<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

       [X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
               EXCHANGE ACT OF 1934

For the fiscal year ended  September 30, 1998
                           ----------------------------------------------------

                                       OR

       [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
               SECURITIES EXCHANGE ACT OF 1934

For the transition period from      Not Applicable    to       Not Applicable
                               ---------------------      -------------------

Commission file number                        0-147
                        -------------------------------------------------------

                               HICKOK INCORPORATED
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                       Ohio                                   34-0288470
-----------------------------------------------      ---------------------------
            (State or other jurisdiction of                (I.R.S. Employer
             incorporation or organization)                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
                                                     ---------------------------

                        Securities registered pursuant to
                            Section 12(b) of the Act:

                                      NONE

           Securities registered pursuant to Section 12(g) of the Act:

                     Class A Common Shares, $1.00 par value
-------------------------------------------------------------------------------
                                (Title of Class)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]   No [ ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

         As of December 10, 1998, the Registrant had 744,884 voting shares of
Class A Common Stock outstanding and 454,866 voting shares of Class B Common
Stock outstanding. As of such date, non-affiliates held 672,011 shares of Class
A Common Stock and 233,098 shares of Class B Common Stock. As of December 10,
1998, based on the closing price of $7.75 per Class A Common Share on the Nasdaq
Small Cap Market, the aggregate market value of the Class A Common Stock held by
such non-affiliates was approximately $5,208,085. There is no trading market in
the shares of Class B Common Stock.



<PAGE>   2











                      Documents Incorporated by Reference:
                      ------------------------------------


Part of Form 10-K                     Document Incorporated by Reference
-----------------                     ----------------------------------

Part III (Items 10, 11, 12 and 13)    Portions of the Registrant's Definitive
                                      Proxy Statement  to be  used  in
                                      connection with its Annual Meeting
                                      of Shareholders to be held on February 24,
                                      1999.

           Except as otherwise stated, the information contained in this Form
10-K is as of September 30, 1998.

                                     PART I
                                     ------

ITEM 1. BUSINESS
----------------

General Development of Business
-------------------------------

                Hickok Incorporated was organized in 1915 as an Ohio
corporation, and first offered its securities to the public in 1959. Except as
otherwise stated, the terms "Company" or "Hickok" as used herein mean Hickok
Incorporated and its two wholly-owned subsidiaries.

                In February 1995 the shareholders approved a change in the
Company's name to Hickok Incorporated from The Hickok Electrical Instrument
Company. The former name was not representative of the Company's current
products and markets and may have conveyed an inaccurate image of the Company to
customers, prospects and investors.

                The Company is primarily involved in providing products and
services to the aftermarket and to original equipment manufacturers ("OEM's")
within the transportation industry. The primary market served is automotive.
Other markets with which the Company is involved include aircraft, locomotive
and marine markets.

                Included among the products the Company has supplied to the
transportation industry for many years are precision indicating instruments for
aircraft, locomotive and general industrial applications. In recent years the
Company has adapted this expertise to become a leader in the development of
electronic diagnostic equipment for the automotive market. Production of
diagnostic test equipment is now one of the Company's largest product classes.



                                       2
<PAGE>   3

                The Company has made several acquisitions in three of the last
five fiscal years as part of a strategic program to expand both its customer
base and its product line utilizing its existing expertise. A new product for
the automotive market was added in February, 1994 when the Company acquired the
fastening systems business from Allen-Bradley Company, Inc. The fastening
business provides computerized equipment to control tools that tighten threaded
fasteners on cars, trucks, locomotives and heavy equipment to provide high
quality threading applications. General Motors is the primary customer for the
Company's fastening systems products. The fastening systems business was fully
integrated into Hickok's operations by June, 1994. This product has become a
significant part of the Company's total business.

                In January, 1996 the Company added new products and customers
within the instrumentation area with the acquisition of the Beacon Gage Division
of Maradyne Corporation. Beacon Gage manufactures specialty pressure gauges for
railroads and transit cars. The gauge business was fully integrated into
Hickok's operations by May, 1996.

                In February, 1998 the Company added new products and customers
within the automotive aftermarket with the acquisition of Waekon Industries, a
privately owned company in Kirkwood, Pennsylvania. Waekon manufacturers a
variety of testing equipment used by automotive technicians. The Waekon name
will become the trademark used by the Company to market its products to the
automotive aftermarket.

                In addition to its products, the Company also provides support
services to Ford Motor Company and others relating to the development of
training curriculums for automotive technicians on the use of diagnostic
equipment, primarily Hickok equipment, on automobiles. In some cases the Company
also provides the actual technical training to automotive technicians at
customer sites. The support services provided to Ford and the technical training
provided to technicians, though not a significant part of the Company's
business, were developed because of the Company's close working relationship
with Ford in the development of diagnostic tools to service engines and other
electronic systems in Ford automobiles.

                The Company's operations are currently concentrated in the
United States. Sales are primarily to domestic customers although the Company
also makes sales to international customers on a world-wide basis. Because its
international presence is growing, the Company established international
representation in the sales and service area during fiscal 1995.

Description of Business
-----------------------

           Products and Services 
           ---------------------

                The Company operates in one major industry segment:
instrumentation and controls products for the transportation industry.

                                       3
<PAGE>   4


                The Company specializes in designing, manufacturing and
marketing instruments used to diagnose problems and to support the servicing of
automotive electronic systems. These products are sold primarily to OEM's but
also to the aftermarket using jobbers, wholesalers and wagon distributors. The
Company has increased its aftermarket business with the acquisition in February,
1998 of Waekon Industries which manufactures a variety of testing equipment used
by automotive technicians. The acquisition added new distribution sources and
significant new products for the aftermarket. The aftermarket currently accounts
for approximately 19% of automotive diagnostic and specialty tool sales as
compared with 3% in fiscal 1997.

                As a result of the acquisition of the fastening systems business
in February, 1994, the Company designs and manufactures instrumentation used to
monitor and control pneumatic and electric tools that tighten threaded fasteners
so as to provide high quality threading applications. The equipment is sold
primarily to original equipment manufacturers in the automotive market.

                The Company also specializes in the development, manufacture and
marketing of precision indicating instruments used in aircraft, locomotives and
other applications. Within the aircraft market, the Company sells its
instruments primarily to manufacturers of business and pleasure aircraft.

                Within the service area the Company supports the development of
training curriculums within Ford Motor Company applicable to servicing
automotive electronic systems. In addition, the Company also provides diagnostic
equipment training to automotive service technicians employed by fleets using
Ford automobiles. Until the end of fiscal 1997 the Company also developed
software and designed systems that were used to develop diagnostic strategies
including engine, body chassis and electrical systems in Ford vehicles. This
software development contract was not renewed at the end of fiscal 1997 because
Ford consolidated suppliers in this area. The Company has elected not to pursue
similar activities in the future.

                Revenue by class of product/service is shown in the table below.
<TABLE>
<CAPTION>

                                                                1998                     1997                        1996
                                                                ----                     ----                        ----


<S>                                                         <C>                       <C>                      <C>         
Automotive Diagnostic Instruments                           $ 14,374,000              $ 11,426,000             $ 13,658,000
Automotive Diagnostic Service/
     Training                                                    212,000                 3,406,000                4,782,000
Fastening Systems                                              2,923,000                 3,796,000                5,023,000
Indicating Instruments                                         2,816,000                 2,040,000                1,907,000
Other product classes                                            443,000                   491,000                  801,000
                                                            ------------              ------------            -------------
                                                            $ 20,768,000              $ 21,159,000            $  26,171,000

</TABLE>

                                       4
<PAGE>   5



     New Products/Services
     ---------------------

                In fiscal 1998 numerous new products were added within the
automotive diagnostic and specialty tool area as a result of the acquisition of
Waekon Industries in February, 1998. In addition to these Waekon products other
products under development in fiscal 1998 include, among others, the Fuel System
Analyzer, the Fuel Cap Tester and the Squeak and Rattle diagnostic tool.
Development of the Fuel System Analyzer began in fiscal 1997 and was completed
in the third quarter of fiscal 1998 and initial shipments occurred in the fourth
quarter. This product is designed for the aftermarket and is used to diagnose
fuel delivery problems. Development of the Fuel Cap Tester began in fiscal 1998
and was substantially completed by the end of the fiscal year. Initial orders
were received and shipped late in the year. The product is intended to provide a
rapid and precise method of testing fuel caps for inspection or maintenance
purposes. The Squeak and Rattle diagnostic tool is in the initial development
stage and will be made available to Ford and other OEM markets. Orders are not
expected until mid to late fiscal 1999. Final development of the Coil-On Plug
Adapter cable for Ford Motor Company occurred during fiscal 1998 and shipments
began in the middle of the year. The cable is used to interface Ford's Service
Bay Diagnostic System (SBDS) with a vehicle's ignition system.

                During fiscal 1997 the Company completed development on the PDR
(portable data recorder) and Audio VIM (vehicle interface module). Both are
automotive diagnostic products originally intended for use by Ford Motor
Company. The PDR is an accessory that can be attached to a customer's vehicle to
diagnose intermittent problems. The Audio VIM is an accessory to the New
Generation STAR tool (NGS) that helps diagnose problems in Ford audio systems.
During fiscal 1998 Ford canceled the PDR project. The Company is now soliciting
other OEM's to determine their interest in the product. Success has been modest
to date. Ford continues to expreess interest in the Audio VIM and their
evaluation of the product is still underway.

                Within the fastening systems area, development of the Pro-Spec
1000 was completed in the second half of fiscal 1998 with initial sales
occurring late in the fiscal year. The Pro-Spec 1000 is a single tool control
product with a market potential that is greater than large networked systems
currently being sold. Initial expectations were that the product would be
available in early fiscal 1997 but the Company significantly underestimated the
development time required to bring the product to completion. Initial
development began during fiscal 1996. Several design changes introduced in early
fiscal 1997 were the main reasons for the delay. The Company anticipates that
approximately half of its fastening system sales in fiscal 1999 will be of this
Pro-Spec 1000 product. Initial development of the pulse tool control and of
Windows based user station software began in fiscal 1998 and is expected to be
completed in early fiscal 1999. The pulse tool control represents a
technological advancement in controlling and calibrating a pulse nut running
tool which is ergonomically more user friendly than other nut running tools
since it eliminates torque reaction. The pulse tool control is expected to be
introduced in the second quarter of fiscal 1999. The Windows based user station
software is also expected to be introduced in the second quarter of fiscal 1999.
The product is attractive because it is easier to use, requires less training
than its DOS based predecessor and can be interfaced with a competitor's tool
control.

                                       5
<PAGE>   6

                Within the indicating instrument area, the Company continues to
pursue certification of its DIGILOG series of instruments, a combination
analog/digital indicator for the aircraft market. The instruments require FAA
certification and the Company is currently pursuing type certification with
several aircraft manufacturers who are using the product in prototype business
jet aircraft. Acceptance of this product is expected to provide an estimated 20%
increase in the indicator product class. The Company anticipates a response from
one of these airplane manufacturers in mid-fiscal 1999.

                During fiscal 1998 the Company finalized the development of the
Watchdog 1000, a smaller, portable version of the Watchdog 2000, a secondary
ignition analyzer for large non-automotive internal combustion engine users.
Longer than expected development time delayed the introduction of the Watchdog
1000 approximately two years. Modest initial sales occurred during fiscal 1998.
The Watchdog 2000 was introduced during fiscal 1996 with the initial sale to a
company in the natural gas distribution industry.

     Sources and Availability of Raw Materials
     -----------------------------------------

                Raw materials essential to the business are acquired primarily
from a large number of U. S. manufacturers. Materials acquired from the
electronic components industry include transistors, integrated circuits,
resistors, capacitors, switches, potentiometers and fabricated metal or plastic
parts. In general, the required materials are available, if ordered with
sufficient lead times, from multiple sources at current prices.

     Importance of Patents, Licenses, Franchises, Trademarks and Concessions
     -----------------------------------------------------------------------

                The Company presently has several patents and patent
applications which relate to certain of its products. It does not consider that
any one patent or group of patents is material to the conduct of its business as
a whole and believes that its position in the industry is dependent upon its
present level of engineering skill, research, production techniques and service
rather than upon its ownership of patents. Other than the name "Hickok" and
"Waekon", the Company does not have any material licenses, trademarks,
franchises or concessions.

     Seasonality
     -----------

                The Company does not believe there is any significant
seasonality to its business, except to the extent that shipments of certain
products are dependent upon customer release dates. The Company's operating
results often fluctuate widely from quarter to quarter. The primary reason for
such quarterly fluctuations is the effect of the Company's automotive diagnostic
test equipment business, since orders for such equipment frequently are
relatively large and subject to customer release. In recent years, the fourth
quarter of each fiscal year has accounted for a large portion of the Company's
net sales. However, the Company does not believe that the importance of the
fourth quarter is due to seasonal factors, but instead to the timing of customer
release of orders. 

                                       6
<PAGE>   7
     Practices Relative to Working Capital Items
     -------------------------------------------

                The nature of the Company's business requires it to maintain
sufficient levels of inventory to meet rapid delivery requirements of customers.
The Company provides its customers with payment terms prevalent in the industry.

     Dependence Upon Single or Few Customers
     ---------------------------------------

                During the fiscal year ended September 30, 1998, sales to Ford
and General Motors Corporation accounted for approximately 45% and 12%
respectively of the consolidated sales of the Company. This compares with 60%
and 13% respectively during the prior fiscal year. The Company has no long-term
contractual relationships with either Ford or General Motors, and the loss of
business from either one without a corresponding increase in business from new
or existing customers would have a material adverse effect on the Company.

     Backlog
     -------

                At September 30, 1998, the unshipped customer order backlog
totaled $2,493,000 in contrast to $2,924,000 at September 30, 1997 and
$3,867,000 at September 30, 1996. The decrease in fiscal 1998 is due to the
following two factors. First, there was a $130,000 reduction due to lower orders
during fiscal 1998 for fastening systems products. Second, because of the
Company's initiative to improve its on-time delivery, there was an increase in
the fill rate on orders for both automotive diagnostic products and indicating
instruments. This increase in the fill rate resulted in a $475,000 reduction in
backlog for these two product classes. The decrease in fiscal 1997 relative to
fiscal 1996 is due primarily to the termination of a contract in September, 1997
to provide diagnostic services to Ford Motor Company. The contract was not
renewed because Ford consolidated suppliers in this area. Offsetting the loss of
this contract was a $200,000 increase in orders for fastening systems products,
a $100,000 increase in orders for automotive diagnostic products and a $100,000
increase in instrumentation orders.

     Government Contract Renegotiation
     ---------------------------------

                No major portion of the business is open to renegotiation of
profits or termination of contracts or subcontracts at the election of the
Government. The amount of revenue derived from Government contracts is currently
minimal and not material.

     Competitive Conditions
     ----------------------

                The Company is engaged in a highly competitive industry and
faces competition from domestic and international firms. Several of the
Company's competitors have greater financial resources and larger sales
organizations than the Company. Competition with respect to the Company's
diagnostic tool business arises from the existence of a number of other
significant manufacturers in the field, such as SPX Corporation,
Hewlett-Packard, GenRad and Vetronix which



                                        7
<PAGE>   8

dominate the total available market in terms of total sales. With regard to
fastening systems products, competition comes from both companies that make the
equipment to control fastening tools and from tool makers themselves. Specific
companies include Beta Tech, Atlas Copco, and Stanley. Hickok is a major
supplier in the high end market consisting of multi-spindle fastening system
control systems. The instrumentation industry is composed primarily of companies
which specialize in the production of particular items as compared to a full
line of instruments. The Company believes that its competitive position in this
field should be gauged in the area of smaller specialized products, an area in
which the Company has operated since 1915 and in which the Company has
established itself competitively by offering high-quality, high-performance
products in comparison to high-volume, mass-produced items.

     Research and Development Activities
     -----------------------------------

                The Company expensed as incurred product development costs of
$3,028,211 in fiscal 1998, $3,263,857 in 1997, and $3,740,003 in 1996. These
expenditures included engineering product support, support for development of
diagnostic system manuals and development of fastening systems products.

     Compliance with Environmental Provisions
     ----------------------------------------

                The Company's capital expenditures, earnings and competitive
position are not materially affected by compliance with federal, state and local
environmental provisions which have been enacted or adopted to regulate the
distribution of materials into the environment.

     Number of Persons Employed
     --------------------------

                Total employment by the Company at September 30, 1998 was 268
employees. None of the employees are represented by a union. The Company
considers its relations with its employees to be good.

     Financial Information Concerning Foreign and Domestic Operations and Export
     ---------------------------------------------------------------------------
     Sales
     -----
          
                During the fiscal year ended September 30, 1998, all
manufacturing, research and development and administrative operations were
conducted in the United States. Revenues derived from export sales approximated
$637,000 in 1998, $616,000 in 1997, and $574,000 in 1996. Shipments to Canada
make up the majority of export sales.



                                       8
<PAGE>   9





ITEM 2. PROPERTIES
------------------

                During fiscal 1998, the Company had facilities in the United
States as shown below:
<TABLE>
<CAPTION>

                                                                                       Owned or
      Location             Size               Description                               Leased
      --------             ----               -----------                               ------

      <S>               <C>         <C>                                             <C>               
      Cleveland,        37,000      Two-story brick construction;                        Owned
      Ohio              sq. ft.     used for corporate administrative
                                    headquarters, marketing and
                                    product development with
                                    limited manufacturing.

      Greenwood,        63,000      One-story modern concrete                       Leased, with annual
      Mississippi       sq. ft.     block construction; used                        renewal options
                                    for manufacturing instruments,                  extending through 2061.
                                    test equipment, and
                                    fastening systems products.


      Kirkwood,         19,600      Two, single story, metal and                    Leased with optional
      Pennsylvania       sq. ft.    concrete block buildings, used                  renewal through 2008
                                    for marketing and manufacturing
                                    of automotive aftermarket products.
</TABLE>

                Management believes that all facilities combined are adequate to
provide for current and anticipated business.


ITEM 3. LEGAL PROCEEDINGS
-------------------------

                The Company is not a party to any material legal proceedings.

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

                Not Applicable.



                                       9
<PAGE>   10





ITEM 10. EXECUTIVE OFFICERS OF THE REGISTRANT*
----------------------------------------------

                The following is a list of the executive officers of the Company
as of September 30, 1998. The executive officers are elected each year and serve
at the pleasure of the Board of Directors. Mr. Bauman was elected Chairman by
the Board of Directors in July 1993. He has been President since 1991. For at
least five years prior to 1991 he held the office of Vice President. Mr.
Nowakowski was elected Vice President, Finance and Chief Financial Officer by
the Board of Directors in December, 1993. He joined the Company in July, 1993
and for at least five years prior to 1993 was a Vice President with Huntington
National Bank in Cleveland, Ohio.
<TABLE>
<CAPTION>

               Office                                  Officer                               Age
               ------                                  -------                               ---

<S>                                               <C>                                        <C>
      Chairman, President and                     Robert L. Bauman                           58
      Chief Executive Officer

      Vice President, Finance                     Eugene T. Nowakowski                       55
      and Chief Financial
      Officer
</TABLE>

                *The description of Executive Officers called for in this Item
                is included pursuant to Instruction 3 to Section (b) of Item 401
                of Regulation S-K.




                                     PART II
                                     -------

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
-----------------------------------------------------------------------------

                a) Market Information
                   ------------------

                The Registrant's Class A Common Shares are traded on The NASDAQ
Small Cap Market under the symbol HICKA. There is no market for the Registrant's
Class B Common Shares.




                                       10
<PAGE>   11





The following table sets forth the range of high and low closing prices for the
Registrant's Class A Common Shares for the periods indicated, which prices
reflect inter-dealer prices without retail markup, markdown or commissions. Data
was supplied by NASDAQ.

<TABLE>
<CAPTION>
                                               Prices for the Years Ended:
                                               ---------------------------

                               September 30, 1998                        September 30,1997
                               ------------------                        -----------------
                              High            Low                     High               Low
                              ----            ---                     ----               ---
<S>                           <C>            <C>                     <C>               <C> 
First Quarter                 11 1/2          8                      12 1/2             9 1/2
Second Quarter                12 3/4          9 1/2                  13 1/2             7
Third Quarter                 14 1/4         10 3/4                  12                 8 1/4
Fourth Quarter                12              6 7/8                  11 1/4             7 3/4
</TABLE>

                b) Holders
                   -------

                As of December 10, 1998, there were approximately 547 holders of
record of the Company's outstanding Class A Common Shares and approximately 5
holders of record of the Company's outstanding Class B Common Shares.

                c) Dividends
                   ---------

                On December 9, 1998 the Board of Directors of the Company
declared a special dividend of $.15 per share on its Class A and Class B Common
Shares, payable on January 22, 1999 to holders of record on January 4, 1999. In
fiscal 1998 the Company paid a special dividend of $.10 per share on its Class A
and Class B Shares on January 23, 1998. In fiscal 1997 the Company on January
24, 1997 paid a special dividend of $.20 per share on its Class A and Class B
Common Shares. In fiscal 1996 on January 25, 1996 the Company paid a special
dividend of $.10 per share on its Class A and Class B Common Shares. The
declaration and payment of future dividends is restricted, under certain
circumstances, by the provisions of the Company's bank credit agreement. Such
restriction is not expected to materially limit the Company's ability to pay
dividends in the future, if declared. In addition, pursuant to the Company's
Amended Articles of Incorporation, no dividends may be paid on Class B Common
Shares until cash dividends of ten cents per share per fiscal year are paid on
Class A Common Shares. Any determination to pay cash dividends in the future
will be at the discretion of the Board of Directors after taking into account
various factors, including the Company's financial condition, results of
operations and current and anticipated cash needs.



                                       11
<PAGE>   12


<TABLE>
<CAPTION>



ITEM 6. SELECTED FINANCIAL DATA
-------------------------------

                                                               For the years ended September 30
                                                               --------------------------------


                                            1998           1997          1996            1995           1994
                                            ----           ----          ----            ----           ----
                                                         (In Thousands of Dollars, except per share amounts)


<S>                                     <C>            <C>           <C>             <C>             <C>       
 Net Sales                              $   20,768     $   21,159    $    26,171     $    29,384     $   22,491
                                        ==========     ==========    ===========     ===========     ==========

 Net Income                             $    1,034     $      605    $       960     $     1,794     $    1,556
                                        ==========     ==========    ===========     ===========     ==========

 Working Capital                        $    8,818     $    9,279    $     8,625     $     8,120     $    6,991
                                        ==========     ==========    ===========     ===========     ==========
 Total Assets                           $   15,047     $   13,736    $    13,981     $    16,629     $   12,500
                                        ==========     ==========    ===========     ===========     ==========
 Long-term Debt                         $      549     $      127             --             --              --
                                        ==========     ==========    ===========     ===========     ==========
 Total Stockholders' Equity             $   12,551     $   11,617    $    11,235     $    10,394     $    8,735
                                        ==========     ==========    ===========     ===========     ==========
  Net Income Per Share                  $      .86     $      .51    $       .80     $      1.50     $     1.31
                                        ==========     ==========    ===========     ===========     ==========
   Dividends Declared
      Per Share:
      Class A                           $      .10     $      .20    $       .10  $          .275    $      .15
      Class B                           $      .10     $      .20    $       .10  $          .275    $      .15

Stockholders' Equity
     Per Share:                         $    10.48     $     9.71    $      9.42  $         8.71     $     7.43
 Return on Sales                               5.0%           2.9%           3.7%            6.1%           6.9%
 Return on Assets                              7.2%           4.4%           6.3%           12.3%          13.2%
 Return on Equity                              8.6%           5.3%           8.9%           18.8%          19.4%

 Closing Stock Price                    $     6.88     $     8.25    $     12.50  $        23.00     $    12.75
</TABLE>

       Note: Share data adjusted for a 2 for 1 stock split in April 1995.


                                       12
<PAGE>   13

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
-----------------------------------------------------------------------
     RESULTS OF OPERATIONS
     ---------------------

Introduction
------------

        Until the mid 1980's Hickok was known primarily for its ability to
develop and manufacture high technology, precision indicating instruments for
business and pleasure aircraft, locomotive and general industrial applications.
This reputation was enhanced because of the Company's capabilities in the design
and implementation of electronics circuitry. In recent years the Company has
used this expertise in automotive electronics diagnostic technology. The Company
currently generates approximately half of its revenue from designing and
manufacturing diagnostic tools for the OEM market. These tools enable automotive
service technicians to identify problems in the rapidly increasing number of
electronics systems in automobiles. In addition, the Company develops
instructional programs and trains automotive technicians in the use of
electronic diagnostic tools and systems.

        Until the end of fiscal 1997 the Company also generated about 15% of its
revenue from developing diagnostic strategies and assisting in supporting the
overall diagnostic system for Ford Motor Company. At the end of fiscal 1997 the
Company was no longer providing this service since its contract was not renewed
because Ford consolidated suppliers in this area. The Company has elected not to
pursue similar activities in the future.

        Approximately five years ago the Company initiated a strategy to use
existing expertise to diversify its customer base and add new products. The
existing OEM business provided the stability that allowed the strategy to be
implemented. It also enabled the Company to remain technologically proficient
throughout the diversification process. The strategy has been implemented
primarily through acquisitions.

        In February, 1994 the Company added a new product for the automotive
market by acquiring the fastening systems business from Allen-Bradley Company,
Inc. The new business produces computerized equipment to control tools that
tighten threaded fasteners in an automotive assembly plant to provide high
quality threading applications. The acquisition cost $730,675 and was structured
as an asset purchase. The fastening systems business was fully integrated into
the Company's operations by June, 1994. This product class continues to be a
major part of the Company's total business.

        In January, 1996 the Company added revenue to its indicating instrument
product class with the acquisition of the Beacon Gage Division of Maradyne
Corporation. The acquisition cost $647,103 and was structured as an asset
purchase. Beacon Gage manufactures specialty pressure gauges for railroads and
transit cars. The purchase added new products and customers within the Company's
instrumentation market. Sales of gauge products accounted for approximately 25%
of instrument revenue in fiscal 1998. The gauge business was fully integrated
into the Company's operations by May, 1996.

                                       13
<PAGE>   14


        In February, 1998 the Company significantly increased its automotive
aftermarket business with the acquisition of Waekon Industries, a privately
owned company in Kirkwood, Pennsylvania. Sales of aftermarket products now
account for 19% of automotive diagnostic and specialty tool sales, up from 3% in
fiscal 1997. Waekon manufactures a variety of automotive diagnostic equipment
and specialty tools used by automotive technicians. The acquisition cost
$2,221,302 and was structured as an asset purchase. Because of its positive
position in the industry, the Waekon name will become by mid fiscal 1999 the
trademark used by the Company to market its products to the automotive
aftermarket.

        The timing of order releases in the Company's automotive diagnostic test
equipment business often creates wide fluctuations in the Company's operating
results, particularly on a quarter-to-quarter basis. The same situation applies
to the Company's recently acquired fastening systems products. Orders for such
equipment frequently are relatively large and subject to customer release. The
result can be substantial variations in quarterly sales and earnings. For
example, fiscal 1997 fourth quarter sales of $7,314,958 were 34.6% of the year's
total sales and net income in the quarter of $1,108,317 or $ .93 per share, was
183% of the year's total net income. By comparison, fiscal 1998 fourth quarter
sales and net income were 24% and 14% respectively of the year's total sales and
total net income. The Company's contracts are subject to customer release, and
although historically the fourth quarter has accounted for a larger portion of
sales and net income, there can be no assurance that the Company's customers
will continue to authorize release of contracts during the fourth quarter of
future fiscal years. The Company is not aware of any seasonal factors which lead
to its customers' release of orders.

        Short-term earnings also can be affected by levels of expenditures for
product development. These expenditures have become increasingly significant to
the Company's operations in recent fiscal years.

        The Company's order backlog as of September 30, 1998 totaled $2,493,000
as compared to $2,924,000 as of September 30, 1997 and $3,867,000 as of
September 30, 1996. The decrease in fiscal 1998 is due to the following two
factors. First, there was a $130,000 reduction due to lower orders during fiscal
1998 for fastening systems products. Second, because of the Company's initiative
to improve its on-time delivery, there was an increase in the fill rate on
orders for both automotive diagnostic products and indicating instruments. This
increase in the fill rate resulted in a $475,000 reduction in backlog for these
two product classes. The decrease in fiscal 1997 relative to fiscal 1996 is due
entirely to the termination of a contract in September, 1997 to provide
diagnostic services to Ford Motor Company. The contract was not renewed because
Ford consolidated suppliers in this area. Offsetting the loss of this contract
was a $200,000 increase in orders for fastening systems products, a $100,000
increase in orders for automotive diagnostic products and a $100,000 increase in
instrumentation orders.



                                       14
<PAGE>   15


Results of Operations
---------------------

        Sales for the fiscal year ended September 30, 1998 declined slightly to
$20,768,362, a decrease of approximately 2% from fiscal 1997 sales. This
decrease in sales was attributable to a $2,782,460 decrease in service revenue
offset by a $2,391,724 increase in product sales. In the service category the
reduction was due to the absence of diagnostic service revenue caused by the
termination of a contract in late fiscal 1997 to provide such services to Ford
Motor Company. The contract was not renewed because Ford consolidated suppliers
in this business segment. The current level of service sales is expected to
continue in fiscal 1999. The increase in product sales was primarily volume
driven and due to a $2,834,000 increase in automotive diagnostic sales of which
$1,941,645 represented sales of aftermarket automotive products manufactured by
Waekon which was acquired on February 17, 1998. The increase in product sales is
also attributed to a $517,000 increase in sales of indicating instruments.
Offsetting the above mentioned increases was a $917,000 decrease in sales of
fastening system products due to continued lower orders from General Motors for
large networked systems. The Company anticipates that product sales will
increase approximately 5% in fiscal 1999 due to an increase in sales of
automotive aftermarket products.

        Sales for the fiscal year ended September 30, 1997 declined to
$21,159,098, a decrease of approximately 19% from fiscal 1996 sales. This
decrease in sales was primarily volume-driven and attributable to lower sales in
both the product and service categories. In the product category, sales of
automotive diagnostic instruments dropped by $2,310,000 or 17% and sales of
fastening system products declined by $1,326,000 or 26%. Sales of indicating
instruments were up approximately $129,000, a 7% increase over the previous
year. Automotive diagnostic instrument sales were down because Ford has
significantly reduced orders for essential special service tools which are
one-time large volume sales to all dealers in North America. Fastening system
sales were down because of lower orders from General Motors for large networked
systems. In the service category, the decrease in sales of $1,196,000 or 23% was
primarily due to lower diagnostic service revenue since the project on which the
service is provided was coming to completion and required less manpower.

        Cost of products sold during fiscal 1998 was $10,678,807 or 54.5% of net
product sales. Cost of products sold during fiscal 1997 was $9,874,129 or 57.4%
of net product sales. For fiscal 1996 the cost of products sold was $12,700,245
or approximately 60.5% of net product sales. The decrease in the percentage of
cost of products sold relative to product sales between fiscal 1998 and fiscal
1997 was due primarily to product mix and, to a lesser extent, to cost
containment. The decrease in the percentage of cost of products sold relative to
product sales between fiscal 1997 and fiscal 1996 was due entirely to product
mix.

        Cost of services sold during fiscal 1998 was $885,731 or 74.9% of net
service sales. Cost of services sold during fiscal 1997 was $3,528,069 or 89.0%
of net service sales. In fiscal 1996 cost of services sold was $4,343,794 or
84.1% of net service sales. The decrease in the cost of services sold as a
percentage of net service sales between fiscal 1998 and fiscal 1997 is 


                                       15
<PAGE>   16

primarily due to the elimination of costs associated with the termination of a
contract in late fiscal 1997 to provide diagnostic services to Ford Motor
Company. The increase in cost of services sold as a percentage of net service
sales between fiscal 1997 and fiscal 1996 resulted because the diagnostic
contract with Ford involved significant price competition.

        The percentage of cost of products sold relative to net product sales in
fiscal 1999 is expected to increase slightly due to a change in product mix.
Specifically, sales of aftermarket automotive products are anticipated to
represent a larger percentage of product sales in fiscal 1999 versus fiscal 1998
and the gross margin on aftermarket products is generally lower than products
sold to OEM's. The percentage of cost of services sold relative to net service
sales is expected to remain unchanged in fiscal 1999.

        Product development expenditures in fiscal 1998 were $3,028,211 which
was 7% lower than fiscal 1997 expenditures of $3,263,857. This decrease was due
to a reduction in engineering and development expenditures on products completed
or nearing completion in fiscal 1998. Products in this category include the Fuel
System Analyzer, the Fuel Cap Tester, the Pro-Spec 1000, the pulse tool control,
and the Watchdog 1000. In fiscal 1997 product development expenditures were
$3,263,857 which was 13% lower than fiscal 1996 expenditures of $3,740,003. The
decrease was due to a reduction in engineering and development expenditures on
new products, namely the Pro-Spec 1000, Audio VIM, PDR and the Watchdog 1000.
Development of these products was at or near completion at the end of fiscal
1997. It is anticipated that the amount spent on product development in fiscal
1999 will be slightly below the amount spent in fiscal 1998 since new products
currently in development are nearing completion. In addition, procedures and
policies have been initiated to reduce the development time on new products.

        Marketing and administrative expenses amounted to $4,824,995 which was
23.2 % of net sales in fiscal 1998; $3,691,892, or 17.4% of net sales in fiscal
1997; and $3,944,962, or 15.1% of net sales in fiscal 1996. Expenditures in
fiscal 1998 were 31% higher than the amount spent in fiscal 1997. Approximately
71% of the dollar increase, or $800,091 represents marketing and administrative
expenses incurred by Waekon which was acquired on February 17, 1998. The balance
of the increase represents higher administrative expenses including an increase
in the bonus applicable to fiscal 1998 operations and expenses associated with
upgrading the Company's computer systems. Expenditures in fiscal 1997 were 6.4%
lower than the amount spent in fiscal 1996. The absolute decrease in the amount
of marketing and administrative expenses between fiscal 1997 and fiscal 1996 was
primarily related to lower administrative expenses due to lower sales. The
Company anticipates that marketing and administrative expenses will increase
approximately 8% in fiscal 1999 due to the inclusion of Waekon for a full twelve
months.

        Interest charges were $58,908 in fiscal 1998 compared with $10,966 in
fiscal 1997 and $156,440 in fiscal 1996. The increase in interest charges in
fiscal 1998 compared to fiscal 1997 was due to additional long-term debt
associated with the Waekon acquisition on February 17, 1998. The decrease in
interest charges in fiscal 1997 compared to fiscal 1996 was caused primarily 



                                       16
<PAGE>   17

by a significant reduction in borrowing by the Company under its revolving line
of credit due to lower working capital requirements associated with a 19%
reduction in sales.

        Other income in fiscal 1998 of $145,692 consists primarily of interest
income on short-term investments and purchased discounts. Fiscal 1997 results
include other income of $70,132, also consisting of interest income on
short-term investments and purchased discounts. Fiscal 1996 results include
other income of $151,858 of which approximately two-thirds was due to rental
income of excess space at the Company's former Lincoln Park, Michigan location.
Fiscal 1996 other income also included approximately $50,000 of purchased
discounts.

        Income taxes in fiscal 1998 were $403,000 which represents a 28.0%
effective tax rate. Fiscal 1997 income taxes were $255,000 which represents an
effective tax rate of 29.7%. Income taxes were $478,000 in fiscal 1996 which
represented a 33.2% effective tax rate. The effective tax rate decreased in
fiscal 1998 and in fiscal 1997 due to the recognition of research and
development tax credits in an amount greater than what was estimated at the end
of the prior year. It is anticipated that the effective tax rate in fiscal 1999
will increase due to a reduction in research and development tax credits.

        Net income in fiscal 1998 was $1,034,400, or $ .86 per share, which was
an increase of $429,083, or 70.9% from fiscal 1997 net income of $ 605,317. Net
income in fiscal 1997 was $605,317, or $.51 per share, which was a decrease of
$354,558, or 36.9% from fiscal 1996 net income of $959,875. The increase in net
income in fiscal 1998 versus fiscal 1997 was primarily due to an improvement in
gross margin on product sales coupled with a 14% increase in product sales. The
decrease in net income in fiscal 1997 versus fiscal 1996 was primarily due to a
decrease in sales, offset in part by an improvement in gross margin and a
reduction in both product development and marketing and administrative expenses.

Liquidity and Capital Resources
-------------------------------

        Current assets of $10,600,029 at September 30, 1998 were 5.9 times
current liabilities and the total of cash and receivables was 2.4 times current
liabilities. These ratios compare to 6.1 and 3.3 respectively at the end of
fiscal 1997. Total current assets were down approximately $497,000 from the
previous year end with most of the reduction in accounts receivable due to lower
sales in the fourth quarter of fiscal 1998 versus the same quarter in fiscal
1997. Cash and cash equivalents was down approximately $1,075,000 due to the
acquisition of Waekon Industries in February 1998. Inventory was up
approximately $1,008,000, also as a result of the Waekon acquisition. There was
virtually no change in current liabilities.

        Working capital at September 30, 1998 was $8,818,135 as compared to
$9,278,599 a year ago. The decrease was due to the use of cash and cash
equivalents to acquire Waekon Industries in February, 1998.



                                       17
<PAGE>   18

        During the fiscal year the Company's business may require relatively
large inventories of both work-in-process and finished goods in order to meet
anticipated delivery schedules. During fiscal 1998 there was no need to build
inventory since sales for the year were down from the previous year and year-end
product backlog was lower than last year. Nevertheless, whenever there may be a
requirement to increase inventory in fiscal 1999 there will be a negative but
temporary impact on liquidity. The Company believes that internally generated
funds and a $5,000,000 revolving line of credit will provide sufficient
liquidity to meet ongoing working capital requirements.

        Internally generated funds in fiscal 1998 were a positive $1,867,048 and
were more than adequate to fund the Company's primary non-operating cash
requirement consisting of capital expenditures which amounted to $390,290 and
$65,306 consisting of long term debt payments. The primary reason for the
positive cash flow from operations was a $1,108,772 decrease in accounts
receivable. In fiscal 1997 internally generated funds were a positive $4,216,015
and were more than adequate to fund the Company's primary non-operating cash
requirement consisting of capital expenditures of $366,842 and current portions
of long term debt of $63,550. The primary reason for the positive cash flow from
operations in fiscal 1997 was a $2,068,580 decrease in accounts receivable. In
fiscal 1996 internally generated funds were a positive $3,339,967 and were more
than adequate to fund the Company's primary non-operating cash requirement
consisting of capital expenditures which amounted to $546,592. The primary
reason for the positive cash flow in fiscal 1996 was a $2,297,688 decrease in
inventory. The Company does not anticipate significant changes in either
accounts receivable or inventory in fiscal 1999. Furthermore, the Company
expects internally generated funds in fiscal 1999 from other operating
activities, primarily net income, to be adequate to fund approximately $550,000
of capital expenditures in addition to $162,000 due on the current portion of
long term debt. Most of the capital expenditures will be made to upgrade
engineering and manufacturing equipment.

        In February, 1998 the Company amended an existing credit agreement with
its financial lender. The agreement expires in February, 1999 and provides for
an unsecured revolving credit facility of $5,000,000 with interest at the prime
commercial rate with a LIBOR option and is unsecured. At September 30, 1998, the
Company had no outstanding balances under this loan facility and remains in
compliance with its loan covenants. The revolving credit facility is subject to
annual review by the Company's lender. Although no determination has been made
to seek renewal of the credit agreement, the Company believes that, given its
current financial condition, renewal at the existing amount may be obtained on
acceptable terms.

Impact of Inflation
-------------------

        In recent years, inflation has had a minimal effect on the Company
because of low rates of inflation and the Company's policy prohibiting the
acceptance of long-term fixed rate contracts without provisions permitting
adjustment for inflation.


                                       18
<PAGE>   19

Year 2000 Readiness Disclosure
------------------------------

        In late fiscal 1997 the Company began its review of Year 2000 issues
with emphasis placed on information technology systems software and hardware.
During fiscal 1998 the Company expanded its review to include non-information
technology systems and the readiness of key third parties, primarily suppliers
and customers. The Company used internal resources to make its assessment.

        The Company determined that its primary information systems software and
hardware were not Year 2000 compliant and decided to replace non-compliant
equipment and software. Training and testing occurred throughout all of fiscal
1998. Installation began in early fiscal 1999 and has been substantially
completed. The system is functioning properly.

        Substantial progress has also been made on the Company's review of non
information technology systems and on the readiness of key third parties. The
review is expected to be completed by mid fiscal 1999. Based on assessment
efforts to date, the Company does not believe that the Year 2000 issue
applicable to these two areas will have a material adverse effect on the
Company's business and operating results. This assessment is based on certain
assumptions and expectations, primarily the ability of third parties to
remediate their own Year 2000 issues. Unexpected and significant compliance
problems in this area could result in a material adverse effect on the Company's
business and operating results. Though the Company does not expect a material
adverse impact on operations, contingency plans are under development and are
expected to be completed by mid 1999. Such plans primarily involve the use of
alternative suppliers and transportation vendors.

        Costs associated with the Company's assessment and remediation of Year
2000 issues did not have a material effect on the Company's financial statements
in fiscal 1998 and are not expected to be material in fiscal 1999.

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, and
(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 


                                       19
<PAGE>   20

products and indicating instrument products, and (d) the ability of significant
third parties with whom the Company does business to provide products and
services in the Year 2000 and beyond.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

        Not Applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
---------------------------------------------------

        The following pages contain the Financial Statements and Supplementary
Data as specified for Item 8 of Part II of Annual Report on Form 10-K.








                                       20
<PAGE>   21

================================================================================

                          INDEPENDENT AUDITORS' REPORT

Shareholders and Board of Directors
Hickok Incorporated
Cleveland, Ohio

We have audited the accompanying consolidated balance sheets of HICKOK
INCORPORATED as of September 30, 1998 and 1997, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended September 30, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance that the financial statements are free from material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Hickok
Incorporated as of September 30, 1998 and 1997, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended September 30, 1998 in conformity with generally accepted accounting
principles.







MEADEN & MOORE, Ltd.
Certified Public Accountants

November 24, 1998                                       
Cleveland, Ohio

================================================================================


                                      F-1
<PAGE>   22

================================================================================

                          CONSOLIDATED BALANCE SHEET
                               HICKOK INCORPORATED
                                  SEPTEMBER 30
                                     ASSETS
<TABLE>
<CAPTION>

                                                                              1998                     1997
                                                                         -------------------------------------
CURRENT ASSETS:
<S>                                                                       <C>                     <C>        
     Cash and cash equivalents                                            $ 1,593,314             $ 2,668,345
     Accounts receivable - less allowance for
         doubtful accounts of $20,000 ($15,000, 1997)                       2,698,012               3,312,988
     Inventories-less allowance for obsolete inventory
         of $112,022 ($78,589, 1997)                                        5,892,089               4,884,401
     Prepaid and deferred expenses                                            234,802                 231,121
     Refundable income taxes                                                  181,812                    --
                                                                         -------------------------------------

                  Total Current Assets                                     10,600,029              11,096,855



PROPERTY, PLANT AND EQUIPMENT:
     Land                                                                     226,738                 199,611
     Buildings                                                              1,541,245               1,410,141
     Machinery and equipment                                                3,953,541               3,813,873
                                                                         -------------------------------------
                                                                            5,721,524               5,423,625
         Less accumulated depreciation                                      3,301,279               3,129,290
                                                                         -------------------------------------
                                                                            2,420,245               2,294,335



OTHER ASSETS:
     Goodwill-less accumulated amortization of $130,308
          ($55,111, 1997)                                                   1,941,585                 224,889
     Deferred charges - less accumulated amortization
         of $178,441 ($103,712, 1997)                                          81,095                 115,988
     Deposits                                                                   4,350                   4,350
                                                                         -------------------------------------
                                                                            2,027,030                 345,227
                                                                         -------------------------------------

                  Total Assets                                            $15,047,304             $13,736,417
                                                                          =====================================
</TABLE>

See notes to consolidated financial statements

================================================================================


                                      F-2
<PAGE>   23
================================================================================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                    1998                    1997
                                                                              -------------------------------------
<S>                                                                           <C>                     <C>         
CURRENT LIABILITIES:
     Current portion of earn out and
         capitalized lease payable                                            $    161,762            $     63,550
     Trade accounts payable                                                        656,302                 657,285
     Accrued payroll and related expenses                                          604,639                 422,772
     Accrued expenses                                                              196,903                 131,662
     Customer deposits                                                                --                   237,587
     Accrued income taxes                                                          162,288                 305,400
                                                                              -------------------------------------

                  Total Current Liabilities                                      1,781,894               1,818,256

DEFERRED INCOME TAXES                                                              165,000                 174,000

LONG-TERM DEBT:
     Minimum earn out and capitalized lease payable -
           less current portion                                                    549,475                 127,101


 STOCKHOLDERS' EQUITY:
     Common shares - par value $1.00:
         Class A 3,750,000 shares authorized, 752,470
              shares issued; (750,570 - 1997)                                      742,884                 740,984
         Class B 1,000,000 convertible shares authorized,
              475,533 shares issued                                                454,866                 454,866
     Contributed capital                                                         1,549,598               1,532,398
     Treasury shares - 9,586 Class A shares and
         20,667 Class B shares                                                    (605,795)               (605,795)
     Retained earnings                                                          10,409,382               9,494,607
                                                                              -------------------------------------

                  Total Stockholders' Equity                                    12,550,935              11,617,060
                                                                              -------------------------------------

                  Total Liabilities and Stockholders' Equity                  $ 15,047,304            $ 13,736,417
                                                                              =====================================
</TABLE>



================================================================================



                                      F-3
<PAGE>   24
================================================================================

                        CONSOLIDATED STATEMENT OF INCOME
                               HICKOK INCORPORATED
                        FOR THE YEARS ENDED SEPTEMBER 30
<TABLE>
<CAPTION>
                                                           1998                     1997                     1996
                                                      ---------------------------------------------------------------

NET SALES
<S>                                                   <C>                      <C>                      <C>         
     Product sales                                    $ 19,585,276             $ 17,193,552             $ 21,009,103
     Service sales                                       1,183,086                3,965,546                5,162,358
                                                      ---------------------------------------------------------------
          Total net sales                               20,768,362               21,159,098               26,171,461

COSTS AND EXPENSES:
     Cost of products sold                              10,678,809                9,874,129               12,700,245
     Cost of services sold                                 885,731                3,528,069                4,343,794
     Product development                                 3,028,211                3,263,857                3,740,003
     Marketing and administrative
          expenses                                       4,824,995                3,691,892                3,944,962
     Interest charges                                       58,908                   10,966                  156,440
     Other income                                         (145,692)                 (70,132)                (151,858)
                                                      ---------------------------------------------------------------
                                                        19,330,962               20,298,781               24,733,586
                                                      ---------------------------------------------------------------
           Income before Provision
              for Income Taxes                           1,437,400                  860,317                1,437,875


PROVISION FOR INCOME TAXES:
     Current                                               416,000                  305,000                  327,000
     Deferred                                              (13,000)                 (50,000)                 151,000
                                                      ---------------------------------------------------------------
                                                           403,000                  255,000                  478,000
                                                      ---------------------------------------------------------------

          NET INCOME                                  $  1,034,400             $    605,317             $    959,875
                                                      ===============================================================

NET INCOME PER COMMON SHARE                           $        .86             $        .51             $        .80
                                                      ===============================================================

WEIGHTED AVERAGE SHARES OF
    COMMON STOCK OUTSTANDING                             1,196,602                1,193,497                1,192,850
                                                      ===============================================================
</TABLE>




See notes to consolidated financial statements

================================================================================


                                      F-4
<PAGE>   25

================================================================================



                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                               HICKOK INCORPORATED
             FOR THE YEARS ENDED SEPTEMBER 30, 1998, 1997, AND 1996

<TABLE>
<CAPTION>
                                                                        COMMON STOCK -
                                                                       $1.00 PAR VALUE
                                                                       ---------------

                                                     RETAINED                              
                                                     EARNINGS        CLASS A       CLASS B 
                                                   ----------------------------------------
<S>                                                <C>           <C>           <C>         
Balance at
September 30, 1995                                 $ 8,287,270   $   737,984   $   454,866 

     Dividend of $.10 per Class A and B shares        (119,285)         --            --   
     Net income                                        959,875          --            --   
                                                   ----------------------------------------

Balance at
September 30, 1996                                   9,127,860       737,984       454,866 

     Dividend of $.20 per Class A and B shares        (238,570)         --            --   
     Sale of Class A shares under option                  --           3,000          --   
     Net income                                        605,317          --            --   
                                                   ----------------------------------------

Balance at
September 30, 1997                                   9,494,607       740,984       454,866 

     Dividend of $.10 per Class A and B shares        (119,625)         --            --   
     Sale of Class A shares under option                  --           1,900          --   
     Net income                                      1,034,400          --            --   
                                                   ----------------------------------------

Balance at
September 30, 1998                                  $10,409,382   $   742,884   $   454,866
                                                    =======================================
</TABLE>


See notes to consolidated financial statements

================================================================================

                                      F-5
<PAGE>   26

================================================================================

<TABLE>
<CAPTION>


 CONTRIBUTED       TREASURY                 
   CAPITAL          SHARES        TOTAL     
-----------------------------------------    
  <S>           <C>           <C>           
                                            
  $ 1,520,111   $  (605,795)  $10,394,436   
                                            
         --            --        (119,285)  
         --            --         959,875   
-----------------------------------------    
                                            
                                            
    1,520,111      (605,795)   11,235,026   
                                            
         --            --        (238,570)  
       12,287          --          15,287   
         --            --         605,317   
-----------------------------------------    
                                            
                                            
    1,532,398      (605,795)   11,617,060   
                                            
         --            --        (119,625)  
       17,200          --          19,100   
         --            --       1,034,400   
-----------------------------------------    
                                            
                                            
  $ 1,549,598   $  (605,795)  $12,550,935  
==========================================   

</TABLE>








================================================================================


                                      F-6

<PAGE>   27


                      CONSOLIDATED STATEMENT OF CASH FLOWS
                               HICKOK INCORPORATED
                        FOR THE YEARS ENDED SEPTEMBER 30

<TABLE>
<CAPTION>

                                                                   1998                   1997                  1996
                                                             ------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                           <C>                    <C>                    <C>         
     Cash received from customers                             $ 21,882,134           $ 23,227,678           $ 27,085,022
     Cash paid to suppliers and employees                      (19,341,978)           (19,316,363)           (22,949,707)
     Interest paid                                                 (26,232)               (19,377)              (168,592)
     Interest received                                              94,048                 56,077                  3,588
     Income taxes (paid) refunded                                 (740,924)               268,000               (630,344)
                                                             ------------------------------------------------------------

     Net Cash Provided by
         Operating Activities                                    1,867,048              4,216,015              3,339,967

CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital expenditures                                         (390,290)              (366,842)              (546,592)
     Deferred charges                                                 --                  (82,500)              (137,200)
     Decrease in deposits                                              101                  9,394                   --
     Proceeds on sale of assets                                     44,743                  6,266                 35,600
     Payments for businesses purchased                          (2,426,518)                  --                 (647,103)
                                                             ------------------------------------------------------------

     Net Cash Used in Investing
         Activities                                             (2,771,964)              (433,682)            (1,295,295)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Changes in short-term borrowings                                 --               (1,375,000)            (2,135,000)
     Decrease in long-term financing                               (65,306)                  --                     --
     Sale of Class A shares under option                            14,816                 12,770                   --
     Dividends paid                                               (119,625)              (238,570)              (119,285)
                                                             ------------------------------------------------------------

     Net Cash Used in
         Financing Activities                                     (170,115)            (1,600,800)            (2,254,285)
                                                             ------------------------------------------------------------

Increase (Decrease) in Cash and Cash
     Equivalents                                                (1,075,031)             2,181,533               (209,613)

Cash and Cash Equivalents at
     Beginning of Year                                           2,668,345                486,812                696,425
                                                             ------------------------------------------------------------

Cash and Cash Equivalents at
     End of Year                                              $  1,593,314           $  2,668,345           $    486,812
                                                             ============================================================
</TABLE>


See notes to consolidated financial statements

================================================================================

                                      F-7
<PAGE>   28
================================================================================
<TABLE>
<CAPTION>


                                                                          1998                   1997               1996
                                                                       ----------------------------------------------------
RECONCILIATION OF NET INCOME TO NET CASH
    PROVIDED BY OPERATING ACTIVITIES:

<S>                                                                    <C>                 <C>                 <C>        
Net income                                                             $ 1,034,400         $   605,317         $   959,875
ADJUSTMENTS TO RECONCILE NET INCOME TO
   NET CASH PROVIDED BY
   OPERATING ACTIVITIES:
      Depreciation  and amortization                                       746,804             707,164             666,315
      Non-cash compensation charge related
          to stock options                                                   4,284               2,517                --
      Loss (Gain) on disposal of assets                                     13,346              30,622             (12,800)
      Deferred income taxes                                                (13,000)            (50,000)            151,000
      CHANGES IN ASSETS AND LIABILITIES:
          Decrease in accounts receivable                                1,108,772           2,068,580             913,561
          Decrease (Increase) in
              inventories                                                 (288,444)             28,457           2,297,688
          Decrease (Increase) in prepaid and
             deferred expenses                                               3,167              (4,172)              2,488
          Decrease (Increase) in refundable income taxes                  (181,812)            267,599            (267,599)
          Increase (Decrease) in trade
             accounts payable                                             (370,073)            297,142            (495,075)
          Increase (Decrease) in accrued payroll and
             related expenses                                              145,062            (346,828)           (551,011)
          Increase (Decrease) in other
             accrued expenses                                             (192,346)            304,217            (288,731)
          Increase (Decrease) in accrued
             income taxes                                                 (143,112)            305,400             (35,744)
                                                                       ----------------------------------------------------

                Total Adjustments                                          832,648           3,610,698           2,380,092
                                                                       ----------------------------------------------------

                Net Cash Provided by
                    Operating Activities                               $ 1,867,048         $ 4,216,015         $ 3,339,967
                                                                       ====================================================
</TABLE>

NON-CASH INVESTING AND FINANCING ACTIVITIES:

During 1998, the Company sold equipment for $5,000. At September 30, 1998,
$1,578 of the proceeds remained in accounts receivable.

Also during 1998, the Company incurred an earn-out liability of $585,892 in
connection with the purchase of Waekon Industries, Inc.

During 1997, the Company sold land for $30,000. At September 30, 1997, $23,934
of the proceeds remained in accounts receivable.

Also during 1997, the Company purchased equipment under a capitalized lease for
$190,651.

================================================================================

                                      F-8
<PAGE>   29
                                      



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               HICKOK INCORPORATED
                        SEPTEMBER 30, 1998, 1997 AND 1996


1. NATURE OF OPERATIONS

Hickok Incorporated and its wholly-owned domestic subsidiaries ("Company")
operate in one major business segment: The development and manufacture of
measuring, indicating, instrumentation and control products, fastening systems
and related engineering services for the transportation industry. As an
extension of the sales of automotive electronic test equipment, the Company also
provides technical training programs in the proper use of the equipment for some
of its automotive technician customers. Prior to 1998, the Company also provided
diagnostic services to a major customer. This contract expired at the end of
1997 and management has elected not to pursue similar activities in the future.
The Company serves the automotive, marine, locomotive and general aviation
markets predominately in North America. The Company also makes sales to
international customers on a worldwide basis. Sales in the Company's principal
product classes, as a percent of consolidated sales, are as follows:
<TABLE>
<CAPTION>

                  PRODUCT CLASSES                                    1998             1997             1996
                  ---------------                                   ----------------------------------------
<S>                                                                  <C>              <C>               <C>  
                  Automotive Test Equipment                          69.2%            54.0%             52.2%
                  Diagnostic/Training                                 1.0             16.1              18.3
                  Fastening Systems                                  14.1             17.9              19.2
                  Indicating Instruments                             13.6              9.6               7.3
                  Other Product Classes                               2.1              2.4               3.0
                                                                    ----------------------------------------

                  Total                                             100.0%           100.0%            100.0%
                                                                    ========================================
</TABLE>


Current operating properties consist of manufacturing plants in Greenwood,
Mississippi and Kirkwood, Pennsylvania; and a corporate headquarters, marketing
and product development facility in Cleveland, Ohio.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

PRINCIPLES OF CONSOLIDATION:
The consolidated financial statements include the accounts of Hickok
Incorporated and its wholly-owned domestic subsidiaries since date of
acquisition. Significant intercompany transactions and balances have been
eliminated in the financial statements.

CONCENTRATION OF CREDIT RISK:
The Company sells its products and services primarily to customers in the United
States and to a lesser extent overseas. The Company extends normal credit terms
to its customers. Customers in the automotive industry (primarily original
equipment manufacturers) comprise 81% of outstanding receivables at September
30, 1998 (84% in 1997). Sales to individual customers in excess of 10% of total
sales approximated $9,400,000 and $2,500,000 (1998), $12,700,000 and $2,800,000
(1997), $13,600,000 and $5,000,000 (1996). The Company establishes an allowance
for doubtful accounts based upon factors surrounding the credit risk of specific
customers, historical trends and other information.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
may affect the reported amounts of certain assets and liabilities and disclosure
of contingencies at the date of the financial statements, and the reported
amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates.

REVENUE RECOGNITION:
The Company records sales as manufactured items are shipped to customers.
Revenue from development contracts is recognized as earned under terms of the
contracts. The Company warrants certain products against defects for periods
ranging primarily from 12 to 36 months. Charges against income for warranty
expense and sales returns and allowances were immaterial during each of the
three years in the period ending September 30, 1998.



================================================================================



                                      F-9
<PAGE>   30

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

PRODUCT DEVELOPMENT COSTS:

Product development costs, which include engineering production support, are
expensed as incurred. Research and development performed for customers
represents no more than 1% of sales in each year. The arrangements do not
include a repayment obligation by the Company.

INVENTORIES:

Inventories are valued at the lower of cost (first-in, first-out) or market and
consist of:
<TABLE>
<CAPTION>

                                                                1998               1997
                                                         ---------------------------------
<S>                                                      <C>                <C>           
Raw materials and component parts                        $    3,249,619     $    2,482,194
Work-in-process                                               1,440,624          1,268,995
Finished products                                             1,201,846          1,133,212
                                                         ---------------------------------

                                                         $    5,892,089     $    4,884,401
                                                         =================================
</TABLE>

PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment are carried at cost. Maintenance and repair costs
are expensed as incurred. Additions and betterments are capitalized.

The depreciation policy of the Company is generally as follows:
<TABLE>
<CAPTION>

                               CLASS                              METHOD                RATE
                               ------------------------------------------------------------------
                              <S>                                 <C>                 <C>  
                               Buildings                          Straight-line       2-1/2 to 4%
                               Machinery and equipment            Straight-line       8 to 33-1/3%
                               Tools and dies                     Straight-line        33-1/3%
</TABLE>

Depreciation amounted to $596,878 (1998), $615,273 (1997) and $619,382 (1996).

INTANGIBLE ASSETS:

Deferred charges represent software implementation costs that were purchased to
support and enhance internal information systems and are being amortized over 3
years. Goodwill is being amortized on a straight-line basis over 15 to 20 years.
Amortization of intangibles amounted to $149,926 (1998), $91,891 (1997) and
$46,933 (1996).

INCOME TAXES:

The Company records income taxes under the provisions of Financial Accounting
Standards Board Statement No. 109, "Accounting for Income Taxes."

INCOME PER COMMON SHARE:

Income per common share information is computed on the weighted average number
of shares outstanding during each period as disclosed in note 8.

CASH AND EQUIVALENTS:

For purposes of the Statement of Cash Flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents. From time to time the Company maintains cash balances in
excess of the FDIC limits. The cash balance at September 30, 1998 amounted to
$1,742,361.

RECLASSIFICATIONS:

Certain prior year amounts have been reclassified to conform with current year
presentation. 



================================================================================



                                      F-10
<PAGE>   31


================================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

3. SHORT-TERM FINANCING

The Company has an unsecured credit agreement of $5,000,000 which matures in
February, 1999 with interest at the bank's prime commercial rate with a LIBOR
option. The agreement includes covenants with which the Company has complied.
The weighted average interest rate on short-term financing was 8.50% (1998),
8.25% (1997), and 8.40% (1996).


4. LEASES
OPERATING:

The Company leases a facility and certain equipment under operating leases
expiring through February 2003.

The Company's future minimum commitments under operating leases are as follows:

<TABLE>
<CAPTION>
                                            <S>                    <C>          
                                            1999                   $     154,092
                                            2000                         126,423
                                            2001                          98,719
                                            2002                          87,000
                                            2003                          32,625
                                                                   -------------
                                              Total                $     498,859
                                                                   =============
</TABLE>

Rental expense under these commitments was $171,176 (1998), $119,926 (1997) and
$264,499 (1996).

CAPITAL:

During 1997, the Company purchased equipment under a capital lease obligation.
The obligation is payable in monthly installments of $5,906 including interest
at 7.2% per year until October 2000. The balance outstanding at September 30,
1998 was $125,346. Minimum annual lease payments under the capital lease are as
follows:
<TABLE>
<CAPTION>

        <S>                                 <C>                  <C>            
                                            1999                 $        70,872
                                            2000                          63,637
                                                                 ---------------
                                                                         134,509
        Less amounts representing interest                                 9,163
                                                                 ---------------
                                                                 $       125,346
                                                                 ===============
</TABLE>

The cost and accumulated depreciation of the equipment held under capital lease
at September 30, 1998 is as follows:
<TABLE>
<CAPTION>

                       <S>                                       <C>
                                              Cost               $       190,651
                         Accumulated depreciation                            -
                                                                 ---------------
                                        Book value               $       190,651
                                                                 ===============
</TABLE>

A facility held under a capital lease has a net book value of $15,000 at
September 30, 1998. Future minimum lease payments which extend through 2061 are
immaterial.

5. CAPITAL STOCK, TREASURY STOCK, AND CONTRIBUTED CAPITAL

Unissued shares of Class A common stock (582,466 and 557,266 shares in 1998 and
1997 respectively) 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 (see note 6). The Class A shares have one vote per share and the
Class B shares have three votes per share, except under certain circumstances
such as voting on voluntary liquidation, sale of substantially all the assets,
etc. Dividends up to $.10 per year, noncumulative, must be paid on Class A
shares before any dividends are paid on Class B shares.


================================================================================


                                      F-11
<PAGE>   32

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

6. STOCK OPTIONS

On December 11, 1997 the Board of Directors adopted and shareholders
subsequently approved at the Company's Annual Meeting held on February 25, 1998,
the 1997 Key Employees Stock Option Plan.

Under the Company's Key Employees Stock Option Plan, the 1995 Key Employees
Stock Option Plan, and the 1997 Key Employees Stock Option Plan (collectively
the "Employee Plans") the Compensation Committee of the Board of Directors has
the authority to grant options to Key Employees to purchase up to 190,000 Class
A shares. The options are exercisable for up to 10 years. Incentive stock
options are available at an exercise price of not less than market price on the
date the option is granted. However, options available to an individual owning
more than 10% of the Company's Class A shares at the time of grant must be at a
price not less than 110% of the market price. Nonqualified stock options may be
issued at such exercise price and on such other terms and conditions as the
Compensation Committee may determine. No options may be granted at a price less
than $2.925. Non-cash compensation expense related to stock option plans was
$4,284 (1998) and $2,517 (1997). All options granted under the Employee Plans
are exercisable at September 30, 1998.

On December 11, 1997 the Board of Directors adopted and shareholders
subsequently approved at the Company's Annual Meeting held on February 25, 1998,
the 1997 Outside Directors Stock Option Plan.

The Company's 1995 Outside Directors Stock Option Plan and the 1997 Outside
Directors Stock Option Plan (the "Directors Plans") provide for the automatic
grant of options to purchase up to 51,000 shares of Class A common stock over a
five year period to members of the Board of Directors who are not employees of
the Company, at the fair market value on the date of grant. All options granted
under the Directors Plans become fully exercisable on February 25, 2001.

Transactions involving the plans are summarized as follows:
<TABLE>
<CAPTION>




                                                        WEIGHTED                    WEIGHTED                WEIGHTED
                                                         AVERAGE                     AVERAGE                 AVERAGE
                                                        EXERCISE                    EXERCISE                EXERCISE
OPTION SHARES                              1998           PRICE        1997           PRICE     1996          PRICE
-----------------------------------------------------------------------------------------------------------------------
EMPLOYEE PLANS:

<S>                                        <C>          <C>          <C>          <C>          <C>         <C>      
Outstanding October 1,                     78,400       $    9.47    53,850       $    8.53    39,800      $    5.45

Granted                                    24,000           10.50    27,550           10.75    14,050          17.25

Canceled (1998 -$8.31                      (2,900)          11.93      --               --       --              --       
   to $17.25 per share)

Exercised (1998 -$6.92
  to $8.31 per share)                      (1,900)           7.80    (3,000)           4.26      --              --
                                          -------                   -------                   ------

Outstanding September 30,
  (1998 -$2.93 to $17.25
   per share)                              97,600            9.69    78,400            9.47    53,850           8.53
                                          =======                   =======                   =======
Exercisable September 30,                  97,600            9.69    78,400            9.47    53,850           8.53
                                          =======                   =======                   =======



DIRECTORS PLANS:

Outstanding October 1,                     24,000           14.69    18,000       $   16.75    12,000      $   16.13

Granted                                     6,000           12.25     6,000            8.50     6,000          18.00

Canceled                                     --               --       --               --       --              --

Exercised                                    --               --       --               --       --              --
                                          -------                   -------                   -------

Outstanding September 30,
  (1998 -$8.50 to $18.00
  per share)                               30,000           15.65    24,000           14.69    18,000          16.75
                                          =======                   =======                   =======
Exercisable September 30,                  18,000           15.69    10,000           16.50     4,000          16.13
                                          =======                   =======                   =======
</TABLE>

================================================================================




                                      F-12
<PAGE>   33

================================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The Company applies APB Opinion No. 25, "Accounting for Stock Issued To
Employees" and related interpretations in accounting for its stock plans as
allowed under FAS Statement No. 123, "Accounting for Stock-Based Compensation."
Accordingly, the adoption of this statement did not affect the Company's results
of operations, financial position or liquidity. Had compensation cost for fixed
price stock options granted in 1998, 1997 and 1996 been determined consistent
with FAS 123, pro forma net income and earnings per share would have been as
follows:

<TABLE>
<CAPTION>
                                                                            1998               1997              1996
                                                                            ----               ----              ----
<S>                                                                <C>               <C>                <C>          
                  Net Income    - as reported                      $   1,034,400     $      605,317     $     959,875
                                                                   =============     ==============     =============

                                - pro forma                        $     939,672     $      518,040     $     864,571
                                                                   =============     ==============     =============

                  Net Income per share - as reported               $         .86     $          .51     $         .80
                                                                   =============     ==============     =============

                                - pro forma                        $         .79     $          .43     $         .72
                                                                   =============     ==============     =============
</TABLE>

The fair value method of accounting has not been determined for options granted
prior to October 1, 1995. The effects of applying FAS No. 123 in this pro forma
disclosure are not necessarily indicative of future amounts.

The fair value of issued stock options is estimated on the date of grant using
the Black-Scholes option pricing model. The Black-Scholes option pricing model
was originally developed for use in estimating the fair value of traded options
which have different characteristics from the Company's employee stock options.
The model is also sensitive to changes in the subjective assumptions which can
materially affect the fair value estimate. As a result, management believes that
the Black-Scholes model may not necessarily provide a reliable single measure of
the fair value of employee stock options. The following weighted-average
assumptions were used in the option pricing model for 1998, 1997 and 1996
respectively: a risk free interest rate of 5.2%, 5.9% and 5.9%; an expected life
of 5 years; an expected dividend yield of 1.3%, 1.6% and 1.2%; and a volatility
factor of .3, .2 and .21.


7. INCOME TAXES

A reconciliation of the provision for income taxes to the statutory Federal
income tax rate is as follows:

<TABLE>
<CAPTION>

                                                                            1998               1997              1996
                                                                   ---------------------------------------------------
 Income before income taxes                                        $   1,437,400    $       860,317    $    1,437,875
 Statutory rate                                                               34%                34%               34%
                                                                   ---------------------------------------------------

<S>                                                                      <C>                <C>               <C>    
                                                                         488,716            292,508           488,878

 State and local taxes - net                                              73,900             67,300            86,460
 Permanent differences                                                   (13,000)            20,300            36,900
 Research and development credit - net                                  (105,800)           (68,000)          (38,000)
 Adjustment of estimated research and development credit - net           (49,500)           (52,000)          (96,000)
 Other                                                                     8,684             (5,108)             (238)
                                                                   ---------------------------------------------------

                                                                   $     403,000    $       255,000    $      478,000
                                                                   ===================================================
</TABLE>


================================================================================



                                      F-13
<PAGE>   34

================================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Changes in deferred income taxes which relate to temporary differences in the
recognition of revenue and expenses for tax and financial reporting purposes are
as follows:

<TABLE>
<CAPTION>

                                                                            1998              1997              1996
                                                                   ---------------------------------------------------
<S>                                                                <C>              <C>                      <C>     
    Inventory costing                                              $     (13,800)   $       (23,900)         $ 65,700
    Warranty reserve                                                     (19,700)                 -            49,000
    Other                                                                 20,500            (26,100)           36,300
                                                                   ---------------------------------------------------

                                                                   $     (13,000)   $       (50,000)   $      151,000
                                                                   ===================================================

</TABLE>

Deferred tax asset (liabilities) consist of the following:
<TABLE>
<CAPTION>

                                                                            1998              1997
                                                                   ---------------------------------
               <S>                                                <C>                <C>    
                  Current:
                      Inventories                                  $      78,700     $       92,500
                      Accrued liabilities                                117,300             99,500
                                                                   ---------------------------------
                                                                         196,000            192,000
                  Noncurrent:
                      Depreciation                                      (175,400)          (180,200)
                      Other                                               10,400              6,200
                                                                   ---------------------------------
                                                                        (165,000)          (174,000)
                                                                   ---------------------------------

                      Total                                        $      31,000     $       18,000
                                                                   ================================= 
</TABLE>


Deferred tax asset balances are included in "prepaid and deferred expenses."


8. EARNINGS PER COMMON SHARE

Earnings per common share are based on the provision 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 effect
of applying FAS No. 128 on earnings per share and required reconciliations are
as follows:
<TABLE>
<CAPTION>

                                                                              FOR THE YEARS ENDED SEPTEMBER 30,
                                                                            1998               1997              1996
                                                                  ---------------------------------------------------
<S>                                                               <C>               <C>                <C>           
Basic Earnings Per Share
Income available to
 common stockholders                                              $    1,034,400    $       605,317    $      959,875

Shares denominator                                                     1,196,602          1,193,497         1,192,850

Per share amount                                                  $          .86    $           .51    $          .80
                                                                  ===================================================

Effect of Dilutive Securities
Average share outstanding                                              1,196,602          1,193,497         1,192,850

Stock options                                                             18,073             17,992            24,305
                                                                  ---------------------------------------------------
                                                                       1,214,675          1,211,489         1,217,155
Diluted Earnings Per Share
Income available to
 common stockholders                                              $    1,034,400    $       605,317    $      959,875

Per share amount                                                  $          .85    $           .50    $          .79
                                                                  ====================================================
</TABLE>

================================================================================


                                      F-14
<PAGE>   35

================================================================================


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

9. EMPLOYEE BENEFIT PLANS

The Company has a formula based profit sharing bonus plan for officers and key
employees. The formula takes into account "Economic Profit" in determining the
bonus pool. The bonus distribution is determined by the Compensation Committee
of the Board of Directors after considering such factors as salary, length of
service and merit. The maximum individual distribution is 50% of the
distributee's salary. For fiscal years ended September 30, 1998, 1997 and 1996,
approximately $73,000, -0- and $98,000, respectively, were expensed.

The Company has a 401(k) Savings and Retirement Plan covering all full-time
employees. Company contributions to the plan, including matching of employee
contributions, are at the Company's discretion. For fiscal years ended September
30, 1998, 1997 and 1996, approximately $30,106, -0- and $27,600, respectively,
were contributed to the plan. The Company does not provide any other post
retirement benefits to its employees.

The Company has a deferred compensation plan which permits selected management
and highly compensated employees to make tax deferred contributions in the form
of salary reductions instead of, or in addition to, contributions made by them
under the 401(k) Savings and Retirement Plan. For fiscal years ended September
30, 1998, 1997 and 1996, approximately $5,542, $9,725 and $86,038 respectively,
were allocated by the participants to this plan and is included in "Accrued
Payroll and Related Expenses."


10. ACQUISITIONS

On February 17, 1998, the Company purchased certain assets of Waekon Industries,
Inc. for $2,221,302 which has been accounted for under the purchase method of
accounting. The purchase included accounts receivable ($504,282), inventory
($719,244), prepaid and other assets ($42,786), machinery and equipment
($380,100), assumption of current liabilities ($425,895), and goodwill
($1,000,785). The Company also recorded as goodwill closing costs related to the
purchase ($205,216), and the present value of a five year earn out contract
having a minimum required pay out of $585,892. The earn out is payable in equal
annual installments of $150,000 including interest, beginning December 30, 1998.
The earn out is calculated based on a percentage of income before tax and of
revenues for 5 years from date of acquisition. Goodwill is being amortized over
20 years.

Pro forma effects of the Waekon Industries, Inc. purchase on fiscal 1997
operations were reported in Unaudited Consolidated Pro Forma Condensed Financial
Statements included with Form 8-K/A dated February 17, 1998. The following pro
forma data summarizes the results of operations of the Company for the twelve
months ended September 30, 1997 and for the twelve months ended September 30,
1998, assuming Waekon was acquired at the beginning of each period presented. In
preparing the pro forma data, adjustments have been made to conform Waekon's
accounting policies to those of the Company and to reflect purchase accounting
adjustments and interest expense.
<TABLE>
<CAPTION>

                                                                   TWELVE MONTHS ENDED

                                                    SEPTEMBER 30, 1997             SEPTEMBER 30, 1998
                                                    ------------------             ------------------


<S>                                                  <C>                            <C>              
                  Net Sales                          $       26,032,266             $      22,809,660
                                                     ==================             =================

                  Net Income                         $          709,584             $       1,118,606
                                                     ==================             =================

                  Net Income
                    per Common Share                 $              .59             $             .93
                                                     ==================             =================
</TABLE>



================================================================================




                                      F-15
<PAGE>   36


================================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The pro forma information does not purport to be indicative of the results of
operations which would have actually been obtained if the acquisition had
occurred on the dates indicated or the results of operations which will be
reported in the future.



On January 31, 1996, the Company purchased certain assets of Maradyne
Corporation's Beacon Gage Division for $647,103 which has been accounted for
under the purchase method of accounting. The purchase consisted of inventory
($289,354), machinery and equipment ($257,749), and goodwill ($100,000).
Goodwill is being amortized over 15 years.

Operations of the Beacon Gage Line have been included in the statement of income
from the date of acquisition. The pro forma effect of the acquisition on prior
years operations is not determinable.


<TABLE>
<CAPTION>

11. QUARTERLY DATA (UNAUDITED)

                                            FIRST           SECOND             THIRD           FOURTH
                                            -----           ------             -----           ------
                  NET SALES
<S>                   <C>          <C>              <C>               <C>              <C>           
                      1998         $    4,805,016   $    6,004,505    $    4,923,793   $    5,035,048
                      1997              4,651,009        4,843,631         4,349,500        7,314,958

                  NET INCOME
                      1998                287,435          540,620            57,440          148,905
                      1997               (194,441)         (72,269)         (236,290)       1,108,317

                  NET INCOME PER
                  COMMON SHARE

                  BASIC
                      1998                    .24              .45               .05              .12
                      1997                   (.16)            (.06)             (.20)             .93

                  DILUTED
                      1998                    .24              .44               .05              .12
                      1997                   (.16)            (.06)             (.19)             .91

</TABLE>



================================================================================


                                      F-16

<PAGE>   37


ITEM 9.           DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
----------------------------------------------------------------------

                  Not Applicable.


                                    PART III
                                    --------

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------------------------

                  The information required by this Item 10 as to the Directors
of the Company is incorporated herein by reference to the information set forth
under the caption "Information Concerning Nominees for Directors" in the
Company's definitive Proxy Statement for the Annual Meeting of Shareholders to
be held on February 24, 1999, since such Proxy Statement will be filed with the
Securities and Exchange Commission not later than 120 days after the end of the
Company's fiscal year pursuant to Regulation 14A. Information required by this
Item 10 as to the Executive Officers of the Company is included in Part I of
this Annual Report on Form 10-K.


ITEM 11.          EXECUTIVE COMPENSATION
----------------------------------------

                  The information required by this Item 11 is incorporated by
reference to the information set forth under the caption "Executive
Compensation" in the Company's definitive Proxy Statement for the Annual Meeting
of Shareholders to be held on February 24, 1999, since such Proxy Statement will
be filed with the Securities and Exchange Commission not later than 120 days
after the end of the Company's fiscal year pursuant to Regulation 14A.


ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------------------------

                  The information required by this Item 12 is incorporated by
reference to the information set forth under the captions "Principal
Shareholders" and "Share Ownership of Directors and Officers" in the Company's
definitive Proxy Statement for the Annual Meeting of Shareholders to be held on
February 24, 1999, since such Proxy Statement will be filed with the Securities
and Exchange Commission not later than 120 days after the end of the Company's
fiscal year pursuant to Regulation 14A.


ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------------------------

                  The information required by this Item 13 is incorporated by
reference to the information set forth under the caption "Transactions with
Management" in the Company's definitive Proxy Statement for the Annual Meeting
of Shareholders to be held on February 24, 1999, since such Proxy Statement will
be filed with the Securities and Exchange Commission not later than 120 days
after the end of the Company's fiscal year pursuant to Regulation 14A.




                                       21
<PAGE>   38


                                     PART IV
                                     -------

ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON 
--------------------------------------------------------------------------------
REPORT 8-K
----------

(a)(1)  Financial Statements
---------------------------

The following Consolidated Financial Statements of the Registrant and its
subsidiaries are included in Part II, Item 8:

                                                                     Page

         Report of Independent Auditors..............................F-1
         Consolidated Balance Sheet - As of
                  September 30, 1998 and 1997........................F-2
         Consolidated Statement of Income - Years
                  Ended September 30, 1998, 1997 and 1996............F-4
         Consolidated Statement of Stockholders'
                  Equity - Years Ended September 30, 1998,
                  1997 and 1996......................................F-5
         Consolidated Statement of Cash Flows -
                  Years Ended September 30, 1998, 1997
                  and 1996...........................................F-7

         Notes to Consolidated Financial Statements..................F-9

(a)(2)  Financial Statement Schedules
        -----------------------------

The following Consolidated Financial Statement Schedules of the Registrant and
its subsidiaries are included in Item 14 hereof.

                                                                 Sequential Page
                                                                 ---------------

Report of Independent Auditors as to Schedules...........................42
Schedule VIII-Valuation and Qualifying Accounts..........................43
Schedule IX-Short-term Borrowings........................................44

         All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable, and therefore have been
omitted.

(a)(3)  Exhibits
        --------

Reference is made to the Exhibit Index set forth herein.

(b)      There were no reports filed on Form 8-K during the quarter ended
         September 30, 1998.




                                       22
<PAGE>   39






                                   SIGNATURES
                                   ----------

         Pursuant to the requirements of Section 13 or 15(d) 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 at Cleveland, Ohio this
22nd day of December, 1998.

                                          HICKOK INCORPORATED



                                          By: /s/ Robert L. Bauman
                                              -----------------------------
                                                 Robert L. Bauman,
                                                 Chairman, President and
                                                 Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated and on the 22nd day of December,
1998:

Signature:                                       Title
----------                                       -----


/s/ Robert L. Bauman             Chairman, President and Chief Executive Officer
--------------------------       (Principal Executive Officer)
Robert L. Bauman                 


/s/ Eugene T. Nowakowski         Chief Financial Officer
--------------------------       (Principal Financial and Accounting Officer)
Eugene T. Nowakowski             


/s/ Thomas H. Barton             Director
--------------------------
Thomas H. Barton


/s/ Harry J. Fallon              Director
--------------------------
Harry J. Fallon


/s/ T. Harold Hudson             Director
--------------------------
T. Harold Hudson


/s/ George S. Lockwood, Jr.      Director
--------------------------
George S. Lockwood, Jr.


/s/ Michael L. Miller            Director
--------------------------
Michael L. Miller


/s/ Janet H. Slade               Director
--------------------------
Janet H. Slade





                                       23
<PAGE>   40





                                  Exhibit Index
                                  -------------


Exhibit No.:     Document                                                 Page
-----------      --------                                                 ----

2                Asset Purchase Agreement, dated February 6, 1998, by
                 and among Waekon Industries, Inc. a Pennsylvania
                 corporation, Peter Vinci, and Waekon Corp., an Ohio 
                 corporation (incorporated herein by reference to the
                 appropriate exhibit to the Company's Current Report
                 on Form 8-K dated February 17, 1998).

3(a)             Articles of Incorporation and Code of Regulations.         *

3(b)             Amendment to Articles of Incorporation (incorporated
                 herein by reference to the Company's Annual Report on
                 Form 10-K for the fiscal year ended September 30,
                 1995).

10(a)            Restated Loan Agreement, dated as of February 28,
                 1998, by and between the Company and Huntington
                 National Bank (incorporated herein by reference to
                 the appropriate exhibit to the Company's Quarterly
                 Report on Form 10-Q for the quarterly period ended
                 March 31, 1998).

10(b)            Hickok Incorporated 1995 Key Employees Stock Option
                 Plan (incorporated herein by reference to the
                 appropriate exhibit to the Company's Registration
                 Statement on Form S-8 as filed with the Commission on
                 September 17, 1998).

10(c)            Hickok Incorporated 1997 Outside Directors Stock
                 Option Plan (incorporated herein by reference to the
                 appropriate exhibit to the Company's Registration
                 Statement on Form S-8 as filed with the Commission on
                 September 17, 1998).

10(d)            Hickok Incorporated 1997 Key Employees Stock Option
                 Plan (incorporated herein by reference to the
                 appropriate exhibit to the Company's Registration
                 Statement on Form S-8 as filed with the Commission on
                 September 17, 1998). 

11               Computation of Net Income Per Common Share.                45

21               Subsidiaries of the Registrant.                            46

23               Consent of Independent Auditors.                           47

27               Financial Data Schedule                                    48

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

* Reference is made to the Company's basic documents filed as Exhibits 3(a) and
3(b) to the Company's Registration Statement on Form S-1, dated September 1,
1959, as supplemented by Amendments 1 and 2 thereto, dated respectively October
15, 1959, and October 19, 1959 (the October 15, 1959 amendment containing an
Amendment to Articles of Incorporation, dated September 29, 1959) and such
exhibits are hereby incorporated by reference herein





                                      E-1
<PAGE>   41



         The following pages contain the Consolidated Financial Statement
Schedules as specified for Item 14(a)(2) of Part IV of Form 10-K.
















<PAGE>   42


           REPORT OF INDEPENDENT AUDITORS AS TO CONSOLIDATED SCHEDULES
           -----------------------------------------------------------



To the Shareholders and Board of Directors
Hickok Incorporated
Cleveland, Ohio

We have audited the consolidated financial statements of HICKOK INCORPORATED
(the "Company") as of September 30, 1998 and 1997, and for each of the three
years in the period ended September 30, 1998, and have issued our report thereon
dated November 24, 1998; such consolidated financial statements and report are
included in Part II, Item 8 of this Form 10-K. Our audits also included the
consolidated financial statement schedules ("schedules") of the Company listed
in Item 14 (a)(2). These schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits. In
our opinion, such schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.




MEADEN & MOORE, Ltd.
Certified Public Accountants


December 21, 1998
Cleveland, Ohio


<PAGE>   43


                               HICKOK INCORPORATED

                SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS


<TABLE>
<CAPTION>

          Col. A                         Col. B                       Col. C                            Col. D            Col. E
--------------------                  -----------          ----------------------------              -------------      ---------

                                                                    Additions
                                                           ----------------------------

                                       Balance at         Charged to               Charged to                          Balance
                                       Beginning          Costs and                  Other                             at End
        Description                    of Period           Expenses                 Accounts        Deductions        of Period
------------------------------        -----------       -------------            -------------    -------------      ----------
<S>                                   <C>               <C>                      <C>              <C>                <C>        
Deducted from Asset Accounts:
                                                             Year Ended September 30, 1996
                                                        --------------------------------------

  Reserve for doubtful accounts       $    15,000       $   2,562 (1)            $     409 (2)    $   2,971 (3)      $    15,000

  Reserve for inventory obsolescence  $    60,200       $ 264,138                $       -        $ 248,513 (5)      $    75,825

  Reserve for warranty claim (4)      $         -       $       -                $       -        $       -          $         -

                                                             Year Ended September 30, 1997
                                                        --------------------------------------

  Reserve for doubtful accounts       $    15,000       $  19,941 (1)            $   2,258 (2)    $  22,199 (3)      $    15,000

  Reserve for inventory obsolescence  $    75,825       $ 276,913                $       -        $ 274,149 (5)      $    78,589

  Reserve for warranty claim (4)      $         -       $       -                $       -        $       -          $         -

                                                             Year Ended September 30, 1998
                                                        --------------------------------------

  Reserve for doubtful accounts       $    15,000       $   25,647 (1)           $      55 (2)    $  20,702 (3)      $    20,000

  Reserve for inventory obsolescence  $    78,589       $  377,743               $       -        $ 344,310 (5)      $   112,022

  Reserve for warranty claim (4)      $         -       $        -               $       -        $       -          $         -
</TABLE>


(1)  Classified as bad debt expense.
(2)  Recoveries on accounts charged off in prior years.
(3)  Accounts charged off during year as uncollectible.
(4)  Reserve classified as an offset to a certificate of deposit of
     $142,995 in current assets which collateralized a related bank guaranteed
     letter of credit. The certificate was cashed in during fiscal 1993.
(5) Inventory charged off during the year as obsolete.



<PAGE>   44





                               HICKOK INCORPORATED

                       SCHEDULE IX - SHORT-TERM BORROWINGS

<TABLE>
<CAPTION>
        Col. A                     Col. B         Col. C                Col. D                    Col. E                  Col. F
----------------------           ----------     --------            --------------            --------------       ---------------
                                                Weighted            Maximum Amount            Average Amount      Weighted Average 
                                 Balance at     Average               Outstanding               Outstanding        Interest Rate 
 Category of Aggregate             End of       Interest              During the                During the           During the 
 Short-term Borrowings             Period         Rate                  Period                    Period             Period (3)
----------------------           ----------     --------            --------------            --------------       ---------------
<S>                             <C>                <C>       <C>                              <C>                         <C>  
                                                             Year Ended September 30, 1996
                                                             -----------------------------

   Note Payable to Bank (1)     $ 1,375,000        8.40%            $    3,835,000            $1,595,000 (2)              8.58%


                                                             Year Ended September 30, 1997
                                                             -----------------------------

   Note Payable to Bank (1)     $         -        8.25%            $    1,205,000            $    8,260 (2)              4.62%


                                                             Year Ended September 30, 1998
                                                             -----------------------------

   Note Payable to Bank (1)     $         -        8.50%            $      350,000            $   14,205 (2)              9.30%
</TABLE>


(1)  Note payable to bank represents borrowings under a revolving credit
     facility which expires February 28, 1999.

(2)  The average amount outstanding during the period was computed by dividing
     the total of daily outstanding principal balances by 365.

(3)  The weighted average interest rate during the period was computed by
     dividing the actual interest by the average short-term debt outstanding.