from
insurance  proceeds.  The Company  intends to continue to vigorously  defend the
lawsuit.

     James S.  Cathers and Sylvia Jean  Cathers,  his wife v. Kerr  Corporation,
Whip-Mix Corporation, The J.M. Ney Company and Dentsply Corporation, Inc.

As originally  reported in the Company's  Form 10-Q for the quarter ended August
31, 1997,  in August  1997,  J.M. Ney was included as a defendant in an asbestos
related civil action for negligence and product  liability filed in the Court of
Common Pleas of Allegheny  County,  Pennsylvania,  in which the Plaintiffs claim
damages in excess of $30,000 (the  jurisdictional  limit) from being  exposed to
asbestos and asbestos products alleged to have been manufactured and supplied by
the  defendants,  including  Ney's  former  Dental  Division,  while  one of the
Plaintiffs  worked in a dental lab from 1960 to 1986 at an unspecified  location
in  Pittsburgh,  Pennsylvania.  The  Plaintiffs  allege  that this  exposure  to
asbestos  and  asbestos  products  caused  the  wrongful  death  of  one  of the
Plaintiffs  from cancer  (mesothelioma).  The  Plaintiffs  have not provided any
specific  allegations of facts as to which  defendants may have  manufactured or
supplied  asbestos  and asbestos  products  which are alleged to have caused the
injury.

The Company has determined  that it has insurance that  potentially  covers this
claim and has called upon the  insurance  carriers to provide  reimbursement  of
defense costs and liability,  should any arise. As of this date, the Company has
no basis to  conclude  that the  litigation  may be  material  to the  Company's
financial  condition or business.  The Company intends to vigorously  defend the
lawsuit.


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

     (a) The  Registrant's  Annual Meeting of Stockholders  was held on June 22,
1999 for the purpose of electing Directors

     (b) The following Directors were elected:

                  Oliver R. Grace, Jr.
                  Francis E. Baker
                  Peter N. Bennett
                  John S. Grace
                  Louis A. Lubrano
                  James J. Pinto

The number of votes of Common Stock for each of the Directors or withheld was as
follows:

Director                                 Votes For               Votes Withheld
--------                                 ---------               --------------
Oliver R. Grace, Jr.                     1,121,728                  15,345
Francis E. Baker                         1,119,181                  17,892
Peter N. Bennett                         1,124,522                  12,551
John S. Grace                            1,123,294                  13,779
Louis A. Lubrano                         1,123,575                  13,498
James J. Pinto                           1,124,728                  12,551


Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits required by Item 601 of Regulation S-K:

     Exhibit               Description

     Exhibit 11            Statement re: Computation of Per Share Earnings.

     Exhibit 27            Financial Data Schedule.


No reports on Form 8-K were filed during the quarter ended May 31, 1999.


<PAGE>


         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.


ANDERSEN GROUP, INC.

By:      /s/ Oliver R. Grace, Jr.
         Oliver R. Grace, Jr.
         President and Chief Executive Officer

Date:    July 13, 1999



By:      /s/ Peter R. Barker
         Peter R. Barker
         Vice President and Chief Financial Officer

Date:    July 13, 1999



<PAGE>

                              ANDERSEN GROUP, INC.
               Statement Re: Computation of Per Share Earnings
                      (In thousands, except per share data)




                                                              Three Months Ended
Calculation of basic earnings                                     May 31, 1999
   per share:
Numerator for basic and diluted earnings per share:

Net income                                                          $ 260
                                                                    =====

Denominator for basic earnings per share:
Weighted average number of shares outstanding during
   the period                                                       1,930
Effect of dilutive securities - stock options                           6
                                                                    -----
Denominator for diluted earnings per share                          1,936
                                                                    =====

Basic earnings per share                                            $0.13

Diluted earnings per share                                          $0.13


<PAGE>

                                                            Exhibit 27
         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.