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


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

For the Quarterly Period ended March 31, 2000

                                       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 office)  (Zip Code)



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

Indicated  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 report),  and (2) has been subject to such
filing requirements for the past 90 days.



                        YES  X                NO __
                             -



Number of Shares of Registrant's  Common Stock  Outstanding as of May 12, 2000-
3,683,271 (Excluding 412,200 Shares of Treasury Stock).


<PAGE>

<TABLE>


FORM 10-Q                                                                       March 31, 2000
Page  2


PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS


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

                                                                March 31,               June 30,
                                                                  2000                    1999
                                                              -----------               ---------
ASSETS

Current Assets

<S>                                                           <C>                       <C>
         Cash                                                 $   427,287               $   922,247
         Marketable securities                                    903,868                   881,622
         Accounts receivable - net                             29,799,762                23,408,900
         Inventories                                           43,210,928                33,224,719
         Prepaid expenses and other                               653,926                   660,782
         Prepaid and refundable income taxes                                                990,855
         Deferred income taxes                                  1,008,000                   336,000
                                                              -----------               -----------

                  Total current assets                         76,003,771                60,425,125


Property, plant and equipment - net                             6,426,398                 6,983,761

Deferred income taxes                                             394,000                   390,000

Excess of cost over net assets acquired - net                   3,655,418                 3,588,449

Other assets                                                    1,722,155                 1,543,328
                                                              -----------               -----------


                                                              $88,201,742               $72,930,663
                                                              ===========               ===========







                              See accompanying notes to condensed consolidated financial statements.


</TABLE>

<PAGE>
<TABLE>


FORM 10-Q                                                                            March 31, 2000
Page 3



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


                                                                       March 31,             June 30,
                                                                         2000                  1999
                                                                     ----------------    --------------

LIABILITIES & SHAREHOLDERS' EQUITY

Current Liabilities

<S>                                                                 <C>                 <C>
         Accounts payable and accrued expenses                      $ 25,159,115        $ 17,635,319
         Current maturities of long term debt and
           capitalized lease obligations                                 859,324             791,814
         Income taxes payable                                          1,130,136
                                                                   -------------          -----------


         Total current liabilities                                    27,148,575          18,427,133

Long term debt and capitalized lease obligations                      22,373,398          18,885,664

Deferred compensation                                                    787,500             750,000


SHAREHOLDERS' EQUITY


         Preferred stock - authorized, 100,000 shares,
           $10 par value; none issued
         Common stock - authorized  10,000,000 shares,
         $.10 par value; issued 4,065,721 and 4,080,721 shares,
         respectively, and 3,653,521 and 3,668,521 shares
           outstanding, respectively                                     408,072             406,572
         Additional paid-in capital - net                             22,721,645          22,531,295
         Retained earnings                                            16,784,584          13,920,807
         Accumulated other comprehensive income                          182,483             213,707
         Treasury stock                                               (2,204,515)         (2,204,515)
                                                                     ------------        ------------

         Total shareholders' equity                                   37,892,269          34,867,866
                                                                      ----------          ----------


                                                                     $88,201,742         $72,930,663
                                                                     ===========          ==========




                     See accompanying notes to condensed consolidated financial statements.

</TABLE>


<PAGE>


<TABLE>

FORM 10-Q                                                                       March 31, 2000
Page 4



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



                                                                   2000                 1999
                                                                -----------            --------


<S>                                                               <C>                 <C>
NET SALES                                                         $51,693,699         $36,187,676

COST AND EXPENSES

Cost of goods sold                                                 39,680,844          29,193,984
                                                                   ----------          ----------

         Gross profit                                              12,012,855           6,993,692

Selling, general and administrative expenses                        8,691,425           6,538,685
                                                                 ------------        ------------

         Operating profit                                           3,321,430             455,007

Interest expense                                                      334,202             335,630
                                                                 ------------        ------------

         Earnings before income taxes                               2,987,228             119,377

Income tax provision                                                1,221,000              48,000
                                                                 ------------        ------------

         NET EARNINGS                                            $  1,766,228        $     71,377
                                                                 ============        ============

Net earnings per common share

Basic                                                            $       0.48        $       0.02
                                                                 ============        ============
Diluted                                                          $       0.45        $       0.02
                                                                 ============        ============

Weighted average common shares outstanding

         Basic                                                      3,657,642           3,653,521
                                                                 ============        ============
         Diluted                                                    3,924,887           3,663,882
                                                                 ============        ============




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


<PAGE>

<TABLE>


FORM 10-Q                                                                       March 31, 2000
Page 5



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



                                                                   2000                 1999
                                                               --------------       -----------


<S>                                                              <C>                 <C>
NET SALES                                                        $138,811,321        $104,410,230


COST AND EXPENSES

Cost of goods sold                                                108,994,750          84,019,054
                                                                  -----------          ----------

         Gross profit                                              29,816,571          20,391,176

Selling, general and administrative expenses                       23,918,836          19,801,603
                                                                 ------------        ------------

         Operating profit                                           5,897,735             589,573

Interest expense                                                    1,002,958             990,094
                                                                 ------------        ------------

         Earnings (Loss) before income taxes                        4,894,777           (400,521)

Income tax provision (benefit)                                      2,031,000           (162,000)
                                                                 ------------        ------------

         NET EARNINGS (LOSS)                                     $  2,863,777        $  (238,521)
                                                                 ============        ============

Net earnings (loss) per common share

Basic                                                            $       0.78        $     (0.06)
                                                                 ============        ============
Diluted                                                          $       0.76        $     (0.06)
                                                                 ============        ============

Weighted average common shares outstanding

         Basic                                                      3,654,885           3,713,132
                                                                 ============        ============
         Diluted                                                    3,768,395           3,713,132
                                                                 ============        ============




     See accompanying notes to condensed consolidated financial statements.

</TABLE>
<PAGE>

<TABLE>
FORM 10-Q                                                                                              March 31, 2000
Page 6




                                         JACO ELECTRONICS, INC. AND SUBSIDIARIES
                                            CONSOLIDATED STATEMENT OF CHANGES
                                                  IN SHAREHOLDERS' EQUITY
                                        FOR THE NINE MONTHS ENDED MARCH 31, 2000
                                                       (UNAUDITED)




                                                                                                       Accumulated
                                                                     Additional                           other
                                                                      paid-in          Retained       comprehensive
                                        Shares        Amount          capital          earnings          income
                                   --------------- -------------- ----------------  ---------------- ----------------

<S>             <C>                     <C>             <C>          <C>               <C>                 <C>
Balance at July 1, 1999                 4,065,721       $406,572     $ 22,801,295      $ 13,920,807        $ 213,707

Net earnings                                                                              2,863,777

Unrealized loss on marketable
  securities - net                                                                                           (31,224)

Comprehensive income

Exercise of Stock Options                  15,000          1,500           89,100

Deferred compensation
                                   --------------- -------------- ----------------  ---------------- ----------------
Balance at March 31, 2000               4,080,721       $408,072     $ 22,890,395      $ 16,784,584        $ 182,483
                                   =============== ============== ================  ================ ================




                                                                      Total
                                    Treasury        Deferred       shareholders'
                                      stock       compensation        equity
                                 -------------   --------------   --------------

<S>             <C>               <C>               <C>             <C>
Balance at July 1, 1999           $ (2,204,515)     $ (270,000)     $34,867,866
                                                                    -----------


Net earnings                                                          2,863,777

Unrealized loss on marketable
  securities - net                                                     (31,224)
                                                                      ---------
Comprehensive income                                                  2,832,553
                                                                     ----------
Exercise of Stock Options                                                90,600

Deferred compensation                                  101,250          101,250
                                  ---------------- --------------- -------------
Balance at March 31, 2000        $ (2,204,515)     $ (168,750)      $37,892,269
                                 ================ =============== ==============



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

<TABLE>

FORM 10-Q                                                                     March 31, 2000
Page 7


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

                                                                                   2000                 1999
                                                                             ------------------   -----------------
 Cash flows from operating activities
<S>                                                                                <C>                  <C>
      Net earnings (loss)                                                          $ 2,863,777          $ (238,521)

Adjustments to reconcile net earnings (loss) to net
     cash provided by (used in) operating activities
          Depreciation  and amortization                                             1,323,241           1,192,647
          Deferred compensation                                                        138,750             138,750
          Deferred income tax (benefit) expense                                       (658,000)              1,000
          Provision for doubtful accounts                                              455,125             347,255
          Gain on sale of equipment                                                                         (1,655)
          Changes in operating assets and liabilities,
          Increase in operating assets - net                                       (14,863,982)         (2,959,292)
          Increase in operating liabilities - net                                    8,653,932             618,076
                                                                             ------------------   -----------------

          Net cash used in operating activities                                     (2,087,157)           (901,740)
                                                                             ------------------   -----------------
Cash flows from investing activities
          Capital expenditures                                                        (453,582)         (1,461,827)
          Increase in marketable securities                                            (71,470)            (35,298)
          Proceeds from sale of equipment                                                                    9,689
          Acquisition of operating assets                                           (1,212,428)
          Increase in other assets                                                    (189,938)           (147,634)
                                                                             ------------------   -----------------
          Net cash used in investing activities                                      (1,927,418)         (1,635,070)
                                                                             ------------------   -----------------
Cash flows from financing activities
          Borrowings under line of credit                                            45,247,667          40,346,052
          Payments under line of credit                                             (41,208,947)        (36,954,685)
          Principal payments under equipment financing
               and term loans                                                         (609,705)           (602,583)
          Borrowings under term loan                                                                       575,000
          Proceeds from exercise of stock options                                      90,600
          Purchase of treasury stock                                                                      (784,553)
                                                                             ------------------   -----------------
          Net cash provided by financing activities                                  3,519,615           2,579,231
                                                                             ------------------   -----------------
          NET (DECREASE) INCREASE IN CASH                                             (494,960)             42,421
                                                                             ------------------   -----------------

Cash at beginning of period                                                            922,247             562,556
                                                                             ------------------   -----------------
Cash at end of period                                                                $ 427,287           $ 604,977
                                                                             ==================   =================
Supplemental schedule of non-cash financing and
    investing activities
          Equipment under capital leases                                             $ 126,229           $ 552,544


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


<PAGE>



FORM 10-Q                                                         March 31, 2000
Page 8


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

NOTE A - 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  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
year ended June 30, 1999 and the notes thereto  included in the Company's annual
report on Form 10-K. The results of operations  for the interim  periods are not
necessarily indicative of the results for the entire year.

2) The Company has a $30,000,000 term loan and revolving line of credit facility
with its banks, which are based principally on eligible accounts receivables and
inventories as defined in the agreement.  The agreement was amended twice during
the first six months of fiscal 2000.  Effective September 1, 1999, the agreement
was amended to extend the  maturity  date to  September  13, 2001 and  effective
December 31, 1999, the requirements of certain financial covenants were amended.
The interest rate is based on the average 30 day LIBOR rate plus 3/4 % to 1 1/4%
depending on the Company's performance for the immediately preceding four fiscal
quarters measured by a certain financial ratio. The applicable interest rate may
be adjusted  quarterly and borrowings under this facility are  collateralized by
substantially all of the assets of the Company.

3) The Board of  Directors of the Company has  authorized  the purchase of up to
650,000 shares of its outstanding common stock under a stock repurchase program.
The  purchases  may be made by the Company from time to time on the open market.
The Company has made  purchases of 412,200  shares of its common stock from July
31, 1996 through  October 16, 1998 for aggregate  consideration  of  $2,204,515.
Since October 17, 1998 the Company has made no additional  purchases of treasury
stock.

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

5) On February 25,  2000,  the Company  purchased  the  operating  assets of PGI
Industries,  Inc., an exporter of electronic  components,  located in Ronkokoma,
New York. The purchase price of approximately  $1.2 million was paid exclusively
by cash.  In  addition,  $100,000  is payable  over the next two years  based on
certain  events defined in the purchase  agreement.  This  acquisition  has been
accounted for by the purchase  method and, as such, the fair value of the assets
acquired  has  been  recorded  on the  date  of the  purchase.  The  results  of
operations   are  included  with  those  of  the  Company's  from  the  date  of
acquisition.  The excess of the purchase  price,  as adjusted  will be amortized
using the  straight  line method over a period not to exceed 20 years.  Proforma
results of  operations  not  expected to be  material,  presently,  they are not
materially different from those of the Company.

6) The Company has entered into a definitive agreement to acquire privately held
Interface Electronics  Corporation (IEC), a distributor of electronic components
primarily serving the Northeast and Southeast. Under the terms of the agreement,
Jaco will acquire IEC for  approximately  $15.4 million in cash plus an earn out
based on IEC's performance.  Jaco will also assume approximately $3.5 million of
IEC's debt. The transaction is expected to be consummated in the second calendar
quarter  of  2000  and  is  subject  to  the   expiration   of  the   applicable
Hart-Scott-Rodino  waiting period and other  customary  closing  conditions.  To
finance the consideration for the transaction, the Company received a commitment
from its commercial  banks to increase its credit  facility from  $30,000,000 to
$50,000,000,  based on  eligible  accounts  receivable  and  inventories  of the
Company.


<PAGE>

<TABLE>

FORM 10-Q                                                                       March 31, 2000
Page 9

7)       The number of shares used in the Company's basic and diluted earnings per share computations are as follows:

                                                       Three Months Ended                     Nine Months Ended
                                                           March 31,                              March 31,
                                                 ---------------------------------    --------------------------------

                                                    2000               1999                2000               1999
                                                --------------     --------------      -------------      -------------

Weighted average common shares
  outstanding net of treasury shares,
<S>                                                 <C>                <C>                <C>                <C>
  for basic earnings per share                      3,657,642          3,653,521          3,654,885          3,713,132

Common stock equivalents for
  stock options                                       267,245             10,361            113,510
                                                --------------     --------------      -------------      -------------

Weighted average common shares
  outstanding for diluted earnings per share        3,924,887          3,663,882          3,768,395          3,713,132
                                                ==============     ==============      =============      =============

</TABLE>


         As of March 31, 2000 options to purchase 584,430 shares of common stock
at a price range of $2.69 to $12.75 were outstanding  compared to 573,229 shares
as of March 31, 1999.  The stock options with exercise  prices  greater than the
average quoted market prices, have been excluded from the computation of diluted
earnings per share as there affect is antidilutive.  Stock options to purchase
52,000  shares  of the  Company's  common  stock  have  been  excluded  from the
computation  of diluted  earnings  per share for the three and nine months ended
March 31, 2000 as compared to 319,230 and 573,229  shares for the three and nine
months ended March 31, 1999, respectively.

8) 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 months and
nine  months  ended March 31,  2000 and 1999 is not  considered  material to the
financial statements.

           The Company's chief  operating  decision maker utilizes net sales and
net earnings  (loss)  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.
Information about the Company's segments is as follows:



<PAGE>
<TABLE>


FORM 10-Q                                                                                      March 31, 2000
Page 10

                                                         Three Months Ended                   Nine Months Ended
                                                             March 31,                            March 31,
                                                             ---------                            ---------
                                                       2000             1999                2000              1999
                                                    ---------        ---------           ---------         -------
                                                           (in thousands)                      (in thousands)

Net sales from external customers
<S>                                                   <C>              <C>                <C>                <C>
    Electronics components distribution               $47,510          $32,833            $128,948           $94,190
    Contract manufacturing                              4,184            3,355               9,863            10,220
                                                      -------          -------             -------          --------

                                                      $51,694          $36,188            $138,811          $104,410
                                                       ======           ======             =======           =======

Intersegment net sales
    Electronics components distribution             $      86        $      93           $     217          $    255
    Contract manufacturing                                                                                       111
                                                      -------         ---------           --------           -------

                                                    $      86          $    93            $    217          $    366
                                                     ========           ======             =======           =======

Operating profit
    Electronics components distribution               $ 3,118         $    325             $ 5,404           $   209
    Contract manufacturing                                203              130                 494               381
                                                      -------          -------             -------           -------

                                                      $ 3,321         $    455             $ 5,898          $    590
                                                        =====          =======              ======           =======

Interest expense
    Electronics components distribution              $    215         $    198            $    627          $    588
    Contract manufacturing                                119              138                 376               402
                                                     --------         --------             -------           -------

                                                     $    334         $    336          $    1,003           $   990
                                                      =======          =======           =========            ======

Income tax provision (benefit)
    Electronics components distribution           $     1,186         $     51          $    1,982         $    (154)
    Contract manufacturing                                 35               (3)                 49                (8)
                                                     --------         ---------           --------         ----------

                                                   $    1,221         $     48          $    2,031         $    (162)
                                                    =========          =======           =========          =========

Identifiable assets
    Electronics components distribution               $77,262          $66,265             $77,262           $66,265
    Contract manufacturing                             10,940           10,819              10,940            10,819
                                                      -------          -------            --------           -------

                                                      $88,202          $77,084             $88,202           $77,084
                                                       ======           ======              ======            ======

Capital expenditures
    Electronics components distribution            $      120         $    194            $    249          $    818
    Contract manufacturing                                113               68                 205               644
                                                     --------          -------             -------           -------

                                                     $    233         $    262            $    454           $ 1,462
                                                      =======          =======             =======            ======
Depreciation and amortization
    Electronics components distribution              $    279         $    275            $    850          $    796
    Contract manufacturing                                167              136                 473               397
                                                     --------         --------             -------           -------

                                                     $    446         $    411          $    1,323         $   1,193
                                                      =======          =======           =========          ========
</TABLE>


<PAGE>


FORM 10-Q                                                         March 31, 2000
Page 11


                     JACO ELECTRONICS, INC. AND SUBSIDIARIES
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:
         Statements in this filing,  and  elsewhere,  which look forward in time
involve  risks  and  uncertainties  which  may  effect  the  actual  results  of
operations. The following important factors, among others, have affected and, in
the future,  could affect the Company's actual results:  dependence on a limited
number of suppliers for products  which  generate a  significant  portion of the
Company's  sales, the effect upon the Company of increases in tariffs or duties,
changes in trade treaties,  strikes or delays in air or sea  transportation  and
possible future United States  legislation with respect to pricing and/or import
quotas on  products  imported  from  foreign  countries,  and  general  economic
downturns in the  electronics  distribution  industry  which may have an adverse
economic  effect upon  manufacturers,  end-users of  electronic  components  and
electronic component distributors.

GENERAL
-------
         Jaco is a distributor of electronic components and provider of contract
manufacturing  and value-added  services.  Products  distributed by Jaco include
semiconductors,  capacitors,  resistors,  electromechanical  devices, flat panel
displays and monitors, and power supplies used in the assembly and manufacturing
of electronic equipment.
         The  Company's   customers   are  primarily   small  and  medium  sized
manufacturers.  The  trend  for  these  customers  has  been  to  shift  certain
manufacturing  functions to third parties (outsourcing).  The Company intends 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 Jaco 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 the  Company.  The  Company  is 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                                                                       March 31, 2000
Page 12


Results of Operations
---------------------
The following  table sets forth  certain  items in the  Company's  statements of
operations as a percentage of net sales for the periods shown:

                                                 Three Months Ended                    Nine Months Ended
                                                      March 31,                            March 31,
                                           ------------------------------         ---------------------------

                                              2000               1999                2000             1999
                                           ----------         ----------          ----------       ----------
<S>                                               <C>              <C>                 <C>               <C>
Net Sales                                         100.0%           100.0%              100.0%            100.0%
Cost of goods sold                                76.8               80.7                78.6             80.5
                                              ----------         ----------          ----------       ----------
Gross Profit                                      23.2               19.3                21.4             19.5
Selling, general and
  administrative expenses                         16.8               18.1                17.2             18.9
                                             ----------         ----------          ----------       ----------
Operating  profit                                  6.4                1.2                 4.2              0.6
Interest expense                                   0.6                0.9                 0.7              1.0
                                             ----------         ----------          ----------       ----------
Earnings (Loss) before income taxes                5.8                0.3                 3.5              (0.4)
Income tax provision (benefit)                     2.4                0.1                 1.4              (0.2)
                                             ----------         ----------          ----------       ----------
NET EARNINGS (LOSS)                               3.4%                0.2%               2.1%              (0.2)%
                                             ==========          =========           =========        =========

</TABLE>

COMPARIS0N OF THE THREE AND NINE MONTHS ENDED MARCH 31, 2000 AND MARCH 31, 1999
-------------------------------------------------------------------------------

         Net sales for the three and nine months ended March 31, 2000 were $51.7
million and $138.8 million,  respectively,  compared to $36.2 million and $104.4
million  for the three and nine  months  ended  March  31,  1999,  respectively,
representing  increases in net sales of 42.8% and 32.9%. The Company's net sales
continue  to be  positively  impacted  by strong  industry-wide  demand for many
components.  There is an extremely strong demand for passive  components,  which
represents approximately fifty percent of the Company's net sales. Additionally,
the Company continues to experience strong results from the sales of flat panels
and  monitors  as  well as  growth  in  providing  value-added  services  to the
Company's key customers.  Most of these value-added services relate to assisting
the customer in all aspects of inventory management.
         Gross profit  margins as a percentage of net sales were 23.2% and 21.4%
for the three and nine months  ended March 31, 2000,  respectively,  compared to
19.3%  and  19.5%  for  the  three  and  nine  months   ended  March  31,  1999,
respectively.  The increases are primarily attributable to the strong demand for
components that continues to exist throughout the electronics industry.
         Selling, general and administrative expenses ("SG&A") for the three and
nine  months  ended  March  31,  2000  were  $8.7  million  and  $23.9  million,
respectively,  increases of $2.2  million and $4.1 million when  compared to the
three and nine months ended March 31, 1999, respectively. As a percentage of net
sales,  SG&A for the three and nine  months  ended March 31, 2000 were 16.8% and
17.2%,


<PAGE>

FORM 10-Q                                                         March 31, 2000
Page 13

respectively,  compared to 18.1% and 18.9% for the three and nine  months  ended
March 31,  1999,  respectively.  These  trends  reflect  operating  efficiencies
achieved by the Company with higher revenue levels. The Company has continued to
invest in sales and  marketing  personnel,  which it believes  is  required  for
continued growth.
         Interest  expense  for the three and nine  months  ended March 31, 2000
were $334,000 and  $1,003,000,  respectively,  compared to $336,000 and $990,000
for the three and nine months  ended March 31, 1999,  respectively.  The Company
has been able to maintain borrowings at comparable levels to last year.

     The net  earnings  for the three and nine months  ended March 31, 2000 were
$1,766,000 and  $2,864,000 or $0.45 and $0.76 per share  diluted,  respectively,
compared  to net  earnings  of $71,000 or $0.02 per share  diluted for the three
months  ended  March  31,  1999 and a net loss of  $239,000  or $0.06  per share
diluted for the nine months ended March 31,  1999.  The increase in earnings was
attributable to the increase in net sales, the increase in gross profit margins,
and the  operating  efficiencies  achieved in SG&A.  The  Company is  cautiously
optimistic that it is positioned to see continued  strong  performance  based on
the demand for electronic components, the Company's flat panel product group and
the value-added  service programs in place to assist customers in the management
of their inventory and procurement programs.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
         The  Company's  agreement  with its banks,  as  amended,  provides  the
Company with a $30,000,000 term loan and revolving line of credit facility based
principally on eligible  accounts  receivable and  inventories of the Company as
defined in the agreement  expiring  September 13, 2001. The interest rate of the
credit  facility  is based on the  average 30 day LIBOR rate plus 3/4% to 1-1/4%
depending on the Company's performance for the immediately preceding four fiscal
quarters measured by a certain  financial ratio, and may be adjusted  quarterly.
The outstanding balance on the revolving line of credit facility was $21,002,295
at March 31, 2000. The term loan, with a remaining  balance of $214,285 at March
31, 2000, requires monthly principal payments of $17,857, together with interest
through  March 1, 2001.  Borrowings  under this facility are  collateralized  by
substantially  all  of  the  assets  of  the  Company.  The  agreement  contains
provisions for maintenance of certain financial ratios, all of which the Company
is in  compliance  with at March 31,  2000,  and  prohibits  the payment of cash
dividends.
         For the nine months ended March 31, 2000,  the  Company's net cash used
in operating  activities was approximately $2.1 million, as compared to net cash
used in operating activities of $0.9 million for the nine months ended March 31,
1999.  The increase is primarily  attributable  to an increase in inventory  and
accounts  receivable  which was  partially  offset by an  increase  in  accounts
payable and accrued  expenses  and net  earnings for the nine months ended March
31, 2000.  Net cash used in investing  activities  increased to $1.9 million for
the nine months  ended  March 31, 2000 as compared to $1.6  million for the nine
months  ended  March  31,  1999.  The  increase  of $0.3  million  is  primarily
attributable to the acquisition of the operating assets of PGI Industries,  Inc.
for $1,212,000 which was partially offset by a decrease in capital  expenditures
of approximately $1.0 million.
           The Company's cash expenditures may vary  significantly  from current
levels,  based on a number of factors,  including,  but not  limited to,  future
acquisitions, if any.
         For the first nine  months of Fiscal  2000 and Fiscal  1999,  inventory
turnover was 3.8x and 3.2x,  respectively.  The average days  outstanding of the
Company's  accounts  receivable at March 31, 2000 was 52 days, as compared to 61
days at March 31, 1999.
         The Board of Directors of the Company had authorized the purchase of up
to 250,000 shares of its common stock under a stock repurchase  program.  During
Fiscal  1999,  the Board of  Directors  authorized  the  repurchase  of up to an
additional 400,000 shares of the Company's common stock. The purchases may


<PAGE>



FORM 10-Q                                                         March 31, 2000
Page 14

be made by the  Company  from time to time on the open  market at the  Company's
discretion and will be dependent on market conditions. Through May 12, 2000, the
Company  has  purchased  412,200  shares  of  its  common  stock  for  aggregate
consideration  of  $2,204,515  under this program.  Since October 17, 1998,  the
Company has made no additional purchases of treasury stock.
         The Company believes that cash flow from operations and funds available
under its credit facility will be sufficient to fund the Company's capital needs
for at least the next twelve months.

Year 2000 Compliance
--------------------
         The year 2000 ("Y2K") issue was the result of computer programs using a
two-digit format, as opposed to four digits, to indicate the year. Such computer
systems  would have been unable to interpret  dates beyond the year 1999,  which
would cause a system failure or other computer errors, leading to disruptions in
operations.  In April 1996, the Company developed a three-phase  program for Y2K
information systems compliance. Phase I was to identify those systems with which
the  Company  had  exposure  to Y2K  issues.  Phase II was the  development  and
implementation  of action  plans to be Y2K  compliant in all areas by late 1998.
Phase III,  which was fully  completed by late 1999, was the final major area of
exposure to ensure  compliance.  The Company  had  identified  three major areas
determined  to be critical for  successful  Y2K  compliance:  (1)  financial and
informational system applications,  (2) manufacturing applications and (3) third
party relationships.
         As of September 1, 1998, Jaco completed the redesign and development of
an  entirely  new  distribution  software  system.  All of the dates in this new
database are 8 characters, including the century. The system has been tested and
has been in production  as of September 1, 1998.  The systems  include  customer
order entry,  purchase order entry to the Company's  manufacturers,  warehousing
and inventory control.
         The financial  systems,  Accounts  Payable and General Ledger have been
Y2K  compliant  since April 1997.  The Accounts  Receivable  system has been Y2K
compliant since September 1, 1998.
     Jaco's  distribution  facilities:  warehouse,  shipping and other  physical
handling have been tested and are Y2K  compliant.  At this time, the Company has
tested  substantially all of its programs and has experienced no system problems
as it relates to Y2k issues. There were only minor corrections that needed to be
made to certain  non-essential  applications.  In  general,  the Y2K  compliance
efforts  continue  to be  part of the  Company's  ongoing  software  development
process. The Company has spent to date approximately $1.8 million to replace the
core financial and reporting software systems for its distribution business. The
Company has utilized outside consultants to undertake a portion of the work.

Inflation

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

Quantitative and Qualitative Disclosure about Market Risk.
----------------------------------------------------------
         The Company is exposed to interest rate change market risk with respect
to its credit facility with a financial institution which is priced based on the
average  30 day  LIBOR  rate  plus  3/4% to 1 1/4%  depending  on the  Company's
performance  for the immediately  preceding four fiscal  quarters  measured by a
certain  financial  ratio,  and may be adjusted  quarterly.  At April 30,  2000,
$17,948,267  was  outstanding  under the credit  facility.  Changes in the LIBOR
interest  rate  during the fiscal year ending June 30, 2000 will have a positive
or negative effect on the Company's interest expense. Each 1% fluctuation in the
LIBOR interest rate will increase or decrease  interest  expense for the Company
by approximately $179,000.



<PAGE>



FORM 10-Q                                                         March 31, 2000
Page 15


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

                           Nothing to Report

Item 5.          Other Information

                            Nothing to Report

Item 6.          Exhibits and Reports on Form 8-K

                    a)       Exhibits

                             27.1     Financial Data Schedule


                    b)       Reports on Form 8-K

                            The Company  filed one report on Form 8-K on May 15,
                  2000,  to report  under Item 5 the issuance of the May 9, 2000
                  press release announcing that it has entered into a definitive
                  agreement to acquire Interface Electronics Corporation.





<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.


                                  JACO ELECTRONICS, INC.
                                       (Registrant)



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









DATED:  May 15, 2000