10-Q

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 March 31, 2003 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 No. 0-147

HICKOK  INCORPORATED
_________________________________________________________________
(Exact name of Registrant as specified in its charter)

Ohio	34-0288470
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
10514 Dupont Avenue; Cleveland, Ohio	44108
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number including area code	(216) 541-8060

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 the filing requirements for the past 90 days.
Yes X No  __  

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).
Yes ___   No  X

As of May 14, 2003 764,884 Hickok Incorporated Class A Common Shares and 454,866 Class B Common Shares were outstanding.

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:

HICKOK INCORPORATED
CONSOLIDATED INCOME STATEMENTS
(Unaudited)

Three months ended
March 31, Six months ended
March 31,

	2003	2002	2003	2002
Net Sales
Product Sales	$2,430,534	$2,779,386	$4,522,878	$4,874,458
Service Sales	483,222	473,409	838,826	963,154
Total Net Sales	2,913,756	3,252,795	5,361,704	5,837,612
Costs and Expenses
Cost of Product Sold	1,289,301	1,292,589	2,611,101	2,519,736
Cost of Service Sold	276,575	262,445	491,082	562,974
Product Development	504,825	476,330	979,354	939,194
Operating Expenses	1,046,609	1,002,184	2,040,587	1,919,824
Interest Charges	747	1,921	1,710	4,149
Other Income	<18,581>	<10,955>	<33,922>	<20,996>
Total Costs and Expenses	3,099,476	3,024,524	6,089,912	5,924,881
Income <Loss> before Provision for Income Taxes	<185,720>	228,271	<728,208>	<87,269>
Income <Recovery of> Taxes	<63,000>	77,300	<248,000>	<29,700>
Net Income <Loss> before cumulative effect of change in accounting principle, net of tax	<122,720>	150,971	<480,208>	<57,569>
Cumulative effect of change in accounting for goodwill, net of tax of $536,000	-	-	1,038,542	-
Net Income <Loss>	$<122,720>	$150,971	$<1,518,750>	$<57,569>
Earnings per Common Share:
Net Income <Loss> before cumulative effect of change in accounting principle	$<.10>	$.12	$<.39>	$<.05>
Cumulative effect of change in accounting for goodwill	-	-	<.85>	-
Net Income <Loss>	$<.10>	$.12	$<1.24>	$<.05>
Earnings per Common Share Assuming Dilution:
Net Income <Loss> before cumulative effect of change in accounting principle	$<.10>	$.12	$<.39>	$<.05>
Cumulative effect of change in accounting for goodwill	-	-	<.85>	-
Net Income <Loss>	$<.10>	$.12	$<1.24>	$<.05>
Dividends per Common Share	$ - 0 -	$ - 0 -	$ - 0 -	$ - 0 -

See Notes to Consolidated Financial Statements

HICKOK INCORPORATED
CONSOLIDATED BALANCE SHEETS

		March 31, 2003 (Unaudited)	September 30, 2002 (Note)	March 31, 2002 (Unaudited)
Assets
Current Assets
Cash and Cash Equivalents		$2,682,676	$2,261,774	$2,009,276
Trade Accounts Receivable-Net		1,699,641	2,420,614	1,950,424
Inventories		3,453,809	3,589,543	3,872,712
Deferred Income Taxes		231,000	231,000	167,300
Prepaid Expenses		97,876	36,691	72,342
Refundable Income Taxes		-	253,000	-
Total Current Assets		8,165,002	8,792,622	8,072,054
Property, Plant and Equipment
Land		229,089	229,089	229,089
Buildings		1,486,969	1,486,969	1,487,337
Machinery and Equipment		2,687,894	2,634,766	3,077,932
		4,403,952	4,350,824	4,794,358
Less: Allowance for Depreciation		3,081,104	2,888,756	3,309,973
Total Property - Net		1,322,848	1,462,068	1,484,385
Other Assets
Goodwill - Net of Amortization		-	1,574,542	1,630,797
Deferred Income Taxes		1,255,924	472,100	831,000
Deposits		2,050	2,050	2,050
Total Other Assets		1,257,974	2,048,692	2,463,847
	Total Assets	$10,745,824	$12,303,382	$12,020,286

Note: Amounts derived from audited financial statements previously filed with the Securities and Exchange Commission

See Notes to Consolidated Financial Statements

	March 31, 2003 (Unaudited)	September 30, 2002 (Note)	March 31, 2002 (Unaudited)
Liabilities and Stockholders' Equity
Current Liabilities
Short-term Financing	$        -	$        -	$       -
Current Portion of Long-term Debt	-	11,334	30,496
Trade Accounts Payable	389,557	374,024	280,757
Accrued Payroll & Related Expenses	293,186	350,039	410,234
Accrued Expenses	159,540	91,416	89,652
Accrued Income Taxes	153,217	175,667	149,167
Accrued Taxes Other Than Income	38,302	70,130	131,183
Total Current Liabilities	1,033,802	1,072,610	1,091,489
Long-term Debt	-	-	-
Stockholders' Equity
Class A, $1.00 par value; authorized    3,750,000 shares; 764,884 shares    outstanding excluding 9,586 shares    in treasury	764,884	764,884	764,884
Class B, $1.00 par value; authorized    1,000,000 shares; 454,866 shares    outstanding excluding 20,667    shares in treasury	454,866	454,866	454,866
Contributed Capital	998,053	998,053	998,053
Retained Earnings	7,494,219	9,012,969	8,710,994
Total Stockholders' Equity	9,712,022	11,230,772	10,928,797
Total Liabilities and Stockholders' Equity	$10,745,824	$12,303,382	$12,020,286

HICKOK INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31,
(Unaudited)

	2003	2002
Cash Flows from Operating Activities:
Cash received from customers	$6,082,677	$7,078,118
Cash paid to suppliers and employees	<5,848,917>	<5,610,554>
Interest paid	<1,710>	<4,149>
Interest received	22,588	11,356
Income taxes <paid> refunded	230,726	24,188
Net Cash Provided by Operating Activities	485,364	1,498,959
Cash Flows from Investing Activities:
Capital expenditures	<53,128>	<47,934>
Purchase of short-term investments	<1,023,185>	-
Sale of short-term investments	1,023,185	-
Net Cash Used in Investing Activities	<53,128>	<47,934>
Cash Flows from Financing Activities:
Decrease in long-term financing	<11,334>	<18,413>
Net Cash Provided By <Used In> Financing Activities	<11,334>	<18,413>
Net increase in cash and cash equivalents	420,902	1,432,612
Cash and cash equivalents at beginning of year	2,261,774	576,664
Cash and cash equivalents at end of second quarter	$2,682,676	$2,009,276
See Notes to Consolidated Financial Statements
	2003	2002
Reconciliation of Net Loss to Net Cash Provided by Operating Activities:
Net Loss	$<1,518,750>	$<57,569>
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	192,348	252,245
Cumulative effect of change in accounting for goodwill	1,574,542	-
Deferred income taxes	<783,824>	-
Changes in assets and liabilities:
Decrease <Increase> in accounts receivable	720,973	1,240,506
Decrease <Increase> in inventories	135,734	121,635
Decrease <Increase> in prepaid expenses	<61,185>	<21,111>
Decrease <Increase> in refundable income taxes	253,000	44,538
Increase <Decrease> in trade accounts payable	15,533	<33,406>
Increase <Decrease> in accrued payroll and related expenses	<56,853>	46,401
Increase <Decrease> in accrued expenses and accrued taxes other than income	36,296	<44,230>
Increase <Decrease> in accrued income taxes	<22,450>	<50,050>
Total Adjustments	2,004,114	1,556,528
Net Cash Provided by Operating Activities	$485,364	$1,498,959

HICKOK INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MARCH 31, 2003

1. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month and six month periods ended March 31, 2003 are not necessarily indicative of the results that may be expected for the year ended September 30, 2003. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended September 30, 2002.

2. Inventories

Inventories are valued at the lower of cost or market and consist of the following:

	March 31, 2003	September 30, 2002	March 31, 2002
Components	$2,272,690	$2,300,401	$2,184,863
Work-in-Process	408,518	558,406	851,149
Finished Product	772,601	730,736	836,700
	$3,453,809	$3,589,543	$3,872,712

The above amounts are net of reserve for obsolete inventory in the amount of $210,824, $31,500 and $269,079 for the periods ended March 31. 2003, September 30, 2002 and March 31, 2002 respectively.

3. Capital Stock, Treasury Stock, Contributed Capital and Stock Options

Under the Company's Key Employees Stock Option Plans (collectively the "Employee Plans"), incentive stock options, in general, are exercisable for up to ten years, at an exercise price of not less than the market price on the date the option is granted. Non-qualified stock options may be granted at such exercise price and such other terms and conditions as the Compensation Committee of the Board of Directors may determine. No options may be granted at a price less than $2.925. Options for 133,900 Class A shares were outstanding at March 31, 2003 (151,400 shares at September 30, 2002 and 167,450 shares at March 31, 2002) at prices ranging from $3.125 to $17.25 per share. Options for 44,300 shares were granted during the three month period ended March 31, 2002 at a price of $3.55 per share, all options are exercisable.  Options for 17,000 shares and 16,050 shares were canceled during the three month periods ended March 31, 2003 and March 31, 2002 respectively, at prices ranging from $3.125 to $17.25 per share. Options for 500 shares were canceled during the three month period ended December  31, 2002 at prices ranging from $3.125 to $3.55 per share.

No other options were granted, exercised or canceled during the three or six month periods presented under the Employee Plans.

The Company's Outside Directors Stock Option Plans (collectively the "Directors Plans"), provide for the automatic grant of options to purchase up to 42,000 shares (less 30,000 options which were either canceled, expired or unissued) of Class A Common Stock to members of the Board of Directors who are not employees of the Company, at the fair market value on the date of grant. Options for 39,000 Class A shares were outstanding at March 31, 2003 (42,000 shares at September 30, 2002 and 42,000 shares at March 31, 2002) at prices ranging from $3.55 to $18.00 per share. Options for 6,000 shares were granted under the Directors Plans during each of the three month periods ended March 31, 2003 and March 31, 2002, at a price of $3.67 and $3.55 per share respectively. Options for 9,000 shares were canceled during the three month period ended March 31, 2003 at prices ranging from $3.55 to $18.00 per share. All outstanding options under the Directors Plans become fully exercisable on February 21, 2006.

In December 2002, the Financial Accounting Standards Board issued SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure. This statement is intended to encourage more companies to adopt the fair value method of accounting and amends the disclosure requirements of  SFAS No. 123, Accounting for Stock-Based Compensation to require more prominent disclosure in both annual and interim financial statements. For companies that follow the "disclosure only" provisions of  SFAS 123, the new rules are effective in the first calendar quarter of 2003.

The Company has adopted the disclosure only provisions of SFAS 123, which allows a company to continue to measure compensation costs for those plans using the intrinsic value-based method of accounting prescribed by APB Opinion No. 25, "Accounting for Stock Issued to Employees". The Company has elected to follow APB Opinion No. 25 and related interpretations in accounting for its stock options for both employees and non-employee Directors. Compensation costs for stock based awards is measured by the excess, if any, of the fair market value price at the grant date of the underlying stock over the amount the individual is required to pay for exercising the stock based award. Compensation cost for fixed based awards are measured at the grant date, and the Company uses the Black-Scholes option pricing model to determine the fair value estimates for disclosure purposes. The Black-Scholes option pricing model requires the use of subjective assumptions which can materially affect the fair value estimates. As a result, management believes that the Black-Scholes model may not necessarily provide a reliable single measure of the fair value of the Company's stock options. The following weighted-average assumptions were used in the option pricing model for the three and six month periods end March 31, 2003 and 2002 respectively: a risk free interest rate of 3.0% and 3.0%; an expected life of 6 and 6 years; an expected dividend yield of 0.0% and 0.0%; and a volatility factor of .60 and .89.

The adoption of this statement did not affect the Company's results of operations, financial position or liquidity. The Company's pro forma net income (loss) and earnings (loss) per share would have been as follows:

Three months ended
March 31,
Six months ended
March 31,

	2003	2002	2003	2002
Net Income <Loss>  as reported	$<122,720>	$150,971	$<1,518,750>	$<57,569>
Deduct: Total stock-based employee and Director compensation expense determined under fair value based method for all awards, net of related tax effects	2,348	119,844	4,644	121,758
Pro forma Net Income <Loss>	$<125,068>	$31,127	$<1,523,394>	$<179,327>
Basic and diluted Income <Loss> per share as reported	$<.10>	$.12	$<1.24>	$<.05>
Pro forma basic and diluted Income <Loss> per share	$<.10>	$.03	$<1.24>	$<.15>

Unissued shares of Class A common stock (627,766 shares) are reserved for the share-for-share conversion rights of the Class B common stock and stock options under the Employee Plans and the Directors Plans.

4. Recently Issued Accounting Pronouncements

In connection with the adoption of the Financial Accounting Standards Board SFAS No. 142, "Goodwill and Other Intangible Assets", the Company discontinued the amortization of goodwill as of October 1, 2002. In lieu of amortization, the new standard requires that goodwill be tested for impairment as of the date of adoption and at least annually thereafter. The initial impairment test indicated that the carrying values of our reporting units exceeded the corresponding fair values due to prior year losses. The fair values were determined by an asset approach. The implied fair value of goodwill in these reporting units was then determined through the allocation of the fair values to the underlying asset and liability classes. The October 1, 2002 carrying value of the goodwill in these reporting units exceeded its implied fair value by $1,574,542. The $1,038,542 represents an entire write-off of the Company's goodwill as of October 1, 2002, net of $536,000 of related tax benefits, and has been reported as the effect of a change in accounting principle in the accompanying financial statements. The goodwill in our September 30, 2002 financial statements, which included the $1,574,542 described above, was supported by the undiscounted estimated future cash flows of the related operations.

SFAS No. 142 does not provide for restatement of our results of operations for periods ending prior to October 1, 2002. Our results of operations for the three month and six month periods ended March 31, 2002 included amortization expense of $28,155 and $56,310 respectively, which affected the net income or loss by $18,555 and $37,110 respectively. Excluding the effect of goodwill amortization, our reported net income for the second quarter of fiscal 2002 would have been increased from $150,971 to $169,526 and our diluted net income per common share would have been increased from $.12 to $.14 per common share. The net loss for the six months ended March 31, 2002 excluding the effect of goodwill amortization would have been reduced from $57,569 to $20,459 and our diluted net loss per common share would have been reduced from $.05 to $.02 per common share. 

The Company has adopted the disclosure only provisions of SFAS 123 and 148 (see note 3).

5. Earnings per Common Share

Earnings per common share are based on the provisions of FAS Statement No. 128, "Earnings per Share." Accordingly, the adoption of this statement did not affect the Company's results of operations, financial position or liquidity. The effects of applying FAS No. 128 on earnings per share and required reconciliations are as follows:

Three Months Ended
March 31, Six Months Ended
March 31,

	2003	2002	2003	2002
Basic Income <Loss> per Share
Income <Loss> available to common stockholders	$<122,720>	$150,971	$<1,518,750>	$<57,569>
Shares denominator	1,219,750	1,219,750	1,219,750	1,219,750
Per share amount	$<.10>	$ .12	$<1.24>	$ <.05>
Effect of Dilutive Securities
Average shares outstanding	1,219,750	1,219,750	1,219,750	1,219,750
Stock options	-	-	-	-
	1,219,750	1,219,750	1,219,750	1,219,750
Diluted Income <Loss> per Share
Income <Loss> available to common stockholders	$<122,720>	$150,971	$<1,518,750>	$<57,569>
Per share amount	$<.10>	$ .12	$ <1.24>	$ <.05>

Options to purchase 172,900 and 209,450 shares of common stock during the second quarter of fiscal 2003 and the second quarter of fiscal 2002, respectively, at prices ranging from $3.125 to $18.00 per share were outstanding but were not included in the computation of diluted earnings per share because the option's effect was antidilutive or the exercise price was greater than the average market price of the common share.

During the six month period of fiscal 2003 and the six month period of fiscal 2002 options to purchase 172,900 and 209,450 shares of common stock, respectively, at prices ranging from $3.125 to $18.00 per share were outstanding but were not included in the computation of diluted earnings per share because the options's effect was antidilutive or the exercise price was greater than the average market price of the common shares.

6. Segment and Related Information

The Company has adopted SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, which changes the way the Company reports the information about its operating segments.

The Company's four business units have a common management team and infrastructure that offer different products and services. The business units have been aggregated into two reportable segments: 1.) indicators and gauges and 2.) automotive related diagnostic tools and equipment.

Indicators and Gauges
This segment consists of products manufactured and sold primarily to companies in the aircraft and locomotive industry. Within the aircraft market, the primary customers are those companies that manufacture business and pleasure aircraft. Within the locomotive market, indicators and gauges are sold to both original equipment manufacturers and to operators of railroad equipment.

Automotive Diagnostic Tools and Equipment
This segment consists primarily of products designed and manufactured to support the servicing of automotive electronic systems. These products are sold to OEM's and to the aftermarket using a variety of distribution methods. The acquisition of Waekon Industries in 1998 added significant new products and distribution sources for the aftermarket. Included in this segment are fastening control products used by large manufacturers to monitor and control pneumatic and electric tools that tighten threaded fasteners so as to provide high quality joint control in assembly plants.

Information by industry segment is set forth below:

Three Months Ended
March 31, Six Months Ended
March 31,

			2003	2002	2003	2002
Net Revenue
Indicators and Gauges			$307,153	$395,121	$601,053	$830,671
Automotive Diagnostic Tools and Equipment			2,606,603	2,857,674	4,760,651	5,006,941
			$2,913,756	$3,252,795	$5,361,704	$5,837,612
Income (Loss) before provision for Income Taxes
Indicators and Gauges			$<12,501>	$10,426	$<39,218>	$60,387
Automotive Diagnostic Tools and Equipment			227,609	612,989	93,674	622,338
General Corporate Expenses			<400,828>	<366,989>	<782,664>	<713,684>
Goodwill Amortization			-	<28,155>	-	<56,310>
			$<185,720>	$228,271	$<728,208>	$<87,269>
Asset Information
Indicators and Gauges					$761,829	$804,779
Automotive Diagnostic Tools and Equipment					4,310,951	4,965,989
Corporate					5,673,044	4,618,721
Goodwill					-	1,630,797
					$10,745,824	$12,020,286
Geographical Information
Included in the consolidated financial statements are the following amounts related to geographical locations:
Revenue:
	United States		$2,785,963	$3,082,735	$5,141,673	$5,566,492
		Canada	64,916	99,601	126,324	182,082
		Other foreign countries	62,877	70,459	93,707	89,038
			$2,913,756	$3,252,795	$5,361,704	$5,837,612

All export sales to Canada and other foreign countries are made in United States of America Dollars.

As discussed in Note. 4, the amortization of goodwill was discontinued at the beginning of fiscal 2003 with the adoption of SFAS No. 142. Although goodwill amortization was included in income or loss before provision for income taxes as general corporate expenses for the three months and the six months ended March 31, 2002, we have adjusted the segment information for fiscal 2002 to present it on a consistent basis with the fiscal 2003 presentation. The fiscal 2002 goodwill amortization expense is now presented on a separate line. Asset information for reported segments was also adjusted and goodwill for fiscal 2002 is presented on a separate line.

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

Results of Operations, Second Quarter (January 1, 2003 through March 31, 2003)
Fiscal 2003 Compared to Second Quarter Fiscal 2002
-----------------------------------------------------------------------------------------

Reportable Segment Information

The Company has determined that it has two reportable segments: 1) indicators and gauges and 2) automotive related diagnostic tools and equipment. The indicators and gauges segment consists of products manufactured and sold primarily to companies in the aircraft and locomotive industry. Within the aircraft market, the primary customers are those companies that manufacture business and pleasure aircraft. Within the locomotive market, indicators and gauges are sold to both original equipment manufacturers and to operators of railroad equipment. Revenue in this segment was $307,153 and $395,121 for the second quarter of fiscal 2003 and fiscal 2002, respectively and $601,053 and $830,671 for the first six months of fiscal 2003 and fiscal 2002, respectively. The automotive diagnostic tools and equipment segment consists primarily of products designed and manufactured to support the servicing of automotive electronic systems. These products are sold both directly to the end user and to the aftermarket using a variety of distribution methods. Included in this segment are fastening control products used primarily by large manufacturers to monitor and control the nut running process in assembly plants. Revenue in this segment was $2,606,603 and $2,857,674 for the second quarter of fiscal 2003 and fiscal 2002, respectively, and $4,760,651 and $5,006,941 for the first six months of fiscal 2003 and fiscal 2002, respectively.

Results of Operations

Product sales for the quarter ended March 31, 2003 were $2,430,534 versus $2,779,386 for the quarter ended March 31, 2002. The 13% decrease in product sales during the current quarter was volume related due primarily to a decrease in shipment of automotive diagnostic products and indicator products. Sales of automotive diagnostic products and fastening system products declined by approximately $198,000 and $64,000 respectively, while indicator product sales declined in the current quarter by approximately $86,000. The current level of product sales is expected to increase modestly for the balance of the fiscal year.

Service sales for the quarter ended March 31, 2003 were $483,222 versus $473,409 for the quarter ended March 31, 2002. The increase was primarily volume related applicable to training related programs invoiced during the current fiscal quarter offset in part by reduced chargeable repair sales. The current level of service sales is expected to continue for the balance of the fiscal year.

Cost of product sold in the second quarter of fiscal 2003 was $1,289,301 (53.0% of product sales) as compared to $1,292,589 (46.5% of product sales) in the second quarter of fiscal 2002. The increase in the cost of product sold percentage was due primarily to a change in product mix.  The current cost of product sold percentage is anticipated to decrease moderately during the balance of the fiscal year due to product mix and improved plant utilization.

Cost of service sold in the second quarter of fiscal 2003 was $276,575 (57.2% of service sales) as compared to $262,445 (55.4% of service sales) in the second quarter of fiscal 2002. The percentage increase was due to an increase in lower margin sales of training services in the current fiscal quarter.  The current cost of services sold percentage is expected to continue for the balance of the fiscal year.

Product development expenses were $504,825 in the second quarter of fiscal 2003 (20.8% of product sales) as compared to $476,330 (17.1% of product sales) in the second quarter of fiscal 2002. The dollar increase was due primarily to increased labor cost but most of the percentage increase was due to the lower sales volume in the current fiscal quarter compared to the year ago period. The current level of product development expenses is expected to continue for the balance of the fiscal year.

Operating expenses were $1,046,609 (35.9% of total sales) in the second quarter of 2003 versus $1,002,184 (30.8% of total sales) for the same period a year ago. The percentage increase was due primarily to the reduction in the level of total sales for the current fiscal quarter. The dollar increase was due primarily to increased labor cost and higher sales and marketing expenses applicable to automotive product sales to the aftermarket. The current level of operating expenses is expected to continue for the remainder of the fiscal year.

Interest expense was $747 in the second quarter of fiscal 2003 which compares with $1,921 in the second quarter of fiscal 2002. The decrease was due to a reduction in employees deferred compensation account balances and "end of lease" termination during the current fiscal quarter. The current level of interest expense is expected to decrease modestly for the remainder of fiscal 2003.

Other income increased by $7,626 during the second quarter of fiscal 2003 due primarily to an increase in interest income on short-term investments caused by a positive cash flow from operating activities.

The net loss in the second quarter of fiscal 2003 was $122,720 which compares with  net income of $150,971 in the second quarter of fiscal 2002. The net loss was due to lower than expected sales and an unfavorable product mix resulting in decreased gross product margin. Management continues to monitor expenditures for possible cost savings and anticipates improved product mix in the following quarters.

Unshipped customer orders as of March 31, 2003 were $1,685,000 versus $1,909,000 at March 31, 2002. Almost all of the backlog is expected to be shipped by the end of fiscal 2003. The lower backlog is directly attributable to economic difficulties in the aircraft market which directly affects the Company's Indicator segment. The lower year to year backlog is largely a reflection of the lower Indicator backlog along with temporarily lower fastening product backlog which is timing related.

Results of Operations, Six Months Ended March 31, 2003Compared to Six Months Ended March 31, 2002

Product sales for the six months ended March 31, 2003 were $4,522,878 versus $4,874,458 for the same period in fiscal 2002. The decrease in product sales during the first six months of the current fiscal year was volume related due mostly to lower sales of automotive diagnostic products of $119,000, specifically automotive OEM diagnostic products, coupled with a decline in indicator product sales of $223,000. The current level of product sales is anticipated to increase modestly over the last six months of the fiscal year based on current quote and order levels within the Company's indicators and gauges and automotive product segments.

Service sales for the six months ended March 31, 2003 were $838,826 compared with $963,154 for the same period in fiscal 2002. The current level of service sales is expected to continue for the balance of the fiscal year. The decrease was volume related and primarily caused by lower repair sales.

Cost of product sold was $2,611,101 or (57.7 % of product sales) compared to $2,519,736 (51.7% of product sales) for the six months ended March 31, 2002. This increase in the cost of product sold percentage was due to the difference in product mix.  The cost of product sold percentage is expected to decrease slightly in the second half of the fiscal year due to a more favorable product mix.

Cost of service sold was $491,082 (58.5 % of service sales) compared with $562,974 (58.5% of service sales) for the six months ended March 31, 2002. The dollar decrease was due primarily to lower repair sales for the first six months of the current fiscal year. The current level of  cost of service sold percentage is expected to continue for the second half of the fiscal year.

Product development expenses were $979,354 (21.7% of product sales) compared to $939,194 (19.3% of product sales) for the six months ended March 31, 2002. The dollar increase was due primarily to higher labor costs. The percentage increase was due primarily to lower product sales during the first six months of the current fiscal year. The current level of product development expenditures is expected to continue for the second half of the fiscal year.

Operating expenses were $2,040,587 for the six months ended March 31, 2003 (38.1% of total sales) versus $1,919,824 (32.9% of total sales) for the six months ended March 31, 2002. The dollar increase represents higher sales and marketing and administrative expenses applicable to automotive product sales to the aftermarket. The percentage increase was due primarily to lower net sales during the first six months of the current fiscal year. The current level of operating expenses is expected to continue for the remainder of the fiscal year. 

Interest expense was $1,710 for the six months ended March 31, 2003, and $4,149 for the same period in 2002. This decrease was due to a reduction in employees deferred compensation account balances and the "end of lease" termination during the current fiscal year. The current level of interest expense is expected to decrease modestly for the remainder of fiscal 2003.

Other income of $33,922 compares with other income of $20,996 in the same period last year. The increase is due primarily to an increase in interest income on short-term investments caused by positive cash flow from operating activities during the current fiscal year.

The net loss for the six months ended March 31, 2003 was $1,518,750 compared with a net loss of $57,569 for the six months ended March 31, 2002. The net loss in the first half of fiscal 2003 includes a $1,038,542 charge from a change in accounting for goodwill, resulting from the adoption of SFAS No. 142 in October 2002.

Management anticipates that as the economy improves sales will increase. Increased sales or further cost cutting measures will generate sufficient taxable income during the carryforward period to fully realize deferred tax benefits. The tax benefits have the effect of reducing future federal income taxes payable. The contribution, research and development credit and net operating loss carryforwards will begin to expire in 2019.

Liquidity and Capital Resources

Total current assets were $8,165,002, $8,792,622 and $8,072,054 at March 31, 2003, September 30, 2002 and March 31, 2002, respectively. The increase from March to March is due primarily to the increase in deferred taxes and prepaid expenses. The decrease from September to March is due to a decrease in accounts receivable due primarily to lower sales levels in the current fiscal year.

Working capital as of March 31, 2003 amounted to $7,131,200 as compared with $6,980,565 a year earlier. Current assets were 7.9 times current liabilities and total cash and receivables were 4.2 times current liabilities. These ratios compare to 7.4 and 3.6, respectively, at March 31, 2002.

Internally generated funds during the six months ended March 31, 2003 were $485,364 and were adequate to fund the Company's primary non-operating cash requirement consisting of capital expenditures of $53,128. The primary reason for the positive cash flow from operations was the reduction in accounts receivable. The Company believes that cash and cash equivalents, together with funds anticipated to be generated by operations and funds available under the Company's credit agreement, will provide the liquidity necessary to support its current and anticipated capital expenditures through the end of fiscal 2003.

Shareholders' equity during the six months ended March 31, 2003 decreased by $1,518,750 which was the net loss during the period.

In February 2003 the Company renewed its credit agreement with its financial lender. The agreement expires in February 2004 and provides for a revolving credit facility of $1,000,000 with interest at the bank's prime commercial rate and is secured by the Company's accounts receivable, inventory, equipment and general intangibles. The credit agreement contains affirmative covenant requirements related to working capital and tangible net worth minimums of $6,500,000 and $9,000,000 respectively. The Company has had no outstanding balance under this loan facility since May 2001.

Critical Accounting Policies

In connection with the adoption of the Financial Accounting Standards Board SFAS No. 142, "Goodwill and Other Intangible Assets", the Company discontinued the amortization of goodwill as of October 1, 2002. In lieu of amortization, the new standard requires that goodwill be tested for impairment as of the date of adoption and at least annually thereafter. The initial impairment test indicated that the carrying values of our reporting units exceeded the corresponding fair values due to prior year losses. The fair values were determined by an asset approach. The implied fair value of goodwill in these reporting units was then determined through the allocation of the fair values to the underlying asset and liability classes. The October 1, 2002 carrying value of the goodwill in these reporting units exceeded its implied fair value by $1,574,542. The $1,038,542 represents an entire write-off of the Company's goodwill as of October 1, 2002, net of $536,000 of related tax benefits, and has been reported as the effect of a change in accounting principle in the accompanying financial statements. The goodwill in our September 30, 2002 financial statements, which included the $1,574,542 described above, was supported by the undiscounted estimated future cash flows of the related operations.

SFAS No. 142 does not provide for restatement of our results of operations for periods ending prior to October 1, 2002. Our results of operations for the three month and six month periods ended March 31, 2002 included amortization expense of $28,155 and $56,310 respectively, which affected the net income or net loss by $18,555 and $37,110 respectively. Excluding the effect of goodwill amortization, our reported net income for the second quarter of fiscal 2002 would have been increased from $150,971 to $169,526 and our diluted net income per common share would have increased from $.12 to $.14 per common share. The net loss for the six months ended March 31, 2002 excluding the effect of goodwill amortization would have been reduced from $57,569 to $20,459 and our diluted net loss per common share would have been reduced from $.05 to $.02 per common share.

Except for the adoption of SFAS No. 142, our critical accounting policies are as presented in Management's Discussion and Analysis of Financial Conditions and Results of Operations in our Form 10-K for the year ended September 30, 2002.

Forward-Looking Statements

The foregoing discussion includes forward-looking statements relating to the business of the Company. These forward-looking statements, or other statements made by the Company, are made based on management's expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors (including, but not limited to, those specified below) which are difficult to predict and, in many instances, are beyond the control of the Company. As a result, actual results of the Company could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) the Company's dependence upon a limited number of customers, including Ford and General Motors, (b) the highly competitive industry in which the company operates, which includes several competitors with greater financial resources and larger sales organizations, (c) the acceptance in the marketplace of new products and/or services developed or under development by the Company including automotive diagnostic products, fastening systems products and indicating instrument products, and (d) the ability of the Company to further establish distribution and a customer base in the automotive aftermarket.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to certain market risks from transactions that are entered into during the normal course of business. The Company has not entered into derivative financial instruments for trading purposes. The Company's primary market risk exposure relates to interest rate risk. There were no material changes in the Company's exposure to market risk from September 30, 2002.

ITEM 4. CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer along with the Company's Vice President, Finance and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Company's Chief Executive Officer along with the Company's Vice President, Finance and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic SEC filings. There have been no significant changes in the Company's internal controls or in other factors which could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

PART II. OTHER INFORMATION

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

The Company's Annual Meeting of Shareholders was originally scheduled for February 19, 2003, but was postponed to obtain a quorum and reconvened on March 5, 2003. The following individuals were elected to the Board of Directors:

	Votes For	Votes Withheld
Robert L. Bauman	1,345,291	31,752
T. Harold Hudson	1,350,097	26,946
James T. Martin	1,350,095	26,948
Michael L. Miller	1,350,095	26,948
James N. Moreland	1,350,077	26,966
Hugh S. Seaholm	1,350,077	26,966
Janet H. Slade	1,350,115	26,928

For information on how the votes have been tabulated for the above, see the Company's definitive Proxy Statement used in connection with the Annual Meeting of Shareholders. 

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a) The following exhibits are included herein:

10(a) Loan Agreement dated February 28, 2003 by and between the Company and Huntington National Bank.

11 Statement re: Computation of earnings per share.

b) The Company did not file any reports on Form 8-K during the six months ended March 31, 2003.

SIGNATURE

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.

Date: May 14, 2003		HICKOK INCORPORATED (Registrant)
	/s/ R. L. Bauman
	R. L. Bauman, Chief Executive Officer, President, and Treasurer
	/s/ G. M. Zoloty
	G. M. Zoloty, Chief Financial Officer

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

Robert L. Bauman, Chief Executive Officer

I, Robert L. Bauman, Chief Executive Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hickok Incorporated (the "Registrant");

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

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

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

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

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

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

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors:

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

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

6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significantchanges in internal controls or in other factors that could significantly affect internal controls subsequent to thedate of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

By:

/s/ R. L. Bauman

R. L. Bauman

Chief Executive Officer

May 14, 2003

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

Gregory M. Zoloty, Vice President, Finance and Chief Financial Officer

I, Gregory M. Zoloty, Vice President, Finance and Chief Financial Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hickok Incorporated (the "Registrant");

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

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

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

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

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

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

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors:

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

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

6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significantchanges in internal controls or in other factors that could significantly affect internal controls subsequent to thedate of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

By:

/s/ G. M. Zoloty

G. M. Zoloty

Vice President, Finance andChief Financial Officer

May 14, 2003

EX-10

 

EXHIBIT 10(a)

BUSINESS LOAN AGREEMENT

Principal
$1,000,000.00 Loan Date
03-24-2003 Maturity
02-28-2004 Loan No
182
Call / Coll Account
8241400008  Officer Initials

References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. 
Any item above containing " * * * " has been omitted due to text length limitations. 

Borrower:
 
    Hickok Incorporated
10514 Dupont Avenue
Cleveland, OH 44108   Lender:   THE HUNTINGTON NATIONAL BANK
Middleburg Heights Commercial Lending
P. 0. Box 1558 - HZ0325
Columbus, OH 43272-4195 

THIS BUSINESS LOAN AGREEMENT dated  2-28-03 , is made and executed between Hickok Incorporated ("Borrower") and THE HUNTINGTON NATIONAL BANK ("Lender") on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement ("Loan"). Borrower understands and agrees that: (A) In granting, renewing, or extending any Loan, Lender is relying upon Borrower's representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing or extending any Loan by Lender at all times shall be subject to Lender's sole judgement and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.

TERM. This Agreement shall be effective as of   2-28-03 , and shall continue in full force and effect until such time as all of Borrower's Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until such time as the parties may agree in writing to terminate this Agreement.

CONDITIONS PRECEDENT TO EACH ADVANCE . Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3) financing statements and all other documents perfecting Lender's Security Interests; (4) evidence of insurance as required below; (5) guaranties; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender's counsel.

Borrower's Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and instruments as Lender or its counsel, may require.

Payment of Fees and Expenses . Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement or any Related Document.

Representations and Warranties . The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct.

No Event of Default . There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document.

REPRESENTATIONS AND WARRANTIES . Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:

Organization . Borrower is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Ohio. Borrower maintains an office at 10514 Dupont Avenue, Cleveland, OH 44108. Unless Borrower has designated otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its records concerning the Collateral. Borrower will notify Lender prior to any change in the location of Borrower's state of organization or any change in Borrower's name.

Assumed Business Names . Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business: None.

Authorization . Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of Borrower's articles of incorporation or organization, or bylaws, code of regulations, or any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower's properties.

Properties . Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower's properties free and clear of all liens and security interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower's properties are titled in Borrower's legal name, and Borrower has not used or filed a financing statement under any other name for at least the last five (5) years.

AFFIRMATIVE COVENANTS . Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will:

Notices of Claims and Litigation . Promptly inform Lender in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.

Financial Records . Maintain its books and records in accordance with accounting principles acceptable to Lender, applied on a consistent basis, and permit Lender to examine and audit Borrower's books and records at all reasonable times.

Financial Statements . Furnish Lender with such financial statements and other related information at such frequencies and in such detail as Lender may reasonably request.

Financial Covenants and Ratios . Comply with the following covenants and ratios:

Working Capital Requirements . Maintain Working Capital in excess of  $6,500,000.00 .

Tangible Net Worth Requirements . Maintain a minimum Tangible Net Worth of not less than: $9,000,000.00 .

Except as provided above, all computations made to determine compliance with the requirements contained in this paragraph shall be made in accordance with accounting principles acceptable to Lender, applied on a consistent basis, and certified by Borrower as being true and correct.

Guaranties . Prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantor named below, on Lender's forms, and in the amount and under the conditions set forth in those guaranties.
 

Name of Guarantor	Amount
Supreme Electronics Corp.	Unlimited

Loan Proceeds . Use all Loan proceeds solely for Borrower's business operations, unless specifically consented to the contrary by Lender in writing.

Taxes, Charges and Liens . Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits.

Performance . Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any agreement.

Operations . Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner.

Compliance with Governmental Requirements . Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the

Loan No: 182
EXHIBIT 10(a) Page 2

BUSINESS LOAN AGREEMENT
(Continued)

Collateral, including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest.

Inspection . Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other properties and to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense.

LENDER'S EXPENDITURES . If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may (but shall not be obligated to) take any action that Lender deems appropriate on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity.

NEGATIVE COVENANTS . Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender:

Continuity of Operations . (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change its name, dissolve or transfer or sell Collateral out of the ordinary course of business, or (3) pay any dividends on Borrower's stock (other than dividends payable in its stock), provided, however that notwithstanding the foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the payment of dividends, if Borrower is a "Subchapter S Corporation" (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends on its stock to its shareholders from time to time in amounts necessary to enable the shareholders to pay income taxes and make estimated income tax payments to satisfy their liabilities under federal and state law which arise solely from their status as Shareholders of a Subchapter S Corporation because of their ownership of shares of Borrower's stock, or purchase or retire any of Borrower's outstanding shares or alter or amend Borrower's capital structure.

CESSATION OF ADVANCES . If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan advances or to disburse Loan proceeds if: (A) Borrower or any guarantor is in default under the terms of this Agreement or any other agreement that Borrower or any guarantor has with Lender; (B) Borrower or any guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's financial condition, in the financial condition of any guarantor, or in the value of any collateral securing any Loan; or (D) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in good faith deems itself insecure, even though no Event of Default shall have occurred.

RIGHT OF SETOFF . To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts.

DEFAULT . Each of the following shall constitute an Event of Default under this Agreement:

Payment Default . Borrower fails to make any payment when due under the Loan.

Other Default . Borrower fails to comply with any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents.

False Statements . Any representation or statement made by Borrower to Lender is false in any material respect.

Insolvency . The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method , by any creditor of Borrower or by any governmental agency against any collateral securing the Loan.

Events Affecting Guarantor . Any of the preceding events occurs with respect to any Guarantor of any of the lndebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.

Change in Ownership . Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

Insecurity . Lender in good faith believes itself insecure.

EFFECT OF AN EVENT OF DEFAULT . If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lender's option, all Indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the "Insolvency" subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender's right to declare a default and to exercise its rights and remedies.

ANNUAL AUDITED FINANCIAL STATEMENT. Borrower shall furnish Lender with, as soon as available, but in no event later than ninety (90) days after the end of each fiscal year, Borrower's balance sheet and income statement for the year ended, audited by a certified public accountant satisfactory to Lender.

INTERIM FINANCIAL STATEMENTS . Borrower shall furnish Lender with, as soon as available, but in no event later than thirty (30) days after the end of each quarter, Borrower's balance sheet and income statement for the period ended, prepared by Borrower and certified by Borrower as fairly representing Borrower's financial condition as of the end of such period.

DEFINITIONS . The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date of this Agreement:

Advance . The word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a line of credit or multiple advance basis under the terms and conditions of this Agreement.

Agreement . The word "Agreement" means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time.

Borrower . The word "Borrower"means Hickok Incorporated, and all other persons and entities signing the Note in whatever capacity.

Collateral . The word "Collateral" means all property and assets granted as collateral security for a Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.

Event of Default . The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this Agreement.

Grantor . The word "Grantor" means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan,

Loan No: 182
EXHIBIT 10(a) Page 3

BUSINESS LOAN AGREEMENT
(Continued)

including without limitation all Borrowers granting such a Security Interest.

Guarantor . The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Loan.

Guaranty . The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.

Indebtedness . The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents.

Lender . The word "Lender" means THE HUNTINGTON NATIONAL BANK, its successors and assigns.

Loan . The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time.

Note. The word "Note" means the Note executed by Hickok Incorporated in the principal amount of $1,000,000.00 dated  2-28-03  , together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement.

Related Documents . The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Loan.

Security Agreement . The words "Security Agreement" mean and include without limitation any agreements, promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest.

Security Interest . The words "Security Interest" mean, without limitation, any and all types of collateral security, present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise.

Tangible Net Worth . The words "Tangible Net Worth" mean Borrower's total assets excluding all intangible assets (i.e., goodwill, trademarks, patents, copyrights, organizational expenses, and similar intangible items, but including leaseholds and leasehold improvements) less total debt.
 

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED   2-28-03 .

BORROWER:
 
 

HICKOK INCORPORATED

By: /s/ Robert L. Bauman
ROBERT L. BAUMAN,   President/CEO of Hickok
Incorporated
 

LENDER:
 
 

THE HUNTINGTON NATIONAL BANK

By: /s/ Terry D. Coreno
TERRY D. CORENO
Authorized Signer

 

EX-11

  FORM 10-Q

EXHIBIT 11

HICKOK INCORPORATED
CONSOLIDATE STATEMENT OF COMPUTATION OF EARNINGS
PER COMMON SHARE AND COMMON SHARE EQUIVALENTS

Three Months Ended March 31,  Six Months Ended
March 31,

	2003	2002	2003	2002
NET INCOME
Net Income <loss> applicable to common shares for basic earnings per share	$<122,720>	$150,971	$<1,518,750>	$<57,569>
Net Income <loss> applicable to common shares for diluted earnings per share	$<122,720>	$150,971	$<1,518,750>	$<57,569>
SHARES OUTSTANDING
Weighted average shares for basic earnings per share	1,219,750	1,219,750	1,219,750	1,219,750
Net effect of diluted stock options – based on the treasury stock method using year-end market price, if higher than average market price.	- *	- *	- *	- *
Total shares for diluted earnings per share	1,219,750	1,219,750	1,219,750	1,219,750
Basic Earnings Per Common Share	$    <.10>	$      .12	$    <1.24>	$    <.05>
Diluted Earnings Per Common Share	$    <.10>	$      .12	$    <1.24>	$    <.05>

* Net effect of stock options was antidilutive for the period.