<PAGE>
                       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 April 30, 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 0-21695

                         Manchester Equipment Co., Inc.
             (Exact name of registrant as specified in its charter)

         New York                                     11-2312854
(State or other jurisdiction of                   (I.R.S. Employer
Incorporation or organization)                   Identification Number)

                                 160 Oser Avenue

                            Hauppauge, New York 11788
              (Address of registrant's principal executive offices)

                                 (631) 435-1199
              (Registrant's telephone number, including area code)


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.

                                 [X] Yes [ ] No

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

         There  were  8,166,465  outstanding  shares of COMMON  STOCK at May 15,
2000.

<PAGE>

                 MANCHESTER EQUIPMENT CO., INC. AND SUBSIDIARIES

                                Table of Contents

PART I.       FINANCIAL INFORMATION                                        Page
-------       ---------------------                                        ----

Item 1.       Condensed Consolidated Balance Sheets

                April 30, 2000 (unaudited) and July 31, 1999                 3

              Condensed Consolidated Statements of Income
                 Three months and nine months  ended
                   April 30, 2000 and 1999 (unaudited)                       4

              Condensed Consolidated Statements of Cash Flows
                 Nine months ended April 30, 2000 and 1999 (unaudited)       5

              Notes to Condensed Consolidated Financial Statements           6

Item 2.       Management's Discussion and Analysis of Financial
                 Condition and Results  of Operations                        8


PART II.      OTHER INFORMATION

Item 2.       Changes in Securities and Use of Proceeds`                    14
Item 6.       Exhibits and Reports                                          14




















<PAGE>


Part I - FINANCIAL INFORMATION

ITEM 1.  Financial Statements

                 Manchester Equipment Co., Inc. and Subsidiaries

                      Condensed Consolidated Balance Sheets

                       (in thousands except share and per share amounts)

                                                April 30, 2000    July 31, 1999
                                                (Unaudited)
                                                 ------------       ----------
Assets:
  Cash and cash equivalents                         $14,667          $  5,749
  Accounts receivable, net                           47,444            34,747
  Inventory                                          14,834             8,245
  Deferred income taxes                                 538               538
  Prepaid expenses and other current assets             499               340
                                                       ----               ---
         Total current assets                        77,982            49,619

  Property and equipment, net                         6,385             6,248
  Goodwill, net                                       6,599             5,070
  Deferred income taxes                                 560               560
  Other assets                                          252               281
                                                       ----               ---

                                                    $91,778           $61,778
                                                    =======           =======

Liabilities:
  Current maturities under capital
   lease obligation                                 $     4           $    85
  Current maturities under notes payable                 25                 -
  Accounts payable and accrued expenses              46,539            20,824
  Deferred service revenue                              575               581
  Income taxes payable                                  898               668
                                                        ---               ---
         Total current liabilities                   48,041            22,158

  Deferred compensation payable                          34                34
                                                      -----                --

         Total liabilities                            48,075            22,192
                                                     -------            ------

Shareholders' equity:
  Preferred stock, $.01 par value;
   5,000,000 shares authorized, none issued               -                 -
  Common stock, $.01 par value; 25,000,000
   shares authorized, 8,191,465 and
   8,084,800 issued and outstanding                      82                81
  Additional paid-in capital                         19,489            18,799
  Deferred compensation                                 (18)              (38)
  Retained earnings                                  24,150            20,744
                                                    -------            ------

         Total shareholders' equity                  43,703            39,586
                                                     ------            ------

                                                    $91,778           $61,778
                                                    =======           =======

See notes to condensed consolidated financial statements.

                                        3

<PAGE>

                 Manchester Equipment Co., Inc. and Subsidiaries
                   Condensed Consolidated Statements of Income

                    (in thousands, except per share amounts)
                                    Unaudited

<TABLE>
<CAPTION>

                                     Three months ended April 30,    Nine months ended  April 30,
                                         2000         1999               2000          1999
                                         ----         ----               ----          ----
<S>                                     <C>          <C>               <C>          <C>     <C>
Revenue

       Products                          $80,424     $52,956           $212,788      $160,409
       Services                            1,443       1,834              5,286         5,269
                                           -----       -----             ------         -----
                                          81,867      54,790            218,074       165,678
                                          ------      ------            -------       -------
Cost of revenue

       Products                           69,367      45,053            184,345       138,501
       Services                            1,249       1,241              3,765         3,406
                                           -----       -----             ------         -----
                                          70,616      46,294            188,110       141,907
                                          ------      -------           -------       -------

       Gross profit                       11,251       8,496             29,964        23,771

Selling, general and

    administrative expenses                8,860       8,073             24,606        22,482
                                           -----       -----             ------        ------

       Income from operations              2,391         423              5,358         1,289

Interest expense                              (2)        ( 2)                (4)           (7)
Interest income                              211         116                482           336
                                             ---         ---                ---           ---

       Income before income taxes          2,600         537              5,836         1,618

Provision for income taxes                 1,105         240              2,430           680
                                           -----         ---             ------           ---

       Net income                         $1,495       $ 297             $3,406          $938
                                          ======       =====             ======          ====

Net income per share

   Basic                                   $0.18       $0.04             $0.42          $0.12
                                           =====       =====             =====          =====
   Diluted                                 $0.18       $0.04             $0.42          $0.12
                                           =====       =====             =====          =====

Weighted average shares outstanding
  Basic                                    8,155       8,097              8,090         8,097
                                           =====       =====              =====         =====
  Diluted                                  8,456       8,097              8,200         8,097
                                           =====       =====              =====         =====
</TABLE>

See notes to condensed consolidated financial statements.

                                        4

<PAGE>

                 Manchester Equipment Co., Inc. and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows

                                 (in thousands)

                               For the nine months

                                 ended April 30,

                                                          2000            1999
                                   (Unaudited)

                                                             ------------------
 Cash flows from operating activities:

        Net income                                        $3,406         $  938
  Adjustments to reconcile net income to
    net cash from operating activities:
        Depreciation and amortization                      1,491          1,325
         Allowance (recovery) for doubtful accounts         (141)           167
         Stock compensation expense                           20             73
  Change in assets and liabilities net of the effects of acquisition:

         Decrease (increase) in accounts receivable      (11,909)           341
         Decrease (increase) in inventory                 (6,086)         1,130
         Increase  in prepaid expenses and
             other current assets                           (139)           (65)
         Decrease in other assets                             90            261
         Increase in accounts payable and
          accrued expenses                                24,218          1,168
         Decrease in deferred service  revenue                (6)          (201)
         (Decrease) increase  in income taxes  payable       246           (225)
         Sale of investments                                   -          1,501
                                                          ------         ------

       Net cash provided by operating activities          11,190          6,413
                                                          ------          -----
Cash flows from investing activities:

         Capital expenditures                             (1,192)        (1,333)
         Payments for acquisitions, net of cash acquired    (240)          (871)
                                                            ----            ---

         Net cash used in investing activities            (1,432)        (2,204)
                                                          ------         ------

Cash flows from financing activities:

         Net repayments of borrowings                       (648)             -
         Payments on capital lease obligations               (81)           (74)
         Purchase and retirement of treasury stock          (518)             -
         Issuance of common stock                            409              -
         Payments on notes payable - other                    (2)             -
                                                              --            ---

              Net cash used in financing activities         (840)           (74)
                                                            ----            ---

Net increase in cash and cash equivalents                  8,918          4,135
     Cash and cash equivalents at beginning of period      5,749          7,816
                                                           -----          -----
Cash and cash equivalents at end of period               $14,667        $11,951
                                                          ======        =======
      See notes to condensed consolidated financial statements.

                                        5

<PAGE>

                 Manchester Equipment Co., Inc. and Subsidiaries
              Notes to Condensed Consolidated Financial Statements

   1.    Organization and Basis of Presentation

          Manchester Equipment Co., Inc. (the "Company") is a network integrator
     and  reseller of  computer  hardware,  software  and  networking  products,
     primarily  for  commercial  customers.  The  Company  offers its  customers
     single-source  solutions  customized to their information  systems needs by
     combining value-added services with hardware, software, networking products
     and peripherals from leading vendors.

          Sales of  hardware,  software  and  networking  products  comprise the
     majority of the Company's revenue.  The Company has entered into agreements
     with  certain  suppliers  and  manufacturers   which  provide  the  Company
     favorable  pricing and price protection in the event the vendor reduces its
     prices.

          In the opinion of the Company,  the accompanying  unaudited  condensed
     consolidated  financial  statements contain all adjustments  (consisting of
     only  normal  and  recurring  accruals)  necessary  to  present  fairly the
     financial  position  of the Company as of April 30, 2000 and the results of
     operations  for the three and nine months ended April 30, 2000 and 1999 and
     cash flows for the nine months ended April 30, 2000 and 1999.  Although the
     Company  believes  that the  disclosures  herein are  adequate  to make the
     information not misleading,  these financial  statements  should be read in
     conjunction  with the audited  consolidated  financial  statements  and the
     notes  thereto for the year ended July 31, 1999,  included in the Company's
     Annual  Report  on Form  10-K as filed  with the  Securities  and  Exchange
     Commission.

   2.    Net Income Per Share

     Basic net income per share has been  computed by dividing net income by the
weighted  average  number of common shares  outstanding.  Diluted net income per
share has been computed by dividing net income by the weighted average number of
common shares  outstanding,  plus the assumed exercise of dilutive stock options
and warrants,  less the number of treasury  shares  assumed to be purchased from
the proceeds of such  exercises  using the average market price of the Company's
common  stock  during  each  respective  period.   Stock  options  and  warrants
representing  250,000 and 1,099,600  shares for the three months ended April 30,
2000 and 1999,  respectively,  and  589,000  and  1,099,600  shares for the nine
months  ended  April 30,  2000 and 1999,  respectively,  are  excluded  from the
calculation   of  diluted  net  income  per  share  when  the  result  would  be
antidilutive.  The following table  reconciles the denominators of the basic and
diluted per share computations. For each period, the numerator is the net income
as reported.

<TABLE>
<CAPTION>

                                                         (shares in thousands)
                             Three months ended April 30,                    Nine months ended April 30,
                                2000               1999                      2000                       1999
                                ----               ----                      ----                       ----
                                   Per share              Per share                 Per share             Per share
                        Shares       amount      Shares    amount        Shares      amount         Shares amount
                        ------       ------      ------    ------        ------      ------         -------------
<S>                      <C>          <C>        <C>        <C>          <C>          <C>          <C>      <C>
         Basic           8,155        $0.18      8,097      $0.04        8,090        $0.42        8,097    $0.12
                                      =====                 =====                     =====                 =====

         Effect of
          dilutive

           options         301                       -                     110                         -
                           ---                      --                     ---                        --

         Diluted         8,456        $0.18      8,097      $0.04        8,200        $0.42        8,097    $0.12
                         =====        =====      =====      =====        =====        =====        =====    =====
</TABLE>

                                        6

<PAGE>

3. Acquisition of Texport Technology Group, Inc. and Learning  Technology Group,
   LLC.

          On  March  22,  2000,  the  Company  acquired  all of the  outstanding
     ownership  interests of Texport  Technology  Group,  Inc.  ("Texport")  and
     Learning  Technology  Group,  LLC ("LTG"),  affiliated  entities engaged in
     reselling  and  providing  of  microcomputer  services and  peripherals  to
     companies in the greater Rochester,  New York area. The acquisition,  which
     has been  accounted for as a purchase,  consisted of a cash payment of $0.4
     million plus potential future contingent payments. Contingent payment of up
     to  $750,000  will be payable on each of March 22, 2001 and 2002 based upon
     achieving  certain agreed upon increases in revenue and pretax earnings for
     each of the next two,  one-year periods from the date of closing.  The cash
     payment was made from the  Company's  cash  balances.  The  selling  owners
     received  employment  agreements  that also  provided  for the  issuance of
     10,000  shares  of  common  stock.  The  fair  value of the  common  stock,
     amounting to $61,250,  was recorded as deferred  compensation  and is being
     expensed  over  the  three-year  vesting  period.  In  connection  with the
     acquisition, the Company assumed approximately $648,000 of bank debt, which
     was subsequently repaid.

          Operating  results of Texport and LTG are  included  in the  condensed
     consolidated  statements  of  income  from  the  date of  acquisition.  The
     estimated  fair value of assets and  liabilities  acquired was $1.6 million
     and $2.2 million,  respectively. The excess of the aggregate purchase price
     over the estimated fair value of the net assets acquired was  approximately
     $995,000,  which is being amortized on a straight-line basis over 20 years.
     The  allocation  of the  purchase  price  to the fair  value of the  assets
     acquired  and  liabilities  assumed are  preliminary,  subject to the final
     determination  of the fair value of such  assets and  liabilities.  The pro
     forma  results of  operations  for Texport and LTG for the  quarters  ended
     April 30,  2000 and 1999 have not been  reflected  as they are deemed to be
     immaterial.

4.       Statement of Cash Flow Information

      Supplemental disclosure of cash flow information:

                           Nine months ended April 30,

                                                        2000              1999
                                                        ----              ----
                                                          (in thousands)
      Cash paid for income taxes                       $1,782             $636
                                                       ======             ====

      Supplemental schedule of non-cash investing activities

                           Nine months ended April 30,

                                                        2000            1999
                                                        ----            ----
                                                           (in thousands)
      Common stock issued in connection
       with acquisition                                  $861                -
                                                         ====               ==


                                        7

<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

           The  following  discussion  and analysis of financial  condition  and
      results of operations of the Company  should be read in  conjunction  with
      the condensed consolidated financial statements and notes thereto included
      elsewhere  in this  Quarterly  Report on Form 10-Q and with the  Company's
      Annual Report on Form 10-K. This discussion and analysis  contains certain
      forward-looking  statements  within the meaning of the  Securities  Act of
      1933, as amended,  and Section 21E of the Securities Exchange Act of 1934,
      as  amended,  which  are not  historical  facts,  and  involve  risks  and
      uncertainties  that could cause actual results to differ  materially  from
      the results anticipated in those forward-looking  statements.  These risks
      and uncertainties  include, but are not limited to, those set forth below,
      those set forth in the  Company's  Annual Report on Form 10-K for the year
      ended July 31, 1999,  and those set forth in the  Company's  other filings
      from time to time with the Securities and Exchange Commission.

      General

           The Company is an  integrator  and  reseller  of  computer  hardware,
      software and networking products,  primarily for commercial customers. The
      Company offers its customers  single-source  solutions customized to their
      information  systems  needs  by  integrating  its  analysis,   design  and
      implementation services with hardware,  software,  networking products and
      peripherals from leading vendors.  To date, most of the Company's  revenue
      has been  derived  from  product  sales.  The Company  generally  does not
      develop or sell software  products.  However,  certain  computer  hardware
      products  sold  by the  Company  are  loaded  with  pre-packaged  software
      products.

           As a result of intense price competition within the computer industry
      as  well  as  other  industry  conditions,  the  Company  has  experienced
      increasing  pressure on per unit prices as well as on its gross profit and
      operating  margins  with  respect  to the sale of  products.  Manchester's
      strategy  includes  increasing its focus on providing value added services
      with operating margins that are higher than those obtained with respect to
      the sale of products.  The Company has experienced an increase in selling,
      general and  administrative  expenses,  primarily in the form of increased
      personnel costs, in connection with the  implementation  of this strategy.
      The  Company's  future  performance  will depend in part on its ability to
      manage successfully a continuing shift in its operations towards services.

           The Company  directly  competes  with local,  regional  and  national
      systems  integrators,  value-added  resellers ("VARs") and distributors as
      well as with certain  computer  manufacturers  that market  through direct
      sales  forces  and/or the  Internet.  In the future,  the Company may face
      further  competition  from new  market  entrants  and  possible  alliances
      between  existing   competitors.   In  addition,   certain  suppliers  and
      manufacturers  may choose to market products directly to end users through
      a direct  sales force  and/or the  Internet  rather than or in addition to
      channel distribution. Some of the Company's competitors have, or may have,
      greater financial,  marketing and other resources, and may offer a broader
      range of products and services, than the Company. As a result, they may be
      able to respond more quickly to new or emerging technologies or changes in
      customer  requirements,  benefit from greater purchasing economies,  offer
      more aggressive  hardware and service pricing or devote greater  resources
      to the promotion of their products and services. There can be no assurance
      that the Company will be able to compete  successfully  in the future with
      these or other current or potential future competitors.

           The Company's business is dependent upon its relationships with major
      manufacturers in the computer industry. There can be no assurance that the
      pricing  and  related  terms  offered  by  major  manufacturers  will  not
      adversely  change in the future.  The failure to obtain an adequate supply
      of products,  the loss of a major  manufacturer,  the deterioration of the
      Company's   relationship  with  a  major  manufacturer  or  the  Company's
      inability  in  the  future  to  develop  new   relationships   with  other
      manufacturers  could  have a  material  adverse  effect  on the  Company's
      business, results of operations and financial condition.

                                        8

<PAGE>
           The Company's  largest two customers  accounted for  approximately 4%
      and 8%, and 7% and 3% of the  Company's  revenue for the nine months ended
      April 30, 2000 and 1999,  respectively,  substantially all of such revenue
      was  derived  from the sale of  hardware  products.  These  two  customers
      accounted  for 7% and 3%,  respectively,  of revenue  for the fiscal  year
      ended July 31,  1999.  There can be no  assurance  that the  Company  will
      continue to derive substantial revenue from these customers.

           The  Company's  profitability  has been  enhanced  by its  ability to
      obtain  volume  discounts  from  certain  manufacturers,  which  has  been
      dependent, in part, upon the Company's ability to sell large quantities of
      products to computer resellers,  including VARs. There can be no assurance
      that the Company  will be able to continue to sell  products to  resellers
      and thereby obtain the desired  discounts from the  manufacturers  or that
      the Company will be able to increase sales to end-users to offset the need
      to rely upon sales to resellers.

           The markets for the Company's products and services are characterized
      by rapidly changing technology and frequent  introductions of new hardware
      and software  products and services,  which render many existing  products
      noncompetitive, less profitable or obsolete. The Company believes that its
      inventory controls have contributed to its ability to respond  effectively
      to these  technological  changes.  As of April 30, 2000 and July 31, 1999,
      inventories  represented 16% and 13%,  respectively,  of total assets. For
      the nine  months  ended  April  30,  2000 and 1999,  annualized  inventory
      turnover was 22 and 28 times,  respectively.  Inventory turned 22 times in
      the fiscal  year  ended  July 31,  1999.  The  failure  of the  Company to
      anticipate  technology  trends or to  continue to  effectively  manage its
      inventory could have a material adverse effect on the Company's  business,
      results of operations and financial condition.

           The  Company  believes  its  controls  on  accounts  receivable  have
      contributed  to  its   profitability.   The  Company's  bad  debt  expense
      represented  less than 0.2% of total  revenues  in each of the nine  month
      periods ended April 30, 2000 and 1999.  For the fiscal year ended July 31,
      1999, bad debt expense represented 0.1% of total revenues.

           The Company's  quarterly  revenue and  operating  results have varied
      significantly  in the past and are  expected  to  continue to do so in the
      future.  Quarterly revenue and operating results generally  fluctuate as a
      result  of the  demand  for  the  Company's  products  and  services,  the
      introduction  of new  hardware  and software  technologies  with  improved
      features,  the  introduction  of new  services  by  the  Company  and  its
      competitors, changes in the level of the Company's operating expenses, the
      timely availability of product supply, competitive conditions and economic
      conditions. In particular,  the Company currently is increasing certain of
      its fixed  operating  expenses,  as part of its  strategy to increase  its
      focus on providing higher margin, value-added services.  Accordingly,  the
      Company  believes  that  period-to-period  comparisons  of  its  operating
      results should not be relied upon as an indication of future  performance.
      In addition,  the results of any  quarterly  period are not  indicative of
      results to be expected for a full fiscal year.

           As a result of rapid  changes  which are taking place in computer and
      networking technologies,  product life cycles are short. Accordingly,  the
      Company's product offerings change  constantly.  Prices of products change
      with  generally  higher  prices early in the life cycle of the product and
      lower  prices  near the end of the  product's  life  cycle.  Recently  the
      computer industry has experienced rapid declines in average selling prices
      of personal  computers.  In some  instances,  the Company has been able to
      offset these price declines with increases in units shipped.  There can be
      no assurance  that average  selling prices will not continue to decline or
      that the Company will be able to offset declines in average selling prices
      with increases in units shipped.

           Most  of  the  personal  computers  shipped  by the  Company  utilize
      operating  systems developed by Microsoft  Corporation.  The United States
      Department of Justice has brought an antitrust  action against  Microsoft,
      which could delay the introduction and distribution of Microsoft products.
      The potential  unavailability of Microsoft  products could have a material
      adverse  effect on the  Company's  business,  results  of  operations  and
      financial condition.

                                        9

<PAGE>
      Impact of Year 2000

            In prior years, the Company discussed the nature and progress of its
      plans to become Year 2000 ready.  In late 1999, the Company  completed its
      remediation  and testing of  systems.  As a result of those  planning  and
      implementation efforts, the Company experienced no significant disruptions
      in mission critical information technology and non-information  technology
      systems and believes those systems successfully responded to the Year 2000
      date change.  Expenses in connection with remediating its systems were not
      significant.  The Company is not aware of any material problems  resulting
      from Year 2000 issues,  either with its  internal  systems or the products
      and services of third  parties.  The Company will  continue to monitor its
      mission  critical  computer  applications  and those of its  suppliers and
      vendors  throughout  the year 2000 to  ensure  that any  latent  Year 2000
      matters that may arise are addressed promptly.

      E-Commerce

         On February 16,  2000,  the Company  launched its enhanced  website and
      electronic commerce system. The new site, located at  www.e-manchester.com
      allows both  existing  customers,  corporate  shoppers  and others to find
      product specifications, compare products, check price and availability and
      place and track  orders  quickly  and  easily 24 hours a day seven  days a
      week. The Company has made,  and expects to continue to make,  significant
      investments and improvements in its e-commerce capabilities.  There can be
      no  assurance  that  the  Company  will be  successful  in  enhancing  and
      increasing its business through its expanded Internet presence.

         On June 25, 1999,  the Company  announced  the launch of a new consumer
      products  on-line  super store,  Marketplace4U.com  ("MP4U").  MP4U offers
      products  in   categories   such  as  consumer   electronics,   automotive
      accessories  and outdoor and  camping  equipment  from its main and outlet
      stores.  The main store offers top brand products at  competitive  prices;
      the outlet store  offers top name brand  factory  refurbished,  warranteed
      products at even greater savings. To date revenue from MP4U is immaterial.
      There can be no assurance that MP4U will generate  significant  revenue or
      that any of the Company's on-line stores will operate profitably.

                                       10

<PAGE>

           Results of Operations

           The  following   table  sets  forth,   for  the  periods   indicated,
      information derived from the Company's condensed  consolidated  statements
      of income expressed as a percentage of related revenue or total revenue.

<TABLE>
<CAPTION>

                              Percentage of Revenue

                                                     Three Months Ended         Nine Months Ended

                                                          April 30,                 April 30,

                                                    2000           1999           2000         1999
                                                    ----           -----          ----         ----
            <S>                                    <C>            <C>           <C>           <C>
            Product sales                           98.2%          96.7%         97.6%         96.8%
            Services                                 1.8            3.3           2.4           3.2
                                                     ---            ---           ---           ---
            Total revenue                          100.0          100.0         100.0         100.0
                                                   -----          -----         -----         -----

           Cost of product sales                    86.3           85.1          86.6          86.3
           Cost of  services                        86.6           67.7          71.2          64.6
                                                    ----           ----          ----          ----
                 Cost of revenue                    86.3           84.4          86.3          85.7
                                                    ----           ----          ----          ----

           Product gross profit                     13.7           14.9          13.4          13.7
           Services gross profit                    13.4           32.3          28.8          35.4
                                                    ----           ----          ----          ----
                Gross profit                        13.7           15.5          13.7          14.3
           Selling, general and
              administrative expenses               10.8           14.7          11.2          13.5
                                                    ----           ----          ----          ----
           Income from operations                    2.9            0.8           2.5           0.8
           Interest and other income, net            0.3            0.2           0.2           0.2
                                                     ---           ----           ---           ---
           Income before income taxes                3.2            1.0           2.7           1.0
           Provision for income taxes                1.4            0.4           1.1           0.4
                                                     ---            ---           ---           ---
           Net income                                1.8%           0.6%          1.6%          0.6%
                                                     ===            ===           ===           ===
</TABLE>

     Three Months Ended April 30, 2000  Compared to Three Months Ended April 30,
     1999

           Revenue.  The Company's revenue increased $27.1 million or 49.4% from
      $54.8  million for the three months ended April 30, 1999 to $81.9  million
      for the three months ended April 30, 2000.  Product  revenue  increased by
      $27.5 million  (51.9%) due primarily to increases in shipments of personal
      computers,  servers  and  displays,  as well as higher per unit prices for
      personal computers. Service revenue decreased $391,000 (21.3%) principally
      as a result of reduction in revenue from the Company's  temporary staffing
      business.

           Gross Profit.  Cost of revenue  includes the direct costs of products
      sold, freight and the personnel costs associated with providing  technical
      services,  offset in part by certain market  development funds provided by
      manufacturers.  All other operating costs are included in selling, general
      and administrative  expenses. Gross profit increased $2.8 million or 32.4%
      from $8.5  million for the third  quarter of fiscal 1999 to $11.3  million
      for the most recent fiscal quarter. Gross profit from the sale of products
      increased  by $3.2  million  while gross  profit from the sale of services
      decreased by $399,000.  The changes in gross profit  primarily result from
      the changes in revenue discussed above,  partially offset by lower margins
      on products sold due to the very competitive marketplace. The reduction in
      gross  profits  derived  from  services  relates  to the  above  mentioned
      reduction in revenue from the Company's temporary staffing business. As a

                                       11

<PAGE>
     percentage of revenue, gross profit decreased to 13.7% in the third quarter
     of fiscal 2000 as compared to 15.5% in fiscal 1999.  Competitive pressures,
     changes in types of  products or  services  sold and  product  availability
     result in fluctuations in gross profit.

          Selling,  General and Administrative  Expenses.  Selling,  general and
     administrative expenses increased $787,000 or 9.7% from $8.1 million in the
     third quarter of fiscal 1999 to $8.9 million in the third quarter of fiscal
     2000. This increase is principally a result of higher officers' salaries as
     well as higher commissions partially offset by lower bad debts expense.

              Interest  Income.  Interest income  increased from $116,000 in the
      third  quarter  of 1999 to  $211,000  in the third  quarter of 2000 due to
      higher cash balances  available for investment as well as higher  interest
      rates received on investments.

              Provision  for  Income  Taxes.   The  effective  income  tax  rate
      decreased  to 42.5% in the  current  period  compared  to 44.7% of pre-tax
      income in the prior year period  principally  as a result of the impact of
      certain non deductible expenses, as a percentage of pre-tax income.

     Nine Months  Ended April 30, 2000  Compared to Nine Months  Ended April 30,
     1999

              Revenue. The Company's revenue increased by $52.4 million or 31.6%
      from $165.7  million  for the nine  months  ended April 30, 1999 to $218.1
      million for the nine months ended April 30, 2000. Revenue from the sale of
      products  increased by $52.4  million  (32.7%)  while revenue from service
      offerings  increased  by $17,000  (0.3%).  The  increases  in revenue were
      largely  attributable  to  growth  in  shipments  of  personal  computers,
      servers, displays and peripherals as well as higher average selling prices
      for personal computers.

          Gross Profit.  Gross profit increased by $6.2 million (26.1%) to $30.0
     million for the first nine months of fiscal 2000 from $23.8  million in the
     comparable  period a year ago. Gross profit from product sales increased by
     29.8% ($6.5  million) from $21.9 million in the first nine months of fiscal
     1999 to $28.4  million  in the  most  recent  nine  month  period.  Service
     offerings  generated  $1.5 million of gross profit in the first nine months
     of fiscal  2000 as  compared to $1.9  million  generated  in the first nine
     months of fiscal  1999,  and 1999.  The growth in gross  profit  dollars is
     principally due to the increase in revenue  discussed  above.  Gross margin
     percentages on product sales declined in the recent period due to generally
     lower vendor incentives and the highly competitive marketplace for computer
     products.  Margins on service  offerings  declined due to lower revenue for
     the most recent quarter from the Company's temporary staffing business.

          Selling,  General and  Administrative  Expenses.  Selling  general and
     administrative  expenses  increased  by $2.1  million  or 9.4%  from  $22.5
     million for the first nine  months of fiscal 1999 to $24.6  million for the
     first nine months of fiscal 2000. The increase is principally due to higher
     salaries, commissions,  depreciation and amortization and consulting costs,
     as well as higher advertising costs primarily relating to the Company's new
     retail consumer  on-line store,  MP4U,  partially offset by lower insurance
     and bad debts expenses.

          Interest Income. Interest income increased due to higher cash balances
     available for investment as well as higher interest rates.

          Provision for Income Taxes.  The effective  income tax rate  decreased
     slightly  from 42.0% for the first nine  months of fiscal  1999 to 41.6% in
     the most recent fiscal period.

                                       12

<PAGE>
      Liquidity and Capital Resources

           The  Company's  primary  sources of  financing  have been  internally
      generated  working  capital  from  operations  and a line of  credit  from
      financial institutions.

           For the nine months ended April 30, 2000,  cash provided by operating
      activities  was $11.1  million  consisting  primarily  of net  income  and
      depreciation  and  amortization,  and an increase in accounts  payable and
      accrued expenses, partially offset by increases in accounts receivable and
      inventory.  The Company's  accounts  receivable  and accounts  payable and
      accrued  expenses  balances as well as its  investment  in  inventory  can
      fluctuate  significantly from one period to the next due to the receipt of
      large  customer  orders or payments or variations in product  availability
      and vendor  shipping  patterns  at any  particular  date.  Generally,  the
      Company's experience is that increases in accounts  receivable,  inventory
      and accounts  payable and accrued  expenses  will  coincide with growth in
      revenue and  increased  operating  levels.  In  addition,  during the nine
      months  ended April 30, 2000 the Company used  approximately  $1.2 million
      for capital  expenditures,  $518,000 to  repurchase  and retire its common
      stock, and $729,000 to repay debt (primarily related to the acquisition of
      Texport and LTG).  The  Company  received  $409,000  in proceeds  from the
      exercise of options to purchase its common stock during February and March
      of 2000. The contingent  purchase  payment due to the former owners of the
      Company's  Coastal  subsidiary  was paid  through the  issuance of 105,786
      shares of the Company's common stock on March 15, 2000.

           The   Company  has   available  a  line  of  credit  with   financial
      institutions  in the  aggregate  amount of $15  million.  No amounts  were
      outstanding under this line as of April 30, 2000.

           The  Company  believes  that its  current  balances  in cash and cash
      equivalents,  expected cash flows from operations and available borrowings
      under the line of credit  will be adequate  to support  current  operating
      levels for the foreseeable future,  specifically  through at least the end
      of fiscal 2000.  The Company  currently  has no material  commitments  for
      capital  expenditures.  The Company has contingent  purchase payments that
      may be due to the former owner of its Texport and LTG subsidiaries.  These
      payments could amount to as much as $750,000 on each of March 22, 2001 and
      2002. These payments are expected to be paid from the Company's  available
      cash balances.  Future capital  requirements  of the Company include those
      for the growth of working  capital items such as accounts  receivable  and
      inventory and the purchase of equipment and expansion of  facilities,  the
      possible opening of new offices, potential acquisitions,  and expansion of
      the Company's e-commerce capabilities.

                                       13

<PAGE>

 PART II - OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds

(c) On January 2, 1998, the Company  acquired all of the  outstanding  shares of
Coastal  Office  Products,   Inc.  ("Coastal"),   a  reseller  and  provider  of
microcomputer  services and  peripherals to companies in the greater  Baltimore,
Maryland area. The acquisition had an aggregate  purchase price of $4.8 million,
consisting of a cash payment of $3.1 million plus performance  based payments of
$871,000  (paid in cash on March 15, 1999) and $800,000 (to be paid on March 15,
2000, in cash or, under certain  circumstances,  shares of the Company's  common
stock,  as determined by the Company).  On March 15, 2000, the Company issued an
aggregate of 105,786  shares of its common stock to the former  shareholders  of
Coastal (the "Former Coastal  Shareholders").  No underwriter or placement agent
was  involved  with this  transaction,  nor the  Company  engage in any  general
solicitation in connection therewith. The issuance of the shares was exempt from
the registration  requirements under the Securities Act of 1933, as amended (the
"Securities  Act"),  pursuant to Section 4(2) of the Securities Act. Pursuant to
its agreement with the Former Coastal  Shareholders,  the Company is required to
register the shares by September 15, 2000.

            The  following  table  sets  forth the name of each  Former  Coastal
Shareholder  and the  number  of  shares  of  common  stock  issued to each such
Shareholder by the Company:

                                             Shares Issued by

Name                                             the Company
-------------------------------------------------------------
Bruce Clasing.........................................52,893
Harold Clasing........................................52,893



Item 6.   Exhibits and Reports

(a)    Exhibits

       --------

       Exhibit No.           Description

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

            27               Financial Data Schedule

(b)    Reports on Form 8-K
       --------------------

      None

                                       14

<PAGE>

                         MANCHESTER EQUIPMENT CO., INC.

                                   Signatures

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

                                           MANCHESTER EQUIPMENT CO., INC.
                                           ------------------------------
                                           (Registrant)


DATE:   June 9, 2000                      ss/    Barry Steinberg
                                           ----------------------
                                           Barry Steinberg

                                           President and Chief Executive Officer

DATE:   June 9, 2000                       ss/ Joseph Looney

                                           -----------------
                                           Joseph Looney
                                           Vice President of Finance and
                                           Chief Financial Officer

                                       15