UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K/A
                                 Amendment No. 1

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended June 30, 2006

                                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       0-5896
                        ----------------

                           JACO ELECTRONICS, INC.
             (Exact name of registrant as specified in its charter)

                     New York                             11-1978958
            --------------------------------    ---------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)
                 145 Oser Avenue, Hauppauge, New York 11788
           ------------------------------------ ---------------------
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  (631) 273-5500

Securities registered pursuant to Section 12(b) of the Act:  None


Securities registered pursuant to Section 12(g) of the Act:


                          Common Stock, $0.10 per share
                                (Title of Class)

         Indicate by check mark whether the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities
Act.     Yes __     No  X
                       ---

         Indicate by check mark whether the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Act.     Yes __     No  X
                       ---

         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 if disclosure  of delinquent  filers  pursuant
to Item 405 of Regulation  S-K is not contained  herein,
and will not be contained,  to the best of  registrant's  knowledge,
in definitive  proxy or information  statements  incorporated  by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

         Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act.
Large Accelerated Filer __     Accelerated Filer __     Non-Accelerated Filer X
                                                                             ---

         Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).

Yes:                                        No: X
    ------                                     ------


The aggregate market value of voting stock held by
non-affiliates of the registrant as of December 31, 2005 was
$ 16,468,936 (based on the last reported sale price
on the Nasdaq National Market on that date).

         The number of shares of the registrant's common stock outstanding as of
September 20, 2006 was  6,294,332  shares
 (excluding 659,900 treasury shares).

<PAGE>


                      DOCUMENTS INCORPORATED BY REFERENCE.



                  None

<PAGE>




                                EXPLANATORY NOTE

         This Amendment No. 1 on Form 10-K/A to our Annual Report on Form 10-K
for the fiscal year ended June 30, 2006 filed on September 28, 2006 (the "Form
10-K") is being filed to amend and restate only the following items of the Form
10-K: Part III, Items 10, 11, 12, 13 and 14. Other than these items, none of the
information contained in the Form 10-K has been revised or amended.

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant.

The current directors and executive officers of the Company, their ages, their
positions and terms of office with the Company are set forth below.

<TABLE>

Name                                                    Age        Position

<S>                                                      <C>
Joel H. Girsky................................           67        Chairman of the Board, President and Treasurer

Joseph F. Oliveri.............................           57        Vice Chairman of the Board and Executive Vice President

Charles B. Girsky.............................           72        Executive Vice President and Director

Jeffrey D. Gash...............................           54        Executive Vice President, Finance and Secretary

Gary Giordano.................................           49        Executive Vice President

Stephen A. Cohen..............................           69        Director

Edward M. Frankel.............................           68        Director

Neil Rappaport................................           60        Director

Robert J. Waldman.............................           71        Director
---------------

</TABLE>


         Joel H. Girsky has served as Chairman of the Board, President and
Treasurer of the Company since 1983, and has been a Director and executive
officer of the Company since it was founded in 1961. He also is a director of
Frequency Electronics, Inc. of Uniondale, New York, a manufacturer of highly
sophisticated synchronized time clocks. Mr. Girsky and Charles B. Girsky are
brothers.

                                       1
<PAGE>


         Joseph F. Oliveri has served as Vice Chairman of the Board of Directors
and an Executive Vice President of the Company since June 2000. From March 1983
to June 2000, he served as President and Chief Executive Officer of Interface
Electronics Corp., a distributor of electronic components ("Interface"). The
Company acquired Interface in June 2000.

         Charles B. Girsky has served as Executive Vice President of the Company
since 1988 and as a Director since 1996. He was a founder, Director and
President of the Company from 1961 through 1983 and then rejoined the Company as
an executive officer in August 1985. Mr. Girsky and Joel H. Girsky are brothers.

         Jeffrey D. Gash has served as an Executive Vice President, Finance of
the Company since October 2000. He served as Vice President of Finance from
January 1989 to September 2000, and as Controller of the Company for more than
five years prior thereto. In September 1999, he became Secretary of the Company.
He has also served in similar capacities with the Company's subsidiaries.

         Gary Giordano has served as Executive Vice President of the Company
since June 2000. From February 1992 to June 2000, he served as Vice President of
Sales and Marketing.

         Stephen A. Cohen has served as a Director since 1970. Since August
1989, he has practiced law as a member of Morrison Cohen LLP, the Company's
outside general counsel. Mr. Cohen informed the Company that, due to personal
reasons, he would not stand for re-election to the Company's Board of Directors
at its Annual Meeting of Shareholders to be held on December 12, 2006 (the
"Annual Meeting") and therefore, his term, will end at the Annual Meeting.

         Edward M. Frankel has served as a Director since 1984. Since December
1999, he has been Chairman of the Board of Vitaquest International, Inc., a
manufacturer and distributor of vitamins and health and beauty products. For
more than five years prior thereto, he served as President of Vitaquest and its
predecessor entities.

         Neil Rappaport has served as a Director since February 2004. Since
December 2000, he has been a Venture Partner with Windward Ventures, a venture
capital firm. Prior to joining Windward Ventures, Neil Rappaport was Vice
President of Sales for Vitesse Semiconductor Corporation. Previously, Mr.
Rappaport was national sales manager with Applied Micro Circuits Corporation. He
began his career as a design engineer at Hughes Aircraft Company.

         Robert J. Waldman has served as a Director since February 2004. Since
September 2002, he has served as President of RJW Associates Inc., a financial
and tax consulting firm located in Boynton Beach, Florida. Prior thereto, Mr.
Waldman served as senior partner of Horowitz, Waldman, Berretta & Maldow,
L.L.P., Woodbury, New York, a certified public accounting firm from 1968 to
2002. He is licensed to practice as a certified public accountant in both New
York and in Florida, and has over 45 years of experience in public accounting.

                                       2
<PAGE>



Section 16(a) Beneficial Ownership Reporting Compliance

         Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who beneficially own more than ten percent of the Company's Common Stock
to file with the Securities and Exchange Commission (the "SEC") initial reports
of beneficial ownership on Form 3 and reports of changes in beneficial ownership
on Form 4 or Form 5. Executive officers, directors, and ten percent shareholders
are required to furnish the Company with copies of such forms. Based solely on a
review of such forms furnished to the Company and written representations from
certain reporting persons, the Company believes that during its fiscal year
ended June 30, 2006 ("Fiscal 2006"), the Company's executive officers, directors
and ten percent shareholders complied with all applicable Section 16(a) filing
requirements.


Audit Committee and Audit Committee Expert

        The Company has a separately-designated standing Audit Committee of its
oard of Directors established in accordance with
Section 3(a)(58)(A) of the Exchange Act.  The members of the Audit Committee
currently are Robert J. Waldman, who acts as Chairman of
the committee, Edward M. Frankel and Neil Rappaport.

         Our Board of Directors has determined that at least one person serving
on the Audit Committee is an "audit committee financial expert" as defined under
Item 401(h) of SEC Regulation S-K. Robert J. Waldman, the Chairman of the Audit
Committee, is an "audit committee financial expert" and is independent as
defined under applicable rules of the SEC and The Nasdaq Stock Market.

Code of Ethics

         We have adopted a code of ethics within the meaning of Item 406(b) of
SEC Regulation S-K, called the "Jaco Electronics, Inc. Code of Business
Conduct," which applies to our chief executive officer, chief financial officer,
controller and all our other officers, directors and employees. This document is
available free of charge on our website at jacoelectronics.com.


Item 11.  Executive Compensation.

Summary of Cash and Certain Other Compensation

         The following table sets forth certain information concerning the
compensation paid or accrued by the Company for services rendered to the Company
in all capacities for the fiscal years ended June 30, 2006, 2005 and 2004 by its
Chief Executive Officer and each of the Company's other four most highly
compensated executive officers during Fiscal 2006 (the "Named Executive
Officers"):



                                       3
<PAGE>


<TABLE>


                                        SUMMARY COMPENSATION TABLE



                                         Annual Compensation                            Long Term Compensation
                                         -------------------                            ----------------------


                                                                                         Securities
Name and                                                  Other Annual     Restricted    Underlying                All Other
------------------------                                  Compensation       Stock        Options/                 Compensation
                                                                      -
Principal Position        Year   Salary($)(1)  Bonus($)      ($)(2)       Awards($)(3)     SARs(#)                    ($)(4)
------------------        ----   ------------  --------      ------       ------------     -------                    ------

<S>            <C>        <C>        <C>                                                                                <C>
Joel H. Girsky (5)        2006       281,558      --           --              --            --                         52,556
Chairman of the Board     2005       337,500      --           --              --            --                         53,447
President, and Treasurer  2004       337,500      --           --              --            --                         52,740

Joseph F. Oliveri         2006       280,385    78,245         --              --            --                            774
Vice Chairman and         2005       270,000    85,700         --              --            --                            804
Executive Vice President  2004       270,000    77,300         --              --            --                            432

Charles B. Girsky (5)     2006       213,962      --           --              --            --                          2,666
Executive Vice President  2005       225,000      --           --              --            --                          2,495
                          2004       225,000      --           --              --            --                          3,519

Jeffrey D. Gash (6)       2006       150,885    45,000         --              --            --                          2,392
Executive Vice President, 2005       146,700    15,000         --              --            --                          2,076
Finance and Secretary     2004       144,000      --           --              --            --                          2,187

Gary Giordano             2006       186,923    15,000         --              --            --                          2,314
Executive Vice President  2005       180,000      --           --              --            --                          1,804
                          2004       180,000      --           --              --            --                          2,687

</TABLE>

         1.   Based on the Company's normal payroll practices, salary amounts
              paid to each of the Named Executive Officers in Fiscal 2006
              included an additional semi-weekly pay period than in its fiscal
              years ended June 30, 2005 and 2004.


         2.   The costs of certain benefits are not included because they did
              not exceed, in the case of each Named Executive Officer, the
              lesser of $50,000 or ten percent of the total annual salary and
              bonus reported in the above table.

          3.   On June 9, 1997,  the Board of Directors  awarded an aggregate of
               97,500  shares of Common  Stock  under the  Company's  Restricted
               Stock Plan to its executive officers as follows: 37,500 shares of
               Common Stock to Mr. Joel Girsky, 37,500 shares of Common Stock to
               Mr. Charles Girsky, 15,000 shares of Common Stock to Mr. Gash and
               7,500 shares of Common Stock to Mr. Giordano, as adjusted to give
               effect to a 3-for-2 stock split of the Common Stock  effective on
               July  24,  2000.   The  plan  was   approved  by  the   Company's
               shareholders   on  December  9,  1997.   The  awards   vested  in
               one-quarter  increments  annually.  Accordingly,  as of June  30,
               2005, all of the aforementioned  awards were vested. The value of
               the aggregate  restricted stock holdings of these  individuals at
               June 30,  2006 was as  follows:  $115,250  for Mr.  Joel  Girsky,
               $115,250 for Mr. Charles Girsky, $46,100 for Mr. Gash and $11,525
               for Mr.  Giordano.  These  figures are based upon the fair market
               value per share of the  Company's  Common Stock at June 30, 2006,
               minus the purchase  price of such awards.  The closing sale price
               for the Company's  Common Stock as of June 30, 2006 on the Nasdaq
               National Market was $3.74.


                                       4
<PAGE>



4.            Includes 401(k) plan matching contributions, premiums paid on
              group term life insurance, and, in the case of Mr. Joel Girsky,
              deferred compensation accrued in connection with his employment
              agreement with the Company. 401(k) matching contributions for
              Fiscal 2006 for the Named Executive Officers were as follows: Mr.
              Joel Girsky - $1,337, Mr. Oliveri - $0, Mr. Charles Girsky -
              $1,430, Mr. Gash - $1,978 and Mr. Giordano - $2,044. Premiums paid
              on group term life insurance for Fiscal 2006 for the Named
              Executive Officers were as follows: Mr. Joel Girsky - $1,219, Mr.
              Oliveri - $774, Mr. Charles Girsky - $1,236, Mr. Gash - $414 and
              Mr. Giordano - $270. $50,000 in deferred compensation was accrued
              in Fiscal 2006 in connection with Mr. Joel Girsky's employment
              agreement with the Company.

5.            Each of Messrs. Joel Girsky and Charles Girsky voluntarily agreed
              to an annual base salary reduction of $70,000 and $20,000,
              respectively for Fiscal 2006 , which reductions were partially
              offset by an additional semi-weekly salary payment in Fiscal 2006,
              as discussed in note 1 above, and each of them has also
              voluntarily agreed to an annual base salary reduction of $52,500
              and $15,000, respectively, for the Company's fiscal year ending
              June 30, 2007 (i.e., equal to 75% of the salary reductions they
              agreed to in Fiscal 2006).

6.            Includes two separate bonus awards to Mr. Gash during Fiscal 2006
              of $35,000, part of which was attributable to his performance in
              the Company's fiscal year ended June 30, 2005, and $10,000.


Employment Agreements

The Company entered into a four-year employment agreement with Mr. Joel Girsky,
effective as of July 1, 2001, to serve as the Company's Chairman and President.
The employment agreement will automatically be extended for additional one-year
periods on each anniversary date, unless notice of non-renewal is given 90 days
prior to an anniversary date. In the event that a notice of non-renewal is so
delivered by either party, Mr. Girsky's employment agreement shall continue for
a period of three years following the anniversary date which follows immediately
after the date that such notice is delivered. However, in the event that a
notice of non-renewal is delivered by either party at such time as Mr. Girsky is
at least 70 years of age, then the employment agreement shall continue for a
period of only one year following the anniversary date which follows immediately
after the date that such notice is delivered. The employment agreement has been
automatically extended for an additional one-year period. Mr. Girsky is entitled
to receive a base salary of $375,000 for each fiscal year ending June 30;
however, effective October 2001, he (and the other Named Executive Officers)
voluntarily agreed to a 10% salary reduction, of which 7.5% remains in effect
with the other 2.5% restored for the Company's fiscal year ending June 30, 2007.
In addition, he is entitled to receive a cash bonus equal to four percent of the
Company's earnings before income taxes for each fiscal year in which such
earnings are between $1.0 million and $2.5 million, or six percent of the
Company's earnings before income


                                       5
<PAGE>



taxes for such fiscal year if such earnings are in excess of $2.5 million, up to
a maximum annual cash bonus of $720,000. If the Company's earnings before income
taxes are in excess of $12.0  million for any such fiscal year,  Mr.  Girsky may
also receive stock  options.  Mr.  Girsky or his estate,  as the case may be, is
entitled  to receive a payment  of  $375,000  if he dies or becomes  permanently
disabled during the term of the employment agreement.  The death benefit of $1.5
million provided for in Mr. Girsky's prior employment agreement with the Company
was funded by life insurance policies maintained by the Company,  which policies
have  been  transferred  to  Mr.  Girsky.  Mr.  Girsky  also  receives  deferred
compensation  which accrues at the rate of $50,000 per year, and becomes payable
in a lump sum at the cessation of his employment,  with or without cause, at any
time. In the event of a change in control of the Company, Mr. Girsky is entitled
to  receive  299% of the  average  of his base  salary  plus cash  bonus for the
previous  five years,  to the extent that such  payment does not equal or exceed
three times Mr.  Girsky's base amount,  as computed in  accordance  with Section
280G(d)(4)  of the  Internal  Revenue  Code of 1986,  as amended  (the  "Code").
Additionally, upon a change of control, Mr. Girsky's employment agreement may be
assigned by the Company or any such successor or surviving  corporation with the
prior written  consent of Mr.  Girsky.  Commencing  upon the  termination of Mr.
Girsky's  employment  with the Company,  and ending on the later to occur of Mr.
Girsky's death or his spouse's death, the Company will permit Mr. Girsky and his
spouse, to the extent eligible, to participate in the health and medical benefit
program provided by the Company to senior executive officers.

The Company entered into a three-year employment agreement with Joseph F.
Oliveri, effective as of June 6, 2000, as amended as of July 1, 2001. The
employment agreement will automatically be extended for additional one-year
periods on each anniversary date, unless notice is given 90 days prior to an
anniversary date. Mr. Oliveri is entitled to receive a base salary at an annual
rate of $300,000. However, effective October 2001, he (and the other Named
Executive Officers) voluntarily agreed to a 10% salary reduction, of which 7.5%
remains in effect with the other 2.5% restored for the Company's fiscal year
ending June 30, 2007. The employment agreement has been automatically extended
for four successive one-year periods. In addition, he is entitled to receive a
cash bonus equal to two percent of gross profit from certain customers for each
twelve-month period beginning June 1, 2000.

The Company entered into a four-year employment agreement with Charles Girsky,
effective as of July 1, 2001, to serve as the Company's Executive Vice
President. The employment agreement will automatically be extended for
additional one-year periods on each anniversary date, unless notice of
non-renewal is given 90 days prior to an anniversary date. In the event that a
notice of non-renewal is so delivered by either party, Mr. Girsky's employment
agreement shall continue for a period of three years following the anniversary
date which follows immediately after the date that such notice is delivered.
However, in the event that a notice of non-renewal is so delivered by either
party at such time as Mr. Girsky is at least 70 years of age, then the
employment agreement shall continue for a period of only one year following the
anniversary date which follows immediately after the date that such notice is
delivered. The employment agreement has been automatically extended for an
additional one-year period. Mr. Girsky is entitled to receive a base salary of
$250,000 for each fiscal year ending June 30; however, effective October 2001,
he (and the other Named Executive Officers) voluntarily agreed to a 10% salary
reduction, of which remains 7.5% in effect with the other 2.5% restored for the
Company's fiscal year ending June 30, 2007. In addition, he is entitled to
receive a cash bonus equal to two percent of the Company's earnings before
income taxes for each fiscal year

                                       6
<PAGE>



in which such  earnings  are between  $1.0  million and $2.5  million,  or three
percent of the  Company's  earnings  before income taxes for such fiscal year if
such earnings are in excess of $2.5 million,  up to a maximum  annual cash bonus
of $360,000.  If the  Company's  earnings  before  income taxes are in excess of
$12.0  million for any such  fiscal  year,  Mr.  Girsky may also  receive  stock
options.  Mr. Girsky or his estate, as the case may be, is entitled to receive a
payment of $250,000 if he dies during the term of the employment agreement.  The
death  benefit of $1.0 million  provided for in Mr.  Girsky's  prior  employment
agreement with the Company was funded by a life insurance  policy  maintained by
the Company,  which policy has been transferred to Mr. Girsky. In the event of a
change in control of the Company,  Mr. Girsky is entitled to receive 250% of the
average of his base salary plus cash bonus for the previous  five years,  to the
extent that such payment does not equal or exceed three times Mr.  Girsky's base
amount,  as  computed  in  accordance  with  Section  280G(d)(4)  of  the  Code.
Additionally, upon a change of control, Mr. Girsky's employment agreement may be
assigned by the Company or any such successor or surviving  corporation with the
prior written  consent of Mr.  Girsky.  Commencing  upon the  termination of Mr.
Girsky's  employment with Jaco, and ending on the later to occur of Mr. Girsky's
death or his spouse's death,  the Company will permit Mr. Girsky and his spouse,
to the extent eligible, to participate in the health and medical benefit program
provided by the Company to senior executive officers.

The Company entered into a four-year employment agreement with Jeffrey Gash,
effective as of July 1, 1998, as amended as of July 1, 2001, to serve as the
Company's Executive Vice President of Finance. The employment agreement will
automatically be extended for additional one-year periods on each anniversary
date, unless notice is given 90 days prior to an anniversary date. In the event
that a notice of non-renewal is delivered by either party, Mr. Gash's employment
agreement shall continue for a period of three years following the anniversary
date which follows immediately after the date that such notice is delivered. The
employment agreement has been automatically extended for four successive
one-year periods. Pursuant to the agreement, as amended, Mr. Gash receives a
base salary of $160,000 for each fiscal year ending June 30. However, effective
October 2001, he (and the other Named Executive Officers) voluntarily agreed to
a 10% salary reduction, of which 7.5% remains in effect with the other 2.5%
restored for the Company's fiscal year ending June 30, 2007. In addition, he is
entitled to receive a cash bonus as determined by the Board of Directors and the
President. Mr. Gash or his estate, as the case may be, is entitled to receive a
payment of $750,000 if he dies during the term of the employment agreement. The
death benefit is currently being funded by a life insurance policy maintained by
the Company. In the event of Mr. Gash's cessation of employment with the
Company, upon his request, the Company is obligated to transfer such policy to
Mr. Gash. Thereafter, the Company would have no further liability for the
payment of such benefit or the premiums on such policy. In the event of a change
in control of the Company, Mr. Gash is entitled to receive 200% of the average
of his base salary plus cash bonus for the previous five years, to the extent
that such payment does not equal or exceed three times Mr. Gash's base amount,
as computed in accordance with Section 280G(d)(4) of the Code. Additionally,
upon a change of control, Mr. Gash's employment agreement may be assigned by the
Company or any such successor or surviving corporation with the prior written
consent of Mr. Gash.

The Company entered into an agreement with Gary Giordano dated as of July 20,
1998, which provides a lump sum payment to him in the event of a change in
control of the Company. If Mr.


                                       7
<PAGE>



Giordano's  employment with the Company or a successor or surviving  corporation
is terminated  other than for cause (e.g.,  commission by Mr. Giordano of an act
constituting  common  law  fraud or a  felony),  for a period of up to two years
after the change in control  event,  he is entitled to receive up to 200% of the
average of his base  salary plus cash bonus for the  previous  three years based
upon a formula.  The  payment  will be made to Mr.  Giordano  to the extent such
payment  does not exceed Mr.  Giordano's  base amount as computed in  accordance
with Section 280G(d)(4) of the Code. The agreement also requires Mr. Giordano to
refrain from disclosing  proprietary or confidential  information  regarding the
Company.  The agreement  does not obligate the Company to retain the services of
Mr. Giordano.


                                       8
<PAGE>



Option Grants

         There were no stock options granted during Fiscal Year 2006 to any of
the Named Executive Officers.


Option Exercises and Fiscal Year-End Option Values

         The following table provides information concerning stock options
exercised during Fiscal 2006 and the number of unexercised options held by the
Named Executive Officers as of June 30, 2006. Also reported are the values for
unexercised, "in the money" options, which represent the positive spread between
the respective exercise prices of such options and the fair market value of the
Common Stock as of June 30, 2006.
<TABLE>

                 AGGREGATE OPTIONS/SAR EXERCISES IN FISCAL 2006
                      AND FISCAL YEAR-END OPTION/SAR VALUES

                                                                  Number of Securities
                                                                 Underlying Unexercised
                                Shares                           Options/SARs at FY-End              Value of Unexercised
                               Acquired        Value                       (#)                   In-the-Money Options/SARs at
                             On Exercise       Realized        Exercisable                               FY-End($)(1)
                             ------------      ---------       -----------
          Name                    (#)             ($)        Unexercisable                         Exercisable Unexercisable
          ----                    ---             ---                                              ----------- -------------

<S>                                                                 <C>                                 <C>
Joel H. Girsky                    --              --                75,000        --                    34,800        --

Joseph F. Oliveri                 --              --                40,000        --                    34,800        --

Charles B. Girsky                 --              --                50,000        --                    34,800        --

Jeffrey D. Gash                   --              --                40,000        --                    34,800        --

Gary Giordano                     --              --                40,000        --                    34,800        --

(1)  Based on the fair  market  value  per share of the  Common  Stock at fiscal
     year-end,  minus the exercise or base price of "in-the-money"  options. The
     closing  sale price for the  Company's  Common Stock as of June 30, 2006 on
     the Nasdaq National Market was $3.74.

</TABLE>


Director Compensation

            Members of our Board of Directors who are not officers or employees
of the Company receive an annual fee of $10,000 for their service on our Board
of Directors. Directors are also reimbursed for reasonable expenses incurred in
connection with attending Board and committee meetings.



                                       9
<PAGE>




             COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Introduction

         The Compensation Committee of the Board of Directors of the Company
(the "Committee") is composed of three directors, each of whom is independent as
defined in applicable rules of the Nasdaq Stock Market, Inc. The Committee is
responsible for reviewing and recommending to the Company's Board of Directors
the Company's compensation policies for the remuneration of the Company's Chief
Executive Officer and all of its other executive officers (collectively,
"Executives"), including salaries, bonuses and grants of awards under, and
administration of the Company's stock incentive plans. In determining the cash
and non-cash compensation of Executives, the Committee annually evaluates both
individual and corporate performance from both a short-term and long-term
perspective.

Philosophy

         The Company's compensation program for Executives (the "Program") seeks
to encourage the achievement of business objectives of the Company and superior
corporate performance by the Executives. The Program is designed to enable the
Company to attract, reward and retain highly qualified executives and to foster
a performance-oriented environment wherein management's long-term focus is on
maximizing shareholder value through the use of equity-based incentives. The
Program calls for consideration of the nature of each Executive's work and
responsibilities, his or her leadership and technical skills, unusual
accomplishments or achievements on the Company's behalf, years of service, the
Executive's total compensation package (cash and non-cash compensation) and the
Company's financial condition generally. The Committee does not assign weights
to these factors nor necessarily consider any one more important than the
others.

Components of Executive Compensation

         Historically, the Company's executive-level employees have received
cash-based and equity-based compensation. The Company attempts to pay its
executive officers competitively in order that it may retain the most capable
people in the industry. Compensation levels for the Executives are derived from
market comparisons with similarly-sized distribution companies, including those
engaged in the electronic components distribution industry with which the
Company competes for executive talent. The Committee believes that the Company's
most direct competitors for this purpose are not necessarily all of the
companies that would be included in a peer group established to compare
shareholder returns. Therefore, the compensation peer group is not the same as
the peer group index set forth in the Company's Stock Performance Graph included
elsewhere in this report. Based on information currently available to the
Committee, including publicly available compensation information relating to
direct competitors of the Company, the Committee believes that cash compensation
levels for the Executives, including the Chief Executive Officer, are, on
average, at or below the median of base salary levels for executive officers of
similar companies.

         Cash-Based Compensation: Base salary represents the primary cash
component of an Executive's compensation, and is determined by evaluating the
responsibilities associated with an Executive's position at the Company and his
or her overall level of experience. In addition, the Committee, in its
discretion, may award cash incentive bonuses based on an Executive's


                                       10
<PAGE>


performance  during the fiscal year. The Committee  believes that the Executives
are best  motivated  through  a  combination  of stock  option  awards  and cash
incentives.

         As described above under "Executive Compensation -- Employment
Agreements," a number of the Executives, including four of five Named Executive
Officers, have entered into employment agreements with the Company that provide
for fixed amounts of base salary and, in some cases, cash bonuses based upon the
Company's profitability. For Fiscal 2006, Messrs. Joel Girsky and Charles Girsky
did not receive cash bonuses and Messrs. Oliveri and Gash did receive cash
bonuses, as determined in accordance with the terms of their respective
employment agreements. In addition, Mr. Giordano was awarded a cash bonus in
respect of his performance during Fiscal 2006.

         Equity-Based Compensation: Equity-based compensation principally has
been in the form of stock options, granted pursuant to the Company's 2000 Stock
Option Plan and 1993 Non-Qualified Plan and awards of shares of Common Stock
under the Company's Restricted Stock Plan. The Committee believes that stock
options represent an important component of a well-balanced compensation
program. Because stock option awards provide value only in the event of share
price appreciation, stock options enhance management's focus on maximizing
long-term shareholder value, and thus provide a direct relationship between an
Executive's compensation and the shareholders' interests. No specific formula is
used to determine option awards for an Executive. Rather, individual award
levels are based upon the subjective evaluation by the Committee of each
Executive's overall past and expected future contributions to the success of the
Company. Additionally, the Committee believes that awards under the Restricted
Stock Plan will enhance the alignment of an Executive's interest with that of
the shareholders because the Executive may be able to realize greater value with
increased stock performance.

Compensation of the Chief Executive Officer

         As described above under "Executive Compensation -- Employment
Agreements," the Company has entered into an employment agreement with Joel H.
Girsky, our Chairman of the Board and President, pursuant to which Mr. Joel
Girsky is entitled to receive a base salary of $375,000 per fiscal year and an
annual incentive cash bonus based on a percentage of the Company's earnings
before income taxes, up to a maximum bonus of $720,000 in any fiscal year.
Through this incentive bonus arrangement, a substantial portion of Mr. Joel
Girsky's cash compensation is specifically linked to the Company's
profitability. Because the Company reported a loss from continuing operations in
Fiscal 2006, Mr. Girsky was not paid a bonus for Fiscal 2006.

         In general, the philosophy, factors and criteria of the Committee
generally applicable to the Company's senior management are applicable to the
Chief Executive Officer.

Tax Deductibility of Executive Compensation

         Section 162(m) of the Internal Revenue Code imposes limitations on the
federal income tax deductibility of compensation paid to the Company's chief
executive officer and to each of the other four most highly compensated
executive officers of the Company. Under these limitations, the Company may
deduct such compensation only to the extent that during any fiscal year the
compensation does not exceed $1,000,000 or meets certain specified conditions
(such as certain performance-based compensation that has been approved by the
Company's


                                       11
<PAGE>


shareholders).  Based on the Company's current  compensation  plans and policies
and the Section  162(m) rules,  the Company and the Committee  believe that, for
the near future,  there is not a significant risk that the Company will lose any
significant tax deduction for executive compensation. The Company's compensation
plans and policies  will be modified to ensure full  deductibility  of executive
compensation  if the Company and the Committee  determine that such an action is
in the best interests of the Company.

                                          COMPENSATION COMMITTEE
                                          Edward M. Frankel
                                          Neil Rappaport, Chairman
                                          Robert J. Waldman


           COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         During Fiscal 2006, the Compensation Committee of the Board of
Directors consisted of Messrs. Frankel, Waldman and Rappaport. No member of this
committee was at any time during Fiscal 2006 or at any other time an officer or
employee of the Company, and no member had any relationship with the Company
requiring disclosure under SEC rules. No executive officer of the Company has
served on the board of directors or compensation committee of any other entity
that has or has had one or more executive officers who served as a member of the
Company's Board of Directors or the Compensation Committee during Fiscal 2006.

                       COMPARATIVE STOCK PERFORMANCE GRAPH

         The following is a graph comparing the annual percentage change in the
cumulative total shareholder return of the Company's Common Stock with the
cumulative total returns of the published Dow Jones US Equity Market Index and
Dow Jones US Support Services Index for the Company's last five (5) fiscal
years:

                                     [GRAPH]



<TABLE>

                                       2001         2002          2003           2004          2005         2006
                                       ----         ----          ----           ----          ----         ----
<S>                                    <C>           <C>           <C>            <C>           <C>          <C>
Jaco Electronics, Inc.                 100.00        76.55         78.34          99.02         48.21        60.91

Dow Jones US Equity Market             100.00        81.91         82.53          99.71        107.66       118.07

Dow Jones US Support Services          100.00        94.78         86.10         107.47        105.40       126.27

                                                         ---------------------

</TABLE>


         Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Exchange Act that might incorporate


                                       12
<PAGE>



future filings made by the Company under those  statutes,  none of the preceding
Compensation  Committee  Report on Executive  Compensation  or the Company Stock
Performance  Graph will be  incorporated  by  reference  into any of those prior
filings, nor will any of such reports or graph be incorporated by reference into
any future filings made by the Company under those statutes.


Item 12.  Security  Ownership of Certain  Beneficial  Owners and  Management and
Related Stockholder Matters.

                  The following table sets forth the number and percentage of
shares of Common Stock owned as of October 27, 2006 by (i) each director of the
Company, (ii) all persons who, to the knowledge of the Company, are the
beneficial owners of more than 5% of the outstanding shares of Common Stock,
(iii) each of the Company's executive officers, and (iv) all of the Company's
directors and executive officers, as a group. Each person named in this table
has sole investment power and sole voting power with respect to the shares of
Common Stock set forth opposite such person's name, except as otherwise
indicated.



<TABLE>


                                                Aggregate Number of Shares
            Name and Address of                     Beneficially                Percentage of Shares
            Beneficial Owner(1)                         Owned                    Beneficially Owned(2)
            -------------------                         -----                    ---------------------

<S>                                                    <C>        <C>                        <C>
Joel H. Girsky                                         1,036,240  (3)                        16.3%

Joseph F. Oliveri                                         40,000  (4)                         **

Charles B. Girsky                                        479,461  (5)                         7.6%

Stephen A. Cohen                                          59,683  (6)                         **

Edward M. Frankel                                         41,250  (7)                         **

Jeffrey D. Gash                                           72,298  (8)                         1.1%

Gary Giordano                                             43,750  (9)                         **

Robert Waldman                                            10,500  (10)                        **

Neil Rappaport                                             7,500  (11)                        **

Dimensional Fund Advisors                                389,165  (12)                        6.2%
1299 Ocean Avenue
11th Floor
Santa Monica, CA  90401

Royce & Associates, LLC                                  554,150  (13)                        8.8%
1414 Avenue of the Americas
New York, NY  10019


                                       13
<PAGE>



Luis Antonio Hernandez                                 596,526 (14)                           9.5%
3069 Misty Harbour
Las Vegas, NV 89117

All directors and executive officers as a              1,790,682  (15)                       27.1%
group (10 persons)
---------------------------------
**       Less than one percent.

</TABLE>


(1)  Unless otherwise  indicated,  the address of each person listed is 145 Oser
     Avenue, Hauppauge, New York, 11788.

(2)  Assumes a base of 6,294,332 shares of Common Stock outstanding,  before any
     consideration is given to outstanding options.

(3)  Includes (i) 75,000 shares of Common Stock  acquirable  pursuant to options
     presently  exercisable  and granted under the  Company's  2000 Stock Option
     Plan,  and (ii) 37,500  shares of Common Stock  awarded under the Company's
     Restricted Stock Plan.

(4)  Includes  40,000  shares of Common  Stock  acquirable  pursuant  to options
     presently  exercisable  and granted under the  Company's  2000 Stock Option
     Plan.

(5)  Includes  (i) 316,311  shares of Common  Stock  owned by the Girsky  Family
     Trust, of which Mr. Charles Girsky is a co-trustee,  with shared voting and
     dispositive  power over such  shares,  (ii) 50,000  shares of Common  Stock
     acquirable pursuant to options presently  exercisable and granted under the
     Company's  2000 Stock Option Plan,  and (iii) 37,500 shares of Common Stock
     awarded under the Company's Restricted Stock Plan.

(6)  Includes (i) 30,000 shares of Common Stock  acquirable  pursuant to options
     presently  exercisable  and granted under the  Company's  2000 Stock Option
     Plan,  and (ii) 22,500  shares of Common  Stock held as nominee for the law
     firm of Morrison  Cohen,  LLP, of which Mr.  Cohen is a partner.  Mr. Cohen
     disclaims  beneficial  ownership of such 22,500 shares except to the extent
     of his pecuniary interest therein by virtue of his partnership  interest in
     Morrison Cohen, LLP.

(7)  Includes  30,000  shares of Common  Stock  acquirable  pursuant  to options
     presently  exercisable  and granted under the  Company's  2000 Stock Option
     Plan.

(8)  Includes (i) 40,000 shares of Common Stock  acquirable  pursuant to options
     presently  exercisable  and granted under the  Company's  2000 Stock Option
     Plan,  and (ii) 15,000  shares of Common Stock  awarded under the Company's
     Restricted Stock Plan.

(9)  Includes (i) 40,000 shares of Common Stock  acquirable  pursuant to options
     presently  exercisable  and granted under the  Company's  2000 Stock Option
     Plan,  and (ii) 3,750 shares of Common Stock  awarded  under the  Company's
     Restricted Stock Plan.


                                       14
<PAGE>




(10) Includes  7,500  shares of Common  Stock  acquirable  pursuant  to  options
     presently  exercisable  and granted under the  Company's  2000 Stock Option
     Plan.

(11) Includes  7,500  shares of Common  Stock  acquirable  pursuant  to  options
     presently  exercisable  and granted under the  Company's  2000 Stock Option
     Plan.

(12) These  securities are held in investment  advisory  accounts of Dimensional
     Fund Advisors, Inc. This information is based upon an amendment to Schedule
     13G  filed  with the SEC dated  February  1,  2006,  and  information  made
     available to the Company.

(13) The  information  is based upon an amendment to Schedule 13G filed with the
     SEC dated January 27, 2006, and information made available to the Company.

(14) The  information  is based  upon a  Schedule  13G filed  with the SEC dated
     February 28, 2006, and information made available to the Company.

(15) Includes  320,000  shares of Common  Stock  acquirable  pursuant to options
     presently  exercisable  and 93,750 shares of Common Stock awarded under the
     Company's Restricted Stock Plan.

Equity Compensation Plan Disclosure

                  The following table summarizes equity compensation plans
approved by security holders and equity compensation plans that were not
approved by security holders as of June 30, 2006:
<TABLE>

                                                                                                       (c)
                                             (a)                        (b)
                                                                                             Number of Securities
                                     Number of Securities        Weighted-Average           Remaining Available for
                                      To be Issued Upon           Exercise Price of        Future Issuance Under Equity
                                   Exercise of Outstanding           Outstanding          Compensation Plans (Excluding
                                    Options, Warrants and             Options,                      Securities
Plan Category                               Rights               Warrants and Rights          Reflected in Column(a)
-------------------------------    -------------------------    ----------------------    -------------------------------
 Equity compensation plans
(stock  option ) approved by
<S>                                           <C>                       <C>                          <C>
stockholders                                  499,750                   $5.07                        621,250


                                   -------------------------    ----------------------    -------------------------------

Total                                         499,750                   $5.07                        621,250
                                   =========================    ======================    ===============================

</TABLE>

Item 13.  Certain Relationships and Related Transactions.

         During Fiscal 2006, the Company paid approximately $661,000 of rental
expenses in connection with the Company's main headquarters, Flat Panel Display
integration and centralized inventory distribution facility located in
Hauppauge, New York, which was paid to Bemar Realty Company ("Bemar), the owner
of such premises. Bemar is a partnership consisting of Messrs. Joel Girsky and
Charles Girsky, both of whom are executive officers, directors and principal
shareholders of the Company. The lease on the property, which is net of


                                       15
<PAGE>



all expenses,  including taxes, utilities,  insurance,  maintenance and repairs,
was renewed in  December  2003 and expires on  December  31,  2013.  The Company
believes  the current  rental rate is at its fair market  value.  As of June 30,
2005,  Bemar advanced the Company  $125,000 to fund the  construction of its new
LCD  Integration  Center,  $75,000 of which the Company repaid in September 2006
and has accrued the remaining $50,000 as a liability.

         During the fiscal years ended June 30, 2006, 2005 and 2004, the Company
recorded sales of $206,966, $1,065,391 and $5,515,450, respectively, from a
customer, Frequency Electronics, Inc. ("Frequency"). Mr. Joel Girsky serves on
the Board of Directors of Frequency. Such sales transactions with Frequency are
in the normal course of business. Amounts included in accounts receivable from
Frequency at June 30, 2006 and 2005 aggregate $17,068 and $206, respectively.

         Stephen A. Cohen, a director of the Company, is a partner of the law
firm of Morrison Cohen LLP, which rendered legal services to the Company during
Fiscal 2006 for which the Company was billed aggregate fees that did not exceed
5% of such law firm's annual gross revenues.

         The son-in-law of Mr. Joel Girsky, our Chairman and President, is
Douglas Spelfogel, who was a partner of the law firm of Nixon Peabody LLP, which
rendered legal services to the Company during Fiscal 2006 for which the Company
was billed aggregate fees that did not exceed 5% of such law firm's annual gross
revenues.

Item 14.  Principal Accountant Fees and Services.

         Grant Thornton LLP has audited the Company's financial statements
annually since the fiscal year ended June 30, 1984.

Audit Fees

         The aggregate fees billed by Grant Thornton LLP for professional
services for the audit of the Company's annual consolidated financial statements
for fiscal years 2006 and 2005 and the review of the quarterly consolidated
financial statements included in the Company's Forms 10-Q for fiscal years 2006
and 2005 were $389,171 and $289,341, respectively.

Audit-Related Fees

         The aggregate fees billed by Grant Thornton LLP for professional
services related to the audit of the Company's annual consolidated financial
statements for the fiscal years 2006 and 2005 were $0 and $20,027, respectively.
These services consisted primarily of (i) services rendered in connection with
acquisitions and divestitures by the Company, (ii) assistance with regulatory
filings and (iii) consultations on the effects of various accounting issues and
changes in professional standards.

Tax Fees

         The aggregate fees billed by Grant Thornton LLP for tax services for
the fiscal years 2006 and 2005 were $87,230 and $136,687, respectively. These
services consisted primarily of tax planning and assistance with the preparation
of returns.


                                       16
<PAGE>



All Other Fees

         There were no fees billed by Grant Thornton LLP for other services for
the fiscal years 2006 and 2005.

Audit Committee Pre-Approval Policies and Procedures

         The Audit Committee of the Company's Board of Directors pre-approves on
an annual basis the audit, audit-related, tax and other non-audit services to be
rendered by the Company's accountants based on historical information and
anticipated requirements for the following fiscal year. The Audit Committee
pre-approves specific types or categories of engagements constituting audit,
audit-related, tax and other non-audit services as well as the range of fee
amounts corresponding to each such engagement. To the extent that the Company's
management believes that a new service or the expansion of a current service
provided by the Company's accountants is necessary or desirable, such new or
expanded services are presented to the Audit Committee for its review and
approval prior to the Company's engagement of its accountants to render such
services. The Company's Chief Financial Officer reports regularly to the Audit
Committee on the services rendered by the Company's accountants and related fees
for audit, audit-related and permitted non-audit services.

         For Fiscal 2006, the Audit Committee has determined that the non-audit
services performed by Grant Thornton LLP are compatible with maintaining the
independence of Grant Thornton LLP.


PART IV

Item 15. Exhibits and Financial Statement Schedules.


(a)     (3)   See Exhibit Index on page 19 of this report for a list of the
               exhibits furnished as part of this report.






                                       17
<PAGE>







                                   SIGNATURES


                  Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Date:  October 27, 2006
                              JACO ELECTRONICS, INC.


                              By:      /s/ Joel H. Girsky
                                           -------------------------------------
                                      Joel H. Girsky, Chairman, President and
                                                Treasurer (Principal Executive
                                                Officer)

                              By:      /s/ Jeffrey D. Gash
                                           -------------------------------------
                                      Jeffrey D.Gash, Executive Vice President-
                                               Finance and Secretary (Principal
                                               Financial and Accounting Officer)



                                       18
<PAGE>



Exhibit No.       Exhibit



31.1      Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.

31.2      Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.



                                       19
<PAGE>