ACME ELECTRIC CORPORATION
INTERIM REPORT 3
39 WEEKS ENDED MARCH 28, 1997


To Our Shareholders:

    Net income for the third quarter was $224,000 on sales of
$24,006,000.  This compares to a net income of $73,000 on sales of
$23,155,000 for the same quarter last year.

    Our Aerospace Division has made solid progress this past quarter in
resolving protracted operational problems.  The Division also secured an
important multi-year contract for FNC battery systems on the McDonnell
Douglas Apache Helicopter Longbow program.

    The conversion to Demand Flow-Registered Trademark- Technology is
nearly complete in the Electronics Division, with only a few minor
details still being attended to.  We expect to begin yielding the
benefits of this new process technology in the months ahead.

    Several new programs under development by the Electronics Division
were delayed at our customers' request, which will curtail sales for this
Division over the next six months.  We have made the necessary
adjustments to this business to minimize the resulting economic impact.

    Our efforts to expand globally the Power Distribution Products
Division's business continue to bear fruit.  The Division's fourth
largest customer is now based in the Far East, and distribution expansion
continues throughout Latin America.

    Corporate-wide conversion to an Oracle-Registered Trademark-
client/server-based business system began at our Electronics Division
during April.  The two remaining Divisions will convert to the new system
over the next six to nine months.

    We have made a great deal of progress over the past 24 months, but
still have much work ahead.  Although our economic results are improving,
they continue to be negatively impacted by the major change initiatives
underway.  The management team understands what is required of them and
is committed to achieving success.

Robert J. McKenna
Chairman and CEO


May 2, 1997<PAGE>
<PAGE>
<TABLE>
<CAPTION>

ACME ELECTRIC CORPORATION
East Aurora, New York

The following tables set forth certain unaudited financial information for the
thirty-nine-week
periods ended March 28, 1997, and March 29, 1996 (in thousands, except for per
share data):

                                                        BALANCE SHEET
                                                        -------------
                                     Mar. 28, 1997      Mar. 29, 1996     
June 30, 1996
                                     -------------      -------------     
-------------
<S>                                    <C>                <C>               
<C>
Current Assets.................         $33,939            $37,091           
$35,371
Fixed Assets and Other - Net...          19,065             18,541            
18,773
  Total........................         $53,004            $55,632           
$54,144

Current Liabilities............         $13,769            $10,054           
$13,014
Long-Term Debt.................          23,129             30,064            
25,446
Shareholders' Equity...........          16,106             15,514            
15,684
  Total........................         $53,004            $55,632           
$54,144

</TABLE>

<TABLE>
<CAPTION>
                                                          INCOME STATEMENT

                                13 Weeks      13 Weeks      39 Weeks       39
Weeks    Fiscal Year
                                 Ended         Ended         Ended         
Ended         Ended
                                03/28/97      03/29/96      03/28/97      
03/29/96     06/30/96
                                --------      --------      --------      
--------     --------
<S>                          <C>           <C>           <C>            <C>
Net Sales....................   $24,006       $23,155       $70,707       
$72,511        $96,551
Net Income (Loss)............       224            73           314          
(428)          (280)
Net Income (Loss) Per Common
 Share                             $.04          $.01          $.06         
$(.09)         $(.06)
Weighted Average Number of 
  Shares Outstanding Used 
  to Compute Income (Loss) 
  Per Common Share..........  4,968,426     4,949,320     4,963,784     
4,953,436      4,955,626

</TABLE>

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