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, 1998

                                       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 Identification No.)
 Incorporation or Organization)

1501 E. Wisconsin Street,
Delavan, Wisconsin   53115                             (414) 728-5521
-----------------------------------------     ---------------------------------

(Address of principal executive offices       (Registrant's Telephone Number,
including Zip Code)                            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 5/11/98 is 23,274,039.

                  Transitional Small Business Disclosure Format

                                    Yes              No       x


<PAGE>
PART I.     FINANCIAL INFORMATION

Item 1.      FINANCIAL STATEMENTS
<TABLE>
<CAPTION>


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


                                                                                    March 31, 1998                    December 31,
                                                                                      (Unaudited)                      1997
ASSETS                                                                            -------------------              ----------------
<S>                                                                             <C>                          <C>  

Current assets:
     Cash                                                                       $                  99         $                234
     Trade accounts receivable, net                                                             5,999                        5,060
     Inventories                                                                                6,765                        6,398
     Prepaid expenses and other                                                                   305                          304
     Deferred tax benefit                                                                         363                          363
                                                                                            ----------                  ----------
                    Total current assets                                                       13,531                       12,359

Fixed assets, net                                                                               1,661                        1,723
Other assets                                                                                      261                          106
Deferred tax benefit                                                                              756                          756
Goodwill                                                                                        1,654                        1,670
                                                                                            ----------                  ----------
                   Total assets                                                 $              17,863         $             16,614
                                                                                            ==========                  ==========

LIABILITIES AND STOCKHOLDERS' EQUITY (deficit)

Current liabilities:
      Notes payable to affiliates                                               $                 160         $                160
      Notes payable to banks                                                                      105                          107
      Current portion of capital lease                                                              4                            4
      Accounts payable                                                                          4,000                        3,204
      Accrued expenses                                                                            714                          684
                                                                                            ----------                  -----------
                    Total current liabilities                                                   4,983                        4,159

Notes payable to affiliates - long term                                                         4,224                        4,212
Notes payable to banks  -  long term                                                            9,393                        9,017

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, $0.01 par value, 296,170 shares
            outstanding at stated value                                                         2,962                        2,962
      Common stock, $.01 par value 100,000,000 shares authorized,
            23,274,039 shares outstanding                                                         233                          233
Additional paid-in capital                                                                      9,313                        9,313
Accumulated deficit                                                                           (14,495)                     (14,532)
                                                                                            ----------                  -----------
            Total stockholders' equity (deficit)                                                 (737)                        (774)
                                                                                            ----------                  -----------
            Total liabilities and stockholders' equity                          $              17,863         $             16,614
                                                                                            ==========                  ===========
                                                                                    

</TABLE>
                                       1
<PAGE>

<TABLE>
<CAPTION>


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


                                                     
                                                                              Three  Months
                                                                           Ended  March  31,
                                                                      1998               1997
                                                                   ----------        ----------    
<S>                                                         <C>                   <C>

Net sales                                                    $         7,598      $      7,601

Cost of sales                                                          6,330             6,143
                                                                  ------------       ----------                           -
      Gross profit                                                     1,268             1,458

Selling, general and                                                   1,028             1,168
   administrative expenses                                        ------------       ----------

      Operating income                                                   240               290

Non-operating expense:
      Interest expense, net                                              335               278
      Other, net                                                        (136)                5
                                                                  -------------      -----------
      Total non-operating expense                                        199               283
                                                                  -------------      -----------
Income (loss) before income taxes                                         41                 7

Income tax expense (benefit)                                               -                 2
                                                                  -------------      -----------                                  -
Net income (loss)                                            $            41       $         5
                                                                  =============      ===========
Basic and diluted earnings per share *                       $          0.00       $       0.00
                                                                  =============      ===========

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




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

</TABLE>
                                       2
<PAGE>
<TABLE>
<CAPTION>


                                                         AJAY SPORTS, INC. AND SUBSIDIARIES
                                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                        (IN THOUSANDS), (UNAUDITED)   )



                                                                               Three  Months
                                                                              Ended  March 31,
                                                                          1998              1997
                                                                     -----------        ------------
<S>                                                             <C>                    <C>

Cash flows from operating activities:

     Net income                                                  $            41        $          5                           
      Adjustments to reconcile to net cash flows from
      operating activities:
      Depreciation and amortization                                          101                   91
      Change in assets [(increase)/decrease] and
       liabilities [increase/(decrease)]:
      Trade accounts receivable, net                                        (939)              (1,962)
       Inventories                                                          (367)                 468
       Prepaid expenses and other current assets                               -                 (236)
       Other assets                                                         (155)                   4
       Deferred tax benefits                                                   -                    2
       Accounts payable                                                      796                  694
      Accrued expenses                                                        25                  137
                                                                     -----------          ------------
                    Net cash used in
                    operating activities                                    (498)                (797)
                                                                     -----------          ------------
Cash flows from investing activities:
       Acquisitions of property, plant, equipment                            (23)                 (44)
                                                                     -----------          ------------

                     Net cash used in
                     investing activities                                    (23)                 (44)
                                                                     -----------          ------------
Cash flows from financing activities:
        Proceeds from notes payable to affiliates                             12                    -
        Net change in bank loan                                              374                1,049
        Dividends                                                              -                  (82)
                                                                     -----------          ------------
                      Net cash provided by
                      financing activities                                   386                  967
                                                                     -----------          ------------
Net increase (decrease) in cash                                             (135)                 126
Cash at beginning of period                                                  234                   64
                                                                     -----------          ------------
Cash at end of period                                              $          99      $           190                           
                                                                     ===========          ============
Supplemental disclosures of cash flow information:
       Cash paid for interest                                      $         286      $           277                   
                                                                     ===========          ============
       Cash paid for income tax                                                -                    -
                                                                     ===========          ============

</TABLE>
                                       3
<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 material adjustments, which
consist only of normal  recurring  adjustments,  necessary to present fairly the
financial  position  of the  Company  at  March  31,  1998  and the  results  of
operations  for the  three-month  periods  ended March 31, 1998 and 1997 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.  These  condensed
financial statements should 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, 1997.

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.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect certain  reported amounts and  disclosures.  Accordingly,  actual results
could differ from those estimates.

The interim period results are not  necessarily  indicative of results which may
be  expected  for any other  interim  or for the full  year.  Certain  costs are
estimated for the full year and  allocated to interim  periods based on activity
associated with the interim period.
Accordingly, such costs are subject to year end adjustment.


Note 2.       INVENTORIES

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


                              March 31,1998            December 31,1997
                              ----------------         -----------------  
Raw Materials                        $1,599                      $1,499
Work in Process                       1,301                       1,026
Finished Goods                        3,865                       3,873
                                      -----                       -----
                                     $6,765                      $6,398
                                      =====                       =====

                                       4
<PAGE>

Note 3.       DEBT

The Company has two sources of debt,  $4.2 million due to  affiliates,  and $9.5
million due to banks.  Of the notes owed to affiliates,  over $3 million is owed
directly to Williams Controls, Inc. The bank debt is long term and consists of a
revolver at $6.4 million and $3.1 million in term loans.  The bank debt consists
of a joint and several loan with  Williams  Controls,  Inc. As part of the "Ajay
Restructuring  Plan", on March 13, 1998, the Company's  bank,  Wells Fargo Bank,
agreed to make revisions in the existing  revolving loan  agreement.  Under this
plan,  Wells Fargo has  committed  to provide the Company  with a separate  loan
facility and to increase  availabilities.  This is in  consideration of Williams
Controls  investing  $2  million  as part of the  Ajay  Restructuring  Plan  and
converting  sufficient notes receivable from Ajay into permanent capital so that
the minimum tangible net worth covenant of $825,000 can be achieved.  Completion
of the Ajay  Restructuring  Plan would  eliminate any further  guarantees of the
bank  debt by  Williams  or Ajay's  affiliates.  Subsequent  to March 31,  1998,
Williams has invested $1 million  during the month of April.  The  additional $1
million  will be  invested  by  Williams  upon  execution  of the new bank  loan
agreement.  The  interest  rate on the new  loans  will be prime  plus 1% on the
revolver and prime plus 1.5% on the term.  The maturity  date of the new loan is
May 2001. This Ajay Restructuring Plan is expected to be completed by the end of
May 1998.  Completion  of this plan should  provide the Company with  sufficient
capital to operate through the next 12 months.


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,
1998 and 1997 (unaudited) are as follows (in thousands):



<TABLE>
<CAPTION>
                                                     Quarter Ended March 31, 1998

                                                             GOLF
                                                 ----------------------------- 
                                                  Mass             Specialty
                             Furniture            Merchant         Golf Stores        Corporate       Consolidated
                             ---------           ---------         -----------       ----------      --------------
<S>                      <C>                 <C>             <C>                 <C>              <C>

Net Sales                $       1,760        $    5,318      $         520       $       -       $     7,598
Operating Profit/(Loss)            220               273              (110)           (143)               240
Total Assets                     2,930            12,061              2,872               -            17,863
Depreciation/Amortization           26                55                 20               -               101
Capital Expenditures                23                 -                  -               -                23
                         
                                                     Quarter Ended March 31, 1997
                                                         
                                                              GOLF
                                                ------------------------------
                                                  Mass             Specialty
                             Furniture            Merchant         Golf Stores        Corporate       Consolidated
                            ----------          -----------       -------------       ----------     --------------
Net Sales                $       1,890        $    4,712      $         999      $        -        $    7,601
Operating Profit/(Loss)            394               141              (182)            (63)               290
Total Assets                     3,475            11,345              5,610               -            20,430
Depreciation/Amortization           16                50                 15               -                81
Capital Expenditures                10                31                  3               -                44


</TABLE>

                                        5
<PAGE>




The reduction in both total assets and those in the specialty golf store segment
result from the Company  closing its  California  facility and more  efficiently
redirecting its resources.  Receivables  from specialty golf stores were reduced
by $675,000  and  inventories  by  $1,675,000.  All other assets were reduced by
$388,000.


Note 5.       DIVIDENDS

Dividends on Series B and C Convertible  Preferred  Stock have not been declared
for 1997 or 1998 due to unavailability  of funds.  Dividends are permitted to be
paid  under the new loan  agreement  when  sufficient  funds  become  available.
Dividends  are in arrears on Series B in the amount of $931,500  and on Series C
in the amount of $370,000.


                                        6

<PAGE>



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

FINANCIAL  CONDITION - At March 31,  1998 the  Company  had  working  capital of
$8,547,000  as compared  with  $8,011,000  at December  31,  1997.  The ratio of
current  assets  to  current  liabilities  at  March  31,  1998 was 2.7 to 1, as
compared to 2.8 as of December  31, 1997.  The  Company's  borrowings  increased
$386,000 since  December 31, 1997.  This and increased  accounts  payable helped
finance a $939,000  increase  in trade  receivables  and a $367,000  increase in
inventories  during the quarter as a result of a seasonally  normal $1.3 million
increase in sales during the quarter.

LIQUIDITY - 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.

During  the  Company's  first  quarter,  operating  cash  flow was  negative  by
$(498,000)  which was  primarily  financed by  increased  borrowing  from banks.
Liquidity  remains  firm with  excess  availability  of $591,000 as of March 31,
1998. The Company believes that if the current  refinancing  effort is concluded
by the end of May as anticipated,  liquidity tightness will be eased and it will
have sufficient funds to operate through the next 12 months.

RESULTS OF  OPERATIONS - During the quarter  ended March 31,  1998,  the Company
reported net sales of $7,598,000,  compared to $7,601,000 for the same period in
1997.  Flat sales were  primarily a result of closing the Company's Palm Springs
Golf  facility in  California  and  integrating  the business into the Company's
Delavan,  Wisconsin facility,  and in connection with that,  de-emphasizing golf
club sales. This restructuring  activity reduced sales by $479,000, but added to
operating  profit by reducing  losses in the Palm  Springs Golf  specialty  golf
store lines. The furniture line sales were off $130,000 due to a weather-related
late start to its spring outdoor furniture season.  This contributed to reducing
operating profit in the furniture  segment by $174,000.  The mass market segment
of the golf business increased its sales by $606,000 and likewise, its operating
earnings increased $132,000.

Gross profit for the three months ended March 31, 1998 was  $1,268,000 or 17% of
sales, compared to $1,458,000 or 19% for the same period in 1997. The decline in
margins was due to a sales shortfall in the outdoor furniture business.

Selling,  general and administrative  expenses were $1,028,000 or 13.5% of sales
for the first quarter of 1998, versus $1,168,000 or 15.4% in the same period the
prior year. This was primarily due to the restructuring of Palm Springs Golf.

Interest  expense  increased  by $58,000  reflecting  an  increase in debt and a
decrease in equity.  Non-operating  income of $136,000  reflects the result of a
favorable judgment from a law suit settlement. As a result of the above factors,
net income for the first quarter ended March 31,1998 was $41,000 which  compares
to a prior year income of $5,000 for the same period.

                                        7

<PAGE>





PART II.  OTHER INFORMATION


Item 6.       EXHIBITS AND REPORTS ON FORM 8-K

              A)   Exhibit #27:     Financial Data Schedule.

              B)   No reports on Form 8-K were filed during the quarter ended 
                   March 31, 1998.




                                        8

<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:     Duly Authorized Officer






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



Date:    May 14, 1998
















                                        9