SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-K

(Mark One)
[ X ]              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934  [FEE REQUIRED]

                     FOR THE FISCAL YEAR ENDED JUNE 2, 2002


                         Commission File Number 0-12611

                                AULT INCORPORATED
             (Exact name of registrant as specified in its charter)

      MINNESOTA                                          41-0842932
(State or other jurisdiction of             (IRS Employer Identification Number)
incorporation or organization)

7105 NORTHLAND TERRACE                                                55428-1028

Registrant's telephone number, including area code: (763) 592-1900
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

                           Common Stock, No Par Value
                                (Title of Class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation 8-K is not contained herein, and will not 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-K or any amendments to
this Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $13,293,000 based upon the closing price of the
Company's common stock on the NASDAQ National Market on August 8, 2002,
multiplied by the number of outstanding shares of the Company held by persons
other than officers, directors and 10% or more shareholders referred to in the
"Security Ownership of Principal Shareholders and Management" table referred to
under Item 12 herein.

On August 8, 2002, there were outstanding 4,573,110 shares of the Registrant's
common stock.


The Form 10-K consists of 51 pages. The Exhibit Index is located on page 49.


                                       1
<PAGE>


                                AULT INCORPORATED

                                    FORM 10-K
                     FOR THE FISCAL YEAR ENDED JUNE 2, 2002

                                     PART I


ITEM 1.  BUSINESS

(a)   GENERAL DEVELOPMENT OF BUSINESS

Ault Incorporated (herein Ault or the Company) was incorporated under the laws
of the State of Minnesota in 1961. The Company designs, manufactures, and
markets external power conversion products and is a leading domestic supplier of
such products to original equipment manufacturers (OEMs) of data communications
equipment, telecommunications equipment, portable medical equipment, and
microcomputers and related peripherals.

On July 16, 2002, the Company purchased a portion of the operating assets of the
Power General division of Nidec America Corporation. The Power General division
developed, manufactured, and sold high efficiency DC/DC converters and custom
power supplies at various power levels up to 1200 watts under the Power General
brand name. Pursuant to the Purchase Agreement, the Company paid the Seller
$366,000 in cash and issued $2,074,000 face amount of the Company's
newly-created Series B 7% Convertible Preferred Stock, no par value (the
"Preferred Stock"). The Preferred Stock issued to Seller is convertible into
488,000 shares of the Company's Common Stock. The Company has agreed to file a
registration statement covering the shares of Common Stock issuable upon
conversion of the Preferred Stock with the Securities and Exchange Commission.
The Company will maintain Power General's engineering group in Massachusetts and
move Power General's manufacturing operations and related functions to Ault's
other facilities in North America and Asia.

(b)   FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

The Company operates in only one industry segment - the manufacture and sale of
power conversion devices.

(c)   NARRATIVE DESCRIPTION OF THE BUSINESS

Ault's power conversion products are used to adapt alternating current (AC) to
provide a source of power at various levels up to 120 watts for a wide variety
of electronic equipment. Most of the Company's products are located outside the
equipment they power as wall plug-in or as in-line components and are generally
referred to as external power conversion products. A small portion of the
Company's products are located inside the equipment they power, when this
feature is required by OEM customers, and are generally known as internal power
conversion devices. External power conversion products, in contrast to more
widely used internal power conversion devices, enable designers of electronic
equipment to remove heat and hazardous voltages from the end product thereby
allowing the end product to function more safely and effectively. Also, by
removing the power conversion feature from inside the end product, the OEM is
afforded greater flexibility in designing and styling. These advantages have
particular application in the Company's target markets where advances in
semiconductor technology have reduced power requirements of many items of
equipment to levels supplied by the Company's products, where rapid growth and
strong competition have resulted in competitive pressure to bring new products
to market quickly, and where there is increasing emphasis on smaller and
portable products that perform increasingly sophisticated functions. Ault's
business strategy is to offer OEMs in these markets an expanding line of high
quality power conversion products and devices, related design engineering and
flexible customer services.

 (1)  PRODUCTS

      Ault's product line includes the four major types of external power
      conversion products: switching power supplies, linear power supplies,
      battery chargers and transformers. The Company's power conversion products
      are capable of providing power at most output levels which OEMs expect
      from an external device. The



                                       2
<PAGE>

      Company's design and application engineers work closely with customers to
      assure that these products are appropriately customized to meet each OEM
      customer's precise power conversion product requirements.

      The following table summarizes the proportion of sales of each of the
      Company's four major product categories for its last three fiscal years
      ended June 2, 2002:

                          SALE OF PRODUCTS BY CATEGORY
                         AS A PERCENTAGE OF TOTAL SALES


                                               Years Ended
      Product Type
                                     June 2,       June 3,       May 28,
                                      2002          2001           2000

      Switching Power Supplies         48%           39%           41%
      Linear Power Supplies            32            41            31
      Transformers                     11            12            17
      Battery Chargers                  9             8            11
      Total                           100%          100%          100%


      POWER SUPPLIES. The Company's traditional power supplies provide all power
      conversion elements for electronic equipment in power outputs ranging from
      1 to 120 watts. The recent purchase of certain assets and certain
      liabilities of Power General Corporation provides power conversion
      elements up to 1200 watts. These products contain a component level
      transformer, which reduces the voltage level, as well as other circuitry
      and components which convert alternating current (AC) to direct current
      (DC) and, in most cases, maintain voltage within specific limits.

*     SWITCHING POWER SUPPLIES. The Company believes the market for switching
      power supplies is generally the fastest growing segment of the overall
      external power conversion product market. Switching power supplies use
      switching transistors to convert power from AC to DC and are more energy
      efficient and considerably smaller and lighter in weight than linear units
      with comparable power outputs. For power requirements exceeding 12 watts,
      switching power supplies are generally more cost effective. The Company
      currently manufactures these products up to 120 watts of power. The
      applications in which these products are currently used include
      telecommunication products, data communication products, modems, computers
      and computer peripherals, medical equipment, microprocessor controlled
      systems, security systems, automatic teller terminals, test equipment,
      multiplexers, digital cameras and point of sale equipment.

      The Company's switching power supply products include a family of
      universal input power supplies, which provide output power from input
      power sources ranging from 90 to 265 volts AC. This family of power
      supplies can be used in virtually any country for applications such as
      local area networks (LANs), printer and fiber optic links. The Company
      also designs universal input switching power supplies specifically for
      medical markets. The Company believes it offers the widest range of
      external switching power supply products currently available for medical
      applications.

      The Company designs and manufactures switching power supplies principally
      for external applications, but also designs and manufactures these
      products for internal power when such action enhances customer relations.

*     LINEAR POWER SUPPLIES. Linear power supplies are larger and generally less
      expensive than switching power supplies because their design is based on
      technology employing steel laminations with windings of copper wire rather
      than switching transistors. Linear power supplies tend to be used when the
      wattage output required is relatively low. Ault manufactures linear power
      supplies that provide up to 11 watts of regulated power and 35 watts of
      unregulated power. The Company's linear power supplies are used in a



                                       3
<PAGE>

      variety of applications including modems, telecommunications products,
      local area networks, microprocessor controlled systems, test equipment and
      multiplexers.

*     TRANSFORMERS. The Company manufactures a wide variety of wall plug-in
      transformers as part of its full range of power conversion products.
      Transformers are used primarily in applications where OEMs desire to
      remove heat, electromagnetic interference and weight from electronic
      equipment, while incorporating the rest of the power conversion system
      within the product. These products reduce AC voltage from approximately
      110 volts (230 volts in some countries) down to lower voltage that range
      from 5 to 60 volts AC. The Company's product line also includes highly
      customized transformers that operate within stringent power output
      tolerances, features that are not offered by most of the Company's
      competitors. The Company's transformers are utilized in a broad spectrum
      of applications including modems, telephone sets, multimedia products and
      scanners.

*     BATTERY CHARGERS. Ault has been an innovator in battery charging
      technology since the early 1980s. Ault specializes in providing custom
      designed, advanced solutions for manufacturers of portable and battery
      powered equipment. Applications for the Company's battery chargers include
      medical devices, mobile telecom devices, notebook computers, global
      positioning equipment and radio frequency communications products.

      The Company's products serve the entire range of widely used battery
      chemistries such as nickel cadmium, sealed lead acid, gel cell and
      nickel-metal hydride. In addition, the Company has developed battery
      chargers for the particular requirements of emerging battery chemistries
      such as zinc air, lithium ion and lithium polymer. The Company is
      committed to supporting these new emerging chemistries and to developing
      battery charger products to be introduced as these new battery chemistries
      become commercially accepted.

      The Company sells primarily "smart" battery chargers as distinguished from
      trickle chargers. Smart charger products use integrated circuits to
      control various charging characteristics while allowing for fast charge
      time and extended battery life. Trickle charging is typically used for
      slow (8 to 10 hours) charging and/or standby battery maintenance.

      The Company believes that the demand for high quality battery chargers
      will continue to increase to accommodate the growing sophistication of
      portable electronic equipment.

*     HIGH-EFFICIENCY DC/DC CONVERTERS. During fiscal 2002, Ault expanded its
      product offering to include high-efficiency DC/DC converters. The Company
      made this decision in response to customer requests for "on-the-board"
      power solutions in order to fulfill the "total solution" approach to power
      conversion products OEMs qualify as preferred vendors. In addition, many
      OEMs use distributed power architecture in the design of their latest
      systems or devices. High-efficiency DC/DC converters are excellent
      components for distributed architecture because they provide outstanding
      performance in a small footprint. Ault's current offering focuses on the
      isolated single output quarter-bricks, dual output quarter-bricks and
      single output half-bricks.

*     MOBILE PRODUCTS. In late fiscal 2002, the Company made another product
      expansion decision - to develop a line of mobile products for business
      travelers and key service industries. The product focus is on auto
      adapters in single and dual output with a primary sales emphasis on laptop
      OEMs and value-added resellers (VARs). The Company anticipates nearly 65%
      of the market to be business travel and service applications in the
      insurance, trucking and delivery industries. The remainder of the
      applications will be emergency fire and medical services (20%); military
      and government (10%); and a small amount of miscellaneous uses (5%). The
      first product is scheduled for release in the first quarter of fiscal
      2003.



                                       4
<PAGE>



(2)   MARKETS AND CUSTOMERS

      The Company's marketing efforts are directed primarily toward OEMs
      producing non-consumer electronic equipment for broadband modems, wireless
      and wire line telecommunications product, personal information appliances,
      computer peripherals, medical applications, as well as industrial and
      retail data acquisition. These markets are characterized by trends toward
      smaller, portable products capable of performing increasingly
      sophisticated functions, as well as intense competitive pressure to
      rapidly introduce new products and product enhancements. Based on its
      expertise in customizing a broad range of products to meet customer
      requirements, the Company believes it is well positioned to serve the
      needs of its OEM customers as they respond to these trends and competitive
      factors.

      Historically, the most significant market for the Company's products has
      been OEMs of telecommunications/data communications equipment (broadband
      modems, wireless and wire line); in fiscal 2002 sales in this market
      represented approximately 36% of net sales. The Company's products power
      cable and ADSL modems, network termination equipment (devices which
      interface between telephone network and the customer's PBX or other
      telephone system), line conditioning equipment (devices which prepare
      telephone lines for the transmission of computer generated data), and
      various items of equipment ancillary to business telephones, including
      speaker phones, automatic dialers, caller identification units and alpha
      numeric displays, low to medium speed PC modems and multiplexers
      (equipment which enables the simultaneous transmission of multiple
      channels of information over the same telephone line).

      Over the past several years the telecommunications/data communications
      market has grown at a rapid rate and the Company has devoted significant
      portions of its product development efforts toward introduction of new
      product families for applications in this combined market.

      During fiscal year 2002, however, the telecommunications industry was hit
      particularly hard by the economic downturn. While the Company did not lose
      any OEM customers, all of them experienced severe setbacks in revenue
      generation, employee resources and the execution of new designs/projects.
      A couple of telecommunications segments, however, did remain active:
      wireless and networking. There are emerging applications such as broadband
      wireless routers and wireless Ethernet devices that require cost-effective
      switching power supplies in the 12-32-watt range. The Company's latest
      offering of standard product has proven to be strong sellers because they
      meet the power requirements for many of the leading edge, high-tech
      designs.

      In fiscal 2002 approximately 18% of the Company's net sales were to OEMs
      of computers and computer peripherals such as digitizers, printers,
      plotters, portable terminals, point of sale scanners and optical character
      readers, LAN hardware and multimedia speakers for computer applications.

      Approximately 26% of net sales in fiscal 2002 were to OEMs of portable
      medical equipment such as infusion pumps, patient monitoring systems,
      apnea monitors, and portable terminals for patient history input
      diagnostics.

      The balance of approximately 20% of the Company's net sales in fiscal 2002
      was to OEMs of various industrial equipment, including digital cameras,
      flat panel displays and mine safety devices, as well military/aerospace
      applications such as secure-line telephones.



                                       5
<PAGE>



(3)   DESIGN ENGINEERING AND PRODUCT DEVELOPMENT

      Design engineering teams at the Company's facilities in the United States,
      Peoples Republic of China and South Korea are responsible for developing
      new power conversion products and customizing existing products to meet
      customer needs. The Company also utilizes the significant engineering
      resources of its Asian subcontractors for the development of products
      targeted for subcontract manufacturing. The Company's product development
      activities are divided equally between developing products to satisfy
      customer needs and new products based upon anticipated customer needs and
      market trends. New product development opportunities are evaluated based
      upon criteria such as global market potential, return on investment and
      technological advantages. The Company believes that its collaborative
      efforts with customers, combined with its forward-looking concern for
      power technology and market trends, have enabled it to gain a reputation
      as a leading innovator in the development of new external power conversion
      products.

(4)   SALES AND DISTRIBUTION

      The Company markets its products primarily in the U.S. and Canada through
      a network of 15 manufacturer representatives employing approximately 125
      salespersons, each of whom represents, in addition to Ault's products,
      several different but complementary product lines of other manufacturers.
      The Company also sells through four national distributor organizations,
      which employ over 1,000 salespersons, and twelve regional distributors,
      which employ over 100 salespersons. The Company selects representatives
      based upon their industry knowledge as well as account expertise with
      products that are synergistic with the Company's products. Individual
      salespersons are trained, mentored and technically assisted by the
      Company's application engineers and other sales administration staff. Any
      reduction in the efforts of these manufacturer representatives or
      distributors could adversely affect the Company's business and operating
      results.

      The Company begins the sales process by identifying a potential customer
      or market; researching the target or potential customer's total business,
      product and strategic needs; and then preparing a total solution proposal
      that includes engineering, product development, safety agency approvals,
      logistics and project development processes, coordinating pilot runs and
      assisting OEMs with their product introductions.

      The Company focuses its selling efforts primarily on OEMs in the U.S. and
      Canada. However, many of the larger OEM customers of the Company
      manufacture and sell their products globally. As a result, the Company has
      extended its presence to markets throughout the world. The Company's sales
      in the Pacific Rim are primarily to customers in South Korea, China and
      Australia.

      The Company markets its products in Europe through a network of
      distributors who are managed through the Company's European sales office.




                                       6
<PAGE>

(5)   SAFETY AGENCY CERTIFICATION

      The power conversion system is potentially the most hazardous element in
      most electronic equipment because the power supply modifies standard power
      to a level appropriate for such equipment. Virtually all of the Company's
      customers require that the power conversion products supplied by the
      Company meet or exceed established international safety and quality
      standards, since many of the Company's products are used in conjunction
      with equipment that is distributed through the world. In response to these
      customer requirements, the vast majority of the Company's products are
      designed and manufactured in accordance with certification requirements of
      many safety agencies, including Underwriters Laboratories Incorporated
      (UL) in the United States; the Canadian Standards Association (CSA) in
      Canada; Technischer Uberwachungs-Verein (TUV) in Germany; the British
      Approval Board for Telecommunication (BABT) in the United Kingdom; the
      International Electrotechnical Committee (IEC), a European standards
      organization and (CE) a standard for the European Community. In addition,
      some of the Company's products have also received Japanese Ministry of
      International Trade and Industry (MITI) approval. For certain safety
      applications, the Company's products conform to FCC Class B requirements,
      which regulate the levels of electronic magnetic interference that may be
      emitted by electronic equipment. Unlike most of its competitors, the
      Company is a certified test laboratory for UL, CSA and TUV and is able to
      conduct most certification tests at its plant in Minneapolis. This
      procedure reduces the time required to obtain safety certifications.

(6)   INNOVATIVE TEAM APPROACH

      The Company uses a team-based organizational structure consisting of six
      teams. The Company's customer base is divided into five geographical
      regions with a specific Ault team assigned to manage the needs of
      customers in each region. A sixth team, Ault Express, manages the
      requirements of customers who have orders below minimum annual levels.
      Each team is headed by a coordinator selected by Ault's President. The
      teams consist of people from all areas of the business, including
      salespersons from manufacturer representative organizations and national
      distributors as well as the Company's own production personnel, engineers,
      technicians, administrative personnel and others. Guided by a written
      statement of corporate values, these teams are charged with responsibility
      for all aspects of the customer relationship, including sales,
      manufacturing, design engineering and other support functions with a view
      to achieving continuous improvements in customer service. The Company
      believes that its innovative implementation of this team-based
      organizational structure provides competitive advantages by increasing
      communication with customers as well as facilitating responsiveness to the
      needs of the Company's diverse worldwide customer base. In 1996, Ault
      received recognition for its innovative approach from the trade
      publication of the American Manufacturing Association.

(7)   COMPETITION

      The Company competes primarily with various manufacturers of external
      power conversion products. The industry is highly fragmented, with
      manufacturers generally focusing their marketing on specific segments. The
      Company has experienced strong competition from Taiwanese-based
      manufacturers principally on price. Many of these competitors have a
      smaller presence in the external conversion market than the Company,
      although several are engaged in more than one business and have
      significantly greater financial resources.

      No single company dominates the overall external power conversion product
      market, and the Company's competitors vary depending upon the particular
      power conversion product category. The companies with which Ault competes
      most directly in each of its major product categories are: Leader
      Electronics, Inc. and Golden Pacific Electronics, Inc. for transformers;
      Dee Van Enterprise Co., Ltd. and Friwo EMC, Inc. for linear power
      supplies; Potrans Electrical Corp., Ltd. and Phihong Enterprise Co., Ltd.
      for switching power supplies; and Engineering Design Sales, Inc. and
      Xenotronics Company for battery chargers.

      The Company competes on the basis of the quality and performance of its
      products, the breadth of its product line, customer service, dependability
      in meeting delivery schedules, design engineering services, and price. The
      Company believes it is currently one of a small number of companies that
      design, manufacture and obtain




                                       7
<PAGE>

      certifying agency approvals for the full range of external power
      conversion devices, which OEMs consider in designing their electronic
      product.

      The Company provides a total solution approach to the OEM's entire
      external power conversion product needs through its commitment to reliable
      partnerships and its delivery of high quality products supported by
      solution-oriented design engineering. The presence of Ault Korea and Ault
      China and the arrangements with subcontract manufacturers in China and
      Thailand allow the Company to compete effectively when price is the
      primary consideration.

      Internal power conversion products continue to be used for most electronic
      equipment, and as a result the Company experiences competition from
      numerous OEMs and independent suppliers offering internal products. With
      the trend toward lower power requirements in portable electronic equipment
      and with the increasing availability of smaller, competitively priced
      internal switching power supplies, certain customers of the Company may
      choose to return to internal power supplies in place of the external power
      conversion products they currently purchase. In response to this issue,
      the Company stresses the several advantages of external power conversion
      products, which generally can be obtained with only a relatively small
      increase in unit cost.

      The Company competes with a broad range of manufacturers in the DC/DC
      converter market. The industry is fragmented, with manufactures
      concentrating their sales and marketing on specific customer requirements
      in specific markets. The Company's primary competitors are Synqor, DI/DT,
      Ericsson, Artesyn, and Galaxy. In the past 12 months, all of the key
      players in the DC/DC market have introduced models in the isolated,
      high-efficiency quarter-brick and half-brick models. The largest single
      market segment for the sale of these high-efficiency models is the
      telecommunication industry and since this segment has suffered severely in
      the down economy, there has been little business generated for these
      products. To date, no single competitor dominates the DC/DC market in
      terms of market share.

      The estimated size of the mobile products market in North America is
      $50-$65 million. The major competitors, Targus, Lind and Mobility,
      specialize in this market segment. These three companies dominate the
      market with combined revenues of approximately $47 million. The rest of
      the market includes smaller companies with limited sales to a handful of
      key customers.


(8)   MANUFACTURING AND SOURCES OF SUPPLY

      The Company's manufacturing operations consist of assembly and integration
      of electronic components to meet product specifications and design
      requirements for a variety of power conversion applications. Manufacturing
      is currently conducted at the Company's facilities in Minneapolis,
      Minnesota; Seoul, South Korea; Xianghe, China; Shanghai, China and at four
      locations in China and Thailand using subcontract manufacturers. Ault
      typically manufactures prototypes and low volume products at its facility
      in Minneapolis, Minnesota.

      Electronic components and raw material used in the Company's products are
      generally available from a large number of suppliers, although from time
      to time shortages of particular items are experienced.

      Quality and reliability are emphasized in both the design and manufacture
      of the Company's products. This emphasis is reflected in the ISO 9001
      certification of the Company's Minneapolis facility in 1991 and of its
      South Korea facility in 1998. The Company tests 100% of its finished
      products against its own and the customers' specifications, and then ships
      the products in custom-engineered protective packaging to minimize any
      damage during shipment.

      The Company has subcontract manufacturing arrangements with two business
      partners in Thailand and two in China. The Company does not have long-term
      commitments with its subcontractors and the subcontractors build product
      for the Company pursuant to individual purchase orders. The Company
      selects its subcontract manufacturers based upon their ability to
      manufacture high quality products, the sufficiency of their engineering
      capabilities to support products being manufactured; and their ability to
      meet required delivery times.



                                       8
<PAGE>

(9)   SIGNIFICANT CUSTOMERS: BACKLOG

      The Company sells its products to over 400 customers and it is the
      Company's objective to maintain a diversified customer base and to avoid,
      where practicable, dependence upon a single customer. In fiscal 2002,
      2001, and 2000 no customers accounted for more than 10% of sales.

      The Company's order backlog at June 2, 2002 totaled $8,365,000 compared to
      $10,792,000 at June 3, 2001. The order backlog represents sales for
      approximately ten weeks and reflects the posture of many OEMs to limit
      their contractual commitments to the best lead-times of their suppliers.
      This requires the Company to place greater reliability on its ability to
      forecast customer needs and requirements for on-time shipment of products.

      The Company enters into buying commitments and other scheduling agreements
      with certain customers. For its larger customers, these agreements allow
      for order increases and decreases within scheduled limits and include
      cancellation charges for completed and in-process products and procured
      materials. Most products are shipped within 4 to 10 weeks of an order.

(10)  WARRANTIES

      The Company provides up to a three-year parts and labor warranty against
      defects in materials or workmanship on all of its products. Servicing and
      repairs are conducted at the Company's manufacturing facilities in
      Minneapolis and South Korea. The Company's warranty expenses have not been
      significant.

(11)  PATENTS

      The Company holds no significant patents.

 (12) SEASONALITY

      In the past net sales of the Company have reflected a certain degree of
      seasonality. The Company's first quarter falls during the summer months
      and during the first quarter of fiscal 2000, the Company recorded levels
      of sales which were generally lower than sales that were recorded for the
      succeeding periods, although this pattern was not repeated in fiscal 2001
      or fiscal 2002. Fiscal 2001 and fiscal 2002 did not have the typical lower
      sales in the first quarter due to the economic slowdown, which began in
      the fourth quarter of fiscal 2001. The Company attributes this seasonality
      to the buying patterns of its customers, the timing of industry trade
      shows where new products are introduced and to other factors. The Company
      believes that similar seasonality trends as experienced in fiscal 2000 are
      expected in the future.




                                       9
<PAGE>


(13)  EMPLOYEES

      As of July 31, 2002, the Company employed approximately 603 full-time
      employees at its facilities as follows:

                                     South
                                     Korea     China      US        Total

      Manufacturing                    90        299       32       421
      Engineering                      20         14        8        42
      Marketing                         7          8       13        28
      General and Administrative       20         49       43       112
                                      ---        ---      ---       ---

      Total                           137        370       96       603

      None of the Company's employees are represented by a labor organization
      and the Company has never experienced a work stoppage or interruption due
      to a labor dispute. Management believes that its relations with its
      employees are good.

(14)  EXECUTIVE OFFICERS OF THE REGISTRANT

      Certain information with respect to the executive officers of the Company
      is set forth:


<TABLE>
<CAPTION>

      Name                 Age  Position                                                  Officer Since

<S>                        <C>  <C>                                                       <C>
      Frederick M. Green   59   President and Chief Executive Officer and Director        1980

      Donald L. Henry      46   Vice President, Treasurer, Chief Financial Officer and    1999
                                Assistant Secretary (Previously 11 years with Abbott
                                Laboratories, most recently: Controller Fermentation
                                Operations, Controller Corporate Plant engineering,
                                Financial Planning and Analysis Manager)

      Xiaodong Wang        44   Vice President - Asia Pacific (Previously 2 years with    2000
                                XD Company as CEO and President and 7 years with
                                Simplot Company most recently:  General Manager of
                                China Operations, International Project Manager)

      Gregory L. Harris    49   Vice President - Business Development                     1988

</TABLE>


(15)  RISK FACTORS

      The following risk factors are relevant to an understanding of the
      business matters discussed herein:

      *     THE ELECTRONIC EQUIPMENT MARKET IS CHARACTERIZED BY RAPIDLY CHANGING
            TECHNOLOGY AND SHORTER PRODUCT LIFE CYCLES. The Company's future
            success will continue to depend upon its ability to enhance its
            current products and to develop new products that keep pace with
            technological developments and respond to changes in customer
            requirements. Any failure by the Company to respond adequately to
            technological changes and customer requirements or any significant
            delay in new product introductions could have a material adverse
            effect on the Company's business and results of operations. In
            addition, there can be no assurance that new products to be
            developed by the Company will achieve market acceptance. See
            "Business-Design Engineering and Product Development."

      *     PRICE COMPETITION IN THE MARKETS IN WHICH THE COMPANY COMPETES IS
            INTENSE, AND COULD RESULT IN A DECLINE IN GROSS MARGIN, WHICH IN
            TURN COULD ADVERSELY IMPACT THE COMPANY'S PROFITABILITY. The
            Company's financial results are subject to fluctuation due to
            various factors, including general business



                                       10
<PAGE>

            cycles in the Company's markets, the mix of products sold, the stage
            of each product in its life cycle and the rate and cost of
            development of new products. In addition, component and material
            costs, the timing of orders from and shipments of products to
            customers and deferral or cancellation of orders from major
            customers could adversely affect financial results.

      *     THE COMPANY'S RELIANCE ON SUCH OUTSIDE CONTRACTORS REDUCES ITS
            CONTROL OVER QUALITY AND DELIVERY SCHEDULES. The Company currently
            depends on third parties located in foreign countries for a
            significant portion of the manufacture and assembly of certain of
            its products. While the Company takes an active role in overseeing
            quality control with its third party manufacturers, the failure by
            one or more of these subcontractors to deliver quality products or
            to deliver products in a timely manner could have a material adverse
            effect on the Company's operations. In addition, the Company's
            third-party manufacturing arrangements are short-term in nature and
            could be terminated with little or no notice. If this happened, the
            Company would be compelled to seek alternative sources to
            manufacture certain of its products. There can be no assurance that
            any such attempts by the Company would result in suitable
            arrangements with new third-party manufacturers. See "Manufacturing
            and Sources of Supply."

      *     THE COMPANY'S SUCCESS DEPENDS IN PART UPON THE CONTINUED SERVICES OF
            MANY OF ITS HIGHLY SKILLED PERSONNEL INVOLVED IN MANAGEMENT,
            ENGINEERING AND SALES, AND UPON ITS ABILITY TO ATTRACT AND RETAIN
            ADDITIONAL HIGHLY QUALIFIED EMPLOYEES. The loss of service of any of
            these key personnel could have a material adverse effect on the
            Company. The Company does not have key-person life insurance on any
            of its employees. In addition, the Company's future success will
            depend on the ability of its officers and key employees to manage
            growth successfully and to attract, retain, motivate and effectively
            utilize the team approach to manage its employees. If the Company's
            management is unable to manage growth effectively, the Company's
            business and results of operations could be adversely affected.

      *     WHILE WE ACTIVELY TRAIN AND TECHNICALLY ASSIST THE INDIVIDUAL SALES
            REPRESENTATIVES REPRESENTING OUR PRODUCTS, A REDUCTION IN THE SALES
            EFFORTS BY OUR CURRENT MANUFACTURER REPRESENTATIVES AND DISTRIBUTORS
            OR TERMINATION OF THEIR RELATIONSHIPS WITH US COULD ADVERSELY AFFECT
            OUR SALES AND OPERATING. The Company markets and sells our products
            primarily through independent manufacturer representatives and
            distributors that are not under our direct control. We employ a
            limited number of internal sales personnel.

      *     TO SATISFY CUSTOMER DEMAND AND TO OBTAIN GREATER PURCHASING
            DISCOUNTS, WE CARRY INCREASED INVENTORY LEVELS OF CERTAIN PRODUCTS.
            Our financial results may be adversely affected when our inventory
            exceeds the demand for those products. Our gross margin can be
            adversely affected by increases in costs of raw materials. There can
            be no assurance that raw material cost increases or the cost of
            carrying increased finished goods inventory will not have a material
            adverse effect on our financial results.

      *     A PROLONGED REDUCTION IN DEMAND FOR OUR PRODUCTS WILL CONTINUE TO
            IMPACT OUR FINANCIAL SUCCESS. In fiscal year 2002, our sales
            declined in large part due to a substantial downturn in sales to the
            telecommunications and data communications markets. A continuation
            of this weakness in the telecommunications and data communications
            markets may have the effect of further reducing our revenue.

      *     INTEGRATION OF POWER GENERAL INTO OUR EXISTING BUSINESS QUICKLY AND
            AT REASONABLE COST WILL DETERMINE THE SUCCESS OF THE ACQUISITION
            THAT TOOK PLACE ON JULY 16, 2002. In connection with the integration
            of a new product line, we must adapt our facilities and assign
            qualified personnel to manufacture and market the new products,
            along with our existing products, on a competitive basis. We also
            must monitor and control costs of our expanding operations. We may
            not take the measures described above when necessary or we may not
            execute them properly or they may prove ineffective. If we are not
            able to successfully manage the integration of the Power General
            Assets into our existing business, our business and financial
            results will suffer.



                                       11
<PAGE>

      *     CIVIL UNREST, LABOR DISRUPTIONS, OR ACTS OF AGGRESSION COULD IMPEDE
            OUR ABILITY TO OPERATE IN OUR FOREIGN LOCATIONS AND WOULD HAVE A
            MATERIAL ADVERSE EFFECT ON OUR FUTURE BUSINESS AND CONSEQUENTLY, OUR
            OPERATING RESULTS. Manufacturing occurs at our facilities in South
            Korea and China and through manufacturing relationships in the
            People's Republic of China ("China") and Thailand. While this
            Pacific Rim manufacturing strategy enables us to compete worldwide
            against other suppliers of external power conversion products, it
            also involves risks. Our manufacturing operations in South Korea,
            China and Thailand have not been affected by labor disruptions,
            civil unrest or political instability, the risk of civil unrest and
            political instability is present in each of these countries.

(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES

Export sales by Ault's U.S. operations in fiscal year 2002 represented 20.4% of
the Company's gross sales, most of which were to OEMs in Europe and Canada. All
other revenues were derived from sales in the U.S. For other financial
information about foreign and domestic operations and export sales including the
amount of export sales for the last 3 years, refer to "Note 9 - Segment
Information and Foreign Operations" under NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS.

ITEM 2.        PROPERTIES

The Company owns and occupies its headquarters and U.S. manufacturing facility
in Brooklyn Park, a suburb of Minneapolis, Minnesota and is approximately 65,000
square feet in size.

Ault Korea Corporation owns and occupies a 54,000 square foot facility in Suwon
City in the province of Kyungki-Do, Korea.

Ault China Corporation owns and occupies a 40,000 square foot facility in the
Province of Xianghe in China. The land use rights expire in the year 2050.

Ault Shanghai Corporation occupies a 9,000 square foot leased facility in
Shanghai, China.

Management considers all of the Company's properties to be well maintained and
current manufacturing arrangements, including subcontract arrangements in China
and Thailand, are believed to be adequate for manufacturing requirements.

ITEM 3.        LEGAL PROCEEDINGS

No material litigation or other claims are presently pending against the
Company.











                                       12
<PAGE>



ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

                                    PART II.

ITEM 5.        MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
               STOCKHOLDER MATTERS

(a)   Market Information

Ault common shares are traded on the NASDAQ market under the symbol AULT. The
following table presents the range of closing bid prices for the Company's
common stock on the NASDAQ Market for fiscal 2002 and 2001.


<TABLE>
<CAPTION>
                                         Fiscal 2002                                            Fiscal 2001
                                         -----------                                            -----------
                                     $                        $                        $                        $
                  Quarter           High                     Low                      High                     Low

<S>                 <C>             <C>                      <C>                      <C>                      <C>
                    1st             6.110                    5.050                    7.375                    4.938
                    2nd             5.338                    3.500                    9.250                    6.125
                    3rd             4.700                    3.660                    7.906                    5.688
                    4th             5.050                    4.000                    6.500                    4.000
</TABLE>

(b)   Holders

As of August 8, 2002 there were 290 shareholders of record for the Company's
common stock. This number of record stockholders does not include beneficial
owners of common stock whose shares are held of record by Depository Trust under
the name CEDE & Co.

(c)   Dividends

Ault has not paid cash dividends on its common shares, and the present policy of
its Board of Directors is to retain any earnings for use in the business. The
Board of Directors does not anticipate paying cash dividends on its common
shares in the foreseeable future.







                                       13
<PAGE>



ITEM 6.    SELECTED FINANCIAL SUMMARY

(Amounts in Thousands, Except Per Share Data)

<TABLE>
<CAPTION>

                                                                                  YEARS ENDED
                                                   June 2,           June 3,          May 28,         May 30,        May 31,
                                                    2002              2001            2000            1999           1998
                                                                       (1)            (2)
<S>                                              <C>               <C>             <C>             <C>            <C>
Net sales                                        $  41,032         $  85,692       $  67,913       $  52,013      $  42,002
Gross profit                                         7,944            18,657          16,236          14,018         10,761
Operating expenses                                  11,968            15,228          13,001          11,426          8,883

   Operating income (loss)                         (4,024)             3,429           3,235           2,592          1,878

Non operating income (expense)                       (234)               172           (311)             256             49

 Income (loss) before income taxes                 (4,258)             3,601           2,924           2,848          1,927

  Income taxes (benefit)                             (694)             1,355           1,061             860            609
  Cumulative effect of accounting
      change, net of tax                                                (50)
Net income (loss)                               $  (3,564)          $  2,196        $  1,863        $  1,988       $  1,318
Net income (loss) per share:
   Basic                                         $  (0.78)          $   0.49        $   0.42        $   0.47       $   0.32
   Diluted                                          (0.78)              0.47            0.40            0.45           0.31

Total assets                                     $  36,697         $  43,457       $  46,256       $  33,303      $  25,417
Property, plant and equipment net                $  12,442         $  12,576       $  10,537        $  6,808       $  4,479
Working capital                                     14,084            17,840          17,708          16,364         15,304
Long-term debt, less current maturities              2,754             3,035           3,657           1,187            414
Stockholders' equity                                24,753            28,129          25,805          23,442         19,628

</TABLE>

(1)   The 2001 results include a non-cash, pre-tax cumulative effect of
      accounting change related to the adoption of Staff Accounting Bulletin No.
      101 of $77 expense ($50 after tax, or $0.01 per share).

(2)   The 2000 results include a gain on the disposition of the Korean facility
      of $1,525.



                                       14
<PAGE>


      (3)   ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
            AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations
are based on our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amount of assets and
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities at the date of our financial statements. Actual results may
differ from these estimates under different assumptions or conditions.

Critical accounting policies are defined as those that involve significant
judgments and uncertainties and potentially result in materially different
results under different assumptions and conditions. Application of these
policies is particularly important to the portrayal of our financial condition
and results of operations. We believe the accounting policies described below
meet these characteristics. Our significant accounting policies are more fully
described in the notes to the consolidated financial statements included in our
annual report on Form 10-K.

INVENTORY VALUATION - Inventory is written down for estimated surplus and
discontinued inventory items. The amount of the write-down is determined by
analyzing historical and projected sales information, plans for discontinued
products and other factors. Changes in sales volumes due to unexpected economic
or competitive conditions are among the factors that would result in materially
different amounts for this item.

ALLOWANCE FOR DOUBTFUL ACCOUNTS - An allowance is established for estimated
uncollectible accounts receivable. The required allowance is determined by
reviewing customer accounts and making estimates of amounts that may be
uncollectible. Factors considered in determining the amount of the reserve
include the age of the receivable, the financial condition of the customer,
general business, economic and political conditions, and other relevant facts
and circumstances. Unexpected changes in the aforementioned factors would result
in materially different amounts for this item.


LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes the Company's working capital position at June 2,
2002, and at June 3, 2001:


                                             June 2,            June 3,
                                              2002                2001
                                     --------------    -------------------
                                            ($000)                 ($000)
Working capital                             14,084                 17,840
Cash and cash equivalents                    4,775                  3,723
Unutilized bank credit facilities            4,975                  4,767
Cash provided by operations                  3,559                  1,953

CURRENT WORKING CAPITAL POSITION

At June 2, 2002, the Company had current assets of $22,840,000 and current
liabilities of $8,756,000 representing working capital of $14,084,000 and a
current ratio of 2.6. This represents a decrease in working capital from
$17,840,000 at June 3, 2001. The Company relies on its credit facilities and
cash flows from operations as sources of working capital to support normal
growth in revenue, capital expenditures and attainment of profit goals. The
Company has not committed to any capital expenditures as of June 2, 2002.

CASH AND INVESTMENTS: At June 2, 2002, the Company had cash and securities
totaling $4,775,000, up from $3,723,000 at June 3, 2001. This increase in cash
was principally due to cash flows generated from operations.



                                       15
<PAGE>

CREDIT FACILITIES: The Company maintains credit facilities with US Bank and with
Korea Exchange Bank. See Note 3, under NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS.

The credit arrangement with US Bank includes:

      (a)   A revolving credit facility of $4.0 million, secured by company
            assets. At June 2, 2002, there were no borrowings against this
            facility.
      (b)   At June 2, 2002, borrowings totaling $149,000 were outstanding on
            one term loan.

The South Korean credit facility is approximately $3.86 million of which
borrowings at June 2, 2002 totaled $2,889,636.

CASH FLOWS FOR FISCAL 2002

OPERATIONS: Operations provided $3,559,000 of cash during fiscal 2002 due
principally to the following activities:

      (a)   The loss net of depreciation of $972,000, amortization of $100,000,
            inventory write off of $999,000, and bad debt reserve of $1,416,000,
            in total used cash of $77,000.
      (b)   Decreases in trade receivables due to the decreased net sales
            provided $3,322,000 of cash.
      (c)   Decreases in inventories net of obsolescence write-downs provided
            $3,227,000 of cash. The decreases are due to the decreased net
            sales.
      (d)   Decreases in accrued expenses and accounts payable used $3,087,000
            of cash from liabilities associated with purchases of material to
            support customer orders.

INVESTING ACTIVITIES: Investing activities used net cash of $839,000 mainly
relating to the completion of the new manufacturing/office facility in Korea.

FINANCING ACTIVITIES: Financing activities used net cash of $1,674,000,
comprised of:

      (a)   Payments of the Korean line of credit used $1,211,000 of cash.
      (b)   Payments of long-term debt used $585,000 of cash.
      (c)   Proceeds from stock options exercised provided $122,000 of cash.

EFFECT OF FOREIGN CURRENCY EXCHANGE RATE FLUCTUATIONS: The effect of translating
the Korean financial statements, which were prepared in Won, to U.S. dollars,
increased cash by approximately $6,000 during the year. The effect of
translating the Chinese financial statements, which were prepared in Yuan to
U.S. dollars, had minimal effect on cash for the year.

SUMMARY: The Company's cash and working capital positions are sound and,
together with its credit facilities, are adequate to support the Company's
strategies for fiscal 2003.

CASH FLOWS FOR FISCAL 2001

OPERATIONS: Operations provided $1,953,000 of cash during fiscal 2001 due
principally to the following activities:

      (a)   Net income, depreciation, and amortization increased cash by
            $3,287,000.
      (b)   Decreases in trade receivables mainly due to the decreased net sales
            in the fourth quarter of fiscal 2001 provided $3,523,000 of cash.
      (c)   Decreases in inventories provided $818,000 of cash. The decreases
            are due to the decreased net sales in the fourth quarter of fiscal
            2001.
      (d)   Decreases in accrued expenses and accounts payable used $5,862,000
            of cash from liabilities associated with purchases of material to
            support customer orders.

INVESTING ACTIVITIES: Investing activities used net cash of $2,607,000 relating
principally to the construction of the new manufacturing/office facility in
Korea.

FINANCING ACTIVITIES: Financing activities provided net cash of $2,033,000,
comprised principally of borrowings in connection with the construction of the
new manufacturing/office facility in Korea.




                                       16
<PAGE>

EFFECT OF FOREIGN CURRENCY EXCHANGE RATE FLUCTUATIONS: The effect of translating
the Korean financial statements, which were prepared in Won, to U.S. dollars,
adversely affected cash by approximately $74,000 during the year. The effect of
translating the Chinese financial statements, which were prepared in Yuan to
U.S. dollars, had minimal effect on cash for the year.

RESULTS OF OPERATIONS
FISCAL YEAR ENDED JUNE 2, 2002

<TABLE>
<CAPTION>
                                                                       Increase  /  (Decrease)
      $000                         Fiscal           Fiscal             --------------------------
                                   2002             2001               Amount        Percent
                                   ---------------- ------------------ ------------- ------------
<S>                                  <C>              <C>                <C>             <C>
      Net Sales                      $41,032          $85,692            $(44,660)       (52)%
      Operating Income (Loss)         (4,024)           3,429              (7,453)      (217)%

</TABLE>

Net sales were $41,032,000 for fiscal 2002, down 52% from $85,692,000 for fiscal
2001. The decrease was due to significantly lower power supply shipments to
major OEMs of telecommunication/data communication equipment of $40,071,000 and
computer and computer peripheral equipment of $9,752,000 primarily due to the
economic slowdown. The decrease was partially offset by an increase in shipments
to the medical markets of $2,099,000, and the industrial markets of $3,064,000.

The gross margin for fiscal 2002 was 19.4%, compared to 21.8% for fiscal 2001.
Margins were decreased primarily due to an inventory write down of $999,000 due
to the identification of obsolete inventory caused by the continued economic
slowdown.

Operating loss totaled $4,024,000 for fiscal 2002 compared to operating income
of $3,429,000 for the same period in fiscal 2001. The decrease in operating
income is primarily due to (1) decreased sales in fiscal year 2002 decreased
operating income $9,736,000 (2) the inventory write down decreased the operating
income by $999,000 (3) increased bad debt expense decreased operating income by
$818,000 (4) the decreased sales decreased the commission expense of the Company
and increased the operating income by $1,120,000 (5) the Company has been
decreasing expenses and increasing efficiencies during fiscal 2002, which
decreased the operating loss by $2,993,000.

The Company's order backlog at June 2, 2002 totaled $8,365,000 compared to
$10,792,000 at June 3, 2001. While the backlog has dropped from the previous
year, customers are reducing lead times for shipments; as a result the backlog
is lower with a minimum expected impact on the revenue level. This requires the
Company to place greater reliability on its ability to forecast customer needs
and requirements for on-time shipment of products.

Nonoperating expense is $234,000 for fiscal 2002 compared to nonoperating income
was $172,000 for the same period in fiscal 2001. The decrease in income is
primarily from (1) the gain on the sale of securities in fiscal 2001 of $56,000,
and (2) currency exchange rate gains by the Korean subsidiary of $400,000 less
in fiscal 2002 as compared to fiscal 2001. The Company incurred interest
expenses of $495,000 in fiscal 2002 and $537,000 in fiscal 2001. The decrease is
due to the decrease in bank debt in Korea.

The effective tax rate was 16.3% for fiscal year 2002, 37.6% for fiscal year
2001, and 36.3% for fiscal year 2000. The effective income tax rate has changed
in fiscal 2002 compared to fiscal 2001 due to the subsidiaries loss overseas
creating a deferred asset with a full valuation offset due to the determination
that currently the realization of the deferred tax asset is not more likely than
not.

FISCAL YEAR ENDED JUNE 3, 2001

<TABLE>
<CAPTION>
                                                                       Increase   /   (Decrease)
      $000                         Fiscal           Fiscal             --------------------------
                                   2001             2000               Amount        Percent
                                   ---------------- ------------------ ------------- ------------
<S>                                  <C>              <C>                <C>           <C>
      Net Sales                      $85,692          $67,913            $17,779       26%
      Operating Income                 3,429            3,235                194        6%

</TABLE>



                                       17
<PAGE>

Net sales were $85,692,000 for fiscal 2001, up 26% from $67,913,000 for fiscal
2000. The growth was primarily due to significantly higher power supply
shipments to major OEMs of high-speed ADSL modems of $9,817,000. The Company is
also benefiting from growing business volumes with OEMs serving the medical
equipment market of $3,714,000 and OEMs of PDAs of $4,651,000. The Company
experienced lower sales in the fourth quarter of fiscal 2001 related to the
economic slowdown.

The gross margin for fiscal 2001 was 21.8%, compared to 23.9% for fiscal 2000.
The significant growth of Asian sales had an impact on gross margins. As an
aggressive new undertaking, the Asian sales effort entails the normal array of
pricing initiatives of $1,269,000. Margins were also affected by a growth in
sales of lower-margin linear power supplies to ASDL customers of $490,000.

Operating income totaled $3,429,000 for fiscal 2001 and $3,235,000 for the same
period in fiscal 2000 or 4.0% and 4.8% of net sales, respectively. Operating
expense increased principally due to (1) fiscal 2000 expenses were reduced by a
gain on the sale of the Korean facility by $1,500,000, (2) increased costs of
Asian Group to manage the increased sales in the region of $500,000, (3)
increased commissions paid to sales representatives on the increased sales of
$560,000, (4) an increase in bad debt expense of $500,000 related to a
customer-filing chapter 11, and (5) decrease in engineering expenses from the
consolidation of the Maryland design center at the end of fiscal 2000 of
$510,000. As a percent of sales, operating expenses decreased to 17.8% in fiscal
2001 from 19.1% in fiscal 2000. The decrease is due to the increase in sales
while maintaining the operating expenses at the same level as fiscal 2000.


The Company's order backlog at June 3, 2001 totaled $10,792,000 compared to
$17,877,000 at May 28, 2000.

Nonoperating income was $171,000 for fiscal 2001 and nonoperating expense was
$311,000 for the same period in fiscal 2000. The increase in income was
primarily from (1) the sale of securities available for sale in fiscal 2001 of
$56,000 and (2) currency exchange rate gains by the Korean subsidiary of
$500,000 in fiscal 2001. The Company incurred interest expenses of $537,000 in
fiscal 2001 and $406,000 in fiscal 2000. The increase is due to the mortgage on
the new facility in Minneapolis for the whole year in 2001 added $65,000 and the
increase in bank debt in Korea added $60,000 of interest expense.

INFORMATION ABOUT PRODUCTS AND SERVICES: The Company's business operations are
comprised of principally one activity--the design, manufacture and sale of
equipment for converting electric power to a level used by OEMs principally in
computer peripherals, data communications/telecommunications and medical markets
to charge batteries and/or power equipment. The Company supports these power
requirements by making available to the OEM products that have various technical
features. These products are managed as one product segment under the Company's
internal organizational structure and the Company does not consider any
financial distinctive measures, including net profitability and segmentation of
assets to be meaningful to performance assessment.

On July 16, 2002, the Company purchased a portion of the operating assets of the
Power General division of Nidec America Corporation. The Power General division
developed, manufactured, and sold high efficiency DC/DC converters and custom
power supplies at various power levels up to 1200 watts under the Power General
brand name. Pursuant to the Purchase Agreement, the Company paid the Seller
$366,000 in cash and issued $2,074,000 face amount of the Company's
newly-created Series B 7% Convertible Preferred Stock, no par value (the
"Preferred Stock"). The Preferred Stock issued to the Seller is convertible into
488,000 shares of the Company's Common Stock. The Company has agreed to file a
registration statement covering the shares of Common Stock issuable upon
conversion of the Preferred Stock with the Securities and Exchange Commission.
The Company will maintain Power General's engineering group in Massachusetts and
move Power General's manufacturing operations and related functions to Ault's
other facilities in North America and Asia.




                                       18
<PAGE>


INFORMATION ABOUT REVENUE BY GEOGRAPHY

Distribution of revenue from the U.S., from each foreign country that is the
source of significant revenue and from all other foreign countries as a group
are as follows:

                                                  FISCAL YEAR ENDED
                                                 June 2,           June 3,
                                                    2002              2001
                                                  ($000)            ($000)
                                                 -------           -------

                  U.S.                           $27,693           $54,170
                  Canada                           1,041             2,690
                  Ireland                            632             4,351
                  Korea                            4,952             7,461
                  Belgium                            215             2,820
                  China                            2,686             5,971
                  Other Foreign                    3,813             8,229
                                                 -------           -------
                  Total                          $41,032           $85,692
                                                 =======           =======

The Company considers a country to be the geographic source of revenue if it has
contractual obligations, including obligation to pay for trade receivable
invoices.

IMPACT OF FOREIGN OPERATIONS AND CURRENCY CHANGES

Products manufactured by the Korean subsidiary comprised a large portion of
total sales. The Company will experience normal valuation changes as the Korean
and Chinese currency fluctuates. The effect of translating the Korean and
Chinese financial statements resulted in a net asset value increase of $14,000
during the year, the majority relating to the Korean currency fluctuations.

FORWARD LOOKING STATEMENTS

From time to time, in reports filed with the Securities and Exchange Commission
(SEC), in press releases, and in other communications to shareholders or the
investing public, the Company may make forward-looking statements concerning
possible or anticipated future results of operations or business developments
that are typically preceded by the words "believes," "expects," "anticipates,"
"intends" or similar expressions. For such forward-looking statements, the
Company claims the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995. Shareholders
and the investing public should understand that such forward-looking statements
are subject to risks and uncertainties which could cause results or developments
to differ significantly from those indicated in the forward-looking statements.
Such risks and uncertainties include, but are not limited to, the overall level
of sales by original equipment manufacturers (OEMs) in the telecommunications,
data communications, computer peripherals and the medical markets; buying
patterns of the Company's existing and prospective customers; the impact of new
products introduced by competitors; delays in new product introductions; higher
than expected expense related to sales and new marketing initiatives;
availability of adequate supplies of raw materials and components; dependence on
outside contractors; reliance on third party distribution; integration of the
Power General assets; dependence on foreign operations; and other risks
affecting the Company's target markets generally.

ACCOUNTING PRONOUNCEMENTS

On June 4, 2001 the Company adopted Statement of Financial Accounting Standard
(SFAS) No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, as
amended by SFAS No. 138, ACCOUNTING FOR CERTAIN DERIVATIVE INSTRUMENTS AND
CERTAIN HEDGING ACTIVITIES. SFAS No. 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities. It requires
that all derivatives, including those embedded in other contracts, be recognized
as either assets or liabilities and that those financial instruments be measured
at fair value. The accounting for changes in the fair value of derivatives
depends on their intended use and designation.




                                       19
<PAGE>

Management has reviewed the requirements of SFAS No. 133 and has determined that
the Company has no free-standing or embedded derivatives. All agreements that
contain provisions meeting the definition of a derivative also meet the
requirements of, and have been designated as, normal purchases or sales. The
Company's policy is to not use free-standing derivatives and to not enter into
contracts with terms that cannot be designated as normal purchases or sales.

In December 1999, the SEC issued Staff Accounting Bulletin (SAB) No. 101 REVENUE
RECOGNITION IN FINANCIAL STATEMENTS. SAB No. 101 summarizes certain of the SEC
staff's views in applying generally accepted accounting principles to selected
revenue recognition issues. As a result, the Company changed the method of
accounting for certain sales transactions. Historically, the Company recognized
revenue upon shipment of products to certain international customers because,
even though some products were shipped FOB destination, we used a common carrier
and thus gave up substantially all the risks of ownership. Under the new
accounting method adopted retroactive to May 29, 2000, the Company now
recognizes revenue at the time risk of ownership passes. The cumulative effect
of the change on prior years resulted in a charge to income of $50,000 (net of
taxes of $27,000) for the year ended June 3, 2001. The pro forma amounts
presented in the consolidated statements of income were calculated assuming the
accounting change was made retroactively to the prior period.

For the three months ended August 27, 2000, the Company recognized $234,000 in
revenue that was included in the cumulative effect adjustment as of May 29,
2000. The effect of the revenue in the first quarter was to increase income by
$50,000 (after reduction for income taxes of $27,000).

In June 2001, the Financial Accounting Standards Board approved for issuance
Statement of Financial Accounting Standards (SFAS) No. 141, BUSINESS
COMBINATIONS and No. 142 GOODWILL AND OTHER INTANGIBLE ASSETS. SFAS No. 141
requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001 and that the use of the
pooling-of-interest method is no longer allowed. SFAS No. 142 requires that upon
adoption, amortization of goodwill will cease and instead, the carrying value of
goodwill will be evaluated for impairment on an annual basis. In fiscal 2002,
2001 and 2000 the amortization expense was $100,000 each year. Identifiable
intangible assets will continue to be amortized over their useful lives and
reviewed for impairment in accordance with SFAS No. 121 ACCOUNTING FOR THE
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF.
SFAS No. 142 is effective for the Company's fiscal year beginning June 3, 2002.
The Company has determined that the adoption of these standards will not be
material.

In August 2001, the FASB issued SFAS No. 144, ACCOUNTING FOR THE IMPAIRMENT OR
DISPOSAL OF LONG-LIVED ASSETS. SFAS 144 addresses financial accounting and
reporting for the impairment or disposal of long-lived assets and supercedes
SFAS 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND ASSETS TO BE
DISPOSED OF, and the accounting and reporting provisions of Accounting
Principles Board Opinion No. 30, REPORTING THE RESULTS OF OPERATIONS--REPORTING
THE EFFECTS OF DISPOSAL OF A SEGMENT OF A BUSINESS AND EXTRAORDINARY, UNUSUAL
AND INFREQUENTLY OCCURRING TRANSACTIONS. SFAS 144 requires that long-lived
assets to be disposed of be measured at the lower of carrying amount or fair
value less cost to sell. The Company adopted SFAS 144 on June 3, 2002. The
Company is in the process of evaluating the impact SFAS 144 will have on its
consolidated financial statements.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company experiences foreign currency gains and losses, which are reflected
in the financial statements, due to the strengthening and weakening of the U.S.
dollar against currencies of the Company's foreign subsidiaries. The Company
anticipates that it will continue to have exchange gains or losses in the
future. The Company realized an exchange gain of $100,000 for fiscal 2002,
$500,000 for fiscal 2001, and $21,000 for fiscal 2000.

As of June 2, 2002, the Company only had fixed rate debt outstanding. Thus,
interest rate fluctuations would not impact interest expense or cash flows. If
the Company were to undertake additional debt, interest rate changes could
impact earnings and cash flows.




                                       20
<PAGE>




CONTRACTUAL OBLIGATIONS

The following table summarizes the Company's contractual obligations and
commercial commitments as of June 2, 2002 (in thousands):

<TABLE>
<CAPTION>
                                                Payments due by Period

                                   Total       Less than 1 year       1-3 years           4-5 years        After 5 years
<S>                                    <C>                  <C>                 <C>                <C>               <C>
Contractual Obligations:
Long-term debt                         $3,035               $282                $441               $343              $1,969
Operating leases                          119                 77                  37                  5
    Total contractual
    obligations                        $3,154               $359                $478               $348              $1,969


</TABLE>


























                                       21
<PAGE>



ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

(a) Financial Statements
         Index to Consolidated Financial Statements
<TABLE>
<CAPTION>
                                                                                                                   Page

<S>                                                                                                                  <C>
         *            Independent Auditors' Report                                                                   23

         *            Consolidated Balance Sheets, June 2, 2002 and June 3, 2001.                                    24

         *            Consolidated Statements of Operations for the Years Ended
                      June 2, 2002, June 3, 2001, and May 28, 2000.                                                  26

         *            Consolidated Statements of Stockholders' Equity for the Years Ended                            27
                      June 2, 2002, June 3, 2001, and May 28, 2000.

         *            Consolidated Statements of Cash Flows for the Years Ended                                      28
                      June 2, 2002, June 3, 2001, and May 28, 2000.

         *            Notes to Consolidated Financial Statements                                                     29

(b) Supplemental Financial Information

         *           Quarterly Financial Data                                                                        41


</TABLE>






                                       22
<PAGE>











                          INDEPENDENT AUDITORS' REPORT


Stockholders and Board of Directors
Ault Incorporated and Subsidiaries
Minneapolis, Minnesota


We have audited the accompanying consolidated balance sheets of Ault
Incorporated and Subsidiaries (the Company) as of June 2, 2002, and June 3, 2001
and the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the three fiscal years in the period ended June 2, 2002.
Our audits also included the financial statement schedule listed in the index as
Item 14.(2). These consolidated financial statements and the financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on the consolidated financial statements and financial
statement schedule based on our audits.

We conducted our audits in accordance with the auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Ault Incorporated and Subsidiaries
as of June 2, 2002, and June 3, 2001 and the results of their operations and
their cash flows for each of the three fiscal years in the period ended June 2,
2002, in conformity with accounting principles generally accepted in the United
States of America. Also, in our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.


Deloitte & Touche LLP

Minneapolis, Minnesota
July 12, 2002 (July 16, 2002 as to Note 11)









                                       23
<PAGE>


AULT INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 2, 2002 AND JUNE 3, 2001

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------
ASSETS                                                                              JUNE 2,               JUNE 3,
                                                                                      2002                  2001
<S>                                                                              <C>                <C>
CURRENT ASSETS:
   Cash and cash equivalents                                                     $     4,775,190    $     3,723,381
   Trade receivables, less allowance for doubtful accounts of
     $320,000 in 2002; $676,000 in 2001 (Note 10)                                      7,012,451         12,360,828
   Inventories (Note 2)                                                                8,501,505         12,422,880
   Prepaid and other expenses                                                          2,299,333            746,599
   Deferred tax asset (Note 4)                                                           251,800            364,000
                                                                                 ---------------    ---------------
         Total current assets                                                         22,840,279         29,617,688

OTHER ASSETS:
   Intangibles, less accumulated amortization of $351,000 in 2002;
     $251,000 in 2001                                                                  1,153,153          1,253,427
   Other                                                                                 261,309              9,792
                                                                                 ---------------    ---------------
                                                                                       1,414,462          1,263,219

PROPERTY, PLANT & EQUIPMENT:
   Land                                                                                1,704,285          1,674,555
   Building and leasehold improvements                                                 7,780,394          5,553,970
   Machinery and equipment                                                             7,586,102          7,517,079
   Office furniture and equipment                                                      1,479,416          1,432,868
   Data processing equipment                                                           2,234,154          2,215,101
   Construction in progress                                                                               1,533,252
                                                                                 ---------------    ---------------
                                                                                      20,784,351         19,926,825

   Less accumulated depreciation                                                       8,342,105          7,351,053
                                                                                 ---------------    ---------------
                                                                                     12,442,246          12,575,772
                                                                                 ---------------    ---------------
                                                                                 $   36,696,987      $   43,456,679
                                                                                 ===============    ===============
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.



                                       24
<PAGE>



AULT INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 2, 2002 AND JUNE 3, 2001

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY                                            JUNE 2,                JUNE 3,
                                                                                  2002                   2001
<S>                                                                           <C>                 <C>
 CURRENT LIABILITIES:
   Note payable to bank (Note 3)                                              $      2,889,636    $     4,003,087
   Current maturities of long-term debt                                                281,507            617,101
   Accounts payable                                                                  4,717,356          5,285,355
   Accrued compensation                                                                434,799            467,294
   Accrued commissions                                                                 285,578            708,360
   Other                                                                               147,864            368,214
   Income tax payable                                                                                     328,135
                                                                              ----------------    ---------------
         Total current liabilities                                                   8,756,740         11,777,546

 LONG-TERM DEBT, less current maturities (Note 3)                                    2,753,747          3,035,253
 DEFERRED TAX LIABILITY(Note 4)                                                        273,639            213,000
 RETIREMENT AND SEVERANCE BENEFITS (Note 1)                                            160,129            301,819


 COMMITMENTS AND CONTINGENCIES (Note 8)


 STOCKHOLDERS' EQUITY (Notes 5, 6, and 7):
   Preferred stock, no par value; authorized 1,000,000 shares;
     none issued
   Common stock, no par value; authorized 10,000,000 shares;
     issued and outstanding 4,563,610 shares in 2002;
     4,528,522 shares in 2001                                                       20,857,629         20,683,920
   Notes receivable arising from the sale of common stock                             (100,000)          (100,000)
   Accumulated other comprehensive loss                                               (921,572)          (935,260)
   Retained earnings                                                                 4,916,675          8,480,401
                                                                              ----------------    ----------------
                                                                                    24,752,732         28,129,061
                                                                              ----------------    ---------------
                                                                              $     36,696,987    $    43,456,679
                                                                              ================    ===============
</TABLE>


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.




                                       25
<PAGE>


AULT INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 2, 2002, JUNE 3, 2001, AND MAY 28, 2000

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------
                                                                     JUNE 2,           JUNE 3,           MAY 28,
                                                                        2002              2001              2000

<S>                                                              <C>               <C>              <C>
NET SALES                                                        $    41,031,854   $   85,691,580   $    67,912,725

COST OF GOODS SOLD                                                    33,087,745       67,034,317        51,676,426
                                                                 ---------------   --------------   ---------------
       Gross profit                                                    7,944,109       18,657,263        16,236,299

OPERATING EXPENSES (INCOME):
   Marketing                                                           3,548,104        6,016,358         5,450,546
   Design engineering                                                  2,393,899        2,881,898         3,583,088
   General and administrative                                          6,025,791        6,329,300         5,492,362
   Gain on sale of facility                                                                              (1,524,879)
                                                                 ---------------   --------------   ----------------
                                                                      11,967,794       15,227,556        13,001,117
                                                                 ---------------   --------------   ---------------

OPERATING INCOME (LOSS)                                               (4,023,685)       3,429,707         3,235,182

NONOPERATING INCOME (EXPENSE):
   Interest expense                                                     (495,356)        (536,890)         (405,936)
   Interest income                                                        93,482          162,126           100,981
   Other                                                                 167,707          546,432            (6,027)
                                                                 ---------------   --------------   ----------------
                                                                        (234,167)         171,668          (310,982)
                                                                 ----------------  --------------   ----------------

INCOME (LOSS) BEFORE INCOME TAXES                                     (4,257,852)       3,601,375         2,924,200

INCOME TAXES (BENEFIT) (Note 4)                                         (694,126)       1,355,191         1,060,644
                                                                 ----------------  --------------   ---------------
NET INCOME (LOSS) BEFORE ACCOUNTING CHANGE                            (3,563,726)       2,246,184         1,863,556

CUMULATIVE EFFECT OF ACCOUNTING CHANGE,
   NET OF TAX                                                                             (49,995)
                                                                 ---------------   ---------------  ---------------


NET INCOME (LOSS)                                                $    (3,563,726)  $    2,196,189   $     1,863,556
                                                                 ===============   ==============   ===============

EARNINGS (LOSS) PER SHARE (Note 1):
   Basic:
     Net income (loss) before accounting change                  $        (0.78)   $         0.50   $          0.42
     Cumulative effect of accounting change                                                 (0.01)
                                                                 ---------------   ---------------  ---------------
     Basic earnings (loss) per share                             $        (0.78)   $         0.49   $          0.42
                                                                 ===============   ==============   ===============
   Diluted:
     Net income (loss) before accounting change                  $        (0.78)   $         0.48   $          0.40
     Cumulative effect of accounting change                                                 (0.01)
                                                                 ---------------   ---------------  ---------------
     Diluted earnings (loss) per share                           $        (0.78)   $         0.47   $          0.40
                                                                 ===============   ==============   ===============

Proforma amounts assuming the accounting change is applied retroactively
   (thousands except per-share amounts)
   Income (loss)                                                 $       (3,564)   $        2,196   $         2,038
   Net income (loss) per common share:
     Basic                                                                (0.78)             0.49              0.46
     Diluted                                                              (0.78)             0.47              0.44
   Weighted average common shares outstanding:
     Basic                                                                4,541             4,493             4,391
     Diluted                                                              4,541             4,691             4,662

</TABLE>


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.



                                       26
<PAGE>


AULT INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED JUNE 2, 2002, JUNE 3, 2001, AND MAY 28, 2000

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                                    NOTES                  ACCUMULATED
                                                                 RECEIVABLE                   OTHER
                                                                  FROM SALE               COMPREHENSIVE    TOTAL
                                            COMMON STOCK          OF COMMON    RETAINED      INCOME    STOCKHOLDERS'
                                       -----------------------
                                         SHARES       AMOUNT        STOCK      EARNINGS      (LOSS)       EQUITY
<S>                                     <C>        <C>          <C>          <C>          <C>          <C>
BALANCE AT MAY 30, 1999                 4,372,789  $19,827,000  $ (145,000)  $ 4,359,317  $ (599,337)  $ 23,441,980

Comprehensive income:
   Net income                                                                  1,863,556                  1,863,556
   Net change in foreign currency
     translation adjustment                                                                   51,263         51,263
                                                                                                       ------------
       Total comprehensive income                                                                         1,914,819
                                                                                                       ------------
Issuance of 66,143 shares of common
   stock in accordance with
   stock purchase plan and stock
   option plan (Notes 5 and 6)             66,143      324,168                                              324,168
 Income tax benefit from stock options
   exercised                                            86,000                                               86,000
Stock grants                                6,500       38,315                                               38,315
                                       ----------  -----------  ----------   -----------  ----------   ------------

BALANCE AT MAY 28, 2000                 4,445,432   20,275,483    (145,000)    6,222,873    (548,074)    25,805,282

Comprehensive income:
   Net income                                                                  2,196,189                  2,196,189
   Net change in foreign currency
     translation adjustment                                                                 (387,186)      (387,186)
                                                                                                       -------------
       Total comprehensive income                                                                         1,809,003
Issuance of 90,945 shares of common
   stock in accordance with
   stock purchase plan and
   stock option plan (Notes 5 and 6)       90,945      285,230                                              285,230
Adjust retained earnings for the change in
   subsidiary fiscal year end                                                     61,339                     61,339
7,855 shares of common stock acquired and
   retired for payment of receivables      (7,855)     (57,927)     45,000                                  (12,927)
Income tax benefit from stock options
   exercised                                           131,000                                              131,000
Stock compensation                                      50,134                                               50,134
                                       ----------  -----------  ----------   -----------  ----------   ------------

BALANCE AT JUNE 3, 2001                 4,528,522   20,683,920    (100,000)    8,480,401    (935,260)    28,129,061

Comprehensive loss:
   Net loss                                                                   (3,563,726)                (3,563,726)
   Net change in foreign currency
     translation adjustment                                                                   13,688         13,688
                                                                                                       ------------
       Total comprehensive loss                                                                          (3,550,038)
Issuance of 35,088 shares of common
   stock in accordance with
   stock purchase plan and
   stock option plan (Notes 5 and 6)       35,088      121,981                                              121,981
Income tax benefit from stock options
   exercised                                            51,728                                               51,728
                                       ----------  -----------  ----------   -----------  ----------   ------------

BALANCE AT JUNE 2, 2002                 4,563,610  $20,857,629  $ (100,000)  $ 4,916,675  $ (921,572)  $ 24,752,732
                                       ==========  ===========  ==========   ===========  ==========   ============

</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.



                                       27
<PAGE>


AULT INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 2, 2002, JUNE 3, 2001, AND MAY 28, 2000

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------
                                                                           JUNE 2,       JUNE 3,         MAY 28,
                                                                             2002          2001            2000
<S>                                                                    <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                   $  (3,563,726)  $  2,196,189    $  1,863,556
   Adjustments to reconcile net income (loss) to net cash
       provided by (used in) operating activities:
     Depreciation                                                            972,230        991,031         752,535
     Amortization                                                            100,274        100,275         136,580
     Allowance for doubtful accounts                                       1,416,000        598,000          54,000
     Adjustment related to change in subsidiary year-end                                     61,339
     Stock compensation                                                                      50,134          38,315
     Gain on disposal of property and equipment                                                          (1,608,423)
     Realized gain from the sale of securities available for sale                           (56,060)
     Deferred taxes                                                          172,283        132,000          87,000
     Change in assets and liabilities, net of effect of acquisition:
       (Increase) decrease in:
         Trade receivables                                                 3,321,769      2,924,698      (5,486,082)
         Inventories                                                       4,226,425        817,715      (5,209,964)
         Prepaid and other expenses                                       (1,061,044)       (40,167)       (280,932)
       Increase (decrease) in:
         Accounts payable                                                   (795,834)    (6,127,775)      6,205,437
         Accrued expenses                                                   (864,905)       261,680         364,336
         Income tax payable                                                 (364,895)        43,850         657,489
                                                                       --------------  ------------    ------------
           Net cash provided by (used in) operating activities             3,558,577      1,952,909      (2,426,153)
                                                                       -------------   ------------    -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                       (838,703)    (3,161,004)     (5,593,031)
   Proceeds from disposition of property and equipment                                                    2,719,870
   Decrease other assets                                                                                     85,855
   Proceeds from the sale of securities                                                     553,521         352,453
                                                                       -------------   ------------    ------------
           Net cash used in investing activities                            (838,703)    (2,607,483)     (2,434,853)
                                                                       --------------  ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net borrowings (payments) on revolving credit agreement                (1,211,131)     2,511,318         731,144
   Proceeds from long-term borrowings                                                                     3,305,467
   Proceeds from issuance of common stock                                    121,981        227,303         324,168
   Payments received from notes receivable arising from sale of
     common stock                                                                            45,000
   Principal payments on long-term borrowings                               (584,905)      (750,826)       (435,642)
                                                                       --------------  ------------    ------------
           Net cash provided by (used in) financing activities            (1,674,055)     2,032,795       3,925,137
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE
CHANGES ON CASH                                                                5,990        (73,511)         51,263
                                                                       -------------   -------------   ------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                           1,051,809      1,304,710        (884,606)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                             3,723,381      2,418,671       3,303,277
                                                                       -------------   ------------    ------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                               $   4,775,190   $  3,723,381    $  2,418,671
                                                                       =============   ============    ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash payments for:
   Interest (Net of Capitalized interest of
        $55,010 in 2001, $144,930 in 2000)                             $     495,356   $    536,890    $    386,488
     Taxes                                                                   171,819      1,446,117         433,000

</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.





                                       28
<PAGE>



AULT INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 2, 2002 AND JUNE 3, 2001
--------------------------------------------------------------------------------
1.      NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

        NATURE OF BUSINESS - The Company and its subsidiaries operate in one
        business segment which includes the design, manufacturing, and marketing
        of power conversion products, principally to original equipment
        manufacturers of data communications equipment, microcomputers and
        related peripherals, telecommunications equipment, and portable medical
        equipment. Sales are to customers worldwide, and credit is granted based
        upon the credit policies of the Company.

        A summary of the Company's significant accounting policies follows:

        PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
        include the accounts of Ault Incorporated, its wholly owned
        subsidiaries, Ault Shanghai, Ault Xianghe Co. Ltd, and Ault Korea
        Corporation. All significant intercompany transactions have been
        eliminated. The foreign currency translation adjustment represents the
        translation into United States dollars of the Company's investment in
        the net assets of its foreign subsidiary in accordance with the
        provisions of Statement of Financial Accounting Standards (SFAS) No. 52.

        CHANGE IN FISCAL YEAR - Effective May 29, 2000 the Company changed its
        fiscal year-end for its Korean subsidiary from May 31 to April 30 and
        consolidates the subsidiary for financial reporting purposes on a
        one-month lag basis. This change was done to facilitate timely and
        accurate consolidation and in order to meet financial reporting
        deadlines of the Company. The results of operations for the subsidiary
        for May 2000 ($61,000 net loss) was included in the consolidated results
        of operations for the first quarter of fiscal 2001. Retained earnings
        was adjusted during the first quarter of fiscal 2001 to eliminate the
        subsidiary net loss for May 2000, which was included in operations for
        the year ended May 28, 2000. The effect of the change in year-end for
        future periods is expected to be insignificant.

        FISCAL YEAR - The Company operates on a 52 to 53-week fiscal year. The
        fiscal years for the financial statements presented end on June 2, 2002,
        June 3, 2001, and May 28, 2000. The years ending June 2, 2002 and May
        28, 2000 contains 52 weeks while the year ending June 3, 2001 contains
        53 weeks.

        CASH AND CASH EQUIVALENTS - The Company maintains its cash in bank
        deposit accounts which, at times, may exceed federally insured limits.
        The Company has not experienced any losses in such accounts.

        The Company considers all highly liquid debt instruments purchased with
        a maturity of three months or less to be cash equivalents. Cash
        equivalents consist primarily of short-term commercial paper.

        AVAILABLE-FOR-SALE INVESTMENTS - Investments were classified as
        available-for-sale securities and consisted primarily of preferred
        stock, including securities that may be sold in response to changes in
        market interest, needs for liquidity, or changes in the availability or
        yield of alternative investments. These securities were carried at fair
        market value prior to their sale in fiscal 2001.

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

        INTANGIBLES - Intangibles consist of goodwill, which is being amortized
        using the straight-line method over its economic useful life, which has
        been estimated to be 15 years.

        DEPRECIATION - Depreciation is based on the estimated useful lives of
        the individual assets. The methods and estimated useful lives are as
        follows:



                                       29
<PAGE>



AULT INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 2, 2002 AND JUNE 3, 2001
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                          Method                                            Years
<S>                                     <C>                                          <C>
        Building                        Straight-line                                        36
        Machinery and equipment         Straight-line                                      3-10
        Office furniture and equipment  Straight-line                                      5-15
        Data processing equipment       Double declining balance and straight-line          3-5
        Leasehold Improvement           Straight-line                                Lease term

</TABLE>

        FINANCIAL INSTRUMENTS - The fair value of the long-term debt is
        estimated based on the use of discounted cash flow analysis using
        interest rates for the same or similar debt offered to the Company
        having the same or similar remaining maturities and collateral
        requirements. Management estimates the carrying value of the long-term
        debt approximates fair value. All other financial instruments
        approximate fair value because of the short-term nature of these
        instruments.

        RETIREMENT AND SEVERANCE BENEFITS - Retirement and severance benefits
        represents the accrual of compensation expense, net of deposits, for the
        Korean operations' employees that is payable upon termination of
        employment.

        The Company does not fund the retirement and severance benefits accrued,
        but rather provides for the estimated accrued liability under the plans
        as of the balance sheet date. Under the National Pension Scheme of
        Korea, the Company is required to transfer a certain portion of the
        retirement allowances of employees to the National Pension Fund. The
        amount transferred reduces the retirement and severance benefit
        liability recorded in the consolidated financial statements.

        REVENUE RECOGNITION - The Company recognizes revenue for all domestic
        shipments at the shipping point. The terms for the domestic shipments
        are FOB shipping point. For international shipments the Company
        recognizes revenue at the time risk of ownership passes. All of the
        Company's product held by distributors are stocked for OEM's and are
        non-cancelable, non-returnable. Payment from distributors are no
        different than other customers, 0.5% 10 net 30.

        FREIGHT BILLING/EXPENSE - Customer billings for freight are included in
        sales, and the freight costs are included in costs of sales in
        accordance with Emerging Issues Task Force No. 00-10, ACCOUNTING FOR
        SHIPPING AND HANDLING FEES AND COSTS (EITF 00-10).

        DESIGN ENGINEERING - Design engineering costs are those incurred for
        research, design, and development of new products and redesign of
        existing products. These costs are expensed as incurred.

        ADVERTISING EXPENSE - The Company expenses advertising costs as
        incurred. Advertising expenses of approximately $45,000, $106,000, and
        $171,000 were charged to operations during the periods ended June 2,
        2002, June 3, 2001, and May 28, 2000, respectively.

        SALE OF KOREAN FACILITY - The Company's facility in Korea was
        expropriated by the government for the construction of a provincial
        road. In the fourth quarter of the year ended May 28, 2000, the Company
        received expropriation proceeds and recognized a gain on the disposition
        of $1,524,879. The Company moved into a new facility during June 2001.



                                       30
<PAGE>


AULT INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 2, 2002 AND JUNE 3, 2001
--------------------------------------------------------------------------------

        INCOME TAXES - Deferred taxes are provided on a liability method whereby
        deferred tax assets are recognized for deductible temporary differences
        and operating loss and tax credit carryforwards, and deferred tax
        liabilities are recognized for taxable temporary differences. Temporary
        differences are the differences between the reported amounts of assets
        and liabilities and their tax bases. Deferred tax assets are reduced by
        a valuation allowance when, in the opinion of management, it is more
        likely than not that some portion or all of the deferred tax assets will
        not be realized. Deferred tax assets and liabilities are adjusted for
        the effects of changes in tax laws and rates on the date of enactment.

        LONG-LIVED ASSETS - In accordance with Statement of Financial Accounting
        Standards No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS
        AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF, the Company reviews its
        long-lived assets and intangibles related to those assets periodically
        to determine potential impairment by comparing the carrying value of the
        long-lived assets outstanding with estimated future undiscounted cash
        flows expected to result from the use of the assets, including cash
        flows from disposition. Should the sum of the expected future
        undiscounted cash flows be less than the carrying value, the Company
        would recognize an impairment loss. An impairment loss would be measured
        by comparing the amount by which the carrying value exceeds the fair
        value of the long-lived assets and intangibles. To date, management has
        determined that no impairment of long-lived assets exists.

        EARNINGS PER SHARE - Basic earnings per share is computed by dividing
        net income (loss) by the weighted-average number of common shares
        outstanding during the period. Diluted earnings per share is computed by
        dividing net income (loss) by the weighted-average number of common
        shares outstanding during the period adjusted by common share
        equivalents related to stock options, warrants, and the employee stock
        purchase plan. Options to purchase 978,926, 299,527, and 196,812 shares
        of common stock were outstanding during the fiscal years ended June 2,
        2002, June 3, 2001, and May 28, 2000, respectively, but were excluded
        from the computation of common stock equivalents because they were
        anti-dilutive.







                                       31
<PAGE>


AULT INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 2, 2002 AND JUNE 3, 2001
--------------------------------------------------------------------------------
      The following table reflects the calculation of basic and diluted earnings
      per share:
<TABLE>
<CAPTION>

                                                                       JUNE 2,         JUNE 3,        MAY 28,
                                                                         2002             2001           2000
<S>                                                                  <C>             <C>             <C>
        Numerator -
         Income (loss)                                               $ (3,563,726)   $   2,196,189   $    1,863,556
                                                                     -------------   -------------   --------------
        Denominator:
         Basic - weighted-average shares outstanding                     4,541,322       4,493,120        4,391,333
         Effect of dilutive shares:
           Stock options outstanding and employee stock purchase
             plan                                                                          198,170          270,887
                                                                     -------------   -------------   --------------
         Diluted - weighted-average shares outstanding                   4,541,322       4,691,290        4,662,220
                                                                     -------------   -------------   --------------

        Basic earnings (loss) per share                              $      (0.78)   $        0.49   $         0.42
                                                                     =============   =============   ==============

        Diluted earnings (loss) per share                            $      (0.78)   $        0.47   $         0.40
                                                                     =============   =============   ==============
</TABLE>

      USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The
      preparation of financial statements in conformity with accounting
      principles generally accepted in the United States of America requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosures of contingent assets and
      liabilities at the date of the financial statements and the reported
      amounts of revenues and expenses during the reporting period. Actual
      results could differ from those estimates.

      COMPREHENSIVE INCOME - The Company's fiscal 2002 comprehensive income
      consists of net income and foreign currency translation adjustments.

      ACCOUNTING PRONOUNCEMENTS - On June 4, 2001 the Company adopted Statement
      of Financial Accounting Standard (SFAS) No. 133, ACCOUNTING FOR DERIVATIVE
      INSTRUMENTS AND HEDGING ACTIVITIES, as amended by SFAS No. 138, ACCOUNTING
      FOR CERTAIN DERIVATIVE INSTRUMENTS AND CERTAIN HEDGING ACTIVITIES. SFAS
      No. 133 establishes accounting and reporting standards for derivative
      instruments and for hedging activities. It requires that all derivatives,
      including those embedded in other contracts, be recognized as either
      assets or liabilities and that those financial instruments be measured at
      fair value. The accounting for changes in the fair value of derivatives
      depends on their intended use and designation. Management has reviewed the
      requirements of SFAS No. 133 and has determined that the Company has no
      free-standing or embedded derivatives. All agreements that contain
      provisions meeting the definition of a derivative also meet the
      requirements of, and have been designated as normal purchases or sales.
      The Company's policy is to not use free-standing derivatives and to not
      enter into contracts with terms that cannot be designated as normal
      purchases or sales.

      In December 1999, the Securities and Exchange Commission (SEC) issued
      Staff Accounting Bulletin (SAB) No. 101 REVENUE RECOGNITION IN FINANCIAL
      STATEMENTS. SAB No. 101 summarizes certain of the SEC staff's views in
      applying generally accepted accounting principles to selected revenue
      recognition issues. As a result, the Company changed the method of
      accounting for certain sales transactions. Historically, the Company
      recognized revenue upon shipment of products to certain international
      customers because, even though some products were shipped FOB destination,
      we used a common carrier and thus gave up substantially all the risks of
      ownership. Under the new accounting method adopted retroactive to May 29,
      2000, the Company now recognizes revenue at the time risk of ownership
      passes. The cumulative effect of the change on prior years resulted in a
      minor non-cash charge to income of $50,000 (net of taxes of $27,000) for
      the year ended June 3, 2001. The pro forma amounts presented in the
      consolidated statements of income were calculated assuming the accounting
      change was made retroactively to the prior period.




                                       32
<PAGE>

AULT INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 2, 2002 AND JUNE 3, 2001
--------------------------------------------------------------------------------

        For the three months ended August 27, 2000, the Company recognized
        $234,000 in revenue that was included in the cumulative effect
        adjustment as of May 29, 2000. The effect of the revenue in the first
        quarter was to increase income by $50,000 (after reduction for income
        taxes of $27,000).

        In June 2001, the Financial Accounting Standards Board approved for
        issuance Statement of Financial Accounting Standards (SFAS) No. 141,
        BUSINESS COMBINATIONS and No. 142 GOODWILL AND OTHER INTANGIBLE Assets.
        SFAS No. 141 requires that the purchase method of accounting be used for
        all business combinations initiated after June 30, 2001 and that the use
        of the pooling-of-interest method is no longer allowed. SFAS No. 142
        requires that upon adoption, amortization of goodwill will cease and
        instead, the carrying value of goodwill will be evaluated for impairment
        on an annual basis. In fiscal 2002, 2001 and 2000 the amortization
        expense was $100,000 each year. Identifiable intangible assets will
        continue to be amortized over their useful lives and reviewed for
        impairment in accordance with SFAS No. 121 ACCOUNTING FOR THE IMPAIRMENT
        OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF. SFAS
        No. 142 is effective for the Company's fiscal year beginning June 3,
        2002. The Company has determined that the adoption of these standards
        will not be material.

        In August 2001, the FASB issued SFAS No. 144, ACCOUNTING FOR THE
        IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS. SFAS 144 addresses
        financial accounting and reporting for the impairment or disposal of
        long-lived assets and supercedes SFAS 121, ACCOUNTING FOR THE IMPAIRMENT
        OF LONG-LIVED ASSETS AND ASSETS TO BE DISPOSED OF, and the accounting
        and reporting provisions of Accounting Principles Board Opinion No. 30,
        REPORTING THE RESULTS OF OPERATIONS--REPORTING THE EFFECTS OF DISPOSAL
        OF A SEGMENT OF A BUSINESS AND EXTRAORDINARY, UNUSUAL AND INFREQUENTLY
        OCCURRING TRANSACTIONS. SFAS 144 requires that long-lived assets to be
        disposed of be measured at the lower of carrying amount or fair value
        less cost to sell. The Company adopted SFAS 144 on June 3, 2002. The
        Company is in the process of evaluating the impact SFAS 144 will have on
        its consolidated financial statements.


2.      INVENTORIES

        The components of inventory at June 2, 2002 and June 3, 2001 are as
        follows:
                                              JUNE 2,           JUNE 3,
                                                 2002              2001

        Raw materials                       $    4,608,937    $    6,583,676
        Work-in-process                            788,456           550,118
        Finished goods                           3,104,112         5,289,086
                                            --------------    --------------
                                            $    8,501,505    $   12,422,880
                                            ==============    ==============


3.      FINANCING ARRANGEMENT AND LONG-TERM DEBT

        FINANCING ARRANGEMENT - The Company has a financing agreement, which
        includes a $4,000,000 revolving line-of-credit agreement through
        February 28, 2003. Interest on advances is at the bank's reference rate
        plus 2.8 percent, 7.55 percent and 6.5 percent at June 2, 2002 and June
        3, 2001 respectively. All advances are due on demand and are secured by
        all assets of the Company. There were no advances outstanding on the
        revolving line of credit at June 2, 2002 or June 3, 2001. Also, the
        Company's Korean subsidiary maintains an unsecured $3,864,000 credit
        facility agreement to cover bank overdrafts, short-term financing, and
        export financing at a rate of 6.25 percent on June 2, 2002 and June 3,
        2001. Advances outstanding relating to the Korean facility were
        $2,889,636 and $4,003,087 at June 2, 2002 and June 3, 2001,
        respectively.



                                       33
<PAGE>



AULT INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 2, 2002 AND JUNE 3, 2001
--------------------------------------------------------------------------------

LONG-TERM DEBT -

<TABLE>
<CAPTION>
                                                                                      JUNE 2,           JUNE 3,
                                                                                         2002              2001
<S>                                                                                  <C>             <C>
        7.2% term loan, due in monthly installments of $7,978, including
         interest to December 2003, secured by equipment                                   148,676          230,482
        7.94% term loan, due in monthly installments of $6,144, including
         interest to September 2004, secured by furniture                                  151,466          210,598
        8.05% term loan, due in monthly installments of $28,756, including
         interest to February 2015, secured by the Company's headquarter
         building in Minneapolis                                                         2,735,112        2,854,729
        Other, paid in 2002                                                                      -          356,545
                                                                                     -------------   --------------
           Total                                                                         3,035,254        3,652,354

        Less current maturities                                                            281,507          617,101
                                                                                     -------------   --------------
                                                                                     $   2,753,747   $    3,035,253
                                                                                     =============   ==============
</TABLE>

        Maturities of long-term debt for years subsequent to June 2, 2002 are as
        follows:

<TABLE>

<S>                                                                                                  <C>
        2003                                                                                         $      281,507
        2004                                                                                                270,413
        2005                                                                                                170,442
        2006                                                                                                164,882
        2007                                                                                                178,656
        Thereafter                                                                                        1,969,354
                                                                                                     --------------
                                                                                                     $    3,035,254
</TABLE>

4.      INCOME TAXES

        Pretax income (loss) for domestic and foreign operations was as follows:

<TABLE>
<CAPTION>

                                                                    JUNE 2,          JUNE 3,           MAY 28,
                                                                       2002             2001              2000
<S>                                                              <C>               <C>               <C>
        Domestic                                                 $    (2,654,385)  $   3,890,363     $    1,235,890
        Foreign                                                       (1,603,467)       (288,988)         1,688,310
                                                                 ----------------  --------------    --------------
        Total                                                    $    (4,257,852)  $   3,601,375     $    2,924,200
                                                                 ================  =============     ==============
</TABLE>




                                       34
<PAGE>


AULT INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 2, 2002 AND JUNE 3, 2001
--------------------------------------------------------------------------------
        The components of the provision (benefit) for income taxes are as
        follows:
<TABLE>
<CAPTION>
                                                                          JUNE 2,          JUNE 3,         MAY 28,
                                                                             2002             2001            2000
<S>                                                                    <C>             <C>             <C>
        Current:
         Domestic                                                      $    (952,026)  $  1,031,191    $    407,644
         Foreign                                                             125,000                        537,000
         State                                                               (18,600)       192,000          29,000
        Deferred                                                             151,500        132,000          87,000
                                                                       -------------   ------------    ------------
                                                                       $    (694,126)  $  1,355,191    $  1,060,644
                                                                       ==============  ============    ============
</TABLE>

        The income tax provision differs from the amount of income tax
        determined by applying the U.S. federal income tax rate to pretax income
        for the fiscal years ended June 2, 2002, June 3, 2001, and May 28, 2000,
        due to the following:

<TABLE>
<CAPTION>
                                                                          JUNE 2,          JUNE 3,         MAY 28,
                                                                             2002             2001            2000
<S>                                                                    <C>             <C>             <C>
        Computed expected tax provision                                $  (1,405,060)  $  1,224,000    $  1,049,000
        Increase (decrease) in income taxes resulting from:
         Nondeductible expenses                                               10,087         11,000          15,000
         State income taxes, net of federal benefit                          (31,360)        85,000          93,000
         Foreign taxes                                                       125,000       (180,000)        (37,000)
        Current year R&D tax credits:
         Domestic                                                             84,000        (10,000)       (117,000)
         State
        Change in valuation allowance                                        502,207        180,000
        Other                                                                 21,000         45,191          57,644
                                                                       -------------   ------------    ------------
                                                                       $    (694,126)  $  1,355,191    $  1,060,644
                                                                       ==============  ============    ============
</TABLE>

        Net deferred taxes consist of the following components:

<TABLE>
<CAPTION>
                                                                                         JUNE 2,        JUNE 3,
                                                                                            2002           2001
<S>                                                                                    <C>             <C>
        Deferred tax assets:
         Allowance for doubtful accounts                                               $     95,000    $    233,000
         Future income tax benefit from stock options exercised                                              52,000
         Accrued vacation                                                                    53,000          45,000
         Accrued warranty                                                                    42,000          50,000
         Equipment and leasehold improvements                                              (264,000)       (265,000)
         Tax credit carryforwards and other                                                 (37,000)         31,000
           Foreign deferred tax asset                                                       682,000         180,000
           Foreign valuation allowance                                                     (682,000)       (180,000)
         State NOL carryforwards                                                             88,000
         Unicap adjustment                                                                    1,000           5,000
                                                                                       ------------    ------------
                                                                                       $    (22,000)   $    151,000
                                                                                       =============   ============

</TABLE>



                                       35
<PAGE>


AULT INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 2, 2002 AND JUNE 3, 2001
--------------------------------------------------------------------------------
        The components giving rise to the net deferred tax asset described above
        have been included in the consolidated balance sheet:
                                                    JUNE 2,           JUNE 3,
                                                       2002              2001

        Current assets                            $    252,000    $    364,000
        Noncurrent liabilities                        (274,000)       (213,000)

        The Company has assessed its past earnings history and trends, budgeted
        sales, and expiration of dates of carryforwards and has determined that
        it is more likely than not that its net deferred tax assets will be
        realized.

5.      EMPLOYEE BENEFIT PLANS

        401(K) EMPLOYER MATCH PLAN - The Company has a 401(K) plan covering
        substantially all U.S. employees. The Company is required to match 25%
        of the employees' first 6% of contributions and may make additional
        contributions to the plan to the extent authorized by the Board of
        Directors. The contribution amounts charged to operating expenses in the
        fiscal years ended June 2, 2002, June 3, 2001, and May 28, 2000
        approximated $72,000, $67,000, and $63,000, respectively.

        STOCK PURCHASE PLAN - On March 10, 1996, the Company established a stock
        purchase plan in which up to 100,000 shares of common stock may be
        purchased by employees. The purchase price is equal to the lesser of 85%
        of the fair market value of the shares on the date the phase commences
        or 85% of the fair market value of the shares on the termination date of
        the phase. Each phase is one year from the commencement date of a phase.
        There were 13,588, 15,740, and 11,359 shares purchased under this plan
        during the fiscal year ended June 2, 2002, June 3, 2001, and May 28,
        2000, respectively.

6.      STOCK OPTION PLAN

        The Company's 1986 and 1996 stock option plan has reserved 600,000 and
        1,050,000 common shares, respectively, for issuance under qualified and
        nonqualified stock options for its key employees and directors. Option
        prices are the market value of the stock at the time the option was
        granted. Options become exercisable as determined at the date of grant
        by a committee of the Board of Directors. Options expire ten years after
        the date of grant unless an earlier expiration date is set at the time
        of grant.

        The Company has adopted the disclosure-only provisions of SFAS No. 123,
        ACCOUNTING FOR STOCK-BASED COMPENSATION. Accordingly, no compensation
        cost has been recognized for the stock option plan, as all options were
        issued with exercised prices at or above fair value. Had compensation
        cost for the Company's stock option plans been determined based on the
        fair value at the grant date for awards in 2002, 2001, and 2000
        consistent with the provisions of SFAS No. 123, the Company's net income
        and net income per share would have changed to the pro forma amounts
        indicated below:



                                       36
<PAGE>


AULT INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 2, 2002 AND JUNE 3, 2001
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                     JUNE 2,         JUNE 3,           MAY 28,
                                                                        2002            2001              2000
<S>                                                                <C>              <C>              <C>
        Net income (loss), as reported                             $  (3,563,726)   $   2,196,189    $    1,863,556
        Net income (loss), pro forma                                  (4,237,331)       1,709,021         1,212,179
        Net income (loss), per share, basic, as reported                   (0.78)            0.49              0.42
        Net income (loss), per share, diluted, as reported                 (0.78)            0.47              0.40
        Net income (loss), per share, basic, pro forma                     (0.93)            0.38              0.28
        Net income (loss), per share, diluted, pro forma                   (0.93)            0.36              0.26
</TABLE>

        The fair value of each option grant is estimated on the date of grant
        using the Black-Scholes option-pricing model with the following
        weighted-average assumptions used for grants in 2002, 2001, and 2000:

<TABLE>
<CAPTION>
                                                                       JUNE 2,        JUNE 3,             MAY 28,
                                                                         2002            2001                2000
<S>                                                                   <C>             <C>                <C>
        Expected dividend yields                                      $      -        $       -          $      -
        Expected stock price volatility                                 59.38%           76.58%             81.20%
        Risk-free interest rate                                          4.81%            6.63%              6.85%
        Expected life of options                                         7.74 years       7.41 years         7.81 years
</TABLE>

        Additional information relating to all outstanding options as of June 2,
        2002, June 3, 2001, and May 28, 2000 is as follows:

<TABLE>
<CAPTION>
                                                  JUNE 2,                  JUNE 3,                   MAY 28,
                                                     2002                     2001                     2000
                                                        Weighted-                 Weighted                 Weighted
                                                         Average                   Average                  Average
                                                        Exercise                  Exercise                 Exercise
                                              Shares      Price        Shares       Price       Shares       Price
<S>                                           <C>       <C>              <C>      <C>            <C>       <C>
        Options outstanding at
                beginning of year             867,676   $  5.71          832,964  $   5.22       675,250   $  5.14
        Options exercised                     (21,500)     3.23          (83,463)     3.20       (54,786)     4.38
        Options expired                       (26,250)     7.15          (32,825)     5.69        (5,000)     7.75
        Options granted                       159,000      5.57          151,000      7.02       217,500      5.45
                                            ---------                 ----------               ---------
        Options outstanding at end of year    978,926   $  5.70          867,676   $  5.71       832,964   $  5.22
                                            =========   =======       ==========   =======     =========   =======


        Options exercisable at end of year    782,926   $  5.60          641,027   $  5.69       515,789   $  5.28
                                            =========   =======       ==========   =======     =========   =======


        Weighted-average fair value of
         options granted during the year                $  3.81                    $  5.52                 $  4.84

</TABLE>





                                       37
<PAGE>


AULT INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 2, 2002 AND JUNE 3, 2001
--------------------------------------------------------------------------------
         The following table summarizes information about stock options
         outstanding at June 2, 2002:

<TABLE>
<CAPTION>
                                                            Options Outstanding           Options Exercisable
                                                       --------------------------      -------------------------
                                                         Weighted-
                                         Number           Average       Weighted-         Number       Weighted-
          Range of                     Outstanding       Remaining       Average        Exercisable     Average
          Exercise                     at June 2,       Contractual     Exercise        at June 2,     Exercise
           Prices                         2002         Life (Years)       Price            2002          Price

<S>     <C>         <C>                    <C>                <C>       <C>                 <C>        <C>
        $0.00     - $ 1.63                 25,000             2.3       $    1.16           24,000     $   1.20
         1.64     -   2.75                 59,500             2.5            2.35           59,500         2.35
         2.76     -   3.88                220,124             6.4            3.77          220,124         3.77
         3.89     -   6.53                349,718             7.5            5.90          209,718         5.98
         6.54     -   8.63                324,584             6.3            7.76          269,584         7.89
-------------------------              ----------                                       ----------
        $0.00     - $ 8.63                978,926             6.4       $    5.70          782,926     $   5.60
        ==================             ==========          ======       =========       ==========     ========
</TABLE>

7.      STOCKHOLDERS' EQUITY

        The Board of Directors is empowered to establish and to designate
        classes and series of preferred shares and to set the terms of such
        shares, including terms with respect to redemption, dividends,
        liquidation, conversion, and voting rights. The Restated Articles of
        Incorporation provide that the preferred shares are senior to the common
        shares with respect to dividends and liquidation. No preferred shares
        have been issued.

        The Company has a shareholders' rights plan. Under this plan, a Class A,
        Junior Participating Preferred Stock with no par value was created. In
        addition, a dividend of one right was declared for each share of common
        stock at an exercise price of $36 per right and a redemption price of
        $0.001 per right. Each right is equal to a right to purchase one
        one-hundredth of a share of the Class A, Junior Participating Preferred
        Stock. 100,000 shares of preferred stock are reserved for the exercise
        of the rights. No rights were exercised during the years ended June 2,
        2002, June 3, 2001, and May 28, 2000.

        The Company has notes receivable from certain officers of the Company
        arising from the sale of common stock recorded as an offset to
        stockholders' equity.

8.      COMMITMENT AND CONTINGENCIES

        OPERATING LEASES - The Company leased its United States plant under an
        operating lease through August 1999 before moving into its newly
        constructed facility. In addition, certain equipment and motor vehicles
        are leased under operating leases with terms of approximately 36 months.



                                       38
<PAGE>


AULT INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 2, 2002 AND JUNE 3, 2001

        Approximate minimum annual rental commitments at June 2, 2002 are as
        follows:

        2003                                                      $    77,377
        2004                                                           30,572
        2005                                                            6,758
        2006                                                            5,069
                                                                  -----------
                                                                  $   119,776

        Total rental expense for the fiscal years ended June 2, 2002, June 3,
        2001, and May 28, 2000 was approximately $44,000, $66,000, and $304,000,
        respectively.

9.      SEGMENT INFORMATION AND FOREIGN OPERATIONS

        The Company has adopted SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF AN
        ENTERPRISE AND RELATED INFORMATION. This statement requires disclosure
        of certain information for each reportable segment, including general
        information, profit and loss information, segment assets, etc.

        The Company conducts its business within one reportable segment: the
        power conversion product industry. The Korean subsidiary, the Chinese
        subsidiaries, and certain nonaffiliated companies in China and Thailand
        do foreign manufacturing. All United States manufacturing is done by
        Ault Incorporated. A summary of the Company's revenues, net income, and
        identifiable assets by geographic area is presented below:

<TABLE>
<CAPTION>

                                                                        JUNE 2,         JUNE 3,        MAY 28,
                                                                           2002            2001           2000
<S>                                                                    <C>             <C>           <C>
        Revenues:
         Domestic operations                                           $  34,811,779   $76,323,990   $ 63,531,358
         Korean and Chinese operations - customers                         6,220,075     9,367,590      4,381,367
         Korean and Chinese operations - parent                            9,711,255    13,957,754     12,228,917
         Eliminations                                                     (9,711,255)  (13,957,754)   (12,228,917)
                                                                       -------------   ------------  -------------
         Consolidated                                                  $  41,031,854   $85,691,580   $ 67,912,725
                                                                       =============   ===========   =============

        Net income (loss):
         Domestic operations                                           $  (1,835,369)  $  2,466,909    $    792,583
         Korean and Chinese operations                                    (1,729,515)      (288,987)      1,038,863
         Eliminations                                                          1,158         18,267          32,110
                                                                       -------------   ------------    ------------
         Consolidated                                                  $  (3,563,726)  $  2,196,189    $  1,863,556
                                                                       ==============  ============    ============


        Identifiable assets:
         Domestic operations                                           $  30,619,959   $ 37,517,703    $ 40,242,985
         Korean and Chinese operations                                    17,549,919     15,683,510      14,965,140
         Eliminations                                                    (11,472,891)    (9,744,534)     (8,951,737)
                                                                       -------------   ------------    ------------
         Consolidated                                                  $  36,696,987   $ 43,456,679    $ 46,256,388
                                                                       ==============  ============    ============
</TABLE>





                                       39
<PAGE>


AULT INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 2, 2002 AND JUNE 3, 2001
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
        Long-lived assets:                      JUNE 2,          JUNE 3,           MAY 28,
                                                 2002             2001              2000

<S>                                        <C>               <C>               <C>
        Domestic operations                $     5,904,130   $   6,444,191     $    6,581,433
        Korean and Chinese operations            6,538,116       6,131,581          3,955,492
                                           ---------------   -------------     --------------
        Consolidated                       $    12,442,246   $  12,575,772     $   10,536,925
                                           ===============   =============     ==============
</TABLE>

        Sales from the subsidiary to the parent company are based upon profit
        margins, which represent competitive pricing of similar products.

        EXPORT SALES - The Company also had foreign export sales amounting to
        17.3, 25.9, and 14.8 percent of total sales for the fiscal years ended
        June 2, 2002, June 3, 2001, and May 28, 2000, respectively.

        OTHER FOREIGN PRODUCTION - In addition to the manufacturing done by the
        Korean subsidiary, the Company has subcontracting agreements for the
        purchase of finished assemblies from certain manufacturers in China and
        Thailand. Total purchases under these agreements were approximately
        $10,388,000, $35,710,000, and $29,944,000 for the fiscal years ended
        June 2, 2002, June 3, 2001, and May 28, 2000, respectively.

10.     MAJOR CUSTOMER

        During the fiscal year ended June 2, 2002, the Company had a major
        customer with 2.8% of total sales and 10.1% of total accounts
        receivable. During the fiscal year ended June 3, 2001, the Company had a
        major customer with 5.0% of total sales and 11.1% of total accounts
        receivable. The Company had no customers with revenues or accounts
        receivable of more than 10% of the total during the fiscal year ended
        May 28, 2000.

11.     SUBSEQUENT EVENT

        On July 16, 2002, the Company purchased a portion of the operating
        assets of the Power General division of Nidec America Corporation. The
        Power General division developed, manufactured, and sold high efficiency
        DC/DC converters and custom power supplies at various power levels up to
        1200 watts under the Power General brand name. Pursuant to the Purchase
        Agreement, the Company paid the Seller $366,000 in cash and issued
        $2,074,000 face amount of the Company's newly-created Series B 7%
        Convertible Preferred Stock, no par value (the "Preferred Stock"). The
        Preferred Stock issued to the Seller is convertible into 488,000 shares
        of the Company's Common Stock. The Company has agreed to file a
        registration statement covering the shares of Common Stock issuable upon
        conversion of the Preferred Stock with the Securities and Exchange
        Commission. The Company will maintain Power General's engineering group
        in Massachusetts and move Power General's manufacturing operations and
        related functions to Ault's other facilities in North America and Asia.



                                       40
<PAGE>


        ITEM 8 (b). SUPPLEMENTAL FINANCIAL INFORMATION

<TABLE>
<CAPTION>

       ------------------------------------------------------------------------------------------------------
                            QUARTERLY FINANCIAL DATA
                                   (Unaudited)
                   (Amounts in Thousands, Except Per Share Data)
       ------------------------------------------------------------------------------------------------------
                                                                        FISCAL QUARTERS
                                                           1ST           2ND            3RD            4TH
<S>                                                         <C>           <C>            <C>            <C>
       Fiscal Year 2002
        Net Sales                                        $10,301        $9,953         $9,484        $11,294

        Gross Profit                                       2,409         1,366          1,957          2,212

        Income (Loss) Before Income Taxes                   (711)       (2,913)          (691)            57

        Net Loss                                            (646)       (2,060)          (610)          (248)

        Loss Per Share:
          Basic                                            (0.14)        (0.45)         (0.13)         (0.05)
          Diluted                                          (0.14)        (0.45)         (0.13)         (0.05)


       Fiscal Year 2001

        Net Sales                                         21,918        26,573         22,677         14,524

        Gross Profit                                       4,699         5,821          4,932          3,205

        Income Before Income Taxes                           960         1,288          1,130            223

        Net Income Before Accounting Change                  635           813            708             90

       Cumulative Effect of Accounting Change                (50)

       Net Income                                            585           813            708             90

        Earnings (Loss) Per Share
          Basic:

            Net income before accounting                    0.14          0.18           0.16           0.02
              change
            Cumulative effect of accounting                (0.01)
              change
                                                   -------------- ------------- -------------- --------------
            Basic Earnings per share                        0.13          0.18           0.16           0.02

          Diluted:
            Net income before accounting                    0.14          0.17           0.15           0.02
              change
            Cumulative effect of accounting                (0.01)
              change
                                                   -------------- ------------- -------------- --------------
            Diluted Earnings per share                      0.13          0.17           0.15           0.02

</TABLE>


ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

Not Applicable.




                                       41
<PAGE>

                                    PART III.

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information called for by Item 405 under Registration S-K with respect to the
Company's executive officers is contained under Item 1, Narrative Description of
The Business -- Executive Officers of the Registrant. The information required
by this item with respect to directors will be presented under the caption
"Election of Directors" in the Company's definitive proxy statement for its
Annual Meeting to be held on September 24, 2002 and is expressly incorporated
herein by reference. Such proxy statement will be filed with the Securities and
Exchange Commission not later than 120 days from the end of the Company's 2002
fiscal year.

Information called for by item 405 under Regulation S-K with respect to the
information relating to compliance with 16(a) of the Exchange Act is presented
under the caption "Compliance with Section 16(a) of the Securities Exchange Act
1934" in the Company's definitive proxy statement for its Annual Meeting to be
held on September 24, 2002 and is expressly incorporated herein by reference.































                                       42
<PAGE>



ITEM 11.   EXECUTIVE COMPENSATION

The information called for by Item 403 under Regulation S-K, to the extent
applicable, will be set forth under the caption "Executive Compensation and
Other Information" under "General" in the Company's definitive proxy materials
for its September 24, 2002 Annual Meeting to be filed within 120 days from the
end of the Company's fiscal 2002 which information is expressly incorporated
herein by reference.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information called for by Item 403 under Regulation S-K, to the extent
applicable, will be set forth under the caption "Security Ownership of Principal
Shareholders and Management" in the Company's definitive proxy statement for its
September 24, 2002 Annual Meeting to be filed within 120 days from the end of
the Company's fiscal year 2002, which information is expressly incorporated
herein by reference.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not Applicable.




























                                       43
<PAGE>




                                    PART IV.

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT, SCHEDULES AND REPORTS

(1) THE FOLLOWING FINANCIAL STATEMENTS ARE INCLUDED IN PART II, ITEM 8:     PAGE

           Independent Auditors' Reports                                      23

           Consolidated Financial Statements

           -- Balance Sheets, June 2, 2002 and June 3, 2001.                  24

           -- Consolidated Statements of Operations for the Years             26
              Ended June 2, 2002, June 3, 2001 and May 28, 2000.

           -- Consolidated Statements of Stockholders' Equity for             27
              the Years Ended June 2, 2002, June 3, 2001 and May 28, 2000.


           -- Consolidated Statements of Cash Flows for the Years             28
              Ended June 2, 2002, June 3, 2001 and May 28, 2000.

           -- Notes to Consolidated Financial Statements                      29

(2)   THE FOLLOWING FINANCIAL STATEMENTS SCHEDULE FOR THE YEARS ENDED JUNE 2,
      2002, JUNE 3, 2001 AND MAY 28, 2000 ARE SUBMITTED HEREIN FOLLOWING THE
      SIGNATURE PAGE OF THIS REPORT.

           -- Schedule II - Valuation and Qualifying Accounts                 47

      All other Schedules are omitted because they are not applicable or the
      required information is shown in the financial statements or notes
      thereto.

(3)   EXHIBITS

      (a)   The Exhibits required to be filed with this report or incorporated
            by reference are listed in the Exhibit Index, which follows the
            Financial Statements Schedules.

      (b)   Reports on Form 8-K during three months ended June 2, 2002 - None




                                       44
<PAGE>


                                   SIGNATURES

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

AULT INCORPORATED

/s/ Frederick M. Green
Frederick M. Green



                                                        August 26, 2002
Frederick M. Green
President, Chief Executive Officer and Director

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

                                POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints FREDERICK M.
GREEN and DONALD L. HENRY as his true and lawful attorneys-in-fact and agents,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any or all
amendments to this Annual Report on Form 10-K and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, each acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all said attorneys-in-fact and agents,
each acting alone, or his substitute or substitutes, may lawfully do or cause to
be done by virtue thereof.

*Principal Financial Officer and Principal Accounting Officer

<TABLE>
<CAPTION>

            SIGNATURE                                          TITLE                                       DATE

<S>                                <C>                                                            <C>
/s/ Frederick M. Green
Frederick M. Green                 President, Chief Executive Officer and Director                August 26, 2002

/s/Donald Henry
Donald Henry                       Vice President, Treasurer, Chief Financial Officer,            August 26, 2002
                                   Assistant Secretary and Controller*

/s/ Marvonia P. Walker
Marvonia P. Walker                 Director                                                       August 26, 2002

/s/ Frank L. Sims
Frank L. Sims                      Director                                                       August 26, 2002

/s/ Delbert W. Johnson
Delbert W. Johnson                 Director                                                       August 26, 2002

/s/ John G. Kassakian
John G. Kassakian                  Director                                                       August 26, 2002

/s/ David L. Larkin
David L. Larkin                    Director                                                       August 26, 2002

/s/ Carol Barnett
Carol Barnett                      Director                                                       August 26, 2002

/s/ John Colwell, Jr.
John Colwell, Jr.                  Director                                                       August 26, 2002
</TABLE>





                                       45
<PAGE>











       *******************************************************************




                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549


                                    FORM 10-K



                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OF


                                AULT INCORPORATED

                                       FOR

                             YEAR ENDED JUNE 2, 2002




       *******************************************************************



                          FINANCIAL STATEMENT SCHEDULES



       *******************************************************************







                                       46
<PAGE>



SCHEDULE II
AULT INCORPORATED AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS

YEARS ENDED JUNE 2, 2002, JUNE 3, 2001, AND MAY 28, 2000

<TABLE>
<CAPTION>
                                                Balance at       Charged to                       Balance at
                                                 Beginning        Costs and                         End of
                                                 of Period        Expenses       Deductions         Period
-------------------------------------------------------------------------------------------------------------
<S>                                            <C>              <C>             <C>               <C>
Year ended June 2, 2002:
     Allowance for doubtful accounts           $     676,000    $   1,416,000   $   1,772,000 (a) $  320,000
     Reserve for warranties                          133,000          133,000         153,000        113,000

Year ended June 3, 2001:
     Allowance for doubtful accounts                 123,000          598,000          45,000 (a)    676,000
     Reserve for warranties                           78,000          304,000         249,000        133,000

Year ended May 28, 2000:
     Allowance for doubtful accounts                  40,000           54,000        (29,000) (a)    123,000
     Reserve for warranties                           74,000          130,000         126,000         78,000

</TABLE>

(a) Represents charge-off of accounts receivable, net of recoveries.














                                       47
<PAGE>









       *******************************************************************




                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549


                                    FORM 10-K



                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OF


                                AULT INCORPORATED

                                       FOR

                             YEAR ENDED JUNE 2, 2002





       *******************************************************************



                                    EXHIBITS


       *******************************************************************






                                       48
<PAGE>


                                AULT INCORPORATED

                                EXHIBIT INDEX TO
                          FORM 10-K FOR THE YEAR ENDED
                                  JUNE 2, 2002

Required Registration S-K
Exhibit Items

SK Reference

<TABLE>
<CAPTION>
               Title of Documents                         Location

<S>            <C>                                        <C>
3(a)           Restated Articles of Incorporation, as     Filed as Exhibit 3(a) to Form 10-K for fiscal 1988 and incorporated
               amended                                    herein by reference

3(b)           Bylaws, as amended                         Filed as Exhibit 3(b) to Registration Statement No. 2-85224 and
                                                          incorporated herein by reference

3(c)           Amendment to Articles of Incorporation     Filed herewith as Exhibit 3(c) Fiscal 1999

4.1            Rights Agreement                           Filed electronically on Form 8-K for March 1996 and incorporated
                                                          herein by reference

10.1           Management Incentive Compensation Plan     Filed as Exhibit 10(b) to Registration Statement 2-85224 and
                                                          incorporated herein by reference

10.2           1986 Employee Stock Option Plan            Filed as Exhibit 10(c) to Form 10-K for fiscal 1987 and
                                                          incorporated herein by reference

10.3           Financing Agreement on Credit Facility     Filed as Exhibit 10(f) to Form 10-K for fiscal 1995 and
                                                          incorporated herein by reference

10.4           First and Second Amendments to Financing   Filed electronically as Exhibit 10(g) to Form 10-K for fiscal 1996
               Agreement on Credit Facility               and herein incorporated by reference

10.5           Employee Stock Purchase Plan               Filed electronically Commission File #333-4609 and herein
                                                          incorporated by reference

10.6           1986 Employee Stock                        Filed electronically.  Commission File #  333-4609 and herein
               Option plan, Amended                       incorporated by reference

10.7           1996 Employee Stock                        Filed electronically.  Commission File #  333-4609 and herein
               Option plan                                incorporated by reference

21             Subsidiary of Registrant                   Filed as Exhibit 21 to Form 10-K for fiscal 1997 and incorporated
                                                          herein by reference.

23             Consent of Independent Auditors            Filed herewith at page 50

</TABLE>


Pursuant to provisions of Item 601(b)(A)(iii)(a) of Regulation S-K, copies of
instruments defining the rights of holders of long-term debt of the Company are
not being filed and in lieu thereof, Company agrees to furnish copies thereof to
the Securities and Exchange Commission upon request.








                                       49