SECURITIES AND EXCHANGE COMMISSION
                        Washington D.C.  20549

                             FORM  10-KSB
              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15D
                OF THE SECURITIES EXCHANGE ACT OF 1934

                For the fiscal year ended July 31, 1999

                    Commission file number  0-12195
                         THERMWOOD CORPORATION
            ( Name of small business issuer in its charter)

               INDIANA                              35-1169185
      (State of incorporation)           (IRS Employer Identification number)

               Old Buffaloville Road
               P.O. Box 436
               Dale, Indiana                           47523
      (Address of principal executive offices)      (Zip Code)

                                   (812) 937-4476
                           (Issuer's telephone number )


Securities registered pursuant to Section 12 (b) and 12 (g) of the Act
Name of each exchange on which registered:
Shares of Common Stock without par value        American Stock Exchange
                                                Pacific Stock Exchange

      Check whether  whether the issuer (1)  filed all reports required
to  be  filed by Section 13 or 15(d) of the Securities Exchange Act  of
1934  during  the past 12 months (or for such shorter period  that  the
registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X]    No [   ]

      Check if disclosure of delinquent filers pursuant to Item 405  of
Regulation  S-K  is not contained in this form, and no disclosure  will
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-KSBor any amendment to this Form 10-KSB.    [ ]

      The  issuer's  revenues  for its most  recent  fiscal  year  were
$24,622,322

      The  aggregate  market value of the voting  stock  held  by  non-
affiliates  of  the issuer at October 21, 1999 based upon  the  closing
price  of  the issuer's Common Stock as reported on the American  Stock
Exchange was approximately $2,835,242.

      The number of the Registrant's shares of Common Stock outstanding
as of October 21, 1999 was 985,045 shares.

     Documents Incorporated by Reference:

     Exhibits to Registrant's Registration Statement on Form S-1 (No. 2-
87641)  filed under the Securities Act of 1933 and effective April  12,
1984, its Registration Statement on Form 8-A filed under the Securities
Act  of  1934 and Current Reports filed on Form 8-K dated February  and
April, 1987, and its Registration Statement on Form 8-A filed under the
Securities Act of 1934 dated November, 1989, its Registration Statement
on  Form  SB-2  (No. 33-54756) which became effective on  February  22,
1993, and amended as of July 14, 1995, and its Forms 10-K for the years
ended July 31, 1995, July 31, 1996, July 31, 1997 and July 31, 1998.


                               PART   I

Forward-Looking Statements

This  Annual  Report  on  Form 10-KSB contains certain  forward-looking
statements  within  the  meaning of the Private  Securities  Litigation
Reform   Act   of  1995,  including,  without  limitation,   statements
containing the words "believes," "anticipates," "expects," and words of
similar  import.   Such forward-looking statements  involve  known  and
unknown  risks,  uncertainties and other factors which  may  cause  our
actual results, financial condition, performance or achievements  to be
materially   different   from  any  future  results,   performance   or
achievements  expressed or implied by such forward-looking  statements.
Certain of these factors are discussed in more detail elsewhere in this
Annual   Report   on   form  10-KSB,  including,  without   limitation,
"Description of Business" and "Management's Discussion and Analysis  of
Financial   Condition   and  Results  of  Operations."    Given   these
uncertainties,  readers are cautioned not to place  undue  reliance  on
such  forward-looking statements.  We disclaim any obligation to update
any  such  forward-looking  statements  to  reflect  future  events  or
developments.

Item   1.   Business

General

On  January  5,  1998  Thermwood effected a 5-1 reverse split  and  all
share  and  per  share information give retroactive  effect  except  as
indicated otherwise.

We  develop  and  manufacture most of the  products  we  market.  Those
products  that  we  market that we do not develop and  manufacture  are
generally purchased from vendors under an OEM arrangement.

Our  operations  are divided into a three operating segments  including
our Machining Products Division, which is responsible for marketing our
machinery,  hardware  and  software products,  our  Technical  Services
Division,  which  is  responsible for marketing our  service,  support,
upgrade  and  catalog products, and Thermwood Europe  Ltd.,  a  British
Company,  which  is a wholly owned subsidiary of Thermwood  Corporation
and  reports  to  the Machining Products Division.  For  the  financial
results  of  our  operating  segments, see  Note  L  of  Notes  to  the
Consolidated Financial Statements incorporated by reference in  Item  7
of Part II of this annual report.

The  Vice  President of Production directs the production organization,
which is responsible for all manufacturing. Manufacturing operates as a
cost  center  allocating costs to each Division  for  the  manufactured
products they sell.

Research  and  development,  product  and  production  engineering   is
directed  by  the  Vice  President  of  Engineering.  Costs  for  these
activities  are  allocated  to  the Machining  Products  and  Technical
Services Divisions.

The  Marketing  Group is managed by the Marketing Manager  who  reports
directly  to  the President. This group provides marketing services  to
the  Machining Products and Technical Services Divisions and  allocates
its costs to these Divisions.

Industry Background

Flexible Automation

Prior  to  the  availability of microprocessor-based machinery  control
systems, there were only two manufacturing methods available:  a manual
operation  using  humans  to  manipulate tools;  or  "hard  automation"
employing dedicated automatic machinery.  High initial cost and limited
flexibility  have  made hard automation suitable only for  applications
involving large volumes of identical parts.  Smaller volumes  of  parts
were traditionally produced by using human labor, hand tools or machine
tools operated manually.

In  today's marketplace, competitive pressures demand a greater variety
of  products.   Due to demographic and economic factors,  neither  hard
automation  nor manual labor appears to be a feasible means of  meeting
this manufacturing requirement.

The  gap  between  hard automation and manual labor is currently  being
filled  by  a variety of flexible automation equipment.  This equipment
is  often  better suited to small and medium volumes of  parts  and  is
usually  designed  to  perform a number of  tasks  utilizing  the  same
computer-controlled machine.

Flexible automation equipment is manufactured in a variety of forms and
addresses  a  number of applications.  Specific markets have  developed
for  certain  classes  of equipment with a number of  vendors  offering
products  in  each  of  these niche markets.  Many  vendors,  including
Thermwood, build products that service several of the markets.

Flexible  automation  equipment is more  economically  feasible  during
times  when  increased production capacity is required or  when  older,
obsolete  or  otherwise less competitive equipment is  being  replaced.
Accordingly, demand for this equipment usually increases during periods
of economic growth and decreases during periods of economic recession.

Machine Control Systems

Flexible  automation  equipment generally uses an  electronic  computer
control  known as Computer Numerical Control, commonly referred  to  as
CNC control. This system uses sets of instructions appearing in blocks,
each  containing  information concerning a particular movement  of  the
machine.  In operation, the machine sequentially executes each block of
instructions.   For  example,  blocks can  include  movements  such  as
straight  lines,  arcs  and circles, or can be  used  to  turn  certain
machine functions on or off.

CNC  control  systems are also used to control the movements  of  other
automated industrial equipment.  This type of system differs  from  the
older  Numerical Controls ("NC") in that a CNC system contains  one  or
more  computers within the control mechanism providing more  capability
than  a  NC  control,  which  lacks  a  computer  and  simply  executes
instructions developed elsewhere.

Programming  a  CNC system can be accomplished in a  variety  of  ways.
These  include  inputting  the  block of information  directly  into  a
terminal,  generating  programs using a computer and  a  computer-aided
design/computer  aided  manufacturing  (CAD/CAM)  system,  moving   the
machine  to  a position and having the machine's controller create  the
block of instructions or using an electronic probe to guide the machine
through the desired path.

We  design  and  manufacturer our own CNC  control,  called  the  91000
SuperControl.  We believe that we are the only company in  our  markets
that  builds  its  own CNC control. We also believe  that  our  control
offers  features and capabilities that other controls in the market  do
not  offer. We also believe that these exclusive features offer  it  an
advantage  in the marketplace, but there is no assurance that  this  is
true.

Machining Products Division

Automated Industrial Equipment- CNC Routers

Our  automated  industrial systems are high-speed computer  controlled,
fully  automatic machining centers commonly called CNC routers.   These
CNC routers are designed to perform a variety of tasks such as routing,
drilling, sanding, carving, sawing and shaping wood parts, trimming  of
three  dimensional  plastic  parts, machining  of  aluminum  honeycomb,
drilling  and high speed machining of aluminum. They generally  operate
over  larger  table  areas and at higher speeds  than  do  conventional
metalworking  machine tools but cannot machine the heavy materials  and
large  cross  sections  that standard metalworking  machine  tools  are
capable of doing.

Our CNC routers utilize the proprietary SuperControl system and consist
of  one  or  more high speed cutting, drilling or machining  heads  and
related  tooling  which move around a table under computer  control  to
perform  programmed operations.  There are two basic types of  systems,
one  where the table is fixed and the cutting heads move both left  and
right and back and forth, and the other where the table moves back  and
forth  and  the cutting heads move only left and right.   Both  systems
permit  the  heads  to  reach all points  on  the  table.   Cutting  is
accomplished by metal bits, drills and blades.  Additional  motions  or
axes, which permit the head to both pivot and rotate, can be installed,
thereby  making three-dimensional cuts possible.  Multiple and  varying
cutting and drilling heads can be added, allowing a number of different
machining operations to be accomplished in a single cycle.


Currently  we  market six standard CNC router systems of varying  sizes
and  capabilities  that  are  generally offered  as  standard  designs.
Because  a  number  of table sizes, configurations, tooling  and  other
options  are  available,  most  of these designs  are  combinations  of
standard components rather than totally new designs.

Our  CNC routers are utilized principally in the woodworking, plastics,
aerospace,  boating and automotive industries.  Current prices  to  end
users  range  from approximately $39,000 to over $200,000  per  system.
The  average  price  of  a  standard system is approximately  $100,000.
Sales  of the CNC router systems were approximately 76% of total  sales
in fiscal year 1999.

Carving Router

One model of our CNC router line is specifically intended for intricate
carving  of  three  dimensional wood parts  such as  chair  legs.  This
machine  is  capable  of  carving  six  parts  simultaneously.  It   is
programmed using an electronic programming probe which traces a  sample
carved   part.  The  CNC  control  automatically  creates  the  program
necessary  to  reproduce the sample carving. Sales of  this  system  in
Fiscal 1999 were $1,038,000.

Hardware Options

Our  Machining  Products Division offers a variety of hardware  options
for  use  with  its  CNC  router line. These options  include  products
designed and manufactured by us, such as tooling heads, automatic  tool
changers and hand held programmers. We also offer a variety of products
manufactured  by others for use with our equipment. These products  are
generally,  but  not always, obtained through an OEM arrangement.  This
type  of product includes, among others, the programming probe,  vacuum
pumps,  dust  collection  systems as well as a  variety  of  electronic
hardware devices that work with our control system.

Software Products

During  Fiscal  1999  the Machining Products Division  established  the
Software  Technology Group to market software products that  work  with
its CNC routers. Although some of these products consist of proprietary
software  developed by us, we expect that the majority will be software
packages obtained from third party vendors under OEM arrangements.

OEM  agreements have been signed with CNC Automation to sell a Computer
Aided  Design/Computer  Aided Manufacturing package  called  MasterCAM;
with  Graphitech Software Solutions, Inc. to distribute  the  Cimagrafi
artistic  CAD/CAM  software  package; with  Northwood  Design,  Inc  to
distribute a software package under the name "Final Finish";  and  with
CNC  Automation, an existing Thermwood Authorized Dealer, to distribute
their  Panelmetrix, kitchen cabinet door program. In addition, we  have
signed  an agreement with Cabinet Vision, Inc., a supplier of  advanced
cabinet  design  software in the US to market its "Solid  Professional"
kitchen design software as part of an integrated package to design  and
manufacture kitchen cabinets. Our European subsidiary, Thermwood Europe
Ltd. has signed a similar agreement with Planit CV of Ashford Kent, UK,
for  distribution of the same product, under essentially the same terms
in  the  UK  and  Europe. Planit CV is the parent  company  of  Cabinet
Vision. During fiscal 1999 the Software Technology Group recorded sales
of $105,000.

Technical Services Division

The  Technical Services Division products consist of customer training,
installation assistance, warranty service, field service, spare  parts,
upgrades  and  enhancements, the Advanced Support Program  and  catalog
sales.   Sales and service by the Technical Services Division in fiscal
year 1999 accounted for approximately 24% of total sales.

The Technical Services Division receives an allocation on the sales  of
each  machine to cover the cost of customer training, installation  and
service  during  the  warranty period. Our  standard  limited  warranty
covers  one year parts and labor; however, if a technician must  travel
to  the  customer site, the customer is required to pay  travel  costs.
After the warranty period, both service labor and spare parts are  sold
to customers.

Advanced Support Program

During  Fiscal  1999 the Advanced Support Program was created  for  CNC
router  customers.  The primary purpose of this  program  is  to  offer
customers  a  low  cost  method of updating their  Thermwood  machines,
minimizing the possibility of a major service expense and providing  us
with an ongoing revenue stream. In order to join the program a customer
must  sign  an  agreement  for an initial 12 month  period  which  then
continues  on  a  month  by month basis. The cost  of  the  program  is
currently  $250  per month for each machine enrolled.  In  return,  the
customer  receives  an  annual control system software  update,  a  35%
discount  on  any  hardware required for the update, an  ongoing  labor
warranty  (customer  pays  travel expense),  a  full  parts  and  labor
warranty  on the control and various discounts on spare parts, upgrades
and  catalog purchases. There were 60 machines enrolled in the  program
at the end of Fiscal 1999.

Catalog Sales

We  publish  a  CNC Router Supply Catalog that offers for sale  various
tooling, supplies, support equipment and consumables that are  used  in
the  operation of a CNC router. This catalog not only contains products
for  use  with  our  machines  but also  offers  products  specifically
intended for use with competitors' machines. In addition to the printed
catalog, the catalog has been available for free download from our  web
site.  After the end of Fiscal 1999, we began offering on-line ordering
of  catalog items from our web site. Catalog sales for Fiscal 1999 were
approximately $414,000.

Thermwood Europe, Ltd.

Thermwood   Europe  Ltd,  a  wholly  owned  subsidiary   of   Thermwood
Corporation, reports to the Machining Products Division and is a  sales
and  service office located in Durham, England.  It is responsible  for
marketing and servicing our machines in Europe.

Marketing

The  market  for  CNC routers can be divided into  a  large  number  of
applications  in several industries.  We seek to produce products  that
address  specific applications in specific industries.  We also attempt
to  provide  complete,  pre-engineered, standard systems  that  require
little  or  no engineering input from the end user.  These systems  are
designed  for  easy  installation, programming  and  use,  and  may  be
operated  and maintained by existing plant personnel without  extensive
training or technical background.

Our  systems  are  currently designed to operate at  high  quality  and
reliability  levels.  In addition, we strive to support  these  systems
with  good  technical services and assistance.  Although our  marketing
strategy  has involved emphasis on small to medium-sized companies,  we
have also received orders from larger companies.

We  generally  sell  our  products through  the  assistance  of  dealer
networks  established  throughout North America  and  Europe.   Dealers
assist  us in making sales and are paid on a commission basis for  this
service.   Commissions  generally range from 10%  to  20%  of  the  our
published  retail  prices.  As of July 31, 1999, we had  15  authorized
dealers  marketing  our  products. We usually require  each  dealer  to
execute  a  non-exclusive written agreement.  A dealer is  required  to
sell  one  machine within each six-month period in order to retain  its
dealership.   Most dealers concentrate their sales efforts in  specific
geographical  areas.  Although some dealers  may  handle  non-competing
products  manufactured  by other companies,  most  dealers  handle  our
products exclusively.

One  dealer  accounted for approximately 25% of the our sales  for  the
fiscal  year  ended July 31, 1999.  See Item 12. "Certain Relationships
and  Related  Transactions" for information relating to  our  agreement
with AutomationAssociates which is owned by  our president and his wife
who  is also an officer and director.  This dealer sold to 33 different
customers, none of which accounted for 10% or more of  our sales in the
fiscal year ended July 31, 1999.

No  other  dealer  accounted for 10% or more of our  business  for  the
fiscal  year.   The  loss of any large dealer could have  a  materially
adverse effect on our business.  Our business is not seasonal.

We have a wholly owned subsidiary, Carolina CNC, Inc., a North Carolina
corporation,  which  operates as a dealer and  conducts  sales  in  the
southeastern region of the United States.

We  also have a wholly-owned subsidiary, Thermwood (Europe) Limited,  a
United  Kingdom  company,  which  currently  conducts  sales,  service,
training and demonstrations out of offices located in England targeting
the  European  Community. During the 1999 fiscal year,  the  subsidiary
had  a  net  loss of $226,000. Their sales of machines and services  in
fiscal year 1999 were approximately $1,700,000, or approximately 8%  of
consolidated net sales.

Typically, we seek to develop sales leads through advertising in  trade
magazines  and  product exhibitions at selected trade shows.   We  also
maintain  an  extensive site on the Internet that offers  both  product
information and pricing. We then furnish leads obtained on the Internet
to  dealers  in  the  geographic area where the potential  customer  is
located.   The  website  also  supplies the  dealers  with  promotional
materials  and  sales  aids, including product literature,  a  dealer's
manual, news letters, press releases and advertising, technical briefs,
sales  incentive  programs  and video of  product  demonstrations.   We
assist  our dealers by providing training for them and their customers.
We   encourage   trainees  and  potential  customers   to   visit   our
manufacturing  facilities  where we maintain  areas  and  machinery  to
demonstrate the operation and use of our products.

In  addition  to  the above, we also seek to sell our products  through
full  service  dealers in areas of the world where we do not  have  the
ability  to  perform the demonstration, training and service  required.
These  full service dealers are responsible for all aspects of selling,
installing, training and servicing our products. Currently we have this
type  of  arrangement  with  dealers in Canada,  Mexico,  Malaysia  and
Israel.

Technical Services

We  believe that providing extensive and ongoing technical services  to
customers is essential for long term success. Accordingly, we  offer  a
variety  of technical services through our Technical Services Division.
These services include training and installation assistance, as well as
upgrading  and  enhancement of older machines. The  Technical  Services
Division also operates the Advanced Support Program as well as  Catalog
Sales.

Technical  services are marketed to current customers  as  well  as  to
companies that purchase our equipment in the used market. The  Division
also markets products from its supply catalog to customers that operate
CNC  router  products manufactured by competitors. A toll-free  service
line is maintained for the use of all owners of our equipment.

Other  than the Advanced Support Program, we do not offer our customers
written service contracts.  We have incurred no significant expenses or
problems in servicing our products.

Product Development - R&D

Research  and development and product development efforts are conducted
concurrently  under the direction of the Vice President of Engineering.
These  efforts are intended to simultaneously improve and  enhance  our
product  performance  and  capabilities  while  reducing  manufacturing
costs. Much of our product development effort during the last two years
has  been  directed  toward development of a  variety  of  cutting  and
machining  heads and automatic tool changers for use on our CNC  router
line  of  equipment.  This development is continuing in  an  effort  to
broaden  the capability of the equipment and thus increase market  size
for these products.

During  the year, we increased the feed speed of our machines from  900
inches per minute to 1500 inches per minute. We also developed a  Turbo
option  that  offers cutting speeds up to 3,000 inches per  minute  and
positioning speed up to 4,200 inches per minute. Tool change  time  for
our  rotary  turret  tooling  head was reduced  from  approximately  11
seconds to approximately 5 seconds. A new low-cost, high-speed, at-the-
head  automatic  tool changer was developed as was a 50  position  bulk
tool  changer.  The  two  were integrated so  that  the  machine  could
automatically retrieve the proper tools when a new program is loaded.

We  developed a multi-function machine table that simplifies use of the
three  most  common methods of holding a part as well as offering  very
fast  changeover from one part to another. An auxiliary  tooling  slide
was  developed that allows turret tooling to be used with the  Extended
Duty Head, which is standard with woodworking machines.

We  also  developed the software interface between the  Cabinet  Vision
Solid  Professional  software package and the Thermwood  91000  Control
system.  As  part of this development, a fixture method  and  operating
system  was  developed for producing hardwood face frames  for  kitchen
cabinets.

We  plan  to  continue our research and development  efforts  primarily
directed  toward the improvement of existing products,  development  of
new  products  or  product enhancements, increases in  feed  speed  and
reduction  in manufacturing costs.  We utilize a variety of sources  in
our  research  and  development efforts, including  employees,  vendor-
engineering  staffs,  contract employees who are  retained  solely  for
specific projects, consultants and independent design firms.

For  the  fiscal years ended July 31, 1999 and 1998, we spent  $570,000
and $314,000, respectively, for research and development.  There was no
customer-sponsored  research and development  during  the  1999  fiscal
year.   We  believe that expenditures need to continue to allow  us  to
maintain a competitive position in the immediate future.

Customers

Although  we  have  sold our industrial products to large  corporations
(i.e.,  companies  with  annual  sales approximating  or  exceeding  $1
billion),  our primary customer base is comprised of small  to  medium-
sized  manufacturers (i.e., companies with annual  sales  ranging  from
approximately  $10  million  to  approximately  $500  million)  located
throughout the United States.  No customer accounted for more than  10%
of our sales in the fiscal year ended July 31, 1999.

We  generally require a purchaser of industrial products to pay 30%  of
the  sales  price when placing the order, an additional  40%  prior  to
shipment  and  the balance within 30 days after the date  of  shipment.
Charges  for technical services and spare parts are due within 30  days
after billing.

We  offer our customers a one year limited warranty on parts and labor.
Under  the  terms  of  this warranty, the customer is  responsible  for
travel  expenses associated with the labor portion of the warranty.  In
addition,  we offer an optional Advanced Support Program that provides,
for  a  monthly payment,  additional warranty protection as well as  an
annual  system software update and miscellaneous discounts. The limited
warranty  offered  under this program covers parts  and  labor  on  the
control system and labor on the remainder of the machine.

We  offer  a  five day training course for two people as  part  of  the
purchase  price  of a new machine. This training is  conducted  at  our
headquarters  in Dale, Indiana. We also offer formal training  for  our
major software products.

Backlog

As  of July 31, 1999, our backlog was approximately $5,059,000 compared
with a backlog of $3,029,000 as of July 31, 1998.  Substantially all of
this  backlog will be manufactured and delivered prior to  January  31,
2000.

Backlog  figures generally include only written orders  from  customers
which  we  believe  are  firm  and will be  shipped  within  12  weeks.
Approximately  90%  of  the backlog is covered by  down  payments  from
customers ranging from 25% to 30%.  On orders where down payments  have
not  been  required, we have normally obtained irrevocable  letters  of
credit   for   payment  upon  proof  of  shipment  or  obtained   lease
documentation from an approved leasing company.

Because of the possibility of customer changes in delivery schedules or
cancellation of orders, our backlog as of any particular date  may  not
be indicative of actual revenues for any subsequent period.

Manufacturing and Production

Our  manufacturing  facilities  are  located  in  Dale,  Indiana.    We
manufacture essentially standard machines with certain options using  a
batch  rather  than a continuous flow or conventional  production  line
process.    Except  for  demonstration  models,  we  do  not  generally
manufacture  products without a purchase order although,  in  order  to
expedite the manufacturing process, certain basic parts of machines may
be  fabricated before purchase orders are received.  The major  portion
of  inventory is purchased to satisfy specific customer orders with the
balance  acquired  from  one to four months  in  advance  of  projected
orders.

We   design,  develop  and  engineer  all  of  the  products  that   we
manufacturer.   Components  contained  in  these  products  are  either
purchased  from  outside suppliers or fabricated by us.   We  fabricate
such  components as the computer-based electronic control  systems  and
the  steel  structure of the CNC routers.  Where possible, the  Company
utilizes its own CNC routers. We also use our own 91000 Control systems
to   operate  conventional  metalworking  machine  tools  to  fabricate
components.

Raw  materials  are  purchased  from third  party  sources.   Most  raw
materials  and  components, including those that are custom  made,  are
either  purchased  or  available  from several  sources.  One  supplier
accounted for approximately 13% of total components purchased  for  the
fiscal  year  ended July 31, 1999.  The materials purchased  from  this
supplier are available from several other sources.

Competition

There  are  many manufacturers of CNC routers in the United States  and
abroad,  particularly in Japan and Europe.  Some of these manufacturers
are larger and have more resources than we do.

Our  primary competitors in the CNC router market are a number of major
domestic, Japanese and European firms such as Shoda Iron Works,  Heian,
Anderson Machinery, Accurouter, Motionmaster and Komo Machinery.  There
are  a  large number of companies offering routing equipment and it  is
our  opinion  that the market cannot support all of them.  We  believe,
however,  that our ability to offer products that perform a variety  of
functions  and  sell  at  low prices provides  us  with  a  competitive
advantage but there is no assurance that this is true.

Competition in CNC routers is based upon real and perceived differences
in   equipment  features,  price,  performance,  reliability,  service,
marketing, financial strength and product development capability.

We  seek  to  design  our products for high levels of  performance  and
reliability while offering them at moderate prices.

Patents, Trade Secrets and Trademarks

We  currently hold 26 domestic patents and have applications pending in
the  United  States for 14 additional patents.  There is  no  assurance
that  any  additional patents will be granted.  We do not believe  that
major  reliance  can  be placed on patents for the  protection  of  our
products,  although patent protection for our newly developed  products
is increasing.

We  rely  primarily  upon  trade secret laws,  internal  non-disclosure
safeguards  and  restrictions incorporated into our dealership,  sales,
employment and other agreements to protect our proprietary property and
information.  In addition, we have proprietary rights arrangements with
our  employees  that provide for the disclosure and assignment  by  the
employee  to us of any discovery, invention or improvement relating  to
our  business.   While we are unaware of any breach  of  our  security,
competitors may develop similar products outside the protection of  any
measures that we take.  In addition, policing unauthorized use  of  our
technology,  particularly in foreign countries, may be  difficult.   We
have  been unsuccessful in prosecuting two claims in the United  States
for  what  we believed were prospective unauthorized use of proprietary
rights.   We  have  not been involved in any claims  concerning  patent
infringement.

Our   products   are  marketed  under  various  trademarks,   including
THERMWOOD,  CARTESIAN 5, 91000 SUPERCONTROL, ROUTER ART and  PANEL-CAD.
We   have  three  trademark  registrations  and  one  application   for
registration in the United States.  We also have two foreign  trademark
registrations and applications for seven foreign registrations.

Employees

As of October 1, 1999, we  had 152 full-time employees, of whom 82 were
engaged in manufacturing, 16 in marketing, 14 in administration, ten in
engineering,  sixin  research  and development,  and  24  in  technical
services.  None of our employees is a member of any union or collective
bargaining  organization.   We  consider  our  relationship  with   our
employees to be satisfactory.

Designing   and   manufacturing  our  industrial   equipment   requires
substantial technical capabilities in many varied disciplines,  ranging
from  mechanics  and  computer sciences to  mathematics.   Although  we
believe  that  the  capability and experience of  our  technical  staff
compare  favorably  with  other  similar  manufacturers,  there  is  no
assurance that we can retain existing employees or attract and hire the
type of skilled employees we may need in the future.

Item 2.  Description of Property

Our  manufacturing facilities and executive offices are  located  in  a
100,000 square foot building in Dale, Indiana, which we own. We believe
that these facilities are in good condition and adequately satisfy  our
current requirements.

Item 3.  Legal Proceedings

We  are  aware  of  no  pending  or threatened  litigation,  claims  or
assessments with respect to us as of July 31, 1999 other than Precision
Plastics,  Inc. vs. Thermwood Corporation et al, Case No.  CIVF-98-5841
OWW  DLE, alleging breach of contract, breach of the covenant  of  good
faith  and  fair  dealing, fraud-intentional misrepresentation,  fraud-
negligent misrepresentation, fraud-concealment of a material  fact  and
rescission,  and seeking damages in an amount according  to  proof  and
punitive  and exemplary damages in an unspecified amount, in connection
with  the  sale  of  a  machine.  Counsel is of the  opinion  that  the
allegations in the Precision litigation are without merit, we have good
defenses  and should prevail and that any unlikely adverse judgment  in
the matter would not have a material effect on our financial affairs.

Item 4.  Submission of Matters to a Vote of Security Holders

None.


                                   PART  II

Item 5.  Market for Common Equity and Related Stockholder Matters

The  Common Stock has been traded on the American Stock Exchange  since
1989 and on the Pacific Stock Exchange since 1987.  The following table
sets forth the high and low per share sales prices for the Common Stock
as  reported on the American Stock Exchange for the fiscal years  ended
July 31, 1999 and July 31, 1998, and for the interim periods indicated:
<TABLE>

Common Stock                Low Sales Price         High Sales Price
1999
     <S>                       <C>                     <C>
     Fourth Quarter             $   4.87                $    7.38
     Third Quarter              $   4.63                $    6.19
     Second Quarter             $   5.63                $    8.13
     First Quarter              $   6.06                $   10.38

1998
     Fourth Quarter             $  7.50                 $  10.06
     Third Quarter              $  7.50                 $   9.12
     Second Quarter             $  9.05                 $  13.10
     First Quarter              $  9.70                 $  14.05

</TABLE>
On  January  5, 1998 a 5-1 reverse split was effected; the above  prices
give retroactive effect to the split.

On  April  27, 1999, $5,062,882 in principal amount of 12% subordinated
debenture bonds due April 27, 2014 were issued in exchange for  460,264
shares of our Common Stock. The bonds were listed on the American Stock
Exchange starting April 27, 1999.

As  of  October  12, 1999,   there were approximately  215  holders  of
record of the Common Stock and  985,045 shares outstanding.

We  have  never  paid any dividends on our Common Stock.   The  current
policy  of  the Board of Directors is to retain earnings,  if  any,  to
finance  the operation of our business.  Accordingly, it is anticipated
that  no cash dividends will be paid to the holders of the Common Stock
in the foreseeable future.

Item  6.   Management's Discussion and Analysis of Financial  Condition
and Results of Operations

In  this  section, we explain our financial condition  and  results  of
operations for the years ended July 31, 1999, 1998 and 1997.

Results of Operations

Net Sales

Net sales during these periods consisted of:
<TABLE>
                     Net Sales by Industry Segment
                            ($ in Millions)

Segment                          1999             1998            1997
                          ----------------  ---------------  -------------
<S>                         <C>      <C>     <C>     <C>     <C>     <C>
Machining
Products Division - U.S.    $14.8     68%    $15.4    71%    $13.1    74%

Thermwood Europe Ltd.         1.7      8%      1.8     8%      1.0     5%
                            -----    ----    -----   ----    -----   ----
Total  Machining Products    16.5     76%     17.2    79%     14.1    79%

Technical Services Division   5.2     24%      4.6    21%      3.7    21%
                            -----    ----    -----   ----    -----   ----
Net Sales                   $21.7    100%    $21.8   100%    $17.8   100%
                            =====    ====    =====   ====    =====   ====
</TABLE>
Net  sales  for fiscal year 1999 were $21,725,883, a decrease  of  less
than  1%  from  fiscal year 1998, and a 22% increase from  fiscal  year
1997.  Machine  sales for 1999 consisted of $16,534,311  of  total  net
sales  compared  with $17,181,745 and $14,184,305  for 1998  and  1997,
respectively.  European sales included in this number for  fiscal  year
1999  were  $1,675,518 or approximately 8% of total net sales  compared
with  $1,734,716  for 1998 and $l,035,484 for 1997. Technical  services
were  $5,191,572 compared  with $4,657,784 and $3,660,548 for 1998  and
1997, respectively.

Gross profit in these periods consisted of:
<TABLE>
                   Gross Profit by Industry Segment
                            ($ in Millions)

Segment                        1999               1998             1997
                         ---------------   -----------------   -------------
<S>                         <C>      <C>       <C>     <C>     <C>      <C>
Machining
Products Division - U.S.    $  5.3    63%      $ 6.5   74%     $ 4.8    69%

Thermwood Europe Ltd.           .6     7%         .7    8%        .4     6%
                            ------   ----      -----   ----    -----    ----
Total  Machining Products      5.9    70%        7.2   82%       5.2    75%

Technical Services Division    2.5    30%        1.6   18%       1.7    25%

Total Gross Profit          $  8.4   100%      $ 8.8  100%     $ 6.9   100%
                            ======   ====     ======  ====     ======  ====
</TABLE>
Gross  profit  for fiscal year 1999 was $8,459,968, or  38.94%  of  net
sales.   The percentage of current year gross profit to net  sales  has
decreased from last year's 40.48% and increased slightly from 38.84 for
1997.   Gross profit for the European operations was $653,096 or 38.98%
of  net sales compared to $695,121, or 40.48% of net European sales for
fiscal  1998  and $374,021 or 36.12% for fiscal 1997.  In  the  current
year,  the  lower gross profit for machining products in the  U.S.  was
affected  by a higher turnover of production employees and inexperience
in  the workforce.  We expect the first quarter of fiscal year 2000  to
reflect  higher margins due to better production efficiency  due  to  a
more   experienced  workforce  and  improved  manufacturing  processes.
Although  we  anticipate that gross profit percentages from  operations
should improve during 2000, no assurance to this effect can be given

The  higher  gross  profit of 48% of net  sales  for  the  technical
services  division  in  fiscal  year 1999  was  due  to  higher  sales,
primarily  consisting of non-warranty and spare parts.  Cost  of  sales
for  the  technical services division in 1999 was lower than  in  1998;
however,  cost  of  sales in fiscal year 1998 was  higher  than  normal
because of higher than normal repair and warranty charges.

Research   and   Development,  Marketing,  General  and  Administrative Expenses

Research   and   development,  marketing,  general  and  administrative
expenses were $7,309,350.in fiscal year 1999, compared to $6,413,160 in
1998 and $4,794,563 in 1997.

These expenses were composed of the following:
<TABLE>
         Expense              1999        1998        1997
                            ---------   ----------   ---------
<S>                        <C>         <C>          <C>
European Operations         $ 832,000   $1,052,000   $ 570,000
Research and Development      570,000      314,000     216,000
Marketing                   2,180,000    1,444,000   1,201,000
General and Administrative  3,727,000    3,603,000   2,808,000
</TABLE>
The  major portion of the increased research and development, marketing
and   general  and  administrative  expenses  from  1998  to  1999  was
attributable to marketing and research and development expenses.  These
expenses amounted to  38% of total expenses in fiscal 1999 compared  to
approximately 27% of total expenses in fiscal year 1998.  At  the  same
time that marketing and research and development expenses increased  in
the   United  States,  European  administrative  expenses  of  $832,000
decreased  approximately  $220,000  from  $1,052,000  in  1998.    This
decrease  resulted primarily from a  different approach to  advertising
and  show  expense  and  the closing of the  Vienna  office.   European
expenses in fiscal 1997 were not for a full year.  Increased wages  and
benefits  and  legal  expenses related to an  uncompleted  1-for-37,000
reverse stock split also contributed to the higher level of expenses in
the United States.

Interest  expense  for fiscal year 1999 was $379,642,  an  increase  of
$147,895 from 1998 and an increase of $303,956 from 1997.  The increase
from  1997  is  due to interest on a $3.5 million line of  credit  from
Dubois County Bank proceeds from which we used to repurchase  preferred
stock   in  the  amount  of  $2,546,320.   Additionally,  approximately
$160,000  was for interest on the 12% debentures issued in  1999  which
are due in 2014.

Operating  income  for  fiscal year 1999  was  $1,150,618  compared  to
operating  income  of  $2,428,463 and  $2,111,353  in  1998  and  1997,
respectively.  The decrease in operating income in 1999 from  1998  and
1997  resulted  primarily  from  increased  research  and  development,
marketing,  and  general  and administrative  expenses.   The  European
operations  had  an  operating loss of $178,849 for  fiscal  year  1999
compared  to  $356,644  and $195,971 for 1998 and  1997,  respectively.
Fiscal  year 1999 net earnings were $637,913, compared to net  earnings
of  $1,317,886 and $1,235,824 in 1998 and 1997, respectively.   Federal
income  tax  expense  for  fiscal year 1999 was  $206,000  compared  to
$848,000 and $819,000 for fiscal years 1998 and 1997, respectively.  Income
taxes were less than expected because of our utilization of remaining tax
carryforwards.

Liquidity and Capital Resources

At  July  31,  1999,  our  working capital was $3,061,769  compared  to
$5,324,458 at July 31, 1998. We had a positive cash flow from operating
activities  for the 1999 fiscal year in the amount of $1,047,747.   Net
earnings  of  $637,913,  along  with the  add-back  of  other  non-cash
expenses  such  as  depreciation and amortization of $535,015,  and  an
increase  in  customer deposits contributed to a  positive  cash  flow.
However, an increase in accounts receivable decreased cash resources.

During  fiscal year 1998, our investing activities consisted  primarily
of  a 20,000 square foot addition to the production area and additional
machinery  purchased to increase efficiency and capacity.  Expenditures
for  fixed  assets in the 1999 fiscal year were for normal replacements
and  purchases of labor-saving equipment for production along with  the
purchase of new software and hardware for us to become Y2K compliant.

Principal  payments on lease obligations during the  1999  fiscal  year
were  for  leased  office  equipment.   Cash  outflows  from  financing
activities  included bond issuance costs of $502,000 and the repurchase
of bonds with a face value of $147,400 at a cost of $112,761.

On  September  4,  1998,  we filed a preliminary  proxy  statement  and
Schedule 13E-3 with the Securities and Exchange Commission relating  to
a  reverse  stock split (and proposed a modified 1-for-37,000  exchange
ratio).   We  also  proceeded with steps to obtain  financing  for  the
transaction.  We intended to borrow $14,000,000 to finance the  reverse
stock split. On October 16, 1998, we determined that we were unable  to
obtain acceptable financing for the reverse stock split and decided not
to proceed with the transaction.  All professional fees related to this
transaction were expensed in fiscal year 1999.

On  September 3, 1998, we entered into an option to purchase the shares
of  Common Stock held by Edgar Mulzer, a major shareholder and director
,  during  a period commencing November 1, 1999 and ending October  31,
2002  for  a price equivalent to $15.50 per share.  This agreement  was
contingent upon the 1-for-37,000 reverse stock split being successfully
completed.   Since  the Board decided not to proceed with  the  reverse
stock split, the option agreement between us and Mr. Mulzer terminated.
On  February  4,  1999, Mr. Mulzer gave us an option  to  purchase  his
shares at a price of $15.00 per share.  We can exercise this option  at
any time after January 1, 2002 and before January 1, 2004.  We paid Mr.
Mulzer $5,000 for this option.

Shareholders' equity decreased as a result of our acquisition in  April
1999  of  an aggregate of 460,264 shares of our Common Stock  from  our
shareholders  in  exchange for 12% subordinated debentures  payable  in
2014  in  the aggregate principal amount of $5,062,882.  The debentures
were discounted using an effective interest rate of 22% resulting in  a
net  increase  in  bonds  payable and a decrease  in  Common  Stock  of
$2,889,700.

Year 2000 Issues

Our failure to adequately prepare our computers and software to be year
2000  compliant could disrupt our business and materially and adversely
affect  our operations.  Many currently installed computer systems  and
software  products  use  two digits rather  than  four  to  define  the
applicable year.  In other words, date-sensitive software may recognize
a  date  using "00" as the year 1900 rather than the year  2000.   This
could  result in system failures or miscalculations causing disruptions
of  operations, including, among other things, a temporary inability to
track  inventory,  issue purchase orders, write  checks  or  engage  in
similar normal business activities.

During  the fiscal year ended July 31, 1998, we began a risk evaluation
of  potential  Year 2000 issues and formed a Year 2000 Committee  which
consists of the Chief Executive Officer, Vice-President of Engineering,
Information  Systems Manager and two other employees.  The  Committee's
purpose is to assess all risks, analyze current systems, including  all
information   technology   and  non-information   technology   systems,
coordinate  upgrades  and  replacements  and  report  the  current  and
projected status of all known Year 2000 compliance issues.

During the assessment phase, we identified computer-related systems and
software  with potential Year 2000 problems.  In the first  quarter  of
fiscal  1999,  we  began corresponding with the vendors  that  had  not
supplied  Year  2000  statements, requesting the Year  2000  compliance
status  of  their products.   Responses received to date  from  vendors
have  not  indicated  any  Year  2000  problems.   We  have  identified
alternative vendors should our current vendors fail to perform  due  to
Year  2000  problems; however, use of some of these  vendors  would  be
inconvenient  and  could be costly.   Moreover, we have  not  contacted
these  alternate  vendors  to  determine whether  they  are  Year  2000
compliant.

As  a  precaution, we plan to stock additional inventory from our  non-
U.S. vendors prior to the beginning of the year 2000.

One mission-critical system, the inventory shop floor control software,
was  not  Year 2000 compliant.  This software tracked incoming  orders,
inventory  levels, material requirements planning, shop floor  control,
labor  tracking,  shipping and administrative  and  financial  tracking
functions.  We have  purchased a new system that is Year 2000 compliant
and,  in our judgment, superior to the  system we were using.  The  new
system  was  installed  during  the  fourth  quarter  of  fiscal  1999.
Upgrades to all of the non-mission critical systems have been completed
as of July 31, 1999.

We  estimate that the replacement or remedial costs for our  Year  2000
compliance  issues  will  be less than $150,000  and  will  consist  of
software  and  hardware upgrades that include new  features  which  are
combined with Year 2000 corrections.  The majority of these costs  have
been   expensed   as  incurred  or  capitalized  and  depreciated,   as
appropriate, during fiscal 1999.

We  have  tested  the  machine  control systems  and  related  computer
software which we sell and we believe that such equipment is Year  2000
compliant.

We estimate that the worst case Year 2000 issue scenario would occur if
the  new  inventory  shop  floor control  software  is  not  Year  2000
compliant.   At  that  point, we would look to alternate  vendors.   We
believe that there are a number of alternate vendors that claim to have
Year  2000  compliant software.  In the event that  we  are  unable  to
integrate  Year 2000 compliant software from any of these  vendors,  we
would  be forced to hire additional staff and return to manual  methods
of tracking inventory and purchasing raw materials.  We believe that we
could  implement this contingency plan within a short period  of  time.
However,  until  such time as this contingency plan  took  effect,  our
ability  to  manufacture could be materially disrupted.   In  addition,
during  the time that we were required to operate under this plan,  our
results of operations would be adversely affected primarily due to  the
resulting  increased administrative expense, and higher  raw  materials
inventory  levels  that would be needed to assure that  we  would  have
sufficient raw materials to avoid disruption of production.

Item 7.  Financial Statements

The  information  called for by this Item 7 is included  following  the
"Index  to Financial Statements and Schedules" appearing at the end  of
this Form 10-KSB.

Item  8.   Changes in and Disagreements with Accountants on  Accounting
and Financial Disclosure

None.
                         PART III

Item  9.  Directors, Executive Officers, Promoters and Control Persons,
Compliance With Section 16(a) of the Exchange Act

Certain  information about our directors and officers is  contained  in
the following table:
<TABLE>
Name                      Age                Position
-----------------------  ----   ---------------------------------------------
<S>                      <C>   <S>
Kenneth J. Susnjara (1)   52    Chairman  of the Board, President and Director

Linda S. Susnjara (1)     50    Secretary and Director

Michael P. Hardesty       45    Vice President of Engineering

Rebecca F. Fuller         49    Treasurer

David J. Hildenbrand      42    Vice President of Sales

Richard Kasten            47    Vice President of Technical Services

Donald L.Ubelhor          42    Vice-President of Manufacturing

Peter N. Lalos (2)        65    Director

Edgar Mulzer (2)          81    Director

Lee Ray Olinger (2)       72    Director
</TABLE>
(1)  Mr. and Mrs. Susnjara are husband and wife.

(2)   Member  of  the  Incentive Stock Option Committee,  Non-Qualified
Stock  Option  Committee,  Audit Committee,  Nominating  Committee  and
Compensation Committee of the Board of Directors.

All directors hold office until the next annual meeting of shareholders
or  until  their successors have been elected and qualified.   Officers
serve  at  the  discretion  of the Board of Directors.   Each  director
receives  compensation  in  the amount of $1,000  plus  $100  for  each
$100,000 in profit for the previous quarter for attending each  of  the
four directors' meetings and is reimbursed for all related expenses.

Mr. Susnjara co-founded Thermwood in 1969 and has been a director since
inception  and  Chairman, President and Chief Executive  Officer  since
1971.   He also served as Treasurer prior to March 1979 and again  from
October  1983  to  June  1985.  He has devoted his  full  time  to  our
business  except  for  a brief period in 1985  when  he  acted  as  our
distributor.  Mr.  Susnjara  is  the  author  of  books  on   furniture
manufacturing  entitled Furniture Manufacturing in the  New  Millennium
and  Three-Dimensional Trimming and Machining and a book on  industrial
robotics  entitled A Manager's Guide to Industrial Robotics.  See  Item
12. ("Certain Relationships and Related Transactions.)

Mrs.  Susnjara has been a director since 1985 and Secretary since 1989.
She  is and has been since 1985 the President of Automation Associates,
Incorporated,  a  dealer  of  our industrial  products.  See  Item  12.
"Certain Relationships and Related Transactions."  Mrs. Susnjara is not
active in our business.

Mr.  Hardesty  has been our Vice President of Engineering since  August
1988.   He  joined  us  in 1975 and was employed  first  as  a  project
engineer, then project manager and then general manager until July 1980
when  he  was promoted to Vice President of Operations.  He  served  in
that  capacity  until  May 1985 when he became Vice  President  of  the
Machining  Products  Division, a position he held  until  assuming  his
current position in 1988.

Mrs. Fuller joined us in 1981 and was promoted to accounting manager in
1983  and  controller  in 1985.  She assumed her  current  position  as
Treasurer in July 1993.

Mr. Hildenbrand became a Vice President in August 1988.  Previously, we
had  employed  him  in various technician and sales  manager  positions
since 1977.  He has also been a director of Thermwood Europe Ltd.,  one
of our wholly owned subsidiaries, since July 1996.

Mr.  Ubelhor  became Vice-President of Manufacturing  in  August  1997.
Previously, he had been our Production Manager since 1993.

Mr.  Kasten  became a Vice President in December 1993.  Previously,  we
had employed him as a manager of applications since 1990.

Mr. Lalos has been engaged in the private practice of law in Washington
D.C.  since 1961 and is the senior partner in the law firm of  Lalos  &
Keegan.  He served as Secretary from September 1981 until December 1989
and as a director from April 1981 until July 1986. He was reelected  to
the  Board  of  Directors  in  December 1989.  See  Item  12.  "Certain
Relationships and Related Transactions."

Mr.  Mulzer  was  Chairman  of the Board of  the  Dale  State  Bank,  a
commercial  bank  in  Dale, Indiana, from 1970  through  1993.   He  is
currently  retired.  He  became a director in September  1974  and  has
served  continuously  in that capacity to the present.   See  Item  12.
"Certain  Relationships and Related Transactions"  in  relation  to  an
option  we  have  purchased from Mr. Mulzer on  February  4,  1999,  to
purchase  his  shares at a price of $15.00 per share.  We can  exercise
this  option  at any time after January 1, 2002 and before  January  1,
2004.  We paid Mr. Mulzer $5,000 for this option.

Mr.  Olinger has been a director since December 1989.  He  has  been  a
director since 1949 and Chairman of the Board since 1986 of First  Bank
of Huntingburg, a commercial bank in Huntingburg, Indiana.

Compliance with Section 16 (a) of the Securities Exchange Act of 1934

To  our  knowledge, based solely on a review of such materials  as  are
required  by  the  Securities  and  Exchange  Commission,  no  officer,
director or beneficial holder of more than ten percent of the Company's
issued  and  outstanding shares of Common Stock failed to  timely  file
with the Securities and Exchange Commission any form or report required
to  be  so  filed pursuant to Section 16 (a) of the Securities Exchange
Act of 1934 during the fiscal year ended July 31, 1999.


Item 10. Executive Compensation

The  following table sets forth the annual remuneration paid during the
fiscal  years ended July 31, 1999, 1998 and 1997 to our Chief Executive
Officer  and to each of our executive officers whose total fiscal  1999
remuneration exceeded $100,000 and  to all officers as a group.
<TABLE>

Summary Compensation Table
                                              Annual compensation
                                        -------------------------------
                                                           Other annual
Name and principal position    Year    Salary     Bonus    compensation (1)
---------------------------   -----    --------- --------- ------------

<S>                           <C>     <C>       <C>           <C>
Kenneth J. Susnjara,           1999    $108,000  $130,814      $3,500
  Chairman of the Board,       1998     108,000   146,664       6,400
  President and director       1997      63,000    83,242       3,700

Michael  Hardesty,             1999      48,000    91,574           0
  Vice-president Engineering   1998      48,000   100,565           0
                               1997      48,000   102,165           0

David Hildenbrand              1999      45,000    70,518           0
  Vice-president Sales         1998      45,000   122,239           0
                               1997      45,000   116,779           0

Rebecca Fuller, Treasurer      1999      40,000    78,491           0
                               1998      40,000    86,199           0
                               1997      40,000    87,570           0
All other officers as a group:
(2) persons                    1999      80,000    74,957           0
(2) persons                    1998      80,000    78,893           0
(1) person                     1997      40,000    29,172           0
</TABLE>


  (1)  Other annual compensation represents directors' fees paid to Mr.
Susnjara.

  Stock options for an additional 4,000 shares were issued to an officer
under the Qualified Stock Option Plan in fiscal year 1998 at prices  in
excess  of then current market prices.  At July 31, 1999,  the exercise
prices  of  some of the unexercised options were less than  the  market
price  of  our  Common  Stock.   On  September  6,  1994,  registration
statements  on  Form  S-8 were filed with the Securities  and  Exchange
Commission  under  the Securities Act of 1933 in  connection  with  the
registration of shares of our Common Stock under our Employee Incentive
Stock Option Plan and Non-Qualified Stock Option Plan.

In  1985  the Board of Directors appointed Mr. Susnjara to the position
of  President and Chief Executive Officer.  In this position, he is  to
receive a bonus based on our pre-tax profits as set forth below.    See
"-Profit Sharing Plan" below.

Certain  other  officers may be entitled to participate in  our  profit
sharing plan.  See "-Profit Sharing Plan" below.

Profit Sharing Plan.

In 1985, we instituted a management profit sharing plan.  This plan was
continued  in an amended form for fiscal year 1999.  Covered under  the
plan  are  the  Chairman, the President, Vice President of Engineering,
Vice  President  of Sales, Vice President of Technical  Services,  Vice
President  of  Manufacturing, the Treasurer  and  various  departmental
managers.

Under  the  plan, the Chairman is entitled to 5% of corporate operating
income.   The  Vice President of Sales and Vice President of  Technical
Services  each  are entitled to 5% of the divisional operating  income.
The Vice President of Manufacturing and the Treasurer are each entitled
to  receive 2% and 3%, respectively, of the Corporate operating income.
Any  divisional losses are to be subtracted from these amounts so  that
the total bonus paid does not exceed 25% of operating income.

Department  managers  are  entitled  to  various  bonuses  based   upon
productivity of their departments.  Payments due under the plan  accrue
for  each  six-month  period and are thereafter  paid  in  six  monthly
installments.   Vesting  of  rights under the  plan  requires  eligible
participants  to  be  continually employed through the  payment  dates.
Divisional  losses of a fiscal year must be recouped in the  succeeding
year, or years, in order to be eligible for profit sharing earnings  in
the succeeding year(s).

Incentive Stock Option Plan.

Under   our  Employee  Incentive  Stock  Option  Qualified  Plan   (the
"Qualified  Plan"), options to purchase a maximum of 80,000  shares  of
our  Common  Stock may be granted to officers and other key  employees.
Options  granted under the Qualified Plan are intended  to  qualify  as
incentive  stock  options as defined in Section 422A  of  the  Internal
Revenue Code.

The  Qualified  Plan is administered by the Board of  Directors  and  a
Committee  currently consisting of three members  of  the  Board  which
determines which persons are to receive options, the number  of  shares
that  may  be purchased under each option and the exercise prices.   In
the event an optionee voluntarily terminates his employment with us, he
has  the  right to exercise his accrued options within 5 days prior  to
such  termination.  However, we may redeem any accrued options held  by
each optionee by paying him the difference between the option price and
the   then   fair  market  value.   If  an  optionee's  employment   is
involuntarily terminated, other than because of death, he also has  the
right  to  exercise his accrued options within 30 days of  termination.
Upon  death, his estate or heirs have one year to exercise his  accrued
options.   The maximum term of any option is ten years and  the  option
price  per  share  may not be less than the fair market  value  of  our
shares on the date the option is granted.  However, options granted  to
persons owning more than 10% of our voting shares may not have  a  term
in  excess of five years and the option price per share may not be less
than 110% of fair market value at the date the option is granted.

The  aggregate  fair  market  value  of  the  shares  of  Common  Stock
(determined at the time the options are granted) with respect to  which
incentive  stock  options are exercisable for the first  time  by  such
optionee  during  any calendar year (under all such  plans)  shall  not
exceed  $100,000.  Options must be granted within ten  years  from  the
effective date of this Qualified Plan.

Options  granted  under the Qualified Plan are not  transferable  other
than  by will or the laws of descent and distribution.  Options granted
under  the  Qualified  Plan  are protected by anti-dilution  provisions
increasing  the number of shares issuable thereunder and  reducing  the
exercise  price  of such options, under certain conditions.   The  life
term  of  the Qualified Plan extends to December 3, 2000,  or  on  such
earlier  date  as  the  Board of Directors may determine.   Any  option
outstanding  at  the  termination date will remain outstanding  at  the
termination  date until it expires or is exercised in  full,  whichever
occurs first.

Between  December 1991 and August 1997, we granted ten year options  to
acquire  50,600  shares of our Common Stock at exercise prices  ranging
from  $5.00  to $10.66 under the Qualified Plan to 20 of our employees.
All of these options are exercisable as of the date hereof.

Non-qualified Stock Option Plan.

Under  our   Non-qualified Stock Option Plan,  options  to  purchase  a
maximum  of  70,000  shares  of our Common  Stock  may  be  granted  to
officers, directors, and other key employees.

The  Non-qualified Stock Option Plan is administered by  the  Board  of
Directors  and  a  committee  of  three  members  of  the  Board  which
determines  which persons are to receive such options,  the  number  of
shares  that  may be purchased under the options, the exercise  prices,
the time and manner of exercise and other related matters.

In  the  event  an  optionee voluntarily terminates his  employment  or
tenure with our consent or his employment or tenure is terminated by us
without  cause,  he  generally has the right to  exercise  his  accrued
options  within  30  days after such termination unless  the  Committee
elects  other time periods.  In all other cases of termination  of  the
optionee's  employment or tenure other than death, said  options  shall
cease  immediately.  Upon death, his estate or heirs have one  year  to
exercise his accrued options.

The  Committee may grant an optionee the right to surrender  all  or  a
portion of his accrued options to us and receive from it the difference
between  the  option  price and the then fair  market  value.   Options
become  exercisable  in  25% installments each year  beginning  in  the
second  year  through  the  fifth  year.   Options  are  generally  not
transferable  and  are conditioned upon the optionee remaining  in  our
employ  for at least one year from the date of their grant.  Under  the
NSO  Plan,  no  option may be granted after January  1,  2005  and  the
exercise  price  of  such options may not be less than  the  then  fair
market  value.  It is within the Committee's discretion to grant  anti-
dilution provisions to each optionee.  Under present federal income tax
law, an employee, officer or director who is granted an option will not
have any income upon the grant of an option and we will not be entitled
to  any deduction at that time.  When an optionee exercises his option,
ordinary income will be realized by him, measured by the excess of  the
fair market value of the shares over the price paid for the shares.  We
will  be entitled to a deduction equal to the amount of income realized
by the holder of the option.  If the optionee surrenders all or part of
his option for a cash or Common Stock payment, he will realize ordinary
income  in  the amount of cash or fair market value of stock  received.
We  will  be  entitled  to a deduction equal to the  amount  of  income
realized by the optionee.

As  of  July  31, 1999 options to acquire 40,000 shares of  our  Common
Stock  at  an  average exercisable price of $8.91 per share  have  been
granted  under  the  Non-qualified Stock Option Plan  to  four  of  our
directors   and   officers.   Currently  all  of  these   options   are
exercisable.

Other options.

There are options to purchase an additional 120,000 shares held by  our
President.   These options extend through October 18, 2005  and  permit
the purchase of 60,000 shares at $15.00 per share and 60,000 shares  at
$30.00 per share.

Section 401(k) Plan

We adopted a tax-qualified cash savings plan (the "401(k) Plan") which
became effective in October 1989.  This Plan covers all employees who
have completed 12 months of continuous service prior to a plan entry
date.  Pursuant to the 401(k) Plan, eligible employees may make salary
deferral (before tax) contributions of up to 15% of their total
compensation per plan year up to a specified maximum contribution as
determined by the Internal Revenue Service. We also make a matching
contribution of 25% of employees' contributions up to 5% of their
annual salaries and an additional match of 10% of their contributions
between 6% and 8% of employees' salaries.

The  401(k)  Plan also includes provisions which authorize us  to  make
discretionary  contributions.   Such  contributions,   if   made,   are
allocated  among all eligible employees as determined under the  401(k)
Plan.   The  trustee  under  the  401(k)  Plan  is  Merrill  Lynch   of
Evansville,  Indiana.   It  invests the assets  of  each  participant's
account in funds at the direction of such participant.


Item   11.   Security  Ownership  of  Certain  Beneficial  Owners   and
Management:

The following table sets forth certain information regarding our Common
Stock   ownership,  including  shares  issuable  upon   conversion   of
outstanding  debentures and upon exercise of options owned as  of  July
31, 1999 by

(a)  each  person known by us to own beneficially more than 5%  of  our
outstanding Common Stock,

(b) each director, and

(c) all officers and directors as a group:
<TABLE>

                                                 Shares Owned
                                                   Including
                                                     Those
                                     Percentage    Underlying    Percentage of
Names and Addresses       Shares      of Total    Exercisable        Total
of Beneficial Owners      Owned at   Outstanding  Options and     Outstanding
                          July 31,     Shares     Convertible    Shares Owned
                           1999        Owned       Securities

<S>                       <C>            <C>         <C>               <C>
Kenneth J. Susnjara(1)
 And Linda Susnjara        261,420 (2)   26.54       411,420           34.29

Edgar Mulzer
401 10th Street
Tell  City, Indiana 47586  208,052 (3)   21.12       218,052           18.18

Peter N. Lalos
14312 Darnstown Road
Gaithersburg,
Maryland  20878              8,000        0.81        22,000            1.83

Lee Ray Olinger
c/o First Bank of
Huntingburg
4th and Main Street
Huntingburg, IN  47542           0           0             0               0

All Officers and
Directors as a Group
 (9 persons)               481,002       48.83       676,002           56.35
</TABLE>
(1)   The  address  of  these shareholders is care  of  Thermwood,  Old
Buffaloville Road, P.O. Box 436, Dale, Indiana 47523.

(2)  These  shares are owned jointly by Mr. and Mrs. Susnjara  who  are
husband  and wife.  Accordingly, each may be deemed to be a  beneficial
owner of the securities owned by the other.

(3)   Mr. Mulzer has given us an option to purchase all of these shares
during the two-year period commencing on January 1, 2002.  Please  read
the  information under the heading "Certain Relationships  and  Related
Transactions" for an illustration of how exercise of that option  would
affect ownership and control of Thermwood.

Item 12. Certain Relationships and Related Transactions:

Transactions With Edgar Mulzer

On February 4, 1999, Edgar Mulzer, a director and major shareholder who
is  not  active  in our management, gave us an option to  purchase  his
shares at a price of $15.00 per share.  We can exercise this option  at
any time after January 1, 2002 and before January 1, 2004.  We paid Mr.
Mulzer  $5,000 for this option.  We have secured this option to further
our  plans to assure that control of Thermwood remains with Kenneth and
Linda Susnjara.

Transactions with Mr. & Mrs.  Susnjara

Mr.   and  Mrs.  Susnjara  are  the  owners  of  Automation  Associates
Incorporated, a dealer of our machine products.  The agreement  between
us  and Automation Associates contains the same terms and conditions as
with  our  other dealers.  We sold no products to Automation Associates
during  fiscal  year 1999, but paid Automation Associates  $669,125  in
commissions  during   the  year for assisting  in  effecting  sales  of
approximately $4,500,000.  This amount represents approximately 25%  of
our  gross  sales  for  fiscal year 1999.  Automation  Associates  also
leases  space from us at what we believe is a fair market rate.  Rental
payments were $2,400 during fiscal years 1999 and 1998.

Transactions with Peter Lalos

Lalos  &  Keegan, a law firm in which Mr. Lalos is the senior  partner,
accrued  fees  of $183,000, $95,000, and $77,000, for the fiscal  years
1999, 1998, and 1997, respectively.  All outstanding balances have been
paid subsequently.

We  believe  that  the terms of the transactions  between  us  and  our
affiliated  parties as described in this section are as fair  as  those
which  we  would have obtained if these transactions had been  effected
with  independent third parties.  Each transaction was  approved  by  a
majority  of  the  disinterested directors.  In the  future,  all  such
transactions  will  continue  to  be approved  by  a  majority  of  the
disinterested directors.

Recent Stock Transactions by Affiliates

We  have  not purchased any shares of our Common Stock since August  1,
1996. Edgar Mulzer purchased on the open market 340 shares at $7.81 per
share  and 2,000 shares at $7.20 per share in December 1996.   Mr.  and
Mrs.  Susnjara  purchased on the open market 400 shares at  $7.625  per
share  on  May  1, 1998, 400 shares at $7.625 on May 4, 1998,  and  600
shares  at $7.625 per share on May 5, 1998.  In addition, Mr. and  Mrs.
Susnjara  converted debentures into 10,000 shares of  Common  Stock  on
September  2, 1998.  Peter Lalos purchased 620 shares at $7.80  and  40
shares  at  $8.80 per share in May 1997 and 200 shares  at  $12.35  per
share  and 140 shares at $12.40 per share in November 1997.  These  are
the  only transactions in our shares effected by such individuals since
August 1, 1996.

To  our  knowledge, neither we nor any of our affiliates, directors  or
executive officers has purchased or sold any Common Stock in  the  last
sixty days.

                              PART   IV

Item 13.  Exhibits and Reports on Form 8-K:

(a)  The following documents are filed as a part of this report:
     1.  Financial Statements:

     Index  to  Financial Statements:                              Page
                                                                Reference
     Independent Auditors' Report                                      21

     Financial Statements:
      Consolidated Balance Sheets  -  July 31, 1999 and 1998           22

      Consolidated Statements of Operations  - Years ended
      July 31, 1999, 1998 and 1997                                     24

      Consolidated Statements of Shareholders' Equity -  Years
      Ended July 31, 1999, 1998 and 1997                               25

      Consolidated Statements of Cash Flows - Years ended
      July 31, 1999, 1998 and 1997                                     26

      Notes to Consolidated Financial Statements                       27

All  other schedules are omitted because they are not required, or  are
inapplicable  or  the information is otherwise shown in  the  financial
statements or notes thereto.

(b)  Reports on Form 8-K:

        None.

(c)        Exhibits:

        None.





                    SIGNATURES


      Pursuant  to  the  requirements of Section 13  or  15(d)  of  the
Securities Exchange Act of 1934, the we have duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

Date:
October 28, 1999              /s/ Kenneth J. Susnjara
                              Kenneth  J.  Susnjara,  Chairman  of  the
                              Board  and President (Principle Executive
                              Officer)

      Pursuant  to the requirements of the Securities Exchange  Act  of
1934, this report has been signed by the following persons on behalf of
Thermwood Corporation and in the capacities and on the dates indicated:

Date:
October 25, 1999              /s/ Kenneth J. Susnjara
                              Kenneth  J.  Susnjara,  Chairman  of  the
                              Board  and President (Principal Executive
                              Officer)

Date:
October 25, 1999              /s/ Rebecca F. Fuller
                              Rebecca  F.  Fuller, Treasurer (Principal
                              Financial and Accounting Officer)

Date:
October 25, 1999               /s/ Linda S. Susnjara
                              Linda S. Susnjara, Secretary

Date:
October 25, 1999              /s/ Peter N. Lalos
                              Peter N. Lalos, Director

Date:
October 25, 1999              /s/ Edgar Mulzer
                              Edgar Mulzer, Director

Date: October 25, 1999

                              Lee Ray Olinger, Director



                     INDEPENDENT AUDITORS' REPORT

To the Shareholders and Board of Directors
Thermwood Corporation:

We  have  audited  the  accompanying  consolidated  balance  sheets  of
Thermwood  Corporation and subsidiaries as of July 31, 1999  and  1998,
and  the  related consolidated statements of operations,  shareholders'
equity  and  cash flows for each of the years in the three-year  period
ended  July 31, 1999.  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  audit
to  obtain  reasonable assurance about whether the financial statements
are  free of material misstatement.  An audit includes examining, on  a
test  basis,  evidence supporting the amounts and  disclosures  in  the
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
that 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
Thermwood  Corporation and subsidiaries as of July 31, 1999  and  1998,
and  the  results of their operations and their cash flows for each  of
the  years  in the three-year period ended July 31, 1999, in conformity
with generally accepted accounting principles.



KPMG LLP
Indianapolis, Indiana
September 10, 1999






<TABLE>
                          THERMWOOD CORPORATION
                       CONSOLIDATED BALANCE SHEETS

                                                         July 31
                                                 1999             1998
                                           -------------     -------------
                Assets

Current assets

    <S>                                     <C>             <C>
    Cash                                    $     80,941     $    115,937
    Accounts receivable, less allowance for
      doubtful accounts of $68,000 for
      1999 and $20,000 for 1998                1,902,865        1,673,826
    Income taxes recoverable                     135,457                0
    Inventories                                5,266,765        5,359,182
    Deferred income taxes                        655,000          694,000
    Prepaid expenses                             422,536          491,209
                                            ------------     ------------
         Total current assets                  8,463,564        8,334,154
                                            ------------     ------------

Property and Equipment

   Land                                           73,260           73,260
   Buildings and improvements                  2,051,882        1,977,659
   Furniture and equipment                     3,503,586        3,131,306
   Construction in progress                            0            6,257
                                            ------------     ------------
     Less accumulated depreciation            (2,861,869)      (2,540,992)
                                            ------------     ------------
         Net property and equipment            2,766,859        2,647,490
                                            ------------     ------------
Other assets

   Patents, trademarks and other                 145,608          139,933
   Bond issuance costs less
     accumulated amortization                    481,179            4,089
   Deferred income taxes                         325,000          199,000
                                            ------------     ------------
         Total other assets                      951,787          343,022
                                            ------------     ------------
Total assets                                $ 12,182,210     $ 11,324,666
                                            ============     ============
</TABLE>


See accompanying notes to consolidated
financial statements.




<TABLE>

                          THERMWOOD CORPORATION
                       CONSOLIDATED BALANCE SHEETS

                                                       July 31
                                                1999             1998
                                           --------------   ---------------
Liabilities and Shareholders' Equity

Current liabilities

     <S>                                   <C>              <C>
     Accounts payable                       $  1,144,634     $  1,136,896
     Accrued compensation and payroll taxes      286,907          498,224
     Customer deposits                         1,080,337          816,315
     Other accrued liabilities                   656,849          552,066
     Current portion of capital lease
        obligations                               36,748            6,195
     Note payable to bank                      2,196,320                0
                                            ------------     ------------
           Total current liabilities           5,401,795        3,009,696
                                            ------------     ------------

Long-term liabilities,  less current
portion

     Capital lease obligations                    70,777                0
     Note payable to bank                              0        2,196,320
     Debentures payable, net of
       unamortized discount of
       $2,107,345 for 1999 and
       $10,450 for 1998                        2,913,184          170,550
                                            ------------     ------------
           Total long-term liabilities         2,983,961        2,366,870
                                            ------------     ------------
Shareholders' equity
   Common stock, no par value,
   4,000,000 shares authorized,
   985,045 and 1,431,109 shares
   issued and outstanding for 1999
   and 1998, respectively                      7,953,077       10,742,636
     Accumulated deficit                      (4,120,998)      (4,758,911)
                                            ------------     ------------
                                               3,832,079        5,983,725
     Less subscriptions receivable                35,625           35,625
                                            ------------     ------------
           Total shareholders' equity          3,796,454        5,948,100
                                            ------------     ------------
Total liabilities and shareholders' equity  $ 12,182,210     $ 11,324,666
                                            ============     ============
</TABLE>


See accompanying notes to consolidated
financial statements.





<TABLE>

                             THERMWOOD CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS

                                            Years Ended July 31
                                       1999        1998          1997
                                   ------------  -----------  ------------
Sales
    <S>                            <C>          <C>          <C>
    Machine sales                   $19,430,750  $20,199,191  $16,420,313
    Technical services                5,191,572    4,657,784    3,660,548
                                   ------------  -----------  -----------
                                     24,622,322   24,856,975   20,080,861
   Less commissions                   2,896,439    3,017,446    2,301,446
                                   ------------  -----------  -----------
Net sales                            21,725,883   21,839,529   17,779,415
                                   ------------  -----------  -----------
Cost of sales
    Machines                         10,563,563    9,981,401    8,841,911
    Technical services                2,702,352    3,016,505    2,031,588
                                   ------------  -----------  -----------
Total cost of sales                  13,265,915   12,997,906   10,873,499
                                   ------------  -----------  -----------
        Gross profit                  8,459,968    8,841,623    6,905,916

Research and development,
  marketing, administrative and
  general expenses                    7,309,350    6,413,160    4,794,563
                                   ------------  -----------  -----------
        Operating income              1,150,618    2,428,463    2,111,353
                                   ------------  -----------  -----------
Other income (expense):
   Interest expense                    (379,642)    (231,747)     (75,686)
   Other                                107,098      (30,830)      19,157
                                   ------------  -----------  -----------
   Other expense, net                  (272,544)    (262,577)     (56,529)
                                   ------------  -----------  -----------
       Earnings before income
         taxes and extraordinary loss   878,074    2,165,886    2,054,824

Income tax expense                     (206,000)    (848,000)    (819,000)
                                   ------------  -----------  -----------
       Earnings before
         extraordinary loss         $   672,074  $ 1,317,886  $ 1,235,824
                                   ------------  -----------  -----------
Extraordinary loss on repurchase of
   bonds, net of income tax
   benefit of $11,000                   (34,161)           0            0
                                   ------------  -----------  -----------
        Net earnings                $   637,913  $ 1,317,886  $ 1,235,824
                                   ============  ===========  ===========
Earnings per share:
Basic                                    $0.49        $0.89         $0.70
Diluted                                  $0.49        $0.86         $0.69
                                   ============  ===========  ===========
</TABLE>


See accompanying notes to
consolidated financial statements
<TABLE>
                          THERMWOOD CORPORATION
              CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                 Preferred Stock      Common Stock
                                                       Subscriptions Accumulated
                 Shares   Amount    Shares     Amount   Receivable     Deficit
               -------- ---------- --------- ----------- --------- -----------
<S>             <C>     <C>        <C>       <C>         <C>       <C>
Balances at
 July 31, 1996  900,000 $3,097,120 1,307,709 $10,190,404 ($28,125) ($6,984,162)

Subscriptions
 received             0          0         0           0    3,375            0

Preferred
 dividends paid       0          0         0           0        0     (285,204)

Redemption of
 preferred
 stock         (162,000)  (550,800)        0           0        0            0

Conversion of 12%
 debentures, net
 of related bond
 issuance costs
 and unamortized
 discount             0          0    92,400     408,881         0           0

Net earnings          0          0         0           0         0   1,235,824
             ---------- ---------- --------- ----------- --------- -----------
Balances at
 July 31, 1997  738,000 $2,546,320 1,400,109 $10,599,285  ($24,750)($6,033,542)
             ---------- ---------- --------- ----------- --------- -----------
Subscriptions
 received             0          0         0           0    19,125           0

Preferred
 dividends paid       0          0         0           0         0     (43,255)

Redemption of
 preferred
 stock         (738,000)(2,546,320)        0           0         0           0

Conversion of 12%
 debentures, net
 of related bond
 issuance costs and
 unamortized
 discount             0           0   24,000     108,351         0           0

Exercise of
 qualified stock
 options              0           0    1,000       5,000         0           0

Exercise of other
 stock options        0           0    6,000      30,000   (30,000)          0

Net earnings          0           0        0           0         0   1,317,886
                 --------- -------- -------- ----------- --------- -----------
Balances at
 July 31, 1998        0           0 1,431,109 $10,742,636 ($35,625)($4,758,911)
                 --------- -------- --------- ----------- -------- -----------
Conversion of 12%
 debentures, net
 of related bond
 issuance costs
 and unamortized
 discount             0           0    14,200      65,775        0           0

Conversion of
 common stock to
 12% bonds due 2014   0           0  (460,264) (2,855,334)       0           0

Net earnings          0           0         0           0        0     637,913
                ------- ----------- --------- ----------- -------- -----------
Balances at
 July 31, 1999        0           0   985,045  $7,953,077 ($35,625)($4,120,998)
                ======= =========== ========= =========== ========= ==========
</TABLE>

 See accompanying notes to consolidated financial statements.
<TABLE>
                           THERMWOOD CORPORATION
                   CONSOLIDATED STATEMENTS OF CASH FLOWS

                                            Years Ended July 31
                                       1999          1998           1997
                                   ------------  -------------  -------------
 Cash Flows From Operating
 Activities:

 <S>                                 <C>          <C>           <C>
 Net earnings                         $ 637,913    $1,317,886    $1,235,824
 Adjustments to reconcile net
 earnings to net cash
  provided by operating activities:
    Depreciation and amortization       535,015       368,261       338,274
    Provision for inventories           165,000        68,000             0
    Gain on disposal of equipment             0        48,936             0
    Deferred income taxes              (87,000)     1,109,000       412,000
    Changes in operating assets
     and liabilities:
      Accounts receivable             (229,039)       128,743      (990,029)
      Inventories                      (72,583)      (809,181)   (1,288,664)
      Prepaid expenses and
       other assets                    (66,784)      (118,922)      (32,864)
      Accounts payable and other
       accrued expenses                (98,797)      (798,976)    1,704,136
      Customer deposits                264,022        (90,795)      413,101
                                     ---------     ----------    ----------
 Net cash provided by
    operating activities             1,047,747      1,222,952     1,791,778
                                     ---------     ----------    ----------
 Cash Flows From Investing Activities:

 Purchases of patents,
   property and equipment             (459,043)    (1,242,887)     (457,599)
                                     ---------     ----------     ---------
 Net cash used by
   investing activities               (459,043)    (1,242,887)     (457,599)

 Cash Flows From Financing Activities:

 Principal payments on
   lease obligations                    (8,915)        (7,478)       (8,065)
 Redemption of debentures             (112,761)             0             0
 Bond issuance costs                  (502,024)             0             0
 Redemption of preferred stock               0     (2,546,320)     (550,800)
 Payment of dividends on
   preferred stock                           0        (43,255)     (285,204)
 Note payable to bank                        0      2,196,320             0
 Proceeds from subscriptions receivable      0         19,125         3,375
 Proceeds from exercise of stock options     0          5,000             0
                                     ---------     ----------   -----------
 Net cash used by financing
    activities                        (623,700)      (376,608)     (840,694)
                                     ---------     ----------   -----------
 Increase (decrease) in cash           (34,996)      (396,543)      493,485

 Cash at beginning of year             115,937        512,480        18,995
                                     ---------     ----------   -----------
 Cash at end of year                 $  80,941     $  115,937   $   512,480
                                     =========     ==========   ===========
</TABLE>

 See accompanying notes to consolidated
 financial statements.

                   THERMWOOD CORPORATION AND SUBSIDIARY
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES :

General:

The  consolidated  financial statements include the accounts  of  Thermwood
Corporation and its wholly-owned subsidiaries, Thermwood Europe Limited,  a
United Kingdom company, CNC Carolina, Inc., a dealer in North Carolina, and
Thermwood  Capital Corporation, a leasing company (together, the  "Company"
or  "Thermwood").  There was no revenue generated  in  1999  or  1998  from
Thermwood Capital Corporation, a leasing company.

Thermwood  operates  within a single industry called industrial  automation
equipment, and manufactures high technology machining systems.  The Company
sells  its  products  primarily through the assistance of  dealer  networks
established throughout the United States and Europe.  One dealer  accounted
for approximately 25% of the Company's business in fiscal 1999; however, no
customer  accounted  for more than 10% of  sales in fiscal  1999,  1998  or
1997.  The loss of any large dealer could have a material adverse effect on
the Company's business.

Thermwood  also  offers  a variety of technical services.   These  services
include  training,  installation  assistance,  preventive  maintenance  and
upgrading  and  enhancement of installed products as  technology  advances.
The  Technical  Services Division also has responsibility for  the  quality
control  of   the  Company's  machine products  during  their  manufacture.
Technical  services  are  marketed  to current  customers  as  well  as  to
companies that purchase Thermwood equipment in the used market.  Sales  and
service by the Technical Services Division in fiscal year 1999 amounted  to
approximately 24% of total gross sales

Thermwood's  machining systems are utilized principally in the woodworking,
plastics  and  boating  industries.  The Company is not  dependent  upon  a
single supplier or only a few suppliers.

Principles of Consolidation:

All significant intercompany transactions and accounts have been eliminated
in consolidation.

Use of Estimates and Assumptions:

The  preparation  of  financial  statements in  conformity  with  generally
accepted  accounting principles requires the Company to make estimates  and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities,  and the reported  amounts
of   revenues  and  expenses.   Actual  results  could  differ  from  those
estimates.

Revenues and Warranties:

The  manufacturing process may extend over several months and advance  cash
deposits  are  normally required from customers.  Sales are  recorded  when
machines are shipped.  Technical services revenues are recognized when  the
services  are  performed.   Revenues  on  long-term  upgrade  and  warranty
agreements  are recognized ratably over the life of the related  agreement.
Estimated costs of product warranties are charged to cost of sales  at  the
time of sale.

Inventories:

Inventories are stated at the lower of cost (first-in, first-out method) or
market.

Property and Equipment:

Property and equipment are recorded at cost for assets purchased and at the
present  value of minimum lease payments for assets acquired under  capital
leases.   The  carrying value of property and equipment  is  assessed  when
factors indicating an impairment are present.  If an impairment is present,
the  assets  are  reported at the lower of carrying value  or  fair  value.
Depreciation and amortization are computed by the straight-line method over
the estimated useful lives of the assets, as shown below:

               Buildings and improvements         10 to 30 years
               Equipment                           3 to 10 years

Depreciation  expense  for 1999, 1998 and 1997 was $414,746,  $345,890  and
$304,716, respectively.

Research and Development:

Research and development costs are expensed as incurred.  Expenditures  for
research and development were approximately $570,000, $314,000 and $216,000
during 1999, 1998 and 1997, respectively.

Customer Deposits:

Customer  deposits  are  recorded as a current  liability  with  no  offset
against  costs incurred on work-in-process.  As of July 31, 1999 and  1998,
substantially all of the deposits had no incurred work-in-process cost.

Earnings Per Share:

Earnings  per  share  for  each  of the three  years  ended  July  31  were
determined as follows:
<TABLE>
                       1999               1998                   1997
                -----------------  ---------------------  -------------------
                 Basic   Diluted     Basic    Diluted       Basic    Diluted
                -------- --------  --------- -----------  --------- ---------
Earnings:

<S>             <C>      <C>       <C>        <C>         <C>        <C>
Earnings before
 extraordinary
 loss           $672,074 $672,074  $1,317,886 $1,317,886  $1,235,824 $1,235,824

Less preferred
 stock dividend        0        0     (43,255)   (43,255)   (285,204)  (285,204)

Add interest
 expense on
 convertible
 debentures            0    13,830          0     47,180           0     62,580

Add amortization of
 discount on
 debentures and
 issuance costs        0     2,490          0      4,701           0     13,120

Income tax effects
 of earnings
 adjustments           0    (6,528)         0    (19,196)          0    (28,009)

Earnings available
 to common
 shareholders    672,074   681,866  1,274,631  1,307,316     950,620    998,311

Extraordinary loss,
 net of tax benefit
 of $11,000      (34,161)  (34,161)         0          0           0          0
                -------- --------- ---------- ---------- ----------- ----------
Net earnings
 available to
 common
 shareholders   $637,913  $647,705 $1,274,631 $1,307,316    $950,620   $998,311
               ========= ========= ========== ========== =========== ==========
Weighted-average
shares:

Outstanding    1,290,521 1,290,521  1,424,676  1,424,676   1,349,143  1,349,143


Incremental
 shares related
 to dilutive
 stock options         0     9,300          0     55,872           0     36,255

Incremental shares
 related to
 convertible bonds     0    22,000          0     36,200           0     60,200
               --------- --------- ---------- ---------- ----------- ----------
Total weighted-
 average
 shares        1,290,521 1,321,821  1,424,676  1,516,748   1,349,143  1,445,598
               ========= ========= ========== ========== =========== ==========
Earnings per share:

Income before
 extraordinary
 earnings          $0.52     $0.52      $0.89     $0.86       $0.70      $0.69

Extraordinary loss,
 net of income
 taxes              (.03)     (.03)         0         0           0          0
               ---------  --------  ---------  --------  ----------  ---------
Net earnings       $0.49     $0.49      $0.89     $0.86       $0.70      $0.69
               =========  ========  =========  ========  ==========  =========
</TABLE>

Income Taxes:

Deferred  tax  assets and liabilities are recognized  for  the  future  tax
consequences  attributable to differences between the  financial  statement
amounts  for  assets  and  liabilities  and  their  respective  tax  bases.
Deferred  tax assets and liabilities are measured using enacted  tax  rates
which  apply  to  taxable  income in the years  in  which  those  temporary
differences are expected to reverse.  The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the period the change
is  enacted.  A valuation allowance is provided when it is more likely than
not  that  some  portion  or all of net deferred tax  assets  will  not  be
realized.

NOTE B -- INVENTORIES:
<TABLE>
Inventories at July 31 consist of:
                                                   1999              1998

                      <S>                      <C>              <C>
                      Finished goods            $     937,662    $    651,398
                      Work-in-process               1,112,684       1,541,258
                      Raw materials                 3,216,418       3,166,526
                                                -------------    ------------
                                                $   5,266,765    $  5,359,182
</TABLE>
NOTE C -- LEASES:

Amounts  included  in  property and equipment at July  31,  1999  and  1998
relating to capital leases are as follows:
<TABLE>
                                                      1999            1998
                                                  -----------      ----------
                      <S>                         <C>             <C>
                      Furniture and equipment      $  110,245      $   17,081
                                                  -----------      ----------
                                                      110,245          17,081
                      Less accumulated amortization    (3,062)        (13,095)
                                                  -----------      ----------
                                                   $  107,183       $   3,986
                                                   ==========      ==========
</TABLE>
Future minimum lease payments as of July 31, 1999  are as follows:
<TABLE>

                                                    Capital          Operating
                      Years ending July 31:          Leases           Leases
                      ---------------------        ----------       ----------
                               <C>                <C>              <C>
                               2000                $   41,460       $ 127,100
                               2001                    41,460         127,100
                               2002                    37,994         127,100
                               2003                         0         127,100
                               2004                         0         127,100
                                                    ---------       ---------
                      Total minimum lease payments  $ 120,914       $ 635,500
                        Less amounts representing
                         interest at an interest
                         rate of 8%                   (13,389)
                                                    ---------
                                                    $ 107,525
                                                    =========
</TABLE>
Total  operating  lease  expense for 1999,  1998  and  1997  was  $127,000,
$119,000 and $44,000 respectively.

NOTE D -- NOTES PAYABLE TO BANK:

During 1998, the Company obtained a $3,500,000 line of credit with a bank.
At July 31, 1999, $2,196,320 was outstanding under the line of credit.  The
line of credit bears interest payable monthly at the bank's money market
prime rate plus .5% (8.5% at July 31, 1999).  The line is secured by the
tangible assets of the Company and expires in January 2000.  Management
expects to renew the line under terms similar to the existing agreement.

NOTE E -- DEBENTURES PAYABLE:

In  1993  the  Company completed a public offering of 2,070 units  totaling
$2,070,000.   Each  unit  consisted of one  Convertible  Debenture  in  the
principal  amount  of  $1,000 bearing interest at  12%  per  year  and  500
Redeemable  Warrants.   The bonds were issued at a  discount  of  $254,573,
which is being amortized using the interest method.

The  debentures,  which  mature in February 2003, are  convertible,  unless
previously  redeemed, into shares of Common Stock at a price of  $5.00  per
share,   subject  to  anti-dilutive  adjustments.   Interest   is   payable
quarterly.  Thermwood may, on 30 days written notice redeem the debentures,
in  whole  or  in part, if the closing price of the Common  Stock  for  the
immediately preceding 30 consecutive trading days equals or exceeds  $12.50
per share.  The redemption price will be 105% plus accrued interest through
the date of redemption.

During  fiscal years ended July 31, 1999 and 1998, holders tendered $71,000
and  $120,000  of  the debentures for conversion into  14,200  and  24,000,
common  shares,  respectively.  At July 31, 1999, there  were  $110,000  in
principal of these debentures outstanding.

The  Company acquired in April 1999 an aggregate of 460,264 shares  of  its
Common  Stock  from Company shareholders in exchange for  12%  subordinated
debentures payable in 2014 in the aggregate principal amount of $5,062,882.
The  subordinated  debentures were discounted using an  effective  interest
rate of 22% resulting in a net increase in bonds payable of $2,855,334.  In
July  1999 the Company repurchased debentures with a face value of $147,400
at  a cost of $112,761.  This transaction resulted in an extraordinary loss
of $34,161, net of the related tax benefit of $11,000.


NOTE F -- COMMON STOCK OPTIONS:

Thermwood  has both a qualified and a nonqualified stock option plan.   The
Company  applies  APB  Opinion  No. 25, "Accounting  for  Stock  Issued  to
Employees"  and related Interpretations in accounting to these plans.   Had
compensation cost been determined based on the fair value at the grant date
for  awards  under those plans consistent with the method of  Statement  of
Financial  Accounting  Standards  No. 123  (FAS  123),   net  earnings  and
earnings  per  share  would  have been reduced to  the  pro  forma  amounts
indicated below:
<TABLE>
                                          1999         1998         1997
                                      -----------  ------------  ------------

   Net Earnings
      <S>                               <C>         <C>           <C>
      As Reported                       $637,913    $1,317,886    $1,235,824
      Pro Forma                          637,913     1,308,962     1,214,168

   Basic Earnings Per Share
      As Reported                          $0.49         $0.89        $0.70
      Pro Forma                             0.49          0.89         0.69

   Diluted Earnings Per Share
      As Reported                           0.49          0.86         0.69
      Pro Forma                             0.49          0.86         0.68
</TABLE>
The  effects  of  applying  FAS 123 in this pro forma  disclosure  are  not
indicative  of future amounts.  The fair value of each option is  estimated
on  the date of grant using the Black-Scholes option pricing model with the
following  assumptions  for grants in fiscal  years  1998  and   1997:   no
dividend  yield  for all years; expected volatility of 35  percent  and  56
percent  for 1998 and 1997, respectively, risk-free interest rates  of  4.7
percent and 6.2 percent for 1998 and 1997, respectively, expected lives  of
ten years for all options. No options were granted in fiscal year 1999.

The  Company reserved 80,000 shares of Common Stock for issuance under  the
qualified  plan.   Options  to purchase 50,600  of  the  shares  have  been
granted.  None of these options were exercised during fiscal year 1999.  As
of  July  31,  1999,  options for 50,600 shares  were  exercisable.   These
options must be exercised within ten years of the grant date.

The  nonqualified plan provides for the issuance of options to purchase  up
to 70,000 shares of Common Stock of which options to purchase 40,000 shares
were outstanding and exercisable as of July 31, 1999.

Other options to purchase 120,000 shares have been granted by the Board  of
Directors,  all of which were outstanding and exercisable as  of  July  31,
1999. The option to purchase  these shares was granted to the President  of
the  Company.  The option extends through October 18, 1999 and permits  the
purchase  of 60,000 shares at $15.00 per share and 60,000 shares at  $30.00
per share.

A summary of Common Stock options for the years ended July 31 follows:
<TABLE>
                              1999               1998              1997
                       ------------------ ----------------- ----------------
                                Weighted          Weighted          Weighted
                                 Average           Average           Average
                        Shares  Exercise   Shares Exercise  Shares  Exercise
                                  Price             Price             Price
                      --------- --------  -------- ---------  -------- --------
 <S>                    <C>        <C>     <C>       <C>       <C>       <C>
 Outstanding at
  beginning of year     214,600    $9.15   226,600   $ 15.90   211,600   15.95

 Granted                      0        0     4,000     10.63    15,000   14.75

 Canceled/expired         4,000     8.44    10,000      9.38         0       0

 Exercised                    0        0     6,000      5.00         0       0

 Outstanding at
  end of year           210,600    $16.10  214,600  $   9.15   226,600  $15.90
                     ---------- --------- -------- --------- --------- -------
 Exercisable at
   end of year          210,600            214,600             226,600
                     ==========           ========             =======
 Weighted average fair
 value of options granted
 during the year                   $    0           $   3.66            $ 6.90
                               ==========           ========            =======
</TABLE>
NOTE G -- SHAREHOLDERS' EQUITY:

The Company is authorized to issue 2,000,000 shares of non-voting preferred
stock,  no  par  value Series A Preferred Stock, of which 1,000,000  shares
were  issued  and  738,000 shares were outstanding at July  31,  1997.  The
holder of Series A Preferred Stock was entitled to receive cumulative  cash
dividends  out of the net profits of the Company at the rate of thirty-four
cents  ($0.34)  per share per annum, payable monthly in equal  installments
within  the  first  fifteen days of each month for the preceding  month  as
directed  by  the Board of Directors of the Company.  The Company  had  the
right  in its sole discretion to redeem the stock at any time at $3.40  per
share.  During fiscal years 1998 and 1997, the Company redeemed 738,000 and
162,000 shares for $2,546,320 and $550,800, respectively,
representing all outstanding shares.

NOTE H -- RELATED PARTY TRANSACTIONS:

Director and shareholder - A director and shareholder is a partner  in  the
law  firm  retained as the Company's outside counsel.  Total  expenses  for
legal  services from the firm were $183,187, $94,954 and $76,699 for  1999,
1998  and 1997, respectively.  The Company had accounts payable of $32,619,
$31,515  and  $14,462  at  July  31, 1999,  1998,  and  1997  respectively,
relating to such legal services.

President  and secretary - The president and secretary of the Company,  who
are  husband and wife and are also directors of the Company, are the owners
of  a dealership which leases office space from and sells equipment for the
Company.   The  Company  primarily  sells  its  machines  directly  to  the
purchaser  within  this dealer's region; however, sales may  also  be  made
directly  to  the dealer who in turn sells the machines to  the  purchaser.
The  agreement  between the Company and the dealer is a standard  agreement
similar to other dealer agreements entered into by the Company.

Rent income from the dealership was $2,400 for 1999 and 1998 and $6,800 for
1997.   Sales commissions of $669,125, $627,816 and $447,667 were  paid  to
the dealership during 1999, 1998, and 1997, respectively, for assisting  in
effecting sales.

NOTE I -- INCOME TAXES:

 Income taxes for the years ended July 31 were allocated as follows:

                                   1999            1998          1997
                               ------------   ------------   -----------

Earnings before
 extraordinary loss             $ (206,000)    $ (848,000)    $ (819,000)
Extraordinary loss                  11,000              0              0
                                ----------     ----------     ----------
Total income tax expense        $ (195,000)    $ (848,000)    $ (819,000)

Income taxes for the years ended July 31 consis of:
<TABLE>
                                    1999           1998             1997
                                -----------     -----------     ------------
Federal:
     <S>                       <C>             <C>              <C>
     Current (expense) benefit  $ (240,000)     $  308,000       $ (407,000)
     Deferred (expense) benefit     80,000      (1,019,000)        (379,000)
                                -----------     -----------     -------------
                                  (160,000)       (711,000)        (786,000)
                                ===========     ===========     =============
State:
     Current expense               (42,000)        (47,000)               0
     Deferred expense                7,000         (90,000)         (33,000)
                                -----------     -----------     ------------
                                   (35,000)       (137,000)         (33,000)
                                -----------     -----------     ------------
Total income tax expense        $ (195,000)     $ (848,000)      $ (819,000)
                                ===========     ===========     ============
</TABLE>
A reconciliation of expected income taxes using an effective combined
state and federal income tax rate of 37% and actual income taxes for the
years ended July 31 follows:
<TABLE>

                                    1999          1998           1997
                                ------------   ----------    -----------
<S>                            <C>            <C>            <C>
Earnings before income taxes    $    878,074   $2,165,886     $2,054,824

Expected income tax expense     $   (325,000)  $ (801,000)    $ (760,000)
Effect of non-deductible items      (28,000)      (19,000)       (14,000)
Extraordinary loss                    11,000            0              0
Utilization of loss
 carryforwards                       170,000            0              0
Other                                (23,000)     (28,000)       (45,000)
                                -------------  -----------  -------------
   Total actual income tax
     (expense) benefit          $   (195,000)  $ (848,000)   $  (819,000)
                                =============  ===========  =============
</TABLE>
The tax effects of significant temporary differences represented by deferred tax
assets and deferred tax liabilities at July 31 are as follows:
<TABLE>
                                    1999           1998           1997
                                 -----------   ------------   -----------
Deferred tax assets
attributable to:

<S>                             <C>           <C>                <C>
Property and equipment           $   318,000   $   185,000     $        0
Inventory valuation                  300,000       245,000        246,000
Warranty reserves                    122,000        79,000         73,000
Net operating loss
 carryforwards                             0       196,000      1,812,000
Other tax carryforwards              174,000       155,000              0
Other                                 66,000        33,000          3,000
                                 -----------   -----------   ------------
      Deferred tax assets            980,000       893,000      2,134,000
                                 -----------   -----------   ------------
Deferred tax liability
attributable to:
Property and equipment                     0             0        132,000
                                 -----------   -----------   ------------
      Net deferred tax assets    $   980,000   $   893,000     $2,002,000
                                 ===========   ===========   ============
</TABLE>
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that all or some portion of the deferred
tax  assets will not be realized. The ultimate realization of deferred  tax
assets is dependent upon the generation of future taxable income during the
periods  in which those temporary differences become deductible. Management
considers  the  scheduled reversal of deferred tax  liabilities,  projected
future  taxable  income,  and  tax  planning  strategies  in  making   this
assessment.  Based  upon  the  level  of  historical  taxable  income   and
projections  for future taxable income over the periods in which  temporary
differences are expected to reverse, management believes it is more  likely
than  not  the  Company  will  realize the  benefits  of  these  deductible
differences at July 31, 1999.

NOTE J -- ADDITIONAL INFORMATION:

Other accrued liabilities at July 31 consist of:

                                                   1999            1998
                                               -----------     ----------
Property taxes                                  $   87,013     $   79,282
Income taxes                                             0         14,002
Accrued warranties                                 329,735        212,339
Other                                              240,101        246,443
                                               -----------     ----------
                                                 $ 656,849      $ 552,066
                                               ===========     ==========
Cash Flow Information:

The  Company  paid cash for interest in the amount of $320,913,  $200,319
and  $69,739 during 1999, 1998 and 1997, respectively.  The Company  paid
cash  for  income  taxes in the amount of $371,675, $77,024  and  $30,000
during 1999, 1998 and 1997, respectively.

Non-cash Investing and Financing Activities:

During  fiscal  years  1999,  1998 and 1997, bonds  with  face  values  of
$71,000,  $120,000 and $462,000, respectively, were converted  to  14,200,
24,000  and 92,400 shares of Common Stock.  A capital lease obligation  of
$110,000 was incurred in fiscal 1999 when the Company entered into a lease
for new computer software.


NOTE K -- PENSION AND PROFIT SHARING PLAN:

Thermwood has a deferred income 40l(k) savings plan for its employees.  The
Company makes a matching contribution of 25% of employees' contributions up
to 5% of their annual salaries and an additional match of 10% of their
contributions between 6% and 8% of employees' salaries.

Pension  expense for fiscal years 1999, 1998 and 1997 amounted to  $54,844,
$48,759  and  $35,840,  respectively.  The Company also  has  a  management
profit sharing plan.  Profit sharing expense amounted to $739,354, $603,978
and $647,407 for fiscal years 1999, 1998 and 1997, respectively.

NOTE L - SEGMENTS

The  Company's  operations  are divided into the following  three  operating
segments:   the  Machining  Products  Division,  which  is  responsible  for
marketing machinery, hardware and software products; the Technical  Services
Division,  which is responsible for marketing service, support, upgrade  and
catalog products; and Thermwood Europe Ltd., a British Company, which  is  a
wholly-owned  subsidiary of Thermwood Corporation responsible for  marketing
and servicing machines throughout Europe.

The accounting policies of the segments are the same as those described in
the summary of significant accounting policies.


<TABLE>

                                             1999
                           ----------------------------------------------
                           Machining    Technical    Thermwood
($'s in Millions)          Products     Services      Europe        Total
                           Division     Division       Ltd.
                         ------------ ----------- ------------- -----------
<S>                            <C>         <C>          <C>          <C>
Net sales                       $14.8       $ 5.2        $  1.7       $21.7
Operating income                   .8          .5           (.2)        1.1
Interest expense                   .2          .1            .1          .4
Depreciation
 and amortization                  .4          .1             0          .5
Income tax expense                 .2           0             0          .2

Total assets                      8.1         2.9           1.0        12.0
</TABLE>


<TABLE>
                                                1998
                           -------------------------------------------------
                           Machining    Technical    Thermwood
($'s in Millions)          Products     Services      Europe       Total
                           Division     Division       Ltd.
                         ------------ ----------- ------------- ----------
<S>                             <C>          <C>          <C>        <C>
Net sales                       $15.4        $4.6         $ 1.8      $21.8
Operating income                  2.7          .1           (.4)       2.4
Interest expense                   .1           0            .1         .2
Depreciation and
  amortization                     .3          .1             0         .4
Income tax expense                 .6          .2             0         .8

Total assets                      7.9         2.4           1.0       11.3
</TABLE>

<TABLE>
                                                 1997
                         ----------------------------------------------------
                           Machining    Technical    Thermwood
($'s in Millions)          Products     Services      Europe       Total
                           Division     Division       Ltd.
                         ------------ ----------- ------------- -------------
<S>                             <C>         <C>           <C>        <C>
Net sales                       $13.1       $ 3.7         $ 1.0      $17.8
Operating income                  2.0          .3           (.2)       2.1
Interest expense                   .1           0             0         .1
Depreciation and
  amortization                     .2          .1             0         .3
Income tax expense                 .6          .2             0         .8

Total assets                      8.3         2.0            .1       11.3
</TABLE>