UNITED STATES   
                      SECURITIES AND EXCHANGE COMMISSION   
   
                            Washington, DC  20549   
   
                                  Form 10-KSB   
                           Annual Report Pursuant to   
                          Section 13 or 15(d) of the   
                     Securities and Exchange Act of 1934   
   
For the fiscal year ended                                Commission File   
    November 30, 1996                                       #09-9599   
   
                                   HIA, INC.   
     (Exact name of small business issuer as specified in its charter)   
   
      New York                                       16-1028783   
(State or other jurisdiction of                 (Federal employer   
 Incorporation or Organization)                 identification number)   
   
                               4275 Forest Street   
                             Denver, Colorado 80216   
                     (Address of principal executive office)   
   
                                 (303) 394-6040   
            (Issuer's telephone number, including area code)   
   
Securities registered pursuant to Section 12(b) of the Act:    NONE   
   
Securities registered pursuant to Section 12(g) of the Act:   
   
                          Common Stock, Par Value $.01   
                                 (Title of Class)   
   
The check mark below indicates whether the Issuer (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 twelve months (or reports),    
and (2) has been subject to such filing requirements for the past ninety    
days.     
   
YES      X                 NO              
   
Indicate by check mark if disclosure of delinquent filers pursuant to    
Item 405 of Regulation S-B 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-KSB or any amendment to this Form 10-KSB.  (X).   
   
The Issuer had revenues of $16,550,803 for the fiscal year ended    
November 30, 1996.     
   
The aggregate market value of voting stock held by non-affiliates of the    
Issuer as of February 1, 1997 was approximately $1,092,072 based on    
insider transactions which took place in 1996.   
   
The number of shares of the only class of Common Stock of the Issuer    
outstanding as of January 1, 1997 was 10,303,383 fully diluted,    
9,103,383 non-diluted.     
   
Transitional Small Business Disclosure Format (check one):   
   
YES                          NO      X        
   
                                   PART I   
   
Item 1.   Business   
   
(a)    General Development of Business   
   
HIA, Inc. (the Company) was incorporated in 1974.  The Company is a    
holding company with all of its business conducted through its wholly-   
owned subsidiary, CPS Distributors, Inc. (CPS).  Through CPS, the    
Company distributes turf irrigation equipment and commercial, industrial    
and residential well pumps and equipment on a wholesale basis.  The    
principal executive offices of the Company are located at 4275 Forest    
Street, Denver, Colorado 80216, telephone (303) 394-6040.   
   
(b)    Narrative Description of Business   
   
General The Company acquired CPS, a ninety-year-old company based in    
Denver, Colorado, in February 1984.  CPS serves customers in the Rocky    
Mountain region in five states consisting of Colorado, Wyoming, New    
Mexico, Kansas and Nebraska.  CPS carries a variety of brand name    
products, including pumps and water systems, water conditioning    
equipment, pump and well accessories, pipe valves and fittings and    
sprinkler system equipment.  The industrial, commercial and residential    
pumps and turf irrigation equipment represented approximately 21% and    
79%, respectively, of net sales for 1996 and approximately 20% and 80%,    
respectively, of net sales in 1995.   
   
CPS' line of products has changed in response to the supply and demand    
forces of the marketplace.  The management of CPS believes that its two    
divisions (i.e., turf and irrigation equipment and industrial,    
commercial and residential pumps and equipment) reduce the cyclicality    
of sales and earnings that would otherwise be affected by product line    
shifts caused by economic and demographic changes; however, the Company    
is subject to the ups and downs of the overall construction activity in    
the Rocky Mountain region.  The Company purchases approximately 27% of    
its products from one manufacturer.  However, the products purchased can    
be obtained from other competing manufacturers but not as a consolidated    
product group.   
   
CPS' sales and service engineers provide technical support to assist    
customers in developing a system specifically tailored to the customers'    
needs.  The Company uses computer resources for its order entry,    
inventory, payroll and accounting functions.     
   
Customer Base; Seasonality CPS' customers include contractors, dealers    
and municipalities with the majority of sales derived from contractors.     
The Company believes that neither its aggregate sales nor those of any    
of its business units are concentrated in or materially dependent upon    
any single customer or small group of customers.     
   
Quotation activity is especially intense in the winter and spring months    
(December to April) when contracts are reviewed and eventually awarded    
for spring or summer construction.  Since over 79% of CPS' business    
relates to turf and irrigation products, its sales are concentrated from    
March to October and are therefore seasonal in nature.   
   
Competition The Company operates in a highly competitive market.     
During at least the past seven years, manufacturers have abandoned the    
exclusive relationships with their distributors.  As a result, the    
Company is competing with other wholesalers of the same products.     
   
In the past several years, most manufacturers have also abandoned prices    
based on volume buying and have gone to a pricing system based on a    
percentage of purchases over the previous years' business.  This change    
allows smaller wholesalers to buy at the same price levels as the larger    
wholesalers.  Therefore, a medium-sized wholesaler, such as CPS, no    
longer has a price advantage to cover the higher operating costs of a    
larger operation.     
   
CPS offers standard discounts on merchandise to its customers.     
Additional discounts are given based on quantity of order or annual    
volume of purchases, depending on product and competitive conditions.     
The Company has monthly specials on certain of its inventory and    
provides discounts for orders placed at trade shows.  The majority of    
the programs offered are based on discounts received from the Company's    
suppliers.  Therefore, there is no material effect on operating results    
from providing these discounts.     
   
Each salesperson receives a draw against commission.  Commission is    
determined as a percentage of the gross profit generated from sales to    
the accounts in the sales representative's territory.  Sales quotas are    
established for each area.  Sales personnel are eligible to receive a    
bonus for meeting or exceeding their assigned quota.     
   
CPS emphasizes customer service, convenient availability of products and    
knowledge of the industry.  However, pricing, currently an important    
factor, is expected to become even more important in the late 1990s    
because the competition can provide the same products and warranties.     
   
CPS has seven major competitors in its market area for turf and    
irrigation equipment and six major competitors in its market area for    
industrial, commercial and residential pumps and equipment.  It is    
estimated by management that CPS has over 20% of the total market in    
Colorado for residential pumps and 25% of the total market in Colorado    
for turf and irrigation equipment.  Some of CPS' competitors have    
financial resources greater than CPS.     
   
CPS estimated that in the past two years its market share in the turf    
and irrigation equipment market in Colorado increased because of the    
cumulative effect of opening satellite operations in Thornton, Colorado,    
in March 1992; Littleton, Colorado, in March 1993; Aurora, Colorado, in    
March 1994; and in the central section of Denver in March 1995; all    
located in the Denver metropolitan area.  CPS opened a branch in    
Cheyenne, Wyoming in June 1996. Management believes that CPS can    
continue to consolidate its market share in the turf and irrigation    
market by opening additional local warehousing and sales operations.     
   
Management believes CPS has an established reputation as a distributor    
of quality product lines such as Rainbird, Hunter, Lasco and Jacuzzi.     
CPS competes primarily on service and, to a lesser extent, on price,    
quality and reliability of products, technical services and availability    
of products.     
   
Employees At November 30, 1996, the Company employed approximately 58    
persons, of which 23 were warehouse employees and 35 were sales and    
administrative employees.  The Company considers its employee relations    
to be good.  None of the Company's employees are covered by union    
contracts or collective bargaining agreements.   
   
   
Item 2.     Properties   
   
On June 14, 1985, CPS sold its real estate located at 560 South Lipan    
and 1225 West Center, Denver, Colorado for $930,000 cash to an    
investment group called Lipan-Center, Ltd.  There were no brokerage fees    
paid by CPS as a result of the sale.  CPS signed a ten-year lease with    
Lipan-Center, Ltd. beginning June 14, 1985 and ending June 13, 1995,    
with monthly lease payments of $9,585.  The base rent was adjusted    
annually by a percentage equal to the consumer price index.  As a result    
of the sale, CPS reported a gain of $288,088 which was reflected in the    
accompanying financial statements as Deferred Gain on the Sale of Real    
Estate and was amortized ratable to income over ten years, the life of    
the lease.  The lease was terminated effective April 1995.   
   
The Company's leased facilities in Denver, Colorado are comprised of an    
aggregate of 32,265 square feet of offices and warehouse on 166,000    
square feet of land.  This building serves as the central warehouse of    
CPS and the executive offices of the Company.  In addition, the Company    
owns property in Casper, Wyoming, which consists of 6,159 square feet of    
office/warehouse space on 33,600 square feet of land.  The Company also    
leases a warehouse and small office in Colorado Springs, Colorado    
comprised of 6,370 square feet of office/warehouse space on 21,781    
square feet of land; 4,000 square feet of office and warehouse space on    
14,000 square feet of land in Fort Collins, Colorado; 10,000 square feet    
of office and warehouse space in Thornton, Colorado; 5,000 square feet    
of office and warehouse space in Littleton, Colorado; 4,000 square feet    
of office and warehouse space in    
   
Aurora, Colorado; 8,400 square feet of office and warehouse space in the    
central section of Denver, Colorado; and 9,120 square feet of office and    
warehouse space in Cheyenne, Wyoming.   
   
On March 28, 1993, the Company entered into a sublease agreement on a    
portion of the property located in Denver, Colorado.  The lease called    
for rent payments of $3,272.50 per month until the expiration of the    
master lease on June 13, 1995.  Upon termination of the master lease in    
April 1995, the sublessee began remitting monthly lease payments to the    
original lessor.  The subleased premises consisted of approximately    
11,900 square feet of office and warehouse space.     
   
During November 1994, the Company entered into a new agreement to lease    
warehouse space for its main warehouse.  The lease has a ten year term,    
beginning March 1995, with monthly rent at $9,500 for the first five    
years, after which the monthly rent may be adjusted by the percentage    
increase in the Consumer Price Index.  The Company has an option to    
purchase the related property at the end of the initial ten year term at    
a price approximating the market value at that time, subject to certain    
conditions.  The Company also has two five-year options to extend the    
lease term, one at the beginning of the eleventh year and one at the    
beginning of the 16th year.  The Company is to pay for all taxes,    
insurance and maintenance on the property.    
   
The Company believes its leased facilities are adequate to meet its    
needs for the next several years and anticipates that it would encounter    
little difficulty in locating alternative facilities should its    
requirements change.    
   
Item 3.     Legal Proceedings   
   
The Company knows of no material pending legal proceedings to which the    
Company is a party or of which any of its properties is the subject and    
no such proceedings are known to the Company to be contemplated by    
governmental authorities.     
   
Item 4.    Submission of Matters to a Vote of Security Holders   
   
There were no matters submitted to a shareholder vote during the fiscal    
year ended November 30, 1996.     
                                         PART II   
   
Item 5.    Market for the Company's Common Stock and Related Security    
Holders Matters   
   
The principal market on which HIA Shares are traded is the Denver over-   
the-counter market.  Prior to June 6, 1986, the Company's stock was    
traded on the NASDAQ National Market System.  On June 6, 1986, HIA    
Shares were de-listed from NASDAQ because the Company no longer    
satisfied the minimum total capital and surplus requirement for    
continued listing.  Although one market maker continues to quote prices    
for HIA Shares, the Company is not aware of any established public    
trading market for HIA Shares since June 6, 1986.     
   
The approximate number of holders of record of HIA Shares as of November    
30, 1996 was 2,000.     
   
The Company has never declared any dividends with respect to HIA Shares.     
The Company has not in the past and is currently restricted from paying    
cash dividends under its existing line-of-credit agreement.   
   
   
Item 6.  Management's Discussion and Analysis or Plan of Operation   
   
Liquidity and Capital Resources   
   
At November 30, 1996, the Company had total cash balances of $141,584.     
Cash flows from operating activities increased by $440,191 during the    
year ended November 30, 1996 primarily as a result of increases in net    
income of $537,669 and accounts payable of $247,340 partially offset by    
increases in accounts receivable and inventory levels of $209,007 and    
$112,518.  The increase in accounts receivable resulted directly from    
increased sales levels.  The increased level of inventories resulted    
primarily from the opening of a new satellite operation during fiscal    
1996.    
   
   
The following is a two-year summary of working capital and current    
ratios:   

<TABLE>   
                               1996             1995         
<S>                            <C>              <C>   
Working Capital                $ 2,027,665      $ 1,837,448   
Current Ratios                   2.10 to 1        2.16 to 1       
</TABLE>   
   
   
At November 30, 1996, the Company and its subsidiaries have an available    
line-of-credit totalling $4,000,000, of which $3,121,387 was unused.   
   
Management believes that the present working capital is adequate to    
conduct its present operations.  The Company does not have any    
commitments nor anticipates material capital expenditures for fiscal    
1997.   
   
During March 1994, the Company entered into an agreement to purchase one    
third of the common shares held by R. Thomas Dalbey, President,    
Director, and principal owner, 1,386,011 shares at $.14 per share for a    
total cost of $194,041.54.  This amount was paid in cash.  The agreement    
also gave the Company the option to purchase 1,386,011 of  Mr. Dalbey's    
remaining shares at $.15 per share by April 1, 1996, and 1,386,011    
shares (or all remaining shares) at $.16 per share by April 1, 1998.     
The per share cost to acquire the remaining 2,772,022 shares held by Mr.    
Dalbey was to be adjusted for the net profit or loss generated by the    
Company during the option period.   
   
On November 30, 1995, the Company exercised its option and purchased    
1,386,011 common shares held by R. Thomas Dalbey at $.18585 per share,    
for a total cost of $257,590 under this agreement.  On October 31, 1996,    
the Company exercised its option and purchased 1,386,011 common shares    
held by R. Thomas Dalbey at $.22282 per share, for a total cost of    
$308,833 under this agreements.   
    
On November 30, 1995, the Board of Directors granted an option to each    
of the three executive officers of CPS to purchase up to 200,000 shares    
at $.18585 per share by December 31, 1997.  The options' exercise price    
was equal to the common stock's market price at the date of grant.   
   
On November 30, 1996, the Board of Directors granted an option to each    
of the three executive officers of CPS to purchase up to 200,000 shares    
at $.22282 per share by December 31, 1998.  The options' exercise price    
was equal to the common stock's market price at the date of grant.   
   
In addition, the Board of Directors granted an option to each of the    
three executive officers of CPS to purchase up to 200,000 shares at $.14    
per share by December 31, 1994.  In June 1994 each of the three officers    
exercised options to purchase 107,143 shares, or 321,428 total shares,    
at $.14 per share for a total of $45,000.  The remaining options were    
exercised in December 1994.   
   
   
Results of Operations   
   
Comparison 1996 vs. 1995   
   
Net sales were up $2,081,686 primarily from the robust housing and    
construction-related trade in the Rocky Mountain region and volume    
increases related to the opening of a Cheyenne, Wyoming satellite    
operation in June 1996 which contributed new sales totalling $275,125    
and additional gross profit of $79,276.  Other income decreased by    
$29,211 as a result of the termination of a sublease agreement in June    
1995.  Cost of sales increased in fiscal 1996 directly in proportion to    
the increase in sales.  Cost of sales as a percentage of net sales was    
69.3% in fiscal 1996 compared to 68.9% in fiscal 1995.  Selling, general    
and administrative expense increased by $379,370 primarily as a result    
of  payroll cost increases of approximately $169,000 and expenses    
associated with the new Cheyenne, Wyoming satellite operation of    
approximately $164,000.  See Item 1 regarding seasonality of sales.    
   
Management believes staffing levels have been reduced as low as    
practicable and interest rates are not expected to be reduced    
significantly in the near future, so that profitability most likely will    
not be improved by further cost reductions in these areas.     
   
The Company had net income of $537,669, which was a increase of $184,125    
from the prior year's net income of $353,544.  The increase was    
primarily a result of the increase in gross profit of $569,430, offset    
by the increases in selling, general and administrative expenses of    
$379,370.    
   
The weighted-average interest rates on bank borrowings was 9.5 percent    
and 8.9 percent for 1996 and 1995.   The weighted-average balance    
outstanding, $1,236,127 for the year ended November 30, 1996, decreased    
approximately $237,742 from 1995 to 1996, primarily as a result of cash    
flow derived from net income from operations.   
     
Income Taxes At November 30, 1996, the Company has recorded a deferred    
tax asset totalling $49,250 classified and included in other current    
assets in the accompanying balance sheet to the Company's consolidated    
financial statements.  Based upon the Company's recent history of    
taxable income and its projections for future earnings, management    
believes that it is more likely than not that sufficient taxable income    
will be generated next year to utilize the deferred tax asset.  See Note    
3 to the Company's consolidated financial statements.    
   
Recent Accounting Pronouncements The Financial Accounting Standards    
Board has recently issued Statement of Financial Accounting Standards    
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets"    
and SFAS No. 123, "Accounting for Stock Based Compensation."  SFAS No.    
121 requires that long-lived assets and certain identifiable intangibles    
be reported at the lower of the carrying amount or their estimated    
recoverable amount and the adoption of this statement by the Company is    
not expected to have an impact on the financial statements.  SFAS No.    
123 encourages the accounting for stock-based employee compensation    
programs to be reported within the financial statements on a fair value    
based method.  If the fair value based method is not adopted, then the    
statement requires pro-forma disclosure of net income and earnings per    
share as if the fair value based method had been adopted.  The Company    
has not yet determined how SFAS No. 123 will be adopted nor its impact    
on the financial statements.  Both statements are effective for fiscal    
years beginning after December 15, 1995.    
   
Item 7.   Financial Statements   
   
The response to this item is submitted as a separate section of this    
report.     
   
Item 8.  Changes in and Disagreements with Accountants on Accounting and    
Financial Disclosure   
   
There have been no disagreements between the Company and its independent    
accountants on any matter of accounting principles or practices or    
financial statement disclosure since the Company's inception.     
   
On February 12, 1996, BDO Seidman, LLP replaced Mitchell Finley and    
Company, P.C. as HIA, Inc.'s principal accountants.    
   
The registrant has not consulted with BDO Seidman, LLP on any accounting    
or auditing matters during the past two years.  On January 1, 1996,    
Mitchell Finley and Company, P.C. combined their practice into BDO    
Seidman, LLP.   
   
Mitchell Finley and Company's report on the financial statements for    
the two years ended November 30, 1994 contained an unqualified opinion.     
Also, there were no disagreements on any matter of accounting principal    
or practice, financial statement disclosure, or auditing scope or    
procedure with Mitchell Finley and Company, P.C.   
   
The Company received a letter from Mitchell Finley and Company, P.C.    
addressed to the SEC stating it agreed with the above statements.  A    
copy of this letter dated February 12, 1996, was filed as Exhibit A to    
the related Form 8-K dated February 12, 1996.    
   
                                          PART III   
   
Item 9.   Directors and Executive Officers of the Company   
   
(a)   Identification of Directors   
   
The list presented below sets forth the names and ages of all directors    
of the Company indicating all positions and offices with the Company    
held by each such person and his term of office as director and the    
period during which he has served as such.     
   
<TABLE>   
   
    Name              Age    Positions                  Director Since   
<S> <C>               <C>    <C>                        <C>   
    Carl J. Bentley   63     Chairman of the Board      1994   
                             and Director   
   
    Alan C. Bergold   48     President, Treasurer       1981   
                             and Director   
   
    Donald Champlin   45     Executive Vice President,  1994   
                             Secretary and Director   
   
    R. Thomas Dalbey  59     Director                   1974   
</TABLE>   
   
(b)   Identification of Executive Officers   
   
The list presented below sets forth the names and ages of all executive    
officers of the Company indicating all positions and offices held by    
such person and the period during which he has served as such.     
   
<TABLE>   
     Name               Age    Position            Year First Elected    
(1)   
<S>  <C>                 <C>   <C>                            <C>   
     Carl J. Bentley     63    Chairman of the Board          1996   
                               and Director                   1994   
   
     Alan C. Bergold     48    President, Treasurer           1996   
                               and Director                   1981   
   
     Donald L. Champlin  45    Executive Vice President,      1996   
                               Secretary    
                               and Director                   1994   
</TABLE>   
(1)  All officers serve at the discretion of the Board of Directors.    
   
(c)   Business Experience   
   
The material presented below sets forth a brief account of the business    
experience during at least the past five years of each director,    
executive officer and significant employee.     
   
Carl J. Bentley, age 63, was appointed Chairman of the Board in October    
1996. He joined the Company as General Manager of CPS in July 1985.  In    
November 1986, he became President and a member of the Board of    
Directors of CPS.  He was appointed to the Company's Board of Directors    
in 1994.   
   
Alan C. Bergold was appointed President in October 1996 and Executive    
Vice President of the Company in July 1983.  He served as Vice President    
and Secretary of the Company from 1981 to 1983.  Mr. Bergold, who is 48    
years old, has been a director of the Company since 1981.  In addition,    
Mr. Bergold is a Colorado Real Estate Broker and a Certified Public    
Accountant.     
   
Donald Champlin, age 45, was appointed Executive Vice President in    
October 1996.  He joined the Company as Pump Product Manager in October    
1983.  In February 1989, he became Vice President of Marketing and a    
member of the Board of Directors of CPS.  He was appointed to the    
Company's Board of Directors in 1994.   
   
R. Thomas Dalbey has been a Director from its inception in 1974.  He    
served as President and Chairman of the Board from 1974 to October 1996.     
For a period of approximately one year in 1978 and 1979, Mr. Dalbey was    
Executive Vice President of Jacobs Equipment Company in Denver,    
Colorado.  Mr. Dalbey is 59 years old.     
   
(d)   Involvement in Certain Legal Proceedings   
   
None.     
   
(e)      Promoters and Control Persons   
   
          Not applicable.    
Item 10.   Executive Compensation   
   
Summary Compensation Table   
   
The following table reflects cash and non-cash compensation paid or    
accrued by the Company during the fiscal years ended November 30, 1996,    
1995 and 1994 to or for the account of the chief executive officer and    
each executive officer whose cash compensation exceeded $100,000, and    
all executives of the Company as a group:     
  
<TABLE>   
   
                         Annual Compensation    
   
Name and         Year Ended    Salary      Bonus       Other Annual   
 Principal        Nov. 30                               Compensation   
 Position   
   
   
<S>              <C>           <C>         <C>          <C>   
Carl J.          1996          $ 122,541   $ 91,316     -   
Bentley          1995            113,550     76,521     -   
Chairman         1994             98,849     67,778(1)   
of the    
Board   
   
Alan C.          1996          $ 120,042   $ 91,316     -   
Bergold          1995            111,050     76,521     -   
President        1994             91,768     67,778(1)  -   
   
Donald           1996          $ 117,546   $ 91,316     -   
Champlin         1995            108,550     76,521     -   
Executive        1994             87,331     67,778(1)  -   
Vice-   
President   
   
R. Thomas        1996          $  14,191   $ 19,908     -   
Dalbey           1995             35,472     32,503     -   
Director         1994             40,323     23,196     -   
</TABLE>   
<TABLE>   
   
                        Long Term Compensation           
   
Name and   Year      Restricted      Options     LTIP     All Other   
Principal  Ended     Stock Award     SARs        Payouts  Compensation   
Postion   
   
<S>          <C>         <C>            <C>          <C>         <C>      
Carl J.      1996        -              200,000(2)   -           -   
Bentley      1995        -              200,000(3)   -           -   
Chairman     1994        -              -            -           -   
of the   
Board   
   
Alan C.     1996         -              200,000(2)   -           -   
Bergold     1995         -              200,000(3)   -           -   
Persident   1994         -              -            -           -   
   
Donald      1996         -              200,000(2)   -           -   
Champlin    1995         -              200,000(3)   -           -   
Executive   1994         -              -            -           -   
Vice   
Prsident   
   
R. Thomas   1996         -              200,000(2)   -           -   
Dalbey      1995         -              200,000(3)   -           -   
Director    1994         -              -            -           -   
</TABLE>   
   
   
(1)  Of the total bonus compensation accrued in fiscal 1994, $13,000 was    
paid to each officer noted through the fiscal 1995 issuance of 92,857    
shares of the Company's common stock.    
   
(2)  Options to purchase shares of common stock at $.222822 each    
expiring December 31, 1998.   
   
(3)  Options to purchase shares of common stock at $.18585 each expiring    
December 31, 1997.   
   
The preceding table does not include any amounts for non-cash    
compensation, including personal benefits, paid to the above-listed    
officers.  The Company believes that the value of such non-cash benefits    
and compensation paid during the periods presented did not exceed the    
lessor of $50,000 or 10% of the cash compensation reported.    
   
The Company has employment agreements as follows:     
   
Carl J. Bentley (2): $124,000 annual salary per year, adjusted for cost    
of living plus five percent per annum base increase; plus seven and one-   
half percent bonus of net pretax income exclusive of parent company    
expenses and profit-sharing contribution; term of six years beginning    
February 1, 1994.    
   
Alan C. Bergold (2):  $121,500 annual salary per year, adjusted for cost    
of living plus five percent per annum base increase; plus seven and one-   
half percent bonus of net pretax income exclusive of parent company    
expenses and profit-sharing contribution; term of six years beginning    
February 1, 1994.     
   
Donald Champlin (2):  $119,000 annual salary per year, adjusted for cost    
of living plus five percent per annum base increase; plus seven and one-   
half percent bonus of net pretax income exclusive of parent company    
expenses and profit-sharing contribution; term of six years beginning    
February 1, 1994.     
   
R. Thomas Dalbey (1):  $17,148 annual salary per year, adjusted by the    
proportional increase in other executive officer's salary; plus 1.67 (1    
2/3%) bonus of net pretax profit exclusive of profit-sharing plan    
contribution.   
   
(1)      There is no provision for additional compensation as a result    
of the sale of all or substantially all of the Company's assets.   
   
(2)      There is a provision for payment of one year's compensation as    
a result of the sale of all or substantially all of the Company's    
assets.   
   
(b)     Option/SAR Grants in Last Fiscal Year   
   
   
<TABLE>   
           Number of      % of Total   
           Securities     Options/SARs   
           Underlying     Granted to   
           Options        Employees   Exercise   
           SARs           in Fiscal   or Base              Expiration   
Name       Granted        Year        Price/($ Share)      Date   
<S>        <C>            <C>         <C>                  <C>    
Alan C.   
Bergold    200,000        33.3%       $ 22282              Dec. 31, 1998   
   
Carl J.    
Bentley    200,000        33.3%        .22282              Dec. 31, 1998   
   
Donald   
Champlin   200,00         33.3%        .22282              Dec. 31, 1998   
</TABLE>   
   
   
(c)    Aggregated Option/SAR Exercise and Fiscal Year-End Option/SAR    
Value Table   
   
<TABLE>   
                                     Number of        Value of   
                                     Securities       Unexercised   
                                     Underlying       In-the-Money   
                                     Unexercised      Options/   
           Shares                    Options/SARs     SARs at   
           Acquired      Value       at FY-end        FY-end    
 Name      on Exercise   Realized   (all exercisable) (all exercisable)   
<S>        <C>           <C>        <C>               <C>   
Alan C.   
Bergold    0             $  0       400,000           $ 81,734   
   
Carl J.    
Bentley    0                0       400,000             81,734   
   
Donald    
Champlin   0                0       400,000             81,734   
   
 
   
Refer to Note 5 to the Consolidated Financial Statements for description    
of Stock Option Plan.     
</TABLE>   
   
Item 11.Security Ownership of Certain Beneficial Owners and Management   
   
(a)  Security Ownership of Certain Beneficial Owners   
   
The following table shows, as of November 30, 1996, the beneficial    
ownership of Common Stock by each person known by the Company to own    
beneficially more than 5 percent of the outstanding shares of its Common    
Stock.  The Company has no other class of voting securities.     
   
<TABLE>   
                                      Common Stock   
   
Name and Address of         Amount and Nature of             Percent   
Beneficial Owner            Beneficial Ownership             of Class   
<S>                         <C>                              <C>   
Carl J. Bentley             1,476,963 (1)                    14.3%   
4275 Forest Street   
Denver, CO  80216   
   
Alan C. Bergold             1,864,454 (1)                    18.1%   
4275 Forest Street   
Denver, CO  80216   
   
Don Champlin                1,501,606 (1)                    14.6%   
4275 Forest Street   
Denver, CO  80216   
   
  
   
(1)  Includes 400,000 shares which may be acquired pursuant to the    
exercise of stock options exercisable within 2 years.   
</TABLE>   
(b)  Security Ownership of Management   
   
The following table shows, as of November 30, 1996, the equity    
securities beneficially owned by all directors of the Company and all    
directors and officers of the Company as a group.     
   
(1)  Directors   
   
<TABLE>   
                                       Common Stock   
   
Name and Address of       Amount and Nature of         Percent   
Beneficial Owner          Beneficial Ownership         of Class   
<S>                       <C>                          <C>   
Carl J. Bentley           1,476,963 (1)                14.3%   
4275 Forest Street   
Denver, CO  80216   
   
Alan C. Bergold           1,864,454 (1)                18.1%   
4275 Forest Street   
Denver, CO  80216   
   
Don Champlin              1,501,606 (1)               14.6%   
4275 Forest Street   
Denver, CO  80216   
   
R. Thomas Dalbey                  0                      0%   
4275 Forest Street   
Denver, CO  80216   
   
  
   
(1)   Includes 400,000 shares which may be acquired pursuant to the    
exercise of stock options exercisable within 2 years.    
   
(2)   Directors and Officers as a Group   
</TABLE>   

<TABLE>                             
                           Amount and Nature of          Percent   
Title of Class             Beneficial Ownership         of Class   
<S>                         <C>                         <C>   
Common Stock                4,843,023                   47.0%   
(par value $.01)   
   
   
(c)  Changes in Control   
</TABLE>   
     None.     
   
   
Item 12.  Certain Relationships and Related Transactions   
   
(a)  Transactions With Management and Others   
   
On November 30, 1996, the Board of Directors granted an option to each    
of the three executive officers of CPS to purchase up to 200,000 shares    
at $.222822 per share by December 31, 1998.   
   
On November 30, 1995, the Board of Directors granted an option to each    
of the three executive officers of CPS to purchase up to 200,000 shares    
at $.18585 per share by December 31, 1997.    
   
During March 1994, the Company entered into an agreement to purchase one    
third of the common shares held by R. Thomas Dalbey, President,    
Director, and principal owner, 1,386,011 shares at $.14 per share for a    
total cost of $194,041.54.  This amount was paid in cash.  On November    
30, 1995, the Company purchased an additional 1,386,011 shares at    
$.18585, adjusted for fiscal 1994 net income, per share for a total of    
$257,590.  This amount was paid in cash. On October 31, 1996, the    
Company purchased the remaining 1,386,011 shares at $.222822 per share    
for a total cost of $308,333 from R. Thomas Dalbey.  This amount was    
paid in cash.   
   
On May 31, 1994, the Board of Directors granted an option to each of the    
three executive officers of CPS to purchase up to 200,000 shares at $.14    
per share by December 31, 1994.  In June 1994, each of the three    
officers exercised options to purchase 107,143 shares, or 321,428 total    
shares, at $.14 per share for a total of $45,000.  The remaining options    
were exercised in December 1994.   
   
(b)  Certain Business Relationships   
   
None.    
(c)  Indebtedness of Management   
   
None.    
   
(d)  Transactions with Promoters   
   
Not applicable.   
   
                                           PART IV   
   
Item 13.  Exhibits and Reports on Form 8-K   
   
Exhibits   
   
(a)  The documents listed below have been filed as exhibits to this    
report.  As used in this exhibit list, "Form 10" means the Company's    
Registration Statement on Form 10 filed with the Securities and Exchange    
Commission in March 1981.     
   
3.1  Articles of Incorporation (incorporated by reference to Exhibits    
3.1 and 3.2 to Form 10).   
   
3.2  By-laws (incorporated by reference to Exhibit 3.3 to the Form 10).     
   
11  Statement Regarding Computation of Per Share Earnings.    
   
21  Subsidiaries of the Company.     
   
24  Power of Attorney   
   
(b)  No reports on Form 8-K were filed by the Company during the last    
quarter    
of the period covered by this report.     
HIA, INC. AND SUBSIDIARIES   
   
   
                                   Exhibit 21   
   
                          SUBSIDIARIES OF THE COMPANY   
   
   
Name                                              State of Incorporation   
   
CPS Distributors, Inc.                                    Colorado   
   
                                      SIGNATURES   
   
     Pursuant to the requirements of Section 13 or 15(d) of the    
Securities and Exchange Act of 1934, the Registrant has duly caused this    
report to be signed on its behalf by the undersigned, thereunto duly    
authorized.     
   
                                                  HIA, INC.   
   
   
   
                By: //Alan C. Bergold   
                ---------------------------   
                Alan C. Bergold, President,   
                Treasurer and Director   
   
     Pursuant to the requirements of the Securities and Exchange Act of    
1934, this report has been signed below by the following persons on    
behalf of the Registrant in the capacities and on the dates indicated.     
   
Signature                               Title                    Date   
   
//Carl J. Bentley   
-------------------                     Chairman of the Board   
Carl J. Bentley                         and Director           2/28/97   
   
//Alan Bergold   
--------------------                    President,   
Alan C. Bergold                         Treasurer and Director 2/28/97   
   
//Donald Chaplin   
--------------------                    Executive Vice   
Donald Champlin                         President, Secretary   2/28/97   
                                        and Director   
   
//R. Thomas Dalbey   
-------------------   
                                        Director               2/28/97   
R. Thomas Dalbey   
   
   
   
Report of Independent Certified Public Accountants    
Consolidated Financial Statements:   
  Balance Sheet   
  Statements of Operation   
  Statements of Stockholders' Equity   
  Statements of Cash Flows   
  Summary of Accounting Policies   
  Notes to Consolidated Financial Statements   
   
Report of Independent Certified Public Accountants   
   
To the Stockholders and Board of Directors   
HIA, Inc.   
Denver, Colorado   
   
We have audited the accompanying consolidated balance sheet of HIA, Inc.    
and subsidiaries (the "Company") as of November 30, 1996 and the related    
consolidated statements of operations, stockholders' equity and cash    
flows for the years ended November 30, 1996 and 1995.  These    
consolidated financial statements are the responsibility of the    
Company's management.  Our responsibility is to express an opinion on    
these consolidated 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 audits    
to obtain reasonable assurance about whether the consolidated financial    
statements are free of material misstatement.  An audit includes    
examining, on a test basis, evidence supporting the amounts and    
disclosures in the consolidated 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 our audits provide a    
reasonable basis for our opinion.    
   
In our opinion, the consolidated financial statements referred to above    
present fairly, in all material respects, the financial position of HIA,    
Inc. and its subsidiaries as of November 30, 1996 and the results of    
their operations and their cash flows for the years ended November 30,    
1996 and 1995 in conformity with generally accepted accounting    
principles.    
   
   
                                                      BDO Seidman, LLP   
   
   
Denver, Colorado   
January 8, 1997   
   
<TABLE>   
<CAPTION>   
HIA, Inc. and Subsidiaries Consolidated Balance Sheet   
November 30,                                                1996   
   
   
Assets (Note 1)   
<S>                                                      <C>   
Current:   
  Cash                                                      $ 141,584   
  Accounts receivable, less allowance of   
   $72,847 for possible losses                              1,528,131   
  Inventories                                               2,078,802   
  Other current assets                                        116,418   
----------------------------------------------------------------------   
   
Total current assets                                       3,864,935   
----------------------------------------------------------------------   
   
Property and equipment:   
  Land and improvements                                       45,295   
  Buildings and improvements                                 237,361   
  Equipment                                                  366,591   
---------------------------------------------------------------------   
   
                                                             649,247   
  Less accumulated depreciation and   
   amortization                                              485,105   
---------------------------------------------------------------------   
   
Net property and equipment                                   164,142   
---------------------------------------------------------------------   
   
Investment and other assets                                   75,544   
---------------------------------------------------------------------   
   
                                                         $ 4,104,621   
========================================================================   
</TABLE>   
<TABLE>   
<CAPTION>   
HIA, Inc and Subsidiaries Consolidated Balance Sheet   
   
November 30,                                              1996   
<S>                                                       <C>   
Liabilities and Stockholders' Equity   
   
Current liabilities:   
  Note payable to bank (Note 1)                           $ 878,613   
  Accounts payable                                          477,637   
  Checks written against future deposits                    126,183   
  Accrued bonuses                                           143,855   
  Accrued profit sharing plan contribution (Note 5)          95,000   
  Income taxes payable (Note 3)                              46,166   
  Other current liabilities                                  69,816   
--------------------------------------------------------------------   
   
Total current liabilities                                 1,837,270   
--------------------------------------------------------------------   
Commitments and contingencies (Notes 2 and 5)                     -   
   
Stockholders' equity (Note 4):   
  Common stock, $.01 par value; 20,000,000 shares    
   authorized; 13,107,896 issued                            131,079   
  Additional paid-in capital                              3,109,271   
  Accumulated deficit                                      (236,043)   
--------------------------------------------------------------------   
   
                                                          3,004,307   
   
  Less treasury stock at cost; 4,004,513 shares             736,956   
-------------------------------------------------------------------   
   
Total stockholders' equity                                2,267,351   
--------------------------------------------------------------------   
   
                                                        $ 4,104,621   
====================================================================   
   
See accompanying summary of accounting policies and notes to   
consolidated financial statements.   
</TABLE>   
[CAPTION]   
HIA, Inc. and Subsidiaries Consolidated Statements of Operations   
<TABLE>   
   
Years Ended November 30,                   1996           1995   
<S>                                        <C>            <C>   
Revenues:   
  Net sales                                $ 16,483,773   $ 14,402,087   
  Interest income                                10,780         18,004   
  Other income                                   23,327         52,538   
----------------------------------------------------------------------   
   
Total revenues                               16,517,880     14,472,629   
----------------------------------------------------------------------   
   
Costs and expenses:   
  Cost of sales                             11,432,836       9,920,580   
  Selling, general and administrative         4,161,733      3,782,363   
  Interest expense                              117,526        131,040   
----------------------------------------------------------------------   
   
Total costs and expenses                     15,712,095     13,833,983   
----------------------------------------------------------------------   
   
Income before taxes on income                   805,785        638,646   
   
Taxes on income (Note 3)                        268,116        285,102   
----------------------------------------------------------------------   
   
Net income                                  $   537,669     $  353,544   
======================================================================   
   
Net income per share                        $       .05     $       .0   
======================================================================   
   
Weighted-average common   
 shares outstanding                          11,575,475     12,405,055   
======================================================================   
</TABLE>   
[CAPTION]   
HIA, Inc. and subsidiaries Consolidated Statements of Shareholders   
Equity   
<TABLE>   
   
Years Ended November 30, 1996      
   
                                             Additional   
                   Common Stock           Paid-In            Accumulated   
               Shares        Amount       Capital            Deficit   
<S>            <C>           <C>        <C>              <C>     
Balance,    
 December 1,   
 1994          13,107,896    $ 131,079  $ 3,109,271      $ (1,127,256)   
   
Acquisition   
 of treasury   
  stock   
   
Issuance of   
 shares held    
  in treasury   
   
Net income                                  353,544   
----------------------------------------------------------------------   
   
Balance,   
 November   
  30, 1995     13,107,896      131,079    3,109,271         (773,712)   
   
Acquisition   
 of treasury   
  stock   
   
Issuance of   
  shares held   
  in treasury   
   
Net income                                  537,669   
----------------------------------------------------------------------   
   
Balance,   
 November   
  30, 1996     13,107,896    $ 131,079  $ 3,109,271       $ (236,043)    
======================================================================   
</TABLE>   
<TABLE>   
                       Treasury Stock         Total Stockholders' Equity   
   
<S>                    <C>                    <C>   
Balance,   
December 1   
,1994                  $ (198,670)            $ 1,914,424   
   
Acquisition   
 of treasury   
  stock                  (268,453)               (268,453)   
   
Issuance of   
 shares held   
 in treasury               39,000                  39,000   
   
Net Income                                        353,544   
----------------------------------------------------------------------   
   
Balance,   
 Novemebr 30,   
  1995                   (428,123)              2,038,515   
   
Acquisition of   
 treasury stock          (375,493)               (375,493)   
   
Issuance of   
 shares held   
 in treasury               66,660                  66,660   
   
Net income                                        537,669   
----------------------------------------------------------------------   
   
Balance,   
 November 30,   
  1996                 $ (736,956)            $ 2,267,351   
======================================================================   
</TABLE>   
[CAPTION]   
HIA, Inc. and Subsidiaries Consolidated Statements of Cash Flows   
<TABLE>   
   
Increase (Decrease) in Cash   
   
Years Ended November 30,                     1996          1995   
   
<S>                                          <C>           <C>   
Operating activities:   
  Net income                                 $  537,669     $  353,544   
   
  Adjustments to reconcile net income to    
   net cash provided by    
    (used in) operating   
     activities:   
    Depreciation and amortization                33,566         48,426   
    Allowance for doubtful accounts             (20,153)        (5,594)   
    Deferred income taxes                       (27,563)        42,653   
    Amortization of deferred gain                              (17,660)   
    Issuance of treasury stock in lieu of   
    bonuses                                                     39,000   
    Changes in operating assets   
      and liabilities:   
    Accounts receivable                        (209,007)      (270,245)   
    Inventories                                (112,518)      (333,584)   
    Other current assets                        (42,413)         4,707   
    Accounts payable                            247,340        (19,461)   
    Other current liabilities                  (148,957)       (24,013)   
----------------------------------------------------------------------   
   
Net cash provided by (used in)   
 operating activities                          257,964       (182,227)   
----------------------------------------------------------------------   
   
Investing activities:   
  Disposal of property and equipment             4,478    
  Purchase of property and equipment           (73,485)       (73,984)   
  Change in deposits                            (3,178)        18,000   
----------------------------------------------------------------------   
   
Net cash used in investing activities          (72,185)       (55,984)   
----------------------------------------------------------------------   
</TABLE>   
<TABLE>   
   
Increase (Decrease) in Cash   
   
Years Ended November 30,                    1996           1995   
   
<S>                                         <C>           <C>   
Financing activities:   
 Proceeds from note payable to bank          5,144,333      5,841,000   
 Repayment on note payable to bank          (5,030,000)    (5,167,268)   
 Proceeds from installment obligations                          4,667   
 Payments on installment obligations            (6,504)       (19,460)   
 Acquisitions of treasury stock               (375,493)      (268,453)   
 Proceeds from sale of treasury stock           66,660      
 Checks written against future deposits         41,697        (54,882)   
   
   
Net cash provided by (used in)   
  financing activities                        (159,307)       335,604   
   
Increase in cash                                26,472         97,393   
   
Cash, beginning of year                        115,112         17,719   
   
Cash, end of year                           $  141,584      $ 115,112   
   
See accompanying summary of accounting policies and notes to   
consolidated financial statements.   
</TABLE>
   
   
Principles of Consolidation   
   
The consolidated financial statements include the accounts of HIA, Inc.    
(the "Company" or "HIA"), its wholly-owned subsidiary CPS Distributors,    
Inc. ("CPS"), and CPS's wholly-owned subsidiary, Water Systems, Inc.     
All significant intercompany accounts and transactions have been    
eliminated in consolidation.    
   
   
Lines of Business   
   
The principal business of HIA, conducted through its subsidiary CPS, is    
the wholesale distribution of turf irrigation equipment and pumps.    
   
   
Reclassifications   
   
Certain reclassifications have been made to the 1995 financial    
statements in order for them to conform to the 1996 presentation. Such    
reclassifications have no impact on the Company's financial position or    
results of operations.   
   
   
Concentration of Risk   
   
Financial instruments which potentially subject the Company to    
concentrations of credit risk consist primarily of cash and trade    
accounts receivable.  The Company invests temporary cash in demand    
deposits with federally insured financial institutions. Such deposit    
accounts at times may exceed federally insured limits.  The Company has    
not experienced any losses in such accounts.   
   
Concentrations of credit risk with respect to accounts receivables are    
limited due to the large number of customers, generally short payment    
terms, and their dispersion across geographic areas.   
   
   
Use of Estimates   
   
The preparation of consolidated financial statements in conformity with    
generally accepted accounting principles necessarily requires management    
to make estimates and assumptions that affect the reported amounts of    
assets and liabilities, the disclosure of contingent assets and    
liabilities at the date of the financial statements and the reported    
amounts of revenue and expenses during the reporting periods.  Actual    
results could differ from those estimates.     
   
   
Financial Instruments   
   
The note payable to bank bears interest of a floating rate of interest    
based upon the lending institutions prime lending rate. Accordingly, the    
fair value approximates its reported carrying amount at November 30,    
1996.   
   
   
Inventories   
   
Inventories consist of wholesale goods held for resale which are    
primarily valued at the lower of cost (as determined using first-in,   
first-out method) or market.    
   
   
Property and Equipment   
   
Property and equipment are stated at cost. Depreciation is computed    
using straight-line and accelerated methods over the estimated useful    
lives of the assets, ranging from five to ten years.  Upon sale or    
retirement, the cost and related accumulated depreciation of disposed    
assets are eliminated from the respective accounts and the resulting    
gain or loss is included in the statement of operation.    
   
Revenue Recognition   
   
The Company recognizes revenue at the time sales are shipped to    
customers in the normal course of business.    
   
   
Income Taxes   
   
The Company accounts for income taxes under Statement of Financial    
Accounting Standards No. 109 ("SFAS No. 109").  Temporary differences    
are differences between the tax basis of assets and liabilities and    
their reported amounts in the financial statements that will result in    
taxable or deductible amounts in future years.   
   
   
Net Income Per Common Share   
   
Net income per common share is computed using the weighted-average    
number of shares outstanding during each period presented. Options to    
purchase stock (1,200,000 and 600,000 options outstanding at November    
30, 1996 and 1995) are included as common stock equivalents, when    
dilutive.    
   
   
Statements of Cash Flows   
For purposes of the statements of cash flows, the Company considers all    
highly liquid debt instruments purchased with an original maturity of    
three months or less to be cash equivalents.    
   
   
Recent Accounting Pronouncements   
   
The Financial Accounting Standards Board has recently issued Statement    
of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the    
Impairment of Long-Lived Assets" and SFAS No. 123, "Accounting for Stock    
Based Compensation".  SFAS No. 121 requires that long-lived assets and    
certain identifiable intangibles be reported at the lower of the    
carrying amount or their estimated recoverable amount and the adoption    
of this statement by the Company is not expected to have an impact on    
the financial statements.  SFAS No. 123 encourages the accounting for    
stock-based employee compensation programs to be reported within the    
financial statements on a fair value based method.  If the fair value    
based method is not adopted, then the statement requires pro-forma    
disclosure of net income and earnings per share as if the fair value    
based method had been adopted.  The Company has not yet determined how    
SFAS No. 123 will be adopted nor its impact on the financial statements.    
Both statements are effective for fiscal years beginning after December    
15, 1995.   
   
   
HIA, Inc. and Subsidiaries   
Notes to Consolidated Financial Statements   
   
1. Note Payable to Bank    
   
CPS and its subsidiary have a line-of-credit agreement with a bank which    
expires April 30, 1998.  The available loan amount is the lesser of    
$4,000,000 or the computed borrowing base, as defined.  The line-of-   
credit provides for interest at the bank's base rate (8.25% at November    
30, 1996) plus 1%.  The agreement is collateralized by primarily all of    
the Company's business assets including trade accounts receivable,    
inventories and property and equipment, excluding owned real estate.    
Additionally, the bank has the right of set-off under this agreement.     
The agreement is also guaranteed by HIA.     
   
The agreement contains several covenants which, among other things,    
require that the Company maintain certain financial ratios, minimum net    
worth and minimum working capital as defined in the line of credit    
agreement. In addition, the agreement limits the payment of dividends,    
the purchase of property and equipment, and officer and stockholder    
compensation.  As of November 30, 1996, the Company was in compliance    
with the line of credit agreement.   
   
As of November 30, 1996, $878,613 was outstanding under this line-of-   
credit agreement.   
   
   
2. Lease Obligation   
   
CPS leases its main warehouse under a non-cancelable operating lease    
requiring monthly payments of $9,500 through February 2005.  CPS has an    
option to purchase the related property at the end of the initial ten-   
year term at a price approximating the market value at that time,    
subject to certain conditions.  CPS also has two five-year options to    
extend the lease term.     
   
CPS also leases vehicles, equipment and warehouse space under non-   
cancelable operating leases.  Total lease expense was $429,055 and    
$322,897 for fiscal 1996 and 1995.     
   
As of November 30, 1996 future minimum lease payments under non-   
cancelable operating leases are as follows:   
   
   
<TABLE>   
November 30,              Total   
<S>                       <C>   
1997                       $  436,776   
1998                          349,849   
1999                          280,003   
2000                          240,063   
2001                          230,833   
Thereafter                    422,039   
   
   
                          $ 1,959,563   
</TABLE>   
   
   
   
The Company subleased certain warehouse space, receiving rent of $3,300    
per month through June 1995.  Total rental income recognized under this    
agreement for the year ended November 30, 1995 was $9,818.    
   
   
3. Taxes on Income   
   
The provision for taxes on income for the years ended November 30, 1996    
and 1995 consisted of the following:   
   
<TABLE>   
                1996          1995   
<S>             <C>           <C>   
Current:   
 Federal        $ 256,044     $ 206,594   
 State             39,635        35,855   
   
Deferred:   
 Federal          (26,185)       36,345   
 State             (1,378)        6,308   
   
                $ 268,116     $ 285,102   
</TABLE>   
   
   
The Company's effective tax rate in 1995 was higher than the federal    
statutory tax rate of 34% as a result of the tax effect of state income    
taxes, net of the federal tax benefit and other nondeductible items.   
   
Temporary differences between the financial statement carrying amounts    
and the tax basis of assets and liabilities that give rise to    
significant portions of the net deferred tax asset at November 30, 1996    
relate to the following:   
   
<TABLE>   
<S>                                <C>   
Inventories                        $  33,600   
Accounts receivable                   26,953   
Property and equipment               (13,523)   
Other                                  2,220   
   
                                   $  49,250   
</TABLE>   
   
   
   
At November 30, 1996 the net deferred tax asset is classified and    
included in other current assets in the accompanying balance sheet.  The    
Company recorded no valuation allowance to offset the net deferred tax    
asset because management believes that it is more likely than not that    
sufficient taxable income will be generated in the foreseeable future to    
realize the deferred tax asset.   
   
   
4. Stockholders' Equity   
   
Treasury Stock and Common Stock Options   
   
During March 1994, the Company entered into a stock purchase agreement    
with an officer under which the Company had an option to purchase    
2,772,022 shares of its common stock from the officer.  The agreement    
provided for the purchase of 1,386,011 shares between March 1, 1994 and    
April 1, 1996 at $.15 per share, and the remaining purchase of 1,386,011    
shares between March 31, 1994 and April 1, 1998 at $.16 per share.     
Under the agreement, the option price was to be adjusted annually to    
reflect cumulative net income or loss for each year.  During fiscal    
1995, the Company exercised its option to purchase 1,386,011    
shares at $.18585 per share, adjusted to reflect fiscal 1994 net income.     
During fiscal 1996, the Company exercised its option to purchase the    
remaining 1,386,011 shares at $.22282 per share, adjusted to reflect    
fiscal 1995 net income.     
   
The Company acquired from other stockholders 338,357 shares of its    
common stock at $.183 to $.20 per share for fiscal 1996 and 71,000    
shares of its common stock at $.14 to $.182 per share for fiscal 1995.     
During fiscal 1996, the Company issued 338,357 shares from treasury to    
its officers at cost for $66,660 cash.  During fiscal 1995, the Company    
issued 278,571 shares from treasury to its officers in lieu of bonuses    
valued at $39,000.   
   
On November 30, 1996, the board of directors of the Company granted    
options to officers of CPS to purchase up to 600,000 treasury shares at    
$.22282 per share through December 31, 1998.  On November 30, 1995, the    
board of directors of the Company granted options to officers of CPS to    
purchase up to 600,000 treasury shares at $.18585 per share through    
December 31, 1997.  The options granted during fiscal 1996 and 1995 were    
granted at an exercise price equal to the common stock's market price at    
the date of grant.  No options were exercised during fiscal 1996 and    
1995 under the 1996 and 1995 option plans.  As of November 30, 1996 and    
1995, the Company has 1,200,000 and 600,000 options outstanding.    
   
In addition, HIA has incentive and non-incentive stock option plans for    
officers, directors and employees of HIA and its subsidiaries under    
which options to purchase HIA's common stock are granted at no less than    
100 percent of the market price of the stock at the date of the grant.     
At November 30, 1996 and 1995, there were 684,250 shares reserved for    
future grants.  Under these plans, there were no options granted or    
outstanding as of November 30, 1996 and 1995.    
   
   
5. Profit Sharing Plan   
   
HIA, Inc. maintains a noncontributory profit sharing plan (the "Plan")    
for the benefit of all full-time employees of CPS and CPS' wholly-owned    
subsidiary, Water Systems, Inc., who are at least 18 years of age.     
Interests vest ratably after two years and are fully vested after seven    
years.  The Plan is funded by the Company's contribution determined    
annually by the Board of Directors.    
   
Contributions to the Plan amounted to $95,000 and $80,000 for the years    
ended November 30, 1996 and 1995.    
   
   
6. Supplemental Disclosures of Cash Flow Information   
   
<TABLE>   
                      1996          1995   
   
<S>                   <C>           <C>   
Cash paid during   
 the year for:   
  Interest            $ 117,526     $ 131,040   
  Income taxes        $ 237,988     $ 161,375   
</TABLE>