<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10Q


                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


For the quarter ended December 30, 1995          Commission File No.: 1-5522


                        STERLING ELECTRONICS CORPORATION 
             ------------------------------------------------------ 
             (Exact name of registrant as specified in its charter) 


                 NEVADA                                  74-1261194            
     -------------------------------      -------------------------------------
     (State or other jurisdiction of      (I.R.S. Employer Identification No.)
     incorporation or organization)

  4201 SOUTHWEST FREEWAY, HOUSTON, TEXAS                    77027    
  --------------------------------------                  ---------- 
  (Address of principal executive office)                 (Zip Code)


         Registrant's area code and telephone number:  (713) 627-9800

     Indicate by check mark whether the registrant (1) has filed all reports 
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during 
the preceding twelve 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 the number of shares outstanding of each of the issuer's 
classes of common stock, as of the close of the period by this report.

           CLASS                     OUTSTANDING AT FEBRUARY 9, 1996 
----------------------------         ------------------------------- 
Common Stock, $.50 par value                   6,839,172


                                                     Page  1 of 12

<PAGE>


                                      INDEX

                        STERLING ELECTRONICS CORPORATION

PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements (Unaudited)

          Condensed consolidated statements of financial position
          December 30, 1995 and April 1, 1995

          Condensed consolidated statements of income - thirteen weeks and 
          thirty-nine weeks ended December 30, 1995 and December 31, 1994

          Condensed consolidated statements of cash flows - thirty-nine weeks 
          ended December 30, 1995 and December 31, 1994

          Notes to condensed consolidated financial statements - December 30,
          1995


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







                                                     Page 2 of 12

<PAGE>



                            STERLING ELECTRONICS CORPORATION             
              CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION   

<TABLE>
<CAPTION>

                                           DECEMBER 30,           APRIL 1,    
ASSETS                                         1995                1995       
                                           ------------       --------------- 
                                                              RESTATED-NOTE D 
<S>                                        <C>                <C>             
Current assets
   Cash                                    $  2,714,050         $ 3,110,397 
   Receivables-net of reserve                                               
     for doubtful accounts                   41,374,043          34,594,615 
   Inventory                                 60,009,027          36,968,153 
   Other current assets                         656,519             320,043 
   Net assets of discontinued  
    operations - Note D                               0           1,812,546 
                                           ------------        ------------ 
     Total current assets                   104,753,639          76,805,754 
     
Property & equipment-net of depreciation      6,434,337           5,055,234 
Goodwill, net of amortization                 4,310,894           1,757,107 
Other assets                                  3,750,506           2,729,925 
                                           ------------        ------------ 

                                           $119,249,376         $86,348,020 
                                           ------------        ------------ 
                                           ------------        ------------ 

LIABILITIES AND SHAREHOLDERS' EQUITY                                        

Current Liabilities                                                         
   Trade accounts payable & accrued 
    expenses                               $ 34,923,851        $ 29,540,584 
   Current portion - long term obligations      294,397             303,233 
                                           ------------        ------------ 

     Total current liabilities               35,218,248          29,843,817 
     
Long-term obligations - net of amounts                                      
   due within one year                       34,576,792          12,950,129 
Postemployment benefits and other                                           
   non-current liabilities                    4,104,174           4,057,205 
     
Shareholders' Equity                                                        
   Common stock, $.50 par value               3,350,927           3,343,005 
   Additional paid-in capital                16,901,601          16,410,284 
   Retained earnings                         27,298,845          20,535,094 
                                           ------------        ------------ 

                                             47,551,373          40,288,383 
   Less treasury stock, at cost               2,201,211             791,514 
                                           ------------        ------------ 

                                             45,350,162          39,496,869 
                                           ------------        ------------ 

                                           $119,249,376         $86,348,020 
                                           ------------        ------------ 
                                           ------------        ------------ 
</TABLE>

                                                              Page  3 of 12 


<PAGE>

                       STERLING ELECTRONICS CORPORATION
                      CONSOLIDATED STATEMENTS OF INCOME
          THIRTEEN WEEKS ENDED DECEMBER 30, 1995 AND DECEMBER 31, 1994

<TABLE>
<CAPTION>
                                                             1995              1994
                                                          -----------     ---------------
                                                                          RESTATED-NOTE D
<S>                                                       <C>             <C>
Net sales                                                 $79,347,305       $58,143,111

Cost of sales                                              62,296,312        45,092,760
Selling, administrative and
   other operating expenses                                12,367,684         9,694,638
                                                          -----------       -----------
                                                           74,663,996        54,787,398

Operating income from continuing operations                 4,683,309         3,355,713
Interest expense                                              504,371           337,820
                                                          -----------       -----------
Income from continuing operations before  income taxes      4,178,938         3,017,893

Income taxes                                                1,676,000         1,219,000
                                                          -----------       -----------
Income from continuing operations                         $ 2,502,938       $ 1,798,893

Discontinued operations - Note D
   Income (loss) from operations less
      applicable income taxes of $0
      and $6,000, respectively                                      0            11,698
    Loss on disposal                                                0                 0
                                                          -----------       -----------
Net income                                                 $2,502,938        $1,810,591
                                                          -----------       -----------
                                                          -----------       -----------

Income per common share and common share 
   equivalents - Note E:

Primary
   Income from continuing operations                            $0.35             $0.26
   Income (loss) from discontinued operations                    0.00              0.00
                                                          -----------       -----------
                                                                 0.35              0.26
                                                          -----------       -----------
                                                          -----------       -----------

Fully diluted
   Income from continuing operations                            $0.35             $0.26
   Income (loss) from discontinued operations                    0.00              0.00
                                                          -----------       -----------
                                                                $0.35             $0.26
                                                          -----------       -----------
                                                          -----------       -----------

Number of common shares and common share
   equivalents used in computing per share 
   amounts - Note E

   Primary                                                  7,102,698         6,978,080
   Fully diluted                                            7,102,698         6,978,649
</TABLE>



                                                                   Page 4 of 12

<PAGE>

                       STERLING ELECTRONICS CORPORATION
                       CONSOLIDATED STATEMENTS OF INCOME
       THIRTY-NINE  WEEKS ENDED DECEMBER 30, 1995 AND DECEMBER 31, 1994

<TABLE>
Caption
                                                             1995              1994
                                                          ------------     ---------------
                                                                           RESTATED-NOTE D
<S>                                                       <C>              <C>
Net sales                                                 $230,152,806       $171,947,037
                                                                     
Cost of sales                                              180,775,591        133,175,856
Selling, administrative and                                                              
   other operating expenses                                 36,047,767         28,835,290
                                                          ------------       ------------
                                                           216,823,358        162,011,146
                                                           
Operating Income from continuing operations                 13,329,448          9,935,891
Interest expense                                             1,147,323            929,899
                                                          ------------       ------------
Income from continuing operations before income taxes       12,182,125          9,005,992
                                                                                         
Income taxes                                                 4,884,000       $  3,645,000
                                                          ------------       ------------
Income from continuing operations                            7,298,125          5,360,992
                                                                     
Discontinued operations - Note D
   Income (loss) from operations less
      applicable income taxes of  $378,000
      and $19,000, respectively                               (522,374)            36,745
   Loss on disposal                                            (12,000)                 0
                                                          ------------       ------------
Net income                                                $  6,763,751       $    5397737
                                                          ------------       ------------
                                                          ------------       ------------

Income per common share and common share 
   equivalents - Note E:

Primary
   Income from continuing operations                      $       1.03       $       0.77
   Income (loss) from discontinued operations                    (0.08)              0.00
                                                          ------------       ------------
                                                          $       0.95       $       0.77
                                                          ------------       ------------
                                                          ------------       ------------
Fully diluted
   Income from continuing operations                      $       1.03       $       0.77
   Income (loss) from discontinued operations                    (0.08)              0.00
                                                          ------------       ------------
                                                          $       0.95       $       0.77
                                                          ------------       ------------
                                                          ------------       ------------
Number of common shares and common share
  equivalents used in computing per share 
  amounts - Note E

   Primary                                                   7,098,108          6,976,114
   Fully diluted                                             7,116,048          6,978,358

</TABLE>

                                                                   Page 5 of 12

<PAGE>

                       STERLING ELECTRONICS CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
       THIRTY-NINE WEEKS ENDED DECEMBER 30, 1995 AND DECEMBER 31, 1994


<TABLE>
<CAPTION>
                                                                      1995               1994
                                                                   ---------       ---------------
                                                                                   RESTATED-NOTE D
<S>                                                                <C>               <C>
OPERATING ACTIVITIES
  Net income                                                       $6,763,751        $5,397,734
     Adjustments needed to reconcile net income to
       net cash provided by operating activities:
         Depreciation and amortization                                909,971           715,585
         Provision for losses on accounts receivable                  995,515           622,104
                                                                  -----------       -----------
                                                                    8,669,237         6,735,423
     Changes in operating assets and liabilities
       (Increase) decrease in accounts receivable                  (5,129,003)          522,277
       (Increase) in inventories                                  (18,748,903)       (5,370,046)
       (Increase) decrease in other current assets                    692,399          (244,362)
       Increase decrease in accounts payable and
           accrued expenses                                         2,222,454        (2,175,789)
       Increase (decrease) in post employment benefits
           and other non-current liabilities                           12,911           (44,356)
                                                                  -----------       -----------
       Net cash used in operating activities                      (12,280,905)         (576,853)


INVESTING ACTIVITIES
     Purchases of property and equipment                           (2,039,210)       (1,450,072)
     Acquisition of DGW Electronics Corporation                    (5,807,745)                0
     (Increase) in other assets                                      (353,581)          (76,358)
                                                                  -----------       -----------
       Net cash used in investing activities                       (8,200,536)       (1,526,430)


FINANCING ACTIVITIES
     Proceeds from borrowings under revolving line of credit       65,894,476        28,050,552
     Repayments of borrowings under revolving line of credit      (44,054,553)      (25,050,552)
                                                                  -----------       -----------
       Net change in revolving line of credit                      21,839,923         3,000,000

     Principal payments on long-term debt, capital lease
       obligations and other                                         (222,096)         (217,538)
      Proceeds from excercise of stock options                        101,517            92,529
      Purchase of treasury stock                                   (1,634,250)         (315,644)
                                                                  -----------       -----------
       Net cash provided by financing activities                   20,085,094         2,559,347

Decrease in cash and cash equivalents                                (396,347)          456,064
Cash and cash equivalents at beginning of period                    3,110,397         2,859,647
                                                                  -----------       -----------
Cash and cash equivalents at end of period                         $2,714,050        $3,315,711
                                                                  -----------       -----------
                                                                  -----------       -----------
</TABLE>

During fiscal 1996 and 1995 the Company issued $622,000 and $600,000,
respectively, of common stock under the Company's Incentive Bonus Plan



                                                           Page  6 of 12



<PAGE>

                       STERLING ELECTRONICS CORPORATION
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                December 30, 1995



Note A - Accounting Policies

The accompanying unaudited condensed consolidated financial statements include
the accounts of Sterling Electronics Corporation and its majority-owned
subsidiaries after elimination of all significant intercompany accounts and
transactions.  In the opinion of the company, the unaudited condensed
consolidated financial statements contain all the adjustments (consisting of
only normal accruals) necessary to present fairly the financial position as of
December 30, 1995 and the results of operations for the thirteen and thirty-nine
weeks then ended.  The results of operations for the thirteen and thirty-nine
weeks ended December 30, 1995 are not necessarily indicative of the results to
be expected for the full year.


Note B - Long-term Debt

Long-term debt as of December 30, 1995 and the amounts due within one year are
as follows:

<TABLE>
<CAPTION>
                            AMOUNTS DUE        LONG-TERM      MATURING IN
DESCRIPTION               WITHIN ONE YEAR       PORTION       FISCAL YEAR
---------------------------------------------------------------------------
<S>                          <C>               <C>             <C>
Revolving credit line         $   -0-        $34,000,000          1998

Capitalized lease
  obligations                  119,882           171,968     1996-2000


Equipment loans                174,515           404,824     1999-2001
                               -------        ----------
                              $294,397       $34,576,792
</TABLE>

Note C - Acquisition of Canadian Subsidiary

The Company completed the acquisition of DGW Electronics Corporation ("DWG") 
on August 22, 1995.  DGW is a distributor of electronic parts with five 
locations in Canada.  The operating results of DGW are included with those of 
the Company from the date of the acquisition forward.  Sales of DGW from 
August 22, 1995 through December 30, 1995 were approximately $7.8 million.



                                                              Page 7 of 12


<PAGE>

Note D - Sale of Phaostron Instruments

The Company completed the sale of its Phaostron Instruments subsidiary in 
September 1995.  The operating results, assets and liabilities of Phaostron 
have been classified as discontinued operations for all periods presented. 
Previously reported amounts have been restated to conform to this 
presentation. Phaostron Instruments accounted for 1%, 2% and 4%, 
respectively, of total Company sales in fiscal years 1995, 1994 and 1993.

Note E - Common Stock Dividend

On December 4, 1995, the Company announced a five percent common stock 
dividend. The new shares were distributed on February 1, 1996 to shareholders 
of record on January 11, 1996.  All per share amounts have been retroactively 
adjusted for the five percent common stock dividend.



                                                              Page 8 of 12



<PAGE>


MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS

THIRTY-NINE WEEKS ENDED DECEMBER 30, 1995 COMPARED TO THIRTY-NINE WEEKS
ENDED DECEMBER 31, 1994.

NET SALES - Consolidated net sales for the current thirty-nine week period 
were 34% ahead of sales for the thirty-nine week period a year ago.  Sales 
increased 26% for passive/electromechanical components, 20% for connector 
products and 45% for semiconductor products, compared to the thirty-nine week 
period a year ago.

GROSS MARGIN - Sterling's consolidated gross margin for the thirty-nine weeks 
declined to 21.5% from 22.5% for the thirty-nine weeks a year ago stemming 
principally from competitive pressures in all product groups and 
semiconductor sales increasing more rapidly than sales of higher margin 
passive and connector products.

SELLING AND ADMINISTRATIVE COSTS -  Consolidated operating expenses declined 
to 15.7% of sales compared to 16.8% of sales for the thirty-nine weeks a year 
ago. This improvement resulted from economies of scale from sales growth 
(fixed costs were spread over an increasing sales base) coupled with 
continuing cost controls.

OPERATING INCOME - As a result of gross margin dollars increasing more 
rapidly than operating expenses, operating income increased $3,394,000, a 34% 
improvement over the previous fiscal year.

INTEREST EXPENSE - The 23% increase in interest expense is the result of the 
$6.6 million increase from the comparable period in average indebtedness 
under the revolving credit line partially offset by the effect of slightly 
lower interest rates.

THIRTEEN WEEKS ENDED DECEMBER 30, 1995 COMPARED TO THIRTEEN WEEKS ENDED 
DECEMBER 31, 1994.

NET SALES - Consolidated net sales for the current thirteen week period were 
36% ahead of sales for the thirteen week period a year ago.  Sales increased 
28% for passive/electromechanical components, 23% for connector products and 
49% for semiconductor products, compared to the thirteen week period a year 
ago.

GROSS MARGIN - Sterling's consolidated gross margin for the thirteen weeks 
declined to 21.5% from 22.4% for the thirteen weeks a year ago stemming 
principally from competitive pressures in all product groups and 
semiconductor sales increasing more rapidly than sales of higher margin 
passive and connector products.

SELLING AND ADMINISTRATIVE COSTS -  Consolidated operating expenses declined 
to 15.6% of sales compared to 16.7% of sales for the thirteen

                                                     Page 9 of 12

<PAGE>

weeks a year ago.  This improvement resulted from economies of scale from 
sales growth (fixed costs were spread over an increasing sales base) coupled 
with continuing cost controls.

OPERATING INCOME - As a result of gross margin dollars increasing more 
rapidly than operating expenses, operating income increased $1,328,000, a 40% 
improvement over the previous fiscal year.

INTEREST EXPENSE - The 49% increase in interest expense is the result  of the 
$13.9 million increase from the comparable period in average  indebtedness 
under the revolving credit line partially offset by the effect of slightly 
lower interest rates.

LIQUIDITY AND CAPITAL RESOURCES

Since the beginning of the current fiscal year, Sterling has invested $23.9 
million in receivables and inventory to support higher sales volume.  In 
connection with this increased investment, the Company increased its 
borrowings under the bank line by $21.8 million. A secondary use of funds was 
the $5.8 million used to acquire DGW Electronics Corporation in Canada. 
Another use of funds has been capital expenditures of $2.1 million, 
principally for new computer hardware and software.  The expenditures in 
excess of the $21.8 million increase in borrowings under the bank line were 
financed by cash flow from operations.

The Company's needs for additional investment in receivables and inventories 
is expected to continue in connection with anticipated sales growth and 
geographic expansion.

Management believes that internal generation of cash flow (net income plus 
non-cash items such as depreciation and amortization), available equipment 
financing, funds available under the bank credit line plus possible increases 
in the bank credit line will be sufficient to meet liquidity needs over the 
next two fiscal years.

Working capital was $69.5 million at December 30, 1995 compared to $47.0 
million at April 1, 1995.  The current ratio was 3.0 compared to 2.6 at the 
beginning of the year.  Working capital continues to increase, reflected 
principally in higher receivables and inventory  required to support higher 
sales, partially offset by increased accounts payable and accrued expenses.

The ratio of long-term debt to total capital was 43% at December 30, 1995 
compared to 25% at the beginning of the year.

                                                     Page 10 of 12

<PAGE>


                                OTHER INFORMATION


ITEM 1 THROUGH ITEM 5

The Company was not required to report on Items 1 through 5.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibit is included herein:
    (11) Statement re: computation of earnings per share

(b) Reports of Form 8-K --  There were no reports on Form 8-K filed
    during the thirteen weeks ended December 30, 1995



                                   SIGNATURES

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


                                   STERLING ELECTRONICS CORPORATION



DATE: February 12, 1996                      MAC MCCONNELL          
-----------------------            ---------------------------------
                                   Mac McConnell, Vice-President
                                   Chief Financial Officer







                                                     Page 11 of 12