UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549
                                    FORM 10-Q



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

For the quarterly period ended December 31, 2002

                                                        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

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 is  accelerated  filer (as defined
in Rule 12b-2 of the Exchange Act). Yes __ No X


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

          Class                       Shares Outstanding at February 7, 2003
Common Stock, $0.10 Par Value         5,770,032 (excluding 655,700 shares
                                       held as treasury stock)

<PAGE>
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FORM 10-Q                                                                       December 31, 2002
Page 2


PART I - FINANCIAL INFORMATION
Item 1. Financial Statements



                     JACO ELECTRONICS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                                                               December 31,             June 30,
                                                                  2002                    2002
                                                                  ----                    ----
ASSETS

Current Assets

<S>                                                           <C>                       <C>
         Cash                                                 $   351,568               $   324,447
         Restricted cash                                          800,000                         0
         Marketable securities                                    589,982                   650,267
         Accounts receivable - net                             26,474,040                29,095,269
         Inventories                                           37,914,936                42,611,225
         Prepaid expenses and other                               851,347                 1,183,043
         Prepaid and refundable income taxes                    3,263,001                 2,440,055
         Deferred income taxes                                  2,016,000                 2,017,000
                                                                ---------                 ---------

                  Total current assets                         72,260,874                78,321,306


Property, plant and equipment - net                             5,705,510                 6,708,828

Deferred income taxes                                             437,000                   434,000

Excess of cost over net assets acquired - net                  22,363,296                22,363,296

Other assets                                                    2,698,980                 2,807,451
                                                                ---------                 ---------


Total assets                                                 $103,465,660              $110,634,881
                                                             ============              ============


</TABLE>

          See accompanying notes to condensed consolidated financial statements.
<PAGE>

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FORM 10-Q                                                                       December 31, 2002
Page 3




                                      JACO ELECTRONICS, INC. AND SUBSIDIARIES
                                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                                    (UNAUDITED)


                                                                      December 31,           June 30,
                                                                         2002                  2002
                                                                         ----                  ----

LIABILITIES & SHAREHOLDERS' EQUITY

Current Liabilities

<S>                                                                 <C>                 <C>
Accounts payable and accrued expenses                               $ 22,990,574        $ 25,289,554
Current maturities of long-term debt and
  capitalized lease obligations                                          809,331             897,419
                                                                         -------             -------


         Total current liabilities                                    23,799,905          26,186,973

Long-term debt and capitalized lease obligations                      31,741,122          34,879,766

Deferred compensation                                                    925,000             900,000


SHAREHOLDERS' EQUITY


         Preferred stock - authorized, 100,000 shares,
           $10 par value; none issued
         Common stock - authorized, 20,000,000,
            $.10 par value; 6,425,732 shares issued
           and 5,770,032 and 5,807,432 shares
           outstanding, respectively                                     642,573             642,573
         Additional paid-in capital                                   25,152,010          25,152,010
         Retained earnings                                            23,574,399          25,102,628
         Accumulated other comprehensive loss                           (66,230)            (24,554)
         Treasury stock                                              (2,303,119)         (2,204,515)
                                                                     ----------          ----------

         Total shareholders' equity                                   46,999,633          48,668,142
                                                                      ----------          ----------


         Total liabilities and shareholders' equity                 $103,465,660        $110,634,881
                                                                    ============        ============




                  See accompanying notes to condensed consolidated financial statements.


</TABLE>

<PAGE>

<TABLE>
FORM 10-Q                                                                       December 31, 2002
Page 4




                     JACO ELECTRONICS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     FOR THE THREE MONTHS ENDED DECEMBER 31,
                                   (UNAUDITED)



                                                                   2002                 2001
                                                                   ----                 ----


<S>                                                               <C>                 <C>
NET SALES                                                         $54,180,114         $42,405,312


COST AND EXPENSES

Cost of goods sold                                                 47,265,256          35,803,750
                                                                   ----------          ----------

         Gross profit                                               6,914,858           6,601,562

Selling, general and administrative expenses                        7,348,081           8,193,330
                                                                    ---------           ---------

         Operating loss                                             (433,223)         (1,591,768)

Interest expense                                                      398,796             539,227
                                                                      -------             -------

         Loss before income taxes                                   (832,019)         (2,130,995)

Income tax benefit                                                  (291,000)           (810,000)
                                                                    --------            --------


         NET LOSS                                                $  (541,019)        $(1,320,995)
                                                                 ===========         ===========

Net loss per common share:

         Basic and Diluted                                       $     (0.09)        $     (0.23)
                                                                 ===========         ===========


Weighted average common shares outstanding:

         Basic and Diluted                                          5,791,717           5,707,459
                                                                    =========           =========





                      See accompanying notes to condensed consolidated financial statements.


</TABLE>
<PAGE>
<TABLE>

FORM 10-Q                                                                       December 31, 2002
Page 5



                     JACO ELECTRONICS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      FOR THE SIX MONTHS ENDED DECEMBER 31,
                                   (UNAUDITED)




                                                                   2002                 2001
                                                                   ----                 ----


<S>                                                              <C>                  <C>
NET SALES                                                        $103,223,769         $91,835,835


COST AND EXPENSES

Cost of goods sold                                                 89,961,447          77,218,772
                                                                   ----------          ----------

         Gross profit                                              13,262,322          14,617,063

Selling, general and administrative expenses                       14,813,444          17,585,675
                                                                   ----------          ----------

         Operating loss                                           (1,551,122)         (2,968,612)

Interest expense                                                      800,107           1,308,931
                                                                      -------           ---------

         Loss before income taxes                                 (2,351,229)         (4,277,543)

Income tax benefit                                                  (823,000)         (1,454,000)
                                                                    --------          ----------


         NET LOSS                                                $(1,528,229)        $(2,823,543)
                                                                 ===========         ===========

Net loss per common share:

         Basic and Diluted                                       $     (0.26)        $     (0.49)
                                                                 ===========         ===========


Weighted average common shares outstanding:

         Basic and Diluted                                          5,799,574           5,704,198
                                                                    =========           =========




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

<PAGE>


<TABLE>
FORM 10-Q                                                                       December 31, 2002
Page 6




                     JACO ELECTRONICS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF CHANGES
                             IN SHAREHOLDERS' EQUITY
                   FOR THE SIX MONTHS ENDED DECEMBER 31, 2002
                                   (UNAUDITED)





                                                                    Additional
                                                                      paid-in        Retained
                                        Shares       Amount           capital        earnings
                                   --------------- -------------- --------------  --------------

<S>             <C>                     <C>            <C>           <C>             <C>
Balance at July 1, 2002                 6,425,732      $ 642,573     $ 25,152,010    $ 25,102,628

Net loss                                                                               (1,528,229)

Unrealized loss on marketable
  securities, net of deferred taxes

Purchase of treasury stock
                                     ------------    -----------   --------------  --------------

Balance at December 31, 2002            6,425,732      $ 642,573     $ 25,152,010    $ 23,574,399
                                     ============    ===========   ==============  ==============



                                            Accumulated
                                              other                              Total
                                           comprehensive       Treasury       shareholders'
                                               loss              stock           equity
                                        ------------------ ---------------- -----------------


Balance at July 1, 2002                         $ (24,554)    $ (2,204,515)     $ 48,668,142

Net loss                                                                          (1,528,229)

Unrealized loss on marketable
  securities, net of deferred taxes                (41,676)                          (41,676)

Purchase of treasury stock                                         (98,604)          (98,604)
                                        ------------------ ---------------- -----------------

Balance at December 31, 2002                    $ (66,230)    $ (2,303,119)     $ 46,999,633
                                        ================== ================ =================



     See accompanying notes to condensed consolidated financial statements.

</TABLE>










<PAGE>
<TABLE>
FORM 10-Q                                                                       December 31, 2002
Page 7



                     JACO ELECTRONICS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                      FOR THE SIX MONTHS ENDED DECEMBER 31,
                                   (UNAUDITED)

                                                                                       2002                 2001
                                                                                       ----                 ----


Cash flows from operating activities
<S>                                                                                   <C>                 <C>
      Net loss                                                                        $ (1,528,229)       $ (2,823,543)

Adjustments to reconcile net loss to net
     cash provided by (used in) operating activities
          Depreciation  and amortization                                                 1,122,473           1,189,926
          Deferred compensation                                                             25,000              25,000
          Deferred income tax expense (benefit)                                             23,000             (14,968)
          Gain on sale of equipment                                                                             (7,048)
          Provision for doubtful accounts                                                  389,200             181,300
          Changes in operating assets and liabilities,
          Decrease in operating assets - net                                             6,437,068          21,790,519
          Decrease in operating liabilities - net                                         (199,417)         (6,591,009)
                                                                                          --------          ----------


          Net cash provided by operating activities                                      6,269,095          13,750,177
                                                                                          --------          ----------

Cash flows from investing activities
Capital expenditures                                                                       (50,655)           (159,169)
Proceeds from sale of equipment                                                                                 37,673
Purchase of marketable securities                                                           (6,391)            (11,072)
Business acquisitions - deferred payments                                               (2,099,563)           (193,297)
Decrease (increase) in other assets                                                         39,971            (328,852)
                                                                                            ------            --------


         Net cash used in investing activities                                          (2,116,638)           (654,717)
                                                                                        ----------            --------


Cash flows from financing activities
Borrowings under line of credit                                                         92,969,790          76,592,648
Payments under line of credit                                                          (95,723,054)        (89,150,168)
Funding of compensating balance                                                           (800,000)
Principal payments under equipment financing
and term loans                                                                            (473,468)           (555,337)
Purchase of treasury stock                                                                 (98,604)
Proceeds from exercise of stock options                                                                         25,000
                                                                                            ------              ------


Net cash used in financing activities                                                   (4,125,336)        (13,087,857)
                                                                                        ----------         -----------


NET INCREASE IN CASH                                                                        27,121               7,603
                                                                                            ------               -----



Cash at beginning of period                                                                324,447              89,523
                                                                                           -------              ------


Cash at end of period                                                                    $ 351,568            $ 97,126
                                                                                         =========            ========


Supplemental schedule of non-cash financing and
    investing activities:
Equipment acquired under capital lease obligations                                                           $ 396,685

     See accompanying notes to condensed consolidated financial statements.

</TABLE>


<PAGE>


FORM 10-Q                                                      December 31, 2002
Page 8


                     JACO ELECTRONICS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

BASIS OF PRESENTATION

1)   The accompanying  condensed  consolidated  financial statements reflect all
     adjustments, consisting only of normal recurring accrual adjustments, which
     are in the opinion of management,  necessary for a fair presentation of the
     consolidated  financial  position  and the  results of  operations  of Jaco
     Electronics,  Inc.  and its  subsidiaries  (the  "Company")  at and for the
     periods  presented.  Such  financial  statements  do not  include  all  the
     information or footnotes necessary for a complete presentation.  Therefore,
     they should be read in conjunction with the Company's audited  consolidated
     statements  for the fiscal year ended June 30,  2002 and the notes  thereto
     included in the  Company's  Annual  Report on Form 10-K for the fiscal year
     ended June 30, 2002. The results of operations for the interim  periods are
     not necessarily indicative of the results for the entire year.

2)   The Company's  credit  agreement with its banks,  as amended,  provides the
     Company with a $45,000,000  revolving line of credit  facility.  The credit
     facility  is  based  principally  on  eligible   accounts   receivable  and
     inventories of the Company as defined in the  agreement.  The agreement was
     amended on September  23, 2002 to (i) extend the maturity date to March 14,
     2004, (ii) reduce the credit facility line from $70 million to $45 million,
     and (iii)  change the  requirements  of certain  financial  covenants.  The
     agreement  also  requires the Company to establish a $800,000  compensating
     balance  arrangement with its banks in an interest  bearing account,  which
     was funded  during the quarter ended  December 31, 2002.  The interest rate
     was based on the average  30-day  LIBOR plus 1% to 2.25%  depending  on the
     Company's  performance for the  immediately  preceding four fiscal quarters
     measured by a specified  financial  ratio.  Effective  October 1, 2002, the
     rate converted to the average 30-day LIBOR plus 2.25% to 2.75%.  Borrowings
     under this facility are  collateralized  by substantially all of the assets
     of the Company.

3)   For interim financial reporting purposes, the Company uses the gross profit
     method for computing inventories,  which consists principally of goods held
     for resale.

4)   On September 18, 2001,  the Company  announced  that its Board of Directors
     authorized the repurchase of up to 250,000 shares of its outstanding common
     stock.  Purchases  may be made  from  time to time  in  market  or  private
     transactions  at prevailing  market  prices.  The Company made purchases of
     37,400  shares of its common stock from  November 5, 2002 through  December
     31, 2002 for aggregate consideration of $98,604.

5)   In June 2002, the Financial  Accounting Standards Board (the "FASB") issued
     Statement  of  Financial  Accounting  Standards  No. 146 ("SFAS No.  146"),
     "Accounting for Costs Associated with Exit or Disposal  Activities,"  which
     addresses  accounting for  restructuring  and similar  costs.  SFAS No. 146
     supersedes previous accounting  guidance,  principally Emerging Issues Task
     Force Issue No. 94-3.  SFAS No. 146 requires  that the  liability for costs
     associated  with  an exit or  disposal  activity  be  recognized  when  the
     liability is incurred.  SFAS No. 146 also  establishes  that the  liability
     should initially be measured and recorded at fair value. Accordingly,  SFAS
     No. 146 may affect the timing of recognizing future  restructuring costs as
     well as the  amount  recognized.  SFAS  no.  146 is  effective  for exit or
     disposal activities that are initiated after December 31, 2002.  Management
     believes that the adoption of SFAS No. 146 will not have a material  impact
     on its results of operations or financial position.

6)   In  December  2002,  the FASB  issued  Statement  of  Financial  Accounting
     Standards  No.  148  ("SFAS  No.   148"),   "Accounting   for   Stock-Based
     Compensation--Transition and Disclosure, an amendment of FASB Statement No.
     123."  SFAS No.  148  amends  SFAS No.  123,  "Accounting  for  Stock-Based
     Compensation," to provide alternative methods of transition for a voluntary
     change  to the fair  value  based  method  of  accounting  for  stock-based
     employee  compensation.  In  addition,  SFAS No. 148 amends the  disclosure
     requirements  of SFAS No.  123 to  require  prominent  disclosures  in both
     annual and interim financial  statements about the method of accounting for
     stock-based  employee  compensation  and the effect of the  method  used on
     reported results. The provisions of SFAS 148 are effective for fiscal years
     ending after  December 15, 2002 and the interim  disclosure  provisions are
     effective for

<PAGE>

FORM 10-Q                                                      December 31, 2002
Page 9


     interim periods  beginning  after December 15, 2002. The Company  currently
     plans to continue to apply the intrinsic-value  based method to account for
     stock  options  and  will  comply  with  the  new  disclosure  requirements
     beginning with its quarter ending March 31, 2003.


7)   On June 6, 2000,  the Company  acquired  all of the issued and  outstanding
     shares of common  stock,  no par  value,  of  Interface  Electronics  Corp.
     ("Interface"), a distributor of electronic parts, components and equipment,
     located in  Massachusetts.  The purchase price was  $15,400,000  payable in
     cash at the  closing,  plus the  assumption  of certain  liabilities  and a
     deferred  payment  of  $5,002,860,  which has been  fully  satisfied  as of
     December 31, 2002. The acquisition has been accounted for as a purchase and
     the operations of Interface  have been included in the Company's  Statement
     of Operations  since the date of  acquisition.  Included in other assets on
     the Company's  condensed  consolidated  balance sheets are the costs of the
     identifiable   intangible   assets  acquired,   principally  an  employment
     agreement  which is being  amortized  on a  straight-line  basis  over five
     years,   and  a  franchise   agreement  which  was  being  amortized  on  a
     straight-line  basis over  fifteen  years until the  Company's  adoption of
     Statement  of  Financial  Accounting  Standards  No. 142 ("SFAS No.  142"),
     "Goodwill and Other Intangible  Assets," on July 1, 2001. The excess of the
     purchase price and related  expenses over the net tangible and identifiable
     intangible  assets  acquired  amounted  to  approximately   $19,703,000  at
     December 31, 2002, and was being  amortized on a  straight-line  basis over
     twenty years until the Company's adoption of SFAS No. 142.


8)   Total comprehensive  income and its components for the three and six months
     ended December 31, 2002 and 2001 are as follows:

<TABLE>
                                        Three Months Ended                      Six Months Ended
                                           December 31,                           December 31,
                                 ---------------------------------     ----------------------------------

                                     2002               2001                2002                2001
                                 --------------     --------------      -------------      ---------------


<S>                                 <C>              <C>                <C>                  <C>
Net loss                            $(541,019)       $(1,320,995)       $(1,528,229)         $(2,823,543)


Unrealized gain (loss)
  on marketable securities              31,302             50,016           (66,676)             (59,017)


Deferred tax (expense) benefit        (12,000)           (18,000)             25,000               21,032
                                 --------------     --------------      -------------      ---------------


Comprehensive loss                  $(521,717)       $(1,288,979)       $(1,569,905)         $(2,861,528)
                                 ==============     ==============      =============      ===============

     Accumulated other comprehensive income is comprised of unrealized gains and losses on marketable securities,
net of the related tax effect.


</TABLE>



<PAGE>







FORM 10-Q                                                      December 31, 2002
Page 10



9)   The weighted  average common shares  outstanding,  net of treasury  shares,
     used in the Company's basic and diluted earnings per share  computations on
     its condensed  consolidated  statements of  operations  were  5,791,717 and
     5,799,574   for  the  three  and  six  months  ended   December  31,  2002,
     respectively,  compared to 5,707,459  and  5,704,198  for the three and six
     months ended December 31, 2001, respectively. Excluded from the calculation
     of earnings per share are options to purchase  1,125,750 and 948,920 shares
     of the Company's  common stock for the three and six months ended  December
     31,  2002 and  2001,  respectively,  as their  inclusion  would  have  been
     antidilutive.  Common stock  equivalents  for stock options are  calculated
     using the treasury stock method.


10)  The Company has two reportable segments: electronics parts distribution and
     contract   manufacturing.   The  Company's  primary  business  activity  is
     conducted  with  small and  medium  size  manufacturers,  located  in North
     America, that produce electronic equipment used in a variety of industries.
     Information  pertaining to the Company's operations in different geographic
     areas for the three and six months ended  December 31, 2002 and 2001 is not
     considered  material to the Company's financial  statements.  The Company's
     chief  operating  decision  maker  utilizes  net  sales  and  net  earnings
     information in assessing performance and making overall operating decisions
     and resource allocations. The accounting policies of the operating segments
     are the same as those  described in the summary of  significant  accounting
     policies  included in the Company's  annual report to shareholders  for the
     fiscal year ended June 30, 2002.  Information about the Company's  segments
     is as follows:


<PAGE>

<TABLE>
FORM 10-Q                                                                                               December 31, 2002
Page 11


                                                         Three Months Ended                   Six Months Ended
                                                            December 31,                        December 31,
                                                            ------------                        ------------
                                                       2002             2001                2002              2001
                                                       ----             ----                ----              ----
                                                           (in thousands)                      (in thousands)
Net sales from external customers
<S>                                                   <C>              <C>                 <C>               <C>
    Electronics components distribution               $49,748          $38,163             $95,835           $80,601
    Contract manufacturing                              4,432            4,242               7,389            11,235
                                                        -----            -----               -----            ------

                                                      $54,180          $42,405            $103,224           $91,836
                                                      =======          =======            ========           =======

Intersegment net sales
    Electronics components distribution             $      74        $      54           $     114         $     169
    Contract manufacturing                              _____            _____               _____             _____

                                                    $      74        $      54            $    114          $    169
                                                    =========        =========            ========          ========

Operating (loss) profit
    Electronics components distribution                $ (439)        $ (1,451)           $ (1,258)         $ (3,025)
    Contract manufacturing                                  6             (141)               (293)               56
                                                            -             ----                ----                --

                                                       $ (433)        $ (1,592)           $ (1,551)         $ (2,969)
                                                        ======         ========            ========          ========

Interest expense
    Electronics components distribution              $    287         $    403         $       575        $    1,007
    Contract manufacturing                                112              136                 225               302
                                                          ---              ---                 ---               ---

                                                      $   399          $   539          $      800        $    1,309
                                                      =======          =======          ==========        ==========

Loss before income taxes
    Electronics components distribution            $     (726)    $     (1,853)          $    (1,833)      $    (4,031)
    Contract manufacturing                               (106)            (278)                 (518)             (247)
                                                         ----             ----                  ----              ----

                                                    $    (832)     $    (2,131)          $    (2,351)      $    (4,278)
                                                     =========      ===========           ===========       ===========

Identifiable assets
    Electronics components distribution               $91,642          $99,884               $91,642           $99,884
    Contract manufacturing                             11,824           14,087                11,824            14,087
                                                       ------           ------                ------            ------

                                                     $103,466         $113,971              $103,466          $113,971
                                                     ========         ========              ========          ========

Capital expenditures
    Electronics components distribution             $      24        $      58               $    51          $    128
    Contract manufacturing
                                                                            31                                      31
                                                           --               --                    --                --
                                                      $    24          $    89               $    51          $    159
                                                      =======          =======               =======          ========

Depreciation and amortization
    Electronics components distribution              $    354         $    373              $    707          $    742
    Contract manufacturing                                209              225                   415               448
                                                          ---              ---                   ---               ---

                                                     $    563         $    598            $    1,122        $    1,190
                                                     ========         ========            ==========        ==========


</TABLE>

<PAGE>


FORM 10-Q                                                      December 31, 2002
Page 12

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

     Cautionary Statement under the Private Securities  Litigation Reform Act of
1995:  Certain  statements  contained in this report or in other written or oral
statements  made from time to time by the Company  may  contain  forward-looking
statements as defined in the Private  Securities  Litigation  Act of 1995.  Such
statements may use words such as "anticipate,"  "estimate," "expect," "believe,"
"may,"  "intend"  and  similar  words or terms.  Although  we  believe  that the
expectations in such forward-looking  statements are reasonable,  we can give no
assurance  that  such  expectations  will  prove  to  have  been  correct.   The
forward-looking  statements are based upon a number of assumptions and estimates
that,  while  presented with  specificity  and considered  reasonable by us, are
inherently  subject to significant  business,  economic and  competitive  risks,
uncertainties  and  contingencies  which  are  beyond  our  control,   and  upon
assumptions  with  respect to future  business  decisions  which are  subject to
change.  Accordingly,  the  forward-looking  statements are only an estimate and
actual  results  will  vary  from  the  forward-looking  statements,  and  these
variations may be material.  We are not obligated to update any  forward-looking
statement, but investors are urged to consult any further disclosures we make in
our   subsequent   filings  with  the   Securities   and  Exchange   Commission.
Consequently,  the  inclusion of the  forward-looking  statements  should not be
regarded as a representation  by us of results or performance that actually will
be achieved.  Forward-looking  statements are necessarily speculative in nature,
and  it is  usually  the  case  that  one or  more  of  the  assumptions  in the
forward-looking  statements do not  materialize.  Investors are cautioned not to
place undue reliance on the  forward-looking  statements.  We caution  investors
that the factors set forth below and in our other  filings  with the  Securities
and Exchange  Commission could cause our results to differ materially from those
stated in the forward-looking  statements.  These factors include, among others,
the impact of competitive  products,  demand for our products and related market
acceptance risks,  fluctuations in our operating results,  delays in development
of highly  complex  electronic  products,  our ability to continue to expand our
operations,  the  level of  costs  incurred  in  connection  with our  expansion
efforts,  the  financial  strength of our  customers  and  suppliers,  and risks
associated with general industry and economic conditions.

GENERAL

     Jaco is a  distributor  of  electronic  components,  provider  of  contract
manufacturing  and  value-added  services.  Products  distributed  by us include
semiconductors,  capacitors,  resistors,  electromechanical  devices, flat panel
displays and monitors, and power supplies used in the assembly and manufacturing
of electronic equipment.

     Our customers are primarily small and medium sized manufacturers. The trend
for these customers has been to shift certain  manufacturing  functions to third
parties (i.e. outsourcing). We intend to seek to capitalize on this trend toward
outsourcing by increasing  sales of products  enhanced by value-added  services.
Value-added  services  currently  provided by us consist of automated  inventory
management  services,  kitting (e.g.,  supplying sets of specified quantities of
products to a customer that are  prepackaged  for ease of feeding the customer's
production lines), and contract  manufacturing through Nexus Custom Electronics,
Inc., a wholly owned subsidiary of ours. We are also expanding in the flat panel
display value-added market, which includes full system integration,  kitting and
the implementation of touch technologies.
<PAGE>
<TABLE>
FORM 10-Q                                                                       December 31, 2002
Page 13



Results of Operations

     The  following  table  sets  forth  certain  items  in  our  statements  of
operations as a percentage of net sales for the periods shown:

                                                 Three Months Ended                     Six Months Ended
                                                    December 31,                          December 31,
                                           ------------------------------         ---------------------------

                                              2002               2001                2002             2001
                                           ----------         ----------          ----------       ----------

<S>                                              <C>                <C>                 <C>             <C>
Net Sales                                        100.0%             100.0%              100.0%          100.0%
Cost of goods sold                                87.2               84.4                87.2            84.1
                                            ----------         ----------          ----------       ----------
 Gross Profit                                     12.8               15.6                12.8            15.9
Selling, general and
  administrative expenses                         13.6               19.3                14.3             19.1
                                            ----------         ----------          ----------       ----------
  Operating loss                                  (0.8)              (3.7)               (1.5)           (3.2)
Interest expense                                   0.7                1.3                 0.8             1.5
                                            ----------         ----------          ----------       ----------
Loss before income taxes                         (1.5)               (5.0)               (2.3)           (4.7)
Income tax benefit                               (0.5)               (1.9)               (0.8)           (1.6)
                                            ----------          ----------          ----------       ----------
NET LOSS                                         (1.0)%              (3.1)%              (1.5)%          (3.1)%
                                           ============       ============        ============     ============
</TABLE>

COMPARISON OF THE THREE AND SIX MONTHS ENDED  DECEMBER 31, 2002 AND DECEMBER 31,
2001

     Net sales for the three and six months  ended  December 31, 2002 were $54.2
million and $103.2  million,  respectively,  compared to $42.4 million and $91.8
million for the three and six months  ended  December  31,  2001,  respectively,
representing  increases of 27.8% and 12.4%. The electronics  industry appears to
be more stable than last year. At this time,  we do not see a general  recovery,
although,  we have seen  certain  customers,  in  different  industry  segments,
indicate  that their  business  is  improving.  This  selective  improvement  is
reflected  in our  increase  in net  sales.  Flat  panel  displays  (FPD)  sales
represented approximately 10% of our distribution net sales for both the quarter
and six months ended December 31, 2002.  Sequentially,  our FPD sales  increased
15%  compared  to the  quarter  ended  September  30,  2002.  Active  components
represented  approximately 67% and passive  components  approximately 33% of our
distribution  net sales for the three and six months  ended  December  31, 2002,
compared to 55% active  components and 45% passive  components for the three and
six months ended December 31, 2001. FPD sales are included in active components.

     Gross profit was $6.9 million and $13.3 million, or 12.8% for the three and
six months ended  December 31, 2002,  respectively,  compared to $6.6 million or
15.6%,  and $14.6 million or 15.9%,  for the three and six months ended December
31,  2001,  respectively.  Pricing  of  components  continues  to  be  extremely
competitive due to the wide  availability of product.  Also, our product mix has
shifted to more active components,  which historically sell at lower margins. We
do not anticipate our margins to improve until demand for product improves.

     Selling, general and administrative ("SG&A") expenses were $7.3 million and
$14.8   million  for  the  three  and  six  months  ended   December  31,  2002,
respectively,  compared to $8.2 million and $17.6  million for the three and six
months  ended  December 31,  2001,  representing  a decrease of 10.3% and 15.8%,
respectively. The decrease is the result of reduced staffing levels, elimination
of discretionary


<PAGE>


FORM 10-Q                                                      December 31, 2002
Page 14

costs and a  reduction  in  variable  costs  such as  commissions  paid to sales
personnel.  As a result of our decrease in SG&A and increase in net sales,  SG&A
as a  percentage  of net sales was 13.6% and 14.4% for the three and six  months
ended  December  31,  2002,  respectively,  compared  to 19.3% and 19.1% for the
comparable three and six months of last year respectively.  Management  believes
it is important to maintain an  infrastructure  to support  customers.  However,
should net sales not  continue to  increase,  we may be  required  to  implement
further reductions in SG&A.

     Interest  expense  decreased to $0.4 million and $0.8 million for the three
and six months ended December 31, 2002,  respectively,  compared to $0.5 million
and  $1.3  million  for the  three  and six  months  ended  December  31,  2001,
respectively,  representing  decreases  of 26.0% and  38.9%.  The  reduction  in
interest  expense is  attributable to our ability to reduce bank borrowings as a
result of inventory reductions and lower borrowing rates.

     Net loss for the three and six  months  ended  December  31,  2002 was $0.5
million,  or $0.09  per  share  diluted,  and $1.5  million,  or $0.26 per share
diluted,  respectively,  compared  to a net loss of $1.3  million,  or $0.23 per
share diluted,  and $2.8 million, or $0.49 per share diluted,  for the three and
six months ended December 31, 2001, respectively. As a result of our increase in
net sales and decrease in SG&A and interest expense,  we were able to reduce our
net loss by 59.0% and 45.9% for the three  and six  months  ended  December  31,
2002, respectively, compared to the comparable period last year.

LIQUIDITY AND CAPITAL RESOURCES

     Our credit agreement with our banks, as amended, expires on March 14, 2004.
The agreement  provides us with a $45 million  revolving line of credit facility
based  principally  on our eligible  accounts  receivable  and  inventories,  as
defined in the agreement. The agreement also requires us to establish a $800,000
compensating  balance arrangement with our banks in an interest bearing account,
which was funded during the quarter ended  December 31, 2002.  The interest rate
applicable  to  borrowings  under our credit  facility  was based on the average
30-day  LIBOR  rate  plus 1% to  2.25%,  depending  on our  performance  for the
immediately  preceding four fiscal  quarters  measured by a specified  financial
ratio. Effective October 1, 2002, the rate converted to the average 30-day LIBOR
plus 2.25% to 2.75%.  The  outstanding  balance on the revolving  line of credit
facility was $31.1 million at December 31, 2002.  Borrowings under this facility
are  collateralized by substantially all of our assets.  The agreement  contains
provisions for maintenance of certain financial ratios,  all of which we were in
compliance  with at  December  31,  2002,  and  prohibits  the  payment  of cash
dividends. Failure to remain in compliance with these covenants could trigger an
acceleration  of our obligation to repay all  outstanding  borrowings  under our
credit facility.

     For the six months ended  December 31, 2002, our cash provided by operating
activities was approximately $6.3 million,  as compared to $13.8 million for the
same period last fiscal  year.  The  decrease in net cash  provided is primarily
attributable to a smaller decrease in our accounts  receivable and inventory for
the six months  ended  December  31,  2002,  as compared to the same period last
fiscal year.  This was  partially  offset by a smaller  decrease in our accounts
payable and accrued  expenses  for the six months ended  December  31, 2002,  as
compared  to the same  period  last  fiscal  year.  Net cash  used in  investing
activities increased to $2.1 million for the six months ended December 31, 2002,
as compared to $0.7  million for the six months ended  December  31,  2001.  The
increase is primarily  attributable to deferred payments of $2.1 million for the
six months ended December 31, 2002,  related to our  acquisition in June 2000 of
Interface  Electronics  Corp., as compared to deferred  payments of $0.2 million
for the  six  months  ended  December  31,  2001.  Net  cash  used in  financing
activities  was $4.1  million  for the six months  ended  December  31,  2002 as
compared  to $13.1  million for the same  period in our last  fiscal  year.  The
decrease  in net cash used is  primarily  attributable  to the  increase  in net
borrowings under our credit facility of approximately $9.8 million.

     For the six months ended  December  31, 2002 and  December  31,  2001,  our
inventory turnover was 4.4x and 2.8x, respectively. The average days outstanding
of our accounts  receivable at December 31, 2002 were 48 days, as compared to 63
days at December 31, 2001.

     Based upon our present plans, we believe that cash flow from operations and
funds available under our credit facility will be sufficient to fund our capital
needs  for the  foreseeable  future.  However,  our cash  expenditures  may vary
significantly from current levels based on a number of factors,  including,  but
not  limited  to,  future  acquisitions  and  capital   expenditures,   if  any.
Historically, we have been able to obtain



<PAGE>


FORM 10-Q                                                      December 31, 2002
Page 15

amendments to our existing credit facility to satisfy financial covenants,  when
necessary.  While we can give no assurances that any such future  amendment,  if
needed,  will be available,  management  believes we will be able to continue to
obtain  financing  on  acceptable  terms under our existing  credit  facility or
through other external sources.

Inflation

     Inflation  has not had a  significant  impact on the  Company's  operations
during the last three fiscal years.

Critical Accounting Policies and Estimates

     We have disclosed in Note A to our consolidated financial statements and in
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  included in our Annual Report on Form 10-K for the fiscal year ended
June 30, 2002 those  accounting  policies that we consider to be  significant in
determining our results of operations and financial position. There have been no
material changes to the critical accounting  policies previously  identified and
described in our Form 10-K. The  accounting  principles we utilized in preparing
our  consolidated  financial  statements  conform in all  material  respects  to
generally accepted accounting principles in the United States of America.

     The preparation of these  consolidated  financial  statements  requires our
management to make estimates and assumptions that affect the reported amounts of
assets,  liabilities,  revenues  and  expenses,  as  well as the  disclosure  of
contingent  assets and liabilities at the date of our financial  statements.  We
base our estimates on historical  experience,  actuarial  valuations and various
other  factors that we believe to be  reasonable  under the  circumstances,  the
results of which form the basis our making judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources. Some of
those judgments can be subjective and complex and, consequently,  actual results
may differ from these estimates under different assumptions or conditions. While
for any given estimate or assumption  made by our management  there may be other
estimates or assumptions that are reasonable, we believe that, given the current
facts and circumstances,  it is unlikely that applying any such other reasonable
estimate or assumption would materially impact the financial statements.

New Accounting Standards

     In  December  2002,  the FASB  issued  Statement  of  Financial  Accounting
Standards   No.   148   ("SFAS   No.   148"),    "Accounting   for   Stock-Based
Compensation--Transition  and  Disclosure,  an amendment of FASB  Statement  No.
123."  SFAS  No.  148  amends  SFAS  No.  123,   "Accounting   for   Stock-Based
Compensation,"  to provide  alternative  methods of  transition  for a voluntary
change to the fair value based method of  accounting  for  stock-based  employee
compensation.  In addition,  SFAS No. 148 amends the disclosure  requirements of
SFAS No.  123 to  require  prominent  disclosures  in both  annual  and  interim
financial  statements  about the method of accounting for  stock-based  employee
compensation  and the  effect  of the  method  used  on  reported  results.  The
provisions of SFAS 148 are effective for fiscal years ending after  December 15,
2002 and the interim  disclosure  provisions  are effective for interim  periods
beginning  after December 15, 2002. The Company  currently  plans to continue to
apply the  intrinsic-value  based  method to account for stock  options and will
comply with the new  disclosure  requirements  beginning with its quarter ending
March 31, 2003.


Item 3. Quantitative and Qualitative Disclosure about Market Risk

     We are exposed to interest  rate changes with respect to  borrowings  under
our credit  facility which bears interest at the higher of the prime rate or the
federal  funds rate plus 0.5% or at our  option,  at a rate equal to the average
30-day  LIBOR  rate plus 2.25% to 2.75%  depending  on our  performance  for the
immediately  preceding four fiscal  quarters  measured by a specified  financial
ratio,  and may be adjusted  quarterly.  At January 31, 2003,  $26.1 million was
outstanding under the credit facility. Changes in the LIBOR interest rate during
the fiscal  year will have a positive or negative

<PAGE>



FORM 10-Q                                                    December  31, 2002
Page 16

effect on our interest expense. Each 1.0% fluctuation in the LIBOR interest rate
will  increase or decrease our  interest  expense  under the credit  facility by
approximately  $0.3  million based on the amount of  outstanding  borrowings at
January 31, 2003.

     The impact of interest rate fluctuations on other floating rate debt is not
material.


Item 4. Procedures and Controls

     Within the 90 days prior to the date of this  report,  the Company  carried
out an  evaluation,  under the  supervision  and with the  participation  of the
Company's  management,  including the Company's  Principal Executive Officer and
Principal Financial Officer, of the effectiveness of the design and operation of
the Company's  disclosure controls and procedures (as defined in Rules 13a-14(c)
and  15d-14(c)  under the  Securities  Exchange  Act of 1934).  Based  upon that
evaluation, the Principal Executive Officer and Principal Financial Officer have
concluded that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed in the reports that the Company
files  or  submits  under  the  Securities  Exchange  Act of 1934  is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities  and  Exchange  Commission's  rules  and  forms.  There  have been no
significant  changes in the  Company's  internal  controls or other factors that
could  significantly  affect  those  controls  since  the date of the  Company's
evaluation and there were no significant  deficiencies or material weaknesses in
such controls and, therefore, there were no corrective actions taken.

<PAGE>


FORM 10-Q                                                      December 31, 2002
Page 17

PART II - OTHER INFORMATION


Item 1.           Legal Proceedings

                           Nothing to Report


Item 2.           Changes in Securities and Use of Proceeds

                           Nothing to Report


Item 3.           Defaults Upon Senior Securities

                           Nothing to Report


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

                  Our Annual Meeting of  Shareholders  was held on December 5,
                  2002. The Shareholders approved the following:

                    The  election  of  each  of the  nominees  to the  Board  of
                     Directors:

                  Stephen A. Cohen          For: 5,460,273     Withheld: 174,116
                  Edward M. Frankel         For: 5,460,273     Withheld: 174,116
                  Charles B. Girsky         For: 5,459,475     Withheld: 174,914
                  Joel H. Girsky            For: 5,459,475     Withheld: 174,914
                  Joseph F. Hickey, Jr.     For: 5,459,475     Withheld: 174,914
                  Joseph F. Oliveri         For: 5,460,273     Withheld: 174,116


Item 5.           Other Information

                            Nothing to Report


Item 6.          Exhibits and Reports on Form 8-K

                    a)  Exhibit  99.9 -  Certification  of  Principal  Executive
                    Officer  pursuant  to 18 U.S.C.  Section  1350,  as  adopted
                    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                    Exhibit 99.10 - Certification of Principal Financial Officer
                    pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant to
                    Section 906 of the Sarbanes-Oxley Act of 2002.

                    b)  Reports  on Form 8-K:  No reports on Form 8-K were filed
                    during the period ended December 31, 2002.




<PAGE>





                                                 S I G N A T U R E




     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.

February 14, 2003
                                     JACO ELECTRONICS, INC.
                                         (Registrant)



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

<PAGE>

CERTIFICATIONS

I, Joel H. Girsky, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Jaco Electronics, Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) designed such disclosure controls and procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the period in which  this  quarterly  report is being
     prepared;

     b) evaluated the effectiveness of the registrant's  disclosure controls and
     procedures  as of a date  within 90 days prior to the  filing  date of this
     quarterly report (the "Evaluation Date"); and

     c)  presented  in  this  quarterly   report  our   conclusions   about  the
     effectiveness  of the  disclosure  controls  and  procedures  based  on our
     evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

     a) all  significant  deficiencies  in the design or  operation  of internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud,  whether or not material,  that involves  management or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

February 14, 2003
                                  /s/ Joel H. Girsky
                                  ------------------------------------
                                  Joel H. Girsky
                                  Chairman, President and Treasurer
                                  (Principal Executive Officer)



<PAGE>


CERTIFICATIONS

I, Jeffrey D. Gash, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Jaco Electronics, Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) designed such disclosure controls and procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the period in which  this  quarterly  report is being
     prepared;

     b) evaluated the effectiveness of the registrant's  disclosure controls and
     procedures  as of a date  within 90 days prior to the  filing  date of this
     quarterly report (the "Evaluation Date"); and

     c)  presented  in  this  quarterly   report  our   conclusions   about  the
     effectiveness  of the  disclosure  controls  and  procedures  based  on our
     evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

     a) all  significant  deficiencies  in the design or  operation  of internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud,  whether or not material,  that involves  management or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

February 14, 2003
                                 /s/ Jeffrey D. Gash
                                 ----------------------------------------------
                                 Jeffrey D. Gash
                                 Executive Vice President, Finance and Secretary
                                 (Principal Financial Officer)