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

                                  UNITED STATES
                       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 JUNE 30, 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 Identification No.)
     incorporation or organization)
         ONE MEADOWLANDS PLAZA                              07073
      EAST RUTHERFORD, NEW JERSEY                        (Zip code)
(Address of principal executive offices)


         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 JULY 30, 2004

Common Stock, $.10 Par Value                                 13,091,068

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


                                       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>

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

<TABLE>
<CAPTION>
                                                                                                    JUNE 30,      DECEMBER 31,
                                                                                                      2004           2003
                                                                                                  ----------------------------
                                     ASSETS
<S>                                                                                               <C>              <C>
Current assets:
   Cash and cash equivalents ................................................................     $     904        $     465
   Marketable securities, at fair value .....................................................         5,659            6,761
   Accounts receivable (less allowance for doubtful accounts of $330 and $263 at
          June 30, 2004 and December 31, 2003, respectively) ................................        42,345           32,328
   Inventories, net (Note 4) ................................................................        34,132           37,169
   Current assets of discontinued operations ................................................         9,682            7,534
   Other current assets .....................................................................         3,072            3,577
                                                                                                  ----------------------------
        Total current assets ................................................................        95,794           87,834
Property, plant and equipment, net ..........................................................        16,856           15,241
Assets of discontinued operations ...........................................................         1,896            1,766
Other long-term assets ......................................................................         2,578            2,947
                                                                                                  ----------------------------
        Total assets ........................................................................     $ 117,124        $ 107,788
                                                                                                  ============================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Revolving credit facility (Note 7) .......................................................     $  31,680        $  17,189
   Current portion of long-term debt (Note 8) ...............................................            54              137
   Accounts payable .........................................................................        15,447           21,088
   Accrued expenses .........................................................................         8,786           11,294
   Current liabilities of discontinued operations ...........................................         2,637            2,223
   Deferred income taxes and income taxes payable ...........................................         8,174            7,644
                                                                                                  ----------------------------
        Total current liabilities ...........................................................        66,778           59,575

Long-term debt, less current portion (Note 8) ...............................................         3,509            3,777
Deferred income taxes .......................................................................        17,274           17,595
Other long-term liabilities .................................................................         1,488            1,475
Warrant .....................................................................................         1,250            1,000
Minority interest in subsidiary .............................................................         2,849            2,686
Liabilities of discontinued operations ......................................................           149              157
Mandatorily redeemable series A cumulative preferred stock (18,264 shares issued;
    17,083 and 18,174 outstanding at June 30, 2004 and December 31, 2003, respectively)
    (Note 9) ................................................................................         5,249            5,665

Commitments and contingencies
Stockholder's equity:
   9% cumulative convertible preferred stock at liquidation value ...........................           177              427
   Common stock, $.10 par value; (25,000,000 authorized; 22,903,931 and 22,146,884 shares
           issued at June 30, 2004 and December 31, 2003, respectively) .....................         2,290            2,214
   Capital in excess of par value ...........................................................       167,291          165,706
   Accumulated other comprehensive income (loss) ............................................           (37)              57
   Accumulated deficit ......................................................................       (56,866)         (58,201)

   Treasury stock, at cost (11,077,433 and 11,109,872 shares at June 30, 2004 and
          December 31, 2003, respectively) ..................................................       (93,828)         (93,861)
   Receivable from stockholders .............................................................          (449)            (484)
                                                                                                  ----------------------------
      Total stockholders' equity ............................................................        18,578           15,858
                                                                                                  ----------------------------
        Total liabilities and stockholders' equity ..........................................     $ 117,124        $ 107,788
                                                                                                  ============================
</TABLE>

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


                                       3
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                         THREE MONTHS ENDED
                                                                                                              JUNE 30,
                                                                                                      -------------------------
                                                                                                          2004           2003
                                                                                                      -------------------------
<S>                                                                                                    <C>            <C>
Net sales ........................................................................................     $ 76,678       $ 80,154
Cost of goods sold ...............................................................................       70,100         74,885
                                                                                                      -------------------------
   Gross profit ..................................................................................        6,578          5,269
Selling, general and administrative expenses .....................................................        6,042          8,363
Restructuring and other charges ..................................................................        1,158          2,391
                                                                                                       ------------------------
   Operating loss ................................................................................         (622)        (5,485)
Interest expense .................................................................................         (673)          (804)
Other income (expense), net ......................................................................          228             14
                                                                                                      -------------------------
   Loss before income taxes, minority interest, equity in earnings of affiliate
      and discontinuedoperations .................................................................       (1,067)        (6,275)
Income tax benefit ...............................................................................          327          2,453
                                                                                                      -------------------------

   Loss before minority interest, equity in earnings of affiliate and discontinued operations ....         (740)        (3,822)
Minority interest in  income of subsidiary .......................................................           (6)            --
Equity in earnings of affiliate ..................................................................           --           (806)
                                                                                                      -------------------------

Loss from continuing operations ..................................................................         (746)        (4,628)
Income from discontinued operations, net of taxes ................................................          892            854
                                                                                                      -------------------------
Net income (loss) ................................................................................          146         (3,774)
Preferred stock dividends ........................................................................         (139)           (10)
                                                                                                      -------------------------
   Net  income (loss) applicable to common stock .................................................     $      7       $ (3,784)
                                                                                                      =========================

Net income (loss) per share of common stock: Basic and diluted:
      Loss from continuing operations ............................................................     $  (0.06)      $  (0.31)
      Income from discontinued operations ........................................................         0.07           0.06
      Preferred stock dividends ..................................................................        (0.01)            --
                                                                                                      -------------------------
      Net income (loss) per basic and diluted share of common stock ..............................     $   0.00       $  (0.25)
                                                                                                      =========================

Weighted average shares outstanding (basic and diluted) ..........................................       12,815         15,107
                                                                                                      =========================
</TABLE>

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


                                       4
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                            SIX MONTHS ENDED
                                                                                                                JUNE 30,
                                                                                                       -------------------------
                                                                                                           2004          2003
                                                                                                       -------------------------
<S>                                                                                                    <C>            <C>
Net sales ........................................................................................     $ 158,019      $ 169,508
Cost of goods sold ...............................................................................       141,253        158,452
                                                                                                       -------------------------
   Gross profit ..................................................................................        16,766         11,056
Selling, general and administrative expenses .....................................................        12,105         17,388
Restructuring and other charges ..................................................................         2,906          4,976
                                                                                                       -------------------------
   Operating income (loss) .......................................................................         1,755        (11,308)
Interest expense .................................................................................        (1,285)        (1,852)
Other income, net ................................................................................           145            100
                                                                                                       -------------------------
   Income (loss) before income taxes, minority interest, equity in earnings of affiliate and
      discontinued operations.....................................................................           615        (13,060)
Income tax (provision) benefit ...................................................................          (425)         5,125
                                                                                                       -------------------------

   Income (loss) before minority interest, equity in earnings of affiliate and discontinued
      operations .................................................................................           190         (7,935)
Minority interest in  income of subsidiary .......................................................          (163)            --
Equity in earnings of affiliate ..................................................................            --            267
                                                                                                       -------------------------
    Income (loss) from continuing operations .....................................................            27         (7,668)
Income from discontinued operations, net of taxes ................................................         1,595          1,580
                                                                                                       -------------------------

Net income (loss) ................................................................................         1,622         (6,088)
Preferred stock dividends ........................................................................          (287)           (19)
                                                                                                       -------------------------
   Net income (loss) applicable to common stock ..................................................     $   1,335      $  (6,107)

Net income (loss) per share of common stock:

    Basic and diluted:
      Income (loss) from continuing operations ...................................................     $    0.00      $   (0.51)
      Income from discontinued operations ........................................................          0.13           0.10
      Preferred stock dividends ..................................................................         (0.02)            --
                                                                                                       -------------------------
      Net income (loss) per basic and diluted share of common stock ..............................     $    0.11      $   (0.41)
                                                                                                       =========================

Weighted average shares outstanding (basic and diluted) ..........................................        12,467         15,019
                                                                                                       =========================
</TABLE>

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


                                       5
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                            SIX MONTHS ENDED
                                                                                              JUNE 30, 2004
                                                                                     ----------------------------
                                                                                         SHARES           AMOUNT
                                                                                     ----------------------------
<S>                                                                                   <C>            <C>
9% cumulative convertible preferred stock:
   Balance at beginning of period ................................................          427      $        427
   Preferred stock redemption ....................................................         (250)             (250)
                                                                                     ----------------------------
      Balance at end of period ...................................................          177               177
                                                                                     ----------------------------

Common stock:
   Balance at beginning of period ................................................   22,146,884             2,214
   Stock options exercised .......................................................        3,166                 1
   Shares issued pursuant to Series A Preferred Stock conversion .................      753,881                75
                                                                                     ----------------------------
      Balance at end of period ...................................................   22,903,931             2,290
                                                                                     ----------------------------

Capital in excess of par value:
   Balance at beginning of period ................................................                        165,706
   Compensation expense related to stock options / grants net of vested shares ...                          1,243
   Shares issued pursuant to Series A Preferred Stock conversion .................                            340
   Stock options exercised .......................................................                              2
                                                                                                     ------------
      Balance at end of period ...................................................                        167,291
                                                                                                     ------------
Accumulated other comprehensive deficit:
   Balance at beginning of period ................................................                             57
   Change in unrealized losses on securities, net of tax .........................                            (94)
                                                                                                     ------------
      Balance at end of period ...................................................                            (37)
                                                                                                     ------------
Accumulated deficit:
   Balance at beginning of period ................................................                        (58,201)
   Net income ....................................................................                          1,622
   Dividends on preferred stock ..................................................                           (287)
                                                                                                     ------------
      Balance at end of period ...................................................                        (56,866)
                                                                                                     ------------
Treasury stock:
   Balance at beginning of period ................................................                        (93,861)
   Stock options and grants ......................................................                             33
                                                                                                     ------------
      Balance at end of period ...................................................                        (93,828)
                                                                                                     ------------
Receivable from stockholders:
   Balance at beginning of period ................................................                           (484)
   Forgiveness of officer loans ..................................................                             35
                                                                                                     ------------
      Balance at end of period ...................................................                           (449)
                                                                                                     ------------
Total stockholders' equity .......................................................                   $     18,578
                                                                                                     ============
</TABLE>

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


                                       6
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                         SIX MONTHS ENDED
                                                                                                             JUNE 30,
                                                                                                     -----------------------
                                                                                                        2004         2003
                                                                                                     -----------------------
<S>                                                                                                  <C>           <C>
Cash flows from operating activities:
   Net income (loss) ...........................................................................     $  1,622      $ (6,088)
   Adjustments to reconcile net income (loss) to net cash provided by (used for) continuing
      operating activities:
      Net income from discontinued operations ..................................................       (1,595)       (1,580)
      Depreciation and amortization ............................................................          360           355
      Amortization of deferred debt issuance costs and accretion of debt discount ..............          296           253
      Compensation expense related to stock options and grants .................................        1,278           409
      Deferred income tax ......................................................................          208        (2,659)
      Gain on sale of fixed assets .............................................................         (274)           --
      Minority interest in income (losses) of subsidiary .......................................          163          (267)
      Increase in fair value of warrant ........................................................          250            --
      Change in assets and liabilities:
        Accounts receivable ....................................................................      (10,016)       14,170
        Inventories ............................................................................        3,037        32,101
        Other current and non-current assets ...................................................          217        (1,453)
        Accounts payable and accrued expenses ..................................................       (7,687)       (2,292)
        Other, net .............................................................................         (328)          908
                                                                                                     -----------------------
Cash flows provided by (used for) continuing operating activities ..............................      (12,469)       33,857
                                                                                                     -----------------------
Cash flows from investing activities:
   Capital expenditures ........................................................................       (2,555)       (3,919)
   Proceeds from sale of assets ................................................................          681         3,364
   Proceeds from sale of investments ...........................................................        1,349         1,296
                                                                                                     -----------------------
Cash flows provided by (used for) investing activities .........................................         (525)          741
                                                                                                     -----------------------
Cash flows from financing activities:
   Borrowings (repayments) under revolving credit facility, net ................................       14,491       (38,773)
   Repayments of long-term borrowings ..........................................................         (440)          (44)
   Other, net ..................................................................................         (341)        3,030
                                                                                                     -----------------------
Cash flows provided by (used for) financing activities .........................................       13,710       (35,787)

Cash flow provided by (used for) discontinued operations .......................................         (277)        3,838
Net increase in cash and cash equivalents ......................................................          439         2,649
Cash and cash equivalents at beginning of period ...............................................          465         8,139
                                                                                                     -----------------------
Cash and cash equivalents at end of period .....................................................     $    904      $ 10,788
                                                                                                     =======================

Supplemental disclosures:
   Cash paid for interest ......................................................................     $    920      $  1,937

   Cash paid (refunded) for income taxes, net ..................................................     $  1,379      $ (1,323)
</TABLE>

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


                                       7
<PAGE>

                     THE ALPINE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (UNAUDITED)

1. GENERAL

         BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

         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  consisted  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.  On June 18,
2004, Alpine entered into an agreement to sell DNE Systems, Inc. The transaction
was closed on July 29, 2004 (the "DNE Sale"). Accordingly, DNE Systems, Inc. has
been accounted for and classified as a discontinued operation in these financial
statements  and prior  year  results  have  been  reclassified  as  discontinued
operations. See note 12 for a description of the DNE Sale.

         RECLASSIFICATIONS

         Certain prior period amounts have been  reclassified  to conform to the
current period presentation.

         STOCK-BASED COMPENSATION

         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.


                                       8
<PAGE>

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.

<TABLE>
<CAPTION>
                                                                                                    THREE MONTHS ENDED
                                                                                                          JUNE 30,
                                                                                               ---------------------------
                                                                                                  2004               2003
                                                                                               ---------------------------
                                                                                                      (IN THOUSANDS,
                                                                                                          EXCEPT
                                                                                                     PER SHARE AMOUNTS)
<S>                                                                                            <C>               <C>
Net income (loss), as reported ...........................................................     $   146           $(3,774)
Add stock-based employee compensation expense included in reported net income (loss),
    net of tax ...........................................................................         541               128
Deduct total stock-based employee compensation expense determined under fair value
    based method for all awards, net of related tax effects ..............................        (630)             (159)
                                                                                               ---------------------------
Pro forma net income (loss) ..............................................................          57            (3,805)

Preferred stock dividends ................................................................        (139)              (10)
                                                                                               ---------------------------
  Proforma net loss - applicable to common stock .........................................     $   (82)          $(3,815)
                                                                                               ===========================

Net income (loss) per share:
   Basic - as reported ...................................................................     $  0.00           $ (0.25)
   Basic - pro forma .....................................................................     $ (0.01)          $ (0.25)
   Diluted - as reported .................................................................     $  0.00           $ (0.25)
   Diluted - pro forma ...................................................................     $ (0.01)          $ (0.25)
</TABLE>

<TABLE>
<CAPTION>
                                                                                                         SIX MONTHS ENDED
                                                                                                            JUNE 30,
                                                                                                    --------------------------
                                                                                                      2004             2003
                                                                                                    --------------------------
                                                                                                       (IN THOUSANDS, EXCEPT
                                                                                                        PER SHARE AMOUNTS)
<S>                                                                                                 <C>               <C>
Net income (loss), as reported ...........................................................          $ 1,622           $(6,088)
Add stock-based employee compensation expense included in reported net income (loss),
    net of tax ...........................................................................              829               243
Deduct total stock-based employee compensation expense determined under fair value
    based method for all awards, net of related tax effects ..............................           (1,006)             (327)
                                                                                                    --------------------------
Pro forma net income (loss) ..............................................................            1,445            (6,172)

Preferred stock dividends ................................................................             (287)              (19)
                                                                                                    --------------------------
  Proforma net income (loss) - applicable to common stock ................................          $ 1,158           $(6,191)
                                                                                                    ==========================

Net income (loss) per share:
   Basic - as reported ...................................................................          $  0.11           $ (0.41)
   Basic - pro forma .....................................................................          $  0.09           $ (0.41)
   Diluted - as reported .................................................................          $  0.11           $ (0.41)
   Diluted - pro forma ...................................................................          $  0.09           $ (0.41)
</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 six months ended June 30,
2004 and 2003,  respectively:  dividend  yield of 0% for both periods;  expected
volatility  of 117% and 99%,  risk-free  interest  rate of 3.7%  and  2.2%,  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
six months  ended June 30,  2004 and 2003 was $1.06 and $0.52,  respectively.  A
total of  151,196  stock  options  were  granted,  15,000  cancelled  and  3,166
exercised during the six month period ended June 30, 2004.


                                       9
<PAGE>

         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 such 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 STANDARD

         In March  2004,  the  Emerging  Issues  Task  Force  (EITF)  reached  a
consensus  on the  remaining  portions  of EITF  03-01,  The  Meaning of Other -
Than-Temporary Impairment and Its Application to Certain Investments,  effective
for the first fiscal year or interim period  beginning after June 15, 2004. EITF
03-01 provides new disclosure requirements for other-than-temporary  impairments
on debt and equity investments.  Investors are required to disclose quantitative
information  about: (i) the aggregate amount of unrealized  losses, and (ii) the
aggregate related fair values of investments with unrealized losses,  segregated
into time periods  during which the  investment  has been in an unrealized  loss
position  of less  than 12 months  and  greater  than 12  months.  In  addition,
investors  are required to disclose the  qualitative  information  that supports
their  conclusion that the impairments  noted in the qualitative  disclosure are
not  other-than-temporary.  The  adoption of this EITF is not expected to have a
material impact on our results of operations or financial condition.

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 $0.1 and $0.3 million of expense recorded in other income (expense) for the
three and six month  periods ended June 30, 2004,  respectively.  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
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  for the three and six month
periods ending June 30, 2004 and 2003 was $22.3 and $37.8 million, and $20.9 and
$59.5  million,  respectively.  The cost for  administrative  services under the
Transitional  Agreement  and the  Supply  Agreement  for the three and six month
periods  ending June 30, 2004 and 2003 was $0.5 and $1.1  million,  and $1.3 and
$2.6 million, respectively.


                                       10
<PAGE>


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 June 30, 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 both the first and
second quarters of 2004 and the remainder will be amortized in the third quarter
of 2004.

4. INVENTORIES

         At June 30, 2004 and December 31, 2003,  the  components of inventories
were as follows:

                                                  JUNE 30,        DECEMBER 31,
                                                    2004              2003
                                             ----------------------------------
                                                      (IN THOUSANDS)

Raw materials.............................           $4,905            $15,358
Work in process...........................            6,909              4.417
Finished goods............................           36,707             26,401
                                             ----------------------------------
                                                     48,521             46,176
LIFO reserve..............................          (14,389)            (9,007)
                                             ----------------------------------
                                                    $34,132            $37,169
                                             ==================================


The  inventories  shown above are all valued  using the LIFO  method.  An actual
valuation of inventory under the LIFO method can be made only at the end of each
year based on the  inventory  levels  and costs at the same  time.  Accordingly,
interim LIFO calculations must necessarily be based on management's estimates of
expected year-end inventory levels and costs.  Because these are subject to many
forces beyond  management's  control,  interim  results are subject to the final
year-end  LIFO  inventory  valuation.  During the  current  quarter  the company
recorded an estimated decrement of $0.9 million to cost of goods sold.

5. COMPREHENSIVE INCOME (LOSS)

         The  components  of  comprehensive  income  (loss) for the three months
ended  June 30,  2004 and 2003 and the six months  ended June 30,  2004 and 2003
were as follows:

                                                            THREE MONTHS ENDED
                                                                 JUNE 30,
                                                         -----------------------
                                                             2004         2003
                                                             ----         ----
                                                               (IN THOUSANDS)

Net income (loss)....................................         $146      $(3,774)
Foreign currency translation adjustment..............           --           (8)
Change in unrealized losses on securities, net of tax          (34)          92
                                                         -----------------------
Comprehensive income (loss)..........................         $112      $(3,690)
                                                         =======================



                                       11

<PAGE>

                                                            SIX MONTHS ENDED
                                                                JUNE 30,
                                                        -----------------------
                                                          2004          2003
                                                          ----          ----
                                                             (IN THOUSANDS)

Net income (loss)....................................     $1,622      $(6,088)
Foreign currency translation adjustment..............                      (8)
Change in unrealized losses on securities, net of tax       (94)          (19)
                                                        -----------------------
Comprehensive income (loss)..........................     $1,528      $(6,115)
                                                        =======================


6. RESTRUCTURING AND OTHER CHARGES

         During the three and six month  periods  ended June 30,  2004 and 2003,
the Company  recorded $1.2 and $2.9 million for 2004,  and $2.4 and $5.0 million
for 2003,  respectively,  of restructuring and other charges. The second quarter
2004  charges  primarily  include  $0.8 million  related to the  relocation  and
installation  of certain  equipment  from closed  facilities  into the Florence,
Alabama  manufacturing  location,  $0.2  million  related  to  freight  costs to
relocate  inventory  and  $0.2  million  in  facility  costs  relating  to idled
warehousing  space.  For the six month  period  ending June 30, 2004 the charges
consisted  primarily of $1.4 million related to the relocation and  installation
of  certain  equipment  from  closed  facilities  into  the  Florence,   Alabama
manufacturing  location,  $1.0 million for costs associated with starting up the
new  manufacturing  processes  at Florence  and  freight to  relocate  displaced
products and $0.6 million in facility costs relating to idled warehousing space.

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

<TABLE>
<CAPTION>
                                                               DECEMBER 31,                            JUNE 30,
                                                                   2003       CHARGES    PAYMENTS        2004
                                                               -----------    -------    --------      --------
                                                                                  (IN THOUSANDS)
<S>                                                               <C>         <C>        <C>              <C>
Employee severance.........................................       $  972      $   --     $  (936)         $36
Facility exit costs........................................           29         556        (585)          --
Equipment and inventory relocation costs and other costs...           --       2,349      (2,349)          --
                                                             -------------------------------------------------
                                                                  $1,001      $2,905     $(3,870)         $36
                                                             =================================================
</TABLE>

7. REVOLVING CREDIT FACILITY

         In  connection  with the  Electrical  Acquisition  (see Note 2), Alpine
Holdco  entered  into a Loan  and  Security  Agreement  (the  "Revolving  Credit
Facility "), 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.

         Effective  concurrently with the consummation of the DNE Sale (see note
12)  on  July  29,  2004,  the  lenders,  released  each  of  DNE  Systems,  DNE
Technologies,  and DNE  Manufacturing  from all of their  obligations  under the
Revolving Credit Facility (the "DNE Parties"),  released all property of the DNE
Parties  from the  liens  granted  for the  benefit  of the  lenders  under  the
Revolving Credit Facility and all of the outstanding and issued capital stock of
the DNE  Parties  from the  pledge  thereof  delivered  in  connection  with the
Revolving  Credit  Facility,  and the DNE Parties no longer are "Borrowers" or a
"Credit  Party",  as the case  may be,  under  the  Revolving  Credit  Facility.
Accordingly,  from and after July 29, 2004,  the DNE Parties are not included in
the term "Companies".

         Subsequent to the closing of the DNE Sale, it is  anticipated  that the
Revolving Credit Facility will be amended to reflect  modifications in covenants
and other aspects of the Loan Agreement impacted as a result of the DNE Sale.

         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


                                       12
<PAGE>

rate at June 30, 2004 and December 31, 2003 was 4.9% 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 June 30, 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.  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 June 30, 2004 and  December  31,  2003,
outstanding  borrowings  under the Revolving  Credit Facility were $31.7 million
and $17.2  million,  respectively.  At June 30, 2004,  the  Companies  had $18.0
million of borrowing  availability.  No dividends  may be paid by Alpine  Holdco
without  prior  consent of the lenders.  On July 29, 2004 the lenders  expressly
consented to the  distribution  by Alpine  Holdco to Alpine of the sale proceeds
from the DNE Sale.

8. LONG-TERM DEBT

         At June 30, 2004 and December 31, 2003,  long-term debt consists of the
following:

<TABLE>
<CAPTION>
                                                                  JUNE 30,     DECEMBER 31,
                                                                    2004            2003
                                                                 --------------------------
                                                                       (IN THOUSANDS)
<C>                                                                 <C>            <C>
6% Junior Subordinated Notes, net of $1.2 million discount....      $3,147         $3,059
Other.........................................................         416            855
                                                                 ----------    -----------
                                                                     3,563          3,914
Less current portion of long-term debt........................          54            137
                                                                 ----------    -----------
                                                                    $3,509         $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  a loan  established  in 1999 with
Raytheon Aircraft Credit Corporation to finance the purchase of a 12.5% interest
in an aircraft. The loan is payable monthly through 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


                                       13
<PAGE>

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
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.

         During the three and six month  periods  ended June 30, 2004 there were
1,076 and 1,091 shares of Series A Preferred Stock,  respectively,  converted to
743,516 and 753,881 shares of the Company's common stock, respectively.

10. INCOME (LOSS) PER SHARE

         The  computation  of basic and diluted  income (loss) per share for the
three months ended June 30, 2004 and 2003 is as follows:

<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED JUNE 30,
                                                     -------------------------------------------------------------------------
                                                                      2004                                 2003
                                                     ------------------------------------    ---------------------------------
                                                                                 PER SHARE                           PER SHARE
                                                      NET INCOME      SHARES      AMOUNT      NET LOSS    SHARES      AMOUNT
                                                     ----------    ----------    --------    ----------   -------   ----------
                                                                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                  <C>           <C>           <C>         <C>          <C>       <C>
Loss from continuing operations ..................   $     (746)                 $  (0.06)   $   (4,628)            $    (0.31)
Income from discontinued operations ..............          892                      0.07           854                   0.06
                                                     ----------    ----------    --------    ----------   -------   ----------

Net income (loss) ................................          146                      0.01    $   (3,774)                 (0.25)
Less: preferred stock dividends ..................         (139)                    (0.01)          (10)
                                                     ----------    ----------    --------    ----------   -------   ----------

Basic and diluted income (loss) per common share .   $        7        12,815    $   0.00    $   (3,784)   15,107   $    (0.25)
                                                     ==========    ==========    ========    ==========   =======   ==========
</TABLE>



                                       14
<PAGE>

         The  computation  of basic and diluted  income (loss) per share for the
six months ended June 30, 2004 and 2003 is as follows:

<TABLE>
<CAPTION>
                                                                             SIX MONTHS ENDED JUNE 30,
                                                     -------------------------------------------------------------------------
                                                                      2004                                 2003
                                                     ------------------------------------    ---------------------------------
                                                                                 PER SHARE                           PER SHARE
                                                      NET INCOME      SHARES      AMOUNT      NET LOSS    SHARES      AMOUNT
                                                     ----------    ----------    --------    ----------   -------   ----------
                                                                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                  <C>           <C>           <C>         <C>          <C>       <C>
Income (loss) from continuing operations .........   $       27                  $   0.00        (7,668)                  (.51)
Income from discontinued operations ..............        1,595                      0.13         1,580                    .10
                                                     ----------    ----------    --------    ----------   -------   ----------
Net income (loss) ................................   $    1,622                      0.13    $   (6,088)                  (.41)
Less: preferred stock dividends ..................         (287)                    (0.02)          (19)
                                                     ----------    ----------    --------    ----------   -------   ----------
Basic and diluted income (loss) per common share .   $    1,335        12,467    $   0.11    $   (6,107)   15,019   $    (0.41)
                                                     ==========    ==========    ========    ==========   =======   ==========
</TABLE>

         The  Company  has  excluded  the  assumed  conversion  of the  Series A
Preferred Stock from the diluted earnings per share  calculation for all periods
as the impact would be  anti-dilutive.  Stock options and unvested  stock awards
that may be exercised in the future, with respect to 3.3 million and 2.4 million
shares of common stock outstanding at June 30, 2004 and 2003, respectively, have
been excluded from the  computation of diluted  earnings per share because to do
so would be antidilutive for all periods  presented.  The dilutive impact of the
warrant  held by  Superior  (to  acquire  common  shares of Essex  Electric)  is
estimated  to be minimal  for the three and six months  ended June 30,  2004 and
antidilutive for the three and six months ended June 30, 2003.

11. BUSINESS SEGMENTS

     The Company's reportable segments prior to second quarter 2004 consisted of
electrical  wire  (Alpine's  90%  owned  subsidiary,  Essex  Electric  Inc)  and
communications and electronic products (DNE). During the second quarter 2004, we
classified the  communications  and electronic  products segment as discontinued
operations.  See  Note 12 for  additional  information  about  our  discontinued
operations.  Subsequent to the classification of DNE as discontinued operations,
the Company has only one business segment.

12. DISCONTINUED OPERATIONS

      On June  21,  2004  the  Company  entered  into an  agreement  to sell DNE
Systems, its wholly-owned defense electronics  subsidiary,  to ULTRA Electronics
Defense,  Inc., a wholly-owned  subsidiary of Ultra Electronics  Holdings plc, a
United  Kingdom-based  company that is listed on the London Stock  Exchange (the
"DNE  Sale").  The  purchase  price is $40  million in cash at closing  plus the
Company may receive an additional  cash payment of up to $3 million if a certain
performance  based measure is achieved in 2005. The sale was consummated on July
29, 2004 and a pretax book gain of approximately  $30 million,  net of expenses,
is  expected  to be  recorded  in the third  quarter  of 2004.  The  assets  and
liabilities of DNE have been reclassified to discontinued operations in the June
30, 2004 and December 31, 2003 balance sheets presented herein.  Likewise, DNE's
results of  operations  for the three and six month  periods ended June 30, 2004
and 2003 have been reclassified to income from discontinued operations.


                                       15
<PAGE>

      The  major  components  of DNE's  assets  and  liabilities  classified  as
discontinued  operations  in the June 30, 2004 and  December  31,  2003  balance
sheets herein are presented below:


                                                   JUNE 30,         DECEMBER 31,
                                                     2004               2003
                                             -----------------------------------
                                                      (IN THOUSANDS)

Accounts receivable.......................           $3,484             $2,232
Inventories...............................            5,434              5,118
Other current assets......................              764                184
                                             ----------------------------------
     Total current assets.................            9,682              7,534
Property, plant and equipment, net........            1,896              1,766
                                             ----------------------------------
    Total assets..........................           11,578              9,300

Accounts payable..........................            1,528                765
Accrued expenses..........................            1,109              1,458
                                             ----------------------------------
    Total current liabilities.............            2,637              2,223
Other long term liabilities...............              149                157
                                             ----------------------------------
   Total liabilities......................            2,786              2,380
                                             ----------------------------------

Total net assets..........................           $8,792             $6,920
                                             ==================================

   The revenue and income before taxes of DNE that is classified in discontinued
operations  for the three and six month periods ended June 30, 2004 and 2003 are
presented below:

                         THREE MONTHS ENDED JUNE 30:   SIX MONTHS ENDED JUNE 30:
                         ---------------------------   -------------------------
                                            (IN THOUSANDS)
                                            --------------
                             2004          2003         2004           2003
                             ----          ----         ----           ----
Revenues................   $ 6,808        $7,109      $13,704        $15,297
Income before taxes.....   $ 1,564        $1,450      $ 2,769        $ 2,723


                                       16

<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.

         On December 11, 2002, Alpine's wholly-owned  subsidiary,  Alpine Holdco
Inc.  ("Alpine  Holdco")  acquired  Essex  Electric and DNE  Systems,  Inc ("DNE
Systems") 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.  On June
18, 2004, Alpine entered into an agreement to sell DNE Systems.  The transaction
closed on July 29, 2004.  Accordingly,  DNE Systems has been  accounted  for and
classified as a discontinued  operation in these financial statements.  See note
12 for a description of this transaction.

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.


                                       17
<PAGE>

RESULTS OF OPERATIONS--THREE MONTH PERIOD ENDED JUNE 30, 2004 AS COMPARED TO THE
THREE MONTH PERIOD ENDED JUNE 30, 2003

         Sales for the  quarter  ended  June 30,  2004  were  $76.7  million,  a
decrease of 4% compared to sales of $80.2 million for the quarter ended June 30,
2003. The  comparative  sales  decrease is due to lower  shipments of electrical
wire by Essex Electric resulting from its consolidation of production facilities
and  reduction  of  manufacturing  capacity  to reduce its  exposure  to certain
geographic   markets,   distribution   channels   and   product   lines   during
implementation  of its  restructuring  and  repositioning  strategy.  The  sales
decrease during the second quarter of 2004 versus the second quarter of 2003 was
partially  offset by a significant  increase (61%) in the cost of copper,  Essex
Electric's   principal   manufacturing   cost  item.  After  adjusting  for  and
eliminating the comparative  difference in the market price of copper, sales for
the quarter  ended June 30, 2004  declined  31% from the quarter  ended June 30,
2003 due  primarily  to a  decrease  in the volume of copper  equivalent  pounds
shipped  partially  offset by an  improvement  in per unit  pricing.  The volume
decline was  anticipated  and is due largely to the impact of the  restructuring
and repositioning program being implemented at Essex Electric.

         Gross profit for the quarter  ended June 30, 2004 was $6.6  million,  a
25% increase of $1.3 million as compared to gross profit of $5.3 million for the
quarter ended June 30, 2003.  The gross profit margin for the quarter ended June
30, 2004 was 9%,  compared to a gross profit  margin of 7% for the quarter ended
June 30, 2003. The increased margin  percentage  reflects higher pricing and mix
changes in products and markets in which Essex Electric competes.

         Selling,  general and  administrative  expense ("SG&A expense") for the
quarter ended June 30, 2004 was $6.0 million,  a decrease of 29%, as compared to
SG&A expense of $8.4 million for the quarter  ended June 30, 2003 due  primarily
to cost  reductions at Essex Electric in connection with  implementation  of its
restructuring.  Included in SG&A expense for the quarter  ended June 30, 2004 is
approximately  $0.5 million of expense  related to accounting  for certain stock
options on a variable accounting basis.  Excluding this charge, SG&A expense for
the  quarter  ended  June 30,  2004  decreased  by 35% from the 2003  comparable
quarter.

         Restructuring  and other charges at Essex  Electric of $1.2 million for
the three months ended June 30, 2004 are described in Note 6.

         The  Company's  operating  loss for the quarter ended June 30, 2004 was
$0.6  compared to an  operating  loss of $5.5  million for the  comparable  2003
quarter. The increase in operating income is due to higher pricing,  product mix
changes and SG&A expense reductions at Essex Electric.

         Interest  expense for the quarter ended June 30, 2004 was $0.7 million,
representing  a decrease of $0.1  million  from the  comparative  2003  quarter
period.  The  decrease  is due  primarily  to a decrease of  approximately  $8.0
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.


                                       18
<PAGE>

RESULTS OF OPERATIONS--SIX MONTH PERIOD ENDED JUNE 30, 2004 AS COMPARED TO THE
SIX MONTH PERIOD ENDED JUNE 30, 2003

         Sales for the six month period ended June 30, 2004 were $158.0 million,
a decrease of 7% compared  to sales of $170.0  million for the six month  period
ended June 30, 2003. The comparative sales decrease is due to lower shipments of
electrical wire by Essex Electric resulting from its consolidation of production
facilities  and  reduction of  manufacturing  capacity to reduce its exposure to
certain geographic markets,  distribution  channels and product lines during the
implementation of its restructuring  and  repositioning  initiatives.  The sales
decrease was also impacted by the sale of the  automotive  and  industrial  wire
product lines in the first quarter of 2003, which contributed approximately $8.0
million in sales in the first quarter of 2003.  The sales decrease was partially
offset by the significant increase (58%) in the cost of copper, Essex Electric's
principal  manufacturing  cost item,  in the first half of 2004  compared to the
copper costs in the first half of 2003.  After adjusting for and eliminating the
comparative  difference  in the market price of copper,  sales for the six month
period ended June 30, 2004 declined 31% from the six month period ended June 30,
2003  due to a  decline  in the  volume  of  copper  equivalent  pounds  shipped
partially  offset by an improvement in per unit pricing.  The volume decline was
anticipated  and  is  due  largely  to  the  impact  of  the  restructuring  and
repositioning program being implemented at Essex Electric.

         Gross  profit for the six month  period  ended June 30,  2004 was $16.8
million,  a 43%  increase of $5.7  million as compared to gross  profit of $11.1
million for the six month period ended June 30,  2003.  The gross profit  margin
for the six month period ended June 30, 2004 was 11%, compared to a gross profit
margin of 7% for the six month period ended June 30, 2003. The increased  margin
percentage  reflects  higher  pricing and mix changes in products and markets in
which Essex Electric competes.

         Selling,  general and  administrative  expense ("SG&A expense") for the
six month  period ended June 30, 2004 was $12.1  million,  a decrease of 30%, as
compared to SG&A  expense of $17.4  million for the six month  period ended June
30, 2003 due primarily to cost  reductions at Essex Electric in connection  with
implementation of its restructuring.  Included in SG&A expense for the six month
period ended June 30, 2004 is  approximately  $0.7 million of expense related to
accounting for certain stock options on a variable  accounting basis.  Excluding
this charge, SG&A expense for the six month period ended June 30, 2004 decreased
by 34% from the 2003 comparable period.

         Restructuring  and other charges at Essex  Electric of $2.9 million for
the six month period ended June 30, 2004 are described in Note 6.

         The Company's  operating income for the six month period ended June 30,
2004 was $1.8  million  compared to an operating  loss of $11.3  million for the
comparable  2003  period.  The  increase  in  operating  income is due to higher
pricing, product mix changes and SG&A expense reductions at Essex Electric.

         Interest  expense for the six month period ended June 30, 2004 was $1.3
million,  representing  a decrease of $0.6 million from the prior year six month
period.  The  decrease is due  primarily  to a decrease of  approximately  $24.0
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.


                                       19
<PAGE>

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.

          Effective concurrently with the consummation of the DNE Sale (see note
12)  on  July  29,  2004,  the  lenders,  released  each  of  DNE  Systems,  DNE
Technologies,  and DNE  Manufacturing  from all of their  obligations  under the
Revolving Credit Facility (the "DNE Parties"),  released all property of the DNE
Parties  from the  liens  granted  for the  benefit  of the  lenders  under  the
Revolving Credit Facility and all of the outstanding and issued capital stock of
the DNE  Parties  from the  pledge  thereof  delivered  in  connection  with the
Revolving  Credit  Facility,  and the DNE Parties no longer are "Borrowers" or a
"Credit  Party",  as the case  may be,  under  the  Revolving  Credit  Facility.
Accordingly,  from and after July 29, 2004,  the DNE Parties are not included in
the term "Companies".

         Subsequent to the closing of the DNE Sale, it is  anticipated  that the
Revolving Credit Facility will be amended to reflect  modifications in covenants
and other aspects of the Loan Agreement impacted as a result of the DNE Sale.

         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 June 30, 2004 was 4.9%. 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.
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 the assets of DNE, as described  above.  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
June 30, 2004 and December 31, 2003,  outstanding borrowings under the Revolving
Credit Facility were $31.7 million and $17.2 million,  respectively. At June 30,
2004 the Companies had $18.0 million of borrowing availability. No dividends may
be paid by Alpine Holdco without prior consent of the lenders.  On July 29, 2004
the lenders  expressly  consented to the distribution by Alpine Holdco to Alpine
of the sale proceeds from the DNE Sale. Alpine Holdco was in compliance with all
applicable covenants at June 30, 2004.

         The Company  estimates that Alpine Holdco  (including its subsidiaries)
capital  expenditures for 2004 will approximate between $6 to $8 million.  Essex
Electric 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.  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 over the next twelve months.


                                       20
<PAGE>

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.

         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.


                                       21
<PAGE>

         During the three month period ended June 30, 2004, the Company  retired
250 shares of its 9% cumulative convertible senior preferred stock at its stated
liquidation value of $1,000 per share.

         As of June 30, 2004 Alpine has unrestricted  cash, cash equivalents and
marketable  securities  of  approximately  $6.6  million.  Alpine's  current and
anticipated  sources of liquidity  include  existing  cash and cash  equivalents
(including the net proceeds from the DNE Sale),  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.

         On July 29, 2004, Alpine Holdco distributed to Alpine the proceeds from
the DNE Sale, net of expenses,  of approximately  $37 million in accordance with
the consent from the lenders previously described.

         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.


                                       22
<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.   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.


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<PAGE>

                           PART II. OTHER INFORMATION

         ITEM 6. EXHIBITS

(a)  EXHIBITS

 10(gg)*    Stock Purchase Agreement Between Alpine Holdco Inc. and Ultra
            Electronics Defense, Inc., Dated as of June 18, 2004

  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



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<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:August 12, 2004
                                      By: /s/ David A. Owen
                                          -------------------------------------
                                          David A. Owen
                                          Chief Financial Officer
                                          (duly authorized officer and principal
                                          financial and accounting officer)



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