UNITED STATES

                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549

                                   FORM 10-Q

MARK ONE:

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

                  For the quarterly period ended March 31, 1997

                                      OR

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

                  For the transition period from               to             

                          Commission File No. 0-18204

                               AJAY SPORTS, INC. 
            -----------------------------------------------------
            (Exact name of Registrant as specified in its charter)


Delaware                                                       39-1644025 
------------------------------                            -------------------
(State or other jurisdiction of                           (I.R.S.  Employer
 Incorporation or Organization)                            Identification No.)
 

1501 E. Wisconsin Street,
Delavan, Wisconsin   53115                                  (414) 728-5521    
-----------------------------------------                 -------------------
(Address of principal executive offices                (Registrant's  Telephone
 including Zip Code)                               Number, including Area Code)
                                       


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  report),  and (2) has been  subject to
such filing requirements for the past 90 days.

            Yes  /x/                              No  / /

Number of shares of common stock outstanding at   4/7/97  was  23,274,039 .

<PAGE>





Item 1.     FINANCIAL STATEMENTS

                         AJAY SPORTS, INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                                              March 31, 1997       December 31,
                                                 (Unaudited)           1996
                                             ---------------       ------------
ASSETS
Current assets:
   Cash and cash equivalents                  $       190             $      64
   Trade accounts receivable, net                   7,236                 5,274
   Inventories                                      7,489                 7,957
   Prepaid expenses and other current assets          598                   362
   Deferred tax benefit                               363                   363
                                                 --------              -------- 
        Total current assets                       15,876                14,020

Fixed assets, net                                   1,785                 1,822
Other assets                                          316                   320
Deferred tax benefit                                  754                   756
Goodwill                                            1,699                 1,709
                                                  -------                ------
        Total assets                              $20,430               $18,627
                                                   ======                ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:

   Notes payable to affiliates                   $    885              $    885
   Notes payable to banks                           6,934                 6,104
Current portion of capital lease                        8                     9
   Accounts payable                                 3,801                 3,107
   Accrued expenses                                   705                   567
                                                  -------               -------
        Total current liabilities                  12,333                10,672

Notes payable - long term                           5,432                 5,213

Stockholders' equity:
 Preferred stock, 10,000,000 shares 
 authorized,
   Series B, $0.01 par value, 12,500 shares
   outstanding at liquidation value                 1,250                 1,250
   Series C, $10.00 par value, 296,170 and
   296,170 shares outstanding at stated value,
   respectively                                     2,962                 2,962
 Common stock, $.01 par value 100,000,000 
   shares authorized, 23,274,039 and
   23,274,039 shares outstanding, respectively        233                   233
   Additional paid-in capital                       9,313                 9,313
   Accumulated deficit                            (11,093)              (11,016)
                                                  --------              --------
      Total stockholders' equity                    2,665                 2,742

      Total liabilities and stockholders'equity   $20,430              $ 18,627
                                                  ========               ======
 

                                      2
<PAGE>



                         AJAY SPORTS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                     (UNAUDITED)



                                                            Three Months
                                                           Ended March 31,
                                                    1997                 1996
                                                  -------               ------- 
Net sales                                        $ 7,601               $ 6,262
Cost of sales                                      6,143                 5,133
                                                  -------               -------
        Gross profit                               1,458                 1,129

Selling, general and
  administrative expenses                          1,168                 1,192
                                                  -------               -------
        Operating income (loss)                      290                   (63)
Non-operating (income) expense:
   Interest expense, net                             278                   279
   Other, net                                          5                     2
                                                  -------               -------
   Total non-operating expense                       283                   281

Income (loss) before income taxes                      7                  (344)

Income tax expense (benefit)                           2                  (117)
                                                  -------               -------
Net income (loss)                               $      5               $  (227)
                                                  =======               =======
Income (loss) per common share outstanding*     $    .00               $  (.01)
                                                  =======               =======
Income (loss) per common share & equivalents    $    .00               $  (.01)
outstanding**                                     =======               =======

Weighted average common shares outstanding        23,274                23,345
                                                  =======               ======


*  Computed by dividing net income or loss, after reduction for preferred stock
dividends, by the weighted average number of common shares outstanding.

** Computed by dividing net income or loss, after reduction for preferred stock
dividends, by the weighted average number of common share and common
share equivalents outstanding.


                                       3

<PAGE>

                         AJAY SPORTS, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF CASH FLOW
                             (IN THOUSANDS), (UNAUDITED)

                                                             Three Months
                                                            Ended March 31,
                                                         1997             1996
                                                       --------        --------

Cash flows from operating activities:
   Net income (loss)                                $        5       $    (227)
   Adjustments to reconcile to net cash
   provided by operating activities:
        Depreciation and amortization                       81             119
   Change in assets [(increase)/decrease] and
   liabilities [increase/(decrease)]:
        Trade accounts receivable, net                  (1,962)         (1,069)
        Inventories                                        468            (181)
        Prepaid expenses and other current assets         (236)           (261)
        Other assets                                         4            (128)
        Deferred tax benefits                                2            (117)
        Accounts payable                                   694              38
        Accrued expenses                                   137            (126)
        Goodwill                                            10              --
                                                       --------         -------
          Net cash used in operating activities           (797)         (1,952)
                                                       --------         -------
Cash flows from investing activities:
   Purchase of property, plant, equipment                  (44)           (155)
                                                       --------         -------
          Net cash used in investing activities            (44)           (155)
                                                       --------         -------
Cash flows from financing activities:
   Net change in bank loan                               1,049           2,012
   Preferred stock conversion                               --               1
   Dividends                                               (82)            (79)
                                                       --------         -------
          Net cash provided by financing activities        967           1,934
                                                       --------         -------
Net increase (decrease) in cash and cash equivalents       126            (173)
Cash and cash equivalents at beginning of period            64             362
                                                       --------         -------
Cash and cash equivalents at end of period           $     190         $   189
                                                       ========         =======
Supplemental disclosures of cash flow information:
   Cash paid for interest                            $     277         $   263
                                                       ========         =======
   Cash paid for income tax                                 --              --
                                                       ========         =======


                                       4

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1.  BASIS OF PRESENTATION
 
     The condensed  consolidated  financial statements included herein have been
prepared by Ajay Sports,  Inc. (the "Company") without audit and pursuant to the
rules and regulations of the Securities and Exchange Commission.  In the opinion
of the Company, the financial statements reflect all adjustments,  which consist
only of normal recurring adjustments,  necessary to present fairly the financial
position of the Company at March 31, 1997 and the results of operations  for the
three-month  periods  ended  March 31,  1997 and 1996 and the cash flows for the
same three-month periods.

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted pursuant to the SEC rules and regulations dealing
with  interim  financial  statements.  However,  the Company  believes  that the
disclosures  made in the  condensed  financial  statements  included  herein are
adequate to make the information presented not misleading.  It is suggested that
these condensed  financial  statements be read in conjunction with the financial
statements  and notes thereto  included in the  Company's  Annual Report on Form
10-K for the fiscal year ended December 31, 1996.

     The  year-end  condensed  balance  sheet  data  was  derived  from  audited
financial statements, but does not include all disclosures required by generally
accepted accounting principles.


Note 2.  INVENTORIES

The major classes of inventories (rounded to thousands) are as follows:


                                  March 31,            December 31,
                                      1997                    1996
                                  ---------            ------------
     Raw Materials                  $ 3,601                 $ 4,153
     Work in Process                  1,144                     995
     Finished Goods                   2,744                   2,809
                                  ---------                --------
                                    $ 7,489                $  7,957
                                  =========                ========

                                        5

<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)


Note 3.  DEBT

     The  Company's  current  bank  lender  advised  the  Company  that the bank
contends that the Company is in technical  default under its loan  agreement due
to  the  default  of  the  guarantor,   Williams  Controls,   Inc.   (Williams).
Accordingly,  the loan must be paid by June 30, 1997. Ajay had been operating up
until February 12, 1997 on a revolver limit of $8.5 million.  On February 12 the
line was reduced to $7 million and the bank  restricted  further  advances  from
Williams to the Company  advising  the Company that the Company was in technical
default  under its loan  agreement as a result of the default of the  guarantor,
Williams  Controls,  Inc. The Company did and has continued to make all interest
payments on time and has operated within the limit amounts contained in the loan
facility.  Restrictions during February and March curtailed operating capability
and reduced sales and profitability  opportunities otherwise available. On April
14 the bank agreed to waive the existing  default and  restructured  the loan on
less  favorable  formula  advance  rates and at an increased  interest  rate. In
addition,  the bank is  requiring  that the  Company  make a $500,000  term loan
payment in June, 1997.

     Ajay has signed loan proposal  agreements  with two  different  asset based
lenders who have begun their respective due diligence investigations.  The loans
under each of the proposed agreements would supply funds sufficient to repay the
current  lender.  As the new loan proposals are presently  structured,  Williams
Controls,  Inc. the guarantor of the Company's loan, would be required to invest
approximately  $5 million into the  Company.  The terms and  conditions  of such
investment have not yet been negotiated or determined. The Company believes that
the new financing,  including  the Williams  investment,  would be sufficient to
provide for its needs  through 1998 and can be put in place by June 30, 1997. If
the Company does not close the new loan and repay the current lender by June 30,
1997, the current lender could demand payment of the loan.

 
Note 4.     BUSINESS SEGMENT REPORTING

     The relative  contributions to net sales, operating profit and identifiable
assets of the  Company's  two industry  segments for the quarter ended March 31,
1997 (unaudited) are as follows (in thousands):

                                              Quarter Ended
                                              March 31, 1997
                              -------------------------------------------------
                                Furniture     Golf     Corporate   Consolidated
                                ---------    ------    ---------   ------------
Net Sales                        $ 1,890   $  5,711    $       -   $     7,601
Operating Profit/(Loss)              394        (41)         (63)          290
Total Assets                       3,475     16,955            -        20,430
Depreciation/Amortization             16         65            -            81
Capital Expenditures                  10         34            -            44
 

                                       6

<PAGE>

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



     FINANCIAL  CONDITION - At March 31, 1997 the Company had working capital of
$3,543,000  as compared  with  $3,348,000  at December  31,  1996.  The ratio of
current assets to current  liabilities at March 31, 1997 was 1.3 to 1, no change
from the ratio at December 31, 1996.

     At March 31, 1997 the Company had  increased  its short term  borrowings by
$830,000  since  December  31,  1996.  This was used to finance an  increase  in
receivables as a result of a $1.3 million sales increase during the quarter.

     LIQUIDITY - The Company's  liquidity is primarily affected by its financing
requirements.  At March 31, 1997 the Company had $11,934,000  outstanding  under
its  $13,500,000  loan  agreement  with U. S. Bank.  The seasonal  nature of the
Company's sales creates  fluctuating cash flow, due to the temporary build-up of
inventories in anticipation of, and receivables during, the peak seasonal period
which  historically has been from February through May of each year. The Company
has relied and  continues  to rely heavily on revolving  credit  facilities  and
financial support from affiliates for its working capital requirements.

     On February 12, the  Company's  current bank lender  reduced the  Company's
revolver limit from $8.5 million to $7 million and prevented  further  advances,
loans and  investments in the Company by Williams  because it contended that the
Company was in technical  default under its loan agreement based on a default by
Williams Controls, Inc. as guarantor.  The Company did and has continued to make
all  interest  payments  on time  and has  operated  within  the  limit  amounts
contained  in the old and  new  facility  lines,  although  restrictions  during
February  and  March  curtailed  operating  capability  and  reduced  sales  and
profitability  opportunities  otherwise available.  This constriction forced the
Company to rely on extended  credit terms from its venders and additional  funds
from affiliated parties. The bank subsequently restructured the agreement and on
April 14 the bank agreed to waive the existing default and restructured the line
on less favorable terms.  The  restructured  facility will terminate on June 30,
1997 and contains  language that reduces the advance rate. The line also carries
an increased  interest rate of prime plus 3 percentage  points. The restructured
line will provide the  liquidity  the Company  needs during the 2nd quarter.  In
connection with the  restructured  facility the Company must also pay a $500,000
term loan payment on June 1, 1997.

     In  order  to  find a more  permanent  solution  to  easing  the  liquidity
situation,  the Company has been seeking alternative financing.  The Company has
signed loan proposal  agreements with two different asset based lenders who have
begun their due diligence  investigations.  The loans under each of the proposal
agreements would supply funds  sufficient to repay the current lender;  however,
as these loan proposals are presently structured,  Williams Controls,  Inc., the
guarantor of the Company's loan,  would be required to advance  approximately $5
million into the Company. The terms and conditions of such investment

                                       7


<PAGE>

Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS (Cont'd)


have  not  yet  been  negotiated  or determined. The Company believes it will be
able to put new  financing  into place by June 30,  1997;  however  the  current
lender  could demand  payment of the existing  bank loans if it is not repaid by
June 30, 1997.

     RESULTS OF OPERATIONS - During the quarter ended March 31, 1997 the Company
had net sales of $7,601,000, compared to $6,262,000 for the same period in 1996.
The 21% sales increase  reflects the strength of the Company's  rapidly  growing
furniture  business  which  contributed  69% of the  sales  increase.  The  golf
business was up 7.7%.

     Gross  profit  for the three  months  ended  March 31,  1997 was 19% of net
sales,  compared  to 18%  for  the  same  period  in  1996.  This  reflects  the
improvement  in  margins  in the  furniture  business  partly  offset  by margin
decreases in golf.

     Selling,  general and administrative  expenses expressed as a percentage of
sales  were  15.4% for the first  quarter  of 1997,  versus  19% for 1996.  This
improvement is a result of sales increases and expense decreases.  Expenses were
decreased by eliminating  duplicate  selling  expenses  connected with the Korex
product line acquired in October 1995.

     Operating income for the first quarter of 1997 was $290,000  compared to an
operating  loss of  $63,000  for the first  quarter  of 1996.  This  improvement
primarily results from the strong sales increase in furniture.

     Interest expense remained the same in the first quarter of 1997 compared to
the first quarter of 1996.

     As a result of the above, net income for the first quarter ending March 31,
1997 was $5,000  compared  to a net loss of  $227,000  for the same  period last
year.


                                       8


<PAGE>

PART II.  OTHER INFORMATION



Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

         a) No reports on Form 8-K were filed during the quarter ended March 31,
            1997.

         b) Exhibit #27:   Financial Data Schedule


                                       9


<PAGE>

                                     SIGNATURES

 
     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


AJAY SPORTS, INC.
-------------------



By:    /s/Robert R. Hebard
       ----------------------
Its:     Corporate Secretary





By:    /s/Duane R. Stiverson  
       ----------------------
Its:    Chief Financial Officer



Date:   May 14, 1997            
 
                                       10