SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                           FORM 10-Q


      (Mark One)

 [X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

     For the quarterly period ended:  MARCH 31, 1997 

 [ ] Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934


     For the transition period from            to                  
                                    -----------   ------------


Commission File Number:  1-8101


Exact Name of Registrant as
  Specified in Its Charter:  DDL ELECTRONICS, INC.


State or Other Jurisdiction of                 I.R.S. Employer  
Incorporation or Organization: DELAWARE        Identification No.: 33-0213512
                                        


Address of Principal Executive Offices:        2151 Anchor Court
                                               Newbury Park, CA 91320

Registrant's Telephone Number:                 (805) 376-9415



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 [ ] 



The registrant had 23,102,047 shares of Common Stock outstanding as of 
May 5, 1997.



<PAGE>
PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                  DDL ELECTRONICS, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEET
                     (Unaudited, except June 30, 1996)


                                     March 31,         June 30,
                                       1997              1996
                                      ------            ------
        Assets

Current assets:
  Cash and cash equivalents       $  1,429,000     $  2,519,000
  Accounts receivable                9,429,000        5,620,000
  Costs and estimated earnings
   in excess of billings on 
   uncompleted contracts             4,394,000        3,026,000
  Inventories                        3,433,000        4,014,000
  Prepaid expenses and other
   current assets                      210,000          314,000
                                    ----------       ----------

     Total current assets           18,895,000       15,493,000
                                    ----------       ----------
Property, equipment and
 improvements, at cost:
  Buildings and improvements         5,926,000        5,604,000
  Plant equipment                   14,167,000       13,999,000
  Office and other equipment         1,860,000        1,444,000
                                    ----------       ----------

                                    21,953,000       21,047,000
Less: Accumulated depreciation
 and amortization                  (15,527,000)     (15,130,000)
                                    ----------       ----------
Property, equipment and
 improvements, net                   6,426,000        5,917,000
                                    ----------       ----------
Other assets:
  Goodwill, net                      4,756,000        5,708,000
  Debt issue costs                     162,000          533,000
  Deposits and other assets            216,000          436,000
                                    ----------      -----------

                                     5,134,000        6,677,000
                                    ----------      -----------

                                  $ 30,455,000     $ 28,087,000
                                    ==========      ===========



<PAGE>
                  DDL ELECTRONICS, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEET
                               (Continued)
                     (Unaudited, except June 30, 1996)


                                     March 31,         June 30,
                                       1997              1996
                                      ------            ------
Liabilities and Stockholders' Equity

Current liabilities:
  Bank lines of credit payable     $ 1,969,000    $      -
  Current portion of 
   long-term debt                    5,960,000         603,000
  Accounts payable                   8,989,000       7,485,000
  Accrued payroll and
   employee benefits                   774,000         777,000
  Other accrued liabilities          2,601,000       3,114,000
                                    ----------      ----------  

     Total current liabilities      20,293,000      11,979,000
                                    ----------      ----------
Long-term debt:
  10% Senior Secured Notes               -           5,300,000
  7% Convertible Subordinated
   Debentures, less current 
   portion                             409,000         443,000
  8-1/2% Convertible
   Subordinated Debentures           1,580,000       1,580,000
  Notes payable, capitalized
   lease obligations and
   other long-term debt, 
   less current portion              3,734,000       3,612,000
                                    ----------      ----------

     Total long-term debt            5,723,000      10,935,000
                                    ----------      ----------

Stockholders' equity:
  Common stock                         231,000         230,000
  Additional paid-in capital        29,456,000      29,304,000
  Common stock held in escrow       (1,325,000)     (1,325,000)
  Accumulated deficit              (23,122,000)    (22,000,000)
  Foreign currency translation
   adjustment                         (801,000)     (1,036,000)
                                    ----------      ----------

     Total stockholders' equity      4,439,000       5,173,000 
                                    ----------      ----------

                                  $ 30,455,000    $ 28,087,000
                                    ==========      ==========



                   See accompanying Notes to Unaudited
                    Consolidated Financial Statements

<PAGE>
                 DDL ELECTRONICS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENT OF OPERATIONS
                              (Unaudited)

                                        Three Months Ended   
                                             March 31,       
                                      -----------------------
                                       1997             1996
                                      ------           ------
Sales                              $13,580,000      $10,501,000

Cost of goods sold                  11,600,000        9,147,000
                                    ----------        ---------
Gross profit                         1,980,000        1,354,000
                                    ----------        ---------
Operating expenses:
  Administrative and selling         1,290,000        1,042,000
  Goodwill amortization                317,000          317,000
                                    ----------        ---------
                                     1,607,000        1,359,000
                                    ----------        ---------

Operating income (loss)                373,000           (5,000)
                                    ----------        ---------
Non-operating income (expense):
  Investment income                     16,000            8,000
  Interest expense                    (279,000)        (355,000)
  Other income (expense)                24,000          (53,000)
                                    ----------        ---------
                                      (239,000)        (400,000)
                                    ----------        ---------

Income (loss) before taxes             134,000         (405,000)

Income tax benefit                       -                -
                                    ----------        ---------
Income (loss) before
  extraordinary item                   134,000         (405,000)

Extraordinary item - gain on
  debt extinguishment                    -            2,356,000
                                    ----------        ---------

Net income                         $   134,000      $ 1,951,000
                                    ==========        =========

Earnings per share:
  Income (loss) before
    extraordinary item                 $  0.01          $ (0.02)
  Extraordinary item                       -               0.12
                                          ----             ----
Total earnings per share               $  0.01          $  0.10
                                          ====             ====
Shares used in computing
 earnings per share                 23,285,231       19,064,501
                                    ==========       ==========

                   See accompanying Notes to Unaudited
                    Consolidated Financial Statements

<PAGE>
                 DDL ELECTRONICS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENT OF OPERATIONS
                              (Unaudited)

                                         Nine Months Ended 
                                             March 31,       
                                      -----------------------
                                       1997             1996
                                      ------           ------
Sales                              $34,660,000      $22,722,000

Cost of goods sold                  30,161,000       19,985,000
                                    ----------       ----------
Gross profit                         4,499,000        2,737,000
                                    ----------       ----------
Operating expenses:
  Administrative and selling         3,653,000        2,937,000
  Goodwill amortization                951,000          317,000
                                    ----------       ----------
                                     4,604,000        3,254,000
                                    ----------       ----------

Operating loss                        (105,000)        (517,000)
                                    ----------       ----------
Non-operating income (expense):
  Investment income                     59,000          208,000
  Interest expense                    (844,000)        (584,000)
  Other income (expense)              (232,000)         114,000
                                    ----------       ----------
                                    (1,017,000)        (262,000)
                                    ----------       ----------

Loss before income taxes            (1,122,000)        (779,000)

Income tax benefit                       -            1,110,000 
                                    ----------       ----------
Income (loss) before
  extraordinary item                (1,122,000)         331,000

Extraordinary item - gain on
  debt extinguishment                    -            2,356,000
                                    ----------        ---------

Net income (loss)                  $(1,122,000)     $ 2,687,000
                                    ==========       ==========

Earnings (loss) per share:
  Income (loss) before
    extraordinary item                 $ (0.05)         $  0.02
  Extraordinary item                       -               0.13
                                          ----             ----
Total earnings (loss) per share        $ (0.05)         $  0.15
                                          ====             ====
Shares used in computing
 earnings (loss) per share          23,046,615       17,677,831
                                    ==========       ==========

                   See accompanying Notes to Unaudited
                    Consolidated Financial Statements

<PAGE>
               DDL ELECTRONICS, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF CASH FLOWS
                             (UNAUDITED)

                                                 Nine Months Ended 
                                                      March 31,
                                              -----------------------
                                               1997             1996
                                              ------           ------
Cash flows from operating activities:
  Net income (loss)                        $(1,122,000)      $ 2,687,000
  Adjustments to reconcile net income
   (loss) to net cash used by operating
   activities:
    Depreciation and amortization            2,356,000         1,152,000
    Gain on debt extinguishment                  -            (2,356,000)
    Gain on sale of assets                    (128,000)            -    
    Net increase in operating
     working capital                        (3,595,000)       (1,773,000)
    (Increase) decrease in deposits
     and other assets                          100,000          (500,000)
    Benefit of noncapital grants              (181,000)         (207,000)
    Other                                       65,000             6,000   
                                             ---------         ---------
Net cash used by operating
  activities                                (2,505,000)         (991,000)
                                             ---------         ---------
Cash flows from investing activities:
  Capital expenditures                        (697,000)         (696,000)
  Proceeds from sale of assets                 202,000             -    
  Purchase of SMTEK, Inc., net of
    cash acquired                                -            (7,638,000)
                                             ---------         ---------
Net cash used by investing activities         (495,000)       (8,334,000)

Cash flows from financing activities:
  Proceeds from bank lines of credit         1,955,000             -    
  Proceeds from long-term debt                   -             8,800,000
  Payments of long-term debt                  (556,000)       (1,445,000)
  Debt issue costs                               -              (352,000)
  Proceeds from issuance of common stock, net    -             1,112,000
  Proceeds from exercise of stock options        -               492,000
  Proceeds from exercise of warrants             -               317,000
  Proceeds from foreign government grants      467,000           231,000
                                             ---------         ---------
Net cash provided by financing activities    1,866,000         9,155,000
                                             ---------         ---------

Effect of exchange rate changes on cash         44,000           (98,000)
                                             ---------         ---------
Decrease in cash and cash equivalents       (1,090,000)         (268,000)
Cash and cash equivalents at 
 beginning of period                         2,519,000         2,917,000
                                             ---------         ---------
Cash and cash equivalents at 
 end of period                             $ 1,429,000       $ 2,649,000
                                             =========         =========

                   See accompanying Notes to Unaudited
                    Consolidated Financial Statements
<PAGE>


                   DDL ELECTRONICS, INC. AND SUBSIDIARIES 
            NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 



Note 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DDL Electronics, Inc. provides integrated design and electronic manufacturing 
services ("EMS") to original equipment manufacturers ("OEMs") in the 
computer, telecommunications, instrumentation, medical, industrial and 
aerospace industries. The Company also manufactures multilayer printed 
circuit boards ("PCBs") for use primarily in the computer, communications and 
instrumentation industries.  The Company's EMS operations are located in 
Southern California and Northern Ireland.  The Company's PCB facilities are 
located in Northern Ireland. 

The accompanying consolidated financial statements, which have not been 
audited by independent accountants (except for the balance sheet as of June 
30, 1996), include the accounts of DDL Electronics, Inc. and its 
subsidiaries.  All significant intercompany transactions and accounts have 
been eliminated in consolidation.  In the opinion of the Company's 
management, the accompanying consolidated financial statements reflect all 
adjustments (consisting of normal recurring accruals) necessary to present 
fairly the Company's financial position at March 31, 1997 and its results of 
operations and cash flows for the nine months ended March 31, 1997 and 1996. 

The Company uses a 52-53 week fiscal year ending on the Friday closest to 
June 30.  In the accompanying interim consolidated financial statements, the 
interim period end for both years is shown as March 31 for clarity of 
presentation.  The actual periods ended on March 28, 1997 and March 29, 1996.  
Certain notes and other information are condensed or omitted from the interim 
financial statements presented in this Quarterly Report on Form 10-Q.  
Therefore, these financial statements should be read in conjunction with the 
Company's 1996 Annual Report to Stockholders as filed with the Securities and 
Exchange Commission on October 11, 1996.

Certain reclassifications have been made to the interim fiscal 1996 financial 
statements to conform with the fiscal 1997 financial statement presentation.  
Such reclassifications had no effect on the Company's results of operations 
or stockholders' equity.  


Note 2 - REVENUE AND COST RECOGNITION

The Company's Northern Ireland operating units recognize sales and cost of 
sales upon shipment of products.  

SMTEK, the Company's U.S. operating unit which was acquired in January 1996, 
has historically generated the majority of its revenue through long-term 
contracts with suppliers of electronic assemblies and products to the federal 
government. Consequently, SMTEK uses the percentage of completion method to 
recognize sales and cost of sales.  SMTEK determines percentage complete on 
the basis of costs incurred to total estimated costs.  Contract costs include 
all direct material and labor costs and those indirect costs related to 
contract performance, such as indirect labor, supplies, tools, repairs and 
depreciation costs.  Selling, general and administrative costs are charged to 
expense as incurred.  In the period in which it is determined that a loss 
<PAGE>
will result from the performance of a contract, the entire amount of the 
estimated loss is charged to income.  Other changes in contract price and 
estimates of costs and profits at completion are recognized prospectively.  
This method recognizes in the current period the cumulative effect of the 
changes on current and prior periods.  The asset "Costs and estimated 
earnings in excess of billings on uncompleted contracts" represents revenues 
recognized in excess of amounts billed.  


Note 3 - ACCOUNTS RECEIVABLE

The components of accounts receivable are as follows:


                                       March 31,      June 30,
                                         1997           1996
                                         ----           ----
    Trade receivables                 $9,022,000     $5,456,000
    Other receivables                    568,000        296,000
    Less allowance for doubtful
     accounts                           (161,000)      (132,000)
                                       ---------      ---------
                                      $9,429,000     $5,620,000
                                       =========      =========

Included in other receivables at March 31, 1997 and June 30, 1996 are grants 
due from the Industrial Development Board for Northern Ireland of $61,000 and 
$251,000, respectively.  


Note 4 - COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS ON UNCOMPLETED
          CONTRACTS

The components of costs and estimated earnings in excess of billings on 
uncompleted contracts are as follows:

                                       March 31,      June 30,
                                         1997           1996
                                         ----           ----
  Costs incurred on uncompleted
   contracts                         $20,004,000    $11,181,000
  Estimated earnings                   2,024,000      1,544,000 
                                      ----------     ----------
                                      22,028,000     12,725,000
  Less:  Billings to date            (17,327,000)    (9,613,000)
         Customer advances and
          progress payments             (307,000)       (86,000)
                                      ----------     ----------
                                     $ 4,934,000    $ 3,026,000  
                                      ==========     ========== 

Costs and estimated earnings in excess of billings on uncompleted contracts 
consists of revenue recognized under electronics assembly contracts which 
amounts were not billable at the balance sheet date.  Essentially all of the 
unbilled receivables are expected to be billed within 90 days of the balance 
sheet date.



<PAGE>
Note 5 - INVENTORIES

Inventories consist of the following:

                                       March 31,      June 30,
                                         1997           1996
                                         ----           ----
  Raw materials                       $2,782,000     $2,853,000
  Work in process                        953,000      1,263,000
  Finished goods                          65,000        146,000
  Less reserves                         (367,000)      (248,000)
                                       ---------      ---------
                                      $3,433,000     $4,014,000
                                       =========      =========

Note 6 - OTHER ACCRUED LIABILITIES

Other accrued liabilities consist of the following:

                                       March 31,      June 30,
                                         1997           1996
                                         ----           ----
  Environmental liabilities           $  649,000     $  728,000
  Accrued taxes payable                  795,000        951,000
  Other                                1,157,000      1,435,000
                                       ---------      ---------
                                      $2,601,000     $3,114,000
                                       =========      =========


Note 7 - FINANCING ARRANGEMENTS

Bank line of credit agreements:

The Company has an accounts receivable-based working capital bank line of 
credit for SMTEK, its U.S. EMS operation, which provides for borrowings of up 
to $2,500,000 at an interest rate of prime plus 1.25%. At March 31, 1997, 
borrowings outstanding under this credit facility amounted to $863,000.  The 
Company also has a credit facility agreement with Ulster Bank Markets for its 
Northern Ireland operations.  This agreement includes a working capital line 
of credit of 1,150,000 pounds sterling (approximately $1,875,000), and 
provides for interest on borrowings at 1-1/2% over the bank's base rate.  At 
March 31, 1997, borrowings outstanding under this credit facility amounted to 
$1,106,000.   

Acquisition indebtedness:

In February 1996, the Company issued 10% Senior Secured Notes due July 1, 
1997 in the aggregate amount of $5,300,000 (the "10% Senior Notes") as 
partial financing for the acquisition of SMTEK.   

The 10% Senior Notes are secured by (i) 1,060,000 shares of common stock and 
(ii) warrants to purchase 1,060,000 shares of common stock (the "Collateral 
Warrants"), all of which have been placed into an escrow account. In the 
event the Collateral Warrants are required to redeem the 10% Senior Notes, 
each warrant would be exercisable into one share of common stock at a price 
which is 6% less than the market value of the Company's common stock at the 
time of exercise. If the 10% Senior Notes are repaid from sources other than 
the Collateral Warrants, then the Collateral Warrants expire and can no 
<PAGE>
longer be exercised. 

The Company plans to retire the 10% Senior Notes at or prior to maturity by 
issuing new common stock.  The note holders have the option to accept common 
stock in lieu of cash.  If the note holders do not so elect, then the Company 
will endeavor to issue stock to other parties to raise the payoff amount.  No 
assurance can be given that the Company will be able to sell stock on 
acceptable terms or at all.  Under certain circumstances, as set forth in the 
agreements governing the 10% Senior Notes, the Company can apply 
approximately 700,000 of the 1,060,000 common stock shares held in escrow 
toward the payoff of these notes.  The total number of new shares of common 
stock which would need to be issued to fund the retirement of these notes 
depends on several factors, including: (i) whether the notes are paid off 
prior to the maturity date; (ii) if paid prior to maturity, whether the 
prepayment is partial or complete; and (iii) the market price of the 
Company's common stock at the time of issuance.


Note 8 - INFORMATION RELATING TO STATEMENT OF CASH FLOWS

"Net cash used by operating activities" includes cash payments for interest 
as follows:
                                         Nine months ended
                                             March 31,
                                       ---------------------
                                        1997           1996
                                       ------         ------
Interest paid                        $ 834,000      $ 433,000 
                                       =======        =======   

"Net increase in operating working capital" is comprised of the following:

                                         Nine months ended
                                             March 31,
                                       ---------------------
                                        1997           1996
                                       ------         ------
(Increase) decrease in 
  accounts receivable              $(3,736,000)    $   226,000
Increase in costs and estimated
 earnings in excess of billings
 on uncompleted contracts           (1,418,000)     (1,621,000)
(Increase) decrease in
  inventories                          779,000      (1,625,000)
Decrease in prepaid expenses           109,000          57,000
Increase in accounts payable         1,225,000         312,000
Decrease in accrued payroll 
 and employee benefits                 (30,000)        (23,000)
Increase (decrease) in other
 liabilities                          (524,000)        901,000
                                     ---------       ---------
Net increase in operating
 working capital                   $(3,595,000)    $(1,773,000)
                                     =========       =========





<PAGE>
Following is the supplemental schedule of non-cash investing and financing 
activities:
                                         Nine months ended
                                             March 31,
                                       ---------------------
                                        1997           1996
                                       ------         ------
Capital expenditures financed by
 lease obligations                  $  710,000      $  619,000 

Conversion of debt to equity        $  153,000      $  124,000

Common stock issued as partial
  consideration for purchase of 
  SMTEK, Inc.                            -          $  801,000

Common stock issued as debt
  placement fee                          -          $  716,000

Common stock issued as collateral
  for 10% Senior Notes                   -          $1,325,000

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS

Certain statements made below are forward-looking in nature and reflect the 
Company's current expectations and plans.  Such statements involve various 
risks and uncertainties that could cause actual results to differ materially 
from those currently expected by the Company.  Meaningful factors that might 
cause such differences include, but are not limited to, significant 
historical losses, limited capital resources and a continuing need for 
financing, dependence on key personnel, concentration of revenues among major 
customers, historical dependence on government business on the part of the 
Company's U.S. operating unit and a recent shift into commercial business, 
industry conditions, competition, environmental matters, dependence on 
suppliers and other factors discussed in the Company's Securities and 
Exchange Commission filings, including other factors described as "Risk 
Factors" in the Company's Registration Statement on Form S-3 (No. 333-02969).

DESCRIPTION OF THE BUSINESS

The Company provides integrated design and electronic manufacturing services 
("EMS") to original equipment manufacturers ("OEMs") in the computer, 
telecommunications, instrumentation, medical, industrial and aerospace 
industries. The Company also manufactures multilayer printed circuit boards 
("PCBs") for use primarily in the computer, communications, and 
instrumentation industries.  The Company's EMS operations are located in 
Southern California and Northern Ireland.  Its PCB facilities are located in 
Northern Ireland.

The Company entered the EMS business by acquiring its domestic EMS operations 
in 1985 and by organizing its European EMS operations in 1990.  In fiscal 
1995, the Company liquidated or sold all assets associated with its PCB and 
EMS operations in the United States.  In January 1996, as the first step 
toward rebuilding a domestic presence in the EMS industry, the Company 
acquired SMTEK, Inc. ("SMTEK"), a provider of integrated design and 
electronic manufacturing services. 

<PAGE>
RESULTS OF OPERATIONS

Consolidated sales for the three months ended March 31, 1997 were 
$13,580,000, compared to $10,501,000 for the same period in the previous 
fiscal year.  Sales of DDL Electronics, Ltd. ("DDL-E"), the Company's 
Northern Ireland EMS operation, increased $2,522,000 in the latest quarter 
compared to the third quarter of last year.  For the three months ended March 
31, 1997, sales of SMTEK and Irlandus Circuits, Ltd. ("Irlandus"), the 
Company's PCB operation, increased approximately 11% and 10%, respectively, 
over sales for the comparable period of the prior year.

Consolidated sales for the nine months ended March 31, 1997 were $34,660,000, 
compared to $22,722,000 for the same period in the previous fiscal year. The 
sales increase results primarily from the acquisition of SMTEK, which 
contributed revenues of $13,120,000 in the nine months ended March 31, 1997, 
compared to $4,871,000 for the same period in the previous fiscal year.  
Because the acquisition of SMTEK in January 1996 was accounted for using the 
purchase method, SMTEK's operations prior to the acquisition are not included 
in the Company's results.  For the nine months ended March 31, 1997, sales of 
DDL-E and Irlandus increased 40% and 5%, respectively, over sales for the 
comparable period of the prior year.

Consolidated gross profit for the three months ended March 31, 1997 was 
$1,980,000, compared to $1,354,000 for the comparable period of the prior 
year. SMTEK's gross profit declined from $979,000 for the three months ended 
March 31, 1996 to $689,000 for the three months ended March 31, 1997, despite 
higher sales, due to higher direct material costs as a percentage of sales, 
as well as an increase in the number of production employees handling the 
higher sales volume.  DDL-E's gross profit increased by $496,000 between 
these two periods due to higher sales volume in the latest quarter and the 
fact that DDL-E's gross profit in last year's third quarter was adversely 
impacted by a ramp-up in the workforce and higher than normal equipment 
maintenance costs.  Irlandus' gross profit increased by $402,000 between 
these two periods, due primarily to a reduction of indirect costs.  The 
Company's consolidated gross profit margin increased from 12.9% in the three 
months ended March 31, 1996 to 14.6% in the latest quarter as a result of the 
increase in gross profit margin of Irlandus and DDL-E.

Consolidated gross profit for the nine months ended March 31, 1997 improved 
by $1,762,000 compared to the same period of the prior year.  SMTEK's gross 
profit of $1,861,000 for the latest nine month period, compared to $979,000 
for the nine months ended March 31, 1996, accounted for $882,000 of the 
increase.  Gross profit of DDL-E and Irlandus for the nine months ended March 
31, 1997 increased $298,000 and $582,000, respectively, compared to the same 
period of the prior year.  These increases were primarily attributable to the 
factors cited above for the three month comparative periods.  The Company's 
consolidated gross profit margin increased from 12.0% in the nine months 
ended March 31, 1996 to 13.0% in the nine months ended March 31, 1997, due 
primarily to improvement in Irlandus' gross profit margin from 12.8% in the 
nine months ended March 31, 1996 to 19.3% in the latest nine month period.  
The improvement in Irlandus' gross profit margin is attributable to an 
increase in higher margin quick-turn orders and a reduction of indirect costs 
as a percentage of sales.

Administrative and selling expenses increased from $1,042,000 for the three 
months ended March 31, 1996 to $1,290,000 for the three months ended March 
31, 1997 due primarily to an increase in legal and consulting fees.


<PAGE>
Administrative and selling expenses for the nine months ended March 31, 1997 
were $3,653,000, compared to $2,937,000 for the same period in the previous 
year. This increase is principally the result of the acquisition of SMTEK in 
January 1996.

In the three months ended March 31, 1997, consolidated operating income was 
$373,000, compared to a consolidated operating loss of $5,000 in the three 
months ended March 31, 1996.  This improvement is primarily attributable to 
increased gross profit of Irlandus and DDL-E.

Consolidated operating losses were $105,000 and $517,000 for the nine months 
ended March 31, 1997 and 1996, respectively.  A smaller operating loss was 
incurred in 1997 despite an increase in goodwill amortization expense from 
$317,000 in the earlier nine month period to $951,000 in the latest nine 
month period.  This operating loss improvement is principally the result of 
increased gross profit in the latest nine month period.

Investment income for the nine months ended March 31, 1997 and 1996 was 
$59,000 and $208,000, respectively.  The 1996 amount includes nonrecurring 
interest income of $106,000 received on income tax refunds.

Interest expense decreased from $355,000 in the three months ended March 31, 
1996 to $279,000 in the three months ended March 31, 1997 because $3,500,000 
of 10% convertible debentures issued in February 1996 were converted to 
equity in May and June 1996.  In the nine months ended March 31, 1997 and 
1996, interest expense was $844,000 and $584,000, respectively.  This 
increase is attributable to interest on debt issued in 1996 to finance the 
SMTEK acquisition.

Other income (expense) for the nine months ended March 31, 1997 and 1996 was 
($232,000) and $114,000, respectively.  The 1997 amount includes debt issue 
cost amortization expense of $372,000 associated with the debt issued to 
finance the SMTEK acquisition, offset by a gain on the sale of assets of 
$128,000.  The 1996 amount includes a $100,000 gain recognized upon the 
negotiated settlement of a facility lease commitment at less than the amount 
previously reserved.

In fiscal year 1996, the Company recognized an income tax benefit associated 
with application for federal tax refunds as permitted under section 172(f) of 
the Internal Revenue Code.  In the aggregate the Company applied for federal 
tax refunds of $2,175,000, net of costs associated with applying for such 
refunds.  To date, the Company has received $1,871,000 of net refunds plus 
interest on such refunds of $106,000, and has recognized as an income tax 
benefit $1,110,000 net of certain expenses. Because of the possibility that 
the tax returns underlying these refunds may be subject to audit by the 
Internal Revenue Service and a portion of the refunds disallowed, the Company 
has not yet recognized a tax benefit for the remainder of the refunds 
received to date, or for the refunds still expected to be received.  
Nonetheless, the Company feels that its claim for refund and carry back of 
net operating losses can be substantiated and is supported by law, and that 
the Company will ultimately collect and retain a substantial portion of the 
refunds applied for.

Income (loss) before extraordinary item for the nine months ended March 31, 
1997 was ($1,122,000) or ($0.05) per share, compared to $331,000 or $0.02 per 
share for the same period of fiscal 1996.  Income (loss) before extraordinary 
item for the fiscal 1996 period includes the $1,110,000 income tax benefit 
discussed above.

<PAGE>
Net income (loss) for the nine months ended March 31, 1997 was ($1,122,000) 
or ($0.05) per share, compared to $2,687,000 or $0.15 per share for the same 
period of fiscal 1996.  Net income (loss) for the first nine months of fiscal 
1996 includes an extraordinary gain on debt extinguishment of $2,356,000 
associated with the negotiated reduction in March 1996 of the Company's 
obligations under several consulting and deferred fee arrangements with 
certain former officers, employees and directors.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of liquidity are its cash and cash equivalents, 
which amounted to $1,429,000 at March 31, 1997, and its bank lines of credit.  
During the nine months ended March 31, 1997, cash and cash equivalents 
decreased by $1,090,000.  This decrease consisted of cash used by operating 
activities of $2,505,000 and capital expenditures of $697,000, partially 
offset by cash inflows of $1,399,000 from new borrowings net of debt 
repayments, proceeds from government grants of $467,000, proceeds from the 
sale of assets of $202,000, and the effect of exchange rate changes on cash 
of $44,000.  

Components of operating working capital increased by $3,595,000 during the 
first nine months of fiscal 1997, comprised of a $3,736,000 increase in 
accounts receivable, a $1,418,000 increase in costs and earnings in excess of 
billings on uncompleted contracts and a $554,000 decrease in accrued 
liabilities, partially offset by a $1,225,000 increase in accounts payable, a 
$779,000 decrease in inventory and a $109,000 decrease in prepaid expenses 
and other current assets. 

Accounts receivable increased from $5,620,000 at June 30, 1996 to $9,429,000
at March 31, 1997.  This increase results primarily from an increase in sales
from $10,414,000 in the three months ended June 30, 1996 to $13,580,000 in the
three months ended March 31, 1997.

The Company has an accounts receivable-based working capital bank line of 
credit for SMTEK which provides for borrowings of up to $2,500,000 at an 
interest rate of prime plus 1.25%. At March 31, 1997, borrowings outstanding 
under this credit facility amounted to $863,000.  The Company also has a 
credit facility agreement with Ulster Bank Markets for its Northern Ireland 
operations.  This agreement includes a working capital line of credit of 
1,150,000 pounds sterling (approximately $1,875,000), and provides for 
interest at 1-1/2% over the bank's base rate.  At March 31, 1997, borrowings 
outstanding under this credit facility amounted to $1,106,000.   

In February 1996, the Company issued 10% Senior Secured Notes due July 1, 
1997 in the aggregate amount of $5,300,000 (the "10% Senior Notes") as 
partial financing for the acquisition of SMTEK.  The 10% Senior Notes are 
secured by (i) 1,060,000 shares of common stock and (ii) warrants to purchase 
1,060,000 shares of common stock (the "Collateral Warrants"), all of which 
have been placed into an escrow account. In the event the Collateral Warrants 
are required to redeem the 10% Senior Notes, each warrant would be 
exercisable into one share of common stock at a price which is 6% less than 
the market value of the Company's common stock at the time of exercise. If 
the 10% Senior Notes are repaid from sources other than the Collateral 
Warrants, then the Collateral Warrants expire and can no longer be exercised.

The Company plans to retire the 10% Senior Notes at or prior to maturity by 
issuing new common stock.  The note holders have the option to accept common 
stock in lieu of cash.  If the note holders do not so elect, then the Company 
will endeavor to issue stock to other parties to raise the payoff amount.  No 
<PAGE>
assurance can be given that the Company will be able to sell stock on 
acceptable terms or at all.  Under certain circumstances, as set forth in the 
agreements governing the 10% Senior Notes, the Company can apply 
approximately 700,000 of the 1,060,000 common stock shares held in escrow 
toward the payoff of these notes.  The total number of new shares of common 
stock which would need to be issued to fund the retirement of these notes 
depends on several factors, including: (i) whether the notes are paid off 
prior to the maturity date; (ii) if paid prior to maturity, whether the 
prepayment is partial or complete; and (iii) the market price of the 
Company's common stock at the time of issuance.

Cash and cash equivalents have declined steadily over the last nine months, 
primarily to fund increases in working capital necessitated by higher sales 
and backlog levels.  The cash decline is a matter of concern to management 
and the Board of Directors, who are considering several means of addressing 
the situation. 

The Company's financial statements are presented on a going concern basis, 
which contemplates the realization of assets and satisfaction of liabilities 
in the normal course of business.  The Company incurred an operating loss of 
$105,000 and negative cash flow from operating activities of $2,505,000 
during the nine months ended March 31, 1997.  In addition, at March 31, 1997 
the Company had a working capital deficit of $1,398,000 as a result of 
transferring the $5,300,000 10% Senior Notes maturing July 1997 from long-
term debt to current liabilities.

With the exception of the latest quarter, during which the Company generated 
operating income of $373,000, the Company has incurred operating losses for a 
number of years.  Management anticipates that the Company could incur further 
operating losses for at least the near term future due to the goodwill 
amortization expense arising from the acquisition of SMTEK.  Operating losses 
could continue until such time as sales increase to a level sufficient to 
offset goodwill amortization.  No assurance can be given as to whether or 
when such sales increases may be achieved.  Sales increases will depend in part 
upon strengthening the Company's sales and marketing functions for its 
existing operations and improving its price competitiveness in the EMS 
industry by achieving economies of scale in the procurement of electronic 
components.  

The achievement of sustained operating profitability is the most significant 
internal factor to ensure the Company's long-term viability.  No assurance 
can be given that the Company will attain operating profitability or that 
cash generated from non-operating sources will be adequate to fund future 
cash needs.  As a necessary step to ensure the Company's increased profit-
ability, the Company is actively pursuing strategic merger and acquisition 
candidates that will help ensure growth of the Company in the markets and 
industries in which it has expertise.  No assurance can be given that any 
such merger or acquisition will occur.

Management believes that the Company's cash resources and borrowing capacity 
on its bank lines of credit are sufficient to fund operations at current 
levels for at least the next 12 months.


<PAGE>
PART II.  OTHER INFORMATION
Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

a.  Exhibits:
    
     11    Computation of Earnings Per Share

     27    Financial Data Schedule (electronic filing only)


b.  Reports on Form 8-K: 

There were no reports filed on Form 8-K during the three months ended  
March 31, 1997. 




                                 SIGNATURE 

Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized. 



         May 12, 1997                           /s/ Richard K. Vitelle   
---------------------------------        -----------------------------------
            Date                                Richard K. Vitelle 
                                                Vice President -Finance 
                                               (Principal Financial Officer)