UNITED STATES

                                        SECURITIES AND EXCHANGE COMMISSION

                                              Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended May 31, 1997
                                                        OR

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

For the transition period from ________ to ___________

                                          Commission file number: 0-1460

                            
(State or other jurisdiction of    (I.R.S. Employer
incorporation or organization)     Identification No.)
CONNECTICUT 06-0659863

                                               ANDERSEN GROUP, INC.
                              1280 Blue Hills Avenue, Bloomfield, CT 06002-1374
                                               (860) 242-0761

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


     Indicate by check mark whether the  registrant  has filed all documents and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes ____ No ____

     As of June 30, 1997,  there were 1,934,478 shares of the Registrants no par
value common stock outstanding.

Title                                            Outstanding

Common Stock, no par value        Authorized 6,000,000 shares; Issued 1,958,478




<PAGE>



                                               ANDERSEN GROUP, INC.
                                    FORM 10-Q

                                TABLE OF CONTENTS

                                                                       Page No.

Part I - Financial Information

         Item 1   Financial Statements:

         Consolidated Balance Sheets
                  May 31, 1997 and February 28, 1997                     3

         Consolidated Statements of Operations for the
                  Three Months Ended May 31, 1997 and 1996               4

         Consolidated Statements of Cash Flows for the
                  Three Months Ended May 31, 1997 and 1996               5

         Notes to Consolidated Financial Statements                      6-7

         Managements Discussion and Analysis of
                  Financial Condition and Results of Operations          7-8



Part II - Other Information

         Item 1 - Legal Proceedings                                      8-9

         Item 3 - Defaults Upon Senior Securities                        9

         Item 6 - Exhibits and Reports on Form 8-K                       9

         Signatures                                                      10




<PAGE>
Part I.  Financial Information
Item 1.  Financial Statements
                                               ANDERSEN GROUP, INC.
                                            Consolidated Balance Sheets
                                                  (In thousands)
<TABLE>
<CAPTION>
                                                                                      May 31,                      February 28,
                                                                                      1997                        1997
ASSETS
<S>
                                                                          (Unaudited)
                                                                                     <C>                        <C>
Current assets:
   Cash and cash equivalents                                                         $ 2,866                    $ 3,219
   Marketable securities                                                               5,935                      5,345
   Accounts and other receivables less
     allowances of $218 and $190                                                       3,829                      2,773
   Inventories                                                                         9,578                      9,040
   Prepaid expenses and other assets                                                     174                        516
                                                                                         ---                        ---
Total current assets                                                                  22,382                     20,893
                                                                                      ------                     ------

Property, plant and equipment                                                         21,660                     20,946
Accumulated depreciation                                                             (11,988)                   (11,610)
                                                                                    --------                    -------
                                                                                       9,672                      9,336
                                                                                       -----                      -----

Prepaid pension expense                                                                4,335                      4,274
Investment in Digital GraphiX                                                            280                      1,346
Investment in Institute for Automated Systems                                            869                        835
Other assets                                                                           1,304                        993
                                                                                       -----                        ---
                                                                                     $38,842                    $37,677
                                                                                     -------                    -------

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED
STOCK AND COMMON AND OTHER STOCKHOLDERS' EQUITY
Current liabilities
   Current maturities of long term debt                                                  778                        773
   Short term debt                                                                     2,815                      2,305
   Accounts Payable                                                                    1,619                      1,398
   Other current liabilities and deferred income
    taxes                                                                              4,238                      4,234
                                                                                       -----                      -----
Total current liabilities                                                              9,450                      8,710
                                                                                       -----                      -----

Long term debt, less current maturities                                                6,931                      7,041
Other long term obligations                                                            1,481                      1,121
Deferred income taxes                                                                  2,290                      2,267

Commitments and contingencies (Note 6)

Redeemable cumulative convertible preferred
                                                                                       4,902                      4,891
stock

Common and Other Stockholders' equity:
   Common stock                                                                        2,103                      2,103
   Additional paid-in capital                                                          3,248                      3,248
   Retained earnings                                                                   8,527                      8,386
   Treasury stock                                                                        (90)                       (90)
                                                                                         ---                        ---
Total common and other stockholders' equity                                           13,788                     13,647
                                                                                      ------                    -------
                                                                                     $38,842                    $37,677

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


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

<TABLE>
<CAPTION>

                                                                                Three months ended May 31,
                                                                                1997               1996
Revenues:
<S>                                                                              <C>               <C>

Net sales                                                                        $7,468             $7,389
   Investment and other income                                                      290                661
                                                                                    ---                ---

                                                                                  7,758              8,050
                                                                                  -----              -----

Costs and expenses:
   Cost of sales                                                                  4,803              4,656
   Selling, general and administrative                                            1,877              1,804
   Research and development                                                         417                361
   Interest expense                                                                 228                198
                                                                                    ---                ---

                                                                                  7,325              7,019
                                                                                  -----              -----

Income before income taxes                                                          433              1,031
Income tax expense                                                                  166                412
                                                                                    ---                ---

Net income                                                                          267                619
Preferred dividend requirement                                                     (126)              (142)
                                                                                   ----               ----

Income applicable to common shares                                                $ 141               $ 477
                                                                                  =====               =====

Earnings per common share:
   Income per common share                                                        $ 0.07              $ 0.25
                                                                                  ======              ======


See accompanying notes to consolidated financial statements.

</TABLE>
<PAGE>

                                               ANDERSEN GROUP, INC.
                                       Consolidated Statements of Cash Flows
                                                  (In thousands)
                                                    (unaudited)
<TABLE>
<CAPTION>

                                                                                Three months ended May 31,
                                                                                     1997                1996
<S>                                                                                     <C>                 <C>

Cash flows from operating activities:
Net income                                                                           $ 267               $ 619
Adjustments to reconcile net income
to net cash used for operating activities
   Depreciation, amortization and accretion                                            384                 370
   Deferred income taxes                                                                23                   -
   Pension income                                                                      (61)                (62)
   Net gains from marketable securities
    and investments                                                                    (78)               (429)
   Purchases of marketable securities                                                 (512)               (695)
   Sales of marketable securities                                                        -                 135
   Proceeds from redemption of Digital GraphiX
    investment                                                                        1,066                  -

Changes in operating assets and liabilities:
   Accounts and notes receivable                                                     (1,056)              (680)
   Inventories                                                                         (538)             1,593
   Prepaid expenses and other assets                                                    354               (339)
   Accounts payable                                                                     106             (1,742)
   Accrued expenses and other long term
    obligations                                                                           1                384
                                                                                          -                ---

   Net cash used for operating activities                                               (44)              (846)
                                                                                        ---               ----

Cash flows from investing activities
   Purchases of property, plant and equipment, net                                     (714)              (475)
                                                                                       ----               ----

   Net cash used for investing activities                                              (714)              (475)
                                                                                       ----               ----

Cash flows from financing activities:
   Principal payments on long term debt                                                (105)               (29)
   Issuance of short term debt, net                                                     510                  -
   Capitalized lease obligations incurred                                                 -                211
                                                                                          -                ---

   Net cash provided by financing activities                                            405                182
                                                                                        ---                ---

   Net decrease in cash and cash
      equivalents                                                                      (353)            (1,139)
   Cash and cash equivalents - beginning of
      period                                                                           3,219             4,116
                                                                                       -----            ------

   Cash and cash equivalents - end of period                                          $2,866            $2,977
                                                                                     ======            ======


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

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)      Accounting Policies

     The accompanying  interim financial  statements and related notes should be
read in  conjunction  with the  Consolidated  Financial  Statements  of Andersen
Group, Inc. and related notes as contained in the Annual Report on Form 10-K for
the fiscal  year ended  February  28,  1997.  The interim  financial  statements
include all adjustments  (consisting only of normal  recurring  adjustments) and
accruals necessary in the judgment of management for a fair presentation of such
statements.  In addition,  certain reclassifications have been made to the prior
period  financial  information  so  that  it  conforms  to  the  current  period
presentation.


(2)       Marketable Securities

     During the fourth  quarter of the prior  fiscal  year and the three  months
ended May 31, 1997, the Company invested a total of $1,000,000 in a portfolio of
Russian  equity  securities  managed by a third party  investment  advisor.  The
reported  market  value of these  securities  at May 31, 1997 was  approximately
$1,672,000.  However,  due to concerns  regarding the  volatility of the Russian
market and liquidity issues, the Company has recorded these securities, net of a
reserve, at a value of approximately $1,070,000.  This reserve will be evaluated
periodically and adjusted based upon an assessment of the market  conditions and
the composition of the investments within the portfolio.

(3)       Inventories

Inventories consisted of the following:
<TABLE>
<CAPTION>
                                                                            (In thousands)
                                                               May 31,            February 28,
                                                                1997                  1997
                                                                ----                  ----
         <S>                                                   <C>                  <C>
         Raw materials                                         $ 2,830              $ 3,111
         Work in process                                         4,006                3,877
         Finished goods                                          3,645                2,955
                                                                 _____               ______
                                                                10,481                9,943
                                                               
         LIFO Reserve                                              903                  903
                                                                   ---                  ---
                                                               $ 9,578              $ 9,040
                                                               =======              =======
</TABLE>


(3)      Income Taxes

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

(4)      Dividends

     The Companys  cumulative  convertible  preferred stock (Preferred Stock) is
entitled to accrue quarterly  dividends ranging from $.1875 to $.4375 per share,
based upon the operating  income (as defined) of The J.M. Ney Company  (Ney),  a
wholly-owned subsidiary of the Company. Due to restrictions in the Companys debt
covenants as discussed  below, no dividends were declared on the Preferred Stock
during the three month period ended May 31, 1997,  although they were accrued at
the rate of $.4375 per share.

     Under  the  terms  of the  Indenture  applicable  to the  Companys  10 1/2%
Convertible Subordinated Debentures, the Company has been restricted from paying
dividends on its capital stock since April 1993 and the Company anticipates that
it will be precluded from paying the quarterly  Preferred Stock dividend for the
foreseeable  future.  Through May 31, 1997,  approximately  $1,050,000  has been
accrued for this  arrearage.  (For further  information  concerning the Companys
ability to pay  dividends  on or purchase  or redeem its  capital  stock,see the
Liquidity and Capital Resources  Section of Managements  Discussion and Analysis
of Results of Operations and Financial  Condition and Part II, Item  3--Defaults
Upon Senior Securities, below).

(5)      Earnings Per Share

     Earnings per share are computed  based on the  weighted  average  number of
common and common  equivalent shares  outstanding.  Fully diluted net income per
share assumes full conversion of all convertible securities into common stock at
the later of the beginning of the year or date of issuance, unless antidilutive.
For the three months ended May 31, 1997, the effect of such conversions has been
antidilutive.

     In February  1997,  the  Financial  Standards  Board  issued  Statement  of
Financial Accounting Standards No. 128, Earnings Per Share (SFAS 128), effective
for periods  ending after  December 15, 1997.  This  statement  will replace the
presentation  of primary  earnings  per share  (EPS)  with basic EPS,  and fully
diluted EPS with  diluted EPS.  For the quarter  ended May 31,  1997,  basic EPS
would have been unchanged from that which is presented as primary EPS.

(6)      Contingencies

     Ney is contingently liable under a $500,000 standby letter of credit issued
by its primary lending bank.

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

     REVENUES.  Revenues  for  the  three  months  ended  May 31,  1997  totaled
$7,758,000,  which was 3.6%  lower  than  total  revenues  recorded  during  the
comparable period in the prior fiscal year. This net decrease represents the net
of a 1.1%  increase  in sales and a  $371,000  decline in  investment  and other
income.

     Sales were only modestly higher as the Electronics  segment had sales equal
to last years record sales level,  while the Ultrasonics  segment recovered from
the impact of a slowdown in the  semiconductor  industry  that had  dampened its
sales in the third and fourth  quarters of the prior fiscal year,  and generated
sales  during the fiscal  quarter  that were 4.7% higher  than the record  sales
levels of last years first quarter.

     Investment  and other  income  during the  quarter was 56.1% lower than the
prior year  primarily due to modest  declines in the values of the investment in
certain  financial  institutions,  and to prior year appreciation of $350,000 in
the value of Phoenix Shannon common stock.  The prior years gain later proved to
be temporary,  as the entire Phoenix Shannon  investment was written off in last
years second and third quarters.

     COST OF SALES.  Cost of sales  during the three  months  ended May 31, 1997
were 3.2% higher than those recorded  during the same period in the prior fiscal
year. Such costs represent a decline in gross margin from 37.0% to 35.7%.  Prior
years margins were unusually high due to favorable  purchase  prices for certain
precious  metals,  while the current years  expenses  reflect costs  incurred to
accommodate  anticipated  future  growth.  

     SELLING,  GENERAL  AND  ADMINISTRATIVE   EXPENSES.   Selling,  general  and
administrative  expenses for the three-month period ended May 31, 1997 increased
by 4.0% over the prior year which is consistent  with general cost  increases in
certain elements of these costs.

     RESEARCH AND DEVELOPMENT EXPENSES.  During the three month period ended May
31,  1997,  research and  development  costs  totaled  5.6% of sales,  versus an
expense  level of 4.9% during the prior fiscal  quarter.  On an absolute  basis,
these costs increased 15.5% from the prior years  three-month  period consistent
with the Company's objectives.

     INTEREST  EXPENSE.  Interest  expense of $228,000  during the three  months
ended May 31, 1997 was 15.2%  higher than  interest  recorded in the  comparable
period of the prior  fiscal  year.  Reductions  in term debt in the prior year's
third and fourth quarters were offset by borrowings  under the revolving  credit
facility  which Ney utilizes to fund  working  capital.  Financings  of precious
metals represented a portion of these borrowings.  During the first quarter, the
effective borrowing costs on palladium and platinum increased  reflecting market
conditions  caused by the  absence  of  shipments  of these  metals to the world
market from Russia.

     INCOME TAX  EXPENSE.  Income  taxes have been  accrued  based on  estimated
effective tax rates ranging from 38 to 40%.

     PREFERRED DIVIDEND REQUIREMENT.  The preferred dividend requirement for the
three month  periods ended May 31, 1997 and 1996 each reflect the accrual at the
maximum rate of $.4375 per preferred  share. Due to preferred stock purchases in
the fourth  quarter of the prior fiscal year,  fewer shares were  outstanding in
the  current  year,  which  resulted  in a lower  dividend  accrual  and a lower
accretion of the issuance discount.

     LIQUIDITY AND CAPITAL RESOURCES.  At May 31, 1997, the Company's cash, cash
equivalents and marketable  securities totaled $8,801,000,  which is an increase
of $237,000 from the February 28, 1997  balance.  During the quarter the Company
received  payment for the preferred  stock portion of its  investment in Digital
GraphiX,  Incorporated,  which was  partially  offset by higher  receivable  and
inventory  levels.  Certain  aspects  of  working  capital  growth  and  capital
expenditures,  including  expenditures  to  accommodate  the  expansion of Ney's
tooling capabilities, were financed by short-term borrowing. During May and June
1997, the market prices and financing rates for platinum and palladium increased
significantly due to shortages  resulting from an absence of shipments of theses
metals to the world market from Russia. This market condition has affected Ney's
cost  of  these  raw  materials,   including  increased   procurement  premiums,
purchasing  terms and  financing  costs,  particularly  as it relates to hedging
metals acquired by Ney's Refining operations.  While Ney believes its ability to
pass on these increased costs,  coupled with other hedging programs,  will limit
the impact of these market  conditions,  there can be no assurances  that future
periods will not be affected.  Ney believes that the  continuation of the market
conditions  will not  adversely  affect the demand for its  products in the near
term, but may result in increased  competition  for substitute  products  longer
term.

     The  Company  believes  that  funds  from  operations,  sales  of  existing
investments or businesses and potential future refinancing will be sufficient to
meet its  anticipated  working  capital and debt  service  requirements  for the
foreseeable  future,  but there can be no  assurance as to the  availability  of
future financing or the terms thereof.
     The Indenture  relating to the  Company's  10.5%  Convertible  Subordinated
Debentures  contains a covenant  restricting  the  payment of  dividends,  on or
repurchases  or  redemption  of the Company's  capital  stock.  As the result of
preferred stock  repurchases and losses incurred in recent years, the Company is
currently  prohibited  by such  covenant  (except as provided by a Capital Stock
Purchase  Program  which had been  approved by a majority of the  non-affiliated
bondholders  that solely  permits the Company to purchase up to $6.0  million of
capital  stock) from making such payments on the  Preferred  Stock or the Common
Stock until such time as the sum of (i) the  aggregate  cumulative  consolidated
net income;  (ii) the aggregate  net cash proceeds  received by the Company from
sales of shares of its capital stock for cash;  and (iii) the aggregate net cash
proceeds  received by the Company from the sales of  indebtedness of the Company
convertible  into  stock of the  Company,  to the  extent  such  stock  has been
converted  into stock of the  Company  (collectively,  Consolidated  Net Income)
exceeds the sum of the aggregate  amount of all dividends  declared and all such
other payments and distributions on account of the purchase, redemption or other
retirement of any shares of stock of the Company (collectively,  Distributions).
As  of  May  31,  1997,   Distributions  exceeded  Consolidated  Net  Income  by
approximately $4,015,000.

         Part II.  Other Information

Item 1.  Legal Proceedings

     As previously  reported in the Company's Annual Report on Form 10-K for the
year ended February 28, 1997, in July 1996 two lawsuits were filed in the United
States District Court for the District of New Jersey, MORTON INTERNATIONAL, INC.
V. A.E.  STALEY MFG. CO. ET AL, and VELSICOL  CHEMICAL CORP. V. A.E. STALEY MFG.
CO. ET AL,  in which  Morton  and  Velsicol,  assert a  private  right of action
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA) against approximately 95 companies relating to the Ventron/Velsicol
Superfund  Site located in Wood Ridge and Carlstadt,  New Jersey (the Site).  In
addition in December 1996, Morton and Velsicol filed a First Amended  Complaint,
alleging an alternative basis for liability under the Resource  Conservation and
Recovery Act (RCRA). Specifically, the plaintiffs allege that Ney is a generator
of  hazardous  substances,  which  were  ultimately  processed  at the  Site and
contributed to the alleged contamination at the Site. The suits, which duplicate
each other in all material aspects, seek to recover the plaintiff's  unspecified
past and future costs of remediation of the Site. The  investigation at the Site
to determine the extent of contamination  has not been completed and no plan for
redemediation  has been developed.  The plaintiffs have not been able to provide
the  defendants  with any  confirmed  figures  with respect to past costs and no
figures at all for its future costs.

     Based on  preliminary  disclosure  of  information  relating  to the claims
asserted in the complaints  made by plaintiffs and defendants in January,  1997,
Ney is one of the smaller parties to have had any  transactions  with one of the
plaintiff's   predecessors  in  interest.   However,   at  the  time,  there  is
insufficient  information  to  determine  the  appropriate  allocation  of costs
between or among the defendants group, if liability to the generator  defendants
is ultimately proved.

     The Company  continues  to  investigate  whether any  liability,  which may
accrue at some future date, may be subject to  reimbursement in whole or in part
from insurance  proceeds.  As of this date, the Company has no basis to conclude
that the  litigation  may be material to the  Company's  financial  condition or
business.

Item 3.  Defaults Upon Senior Securities

     As discussed above in Note 4, Dividends, and in Management's Discussion and
Analysis of Results of Operations  and Financial  Condition,  the Company is not
permitted  to pay  dividends  on any of its capital  stock.  As a result of this
restriction, the Company was precluded from paying the Preferred Stock dividends
earned  for each of the  four  quarters  in  fiscal  years  1994  through  1997,
respectively,  and is precluded from paying the Preferred Stock dividends earned
for the quarter  ended May 31, 1997.  These  dividends  are  ordinarily  payable
within 45 days  after the end of the  quarter.  Therefore,  while the  quarterly
dividends  for fiscal 1994  through  1997 are in arrears,  the  dividend for the
quarter ended May 31, 1997, which was in the amount of $.4375 per share, will be
in  arrears  on July  16,  1997.  The  aggregate  arrearage  for  all  dividends
(including that payable on July 15, 1997) is approximately $1,050,000.

     As of October 16,  1994,  the  Company  was in arrears for six  consecutive
quarters in the payment of the  dividends on the Preferred  Stock.  The terms of
the  Preferred  Stock provide that once the Company is in arrears on the payment
of the  dividends  on the  Preferred  Stock for six  consecutive  quarters,  the
holders of the  Preferred  Stock,  voting  together as a class,  are entitled to
elect one additional  director to the Company's Board of Directors at any annual
meeting of  shareholders  or a special  meeting held in place  thereof,  or at a
special meeting of the holders of the Preferred Stock. If and when the dividends
which are in arrears on the Preferred Stock shall have been paid or declared and
set apart for payment, the rights of the holders of the Preferred Stock to elect
such additional  director shall cease (but always subject to the same provisions
for the  vesting  of such  voting  rights  in the  case  of any  similar  future
arrearages in dividends),  and the term of office of any person elected director
by the holders of the Preferred Stock shall  terminate.  As of June 30, 1997, no
special meeting of the preferred stockholders has been held or scheduled.

Item 6.  Exhibits and Reports on Form 8-K

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

     Exhibit               Description

     Exhibit 27            Financial Data Schedule.

     Exhibit 27.1          Restated Financial Data Schedule Quarter
                           Ended May 31, 1996.

No reports on Form 8-K were filed during the quarter ended May 31, 1997.


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


ANDERSEN GROUP, INC.

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

Date:    July 2, 1997



By:      /s/ Andrew M. O'Shea
         Andrew M. O'Shea
         Treasurer

Date:    July 2, 1997