10QSB

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _____ to _____ .

Commission File No. 0-147

HICKOK INCORPORATED
_________________________________________________________________
(Exact name of small business issuer 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

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes X No___As of May 4, 2004:  764,884 Hickok Incorporated Class A Common Shares and 454,866 Class B Common Shares were outstanding.

Transitional Small Business Disclosure Format (Check one):  Yes___No X

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:

HICKOK INCORPORATED
CONSOLIDATED INCOME STATEMENTS
(Unaudited)

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

	2004	2003	2004	2003
Net Sales
Product Sales	$5,472,436	$2,430,534	$8,648,750	$4,522,878
Service Sales	399,207	483,222	793,302	838,826
Total Net Sales	5,871,643	2,913,756	9,442,052	5,361,704
Costs and Expenses
Cost of Product Sold	2,792,245	1,289,301	4,423,731	2,611,101
Cost of Service Sold	210,707	276,575	427,351	491,082
Product Development	541,906	504,825	1,049,255	979,354
Marketing and Administrative Expenses	1,662,563	1,046,609	2,632,438	2,040,587
Interest Charges	304	747	808	1,710
Other Income	<19,960>	<18,581>	<36,119>	<33,922>
Total Costs and Expenses	5,187,765	3,099,476	8,497,464	6,089,912
Income <Loss> before Provision for Income Taxes	683,878	<185,720>	944,588	<728,208>
Income <Recovery of> Taxes	232,500	<63,000>	321,200	<248,000>
Net Income <Loss> before cumulative effect of change in accounting principle, net of tax	451,378	<122,720>	623,388	<480,208>
Cumulative effect of change in accounting for goodwill, net of tax of $536,000	-	-	-	1,038,542
Net Income <Loss>	$451,378	$<122,720>	$623,388	$<1,518,750>
Earnings per Common Share:
Net Income <Loss> before cumulative effect of change in accounting principle	$.37	$<.10>	$.51	$<.39>
Cumulative effect of change in accounting for goodwill	-	-	-	<.85>
Net Income <Loss>	$.37	$<.10>	$.51	$<1.24>
Earnings per Common Share Assuming Dilution:
Net Income <Loss> before cumulative effect of change in accounting principle	$.36	$<.10>	$.50	$<.39>
Cumulative effect of change in accounting for goodwill	-	-	-	<.85>
Net Income <Loss>	$.36	$<.10>	$.50	$<1.24>
Dividends per Common Share	$ - 0 -	$ - 0 -	$ - 0 -	$ - 0 -

See Notes to Consolidated Financial Statements

HICKOK INCORPORATED
CONSOLIDATED BALANCE SHEETS

		March 31, 2004 (Unaudited)	September 30, 2003 (Note)	March 31, 2003 (Unaudited)
Assets
Current Assets
Cash and Cash Equivalents		$3,001,513	$1,347,971	$2,682,676
Short-term Investments		-	1,018,000	-
Trade Accounts Receivable-Net		2,565,201	1,697,549	1,699,641
Inventories		3,832,354	3,291,328	3,453,809
Deferred Income Taxes		131,400	131,400	231,000
Prepaid Expenses		236,236	47,381	97,876
Refundable Income Taxes		-	-	-
Total Current Assets		9,766,704	7,533,629	8,165,002
Property, Plant and Equipment
Land		229,089	229,089	229,089
Buildings		1,478,629	1,478,629	1,486,969
Machinery and Equipment		2,646,256	2,600,444	2,687,894
		4,353,974	4,308,162	4,403,952
Less: Allowance for Depreciation		3,193,408	3,042,178	3,081,104
Total Property - Net		1,160,566	1,265,984	1,322,848
Other Assets
Goodwill - Net of Amortization		-	-	-
Deferred Income Taxes		1,257,500	1,578,700	1,255,924
Deposits		1,750	1,750	2,050
Total Other Assets		1,259,250	1,580,450	1,257,974
	Total Assets	$12,186,520	$10,380,063	$10,745,824

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

See Notes to Consolidated Financial Statements

	March 31, 2004 (Unaudited)	September 30, 2003 (Note)	March 31, 2003 (Unaudited)
Liabilities and Stockholders' Equity
Current Liabilities
Short-term Financing	$ -	$ -	$ -
Current Portion of Long-term Debt	-	-	-
Accounts Payable	856,728	294,216	389,557
Accrued Payroll & Related Expenses	842,309	249,051	293,186
Accrued Expenses	204,735	132,675	159,540
Accrued Taxes Other Than Income	44,852	89,613	38,302
Accrued Income Taxes	156,934	156,934	153,217
Total Current Liabilities	2,105,558	922,489	1,033,802
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	7,863,159	7,239,771	7,494,219
Total Stockholders' Equity	10,080,962	9,457,574	9,712,022
Total Liabilities and Stockholders' Equity	$12,186,520	$10,380,063	$10,745,824

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

	2004	2003
Cash Flows from Operating Activities:
Cash received from customers	$8,574,400	$6,082,677
Cash paid to suppliers and employees	<7,915,745>	<5,848,917>
Interest paid	<808>	<1,710>
Interest received	23,507	22,588
Income taxes <paid> refunded	-	230,726
Net Cash Provided by Operating Activities	681,354	485,364
Cash Flows from Investing Activities:
Capital expenditures	<45,812>	<53,128>
Purchase of short-term investments	-	<1,023,185>
Sale of short-term investments	1,018,000	1,023,185
Net Cash Provided By <Used In> Investing Activities	972,188	<53,128>
Cash Flows from Financing Activities:
Payments on lease obligation	-	<11,334>
Net Cash Provided By <Used In> Financing Activities	-	<11,334>
Net increase in cash and cash equivalents	1,653,542	420,902
Cash and cash equivalents at beginning of year	1,347,971	2,261,774
Cash and cash equivalents at end of second quarter	$3,001,513	$2,682,676
See Notes to Consolidated Financial Statements
	2004	2003
Reconciliation of Net Income <Loss> to Net Cash Provided By <Used In> Operating Activities:
Net Income <Loss>	$623,388	$<1,518,750>
Adjustments to reconcile Net Income <Loss> to net cash provided by operating activities:
Depreciation and amortization	151,230	192,348
Cumulative effect of change in accounting for goodwill	-	1,574,542
Deferred income taxes	321,200	<783,824>
Changes in assets and liabilities:
Decrease <Increase> in accounts receivable	<867,652>	720,973
Decrease <Increase> in inventories	<541,026>	135,734
Decrease <Increase> in prepaid expenses	<188,855>	<61,185>
Decrease <Increase> in refundable income taxes	-	253,000
Increase <Decrease> in trade accounts payable	562,512	15,533
Increase <Decrease> in accrued payroll and related expenses	593,258	<56,853>
Increase <Decrease> in accrued expenses and accrued taxes other than income	27,299	36,296
Increase <Decrease> in accrued income taxes	-	<22,450>
Total Adjustments	57,966	2,004,114
Net Cash Provided by Operating Activities	$681,354	$485,364

HICKOK INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MARCH 31, 2004

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-QSB 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, 2004 are not necessarily indicative of the results that may be expected for the year ended September 30, 2004. 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, 2003.

2. Short-term Investments

Investments are considered as held-to-maturity with the cost approximating the market value.

3. Inventories

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

	March 31, 2004	September 30, 2003	March 31, 2003
Components	$2,155,849	$2,287,708	$2,272,690
Work-in-Process	1,215,943	330,299	408,518
Finished Product	460,562	673,321	772,601
	$3,832,354	$3,291,328	$3,453,809

The above amounts are net of reserve for obsolete inventory in the amount of $202,418, $78,000 and $210,824 for the periods ended March 31. 2004, September 30, 2003 and March 31, 2003 respectively.

4. 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 127,900 Class A shares were outstanding at March 31, 2004 (129,900 shares at September 30, 2003 and 133,900 shares at March 31, 2003) at prices ranging from $3.125 to $17.25 per share. Options for 2,000 shares and 17,000 shares were canceled during the three month periods ended March 31, 2004 and March 31, 2003 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 45,000 shares (less 33,000 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 45,000 Class A shares were outstanding at March 31, 2004 (39,000 shares at September 30, 2003 and 39,000 shares at March 31, 2003) 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, 2004 and March 31, 2003, at a price of $7.25 and $3.67 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 19, 2007.

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.

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 ended March 31, 2004 and 2003 respectively: a risk free interest rate of 4.0% 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 .44 and .60.

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,

	2004	2003	2004	2003
Net Income <Loss> as reported	$451,378	$<122,720>	$623,388	$<1,518,750>
Deduct: Total stock-based employee and Director compensation expense determined under fair value based method for all awards, net of related tax effects	2,723	2,348	5,071	4,644
Pro forma Net Income <Loss>	$448,655	$<125,068>	$618,317	$<1,523,394>
As Reported:
Basic Income <Loss> per share	$.37	$<.10>	$.51	$<1.24>
Diluted Income <Loss> per share	$.36	$<.10>	$.50	$<1.24>
Pro forma:
Basic Income <Loss> per share	$.37	$<.10>	$.51	$<1.24>
Diluted Income <Loss> per share	$.36	$<.10>	$.49	$<1.24>

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.

5. 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 Company has adopted the disclosure only provisions of SFAS 123 and 148 (see note 4).

6. 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,

	2004	2003	2004	2003
Basic Income <Loss> per Share
Income <Loss> available to common stockholders	$451,378	$<122,720>	$623,388	$<1,518,750>
Shares denominator	1,219,750	1,219,750	1,219,750	1,219,750
Per share amount	$.37	$<.10>	$.51	$<1.24>
Effect of Dilutive Securities
Average shares outstanding	1,219,750	1,219,750	1,219,750	1,219,750
Stock options	35,492	-	35,492	-
	1,255,242	1,219,750	1,255,242	1,219,750
Diluted Income <Loss> per Share
Income <Loss> available to common stockholders	$451,378	$<122,720>	$623,388	$<1,518,750>
Per share amount	$.36	$<.10>	$.50	$<1.24>

Options to purchase 172,900 and 172,900 shares of common stock during the second quarter of fiscal 2004 and the second quarter of fiscal 2003, 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 2004 and the six month period of fiscal 2003 options to purchase 172,900 and 172,900 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.

7. 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 several brand names and a variety of distribution methods. 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,

			2004	2003	2004	2003
Net Revenue
Indicators and Gauges			$422,033	$307,153	$733,177	$601,053
Automotive Diagnostic Tools and Equipment			5,449,610	2,606,603	8,708,875	4,760,651
			$5,871,643	$2,913,756	$9,442,052	$5,361,704
Income (Loss) before provision for Income Taxes
Indicators and Gauges			$150,864	$<12,501>	$158,210	$<39,218>
Automotive Diagnostic Tools and Equipment			1,403,539	227,609	2,013,012	93,674
General Corporate Expenses			<870,525>	<400,828>	<1,226,634>	<782,664>
			$683,878	$<185,720>	$944,588	$<728,208>
Asset Information
Indicators and Gauges					$666,323	$761,829
Automotive Diagnostic Tools and Equipment					5,711,986	4,310,951
Corporate					5,808,211	5,673,044
					$12,186,520	$10,745,824
Geographical Information
Included in the consolidated financial statements are the following amounts related to geographical locations:
Revenue:
	United States		$5,751,897	$2,785,963	$9,248,600	$5,141,673
		Canada	76,568	64,916	113,986	126,324
		Other foreign countries	43,178	62,877	79,466	93,707
			$5,871,643	$2,913,756	$9,442,052	$5,361,704

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

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

Results of Operations, Second Quarter (January 1, 2004 through March 31, 2004)
Fiscal 2004 Compared to Second Quarter Fiscal 2003
-----------------------------------------------------------------------------------------

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 $422,033 and $307,153 for the second quarter of fiscal 2004 and fiscal 2003, respectively and $733,177 and $601,053 for the first six months of fiscal 2004 and fiscal 2003, 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 to OEM's and to the aftermarket using several brand names and a variety of distribution methods. Included in this segment are fastening control products used primarily by large manufacturers to monitor and control the tightening of threaded fasteners in assembly plants. Revenue in this segment was $5,449,610 and $2,606,603 for the second quarter of fiscal 2004 and fiscal 2003, respectively, and $8,708,875 and $4,460,651 for the first six months of fiscal 2004 and fiscal 2003, respectively.

Results of Operations

Product sales for the quarter ended March 31, 2004 were $5,472,436 versus $2,430,534 for the quarter ended March 31, 2003. The 125% increase in product sales during the current quarter of approximately $3,042,000 was volume related due primarily to increased sales of automotive diagnostic products, primarily, aftermarket products which include emissions products. Emission product sales increased approximately $2,911,000 largely as a result of a Pennsylvania emissions program. The program requires OBD II related emissions testing of vehicles in a number of the State's counties. The implementation dates are spread over about a seven month period depending on the county and the program should be essentially complete during the Company's third fiscal quarter. Hickok is involved in the program with both a product that performs the State mandated testing and also providing a number of the other vendors with the gas cap testing apparatus used with their testing units. Sales of indicator products and other automotive diagnostic products increased by approximately $104,000 and $57,000, respectively. Fastening system products sales declined by approximately $29,000. Product sales are expected to decline dramatically during the Company's third and fourth fiscal quarters to levels approximating the first fiscal quarter because of the conclusion of the Pennsylvania emissions program.

Service sales for the quarter ended March 31, 2004 were $399,207 versus $483,222 for the quarter ended March 31, 2003. The decrease was volume related applicable to lower repair sales. The current level of service sales related to both product repair sales and training is expected to decrease slightly for the balance of the fiscal year.

Cost of product sold in the second quarter of fiscal 2004 was $2,792,245 (51.0% of product sales) as compared to $1,289,301 (53.0% of product sales) in the second quarter of fiscal 2003. The decrease in the cost of product sold percentage was due primarily to higher product sales which absorbed more of the fixed costs and a change in product mix. The current cost of product sold percentage is anticipated to increase modestly during the balance of the fiscal year due to product mix.

Cost of service sold in the second quarter of fiscal 2004 was $210,707 (52.8% of service sales) as compared to $276,575 (57.2% of service sales) in the second quarter of fiscal 2003. The dollar decrease was due to lower repair sales in the current fiscal quarter. The current cost of services sold percentage is expected to increase slightly for the balance of the fiscal year.

Product development expenses were $541,906 in the second quarter of fiscal 2004 (9.9% of product sales) as compared to $504,825 (20.8% of product sales) in the second quarter of fiscal 2003. The dollar increase was due primarily to increased labor cost while the percentage decrease was due to increased product sales. The current level of product development expenses is expected to increase modestly for the balance of the fiscal year.

Marketing and administrative expenses were $1,662,563 (28.3% of total sales) in the second quarter of 2004 versus $1,046,609 (35.9% of total sales) for the same period a year ago. The percentage decrease was due to the increase in the level of total sales for the current fiscal quarter. The dollar increase was due primarily to higher administrative labor costs including employee bonus provisions that took effect during the current quarter. Also contributing to the dollar increase were higher variable sales and marketing expenses applicable to non-emission and emission automotive product sales to the aftermarket. The cost increases were in commissions, royalties and promotional expenses as the result of the higher sales volume from the Pennsylvania emissions program. The current level of marketing and administrative expenses is expected to decrease moderately because of lower volume related variable expenses; however, fixed expenses will increase slightly for the remainder of the fiscal year.

Interest expense was $304 in the second quarter of fiscal 2004 which compares with $747 in the second quarter of fiscal 2003. The current level of interest expense is expected to continue for the remainder of fiscal 2004.

Other income was $19,960 in the second quarter of fiscal 2004 which compares with $18,581 in the second quarter of fiscal 2003. Other income consists primarily of interest income on short-term investments and the proceeds from the sale of scrap metal shavings associated with emissions product.

Net income in the second quarter of fiscal 2004 was $451,378 which compares with a net loss of $122,720 in the second quarter of fiscal 2003. The net income for the current quarter is primarily the result of sales from emission products in connection with the Pennsylvania program and are viewed as a large event that does not represent the Company's core repetitive business. The prior year second quarter loss was due to lower sales and an unfavorable product mix resulting in decreased gross product margin.

Unshipped customer orders as of March 31, 2004 were $2,957,000 versus $1,685,000 at March 31, 2003. The increase was due primarily to increased orders in the automotive diagnostic products of $1,272,000, specifically, ($551,000)for non-emission aftermarket products and ($730,000) for emission products. Also contributing to the increase was ($83,000) for indicators and gauges and ($117,000) for training programs. Fastening product backlog decreased by approximately $209,000. Almost all of the backlog is expected to be shipped by the end of fiscal 2004. As the automotive aftermarket becomes a more significant element of the Company's business lower operating backlogs are to be expected however emissions programs which are typically large and unpredictable can substantially alter the current backlogs. The higher year to year backlog is largely a reflection of the Pennsylvania emissions program which is expected to be essentially complete during the Company's third fiscal quarter.

Results of Operations, Six Months Ended March 31, 2004
Compared to Six Months Ended March 31, 2003

Product sales for the six months ended March 31, 2004 were $8,648,750 versus $4,522,878 for the same period in fiscal 2003. The 91% increase in product sales during the first six months of the current fiscal year of approximately $4,126,000 was volume related due primarily to increased sales of automotive diagnostic products, specifically, aftermarket products which include emissions products. Emission products sales increased approximately $4,322,000 largely as a result of a Pennsylvania emissions program, offset by a decline in non-emission products and fastening systems product sales of approximately $114,000 and $207,000, respectively. Sales of indicator products increased by approximately $125,000. Product sales are expected to decline dramatically during the Company's third and fourth fiscal quarters to levels approximating the first fiscal quarter because of the conclusion of the Pennsylvania emissions program the impact of which maybe offset partially by an expected improvement in core automotive product sales.

Service sales for the six months ended March 31, 2004 were $793,302 compared with $838,826 for the same period in fiscal 2003. The current level of service sales is expected to decrease slightly for the balance of the fiscal year. The decrease was volume related and primarily caused by lower repair sales.

Cost of product sold was $4,423,731 or (51.1 % of product sales) compared to $2,611,101 (57.7% of product sales) for the six months ended March 31, 2003. This decrease in the cost of product sold percentage was due primarily to higher product sales which absorbed more of the fixed costs and a change in product mix. The cost of product sold percentage is expected to increase modestly in the second half of the fiscal year due to product mix.

Cost of service sold was $427,351 (53.9 % of service sales) compared with $491,082 (58.5% of service sales) for the six months ended March 31, 2003. 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 increase slightly for the second half of the fiscal year.

Product development expenses were $1,049,255 (12.1% of product sales) compared to $979,354 (21.7% of product sales) for the six months ended March 31, 2003. The dollar increase was due primarily to higher labor costs. The percentage decrease was due to higher product sales during the first six months of the current fiscal year. The current level of product development expenditures is expected to increase modestly for the second half of the fiscal year.

Marketing and administrative expenses were $2,632,438 for the six months ended March 31, 2004 (27.9% of total sales) versus $2,040,587 (38.1% of total sales) for the six months ended March 31, 2003. The percentage decrease was due to higher net sales during the first six months of the current fiscal year. The dollar increase was due primarily to higher administrative labor costs including employee bonus provisions that took effect during the first six months of the current fiscal year. Also contributing to the dollar increase were higher variable sales and marketing expenses applicable to non-emission and emission automotive product sales to the aftermarket. The cost increases were in commissions, royalties and promotional expenses as the result of the higher sales volume from the Pennsylvania emissions program. The current level of marketing expense is expected to decrease moderately for the remainder of the fiscal year primarily related to a decrease in revenue related expenses. Administrative expense is expected to increase moderately because of expenses that may be incurred if the Company determines to deregister its Class A stock. No final decision has been made regarding deregistration; however, the Company is evaluating the feasibility of deregistration.

Interest expense was $808 for the six months ended March 31, 2004, and $1,710 for the same period in 2003. This decrease was due to a reduction in employees deferred compensation account balances during the current fiscal year. The current level of interest expense is expected to continue for the remainder of fiscal 2004.

Other income of $36,119 compares with other income of $33,922 in the same period last year. Other income consists primarily of interest income on short-term investments and the proceeds from the sale of scrap metal shavings associated with emissions product. The increase is due primarily to an increase in proceeds from the sale of the scrap metal. The current level of other income is expected to continue for the remainder of fiscal 2004 due to the Company's intent to invest its excess cash in higher yield investments.

Net income for the six months ended March 31, 2004 was $623,388 compared with a net loss of $1,518,750 for the six months ended March 31, 2003. The net income for the first half of fiscal 2004 is primarily the result of sales from emission products in connection with the Pennsylvania program and are viewed as a large event that does not represent the Company's core repetitive business. 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.

State automotive emissions programs tend to be large events the timing of which is largely unpredictable. The Company continues to participate in development for several possible future programs although timing and possible value to the Company are difficult to quantify. Management is optimistic that one or more programs will take place over the next several years. If and when they occur these programs could have a dramatic effect on the Company's revenues and profits. In addition, Management anticipates that as the economy improves future core business sales should increase. Management projects increased sales or future 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 $9,766,704, $7,533,629 and $8,165,002 at March 31, 2004, September 30, 2003 and March 31, 2003, respectively. The increase of approximately $1,602,000 from March to March is due primarily to the increase in accounts receivable and inventories of $866,000 and $379,000 respectively due to the increased sales and inventory purchasing volume. Cash and prepaid expenses increased by $319,000 and $138,000 respectively, while deferred taxes decreased by approximately $100,000. The increase from September to March of approximately $2,233,000 is due primarily to the increase in accounts receivable, inventory and prepaid expenses of $868,000, $541,000 and $189,000 respectively, due primarily to the increased sales levels in the current fiscal year. Cash increased by approximately $1,654,000 while short-term investments decreased by $1,018,000 due to the investments maturing.

Working capital as of March 31, 2004 amounted to $7,661,146 as compared with $7,131,200 a year earlier. Current assets were 4.6 times current liabilities and total cash and receivables were 2.6 times current liabilities. These ratios compare to 7.9 and 4.2, respectively, at March 31, 2003.

Internally generated funds during the six months ended March 31, 2004 were $681,354 and were adequate to fund the Company's primary non-operating cash requirement consisting of capital expenditures of $45,812. The primary reason for the positive cash flow from operations was the net income during the period. 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 2004.

Shareholders' equity during the six months ended March 31, 2004 increased by $623,388 which was the net income during the period.

In February 2004 the Company renewed its credit agreement with its financial lender. The agreement expires in February 2005 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 tangible net worth minimums of $9,000,000, maintain a ratio of debt to tangible net worth of not more than 1.00 to 1.00 and an interest coverage ratio of not less than 1.25 to 1.00. The Company has had no outstanding balance under this loan facility since May 2001.

Critical Accounting Policies

Our critical accounting policies are as presented in Notes to Consolidated Financial Statements and Management's Discussion and Analysis of Financial Conditions and Results of Operations in our Form 10-K for the year ended September 30, 2003.

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 Motor Company, (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, (d) the ability of the Company to further establish distribution and a customer base in the automotive aftermarket, and (e) the Company's ability to capitalize on market opportunities including state automotive emissions programs.

ITEM 3. CONTROLS AND PROCEDURES

As of March 31, 2004, an evaluation was performed, 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. Based upon that evaluation, the Company's management, including the Chief Executive Officer along with the Company's Vice President, Finance and Chief Financial Officer, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2004 in ensuring that information required to be disclosed by the Company in the reports it files and submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. 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

At the Company's Annual Meeting of Shareholders held on February 18, 2004, the following individuals were elected to the Board of Directors:

	Votes For	Votes Withheld
Robert L. Bauman	1,720,191	210,766
T. Harold Hudson	1,728,431	202,526
James T. Martin	1,727,431	203,526
Michael L. Miller	1,728,431	202,526
James N. Moreland	1,727,431	203,526
Hugh S. Seaholm	1,728,499	202,458
Janet H. Slade	1,728,431	202,526

The following proposal was approved at the Company's Annual Meeting:

		Votes	Votes	Votes
		For	Against	Withheld
1.	Approval of the adoption of the 2003 Outside Directors Stock Option Plan	1,765,620	24,568	6,060

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, 2004 by and between the Company and Huntington National Bank; (11) Statement re: Computation of earnings per share; (31.1) Certification by the Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002; (31.2) Certification by the Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002; (32.1) Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002; (32.2) Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

b) On February 12, 2004 the Company filed a Current Report on Form 8-K related to its' First Quarter Earnings News Release. On February 24, 2004 the Company filed a Current Report on Form 8-K announcing that it is evaluating the feasibility of deregistration of its stock. On April 9, 2004 the Company filed a Current Report on Form 8-K announcing it was notifying NASDAQ of its intent to voluntarily delist its stock from the NASDAQ Small Cap Market effective April 15, 2004. No other Form 8-K was filed during the period.

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 10, 2004		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

EX-10

 

EXHIBIT 10(a)

BUSINESS LOAN AGREEMENT

Principal
$1,000,000.00 Loan Date
02-05-2004 Maturity
02-28-2005 Loan No
26
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
Cleveland Commercial Lending
P. 0. Box 341470 - HZ0325
Columbus, OH 43234-9429 

THIS BUSINESS LOAN AGREEMENT dated  2-28-04 , 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 of 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   2-28-04 , 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.

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 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,

EXHIBIT 10(a) Page 2

BUSINESS LOAN AGREEMENT
(Continued)

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.

Agreements.  Borrower will not enter into any agreement containing any provisions which would be violated or breached by the performance of Borrower's obligations under this Agreement or in connection herewith.

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 Indebtedness 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 STATEMENTS OF BORROWER.  Borrower shall furnish Lender with, as soon as available, but in no event later than one hundred twenty (120) days after the end of each fiscal year, Borrower's financial statement, including a balance sheet and income statement for the year ended, audited by an independent 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 fiscal quarter, Borrower's financial statement, including a balance sheet and income statement and statement of cash flow for the period ended, prepared by Borrower and certified by Borrower's president, chief financial officer or other officer or person acceptable to Lender as fairly representing Borrower's financial condition and results of operations as of the end of such period.

TANGIBLE NET WORTH.  Borrower shall maintain tangible net worth of not less than $9,000,000.00, as of the end of each fiscal quarter, beginning on March 31, 2004. As used herein, "tangible net worth" shall mean Borrower's net worth less all intangible assets such as goodwill, trademarks, patents, copyrights, organization expenses, and similiar intangible items and amounts due from affiliates, subsidiaries, officers, employees and other related parties.

DEBT TO TANGIBLE NET WORTH PLUS SUBORDINATED DEBT RATIO.  Borrower shall maintain a ratio of Debt to Tangible Net Worth of  not more than 1.00 : 1.00 as of the end of each fiscal quarter, beginning on March 31, 2004. "Debt to Tangible Net Worth Ratio" means the ratio of Borrower's total liabilities to Borrower's tangible net worth plus subordinated debt.

INTEREST COVERAGE RATIO.  Borrower shall maintain an Interest Coverage Ratio of not less than 1.25 : 1.00 as of the end of each fiscal year, beginning on September 30, 2004. As used herein, "Interest Coverage Ratio" means the ratio of EBIDA (as defined below) to the sum of interest expense. As used herein, EBIDA shall mean the sum of net income, plus (to the extent deducted in computing net income) the sum of interest expense, depreciation expense, amortization expense and all non-case charges, minus extraordinary non-operating income and any gain from any non-recurring transaction.

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 includes all co-signers and co-makers signing the Note.

EXHIBIT 10(a) Page 3

BUSINESS LOAN AGREEMENT
(Continued)

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, 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  2-28-04  , 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.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED   2-28-04 .

BORROWER:
 
 

HICKOK INCORPORATED

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

LENDER:
 
 

THE HUNTINGTON NATIONAL BANK

By: /s/ W. L. Simonson, Jr.
WILLIAM L. SIMONSON, JR.
Authorized Signer

 

EX-11

  FORM 10-QSB

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,

	2004	2003	2004	2003
NET INCOME
Net Income <loss> applicable to common shares for basic earnings per share	$451,378	$<122,720>	$623,388	$<1,518,750>
Net Income <loss> applicable to common shares for diluted earnings per share	$451,378	$<122,720>	$623,388	$<1,518,750>
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.	35,492	- *	35,492	- *
Total shares for diluted earnings per share	1,255,242	1,219,750	1,255,242	1,219,750
Basic Earnings Per Common Share	$    .37	$    <.10>	$    .51	$    <1.24>
Diluted Earnings Per Common Share	$    .36	$    <.10>	$    .50	$    <1.24>

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

EX-31

Form 10-QSB

Exhibit 31.1

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-QSB of Hickok Incorporated;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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  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-15(e) and 15d-15(e)) for the registrant and have:

   a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

   b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the controls and procedures, as of the end of the period covered by this report based on such evaluation; and

   c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

   a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

   b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:May 10, 2004

/s/ R. L. Bauman

R. L. Bauman

Chief Executive Officer

EX-31

Form 10-QSB

Exhibit 31.2

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-QSB of Hickok Incorporated;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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  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-15(e) and 15d-15(e)) for the registrant and have:

   a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

   b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the controls and procedures, as of the end of the period covered by this report based on such evaluation; and

   c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

   a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

   b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 
   

Dated:May 10, 2004

/s/ G. M. Zoloty

G. M. Zoloty

Vice President, Finance and Chief Financial Officer

EX-32

Form 10-QSB

Exhibit 32.1

CERTIFICATION PURSUANT TO

18U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Hickok Incorporated (the "Company") on form 10-QSB for the period ending March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert L. Bauman, Chief Executive Officer of the Company, certify, pursuant to 18U.S.C.section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ R. L. Bauman

R. L. Bauman

Chief Executive Officer

May 10, 2004

EX-32

Form 10-QSB

Exhibit 32.2

CERTIFICATION PURSUANT TO

18U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Hickok Incorporated (the "Company") on Form 10-QSB for the period ending March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gregory M. Zoloty, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ G. M. Zoloty

G. M. Zoloty

Chief Financial Officer

May 10, 2004