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

                                    FORM 10-Q

/ X /       QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
            EXCHANGE ACT OF 1934 (FEE REQUIRED)

                For the quarterly period ended: JANUARY 31, 1997

/   /       TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934 (NO FEE REQUIRED)


                         COMMISSION FILE NUMBER: 0-20688
                         -------------------------------

                          GLASGAL COMMUNICATIONS, INC.
                          ----------------------------
             (Exact name of Registrant as specified in its charter)

              Delaware                                        94-2914253
-------------------------------                             -------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)


23 Madison Road, Fairfield, NJ                                   07004
------------------------------                               ------------------
(Address of principal executive                               (Zip Code)
offices)

                                 (201) 808-4000
                                 --------------
               Registrant's telephone number, including area code


Check whether the Registrant  (1) has filed all reports  required to be filed by
Section 12 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the Registrant was required to file such
reports) and (2) has been subjected to such filing  requirements for the past 90
days. Yes /X/ No / /.

The number of shares of  Registrant's  Common Stock  outstanding  on January 31,
1997 was 21,772,559.


<PAGE>

                          GLASGAL COMMUNICATIONS, INC.
                                    FORM 10-Q
                       NINE MONTHS ENDED JANUARY 31, 1997


                                      INDEX

PART I:  FINANCIAL INFORMATION

                                                                           PAGE
         Item 1:     Consolidated Financial Statements

                     Balance Sheets at January 31, 1997 and
                     April 30, 1996                                          3

                     Statements of Operations for the three months ended
                     January 31, 1997 and 1996                               4

                     Statements of Operations for the nine months ended
                     January 31, 1997 and 1996                               5

                     Statements of Cash Flows for the nine months ended
                     January 31, 1997 and 1996                               6

                     Notes to Unaudited Consolidated Financial Statements    7

         Item 2:     Management's Discussion and Analysis of Financial
                     Condition and Results of Operations                    11


PART II: OTHER INFORMATION                                                  13

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

         Item 6:     Exhibits and Reports of Form 8-K

                                       2

<PAGE>

                          GLASGAL COMMUNICATIONS, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                         April 30,                  January 31,
                                                                           1996                        1997
                                                                           ----                        ----
ASSETS
----------------------------------------------
CURRENT ASSETS:
<S>                                                                     <C>                         <C>        
   Cash                                                                 $  2,219,564                $   556,028
   Accounts receivable, net                                               15,571,675                 16,760,891
   Inventory                                                               6,039,863                  5,580,788
   Prepaid expenses and other                                              1,092,751                  1,477,198
                                                                        ------------                -----------

               Total current assets                                       24,923,853                 24,374,905

PROPERTY AND EQUIPMENT, NET                                                7,006,862                  7,379,334

OTHER ASSETS                                                               3,003,267                  2,942,669
                                                                        ------------                -----------

               Total assets                                             $ 34,933,982                $34,696,908
                                                                        ============                ===========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES:
   Short-term borrowings                                                $ 11,232,130                $ 6,912,192
   Current portion of long-term
      obligations                                                          2,685,328                    637,999
   Accounts payable                                                       13,617,917                 13,644,748
   Accrued liabilities                                                     7,611,488                  7,282,700
                                                                        ------------                -----------

               Total current liabilities                                  35,146,863                 28,477,639
                                                                        ------------                -----------

LONG-TERM OBLIGATIONS                                                      3,595,247                  4,582,868
                                                                        ------------                -----------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY (DEFICIT):
    Common Stock                                                              20,261                     20,752
    Preferred Stock                                                               --                        150
   Additional paid-in capital                                             11,978,404                  9,844,141
   Accumulated deficit                                                   (15,559,326)                (7,904,544)
   Cumulative translation adjustment                                        (247,467)                  (324,098)
                                                                        -------------               ------------
      Total shareholders' equity (deficit)                                (3,808,128)                 1,636,401
                                                                        -------------               -----------

      Total liabilities and shareholders' equity (deficit)              $ 34,933,982            $    34,696,908
                                                                        ============            ===============
</TABLE>


      The accompanying notes to unaudited consolidated financial statements
                  are an integral part of these balance sheets.

                                        3
<PAGE>

                          GLASGAL COMMUNICATIONS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     FOR THE THREE MONTHS ENDED JANUARY 31,
                                   (UNAUDITED)


                                                  1996                  1997
                                                  ----                  ----

                                             $26,097,418     $     21,354,627
SALES

   Operating Costs:
     Cost of Sales                            17,732,477           15,329,131
     Selling, general and administrative      10,239,545            8,041,595
                                             -----------     ----------------

TOTAL OPERATING EXPENSES                      27,972,022           23,370,726
                                             -----------     ----------------


OPERATING INCOME(LOSS)                        (1,874,604)          (2,016,099)

INTEREST EXPENSE, NET                            419,330              267,050
                                             -----------     ----------------

INCOME(LOSS) BEFORE TAXES                     (2,293,934)          (2,283,149)

INCOME TAXES                                       2,014              (12,455)
                                             -----------     -----------------

NET LOSS                                     $(2,295,948)    $     (2,270,694)
                                             ============    =================


NET INCOME(LOSS) PER COMMON SHARE            $      (.12)    $           (.11)
                                             =============   =================

AVERAGE OUTSTANDING COMMON

  AND EQUIVALENT SHARES                       19,853,872           21,031,012
                                             -----------      ---------------


      The accompanying notes to unaudited consolidated financial statements
                    are an integral part of these statements.

                                       4
<PAGE>

                          GLASGAL COMMUNICATIONS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      FOR THE NINE MONTHS ENDED JANUARY 31,
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                 1996                       1997
                                                                 ----                       ----


<S>                                                          <C>                        <C>        
                                                             $89,055,451                $73,965,113
SALES

   Operating Costs:
     Cost of Sales                                            58,182,876                 49,858,135
     Selling, general and administrative                      30,186,873                 23,073,497
     Acquisition Costs                                                --                    497,000
                                                             -----------                -----------

TOTAL OPERATING EXPENSES                                      88,369,749                 73,428,632
                                                             -----------                -----------

OPERATING INCOME                                                 685,702                    536,481

INTEREST EXPENSE, NET                                          1,562,357                  1,067,211
                                                             -----------                -----------

INCOME(LOSS)  BEFORE TAXES                                      (876,655)                  (530,730)

INCOME TAXES                                                      65,990                    313,687
                                                             -----------                -----------

LOSS BEFORE EXTRAORDINARY ITEM                                  (942,645)                  (844,417)

EXTRAORDINARY ITEM                                               223,066                         --
                                                             -----------                -----------

NET LOSS                                                     $(1,165,711)               $  (844,417)
                                                             ============               ============

INCOME(LOSS)  PER SHARE

   Income(Loss) before extraordinary item                    $      (.06)               $     (.04)

   Extraordinary item                                               (.01)
                                                                                                --

NET INCOME(LOSS) PER COMMON SHARE                            $     (. 07)               $     (.04)
                                                             =============              -----------


WEIGHTED AVERAGE OUTSTANDING COMMON
  AND EQUIVALENT SHARES                                       17,187,725                 20,738,233
                                                              ----------                -----------
</TABLE>


      The accompanying notes to unaudited consolidated financial statements
                    are an integral part of these statements.

                                       5
<PAGE>

                          GLASGAL COMMUNICATIONS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  FOR THE NINE MONTH PERIODS ENDED JANUARY 31,
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                       1996                  1997
                                                                       ----                  ----

      CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                <C>                    <C>         
         Net Loss                                                  $(1,165,711)           $  (844,417)
         Adjustments  to  reconcile  net  loss to net
          cash  used  in  operating activities:
         Depreciation and amortization                               1,250,041              1,332,587
         Provision for doubtful accounts                               374,726                355,439
      Changes in operating assets and liabilities:
         (Increase) decrease in accounts receivable                 (2,972,439)            (1,544,655)
         (Increase) decrease in inventory                             (983,923)               459,075
         (Increase) decrease in prepaid expenses and
         other assets
                                                                      (508,753)              (491,444)
          Increase (decrease) in accounts payable,
           accrued and other liabilities                               551,491               (274,200)
                                                                   -----------              ----------

      Net cash provided by (used in) operating activities           (3,454,568)             (1,007,615)
                                                                   -----------             ------------


      CASH FLOWS FROM INVESTING ACTIVITIES:
        Purchases of property and equipment                         (2,254,409)             (1,537,464)
                                                                   -----------             -----------
        Net cash provided by (used in) investing
        activities                                                  (2,254,409)             (1,537,464)
                                                                   -----------            ------------

      CASH FLOWS FROM FINANCING ACTIVITIES:
         Increase (decrease) in short-term borrowings, net
                                                                    (2,465,036)             (4,319,938)
         Increase in (payments of) indebtedness                        898,289               (1,059,708)
         Proceeds from stock/warrant issuances                       7,204,313               6,924,833
         Distribution to stockholders                                       --               (587,013)
                                                                   -------------          --------------

           Net cash provided by financing activities                 5,637,566                 958,174
                                                                   -------------          --------------
           Net effect of translation on cash                          (164,950)                (76,631)
                                                                   ------------           --------------
           Net increase (decrease) in cash                            (236,361)             (1,663,536)
      CASH AT BEGINNING OF PERIOD                                      265,540               2,219,564
                                                                   ------------           -------------
      CASH AT END OF PERIOD                                        $    29,179            $    556,028
                                                                   ============           ============

      SUPPLEMENTAL DISCLOSURES OF CASH
        FLOW INFORMATION:

        Interest paid                                              $ 1,171,144            $    977,719
        Income taxes paid                                          $    17,202                     984
</TABLE>

                                       6
<PAGE>

                          GLASGAL COMMUNICATIONS, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


(1) Business

         Glasgal Communications, Inc. ("Glasgal") and its subsidiaries Signatel,
Ltd.  ("Signatel"),  HH  Communications,  Inc.  ("HH") (see Note 3), and Datatec
Industries,  Inc. ("Datatec") (see Note 3) provide a full range of services from
designing customer  networking  systems,  deploying and installing such systems,
supporting such systems and  requisitioning  the hardware and operating software
used in such systems.  Glasgal's 80% owned subsidiary,  Computer-Aided  Software
Integration,  Inc.  ("CASI")  develops and markets a suite of software  products
known as the  "Integrators'  Workbench  Product  Series",  which  automates  the
configuration and integration processes.

(2) Basis of Presentation

         The consolidated  financial statements include the accounts of Glasgal,
Signatel,  HH, Datatec and CASI (the "Company").  All intercompany  accounts and
transactions have been eliminated.

         The accompanying  unaudited consolidated financial statements have been
prepared in conformity with generally accepted accounting  principles consistent
with those  applied  in, and should be read in  conjunction  with,  the  audited
financial  statements for the year ended April 30, 1996.  The interim  financial
information is unaudited,  but reflects all normal  recurring  adjustments  that
are, in the opinion of management, necessary for a fair statement of results for
the interim periods  presented.  The results for the three and nine months ended
January 31, 1997 are not necessarily indicative of results expected for the full
fiscal year.

         Through October 31, 1996,  Datatec filed its Federal income tax as an S
Corporation.  As a result,  Datatec's taxable income was includable  directly in
the Federal income tax return of the  shareholders and no provision was made for
Federal  income  taxes.  Provision  was made for those  states in which  Datatec
operates  which do not  recognize  such an election or in which  Datatec has not
made such  election.  Effective  October  31,  1996,  Datatec  terminated  its S
Corporation  status and became subject to Federal  income taxes.  In conjunction
with the conversion  from an S Corporation to a C Corporation,  the  accumulated
deficit of Datatec  was  reclassified  from  accumulated  deficit to  additional
paid-in capital.

                                       7

<PAGE>

(3)  Acquisitions

HH COMMUNICATIONS, INC.

         On July 31, 1996, the Company acquired all of the outstanding shares of
HH  Communications,  Inc. in exchange  for  1,500,000  shares of common stock of
Glasgal Communications, Inc. The transaction has been accounted for as a pooling
of interests. Presented below are the individual company and combined annual net
sales and net income.
<TABLE>
<CAPTION>

                                                                     GLASGAL                HH              COMBINED
                                                                 ---------------       -----------       ----------------
           For the year ended December 31,1993
           ----------------------------------------------
<S>                                                              <C>                   <C>               <C>          
           Net Sales                                             $  36,391,174         $  897,295        $  37,288,469
           Net Income                                                 (147,333)            43,863             (103,470)
           For the four months ended April 30, 1994
           ----------------------------------------------
           Net Sales                                                11,154,560            519,554           11,674,114
           Net Income                                               (2,145,578)           156,206           (1,989,372)
           For the year ended April 30,1995
           ----------------------------------------------
           Net Sales                                                35,161,298          3,095,316           38,256,614
           Net Income                                               (1,642,789)           (92,519)          (1,735,308)
           For the year ended April 30, 1996
           ----------------------------------------------
           Net Sales                                                41,780,821          6,307,776           48,088,597
           Net Income                                               (1,180,157)         (288,587)           (1,468,744)
</TABLE>


         The combined  results are not  necessarily  indicative of what actually
would  have  occurred  if the  acquisition  had been in effect  for all  periods
presented.  In  addition,  they are not  intended to be a  projection  of future
results and do not reflect any  synergy's  that might be achieved  from combined
operations.

DATATEC INDUSTRIES, INC.

         On October 31,  1996,  the Company  acquired  98.5% of the  outstanding
shares of Datatec  Industries,  Inc. in exchange for 4,000,000  shares of common
stock of Glasgal Communications,  Inc. The transaction has been accounted for as
a pooling of interests.  Presented below are the individual company and combined
annual net sales and net income.

                                       8
<PAGE>

<TABLE>
<CAPTION>



                                                                        GLASGAL              DATATEC                COMBINED
                                                                    --------------        --------------         --------------
           For the year ended December 31,1993
           ----------------------------------------------
<S>                                                                 <C>                    <C>                   <C>          
           Net Sales                                                $  37,288,469          $ 46,372,821          $  83,661,290
           Net Income                                                    (103,470)            6,449,991              6,346,521
           For the four months ended April 30, 1994
           ----------------------------------------------
           Net Sales                                                   11,674,114            14,080,866             25,754,980
           Net Income                                                  (1,989,372)           (1,638,350)            (3,627,722)
           For the year ended April 30,1995
           ----------------------------------------------
           Net Sales                                                   38,256,614            64,848,900            103,105,514
           Net Income                                                  (1,735,308)             (656,667)            (2,391,975)
           For the year ended April 30, 1996
           ----------------------------------------------
           Net Sales                                                   48,088,597            68,800,265            116,888,862
           Net Income                                                  (1,468,744)          (11,949,725)           (13,418,469)
</TABLE>


         Included in the amounts  above for Datatec are net sales and net income
of $12,224,845  and $227,344 for the year ended April 30, 1995, and  $14,684,948
and  ($3,858,647)  for the year ended April 30,  1996,  that relate to a Datatec
subsidiary that was sold in September 1996.

         The combined  results are not  necessarily  indicative of what actually
would  have  occurred  if the  acquisition  had been in effect  for all  periods
presented.  In  addition,  they are not  intended to be a  projection  of future
results and do not reflect any  synergy's  that might be achieved  from combined
operations.

(4)  Debt

         In January 1997,  and pursuant to a prior  agreement  between  Glasgal,
Datatec,  Datatec's lender and an affiliated company of the majority shareholder
of  Datatec,  prior to the  acquisition  of Datatec by Glasgal,  the  affiliated
company loaned the Company approximately $1,660,000.  The loan bears interest at
12.5% per annum with interest payable monthly. The principal balance of the loan
is due in January 1999.

         In February 1997, the Company entered into two  convertible  loans each
for $1  million.  The  loans are  convertible  into  common  stock at 80% of the
average  closing bid price per share of common  stock for the five  trading days
immediately  preceding  the  conversion  date.  The loans bear  interest at 10%.
Interest is due at the time of conversion. If not previously converted the loans
mature in February 1999.

                                        9

<PAGE>

         In March  1997,  the  Company  entered  into a senior  credit  facility
consisting of a $15 million revolving line of credit and a $2 million term loan.
The  available  borrowings  under the  revolving  credit  facility  are based on
eligible accounts  receivable and inventory,  as defined.  The revolving line of
credit bears interest at prime plus  three-quarters  of one percent (3/4%).  The
term loan bears interest at prime plus on and one-half percent (1 1/2%). The new
$15 million  revolving line of credit  replaced two existing  revolving lines of
credit  which  allowed for maximum  combined  borrowings  of  approximately  $11
million.

(5)  Preferred Stock

         On  September  30, 1996,  October 29, 1996 and  November 15, 1996,  the
Company  issued 250,000  shares,  25,000 shares and 75,000 shares of convertible
preferred  stock,  respectively.  The net  proceeds  from these  issuances  were
$6,590,000.  The preferred stock is convertible  into common stock at the lesser
of (i) the  average  closing  bid price of a share of common  stock for the five
trading days prior to the issuance of the preferred  stock or (ii) an average of
77% of the  average  closing  bid price  per share of common  stock for the five
trading days immediately  preceding the conversion date.  Dividends on preferred
stock accrue at 6% per annum.

         As of January  31,1997  150,000 shares of convertible  preferred  stock
remain outstanding. As a result of the conversion of preferred stock into common
stock,  1,048,246  shares of common  stock were issued  during the three  months
ended January 31, 1997.

                                       10
<PAGE>

                          GLASGAL COMMUNICATIONS, INC.
                         PART I - FINANCIAL INFORMATION

ITEM 2:     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS - FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 1997

         Net sales for the three and nine  months  ended  January  31, 1997 were
$21,355,000   and   $73,965,000,   respectively   compared  to  $26,097,000  and
$89,055,000,  respectively for the three and nine months ended January 31, 1996.
This  represents  a  decrease  of 18.2% and 16.9% for the three and nine  months
ended January 31, 1997, respectively.  This decrease in sales is attributable to
three factors,  the sale of the Company's French subsidiary in September 1996, a
decrease  in  sales  to  government   contractors   and  temporary  post  merger
disruptions. The Company recorded sales from its French subsidiary for the three
and  nine  months  ended  January  31,  1996  of  $3,055,000  and   $11,970,000,
respectively  compared to no sales for the three months  ended  January 31, 1997
and  $1,303,000  for the nine months  ended  January 31,  1997.  During the nine
months ended January 31, 1997 the Company significantly restricted the credit it
extended  to a  significant  customer  who  acted as a prime  contractor  to the
federal government. Although management believes these restrictions to have been
prudent,  they did  contribute  to a reduction  of sales to this  contractor  of
$4,637,000   for  the  nine  months  ended   January  31,  1997.   Although  not
quantifiable,  sales have been  negatively  impacted  during the  quarter as the
merged entity spent weeks training and refocusing its combined sales force.  The
Company  believes  such  efforts  will  significantly  contribute  to its future
success.

         Gross profits for the three and nine months ended January 31, 1997 were
$6,025,000 and $24,107,000, respectively, compared to $8,365,000 and $30,873,000
in the  three and nine  months  ended  January  31,  1996.  Gross  profits  as a
percentage of net sales were 28.2% and 32.6% for the three and nine months ended
January 31, 1997 compared to 32.1% and 34.7% for the three and nine months ended
January 31, 1996.  The Company  believes the decrease in gross margin during the
three  months  ended  January  31, 1997 is a function of product mix and several
sizable low margin deals. The Company does not believe this to be representative
of future gross margin percentages.

         Selling,  general and  administrative  expenses  for the three and nine
months  ended  January  31, 1997 were  $8,042,000  and  $23,570,000  compared to
$10,240,000  and  $30,187,000  for the three and nine months  ended  January 31,
1996.  Approximately  $1,250,000  and $3,700,000 of this reduction for the three
and nine months,  respectively,  is attributable to the French subsidiary, which
was sold in September 1996.

         Interest  expense for the three and nine months ended  January 31, 1997
was $267,000 and $1,067,000,  respectively,  compared to $419,000 and $1,562,000
for the three and nine  months  ended  January 31,  1996.  These  decreases  are
attributable to lower

                                       11
<PAGE>

average  borrowing under the Company's credit  facilities for the three and nine
months ended January 31, 1997.

         The  Company's net loss for the three and nine months ended January 31,
1997  was  $2,271,000  and  $844,000  respectively,  compared  to a net  loss of
$2,296,000 and $1,166,000 for the three and nine months ended January 31, 1996.

FINANCIAL POSITION

         In March 1997,  the Company  entered into a  $17,000,000  senior credit
facility to replace two of its existing  credit  facilities.  The senior  credit
facility  consists of a  $15,000,000  revolving  line of credit and a $2,000,000
term loan.  The senior credit  facility is supported by accounts  receivable and
inventory as well as other assets of the Company,  has a term of three years and
bears interest at prime plus three quarters of one  percent(3/4%) and prime plus
one and  one-half  percent  (1  1/2%)  on the  line of  credit  and  term  loan,
respectively.  Availability  under the  revolving  line of credit is  calculated
using a formula  of 85% of  eligible  accounts  receivable  and 50% of  eligible
inventory.  The 15,000,000  revolving  line of credit  represents an increase of
approximately  $4,000,000  over the  revolving  line of credit it replaces.  The
Company believes the increase will be sufficient to meet its projected growth.

         The Company's  shareholders  equity as of January 31, 1997 increased by
approximately  $5,445,000 to $1,636,000,  compared to a deficit of $3,808,000 as
of April 30, 1996.

         The Company's working capital improved from a deficiency of $10,223,000
at the  beginning of the year to a deficiency  of  $4,103,000  at the end of the
quarter under review.




                                       12
<PAGE>

                          GLASGAL COMMUNICATIONS, INC.
                                    FORM 10-Q
                           PART II - OTHER INFORMATION


ITEM 4:     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                        None


                                       13
<PAGE>

                          GLASGAL COMMUNICATIONS, INC.
                                    FORM 10-Q
                     PART II - OTHER INFORMATION - CONTINUED


ITEM 6:     EXHIBITS AND REPORTS ON FORM 8-K

            (a)         Exhibits

                        27  Financial Data Schedule

            (b)         Reports on Form 8-K

                            None


                                       14

<PAGE>

                                   SIGNATURES


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

                                            GLASGAL COMMUNICATIONS, INC.
                                                  REGISTRANT



Date: March 24, 1997                          By: /s/ James M. Caci
                                                  ----------------------
                                              James M. Caci
                                              Chief Financial Officer and Duly
                                              Authorized Officer

                                       15