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 MAY 31, 1998
                                   
                                   
                    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
incorporation or organization)                 Identification Number)

7300 BOONE AVENUE NORTH, MINNEAPOLIS, MINNESOTA        55428-1028
(address of principal executive offices)
(Zip Code)

Registrant's telephone number, including area code: (612) 493-1900
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 $14,163,000 based upon the ending
price  of the Company's common stock on the NASDAQ National Market  on
July  31, 1998, 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  10,1998, there were outstanding 4,161,758  shares  of  the
Registrant's common stock.

Documents  Incorporated by Reference:  The Company's  Proxy  Statement
for  its  Annual Meeting of Shareholders to be held on  September  28,
1998, is incorporated by reference into Part III of this Form 10-K.

The  Form 10-K consists of 47 pages.  The Exhibit Index is located  on
page 45.


                           AULT INCORPORATED
                                   
                               FORM 10-K
                FOR THE FISCAL YEAR ENDED MAY 31, 1998
                                   
                                PART I


ITEM 1. BUSINESS

(a)  General Development of Business

Ault Incorporated (herein "Ault" or "Company") was incorporated under
the laws of the State of Minnesota in 1961.  The Company designs,
manufactures, and markets a line of 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.

(b)  Financial Information About Industry Segments

The Company operates in only one industry segment - the manufacture
and sale of power conversion devices.  Financial information regarding
this segment is presented in the financial statements under Item 8
herein.

(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 90 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 know 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 virtually all
   output levels which OEMs expect from an external device.  The
   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 the each
   of  the Company's four major product categories for its last  three
   fiscal years ended May 31, 1998:
<TABLE>
<CAPTION>   
                                    Sale of Products by Category
                                    as a Percentage of Total Sales
   
                                                Years Ended
   
   Product Type                 May 31, 1998   June 1, 1997    June 2, 1996
   <S>                                  <C>            <C>             <C>
                                                                           
   Switching Power Supplies              37%            42%             37%
   Linear Power Supplies                  15             16              19
   Transformers                           40             34              38
   Battery Chargers                        8              8               6
   Total                                100%           100%            100%
</TABLE>
   
   
   Power Supplies.  The Company's power supplies provide the entire
   power conversion requirements for electronic equipment in power
   outputs ranging from 1 to 90 watts.  These products contain a
   component level transformer, which reduces the voltage level, as
   well as other circuit 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 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 90
     watts of power.  The application in which these products are currently
     used include telecommunications products, data communications
     products, modems computers and computer peripherals, medical
     equipment, microprocessor controlled systems, security systems,
     automatic teller terminals, test equipment and multiplexers.
   
     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.  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.
     
   *    High Density Switching Power Supplies.  In fiscal 1997, the
     Company introduced product families based upon patented high density
     power conversion technology.  This technology enables the Company to
     offer switching power supply products less than one-half the size of
     its existing switching power supplies but provide comparable power
     output.  The Company's high density switching power supplies provide
     approximately 45 watts to 80 watts of power.  In addition, using its
     high density technology, the Company expects to introduce  in late
     calendar year 1998 a family of switching power supplies capable of
     power outputs of up to 100 watts.  The Company believes that the
     addition of this product line will enable it to compete for product
     applications currently not served by the Company or its competitors.
   
     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 70 watts of unregulated power.
     The Company's linear power supplies are used in a 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 systems 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 transformer
     that operate within stringent power output tolerances.   This is a
     product 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 manufactures 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.
     
(2)  Vertical Markets and Customers
   
   The following table presents applications of the Company's various
   power conversion products.
<TABLE>
<CAPTION>   
   Product Type     Market Segment      Applications
   <S>              <C>                 <C>      
   Switching Power  Data                Cable modems
   Supplies         communications      Local area
                                         network
                                        
                    Data                Retail scanners
                    communications      
                   
                    Medical             Instrumentation and Test
                                         equipment
                                        Diagnostic
                                         monitors
                    Computer            Netwprk router
                    peripherals         Flat panel displays
                                        
   Linear Power     Telecommunica-      Business PBX
   Supplies         tions                   

                    Telecommunica-      Wireless
                    tions                telephones
                                   
                    Data                Business modems
                    communications

   Transformers     Telecommunica-      Telephones
                    tions                   

                    Data                PC modems
                    communications      
                                        
                    Computer            Multimedia
                    peripherals          speakers
                    
   Battery          Medical             Defibrillators
   Chargers                             Apnea monitors

                    Telecommunica-      Global
                    tions                positioning
</TABLE>
   

   The Company's marketing efforts are directed primarily toward OEMs
   producing non-consumer electronic equipment for
   telecommunications, computer peripheral and medical applications.
   These vertical 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 equipment, and in
   fiscal 1998 sales in this market represented approximately 33% of
   net sales.  Presently, the Company's products power 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, callers identification units and alpha
   numeric displays.
   
   An equally significant market for the Company is OEMs of data
   communications equipment, and in fiscal 1998 sales in this market
   also represented approximately 28% of net sales.  In this market
   Ault's products are principally being used to power a number of
   low to medium speed modems and multiplexers (equipment which
   enables the simultaneous transmission of multiple channels of
   information over the same telephone line).
   
   Because it believes the telecommunications/data communications
   market is growing at a rapid rate, the Company is devoting a
   significant portion of its product development effort towards
   annual market introductions of new products including product
   families for applications in this combined market.
   
   In fiscal 1998 approximately 22% of the Company's net sales were
   to OEMs of computers and computer peripherals such as digitizers,
   printers, plotters, portable terminals, point of sales scanners
   and optical character readers, LAN hardware and multimedia
   speakers for computer applications.
   
   Approximately 14% of net sales in fiscal 1998 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 3% of the  Company's  net  sale  in
   fiscal   1998  were  to  OEMs  of  various  industrial   equipment,
   including digital cameras and mine safety devices.
   
(3)  Design Engineering and Product Development

   Design engineering teams at the Company's facilities in the United
   States and South Korea are responsible for developing new power
   conversion products and customizing existing products to meet
   customer needs.  The Company has an engineering staff of 27 and
   over the last three fiscal years has spent an average of at least
   4.3% of revenues on product engineering.  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 marker 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 of new external power conversion
   products.  The following table summarizes Ault's product
   development cycle.

   Reflecting an increased emphasis on new product development during
   the past years, the Company developed and introduced 29 new
   products in 1998, 18 new product families in 1997 and several
   product families are currently in various stages of development.
   The Company expects to introduce approximately 20 product families
   during fiscal 1999.  Anticipating continued growth of
   approximately 30% annually in the switching power supply segment
   of the power conversion product market, a significant portion of
   the new products under development are switching power supplies.
   
   In December 1995, the Company purchased a U.S. patent for high
   density power conversion technology which it is using to develop a
   family of power supplies providing output comparable to the
   Company's existing power supplies that are approximately twice as
   large.  This technology serves as a platform upon which a family
   of high density switching power supplies providing approximately
   45 watts of power and a series of external power supplies
   providing 80 watts of power.  Later in calendar year 1998, the
   Company expects to offer a new series of external power supplies
   which will provide approximately 100 watts of power have been
   introduced.  The Company believes that these higher output
   products will enable it to compete for new electronic equipment
   applications that traditionally have been outside the range that
   could feasibly be powered by external products.
   
   Other product development efforts currently underway at the
   Company include the development of products tailored to the needs
   of European markets and the development of low cost AC to DC
   transformers and AC to DC linear power supplies.
   
(4)  Sales and Distribution

   The Company markets its products primarily in the U.S. and Canada
   through a network of 20 manufacturer representatives employing
   approximately 115 salespersons, each of whom represents, in
   addition to Ault's products, several different but complementary
   product lines of other manufactures.  The Company also sells
   through six  national distributor organizations which employ over
   200 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
   manufactured 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.  Among the logistics services
   provided by the Company are warehousing and shipping of finished
   products and customs clearance in order to facilitate just-in-time
   production schedules.
   
   The Company focuses its selling efforts primarily on OEMs in the
   U.S. and Canada.  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 markers throughout the world.
   
   The Company's sales in the Pacific Rim had been limited and made
   primarily to customers in South Korea. In fiscal year 1998,
   further efforts to penetrate Korean market were enhanced to grasp
   opportunity offered by the devalued Won for sales to Korean OEMs.
   Results, so far, though minimal, have been meeting increasing
   success.   In fiscal 1998, the Company finalized an agreement,
   with a well-recognized sales representative organization in Japan
   which will sell the Company's product in Japan and most Pacific
   Rim countries other than South Korea.  Certain of the Company's
   products have already obtained required MITI approvals in Japan
   and sales promotion in that market was initiated during the second
   half of fiscal 1997.  Steps are being taken to establish a sales
   administrative presence in Japan to further strengthen opportunity
   for selling in that market.
   
   The Company currently markets its products in Europe through a
   network of distributors (with a total of approximately 15
   salespersons) with products and promotional methods that are
   tailored for this market.  Sales in Europe during fiscal 1997 and
   1998 relating to direct market activities were, respectively, 2.2%
   and 2.9% of total net sales for these periods.  Plans are also to
   establish sales administrative presence in this market in fiscal
   1999.
   
(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
   which are 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 Stares; 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 (EC) a standard for the European
   Community.  In addition, some of the Company's products have also
   received Japanese 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 and
   CSA and is able to conduct most certification tests at its plant
   in Minneapolis.  This procedure reduces the time required to
   obtain safety certifications. The Company's Minneapolis facility
   is certified to ISO 9001 and the Company's South Korea facility is
   certified to ISO 9002.
   
(6)  Innovative Team Approach

   For the past several years, the Company has used a team-based
   organizational structure consisting initially of four recently
   increased to six distinct teams.  The Company's customer base is
   divided into six geographical regions with a specific Ault team
   assigned to manage the needs of customers in each region.  Each
   team is headed by a coordinator selected by the president and an
   assistant coordinator who is elected annually by the team.  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 statements 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 manufactures 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 Sino American Electronics Company., Ltd. for linear
   power supplies; Portrans Electrical Corp., Ltd. and Phihong
   Enterprise Co., Ltd. for switching power supplies; and Engineering
   Design Sales, Inc. and Xenotronics Company for battery chargers.
   
   Recently, certain  electronic equipment manufactures have
   dismantled or spun off their power supply operations.  While this
   change created greater opportunities in the merchant market where
   the Company competes, certain of these spin-off have created large
   power supply manufacturers with the state-of-the-art manufacturing
   facilities.  Most of these newer companies are now focusing on the
   internal power supply market and/or continue to sell exclusively
   to a single customer.  These companies, some of which enjoy far
   greater resources than Ault, could focus on external power
   conversion products and/or expand into the same electronic markets
   in which the Company now competes, thus intensifying competitions.
   
   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 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.  In addition, the presence of Ault Korea and Ault
   China and the expanding arrangements with manufacturers in China
   and Thailand provide the Company with additional strength 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 companies providing such internal
   products, including both OEMs and independent suppliers.  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 relation to this competition, 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.

(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
   conversions applications.  Manufacturing is currently conducted at
   the Company's facility in Minneapolis, Minnesota (which accounted
   for 18% of 1998 net sales); at the Ault Korea facility near Seoul,
   South Korea (which accounted for 31% of 1998 net sales); at the
   newly formed subsidiary, Ault China, which had no significant
   sales contribution in fiscal 1998, and at three locations in China
   and Thailand using manufacturing subcontractors (which accounted
   for 51% of 1998 net sales).  Ault typically manufactures
   prototypes and low volume products at its facilities in
   Minneapolis, Minnesota.  Ault Korea is and it anticipated that by
   fiscal year 2000, Ault China will be equipped to manufacture
   substantially all of the Company's products.
   
   A number of the components and raw material integral to the
   manufacture of the Company's products are purchased from a single
   supplier or a limited number of suppliers. Electronic components
   and raw material used in the Company's products are nevertheless
   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 the ISO 9002 certification of its South Korea
   facility in 1996.  The Company tests 100% of its finished products
   against its own customers' specifications, then ships the products
   in custom engineered protective packaging to minimize any damage
   during shipment.
   
   The Company has subcontract  manufacturing arrangements with one
   subcontractor in Thailand and two in China. The Company does not
   have long term commitments from the subcontractors and the
   subcontractors build product for the Company pursuant to
   individual purchase orders.  The Company selects its subcontract
   manufactures 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.  In addition, each of the Company's
   subcontract manufacturers is regularly reviewed by the Company's
   Taiwanese-based Director of Far East Operations with respect to
   product quality and other performance criteria.

(9)  Significant Customers: Backlog

   The Company sells its products to over 200 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 1998; however, two customers accounted for 9.7% and 9.6% of
   the Company's net sales.
   
   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.  Order backlog at August
   1, 1998 was $13,643,000 as compared to $15,333,000 on August 1,
   1997.  See Order Backlog, under ITEM 7, MANAGEMENT DISCUSSION AND
   ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.

(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 four patents, three of which it no longer
   considers significant.  The fourth patent, acquired in December
   1995, covers high density power conversion technology ("high
   density patent") which will enable the Company to offer external
   switching power supplies less than one-half the size of current
   power supply products but with comparable power outputs.
   
   The high density patent was issued by the United States Patent
   Office in 1994 and the original applicant did not pursue patent
   protection in foreign countries.  Since the high density patent
   was issued prior to its being assigned to the Company, the Company
   is precluded from seeking patent protection in most foreign
   countries. For that reason, some of its competitions may use this
   type of technology for products manufactured and sold outside the
   United States.  Also there can be no assurance that the scope of
   the high density patent will prevent competitors, many of whom
   have greater financial and other resources, from introducing
   competitive products or from challenging the validity of the high
   density patent.

 (12)     Seasonality

   As indicated by ITEM 8(b) SUPPLEMENTAL FINANCIAL INFORMATION, 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 1997 and fiscal
   1998, the Company recorded the lowest level of sales followed by
   increased sales in successive quarters.  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 will be represented in the future.

 (13)     Employees

   As  of August 4, 1998, the Company employed approximately 399 full-
   time employees at its  facilities as follows:
<TABLE>
<CAPTION>   
                     South
                     Korea    China    Taiwan  US      Total
   <S>               <C>     <C>       <C>    <S>     <C>
   
   Manufacturing     116     116               66     298
   Engineering         8       2               17      27
   Marketing           4                       13      17
   General and        14      16       1       26      57
    Administrative
   Total             142     134       1      122     399
</TABLE>
   
   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; Former Employment         Officer
                                                                Since
     <S>               <C>  <C>                                 <C>
                                                                
     Frederick M.      55   President and Chief Executive       1980
     Green                  Officer and Director
     Carlos S.         61   Vice President, Treasurer, Chief    1981
     Montague               Financial Officer and Assistant
                            Secretary
     Richard A.        52   Secretary                           1995
     Primuth
     Hokung C. Choi    58   Vice President - Far East           1989
                            Operations
     Gregory L.        45   Vice President - Marketing          1988
     Harris
</TABLE>

(15) Risk Factors

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

   *    Technological Change and New Product Development. 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."

   *    Dependence on Outside Contractors.  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.
     Some of these countries are economically troubled areas.  The
     Company's reliance on such outside contractors reduces its control
     over quality and delivery schedules.  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 Supply."

   *    Dependence on Key Personnel; Management of Growth.  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 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.

   *    Anti-takeover Considerations.  Certain anti-takeover provisions
     of the Minnesota Business Corporation Act and the ability of the Board
     of Directors to issue preferred stock without stockholder approval
     under the Company's Right Plan may have the effect of delaying or
     preventing a change in control or merger of the Company.  These
     provisions could delay, discourage, hinder or preclude an unsolicited
     acquisition of the Company, could make it less likely that
     stockholders receive a premium for their shares as a result of any
     such attempt and could adversely affect the market price of the Common
     Stock.  See "Note 7 - Stockholders' Equity under NOTES TO CONSOLIDATED
     FINANCIAL STATEMENTS.
   
   *    Year 2000 Interruptions.  The Company utilizes several microchip
     based date referenced systems for its business operations, including
     the timely  procurement of material and supporting customer
     requirements.  Because these business matters are also dependent on
     support from external sources, the Company cannot provide any
     assurance that its ability to provide service to customers will not be
     interrupted by the inability of any supporting microchip-based  date
     referenced  system to timely process data.  This situation could have
     an adverse material effect on the Company's ability to retain
     customers and to  generate revenue and profitability.

(d)  Financial Information About Foreign and Domestic Operations and
Export Sales

Export Sales by the U.S. Operations in fiscal year 1998 ending May 31
represented 27.1% of the Company's gross sales most of which were to
OEMs in Europe and Canada.  All other revenues were derived from
domestic sales principally 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 10, Operations Information, under NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS.
     
Management recognizes that there are certain risks involved in the
Company's foreign operations, such as political risks that may
interrupt the flow of products to customers but believes that any
interruption would be only temporary because of the diversity,
capability and flexibility of its operations.


ITEM 2. PROPERTIES
The Company's headquarters and US manufacturing facility is located in
Brooklyn Park, a suburb of Minneapolis, Minnesota.  Approximately
50,000 square feet in size , this facility houses all of the Company's
U.S. operations.  The lease on this property expires in August 1999.

The Company's subsidiary, Ault Korea Corporation, operates in a 36,000
square foot facility in Suwon City in the province of Kyungki-Do
Korea, which the subsidiary purchased in May 1995.  The Company has no
other property ownership.

Ault China, a subsidiary of Ault Korea Corporation occupies a 40,000
square foot leased facility in The Province of Xiang-He in China.  The
lease expires in the year 2009.

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

ITEM 3. LEGAL PROCEEDINGS

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

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 in the national over-the-counter market
under the symbol AULT.  The following table presents the range of
closing bid prices for the Company's common stock as reported by
NASDAQ National Market Issues for fiscal 1998 and 1997.  The bid
quotations representing prices in the over-the-counter market between
dealers in securities do not include retail mark-ups, mark-downs or
commissions and do not necessarily represent actual transactions.
<TABLE>
<CAPTION>       
                  Fiscal 1998              Fiscal 1997 

        Quarter    High           Low           High          Low
          <S>       <C>           <C>           <C>           <C>
                                                              
          1st       10-1/8        7-3/4         14-3/4        7-1/2
          2nd        9-1/8        6-1/2         11-1/4        8-1/4
          3rd        7-1/8        4-5/8         10-1/8        6-3/4
          4th        8-1/4        5-4/5          8-1/2        6-1/2
</TABLE>

(b)  Holders

As of August 6, 1998 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, under
present policy of its Board of Directors to retain any earnings for
use in the business, does not anticipate paying cash dividends on its
common shares in the near future.  In addition, the Company's bank
line of credit agreement precludes the payment of dividends.
<TABLE>
<CAPTION>

ITEM 6.                    SELECTED FINANCIAL SUMMARY

                                                 YEARS ENDED

                               MAY 31,  JUNE 1,  JUNE 2,  MAY 28,  MAY 29,
                                1998      1997     1996     1995     1994

                               (Amounts in Thousands, Except Per Share Data)
<S>                            <C>      <C>      <C>      <C>       <C>

Net Sales                      $41,136  $40,012  $33,774  $27,054   $17,975
                                                                           

Cost of Goods Sold              30,375   29,489   25,509   20,727    14,238
                                                                           
Gross Profit                   $10,761  $10,523   $8,265   $6,327    $3,737
                                                                           
Operating Expenses:                                                        
   Marketing                    $3,707   $3,307   $2,633   $2,346    $1,878
   Design Engineering            1,789    1,582    1,575    1,269       934
   General &                     3,387    3,052    2,491    1,955     1,956
Administration                                                             
                                $8,883   $7,941   $6,699   $5,570    $4,768

                                                                           
   Operating Income (Loss)      $1,878   $2,582   $1,566   ($757)  $(1,031)
                                                                           
Other                              197      183       84       22       (1)
Interest Expense                  (148)    (490)    (742)    (446)    (288)
                                                                           
Income Before Income Taxes      $1,927   $2,275     $908     $333    $1,320
                                               
  Income Taxes (Benefit)           609      (90)      25      -         - 
                                                                           
Net Income (Loss)               $1,318   $2,365     $883     $333  $(1,320)
                                                                           
Per Share Earnings, Basic        $0.32    $0.79    $0.42    $0.16     $0.64
Per Share Earnings
 Diluted                         $0.31    $0.72    $0.39    $0.16     $0.64
                                                                           
                                                                           
Total Assets                        $25,417  $26,094  $18,730  $15,429   $10,667
Property Plant &                $4,479   $3,568   $2,849   $3,002    $1,725
Equipment, Net
Working Capital                $15,304  $15,231   $3,754   $2,703    $2,703
Long Term Notes Payable           $414     $441     $935   $1,221      $233
Stockholders' Equity           $19,628  $18,936   $5,571   $4,484    $4,069

</TABLE>

ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
        RESULTS OF OPERATIONS

From time to time, in reports filed with the Securities and Exchange
Commission, 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 which 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 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; and other risks affecting the Company's
target markets generally


RESULTS OF OPERATIONS

Net sales for fiscal 1998 were $41,136,000, up 2.8% from net sales of
$40,012,000 in fiscal 1997 which were up by 18.5%  from net sales of
$33,774,000 in fiscal 1996.  The Company achieved only modest
improvement in its fiscal 1998 net sales principally because
infrastructure, such as transmission stations and wired systems were
not sufficiently in place to support anticipated demand for cable
modems, an emerging new technology product.  Because of this
situation, significant orders that were expected from customers who
are leading OEMs in this market did not materialize.  The Company
believes that the infrastructure issue is being addressed and, as a
result, anticipates increased demand for cable modems in fiscal 1999.
If this happens,  the Company believes that orders for its products in
support of the cable modem industry  could improve significantly in
fiscal 1999, thereby enhancing growth in revenue, principally in the
later quarters of the fiscal year.  The telecommunications/data
communications market , of which the market for cable modems is a
segment, is a principal user of the Company's products. Other segments
of the telecommunications/data communications market and other markets
served by the  Company experienced normal growth rates in fiscal 1998
and are expected to do so in fiscal 1999. Driven by its successful
customer service strategies, the Company's sales grew in fiscal 1997
due to growth in the data communications and telecommunications market
and its resulting demand for power conversion products and related
services.  Service to customers continues as a strong strategic focus.
To this end, the Company's engineering activities are directed to
various customer product applications that are anticipated to generate
revenue in fiscal 1999.  These applications include uninterruptible
power supplies, as well as power supplies for asymmetric digital
subscriber line modems  (a competing technology to cable modem);
medical product applications, and hubs, routers and switches for the
networking market.  Like the cable modem market, these programs are
anticipated to generate sales for the Company mainly in the later
quarters of fiscal 1999.

The Company's order backlog at May 31,1998 totaled $15,340,000, up
from $14,720,000 at June 1, 1997, which was down from $16,971,000 at
June 2, 1996.  The  order backlog at May 31, 1998, represented
shipments for  approximately four months and reflected the posture of
many OEMs to limit their contractual commitments to the best lead -
times of their customers. Aided by the order backlog at May 31, 1998,
management believes that sales for the first quarter of fiscal 1999
will compare favorably with sales that were attained in the comparable
quarter of fiscal 1998.

Gross profit for fiscal 1998 amounted to $10,761,000 or 26.2% of net
sales , compared to $10,523,000, which was 26.3% of net sales for
fiscal 1997, and $8,265,000, which amounted to 24.5% of net sales  in
fiscal 1996.  The relatively stable rates of gross profit for fiscal
1998 and fiscal 1997 are due mainly to better prices on sales of
switching power supplies and battery chargers compared to sales of
other products.  Compared to fiscal 1996, the greater gross margin
posted by the Company in fiscal 1997 was also due  to better margins
on switching power supplies and the efficiencies of scale supporting
the larger amounts of sales in fiscal 1997.

Operating expenses for fiscal 1998 totaled $8,883,000, which amounted
to 21.6% of net sales, compared to $7,940,000 for fiscal 1997, which
were 19.8% of net sales.  In fiscal 1996, operating expenses were
$6,699,000, which were also 19.8% of net sales.  Compared to fiscal
1997, the increased expenditure of $942,000 in fiscal 1998 was
incurred principally for payments made to certify the reliability of
new products and for expenditure relating to the implementation of
strategic initiatives, some of which began during the second half of
fiscal 1997.  The strategic initiatives were implemented for the
following purposes:

     1.   Strengthening the Company's sales and marketing competitive
       position in the US and Asia.
2.   Enhancing Asian manufacturing supervision
3.   Providing promotional material for the Company's products
     4.   Providing direct internet  communication links between Ault US
       and Ault Korea
     5.   Installing software for upgrading the quality of management
       information services.

It  is anticipated that these strategic initiatives will be beneficial
to the generation of future sales and the provision of information for
managing the Company.  Compared to fiscal 1996, the increased
expenditure of $1,242,000 in fiscal 1997 was incurred principally for
commissions paid to sales representatives on the higher sales,
expenses incurred for sales promotional activities and to position the
Company to better compete in the Asian market.  Additionally, the
Company incurred expenses  in fiscal 1997 to initiate  upgrading of
its management  information system program, as well as for
administration of  its expanding foreign manufacturing activities.
Also, in adherence to its  policy of making performance bonus payments
to its US employees for attaining certain levels of targeted
profitability,  payments amounting to two weeks of  salaries  were
made to each employee in fiscal 1997 and fiscal 1996.  No bonus
payments were made in fiscal 1998.

Operating income decreased by 27.3% to $1,877,000 from $2,582,000 in
fiscal 1997 principally due to the expenditures that were incurred for
implementation of the strategic initiatives discussed above.
Operating income grew in fiscal 1997 by 64.9% from $1,566,000 in
fiscal 1996 due principally  to the greater sales attained in fiscal
1997.

Non-operating income of $198,000, $183,000 and $84,000 for fiscal
years 1998, 1997 and 1996,  respectively, represented primarily
interest income, currency exchange rate gains from importation of raw
material by the Korean subsidiary and income derived from rented
portions of the Korean manufacturing facility.  The Company incurred
interest expenses of $148,000 in fiscal 1998, $490,000 in fiscal 1997,
and $742,000 in fiscal 1996.  Interest expenses declined in fiscal
1997 and interest income increased due to the availability of funds
that were raised from the public offering of common shares in the
third quarter of  the fiscal year, portions of which were used for the
repayment of debt.

The Company had pre-tax income of $1,927,000 for fiscal 1998 on which
its recorded income tax liability totaled $609,000, which included the
utilization of deferred tax assets totaling $415,000.  In fiscal 1997,
the Company had pre-tax income of $2,275,000 but derived a net tax
benefit of $90,000 after the recognition of deferred tax assets
amounting to $681,000.  Pre-tax income totaled  $908.000 in fiscal
1996, of which income tax expense totaled $25,000.  Ault Korea
Corporation reported pre-tax income of $476,000 in fiscal 1998 on
which it recorded Korean income tax liability of $57,000.  The
subsidiary incurred losses in fiscal 1997 and fiscal 1996 and had no
income tax expenses.  See Note 4. Income Taxes, under NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS.

 The Company reported diluted per share earnings of $0.31 for fiscal
1998 based on 4,254,172 of outstanding weighted average shares,
compared to diluted per share earnings of  $0.72 in fiscal 1997, which
was based on 3,279,709 outstanding weighted average shares.   The
Company reported diluted per share earnings of $0.39 for fiscal 1996
which was calculated from weighted average outstanding shares of
2,256,211.

LIQUIDITY AND CAPITAL RESOURCES

The following table describes the Company's working capital resources
and cash flows from operations at May 31, 1998, and June 1, 1997.
<TABLE>
<CAPTION>       
                                 May 31,       June 1,
                                         1998          1997
                                                 (000)
     <S>                                 <C>           <C>
     
     Working capital                     $15,303       $15,231
     Resources:
          Cash                            $5,935       $ 3,677
          Trading Securities at market       866           849
     
          Unutilized bank credit            
            facilities                      3,264        2,744    
          Cash provided by (used in) 
            operations                      4,801         (690)
</TABLE>

Current Working Capital Position

The Company's principal  sources of working capital for normal growth
in revenue and attainment of profit goals have been its credit
facilities and cash flows from operations.  Since fiscal 1995,
however, market conditions for sale of power conversion products have
significantly improved at the same time that strategies of the Company
to grow by offering competitive engineering and services to customers
were achieving increasing success.  These factors presented
opportunities to enhance revenue and profits above that which its
existing sources of working capital would support.  Also, growth in
trade receivables and inventories that resulted from increased sales
and growing requirement of customers for suppliers to maintain
finished products for their emergency needs were using increasing
amounts of cash.   This situation placed greater reliance on credit
facilities as a source of working capital.  To lessen reliance on
credit facilities, the Company conducted  a public offering of its
common shares in fiscal 1997.  The proceeds from that public offering
enabled the Company to repay certain debt, to strengthen its
operations and to commence fiscal 1998 with cash amounting to
$3,677,000 and trading securities of $849,000.

At May 31, 1998, the Company had cash and cash equivalents and
investments in trading securities totaling $6,801,000, up from
$4,526,000 at June 1, 1997.  Ratio of current assets to current
liabilities increased to 4.02 to 1 from 3.44 to 1 at June 1, 1997, and
working capital increased during the period to $15,303,000 from
$15,231,000 at June 1, 1997.


Credit Facilities

The Company currently maintains two credit facilities; its primary
credit facility with USBank,  and a smaller facility with Korea
Exchange Bank that supports the South Korean subsidiary.

The credit arrangement with USBank  includes the following:
     (a)  A revolving credit facility of $2.0 million  at prime rate of
       interest, secured  by trade receivables and expiring on October 1,
       1998, although it may be amended for an extended period.  At the end
       of the fiscal year, there were no outstanding borrowings against it.
(b)  One or more term loans, each up to an amount of $300,000.  At May
31, 1998, borrowings amounting to $483,000 were outstanding on two
term loans.  See Note 3,under NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS.

The South Korean credit facility is for approximately $1.5 million of
which borrowings at May 31, 1998, were $236,000.

Cash Flows

Operations:  Operations provided $4,801,000 of net cash in fiscal
1998, which came from activities that provided $5,560,000 of cash and
activities that used $759,000 of cash.  The activities that provided
$5,560,000 of cash were the following:

(a)  Net profit adjusted for non-cash items provided net cash of
  $2,348 ,000, of which net profit before adjustments totaled
  $1,318,000.  The non-cash items were principally depreciation of
  assets which provided $528,000 of cash, and utilization of deferred
  tax assets which provided $415,000 of cash.
(b)  Reduction in trade receivables provided $2,665,000 of cash.  The
reduction was principally afforded by collections in fiscal 1998 of
the greater sales that were made during the fourth quarter of fiscal
1997, as compared to growth in receivables from sales during the
fourth quarter of fiscal 1998.
(c)  Reduction in inventories due to enhanced control measures and
  lower customer requirements for stocking of products for emergencies
  provided $646,000 of cash.


The activities that used $759,000 of cash were:

(a)  Changes in accounts payable, prepaid expenses  and accrued
  expenses used $509,000 of cash.  The reduction occurred principally
  because of payment  of liabilities that were incurred to support
  shipments for the fourth quarter of fiscal 1997.
(b)  Increases in investment trading securities used $17,000 of cash.
  These trading securities are principally investment-grade preferred
  stocks with dividends that provide a tax advantage to the Company.
(c)  Changes in income taxes payable used $233,000 of cash..

Investing Activities:  Investing activities used net cash of
$1,385,000 which was expended mainly for the purchase of capital
equipment and tooling, expanding manufacturing capacity in China and
for upgrading management information systems.

Financing Activities:  Financing activities used net cash of $229,000
of which $519,000 was expended to reduce Ault Korea's bank
indebtedness in view of the  currency exchange rate that favored the
US dollar.  Additionally, the Company received an amount of $304,000
from the exercise of common stock options by employees.

Effect of Foreign Currency Exchange Rate Fluctuations: The current
economic crisis in South Korea saw a dramatic devaluation in the Won,
the country's currency,  late in the Company's second quarter of
fiscal 1998.  The Won has since regained some strength, but, compared
to its value during the past several years, remains weak in relation
to the value of the US dollar.   The effect of the translation of the
Korean financial statements, which were prepared in Won, to US
dollars, resulted in a net asset value decrease of $929,000, which
related principally to long-term inter-company receivables as follows:
<TABLE>
                                                        (000)
      <S>                                             <C>
      
      Beginning cumulative gain at June 1, 1997        $ 31
      Loss in fiscal 1998 from:
             a. Long-term inter-company receivables     (870)
             b. Other                                    (90)
               
                    Total                             $( 929)
</TABLE>

Summary:

The Company's cash and working capital positions are sound and,
together with its credit facilities, are adequate for the support of
normal growth in revenue and profit beyond the current fiscal year.

Impact of Recent Accounting Standard Changes:


Statement No. 128:  The FASB has issued Statement No. 128, Earnings
Per Share, which supersedes APB Opinion No. 15.  Statement No. 128
requires the presentation of earnings per share by all entities that
have common stock or potential common stock, such as options,
warrants, and convertible securities outstanding that trade in a
public market.  Those entities that have only common stock outstanding
are required to present basic earnings per-share amounts.  All other
entities are required to present basic and diluted per-share amounts.
Diluted per-share amounts assume the conversion ,exercise, or issuance
of all potential common stock instruments unless the effect is to
reduce a loss or increase the income per common share from continuing
operations.  The Company initially applied Statement No. 128 for the
year ended May 31, 1998, and, as required by the statement, has
restated al1 per share information for the prior years.  See Note 1,
Nature of Business and Significant Accounting Policies, and Note 8,
Earnings Per Share, Under NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

Statement No. 130:  The FASB has issued Statement No. 130, Reporting
Comprehensive Income, effective for fiscal years beginning after
December 15, 1997.  Statement No. 130 requires reporting items which
are components of other comprehensive income, such as foreign currency
items and unrealized gains and losses on certain investments in debt
and equity securities.  The Company will adopt this statement in the
fiscal year ending May, 30, 1999. See Note 1,  Nature of Business and
Significant Accounting Policies, Under NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS.

Statement No. 131:  FASB has issued Statement No. 131, Disclosures
About  Segments of an Enterprise and Related Information, effective
for fiscal years beginning after December 15, 1997.  Statement No. 131
requires disclosure of certain information for each reportable
segment, including general information, profit and loss information,
segment assets, etc.  The Company will adopt this statement in the
fiscal year ending May 30, 1999.  The Company does not expect this
statement to have a significant effect on its financial statements.
See Note 1,  Nature of Business and Significant Accounting Policies,
Under NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Impact of Foreign Operations and Currency changes:

South Korea had  a significant fall in the value of its currency
during the third quarter of fiscal 1998, but recovered portions of the
early loss by the end of the fiscal year.  Although products that were
manufactured  by the Korean subsidiary contributed a very significant
portion of total sales, the devalued Won  had no significant  impact
on the Company's consolidated sales for the fiscal year because the
greater portions of the subsidiary's sales were made under
intercompany contracts with the US operations.  Sales by the
subsidiary in its local market are comprised only of a small portion
of its total sales in contrast to its intercompany sales.  The
Company's US operations have no significant  exposure to currency
risks because the predominant portions of its foreign contracts are
made in US dollars.

Microchip Based Date-referenced Systems and Year 2000 Compliance

Most of the Company's microchip-based date referenced systems,
including computer software and hardware are already year 2000
compliant.  Others are being examined  for compliance and it is
believed that the solution to any non-compliance found will not be
difficult.   There are no internal matters, therefore, that are
expected to affect the Company's ability to process systems date-
referenced information when year 2000 arrives.  The Company does not
yet know of the extent to which the current preparedness  of its
external business associates and external infrastructure would show to
adversely affect its business transactions if they were tested today.
The Company is communicating with these external sources  and its
objective is to obtain their commitment, with some verification, that
they will be Year 2000 compliant by December 31, 1998.

ITEM 7A.       QUANTITATIVE  AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

Approximately 3% of the Company's total assets  is invested in trading
securities of various domestic companies.  Although the market value
of these investments is subject to fluctuation from time to time,
management does not believe that any risk of loss of the principal
amounts would be material to the Company's profitability or asset
value.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

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

                                                           Page
                                                                
<C>  <S>                                                      <C>
     *     Independent Auditor's Report                       18
                                                                
     *     Consolidated Balance Sheets, May 31, 1998 and      
           June 1, 1997.                                      19
                                                                
     *     Consolidated Statements of Operations for the        
           Years Ended May 31, 1998 June 1, 1997 
           and June 2, 1996.                                  21       
   
     *     Consolidated Statements of Stockholders' 
           Equity  for the Years ended May 31, 1998 
           June 1, 1997 and June 2, 1996.                     22
                                           
     *     Consolidated Statements of Cash Flows for the        
           Years ended May 31, 1998, June 1, 1997 and 
           and June 2, 1996.                                  23
                           
     *     Notes to Consolidated Financial Statements         25

(b)  Supplemental Financial Information                       

     *     Quarterly Financial Data                           38
</TABLE>
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                     INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
Ault Incorporated and Subsidiary
Minneapolis, Minnesota

We  have audited the accompanying consolidated balance sheets of  Ault
Incorporated and Subsidiary as of May 31, 1998, and June 1, 1997,  and
the  related consolidated statements of income, stockholders'  equity,
and  cash flows for each of the three fiscal years in the period ended
May  31,  1998.  These financial statements are the responsibility  of
the Company's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.

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

In  our  opinion,  the consolidated financial statements  referred  to
above present fairly, in all material respects, the financial position
of  Ault  Incorporated and Subsidiary as of May 31, 1998, and June  1,
1997,  and  the results of their operations and their cash  flows  for
each  of  the three fiscal years in the period ended May 31, 1998,  in
conformity with generally accepted accounting principles.






Minneapolis, Minnesota
July 8, 1998



AULT INCORPORATED AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
May 31, 1998 and June 1, 1997
<TABLE>
<CAPTION>

ASSETS                                       1998       1997
<S>                                     <C>         <C>

Current Assets                                       
   Cash and cash equivalents             $5,934,794  $3,677,089
   Investment in trading securities         866,174     848,699
   Trade receivable, less allowance for                        
   doubtful accounts: 1998, $31,000; 
   1997 $55,000 (Notes 3 AND 11)          6,254,920   8,895,864
   Inventories (Note 2)                   6,616,359   7,261,927
   Prepaid and the expenses                 617,921     660,400
   Deferred taxes (Note 4)                   74,000     123,000
   Total current assets                  20,364,168  21,466,979
                                                     
Other Assets                                         
   Other receivable, less allowance         
   of $65,000 in 1997                       199,209     196,677
   Patent, less amortization in 
   1998 of$39,330                           142,197     178,503   
   Deferred taxes (Note 4)                  192,000     558,000
   Other                                     40,908     126,179
                                            574,314   1,059,359



Property, Equipment, and Leasehold                   
Improvements, at cost (Note 9)
   Land                                     875,699     875,198
   Building                                 812,867     796,354
   Machinery and equipment                5,969,052   5,571,665
   Office furniture and equipment           734,299     519,418
   Data processing equipment              1,493,463   1,014,964
   Leasehold improvements                   977,998     656,429
                                         10,863,378   9,434,028

   Less accumulated depreciation          6,384,546   5,865,905
                                          4,478,832   3,568,123
                                        $25,417,314 $26,094,461
</TABLE>
See Notes to Consolidated Financial Statements.

<TABLE>
<CAPTION>
 LIABILITIES AND STOCKHOLDERS' EQUITY
                                  
                                             1998       1997
<S>                                      <C>           <C>

Current Liabilities                                   
       Note payable to bank   (Note 3)   $   236,468   $  755,696      
       Current maturities of long-term       
       debt                                  213,233      199,118
       Accounts payable                    3,426,989    3,530,915
       Accrued expenses:                                      
                Compensation                 391,670      503,308
                Commissions                  475,886      527,328
                Other                        118,810      289,483
       Income tax payable                    197,554      430,151
             Total current liabilities     5,060,610    6,235,999
                                                              
Long-Term Debt, less current 
  maturities (Note 3)                        413,510      441,100
                                                              
Deferred Rent Expense (Note 9)                70,162      123,167
                                                              
Retirement and Severance Benefits            244,911      358,384
                                                      
Commitments and Contingencies (Note 9)                
                                                      
Stockholders' Equity    (Notes 3, 5, 6,               
and 7)
      Preferred stock, no par value;                  
      authorized 1,000,000 shares;
      none issued                                  -         -      
      Common stock, no par value;                             
      authorized 5,000,000 shares;
      issued and outstanding 1998                        
      4,161,758 shares; 1997,
      4,075,733 shares                    18,358,797   18,055,290
Deduct notes receivable arising     
from the sale of common stock               (203,750)    (203,750)                       
Foreign currency translation adjustment     (898,127)      30,788
Retained earnings                          2,371,201    1,053,483
                                                            
                                          19,628,121   18,935,811
                                                         
                                         $25,417,314   $26,094,461

</TABLE>
<TABLE>
<CAPTION>

AULT INCORPORATED AND SUBSICIARY

CONSOLIDATED STATEMENT OF INCOME
Years Ended May 31, 1998, June 1, 1997, and June 2, 1996




                            1998        1997         1996
<S>                      <C>          <C>         <C>
                                                           
Net sales (note 11)      $41,136,232  $40,011,790 $33,773,875
Cost of goods sold        30,375,684   29,489,141  25,509,262
                         
   Gross profit           10,760,548   10,522,649   8,264,613
                                                           

Operating expenses:                                        
     Marketing             3,707,267    3,306,320   2,632,857
     Design engineering    1,788,736    1,582,046   1,575,038
     General and    
     administrative        3,387,120    3,052,244   2,491,057

                           8,883,123    7,940,610   6,698,952
    
    Operating income       1,877,425    2,582,039   1,565,661
                                                           
Non operating income                                       
(expense):
     Interest expense       (148,415)    (489,931)   (742,305)
     Other                   197,708      182,971      84,333
    
    Income before   
    income taxes           1,926,718    2,275,079     907,689

Income taxes (benefit)       
(Note 4)                     609,000      (90,000)     25,000

    Net income            $1,317,718   $2,365,079    $882,689
                                                           

Earnings per                   $0.32        $0.79       $0.42
share-basic (Note 8)
Earnings per                    
share-diluted (Note 8)          0.31         0.72        0.39
                                                 
</TABLE>


See Notes to Consolidated Financial Statements.




AULT INCORPORATED AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended May 31, 1998, June 1, 1997, and June 2, 1996
<TABLE>
<CAPTION>                                   
                                                                
                                              Notes       
                                            Receivable             Foreign   
                                              From                 Currency  
                                              Sale                 Trans-
                                               of       Retained    lation     
                         Common Stock         Common    Earnings    Adjust-     
                       Shares   Amount         Stock    (Deficit)    ments      Total
                                                            ent
<S>                   <C>       <C>          <C>        <C>         <C>        <C>
                                                                             
Balance, May 28, 1995  2,083,776  $6,897,332 $(107,813)  $2,194,285  $(111,686  $4,483,548
Net income                   -        -         -           882,689         -      882,689
Net change in foreign                                                        
currency translation
adjustments                  -        -         -              -        27,758      27,758
Issuance of 36,000                                                           
shares of common
stock in accordance                                                          
with stock
option plan (Note 6 )    36,000       69,447    -              -         -          69,447
Payment of notes                                                             
receivable which
arose from the sale                                                          
of common
stock                        -        -        107,813         -         -         107,813
Balance, June 2,1996  2,119,776   6,966,779     -        (1,311,596)   (83,928)  5,571,255
Net income                   -        -         -         2,365,079      -       2,365,079
Net change in foreign                                                        
currency translation
adjustment                   -        -         -              -       114,716     114,716
Issuance of 115,957                                                          
shares of common                                                             
stock in accordance                                                          
with stock purchase
plan and stock option
plan (Notes 5 and 6)    115,957     336,717   (203,750)        -         -         132,967
Sale of company                                                               
stock of offering
expenses of
$442.109              1,840,000  10,620,794      -             -         -      10,620,794
Income tax benefit                                                           
from stock options
exercised (Note 4)           -      131,000      -             -         -         131,000
Balance June 1, 1997  4,075,733  18,055,290   (203,750)  1,053,483     30,788   18,935,811
Net income                   -        -          -       1,317,718       -       1,317,718
Net change in foreign                                                        
currency translation
djustment                    -        -          -             -     (928,915)    (928,915
Issuance of 86,025                                                           
shares of common
stock in accordance
with stock purchase
plan and stock
option plan
(Notes 5 and 6)          86,025     303,507      -             -         -         303,507
                                                                             
Balance,
May 31, 1998          4,161,758 $18,358,797  $(203,750) $2,371,201  $(898,127) $19,628,121
</TABLE>
                                                                     
                                   
 See Notes To Consolidated Financial Statements.
                                   
                                   
                   AULT INCORPORATED AND SUBSIDIARY
                                   
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
        Year Ended May 31, 1998, June 1, 1997, and June 2, 1996
<TABLE>
<CAPTION>
                                   
                                           1998        1997        1996
<S>                                      <C>         <C>         <C>
       

Cash Flows From Operating Activities                                    
  Net income                             $1,317,718   2,365,079    882,689
  Adjustments to reconcile net income                                   
   to net cash provided by (used in) 
   operating activities:
   Depreciation                             528,193     489,950     509,458
   Amortization                              36,306       3,025       2,363
   Provision for doubtful accounts          (24,000)     50,000      67,000
   Provision for inventory allowance            -           -     (130,000)
   Loss (gain) on disposal
    of equipment                             28,830      (4,117)         -
   Deferred taxes                           415,000    (681,000)         -
   Tax benefit associated with
    stock options                               -       131,000          -
   Deferred rent expense                    (53,005)    (40,805)    (28,905)
Changes in assets and liabilities:                                      
     (Increase) decrease in:                                            
         Trade receivables                2,664,944  (1,550,600) (2,106,114)
         Inventories                        645,568      10,867  (1,242,606)
         Prepaid and other expenses          42,479    (200,322)     10,511
         Trading securities                 (17,475)   (848,699)         -
   Increase (decrease) in:                                                 
         Accounts payable                  (103,926)   (981,624)    151,533
         Accrued expenses                  (447,226)    161,706     480,653
         Income tax payable                (232,597)    405,151      25,000

       Net cash provided by (used in)     
         operating activities             4,800,809    (690,389) (1,378,418
                                                                        
Cash Flows From Investing Activities                                    
    Purchase of property and equipment   (1,467,732) (1,204,925)   (356,312)
    (Increase) decrease in patent and 
      other assets                           82,739    (163,846)   (158,573)

       Net cash used in       
         investment activities           (1,384,993) (1,368,771)   (514,885)
                                                                        
Cash Flows From Financing Activities                                    
    Net (payments) borrowings on
      revolving credit agreement           (519,228) (4,862,124)  2,048,207
    Proceeds from long-term borrowings      300,000     524,140          -
    Proceed from issuance of
      common stock                          303,507     132,967      69,447
    Net payments from notes receivable                                 
      arising from sale of
      common stock                           -          -           107,813
    Principal payments on long-term                                     
      borrowings. including capital
      lease obligations                    (313,475) (1,206,650)   (266,759)
    Proceeds from sale of common stock, 
      net of $442,109 of expenses            -       10,620,794          -

          Net cash provided by    
            financing activities           (229,196)  5,209,127   1,958,708
</TABLE>
                                   
                                (Continued)
                                   
                                   

AULT INCORPORATED AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS   (Continued)
Years Ended May 31, 1998, June 1, 1997, and June 2, 1996
<TABLE>
<CAPTION>

                                           1998        1997       1996
<S>                                         <C>          <C>        <C>
                                                                        
Effect of Foreign Currency Exchange    
 Rate Changes on Cash                      (928,915      114,716   27,758 
                                                                        
        Increase (decrease) in cash     
         and cash equivalents             2,257,705    3,264,683   93,163
                                                                        
Cash and Cash Equivalents                                               
     Beginning                            3,677,089      412,406  319,243
     Ending                              $5,934,794   $3,677,089 $412,406
                                                                        
Supplemental Disclosures of Cash Flow                                   
Information
      Cash payments for:                                                
          Interest                         $147,149     $534,803 $676,810
          Taxes                             420,370       59,433        -
</TABLE>
                                                                



See Notes to Consolidated financial                             
Statements.
                                   
                                   
                                   
                                   
AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1.     Nature of Business and Significant Accounting Policies

Nature  of business:    The Company and its subsidiary operate in  one
business  segment  which  includes  the  design,  manufacturing,   and
marketing  of   power  conversion products,  principally  to  original
equipment    manufactures    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  accompanying  consolidated
financial  statement  include the accounts of Ault  Incorporated,  its
wholly-owned  subsidiary, Ault Korea Corporation, and its wholly-owned
subsidiary, Ault Xianghe Co. Ltd. (located in China), which  commenced
operations  in  May  1997.  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 for its foreign subsidiary in accordance
with provisions of FASB Statement No. 52.

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 loses in such accounts.

For purposes of reporting cash flows, 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.

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

Investment in trading securities:     Trading securities are held  for
resale  in  anticipation of short-term (generally  90  days  or  less)
fluctuations  in  market  prices.  Trading securities,  consisting  of
marketable  equity  securities,  are  stated  at  fair  value,   which
approximates  cost  at May 31, 1998, and June 1, 1997.   Realized  and
unrealized gains and losses are included in income.

Prepaid and other expenses:     Prepaid and other expenses at May  31,
1998,  and  June  1,  1997,  include refundable  value-added  tax  and
refundable  custom  duties  relating  to  the  Korean  operations   of
approximately $236,000 and $224,000, respectively.

Patent:     The patent is stated at cost and is being amortized  using
the straight-line method over its economic useful life, which has been
estimated to be five years.

AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.     Nature of Business and Significant Accounting Policies
(Continued)

Depreciation:     It is the Company's policy to include depreciation
expenses on assets acquired under capital leases with depreciation
expense on owned assets.  Depreciation is based on the estimated
useful lives of the individual assets.  The methods and estimated
useful lives are as follows:
<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 improvements               Straight-line            Life of
                                                                lease
</TABLE>

Retirement and severance benefits:   Retirement and severance benefits
represents  the accrual of compensation expense, net of  deposit,  for
the  Korean operations' employees that is payable upon termination  of
employment.

The  Company  does  not  fund the retirement  and  severance  benefits
accrued, 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 amount payable to  employees  and  is
reflected in the accompanying financial statements.

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 currently.

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 assists 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.

Investment  tax  credits, research and development  credits,  and  job
credits  are  accounted for by the  flow-through method  whereby  they
reduce  income  taxes currently payable and the provision  for  income
taxes in the period the assets giving rise to such  credits are placed
in  service.  To the extent such credits are not currently utilized on
the   Company's   tax   return,  deferred  tax  assets,   subject   to
considerations   about  the  need  for  a  valuation  allowance,   are
recognized for the for the carryforward amount.

Use  of  estimates  in  the  preparation of financial  statement:  The
preparation  of  financial  statements in  conformity  with  generally
accepted  accounting principles 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.


AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


  Note  1.      Nature of Business and Significant Accounting Policies
(Continued)

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  cash  flows  expected to result from the use  of  the  assets,
including cash flows from disposition.  Should the sum of the expected
future  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.

Fair  value  of financial instruments:     The following  methods  and
assumptions were used to estimate the fair value of certain  financial
instruments:

Cash equivalents:     The carrying amount approximates fair value.

Investments  in available-for-sale securities:     The fair  value  of
these  investments  is  based on quoted market prices.   The  carrying
amount approximates fair value.

 Long-term debt:     The fair value of the long-term debt is estimated
based  on interest rates for the same or similar debt offered  to  the
Company having the same or similar remaining maturities and collateral
requirements.   The carrying value of the long-term debt  approximates
fair value.

Earning  per  share:   The FASB has issued Statement No. 128,  Earning
Per  Share, which superseded APB Opinion No. 15.   Statement  No.  128
requires  the presentation of earnings per share by all entities  that
have  common  stock  or  potential  common  stock,  such  as  options,
warrants,  and  convertible securities, outstanding that  trade  in  a
public market.  Those entities that have only common stock outstanding
are  required to present basic earnings per share amounts.  All  other
entities  are required to present basic and diluted per share amounts.
Diluted per share amounts assume the conversion, exercise, or issuance
of  all  potential common stock instruments unless the  effect  is  to
reduce  a loss or increase the income per common share from continuing
operations.

The Company initially applied Statement No. 128 for the year ended May
31,  1998,  and,  as required by the statement, has restated  all  per
share information for the prior years.

Comprehensive  income:     The  FASB has  issued  Statement  No.  130,
Reporting  Comprehensive Income, effective for fiscal years  beginning
after  December 15, 1997.  Statement No. 130 requires reporting  items
which  are  components of other comprehensive income, such as  foreign
currency  items and unrealized gains and losses on certain investments
in  debt and equity securities.  The Company will adopt this statement
in the fiscal year ending May 30, 1999.


AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 1.     Nature of Business and Significant Accounting Policies
(Continued)

Segments:     The FASB has issued Statement No. 131, Disclosures About
Segments  of  an  Enterprise  and Related Information,  effective  for
fiscal  years  beginning after December 15, 1997.  Statement  No.  131
requires   disclosure  of  certain  information  for  each  reportable
segment,  including general information, profit and loss  information,
segment  assets, etc.   The Company will adopt this statement  in  the
fiscal  year  ending May 30, 1999.  The Company does not  expect  this
statement to have a significant effect on the financial statements.

Fiscal year:     The Company operates on a 52- to 53-week fiscal year.
The  fiscal years for the financial statements presented ended May 31,
1998, June 1, 1997, and June 2, 1996.

Note 2.     Inventories

The components of inventory at May 31, 1998, and June 1, 1997, are as
follows:
<TABLE>
<CAPTION>       
                                   1998          1997
<S>                                     <C>           <C>                
Raw materials                           $3,743,940    $4,255,624
Work in process                            277,943       256,042
Finished goods                           2,594,476     2,750,261
                                        $6,616,359    $7,261,927
</TABLE>

Note 3.     Financing Arrangement and Long-Term Debt

Financing  arrangement:      At  May  31,  1998,  the  Company  had  a
$2,000,000  revolving  line-of- credit agreement  through  October  1,
1998.   Interest  on  advances is at the bank's  reference  rate,  8.5
percent  at  May  31, 1998.  All advances are due on  demand  and  are
secured  by  trade  receivables.  In addition, the agreement  contains
certain  reporting  and  operating  covenants,  one  of  which  is   a
restriction  on the payment of any dividends.  There were no  advances
outstanding  at  May 31, 1998.  Also, the Company's Korean  subsidiary
maintains a modest facility agreement to cover bank overdrafts, short-
term  financing, and export financing.  Advances outstanding  relating
to the Korean facility were $236, 468 at May31, 1998.

Long-term debt:
<TABLE>
<CAPTION>       
                                  May 31,   June 1,
                                          1998       1997
<S>                                       <C>        <C>
7.97% term loan, due in monthly                    
installments of $7,320,
including interest to November       
2001, secured by   equipment              $267,502         -
8.11% term loan, due in monthly                            
installments of $7,340,
including interest of February                        
2001, secured by trade
receivables                                215,665   288,045

</TABLE>

AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 3.     Financing Arrangement and Long-Term Debt (Continued)
<TABLE>
<CAPTION>       
                                            May 31,   June 1,
                                                     1998      1997
<S>                                                 <C>       <C>
6.5% note payable, due in quarterly installments             
of $28,019 plus interest through April 2000,
secured by equipment                                 143,576  224,140
Other notes payable                                        -  128,033

Total                                                626,743  640,218
                                                                     
Less current maturities                              213,233  199,118
                                                    $413,510  441,100

</TABLE>

Approximate maturities of long-term debt for years subsequent to May
31, 1998, are as follows:
<TABLE>
<S>                                                         <C>

1999                                                        $213,000
2000                                                         226,000
2001                                                         145,000
2002                                                          43,000
                                                            $627,000
</TABLE>

Note 4.     Income Taxes

Pretax income (loss) for domestic and foreign operations was as
follows:
<TABLE>
<CAPTION>       
                                  May 31,       June 1,      June 2
                                    1998         1997         1996
<S>                              <C>          <C>           <C>
                                                                    
Domestic                         $1,516,396   $2,394,204    $916,344
Foreign                             410,322    (119,125)     (8,655)
Total                            $1,926,718   $2,275,079    $907,689
</TABLE>

The components of the provision (benefit) for income taxes are as
follows:
<TABLE>
<CAPTION>       
                           May 31,       June 1,     June 2,
<S>                                <C>          <C>          <C>
                                    1998          1997        1996
Current:                                                 
    Domestic (b)                   $129,000     $412,000     $25,000
     Foreign                         21,000            -           -
     State                           44,000       48,000           -
Deferred                            415,000     (681,000)          -
Additional capital from                                             
benefit of stock
     options exercised (a)                -      131,000           -
                                   $609,000     $(90,000)    $25,000
</TABLE>

AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 4.     Income Taxes (Continued)

(a)     Stock options which were exercised by employees resulted in
   compensation to them for income tax purposes based on the increase
   in fair market value of the Company's common stock subsequent to
   the date of grant of those options.  As required, this
   compensation was not recognized as an expense for financial
   accounting purposes, and the related tax benefits were recorded
   directly to the Company's capital.  The compensation deductions
   resulting from the excise of stock options were not material in
   1996 and 1998.
<TABLE>
<CAPTION>       
                              May 31,     June 1,    June 2,
<S>                                   <C>         <C>        <C>
                                       1998       1997        1996
 (b)  Domestic tax expense before                          
       application of net 
       operating loss and tax                            
       credits carryforward           $346,000    $680,000   $270,000
        Federal net operating loss           -     (65,000)  (245,000)
        Tax credits                   (217,000)   (203,000)         -
        Domestic tax expense          $129,000    $412,000    $25,000
</TABLE>
The income tax provision differs from the amount of income tax
determined by applying U.S. federal income tax rate to pretax income
for the year ended May 31, 1998, June 1, 1997, and June 2, 1996, due
to the following:
<TABLE>
<CAPTION>       
                                     1998         1997        1996
<S>                                   <C>          <C>       <C>                                                    
Computed expected tax provision       
 (benefit)                            $655,000     $774,000  $309,000   
Increase (decrease) in income                                        
taxes resulting from:
     Nondeductible expenses              9,000       28,000         -
     State income taxes, net of         
      federal benefit                   39,000       82,000     6,000    
     Lower rates on earnings of      
      foreign operations              (66,000)       12,000     3,000
Utilization of net operating loss                                    
and tax credit
     carryforwards:                                                  
     Domestic                                -     (268,000) (293,000)
     Foreign                                 -            -         -
     State                                   -      (35,000)        -
Reduction in valuation allowance      (28,000)     (711,000)        -
Nonutilization of foreign tax                
 benefit                                     -       28,000         -
                                      $609,000     $(90,000)  $25,000
</TABLE>

Net deferred taxes consist of the following components as of May 31,
1998, June 1, 1997:
<TABLE>
<CAPTION>       
                                               1998          1997
<S>
Deferred tax assets:                            <C>           <C>  
     Tax credit carryforwards                   $107,000      $451,00
                                                                    0
     Loss carryforwards                           17,000       28,000
     Allowance for doubtful accounts              13,000       48,000

</TABLE>

AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 4.     Income Taxes (continued)
<TABLE>
<CAPTION>       
                                          1998          1997
<S>                                             <C>          <C>         
Inventory allowances                                   -        9,000
Accrued vacation                                  28,000       34,000
Accrued warranty                                  33,000       32,000
Equipment and leasehold improvements              68,000      107,000
                                                 266,000      709,000
                                                                     
Less valuation allowance                               -       28,000
                                                $266,000     $681,000
</TABLE>
                                                                    


The components giving rise to the net deferred tax asset described
above have been included in the accompanying consolidated balance
sheet as of  May 31, 1998, as follows:
<TABLE>
<S>                                             <C>
Current assets                                  $74,000                    
Noncurrent assets                               192,000
</TABLE>

At June 1, 1997, the Company reduced the valuation allowance to
reflect the deferred tax assets utilized in 1997 to reduce current
income taxes and to recognize net deferred tax assets of $681,000 at
June 1, 1997.  The recognized deferred tax assets results from the
expected utilization of net operating losses and tax credit
carryforwards and reversal of certain temporary differences.

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 the $266,000 of
deferred tax assets at May 31, 1998, will be realized.

At May 31, 1998, the Company had net operating loss carryforwards to
reduce future taxable income in Korea of approximately $137,000.  The
Company also has tax credit carryforwards of approximately $107,000
available to reduce future income taxes in the United States for
income tax purposes.  The net operating loss and tax credit
carryforwards expire in varying amounts as follows for income tax
reporting purposes:
<TABLE>
<CAPTION>       
                                            Net          
                                                Operating     Tax
                                                  Loss       Credit
                                                                     
<S>                                              <C>        <C>                                           
2002                                             $ 137,000  $      -
2007                                                     -     18,000
2008                                                     -     31,000
2009                                                     -     13,000
2010                                                     -     41,000
2011                                                     -      4,000
                                                   137,000   $107,000

</TABLE>


AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Note 5.     Employee Benefit Plans

Pension plan:     The company has a pension plan covering
substantially all U.S. employees.  The Company is required to match 25
percent of the employees' first 6 percent 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 years ended May 31, 1998, June 1, 1997, and June 2,
1996, approximated $39,000, $37,000, and $38,000, 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 percent of the fair market value of the shares on the date the
Phase commences or 85 percent 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 10,825 and 13,957 shares
purchased under this plan during the years ended May 31, 1998, and
June 1, 1997, respectively.

Note 6.     Stock Option Plan

The Company's 1996 stock option plan has reserved 500,000 common
shares 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 Statement of
Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation.  Accordingly, no compensation cost has been recognized
for the stock option plan.  Had compensation cost for the Company's
stock option plans been determined based on the fair value at the
grant date for awards in 1998 and 1997 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:
<TABLE>
       
<CAPTION>                                    1998       1997
<S>                                    <C>         <C>
                                                             
Net income, as reported                $1,317,718  $2,365,079
Net Income, pro forma                     700,698   1,969,063
Net income, per share, basic, as             
reported                                     0.32        0.79
Net income, per share, diluted, as        
reported                                     0,31        0,72
Net income, per share, basic, pro forma      0.17        0.65
Net income, per share, diluted, pro          
forma                                        0.17        0.60
</TABLE>

AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6.     Stock Option Plan (Continued)

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 1998 and 1997:
<TABLE>
<CAPTION>       
                                1998              1997
<S>                                   <C>               <C> 
Expected dividend yields                     -               -
Expected stock price volatility         63.14%          67.68%
Risk-free interest rate                  6.04%           6.18%
Expected life of options               4 years          5 years
</TABLE>
                                                        

The pro forma effect on net income in 1998 and 1997 is not
representative of the pro forma effect in future years because it does
not take into consideration pro forma compensation expense related to
grants made prior to 1996.

Additional information relating to all outstanding options as of May
31, 1998, June 1, 1997, and June 2, 1996, is as follows:
<TABLE>
<CAPTION>       
                                  1998              1997           1996
                                 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        426,750   4.44   345,250  $ 2.37  275,25   $ 2.31     
Options exercised         (75,200)  3.30  (102,000)   2.68  (36,00)    1.93
Options expired            (2,500)  7.75        -     -       -       -
Options granted           163,500   8.43   183,500    7.35  106,00     2.39
Options outstanding
 at end of year           512,550   5.86   426,750    4.44  345,25   $ 2.37    
                                                                     
Weighted-average fair                                                
value of options
granted during the year           $4.66             $ 4.34           $ 1.39    

</TABLE>

The following table summarizes information about stock options
outstanding at May 31, 1998:
<TABLE>
<CAPTION>       
                   Options Outstanding    Options Exercisable
                                      
                          Weighted-                
                           Average            
                          Remaining                 
                 Number   Contrac-        
               Outstand-   Life      Weighted-      Number      Weighted-
 Range of         ing      tual      Average      Exercisable   Average
 Exercise       at May     Life      Exercise       at May      Exercise
  Prices       31, 1998   (Years)     Price         31,1998       Price                        
<S>            <C>          <C>       <C>         <C>           <C>

$1.19-$1.630    52,000      6.0       $1.21        52,000       $ 1.21
 2.13- 2.750   107,550      6.1        2.38        82,550         2.40
 3.50- 3.690    21,000      5.0        3.54        21,000         3.54
 6.00- 7.750   173,500      8.1        7.28        83,500         7.2
 8.50- 8.630   158,500      9.0        8.50        44,125         8.52 

$1.19- 8.863   512,250      7.6       $5.86       283,175       $ 4.65 

</TABLE>

AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 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 $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 year-ended May 31, 1998, and June
1, 1997.

The Company has notes receivable from certain officers of the Company
arising from the sale of common stock as an offset to stockholders'
equity.  The notes are due in September 2001.

In December 1996, the Company completed a secondary stock offering of
1,840,000 shares of common stock.  Proceeds from the issuance of
common stock were $10,620,794, net of offering expenses of $442,109.
In connection with this offering, warrants to purchase 112,000 shares
of common stock were issued.  These warrants are exercisable at $7.80
per share through December 2001.

Note 8.     Earnings Per Share
In fiscal 1998 the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 128, Earnings Per Share.  Earning per share
amounts presented for 1997 and 1996 have been restated for the
adoption of SFAS No. 128.  The following table reflects the
calculation of basic and diluted earnings per share.
<TABLE>
<CAPTION>
                                       1997           1998         1996
<S>                                  <C>          <C>          <C> 

Earnings per share-basic:                                       
 Income available to common              
  shareholders                       $ 1,317,718  $ 2,365,079  $   882,689
 Weighted-average shares    
  outstanding                          4,136,059    3,011,062    2,093,513
 Earnings per share-basic                   0.32         0.79         0.42
Earnings per share-diluted:                                         
 Income available to common 
  shareholders                         1,317,718    2,365,079      882,689

 Weighted average shares                                                                   
  outstanding                          4,136,059    3,011,062    2,096,513
 Dilutive impact of options 
  outstanding                            118,113      263,488      162,698
 Dilutive impact of warrants
  outstanding                                    -      5,159         -
 Weighted-average shares and                                    
  dilutive shares outstanding          4,254,172     3,27,709    2,256,211
                                                                    
 Earnings per share-diluted                 $0.31       $0.72        $0.39

</TABLE>

AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENT


Note 9.     Commitments and Contingencies

Operating leases:     The Company leases its United States plant under
an operating lease through August 1999.  In addition, certain
equipment and motor vehicles are leased under operating leases with
terms of approximately 36 months.

The lease on the United States plant and office facilities includes
scheduled base rent increases over the term of the lease.  The total
amount of the base rent payments is being charged expense on the
straight-line method over the term of the lease.  In addition to the
base rent payment, the Company pays a monthly allocation of the
building's operation expenses.  The Company has recorded a deferred
credit to reflect the excess of rent expense over cash payments since
inception of the lease.

Approximate minimum annual rental commitments at May 31, 1998, are as
follows:

<TABLE>

<S>                                              <C> 
1999                                             $   273,000
2000                                                  77,000
2001                                                   2,000
                                                                   
                                                 $   352,000
</TABLE>

Total rental expense for the years ended May 31, 1998, June 1, 1997,
and June2, 1996, was approximately $391,000, $456,00, and $385,000,
respectively.

Note 10.  Operations Information

Foreign manufacturing is done by the Korean subsidiary, including its
wholly-owned subsidiary located in China, and certain nonaffiliated
companies in China and Thailand.  All United States manufacturing is
done by Ault Incorporated.  A summary of the Company's manufacturing
operations by geographic area is presented below:
<TABLE>
<CAPTION>       
                                  May 31,     June 1,    June 2,
                                    1998       1997       1996
<S>                              <C>           <C>          <C>
                                                               
United States:                                                 
     Customer sales           $ 39,849,215  $ 39,022,322 $  33,359,291
     Sales to subsidiary                     -          -          -

           Total              $ 39,849,215  $ 39,022,322 $  33,359,291
                                                                    
Operating profit                 1,306,611     2,639,853     1,560,693
Total assets                    24,381,633    24,231,186    14,414,074
Capital expenditures               413,503       336,000       194,129
Depreciation and amortization      380,561       323,228       314,810

</TABLE>

AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 10.     Operations information (Continued)
<TABLE>
<CAPTION>       
                                    May 31,      June 1        June 2,
                                     1998         1997          1996
<S>                                   <C>          <C>           <C>

Korea and China:                                            
     Customer sales                $  1,287,017  $   989,468  $    414,574
     Sales to parent                  9,056,631    7,965,817    10,496,364
     Total                         $ 10,343,648    8,955,285  $ 10,910,948   
                                                                    
                                                                    
     Operating profit (loss)       $    636,752     (114,268)       62,970
     Total assets                     7,108,449    7,435,977     6,502,582
     Capital expenditures             1,054,229      868,925       162,183
     Depreciation and amortization      183,938      169,747       197,011
                                                                    
                                                                    
Adjustments and eliminations                                        
     Intercompany sales                       
     Intercompany sales            $  9,056,631 $  7,965,817  $ 10,496,364   
     Operating profit (loss)           (65,937)       56,454       (58,002)
     Total assets                   (6,072,768)   (5,572,702)   (2,186,545
                                                                    
                                                                    
Consolidated:                                                       
     Sales                         $ 41,136,232 $ 40,011,790  $ 33,773,875
     Operating profit                 1,877,426    2,582,039     1,565,661
     Total assets                    25,417,314   26,094,461    18,730,111
     Capital expenditures             1,467,732    1,204,925       356,312
     Depreciation and amortization      564,499      492,975       511,821

</TABLE>

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

Export sales:     The Company also had foreign export sales amounting
to 27.1, 20.4, and 19.4 percent of total sales for the years ended May
31, 1998, June 1, 1997, and June 2, 1996, respectively.

The sales were made principally to the following locations:
<TABLE>
<CAPTION>                                                   Years        
                                                   Ended
                                                               
                                      May 31,     June 1,  June 2,
                                        1998       1997      1996
<S>                                         <C>      <C>        <C>
                                                                    
Canada                                      3.1%     7.8%       8.9%
France                                      9.3%     8.0%       0.2%
Ireland                                     5.6%     0.1%          -
Elsewhere                                   9.1%     4.5%      10.3%
                                           27.1%    20.4%      19.4%
</TABLE>



AULT INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENT


Note 10.     Operations Information (Continued)
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 $15,340,000, $15,248,000, and $9,941,000 for the years
ended May 31, 1998, June 1, 1997, and June 2, 1996, respectively.

Note 11.     Major Customers
The Company had major customers during the years ended May 31, 1998,
June 1, 1997, and June 2, 1996, as follows:
<TABLE>
<CAPTION>                                         For the Years Ended    
                                                             
                                    May 31,    June 1,    June 2,
                                      1998      1997       1996
<S>                                     <C>       <C>        <C>

Sales percentage:                                        
     Customer A                          9.7%      7.5%          -
     Customer B                          9.6%      7.2%       5.5%
     Customer C                          5.1%         -          -
     Customer D                          5.4%      6.9%      11.0%
Accounts receivable percentage:                                   
     Customer A                             -     11.6%          -
     Customer B                          5.4%     10.9%       8.6%
     Customer C                         10.9%         -          -
     Customer D                          6.0%      6.1%      14.8%
</TABLE>

ITEM 8(B) SUPPLEMENTAL FINANCIAL INFORMATION

QUARTERLY FINANCIAL DATA
(Unaudited)
(Amounts in thousands, Except Per Share Data)
<TABLE>
<CAPTION>
                                                  Fiscal Quarters

1998                               1st         2nd        3rd       4th
                                       
                                                  (UNAUDITED)  
                                                    
<S>                                 <C>       <C>        <C>       <C>
                                                      
Net Sales                           $9,423    $10,954    $10,294   $10,465
                                                                          
Gross Profit                        $2,208     $2,868     $2,673    $3,010
                                                                          
Income Before Income Taxes            $146       $753       $361      $666
                                                                          
Net Income (Note 4)                    $87       $509       $282      $439
                                                                          
Net Income Per Share:                                                     
Basic                                $0.02      $0.12      $0.07     $0.11
                                                                          
Diluted                              $0.02      $0.12      $0.07     $0.10
                                                                          
1997                                   1st        2nd        3rd       4th
                                                                 
Net Sales                           $8,678     $9,248    $10,578   $11,508
                                                                          
Gross Profit                        $2,132     $2,387     $2,818    $3,186
                                                                          
Income Before Income Taxes            $301       $385       $771      $818
                                                                          
Net Income (Note 4)                   $227       $290       $620    $1,228
                                                                          
Net Income Per Share:                                                     
Basic                                $0.11      $0.14      $0.17     $0.31
Diluted                              $0.09      $0.12      $0.16     $0.29

</TABLE>

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

Not Applicable.

                               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 28, 1998 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 1998 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 28, 1998 and
is expressly incorporated herein by reference.

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 29, 1998 Annual Meeting
to be filed within 120 days from the end of the Company's fiscal 1998
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 28, 1998  Annual Meeting
to be filed within 120 days from the end of the Company's fiscal year
1998, which information is expressly incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not Applicable.

                               PART IV.
                                   
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT, SCHEDULES AND REPORTS

(a)(1)    The following financial statements are included in Part II,
Item 8:
<TABLE>
<CAPTION>                                                  Page
          <S>                                               <C>
          
          Independent Auditor's Report                      18
                                                              
          Consolidated Financial Statements                   
                                                              
          -- Balance Sheets, May 31, 1998 and June 1        19
          1997.
                                                              
          -- Consolidated Statements of Operations for        
          the Years                                         21
             Ended May 31, 1998, June 1, 1997 and June
          2,1996.
                                                              
          -- Consolidated Statements of Stockholders'         
          Equity for                                        22
             the Years Ended May 31, 1998, June 1, 1997
          and June 2, 1996.
          
          -- Consolidated Cash Statements of cash flow        
          for the Years Ended                               23
             May 31, 1998, June 1, 1997 and June 2, 1996.
                                                              
          -- Notes to Consolidated Financial Statements     25
</TABLE>

(2)  The following financial statements schedule for the years ended
     May 31,
     1998, June 1, 1997 and June 2, 1996 are submitted herein
     following the
     signature page of this report.
<TABLE>
<CAPTION>
                                                            Page
             <S>                                            <C>
             Independent Auditor's report on the Schedule   42
                                                              
             Schedule II - Valuation and Qualifying         
               Accounts                                     43
</TABLE>
     
     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                                               

     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 3 months ended May 31, 1998.

          There were no reports on Form 8-K filed for the quarter
ended May 31, 1998.
     
                              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
August 25, 1998
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.
<TABLE>
<CAPTION>

Signature                Title                     Date
<S>                      <C>                       <C>      
/s/Frederick M. Green    President, Chief          August 25, 1998
Frederick M. Green       Executive Officer and
                         Director
                                                   
/s/Carlos S. Montague    Vice President,           August 25, 1998
Carlos S. Montague       Treasurer, Chief
                         Financial Officer,
                         Assistant Secretary and
                         Controller*
                                                   
/s/Matthew A. Sutton     Director                  August 25, 1998
Matthew A. Sutton
                                                   
                         Director                  
Eric G. Mitchell, Jr.
                                                   
/s/Delbert W. Johnson    Director                  August 25, 1998
Delbert W. Johnson
                                                   
/s/John G. Kassakian     Director                  August 25, 1998
John G. Kassakian
                                                   
/s/Edward C. Lund        Director                  August 25, 1998
Edward C. Lund
                                                   
/s/James M. Duddleston   Director                  August 25, 1998
James M. Duddleston

<FN>
*Principal Financial Officer and Principal Accounting Officer

</TABLE>
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
  *******************************************************************
                                   
                                   
                                   
                                   
                  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 MAY 31,1998
                                   
                                   
                                   
                                   
                                   
  *******************************************************************
                                   
                                   
                                   
                     FINANCIAL STATEMENT SCHEDULES
                                   
                                   
  *******************************************************************
                                   



G25





                     INDEPENDENT AUDITOR'S REPORT
                   ON THE SUPPLEMENTARY INFORMATION



To the Board of Directors
Ault Incorporated and Subsidiary
Minneapolis, Minnesota

Our audits were made for the purpose of forming an opinion on the
basic consolidated financial statements taken as a whole.  The
consolidated supplemental schedule II is presented for purposes of
complying with the Securities and Exchange Commission's rules and is
not a part of the basic consolidated financial statements.  This
schedule has been subject as to the auditing procedures applied in our
audits of the basic consolidated financial statements and, in our
opinion, is fairly stated in all material respects in relation to the
basic consolidated financial statements taken as a whole.

                                        McGladrey & Pullen, LLP



Minneapolis, Minnesota
July 8, 1998



                                                            SCHEDULE
II
AULT INCORPORATED AND SUBSIDIARY

VALUATION AND QUALIFYING ACCOUNTS
Years Ended May 31, 1998, June 1, 1997, and June 2, 1996

<TABLE>
<CAPTION>       
                              Balance    Charged                 Balance
                                at        to                       at
                             Beginning  Costs and                End of
                             of Period  Expenses   Deductions    Period     
<S>                           <C>         <C>      <C>       <C> <C>

Year ended May 31, 1998:                                      
     Allowance for doubtful        
      accounts                $ 120,000   $ 95,000 $ 184,000 (a) $ 31,000
     Reserved for warranties     81,000     97,000    95,000       83,000
Year ended June 1, 1997:                                             
     Allowance for doubful    
      accounts                  116,000     50,000    46,000 (a)  120,000
     Reserve for warranties      77,000     72,000    68,000       81,000
Year ended June 2, 1996:                                             
     Allowance for doubtful 
      accounts                  103,000     67,000    54,000 (a)  116,000
     Reserve for warranties      66,000    101,000    90,000       77,000
     Allowance for inventory                                         
      valuation in excess
      of net realizable value   130,000          -   130,000            -
  <FN>
 (a)  Represents charge-off of accounts receivable, net of recoveries.
</TABLE>








  *******************************************************************
                                   
                                   
                                   
                                   
                  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 MAY 31, 1998
                                   
                                   
                                   
                                   
                                   
  *******************************************************************
                                   
                                   
                                   
                               EXHIBITS
                                   
                                   
  *******************************************************************
                                   


                           AULT INCORPORATED
                                   
                           EXHIBIT INDEX TO
               FORM 10-K FOR THE YEAR ENDED JUNE 1, 1997
                                   
Required Registration S-K
Exhibit Items

SK Reference
<TABLE>
<CAPTION>
 SK
Refer-       
ence   Title of Documents     Location
<S>    <c.                    <C>      
3(a)   Restated Articles of   Fled as Exhibit 3(a) to Form 10-K for fiscal
       Incorporation, as      1988 and incorporated herein by reference
       amended
                              
3(b)   Bylaws, as amended     Filed as Exhibit 3(b) to Registration
                              Statement No. 2-85224 and incorporated
                              herein by reference
                              
4.1    Rights Agreement       Filed electronically on Form 8-K for March
                              1996 and herein incorporated by reference
                              
10.1   Management Incentive   Filed as Exhibit 10(b) to Registration
       Compensation Plan      Statement 2-85224 and incorporated herein by
                              reference
                              
10.2   1986 Employee Stock    Filed as Exhibit 10(c) to Form 10-K for
       Option Plan            fiscal 1987 and incorporated herein by
                              reference
                              
10.3   Ten Year Building      Filed as Exhibit 10(c) to Form 10-K for
       Lease Contract         fiscal 1987 and incorporated herein by
                              reference
                              
10.4   Financing Agreement    Filed as Exhibit 10(f) to Form 10-K for
       on Credit Facility     fiscal 1995 and incorporated herein by
                              reference
                              
10.5   First and Second       Filed electronically as Exhibit 10(g) to
       Amendments to          Form 10-K for fiscal 1996
       Financing Agreement
       on Credit Facility
                              
10.6   Employee Stock         Filed electronically Commission File #333-
       Purchase Plan          4609 and herein incorporated by reference
                              
10.7   Agreement to Credit    Filed as Exhibit 10.8 to Form 10-Q for Third
       Facility               Quarter of fiscal 1998 and incorporated
                              herein by reference
                              
10.8   1986 Employee stock    Filed electronically.  Commission File #
       Option plan, Amended   333-4609
                              and herein incorporated by reference
                              
10.9   1996 Employee stock    Filed electronically.  Commission File #
       Option plan            333-4609
                              and herein incorporated by reference
                              
11     Computation of Per     
       Share                  Filed herewith at page 48
       Earnings
                              
21     Subsidiary of          Filed as Exhibit 21 to Form 10-K for fiscal
       Registrant             1997 and incorporated herein by reference.
                              
23     Consent of             Filed herewith at page 49
       Independent Auditors
                              
27     Financial Data         Filed electronically
       Schedule
</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 note being filed and in lieu thereof, Company
agrees to furnish copies thereof to the Securities and Exchange
Commission upon request.
27, 1998