ACME ELECTRIC CORPORATION
INTERIM REPORT FOR THE
PERIOD ENDED DECEMBER 27, 1996


To Our Shareholders:

     In the second quarter, net income was $84,000 on sales of $23,478,000. 
This compares to a net loss of $834,000 on sales of $23,425,000 for the
same quarter of last year.
     The Ultra Force Battery Company was unable to meet required contingen-
cies for the purchase of our Aerospace Division, which will now remain an
integral part of the Company.  This business is slowly improving and is
expected to operate at a break-even level within the next nine to twelve
months.  Several important new military programs will move into production
between now and next Fall, which will further improve performance.
     The Electronics Division has converted 80% of its manufacturing
operations to Demand Flow Technology.  We are pleased with the early
results -- service and quality levels are up, while inventories have
declined $2.5 million from a year ago.
     This past quarter, the Electronics Division received the first award
ever granted by Silicon Graphics to a power supply source for excellence in
product and process design.  The Division has been named the sole supplier
of high-wattage power supplies for Silicon Graphics' new Onyx 2 line of
super computers.
     The Power Distribution Products Division has received formal
certification from the JcIT Institute of Technology for its Demand Flow
Technology conversion.  Here, too, we have improved service and quality
levels with less inventory investment.  On-time delivery for the Division
has improved to over 95% of orders from 78% a year ago.
     Sales of electrical products to Latin America and the Far East
continue to grow as we expand our efforts in those regions.
     Throughout the balance of this fiscal year, we will be completing our
conversion to an Oracle-Registered Trademark- client/server-based business
system.  Much planning and preparation have gone into this project to
ensure minimal disruption to our business.  The system has been thoroughly
tested in one of our sheet metal operations and is now ready to be
implemented throughout the major portions of our business.  This new system
will support us well for many years and enable us to more effectively
manage the Company.




Robert J. McKenna
Chairman and CEO

February 7, 1997
<PAGE>
<PAGE>
<TABLE>
<CAPTION>

ACME ELECTRIC CORPORATION
East Aurora, New York

The following tables set forth certain unaudited financial information for the
twenty-six-week
periods ended December 27, 1996, and December 29, 1995 (in thousands, except
for per share
data):

                                                               BALANCE SHEET

                                     Dec. 27, 1996       Dec. 29, 1995     
June 30, 1996
                                     -------------       -------------     
-------------
<S>                                     <C>                 <C>               
<C>
Current Assets..................        $34,799             $38,523           
$35,371
Fixed Assets and Other - Net....         19,162              16,331            
18,773
  Total.........................        $53,961             $54,854           
$54,144

Current Liabilities.............        $12,918             $11,714           
$13,014
Long-Term Debt..................         25,180              27,746            
25,446
Shareholders' Equity............         15,863              15,394            
15,684
  Total.........................        $53,961             $54,854           
$54,144

</TABLE>

<TABLE>
<CAPTION>
                                                     INCOME STATEMENT

                             13 Weeks      13 Weeks      26 Weeks      26
Weeks     Fiscal Year
                               Ended         Ended         Ended         Ended 
       Ended
                           Dec. 27, 1996 Dec. 29, 1995 Dec. 27, 1996 Dec. 29,
1995 June 30, 1996
                           ------------- ------------- ------------- ---------
----- -------------
<S>                           <C>           <C>           <C>           <C>    
      <C>
Net Sales...............        $23,478       $23,425       $46,701      
$49,356       $96,551
Net Income (Loss).......             84          (834)           90         
(501)         (280)
Net Income (Loss) Per 
  Common Share                     $.02         $(.17)         $.02        
$(.10)        $(.06)
Weighted Number of Shares    
  Outstanding Used to 
  Compute Net Income (Loss)
  per Common Share            4,965,378     4,949,791     4,961,463    
4,955,494      4,955,626

</TABLE>

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