UNITED STATES 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 For the Fiscal Year Ended December 31, 2003

                       OR

( )  Transition Report Pursuant to Section 13 or 15(d) of The Securities
     Exchange Act of 1934

                         Commission File Number 0-275

                           Allen Organ Company
            (Exact name of registrant as specified in its charter)

     Pennsylvania                       23-1263194
  (State of Incorporation)      (IRS Employer Identification No.)

  150 Locust Street, P. O. Box 36, Macungie, Pennsylvania      18062-0036
  (Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code           610-966-2200

         Securities registered pursuant to section 12 (b) of the Act:

                                     None

         Securities registered pursuant to section 12 (g) of the Act:

                 Class B Common Shares, par value $1 per share
                               (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 S-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  amendment  of
this Form 10-K.  (  X  )
The  Class A voting stock of the registrant is not registered pursuant  to  the
Securities  Exchange Act of 1934, is not publicly traded,  and,  therefore,  no
market value information exists for such stock held by non-affiliates.
The  number of shares outstanding of each of the Registrant's classes of common
stock, as of the close of business on March 24, 2004:
Class A - Voting     83,864                Class B - Non-voting     1,072,379
Indicate by check mark whether the registrant is an accelerated filer (as
defined by Rule 12b-2 of the Act).
                               Yes            No   X
The aggregate market value of the Class B Common Shares held by non-affiliates
of the Registrant as of June 30, 2003:  $32,438,239
<PAGE>
                              ALLEN ORGAN COMPANY

                                     INDEX


Item

                                    PART I

1. Business
      - General developments of business
      - Industry Segments
      - Description of business
      - Financial information about geographic areas
      - Available information
2. Properties
3. Legal Proceedings
4. Submission of Matters to a Vote of Security Holders

                                    PART II

5. Market for the Registrants Common Stock and
      Related Stockholder Matters
6. Selected Consolidated Financial Data
7. Management's Discussion and Analysis of Financial Condition and
      Results of Operations
7A.Quantitative and Qualitative Disclosures About Market Risk
8. Financial Statements and Supplemental Data
9. Changes in and Disagreements with Accountants on Accounting
      and Financial Disclosure
9A Controls and Procedures

                                   PART III

10.   Directors and Executive Officers of the Registrant
11.   Executive Compensation
12.   Security Ownership of Certain Beneficial Owners and Management
13.   Certain Relationships and Related Transactions
14.   Principal Accountant Fees and Services

                                    PART IV

15.   Exhibits, Financial Statement Schedules and Reports on Form 8-K

Signatures

Financial Statement Schedules

Exhibits
<PAGE>
                                    PART I
Item 1.   Business

          General developments of business.
                Incorporated in Pennsylvania in 1945, Allen Organ  Company  and
          Subsidiaries  ("Company") operate in four industry segments:  Musical
          Instruments,  Data  Communications, Electronic Assemblies  and  Audio
          Equipment.
                The Musical Instruments segment consists of the manufacture and
          sale  of  electronic keyboard musical instruments, primarily  digital
          church  organs and accessories.  During 2003 the Musical  Instruments
          segment  was  negatively affected by the continued  weakness  in  the
          economy, declines in financial markets and general global uncertainty
          caused  by  the  war  in  Iraq.   These factors  negatively  impacted
          contributions to religious institutions, this segments major  market,
          and  led to a reduction in the 2003 order rate resulting in lower net
          sales  and  operating  losses for this segment.  Management  believes
          that  recent  signs of improvement in both the economy and  financial
          markets  may  have  a  positive effect on the order  rate  for  2004.
          However,  the budgets and spending patterns of religious institutions
          often lag the general economy and, as a result, the recovery for this
          segment may take longer than the economy's overall recovery.   During
          2003  management took steps to lower operating costs at its Macungie,
          PA plant.
                The  Data  Communications  segment  designs  and  markets  data
          networking  products.  This segment's 2003 sales  were  approximately
          equal  to  2002,  while gross margins and operating income  increased
          when  compared to 2002.  The increase in gross margin was mainly  the
          result  of  favorable  product mix changes.   Future  sales  in  this
          segment   have   become  increasingly  dependent  on   larger   sales
          opportunities  that could result in the amount and timing  of  future
          revenue  being  more  volatile.  The markets in  which  this  segment
          operates have seen improvement in the level of business activity,  as
          well as the way financial markets view the industry.
                 The   Electronics  Assemblies  segment  provides   subcontract
          manufacture  of  electronic assemblies for  outside  customers.   The
          economic  downturn has negatively affected the Electronic  Assemblies
          segment,  resulting in a significant reduction in its order  rate  in
          2003  compared  to  earlier periods.  Management  believes  that  its
          efforts   to  diversify  its  customer  base  and  recent  signs   of
          improvement  in  the  economy may improve the  order  rate  for  this
          segment in 2004.
                The  Audio Equipment segment designs, manufactures and  markets
          high-quality audio speaker cabinets for hi-fi stereo and home theater
          applications.  This segment's 2003 sales were approximately equal  to
          2002.   The  economic downturn also negatively affected this  segment
          whose  products  are  discretionary  spending  items.   This  segment
          continues its efforts to develop an expanded dealer network.

          Industry segments.
                 The  Company  operates  in  four  industry  segments:  Musical
          Instruments,  Data  Communications, Electronic Assemblies  and  Audio
          Equipment.   For financial information concerning the  segments,  see
          Note 22 to the Consolidated Financial Statements.

          Description of business.

              Musical Instruments.
                Allen  Organ  Company is a leading manufacturer  of  electronic
          keyboard  musical  instruments, primarily digital church  organs  and
          accessories.   This segment accounted for 34%, 37%  and  40%  of  net
          sales in 2003, 2002 and 2001, respectively.
                The  principal  market for the Musical Instruments  segment  is
          institutions, primarily churches.  Sales to the home market make up a
          smaller  portion  of this segment's sales.  Musical  Instruments  are
          distributed  mostly  through  dealers, primarily  independent  retail
          music  stores throughout the United States, with a lesser  percentage
          distributed through dealers internationally.  The segment's  business
          is not seasonal.
                The principal raw materials used in the segment's products  are
          electronic  components  and wood, which are  readily  available  from
          various sources without undue difficulty.  Traditionally, organs have
          longer  service  requirements than other digital products.   As  life
          cycles  for electronic components have shortened in recent years  the
          Company has had to redesign some circuit boards to satisfy the  needs
          of  current and past customers.  At the present time, management does
          not   expect  this  issue  to  significantly  affect  future  product
          shipments.
                This  segment  does  not engage in any significant  amounts  of
          extended  payment  terms,  or  lease  guarantees.   The  Company   is
          contingently  liable in connection with certain customers'  financing
          arrangements  (see Note 13 to the Consolidated Financial Statements).
          The  dollar amounts and number of times the Company has had to  honor
          these repurchase agreements are negligible.
                The  Musical Instruments segment is not dependent on any single
          or  small group of customers, the loss of which would have a material
          adverse  effect on the business.  The dollar amount of the  segment's
          unshipped order backlog at the end of February 2004 and 2003 was $3.6
          million  and $4.2 million, respectively.  All orders are expected  to
          be filled in the current year.
                The  organ industry is competitive involving at least five  (5)
          domestic  and  foreign companies manufacturing  digital  organs.   In
          addition,  there are many small pipe organ companies that  serve  the
          institutional organ market.  The organ market consists of  two  basic
          divisions,   institutional   (primarily   churches)   and   home   or
          entertainment.   Management believes it is the  largest  supplier  of
          organs  for  the  institutional market in the United States  (largest
          world  market) because of product performance and competitive prices,
          and  a  smaller percentage of the home or entertainment organ market.
          This  segment also markets its organ consoles and control electronics
          to  customers that want to retain their wind-blown pipes and  augment
          them   with  digital  voices.   Allen  Organ  Company  maintains   an
          aggressive research and development program to take advantage of  the
          latest  in  technological  developments  relating  to  digital  sound
          generation.

              Data Communications.
                The  Data  Communications segment consists of Eastern Research,
          Inc.   (ERI).    This   segments  operations  are  headquartered   in
          Moorestown,  New  Jersey.   ERI designs and markets  data  networking
          products  enabling network service providers to deliver  services  to
          their customers.  This segment accounted for 59%, 54% and 43% of  the
          Company's net sales in 2003, 2002 and 2001, respectively.
                Data Communications products are sold directly to end-users, to
          wholesale  and retail distributors worldwide and to a smaller  extent
          under  OEM agreements with some customers.  The segment maintains  an
          inventory  of  in-process  and finished  goods  to  allow  for  rapid
          fulfillment of customer orders that is expected in the industry.
                The  principal  raw  materials used in the Data  Communications
          products are electronic components, which are readily available  from
          various  sources  without  undue  difficulty.   As  life  cycles  for
          electronic components have shortened in recent years, the Company has
          had  to  redesign some circuit boards to satisfy the needs of current
          and  past customers.  At the present time, management does not expect
          this to significantly affect future product shipments.
                The  Data  Communications segment derived 16% of its  2003  net
          sales  from one customer, 40% of its net sales from two customers  in
          2002, and 13% of its net sales from one customer in 2001.
                ERI's  customer  base  includes  major  end-user  corporations,
          network  service providers, wireless service providers,  and  others,
          both  in  the  domestic and international markets.   There  are  many
          competitors  in  this  market  that  is  dominated  by   large   data
          communications companies, such as Adtran, Tellabs and  Alcatel.   The
          Company's  strategy  has been to target market niches  with  products
          that   provide  desirable  features  and  packaging  with  attractive
          pricing.
                ERI initially built its business in the CSU/DSU market and also
          developed  router technology products.  In 1997, ERI  introduced  its
          multi-service access concentrator (DNX) family of products.  ERI  has
          expanded this product family and broadened its feature set making the
          DNX  its  flagship product.  The DNX revenues represent approximately
          89% of ERI's net sales for 2003.  During 2002, ERI introduced the DNX-
          1u,  which is targeted at wireless service providers.  The DNX-1u  is
          the  smallest product in the DNX family and includes up 8  T1  or  E1
          circuits.  This and prior product introductions have strengthened the
          DNX  product line.  The largest product in the DNX line is the DNX-88
          that  can handle as many as 600 T1 circuits and also includes T3  and
          OC3  (optical) capabilities.  To properly capitalize on this market's
          opportunities,  ERI  has implemented aggressive marketing  strategies
          and product development work and will continue to do so in a way that
          takes into account ERI's needs and the economic environment.
                On  July  24, 2003, ERI purchased the assets of Avail Networks,
          Inc. (Avail) in exchange for $200,000 in cash and contingent payments
          based  on future revenue related to the sale of Avail products during
          the 30 months after the acquisition.
               Avail's intelligent last-mile broadband solutions enable service
          providers  to  deliver  more  revenue-generating  services  to  their
          enterprise  customers from a single customer located platform  across
          metro  fiber,  traditional  wireline and  wireless  access  networks.
          Avail's flagship FronteraT products deliver multiple services to end-
          user sites in a variety of subscriber locations and configurations.
                With  the  addition of the Frontera products  to  its  existing
          product offerings, ERI is positioned as a supplier of network  access
          solutions  for  next-generation  convergence  applications,  such  as
          integrated  data, voice and video over single broadband  connections.
          In  addition,  this acquisition gives ERI access to Avail's  advanced
          ATM (Asynchronous Transmission Mode) technology.
                Avail's sales prior to the acquisition date were minimal.   ERI
          is  introducing Avail products to its established customer base.  Due
          to  lengthy  sales  cycles, these products are not  expected  to  add
          significant revenues in the near-term.
                This segment derived approximately 19%, 28% and 13% of its  net
          sales   from   international  markets  in  2003,   2002   and   2001,
          respectively,  primarily  from Asia Pacific  and  Europe.   ERI  will
          continue to pursue growth opportunities in markets outside the United
          States.   The realization of future business from these opportunities
          could  be  adversely  affected by currency fluctuations,  social  and
          political risks and changes in foreign economies.
                The  dollar  amount of unshipped order backlog at  the  end  of
          February   2004   and  2003  was  $7.0  million  and  $2.0   million,
          respectively.   All orders are expected to be filled in  the  current
          year.
                This  segment has directed its sales and marketing  efforts  to
          focus on markets for which its product line is well suited, including
          the   wireless,  enterprise,  government  and  certain  international
          markets.   Future  sales  in  this segment have  become  increasingly
          dependent  on  larger sales opportunities that could  result  in  the
          amount and timing of future revenue being more volatile.

              Electronic Assemblies.
                Allen  Integrated Assemblies (AIA), a division of  Allen  Organ
          Company,  provides  subcontract manufacture of electronic  assemblies
          for  outside  customers.   The Electronic Assemblies  segment  is  an
          outgrowth  of  the  technical  skills and manufacturing  capabilities
          developed  by the Company for its Musical Instruments business.   AIA
          services  are supplied out of the Macungie, PA plant, the same  plant
          in  which  the  Company  manufactures Allen Organ  and  Legacy  Audio
          products.   This segment accounted for 5%, 7% and 14% of  2003,  2002
          and  2001  net sales, respectively.  AIA derived 61% of its 2003  net
          sales  from two customers and 73% and 82% of its net sales from three
          customers  in  2002  and  2001,  respectively.   AIA  is  working  to
          diversify its customer base.
                The  Electronic  Assemblies segment is  very  competitive  with
          numerous manufacturers offering similar services.  AIA customers  are
          generally obtained from a geographic area located relatively close to
          the Company's manufacturing facility.
                The  dollar amount of the segment's unshipped order backlog  at
          the  end  of  February  2004  and 2003  was  $909,000  and  $721,000,
          respectively.   All orders are expected to be filled in  the  current
          year.

              Audio Equipment.
                The  Audio  Equipment  segment operates mainly  through  Legacy
          Audio,  Inc.  (LAI).   LAI designs, manufactures  and  markets  high-
          quality  audio  speaker cabinets for hi-fi stereo  and  home  theater
          applications.   It also markets electronic audio equipment,  such  as
          amplifiers,  that  are  manufactured to its specifications  by  third
          party suppliers.  This segment accounted for 2% of net sales in  2003
          and 2002, respectively, and 3% of net sales in 2001.
                The principal raw materials used in the segment's products  are
          audio  speakers,  electronic components and wood, which  are  readily
          available from various sources without undue difficulty.
                The  Audio Equipment segment is not dependent on any single  or
          small  group  of customers, the loss of which would have  a  material
          adverse effect on the business.
                The  principal market for LAI's products is consumers for  home
          use.    The   segment's  products  are  mainly  distributed   through
          independent retail dealers and directly to end-users.  This segment's
          business is not seasonal.
                LAI  historically  sold its products through direct  marketing.
          Management  determined that this method of distribution  limited  its
          ability  to  penetrate the broader market.  During 2001  the  Company
          began  implementing a plan to distribute its products through a  more
          traditional dealer network.  The Company has added independent retail
          dealers and will continue to do so in a conservative manner to  build
          a  quality  dealer  network.   During this  period  LAI  has  shifted
          marketing  resources to the new method of distribution.  In addition,
          the general economic slowdown has negatively affected sales.
                The high-end audio market is evolving from the traditional two-
          channel  to  the  multi-channel market, which  is  utilized  in  home
          theater  applications.  LAI has and continues to develop  and  market
          products specifically for these home theater applications.
                In  August  2002,  LAI  closed its  manufacturing  facility  in
          Springfield,  Illinois  and  consolidated  all  production  into  the
          Company's manufacturing facility in Macungie, PA.
                LAI  competes with several other high-end audio speaker cabinet
          manufacturers  including  Martin-Logan, Thiel,  B&W,  Celestion,  and
          others.
                The  dollar amount of the segment's unshipped order backlog  at
          the  end  of  February  2004  and 2003  was  $179,000  and  $106,000,
          respectively.   All orders are expected to be filled in  the  current
          year.

              General.
                The  Company's working capital is sufficient to meet the normal
          expansion of inventory and receivables.
               The Company spent $8,785,522, $7,782,571 and $8,004,838 in 2003,
          2002  and 2001, respectively, on research and development.  The  2003
          increase  was  mainly  within the Data Communications  segment.   The
          Company  maintains  an ongoing commitment to new product  development
          and  expects future expenditures for these activities to  exceed  the
          2003 level.
                The  Company  and  its  subsidiaries employ  approximately  450
          people.
                The  Company  monitors its compliance with applicable  federal,
          state,  or  local  provisions  with regard  to  the  environment  and
          implements  procedures or modifies its equipment as  necessary.   The
          Company  does  not  expect any significant capital additions  in  the
          coming year to maintain its compliance.


          Financial information about geographic areas.
                The  Company does not own manufacturing or sales facilities  in
          any  foreign  countries.   See Note 15 to the Consolidated  Financial
          Statements for additional information on export sales.
                Export  sales are all made in US dollars and, based on customer
          credit  information,  are  made either on open  credit  terms,  under
          letter of credit or on a prepaid basis.
                The  Company had established a Foreign Sales Corporation within
          the  meaning of the Internal Revenue Code of 1986.  This wholly-owned
          subsidiary,  Allen  Organ  International,  Inc.,  a  Virgin   Islands
          corporation, has been dissolved effective December 31, 2003.

           Available information.
               The Company files annual reports on Form 10-K, quarterly reports
          of  Form  10-Q, current reports on Form 8-K and amendments  to  those
          reports  pursuant to Section 13(a) or 15(d) of the exchange Act  with
          the  Commission.   The public may read and copy any  materials  filed
          with the Securities and Exchange Commission at their Public Reference
          Room  at 450 Fifth Street, NW, Washington, DC 20549.  The public  may
          also  obtain this information by calling the Commission at 1-800-SEC-
          0330.   The  Securities and Exchange also maintains an Internet  site
          that  contains  reports and other information  statements  and  other
          information regarding electronic filers at www.sec.gov.


Item 2.   Properties
                The  following  sets  forth  the location,  approximate  square
          footage  and  use  of the Company's operating locations  by  segment.
          Management  believes that its facilities are generally  suitable  and
          adequate for its needs.

                                                     Approximate
           Location            Square Footage            Use

          Musical Instruments, Audio Equipment and Electronic Assemblies:

          Macungie, Pennsylvania   242,000   Administrative,    research    and
                                             manufacturing facility.  Owned  by
                                             Allen Organ Company.  Operating at
                                             approximately 85% capacity.

          Macungie, Pennsylvania    27,000   International   sales,  exhibition
                                             center,   museum   and    teaching
                                             facility. Houses the sales offices
                                             for   Musical    Instruments   and
                                             Legacy  Audio.   Owned  by   Allen
                                             Organ Company.

          Data Communications:

          Moorestown, New Jersey    39,000   Administrative,  sales   and
                                             research  facility.  Leased  until
                                             September 2005.

          Ann Arbor, Michigan        5,000   Research  facility.    Leased
                                             until July 2004.

                In  October 2002, the Company's subsidiary, Legacy Audio, Inc.,
          sold  its  manufacturing and sales facility located  in  Springfield,
          Illinois.   See Note 22 to the Consolidated Financial Statements  for
          additional information.


Item 3.   Legal Proceedings
               There is no litigation requiring disclosure pursuant to Item 103
          of Regulation S-K.


Item 4.   Submission of Matters to a Vote of Security Holders
                No  matters were submitted to a vote of security holders during
          the fourth quarter of fiscal year 2003.


                                     PART II

Item 5.   Market  for  the  Registrant's Common Stock and Related  Stockholder
           Matters
                The  Company's Class A voting shares are not registered pursuant
          to  the  Securities Exchange Act of 1934 and are not publicly  traded.
          The  Company's  Class B non-voting stock trades on  the  NASDAQ  Stock
          Market under the symbol AORGB.
                The high and low bid quotations for each quarter during the last
          two  years  as  reported  by NASDAQ Market Information  System  is  as
          follows:

                  2003             High           Low
                  First Quarter $  40.64       $  37.00
                  Second Quarter   42.58          35.46
                  Third Quarter    44.11          37.97
                  Fourth Quarter   50.03          43.00

                  2002             High           Low
                  First Quarter $  35.18       $  30.00
                  Second Quarter   42.50          33.69
                  Third Quarter    41.25          37.40
                  Fourth Quarter   41.23          37.00

                The  Company  has  7  Class  A  Shareholders  and  241  Class  B
          Shareholders of record as of March 24, 2004.
                During  the  past  two  fiscal years, the Company  has  declared
          dividends on both its class A and B shares as follows:

                  Record of Quarterly Dividends Paid in 2003
                       Record Date    Payable    Amount
                  Cash  2/14/2003    2/28/2003   $0.14
                  Cash  5/16/2003    5/30/2003   $0.14
                  Cash  8/15/2003    8/29/2003   $0.14
                  Cash  11/14/2003   11/28/2003  $0.14

                  Record of Quarterly Dividends Paid in 2002
                       Record Date    Payable    Amount
                  Cash  2/15/2002    3/1/2002    $0.14
                  Cash  5/17/2002    5/31/2002   $0.14
                  Cash  8/16/2002    8/30/2002   $0.14
                  Cash  11/15/2002   11/29/2002  $0.14


Item 6.   Selected Financial Data
        The  selected  consolidated  financial data presented  below  have  been
     derived  from the Company's consolidated financial statements for  each  of
     the  periods indicated.  The data set forth below is qualified by reference
     to  and  should  be read in conjunction with "Management's  Discussion  and
     Analysis  of  Financial  Condition  and  Results  of  Operations"  and  the
     Company's Consolidated Financial Statements included as Items 7  and  8  in
     this Annual Report on Form 10-K.
                                  Years Ended December 31,
                     2003         2002         2001         2000         1999

Net Sales        $60,788,058  $67,739,548  $60,490,513  $72,516,208  $58,018,742

Operating Income
 (Loss)          $   889,497  $ 3,080,022  $(7,113,614) $ 3,784,196  $ 2,866,985

Net Income (Loss)$ 1,396,896  $ 2,685,357  $(4,083,810) $ 3,954,896  $ 2,884,488

Basis and
diluted earnings
(loss) per share $      1.20  $      2.29  $     (3.49) $      3.38  $      2.46

Cash dividends
 per share       $      0.56  $      0.56  $      0.56  $      0.56  $      0.56

At Year End:
 Cash            $ 5,907,576  $ 4,515,189  $ 4,449,998  $ 2,712,368  $   209,277

 Investments     $17,143,171  $17,176,750  $11,609,416  $24,694,377  $19,649,433

 Working Capital $43,917,002  $41,551,690  $38,656,758  $41,648,400  $40,908,583

 Total Assets    $71,950,276  $73,362,868  $66,472,252  $80,807,742  $67,466,070

 Long-Term Debt,
  net of current
  portion        $         0  $         0  $         0  $         0  $         0

 Stockholders'
  Equity         $56,364,833  $56,306,332  $56,315,015  $62,434,901  $59,321,691


Item  7.  Management's  Discussion and Analysis  of  Financial  Condition  and
          Results of Operations
     Liquidity and Capital Resources:
        The  Company continues to maintain a strong financial position and  high
     level  of liquidity, which enables it to generate funds internally to  meet
     operating  needs,  capital  expenditures and short-term  obligations.   Key
     indicators of the Company's liquidity are presented below:
                                            December 31,
                                       2003             2002
          Working Capital          $43,917,002      $41,551,690
          Current Ratio              6.5 to 1         4.8 to 1
          Total Liabilities to
           Equity Ratio             0.28 to 1        0.30 to 1

        Cash  flows  provided by operating activities decreased during  2003  as
     compared to 2002, primarily due to operating losses incurred in the Musical
     Instruments   segment,  reduction  in  accounts   payable   in   the   Data
     Communications  segment  due  to the payment in  early  2003  of  inventory
     purchased to fulfill a large customer order in the fourth quarter of  2002.
     This  decrease  was  partially  offset by decreases  in  inventory  in  all
     segments of the Company.
        Cash  flows provided by operating activities increased during  2002,  as
     compared  to  2001  primarily due to higher operating income  in  the  Data
     Communications segment, reductions in inventory in the Musical  Instruments
     and Electronic Assemblies segments and income tax refunds.
        Cash  flows  used  in  investing activities during  2003  were  used  to
     purchase  approximately $160,000 and $900,000 of property and equipment  in
     the Musical Instruments and Data Communications segments, respectively.  In
     addition, the Data Communications segment used $200,000 as payment for  the
     acquisition of Avail Networks.
        Cash  flows  used  in  investing activities during  2002  were  used  to
     purchase  approximately $1,039,000, $188,000 and $672,000 of  property  and
     equipment  in  the  Musical  Instruments, Electronic  Assemblies  and  Data
     Communications segments, respectively.
        Cash  flows  provided by investing activities during 2001  includes  the
     sale  of  more  than  $12,000,000 in short term  investments  to  fund  the
     repayment  of  ERI's  bank  loans.   Cash  flows  were  used  to   purchase
     approximately  $529,000  and  $736,000 of property  and  equipment  in  the
     Musical Instruments and Data Communications segments, respectively.
        As  indicated  in  Note 9 of the Consolidated Financial Statements,  ERI
     had obtained bank financing to provide them with working capital as well as
     funds  to repay $7,000,000 of ERI's inter-company loans due to Allen  Organ
     Company.   The  proceeds of the term loan were invested  in  the  Company's
     short-term   investment  accounts.   During  June  2001  ERI   repaid   all
     outstanding  bank loans totaling $12,000,000 with funds provided  by  Allen
     Organ  Company.  The Company originally obtained these loans  to  give  ERI
     financial  autonomy as it explored strategic alternatives.  As a result  of
     changes  in  the  financial  markets, the  Company  decided  to  repay  the
     outstanding loans to eliminate the costs related to this financing.

     Results of Operations:
        Sales and Operating Income
        Consolidated sales for 2003 decreased $6,951,490 (10%) when compared  to
     2002,  primarily  due  to  lower  sales  in  the  Musical  Instruments  and
     Electronic  Assemblies  segments.  Consolidated sales  for  2002  increased
     $7,249,035  (12%) when compared to 2001, primarily due to higher  sales  in
     the Data Communications segment.
                                              December 31,
                                   2003            2002            2001
        Net Sales
        Musical Instruments
         Domestic              $17,033,746     $21,694,445     $20,616,513
         Export                  3,348,158       3,248,480       3,759,129
          Total                 20,381,904      24,942,925      24,375,642

        Data Communications
         Domestic               29,252,691      26,107,275      22,567,298
         Export                  6,769,565      10,428,899       3,342,587
          Total                 36,022,256      36,536,174      25,909,885

        Electronic
        Assemblies
         Domestic                2,819,640       4,750,143       8,382,021

        Audio Equipment
         Domestic                1,390,526       1,441,084       1,603,650
         Export                    119,780          69,222         219,315
          Total                  1,564,258       1,510,306       1,822,965

        Total                  $60,788,058     $67,739,548     $60,490,513

        Income (Loss) from Operations
        Musical Instruments    $  (764,639)    $ 2,024,144     $ 2,174,970
        Data Communications      2,446,213       2,091,520      (8,425,231)
        Electronic Assemblies     (457,366)       (401,165)        125,000
        Audio Equipment           (334,711)       (634,477)       (988,353)
         Total                 $   889,497     $ 3,080,022     $(7,113,614)

     Musical Instruments Segment
        The domestic sales for 2003 decreased $4,660,699.  The 2003 decrease  in
     domestic  sales  was  the  result of lower order volume,  which  management
     believes was caused by the economic downturn, declines in financial markets
     and  general global uncertainty caused by the war in Iraq.  While the order
     rate for 2002 was slightly lower than 2001, the 2002 sales were higher than
     2001 due to shipments made to customers against a higher order backlog.
        Export  sales  were approximately equal in 2003 and 2002, and  decreased
     in  2002,  as  compared  to  the previous year.   Certain  foreign  markets
     continue  to  be  affected by unfavorable economic conditions.   While  the
     value  of  the  US  dollar  compared  to  certain  foreign  currencies  has
     decreased,  there  is a time lag before any such change can  impact  export
     sales.
        Gross  profit margins on sales were 21.1%, 29.5% and 30.1% for the years
     ended  December 31, 2003, 2002 and 2001, respectively.  The  2003  decrease
     was  a  result of lower sales volume over which to absorb fixed  costs  and
     higher  operating costs including employee pension expense, which increased
     by  $597,000 (103%) in 2003 versus 2002.  The decrease in gross  profit  in
     2002,  when compared to 2001, was due to higher operating costs,  primarily
     employee  pension  expense and lower absorption of fixed costs  related  to
     planned  decreases in the level of inventory necessitating lower levels  of
     production.  The Company has taken steps to reduce its operating  costs  at
     the Macungie, PA plant, including reductions in personnel.
        Selling and advertising expenses decreased approximately $71,000  during
     2003 when compared to 2002, due to lower sales volume and was approximately
     equal  in  2002  and  2001.  General and administrative expenses  decreased
     approximately  $60,000  in  2003  when  compared  to  2002,  and  increased
     approximately $38,000 in 2002 when compared to 2001.
        Research  and  development  expenses  increased  approximately   $82,000
     during  2003 when compared to 2002, and decreased approximately $29,000  in
     2002 from 2001.
        Several  of  the  Company's  operating  expenses  continue  to  rise  at
     significant  rates  including business insurances,  medical  insurance  and
     pension expense.  The Company's pension expense has increased due to  lower
     investment returns realized in the Company's defined benefit pension plans.
     As discussed in Note 16 to the financial statements, effective December 31,
     2003  the Company has frozen future benefit accruals in both of its defined
     benefit  pension  plans  and  replaced this benefit  with  a  discretionary
     contribution to the Allen Organ Company Savings and Profit Sharing Plan.

     Data Communications Segment
        Domestic  sales  increased $3,145,416 and $3,539,977 in 2003  and  2002,
     respectively.   International  sales  decreased  $3,659,334  in  2003  when
     compared  to 2002 and increased $7,086,312 in 2002 when compared  to  2001.
     International  sales  in  2002 were higher than  both  2003  and  2001  due
     primarily  from  sales  made to one customer.  The total  2003  sales  were
     approximately equal to 2002, which increased over 2001 due to  new  product
     introductions  and  from  redirecting the  Company's  sales  and  marketing
     efforts  away  from CLEC's to other Data Communications markets,  including
     the wireless, enterprise, government and certain international markets.
        Gross  profit  margins  were 56%, 50% and 40% in 2003,  2002  and  2001,
     respectively.  The 2003 increase is due to favorable product  mix   changes
     and   was   lowered   by   an   $850,000   accrual   for   warranty  costs.
     The  2002  increase is attributable to higher sales volume  over  which  to
     absorb fixed costs, as well as changes in product mix.  Cost of goods  sold
     for  2001  includes  $1,539,000 of additional non-cash inventory  valuation
     adjustments  recorded at VIR, Inc. for slow moving and  obsolete  inventory
     associated   with  discontinued  product  lines.   The  result   of   these
     adjustments was to decrease the 2001 gross profit margin by 6% from 46%  to
     40%.   While  the Company strives to maintain profit margins by  developing
     products  that  offer desirable features, the industry is very  competitive
     which often results in pricing changes to obtain and maintain market share.
        Selling  expenses increased approximately $823,000 in 2003 when compared
     to  2002  due to increases in ERI's sales force and higher costs associated
     with international sales efforts.  Selling expenses decreased approximately
     $654,000 in 2002 compared to 2001 due to cost cutting measures initiated in
     the first half of 2001 due to the economic downturn.
        Administrative   expenses  increased  approximately  $50,000   in   2003
     compared  to 2002, and decreased approximately $21,000 in 2002 compared  to
     2001.
        Research  and  development  expenses  were  $7,173,393,  $6,352,909  and
     $6,599,104  for  the  years  ended  December  31,  2003,  2002  and   2001,
     respectively.  The 2003 increase was due to increased expenditures incurred
     in  connection with the acquisition of Avail Networks and the  commencement
     of work on next generation products.  The 2002 decrease is primarily due to
     the  combination  of  the VIR development operations into  ERI  during  the
     second  half  of 2001.  The segment is committed to new product development
     and expects these expenditures to increase during 2004.
        The  combination  of  higher sales, change in product  mix,  and  higher
     gross  margins  resulted in operating income of $2,474,257  and  $2,105,802
     during  2003  and  2002,  respectively, for  this segment  compared  to  an
     operating  loss  of  $8,284,232  in 2001.   The  2001  operating  loss  was
     negatively  affected  by  inventory valuation  adjustments,  plant  closing
     costs, and a charge to write down the goodwill and intangible assets of VIR
     totaling $3,469,000.  Future sales in this segment have become increasingly
     dependent on larger sales opportunities that could result in the amount and
     timing of future revenue and operating income to be more volatile.

     Electronic Assemblies Segment
        Sales   decreased   $1,930,503  and  $3,631,878  in   2003   and   2002,
     respectively, compared  to  the previous year.  The  segment's  order  rate
     decreased significantly beginning in the second half of 2001 as a result of
     the  economic  slowdown  that  has  also affected  the  Company's  contract
     manufacturing customers.  Management believes that its efforts to diversify
     its  customer  base  and recent signs of improvement  in  the  economy  may
     improve  this segment's order rate in 2004.  Because of lower sales volume,
     the Company has taken steps to reduce costs at its Macungie, PA plant.
        Gross  profit  margin  for  2003 and 2002 was a  loss  of  approximately
     $(114,000)  (4%)  and $(61,000) (1%), respectively.  Gross  profit  margins
     were  7.1%  in  2001.  These decreases are the result of lower  sales  over
     which to absorb fixed costs.
        Selling,  general and administrative expenses in 2003 were approximately
     equal to 2002, which decreased approximately $52,000 compared to 2001.  The
     segment continues its efforts to diversify its customer base and to improve
     its  production  capabilities  to  offer state  of  the  art  manufacturing
     services to its customers.

     Audio Equipment Segment
        Sales  increased  $53,952 in 2003 and decreased $312,659  in  2002  when
     compared  to  the  previous year.  Legacy Audio has historically  sold  its
     products through a direct marketing program.  Management believes that this
     method  of  distribution has limited its ability to penetrate  the  broader
     market.   In  2002, Legacy began distributing its products through  a  more
     traditional  dealer  network.   The Company has  added  independent  retail
     dealers  and  will continue to do so in a conservative manner  to  build  a
     quality  dealer network.  During this period, Legacy has shifted  marketing
     resources  to  the  new method of distribution.  In addition,  the  general
     economic slowdown has slowed the sales of some consumer goods.
        Gross  profit  margins  were  35%, 22%, and  12%  for  the  years  ended
     December  31,  2003,  2002  and  2001, respectively.   The  2003  and  2002
     increases  over  the previous year was due to steps taken  to  reduce  this
     segment's   costs,  including  the  consolidation  of   all   of   Legacy's
     manufacturing into the Macungie, PA plant.
        Selling,   general  and  administrative  costs  decreased  approximately
     $29,000  and  $233,000  in  2003 and 2002, respectively,  compared  to  the
     previous  year,  as a result of steps taken to reduce operating  costs  and
     because of Legacy Audio's switch to a dealer based selling model.

     Other Income (Expense)
        Investment  income decreased during 2003 when compared to  2002  due  to
     lower  rates  of return available on invested funds and increased  slightly
     during 2002 when compared to 2001 due to realized gains on investments  and
     higher  invested  balances that offset lower rates of  return  on  invested
     funds.   Interest expense was incurred in 2001 on short-term bank financing
     related to ERI.
        The  2001  loss  on  the  sale of property, plant &  equipment  includes
     approximately $158,000 of losses related to the disposition of property and
     equipment  at  VIR's Southampton, PA facility that was closed in  September
     2001.

     Income Taxes
        The effective tax rate (benefit) was (5.7%), 29.3% and (36.8%) in  2003,
     2002 and 2001, respectively.  The effective tax rate in 2003, 2002 and 2001
     are lower than statutory tax rates due to tax credits and other non-taxable
     items.

     Significant Accounting Policies
        The  significant  accounting policies of the Company  are  described  in
     Note  1  of  the  Consolidated Financial Statements.   The  preparation  of
     financial  statements  in conformity with accounting  principles  generally
     accepted  in  the  United  State of America  requires  management  to  make
     estimates  and assumptions that affect the reported amounts of  assets  and
     liabilities  and  disclosures of contingent assets and liabilities  at  the
     date  of  the financial statements and the reported amounts of revenue  and
     expense during the reporting period.
        Certain  accounting estimates and assumptions are particularly sensitive
     because of their significance to the consolidated financial statements  and
     the possibility that future events affecting them may differ markedly.
        Management considers the following accounting estimates to be  the  most
     critical  in  preparing  the  consolidated  financial  statements.    These
     critical accounting estimates have been discussed with the Company's  audit
     committee.

          Allowance  for Doubtful Accounts:  Management performs ongoing  credit
          evaluations of customers and adjusts credit limits based upon  payment
          history and the customer's current credit worthiness, as determined by
          a review of their current credit information.  Management continuously
          monitors  collections  and  payments from customers  and  maintains  a
          provision for estimated credit losses based upon historical experience
          and any specific customer collection issues that have been identified.
          If  the  financial condition of a specific customer or  the  Company's
          general  customer base were to deteriorate, resulting in an impairment
          of  their  ability  to  make payments, additional  allowances  may  be
          required.

          Carrying  Value  of Obsolete and Slow Moving Inventory:   The  Company
          values inventory at the lower of cost or market.  Management regularly
          reviews  inventory  quantities on-hand and  records  a  provision  for
          excess  and obsolete inventory based primarily on estimated  forecasts
          of  product demand and historical usage, after considering the  impact
          of  new products.  If actual market conditions and product demand  are
          less favorable than projected, additional inventory write-downs may be
          required.

          Carrying  Value of Goodwill and Intangible Assets:  In  assessing  the
          recoverability  of  goodwill  and  intangible  assets,  management  is
          required to make assumptions regarding estimated future cash flows and
          other  factors  to determine whether the fair value  of  the  business
          supports  the  carrying value of goodwill, intangible assets  and  net
          operating  assets.  This analysis includes assumptions  and  estimates
          about future sales, costs, working capital, capital expenditures,  and
          cost  of  capital.  If these assumptions and estimates change  in  the
          future,  the  Company may be required to record an  impairment  charge
          related to goodwill and intangible assets.

          Realization of Deferred Income Tax Benefits:  As discussed in Note  18
          of  the  Consolidated Financial Statements, the Company  has  recorded
          valuation  allowances related to the uncertainty of realizing  certain
          federal  and  state net operating loss carryforwards and state  credit
          carryforwards.  If the estimates and related assumptions  relating  to
          the likely utilization of the deferred tax asset change in the future,
          the valuation allowance may change accordingly.

          Warranty  Reserve:  The Company provides warranties  on  some  of  its
          products for varying lengths of time. A warranty liability is recorded
          at the time of product sale based on estimates that are developed from
          historical  information and certain assumptions about  future  events.
          Future  warranty  obligations are affected by product  failure  rates,
          usage and service costs incurred in addressing warranty claims.  These
          factors are impacted by the level of new product introductions and the
          mix  of  equipment  sold.   If  actual  warranty costs differ from the
          estimates, adjustments  to  the warranty liability would be required.

     Contractual Obligations and Commercial Commitments
        Following  is a summary of contractual obligations and other  commercial
     commitments of the Company:
                                               Payments Due by Period
           Contractual                 Less than                         After
           Obligations          Total   1 year   1-3 years   4-5 years  5 years

        Operating Leases      $614,188  $372,876  $241,312      $0        $0

          Other Commercial            Amount of Commitment Expiration Per Period
            Commitments    Total Amounts Less than                       After
                             Committed    1 year   1-3 years 4-5 years  5 years
        Contingent Repurchase
        Commitments Related to
        Customer Financing
        Arrangements        $1,309,112  $1,309,112    $0        $0        $0

     Factors that May Affect Operating Results
        The  statements  contained in this report on  Form  10-K  that  are  not
     purely  historical  are forward looking statements within  the  meaning  of
     Section 27A of the Securities Act of 1933 and Section 21E of the Securities
     Exchange   Act  of  1934,  including  statements  regarding  the  Company's
     expectations,  hopes,  intentions  or  strategies  regarding  the   future.
     Forward looking statements include: statements regarding future products or
     product  development; statements regarding future research and  development
     spending  and the Company's marketing and product development strategy  and
     statements  regarding  future  production capacity.   All  forward  looking
     statements included in this document are based on information available  to
     the  Company  on the date hereof, and the Company assumes no obligation  to
     update  any such forward looking statements.  Readers are cautioned not  to
     place  undue  reliance on these forward looking statements,  which  reflect
     management's opinions only as of the date hereof.  Readers should carefully
     review the risk factors described in other documents the Company files from
     time  to  time  with the Securities and Exchange Commission, including  the
     Quarterly  Reports on Form 10-Q to be filed by the Company in  fiscal  year
     2004.   It  is  important to note that the Company's actual  results  could
     differ  materially from those in such forward looking statements.  Some  of
     the  factors that could cause actual results to differ materially  are  set
     forth below.
        The  Company  has  experienced and expects  to  continue  to  experience
     fluctuations  in  its  results  of operations.   Factors  that  affect  the
     Company's  results of operations include the volume and  timing  of  orders
     received, changes in global economics and financial markets, changes in the
     mix of products sold, market acceptance of the Company's and its customer's
     products,  competitive pricing pressures, global currency  valuations,  the
     availability  of  electronic  components that the  Company  purchases  from
     suppliers,  the Company's ability to meet increasing demand, the  Company's
     ability  to  introduce new products on a timely basis, the  timing  of  new
     product  announcements and introductions by the Company or its competitors,
     changing  customer requirements, delays in new product qualifications,  the
     timing and extent of research and development expenses and fluctuations  in
     manufacturing yields.  As a result of the foregoing or other factors, there
     can  be  no  assurance  that  the  Company  will  not  experience  material
     fluctuations  in future operating results on a quarterly or  annual  basis,
     which  would  materially  and  adversely  affect  the  Company's  business,
     financial condition and results of operations.

     New Accounting Standards
        Effective   January  1,  2002,  the  Company  adopted  SFAS   No.   142.
     Accordingly, no amortization of goodwill was recognized in the accompanying
     consolidated  financial  statements  of  operations  for  the  years  ended
     December 31, 2003 and 2002, compared to $52,666 for the year ended December
     31,  2001.   In accordance with the provisions of SFAS No. 142,  management
     has performed the required transitional impairment test of goodwill and has
     determined  that no impairment loss need be recognized in  the  year  ended
     December  31,  2003 and 2002.  As required by SFAS No. 142,  prior  results
     have  not  been restated.  A reconciliation of the previously reported  net
     loss and loss per common share for the year ended December 31, 2001, as  if
     SFAS No. 142 had been adopted as of January 1, 2001, is as follows:

           Reported net (loss) income         $(4,083,810)
           Add back: Goodwill amortization,
             net of related tax effect             32,165
           Adjusted net (loss) income         $(4,051,645)

           Basic and diluted (loss) earnings
             per share, as reported            $    (3.49)
           Impact of goodwill amortization,
             net of tax                              0.03
           Adjusted basic and diluted (loss)
             earnings per share                $    (3.46)

        In  December  2002, the FASB finalized EITF Issue No. 00-21, "Accounting
     for  Revenue  Arrangements  with Multiple  Deliverables".   This  Issue  is
     applicable  to  agreements entered into in fiscal periods  beginning  after
     June  15, 2003.  This Issue addresses how to determine whether arrangements
     involve the delivery or performance of multiple products, services,  and/or
     rights  to use assets.  The adoption of this Issue did not have a  material
     effect on the Company's consolidated financial statements.
        During  2003  the  Financial  Accounting  Standards  Board  issued   the
     following  new  statements  that  are applicable  to  the  Company.   These
     statements  did  not  have  a material effect on  the  Company's  financial
     statements.
        SFAS  132  (revised), "Employers Disclosures about  Pensions  and  Other
     Postretirement  Benefits"  - revises employers' disclosures  about  pension
     plans  and  other postretirement benefit plans.  This additional disclosure
     is included in Note 16.
        SFAS  149,  "Amendment  of Statement 133 on Derivative  Instruments  and
     Hedging  Activities"  -  amends  and  clarifies  financial  accounting  and
     reporting for derivative instruments under SFAS 133.
        SFAS   150,   "Accounting   for  Certain  Financial   Instruments   with
     Characteristics of both Liabilities and Equity" - establishes standards for
     how  an  issuer classifies and measures certain financial instruments  with
     characteristics of both liabilities and equity.
        FASB  Interpretation  No.  45, "Guarantor's Accounting  and  Disclosure
     Requirements for Guarantors, Including Indirect Guarantees of Indebtedness
     to  Others, an interpretation of FASB Statements No. 5, 57 and 107  and  a
     rescission  of  FASB  Interpretation No. 34", requires  that  a  guarantor
     recognize, at inception of a guarantee, a liability for the fair value  of
     the  obligation undertaken and enhances the disclosures to be  made  by  a
     guarantor.   See  Note  13  for disclosure of the Company's  guarantee  of
     financing  arrangements of certain customers and Note 12  for  disclosures
     related  to  the  Company's  product warranties.   The  adoption  of  this
     Interpretation   did  not  have  a  material  effect  on   the   Company's
     consolidated financial statements.

Item 7A   Quantitative and Qualitative Disclosures About Market Risk.
        Financial  instruments that potentially subject the  Company  to  market
     and/or credit risk consist principally of short-term investments and  trade
     receivables.   The Company places substantially all of its  investments  in
     mutual  funds holding federal, state and local government obligations  and,
     by policy, limits the amount of credit exposure in any one investment.  The
     Company's  Musical Instruments segment sells most of its  products  through
     established dealer networks.  The Data Communications segment sells most of
     their  products directly to end-users, to wholesale and retail distributors
     worldwide,  and  to a smaller extent under OEM agreements with  other  data
     communications  companies.   The market and  credit  risk  associated  with
     related  receivables  is limited due to the large  number  of  dealers  and
     distributors  and their geographic dispersion.  The Company  has  no  other
     material exposure to market risk.

Item 8.   Financial Statements and Supplemental Data
        The  information required by this Item is set forth on pages 16  through
     36 hereto and is incorporated by reference herein.

Item 9.   Changes in and Disagreements with Accountants on Accounting and
           Financial Disclosure
        There were no reportable events as described in Item 304(b).

Item 9A.  Controls and Procedures
        The  Company's Chief Executive Officer and Chief Financial Officer  have
     evaluated  the  effectiveness of the design and operation of the  Company's
     disclosure controls and procedures, which are designed to insure  that  the
     Company  records,  processes,  summarizes  and  reports  in  a  timely  and
     effective  manner the information required to be disclosed in  the  reports
     filed  with or submitted to the Securities and Exchange Commission.   Based
     upon this evaluation, they concluded that the Company's disclosure controls
     are  effective  as of December 31, 2003.  There has been no change  in  the
     Company's  internal control over financial reporting that  occurred  during
     the  year  ended  December  31, 2003 that has materially  affected,  or  is
     reasonably likely to materially affect, the Company's internal control over
     financial reporting.
<PAGE>

KPMG
4905 Tilghman Street
Allentown, PA 18104

                          INDEPENDENT AUDITORS' REPORT


The Board of Directors
 and Stockholders
Allen Organ Company


     We have audited the accompanying consolidated balance sheets of Allen Organ
Company  and  Subsidiaries as of December 31, 2003 and  2002,  and  the  related
consolidated statements of income, stockholders' equity and cash flows  and  the
related  financial statement schedule for each of the years in  the  three  year
period  ended  December 31, 2003.  These consolidated financial  statements  and
financial statement schedule are the responsibility of the Company's management.
Our  responsibility  is  to express an opinion on these  consolidated  financial
statements and financial statement schedule based on our audits.

      We  conducted  our audits in accordance with auditing standards  generally
accepted in the United States of America.  Those standards require that we  plan
and perform the audit to obtain reasonable assurance about whether the 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 Allen  Organ
Company  and Subsidiaries as of December 31, 2003 and 2002, and the  results  of
their  operations and their cash flows for each of the years in the  three  year
period  ended  December  31,  2003  in  conformity  with  accounting  principles
generally  accepted in the United States of America. Also, in our  opinion,  the
related  financial statement schedule, when considered in relation to the  basic
consolidated  financial  statements taken as a whole, presents  fairly,  in  all
material respects, the information set forth therein.

     As discussed in Note 1 to the consolidated financial statements, effective
January 1, 2002, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets".

/s/KPMG, LLP

Allentown, PA
February 6, 2004

<PAGE>
                      ALLEN ORGAN COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                        December 31,
                     ASSETS                          2003          2002
CURRENT ASSETS
 Cash                                           $  5,907,576  $  4,515,189
 Investments including accrued interest           17,143,171    17,176,750
 Accounts receivable, net of allowance for
  doubtful accounts of $605,496 in 2003
  and $502,209 in 2002                            11,652,365    12,184,564
 Inventories                                      13,926,173    16,223,682
 Prepaid income taxes                                  --          161,071
 Prepaid expenses                                    491,444       318,943
 Deferred income taxes                             2,741,167     1,992,694
     Total Current Assets                         51,861,896    52,572,893

PROPERTY, PLANT AND EQUIPMENT, NET                10,167,004    10,857,494

OTHER ASSETS
 Note receivable from related party                2,397,291     2,397,291
 Cash value of life insurance                      2,474,002     2,273,163
 Deferred income taxes                             3,493,238     3,422,448
 Intangible assets, net                            1,347,822     1,628,964
 Goodwill, net                                       194,523       194,523
 Other assets                                         14,500        16,092
     Total Other Assets                            9,921,376     9,932,481
     Total Assets                               $ 71,950,276  $ 73,362,868

          LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
 Accounts payable                               $  1,278,535  $  5,688,967
 Accrued income taxes                                657,941         --
 Accrued expenses                                  3,811,025     2,638,256
 Customer deposits                                 2,197,393     2,693,980
     Total Current Liabilities                     7,944,894    11,021,203

NONCURRENT LIABILITIES
 Deferred and other noncurrent liabilities         1,946,696     1,028,785
 Accrued pension costs                             5,693,853     5,006,548
     Total Noncurrent Liabilities                  7,640,549     6,035,333
     Total Liabilities                            15,585,443    17,056,536

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
 Class A Voting Common stock, $1 par value,
  400,000 shares authorized,
  127,232 shares issued                              127,232       127,232
 Class B Non-Voting Common stock, $1 par value,
  3,600,000 shares authorized,
  1,410,761 shares issued                          1,410,761     1,410,761
 Additional paid-in capital                       13,150,610    12,961,610
 Retained earnings                                58,015,139    57,267,763
 Accumulated other comprehensive loss             (3,832,694)   (3,460,463)

 Treasury stock, at cost, 43,368 Class A shares
  in 2003 and 2002, 338,380 Class B shares
  in 2003 and 324,565 in 2002                    (12,506,215)  (12,000,571)
     Total Stockholders' Equity                   56,364,833    56,306,332
     Total Liabilities and Stockholders' Equity $ 71,950,276  $ 73,362,868


          See accompanying notes to Consolidated Financial Statements.
<PAGE>
                    ALLEN ORGAN COMPANY AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF INCOME

                                              Years Ended December 31,
                                       2003            2002            2001

NET SALES                         $ 60,788,058    $ 67,739,548    $ 60,490,513

COSTS AND EXPENSES
  Cost of sales                     35,693,613      41,963,839      41,707,417
  Selling, administrative and
   other expenses                   15,390,231      14,886,291      15,811,522
  Research and development           8,785,522       7,782,571       8,004,838
  Other expense, net                    29,195          26,825         150,350
  Plant closure costs                    --              --            530,000
  Impairment of goodwill and
   intangibles                           --              --          1,400,000
  Total Cost and Expenses           59,898,561      64,659,526      67,604,127

INCOME (LOSS) FROM OPERATIONS          889,497       3,080,022      (7,113,614)

OTHER INCOME (EXPENSE)
  Investment income                    432,399         716,335       1,018,162
  Interest expense                       --              --           (315,083)
  Minority interests in
   consolidated subsidiaries             --              --            (33,275)
  Total Other Income (Expense)         432,399         716,335         669,804

INCOME (LOSS) BEFORE INCOME TAXES    1,321,896       3,796,357      (6,443,810)

INCOME TAXES
  Current                              571,000       1,669,000      (1,168,000)
  Deferred                            (646,000)       (558,000)     (1,192,000)
   Total                               (75,000)      1,111,000      (2,360,000)

NET INCOME (LOSS)                 $  1,396,896    $  2,685,357    $ (4,083,810)

OTHER COMPREHENSIVE LOSS,
 NET OF TAX
  Unrealized (loss) gain on
   investments:
   Unrealized (loss) gain arising
    during period                 $    (26,898)   $    132,305    $   (138,420)
   Less:  reclassified adjustment
    for gain (loss) included in
    income                               2,495         (97,186)        (41,153)
   Total                               (24,403)         35,119        (179,573)
  Minimum pension liability
   adjustment                         (347,828)     (2,121,282)     (1,334,717)
Other comprehensive loss              (372,231)     (2,086,163)     (1,514,290)
COMPREHENSIVE INCOME (LOSS)       $  1,024,665    $    599,194    $ (5,598,100)

BASIC AND DILUTED EARNINGS
 (LOSS) PER SHARE                 $       1.20    $       2.29    $      (3.49)

        See accompanying notes to Consolidated Financial Statements.
<PAGE>
                     ALLEN ORGAN COMPANY AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


                                         Common Stock               Additional
                                 Class A             Class B         Paid-in
                             Shares   Amount    Shares     Amount    Capital

Balance-December 31, 2000   127,232  $127,232  1,410,761 $1,410,761 $12,758,610

Tax benefit from exercise
of subsidiary stock options                                             145,000

Balance-December 31, 2001   127,232   127,232  1,410,761  1,410,761  12,903,610

Tax benefit from exercise
of subsidiary stock options                                              58,000

Balance-December 31, 2002   127,232   127,232  1,410,761  1,410,761  12,961,610

Tax benefit from exercise
of subsidiary stock options                                             189,000

Balance-December 31, 2003   127,232  $127,232  1,410,761 $1,410,761 $13,150,610


                                         Accumulated
                                            Other
                             Retained   Comprehensive      Treasury Stock
                             Earnings   Income (Loss)   Shares       Amount


Balance-December 31, 2000  $59,977,002    $139,990     367,378   $(11,978,694)

Net loss                    (4,083,810)
Reacquired Class B shares                                  156         (6,891)
Reacquired Class A shares                                  138         (4,416)
Change in unrealized gain
 (loss) on securities
 available for sale                       (179,573)
Minimum pension
 liability adjustment                   (1,334,717)
Cash dividend paid
 ($0.56 per share)            (655,479)
Balance-December 31, 2001   55,237,713  (1,374,300)    367,672    (11,990,001)

Net income                   2,685,357
Reacquired Class B shares                                  261        (10,570)
Change in unrealized gain
 (loss) on securities
 available for sale                         35,119
Minimum pension
 liability adjustment                   (2,121,282)
Cash dividend paid
($0.56 per share)             (655,307)
Balance-December 31, 2002   57,267,763  (3,460,463)    367,933    (12,000,571)

Net income                   1,396,896
Reacquired Class B Shares                               13,815       (505,644)
Change in unrealized
 loss on securities
 available for sale                        (24,403)
Minimum pension
 liability adjustment                     (347,828)
Cash dividend paid
 ($0.56 per share)           (649,520)
Balance-December 31, 2003 $58,015,139  $(3,832,694)    381,748   $(12,506,215)


         See accompanying notes to Consolidated Financial Statements.
<PAGE>
                     ALLEN ORGAN COMPANY AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                Years Ended December 31,
                                            2003         2002          2001
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income (loss)                       $1,396,896   $2,685,357   $(4,083,810)

 Adjustments to reconcile net income
  (loss) to net cash provided
  by operating activities
   Depreciation and amortization          2,518,612    2,801,512     2,974,898
   Minority interest in consolidated
    subsidiaries                              --           --           33,275
   Loss from impairment of goodwill
    and intangibles                           --           --        1,400,000
   Loss on sale of property, plant
    and equipment                            16,554       55,184       175,358
   Loss (Gain) on sale of investments         4,000     (156,248)      (65,635)
   Tax benefit from exercise of stock
    options                                 189,000       58,000       145,000
   Deferred income taxes                   (624,135)    (518,984)   (1,296,667)
   Change in assets and liabilities
    Accounts receivable                     532,199   (2,236,722)      337,817
    Inventories                           2,297,509    1,073,475     3,201,673
    Prepaid income taxes                    161,071      945,143    (1,092,242)
    Prepaid pension costs                   144,349     (175,069)      126,006
    Other assets                              1,592        --            2,500
    Accounts payable                     (4,410,432)   2,938,716      (697,868)
    Accrued income taxes                    657,941        --            --
    Accrued expenses                      1,172,769      665,102      (842,948)
    Customer deposits                      (496,587)    (284,043)      (13,605)
    Deferred and other noncurrent
     liabilities                          1,062,260      145,947       523,759
      Net Cash Provided by Operating
       Activities                         4,306,748    8,239,917       619,426

CASH FLOWS FROM INVESTING ACTIVITIES
 Cash proceeds from sale of investments
  classified as available for sale          526,866   30,633,381    18,682,314
 Cash paid for purchase of investments
  classified as available for sale         (521,690) (36,009,348)   (5,711,291)
 Increase in cash value of life
  insurance                                (200,839)     (99,597)     (138,699)
 Increase in note receivable                  --        (400,184)     (440,386)
 Payment for acquisition of business       (200,000)       --            --
 Cash proceeds from sale of property,
  plant and equipment                         5,100      319,155        11,250
 Cash paid for purchase of property,
  plant and equipment                    (1,063,231)  (1,898,586)   (1,458,233)
   Net Cash (Used In) Provided by
    Investing Activities                 (1,453,794)  (7,455,179)   10,944,955

CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from bank loans                     --           --        3,300,000
 Repayment of bank loans                      --           --      (12,000,000)
 Dividends paid in cash                    (649,520)    (655,307)     (655,479)
 Reacquired Class A common shares              --          --           (4,416)
 Reacquired Class B common shares          (505,644)     (10,570)       (6,891)
 Subsidiary company stock reacquired
  from minority stockholders               (448,659)     (89,386)     (556,298)
 Proceeds from sale of subsidiary stock     143,256       35,716        96,333
  Net Cash Used in Financing Activities  (1,460,567)    (719,547)   (9,826,751)

NET INCREASE IN CASH                      1,392,387       65,191     1,737,630

CASH, JANUARY 1                           4,515,189    4,449,998     2,712,368

CASH, DECEMBER 31                        $5,907,576   $4,515,189    $4,449,998

           SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

  Cash paid (refunded) for income taxes  $ (439,012)  $  750,008    $ (218,816)
  Cash paid for interest                 $    --      $    --       $  315,084

The above changes in assets and
 liabilities excludes the following
 adjustments related to the minimum
 pension liability.
  Accumulated other comprehensive income $  347,828   $2,121,282    $1,334,717
  Deferred income tax benefits              195,128    1,312,295       794,019
  Accrued pension costs                    (542,956)  (3,433,577)   (2,128,736)

         See accompanying notes to Consolidated Financial Statements.
<PAGE>
                     ALLEN ORGAN COMPANY AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1  Background and Significant Accounting Policies
     Background:
        Allen  Organ  Company  and  Subsidiaries  (Company)  operate  in   four
     industry  segments:  Musical Instruments, Data Communications,  Electronic
     Assemblies,  and Audio Equipment.  See Note 22 for additional  information
     on the operating activities of each segment.

     Principles of Consolidation:
        The  consolidated  financial statements include  the  accounts  of  the
     Company  and  its wholly-owned subsidiaries (Allen Diversified,  Inc.  and
     Legacy  Audio,  Inc.)  and  majority-owned subsidiary  (Eastern  Research,
     Inc.).    In  addition,  the  Company  has  other  inactive,  wholly-owned
     subsidiaries.   All  material intercompany accounts and transactions  have
     been eliminated.

     Use of Estimates:
        The  preparation of financial statements in conformity  with  generally
     accepted accounting principles in the United States requires management to
     make  estimates and assumptions that affect the reported amounts of assets
     and liabilities and disclosure of contingent assets and liabilities at the
     date of the financial statements and the reported amounts of revenues  and
     expenses  during  the reported period.  Actual results could  differ  from
     those estimates.

     Investments:
        The  Company accounts for its short-term investments in accordance with
     Statement  of  Financial Accounting Standards (SFAS) No. 115,  "Accounting
     for  Certain  Investments  in  Debt and  Equity  Securities".   Management
     determines the appropriate classification of its investments in  debt  and
     equity   securities  at  the  time  of  purchase  and   reevaluates   such
     determination at each balance sheet date.

     Accounts Receivable Allowance:
         The   Company   records   an  allowance  for  uncollectible   accounts
     receivable based on historical loss experience, customer payment  patterns
     and  current  economic trends.  Management reviews  the  adequacy  of  the
     allowance for uncollectible accounts receivable on a quarterly basis  and,
     if necessary, increases or decreases the allowance.

     Inventories:
        Inventories  are  valued  at the lower of  cost  or  market.   Cost  is
     determined  using  the  first-in,  first-  out  (FIFO)  method   for   all
     inventories.

     Property, Plant and Equipment:
        Property,  plant  and  equipment are stated at cost.   Depreciation  is
     computed  over  the estimated useful asset lives using both  straight-line
     and  accelerated  methods for financial reporting and accelerated  methods
     for tax reporting purposes.

     Goodwill and Intangible Assets:
        Goodwill  represents the excess of costs over fair value of  assets  of
     businesses acquired. The Company adopted the provisions of SFAS  No.  142,
     "Goodwill  and  Other Intangible Assets", as of January 1, 2002.  Goodwill
     and  intangible  assets  acquired in a purchase business  combination  and
     determined  to  have  an  indefinite useful life are  not  amortized,  but
     instead  tested  for impairment at least annually in accordance  with  the
     provisions  of  SFAS No. 142.  SFAS No. 142 also requires that  intangible
     assets  with  useful  lives be amortized over their  respective  estimated
     useful  lives  to  their  estimated  residual  values,  and  reviewed  for
     impairment in accordance with SFAS No. 144, "Accounting for Impairment  or
     Disposal of Long-Lived Assets".
        Prior  to  January  1, 2002, goodwill was amortized  to  expense  on  a
     straight-line basis over various periods of 5-20 years. The carrying value
     of  goodwill  was  reviewed  for possible impairment  whenever  events  or
     changes in circumstances indicated that an impairment might exist.
        Intangible  assets  represent  identifiable  assets  such  as  customer
     lists, developed technology and trademarks acquired in connection with the
     purchase  of the Company's subsidiaries.  Intangible assets are  amortized
     on  a  straight-line basis over various periods, generally  from  5  -  20
     years, and are presented net of accumulated amortization of $3,696,762 and
     $3,024,517 at December 31, 2003 and 2002, respectively.
        The  carrying value of goodwill and intangible assets for each business
     is   continually  reviewed  to  assess  its  recoverability  from   future
     operations,  based  on  future cash flows (undiscounted)  expected  to  be
     generated  by such operations.  Any impairment in value indicated  by  the
     assessment  would be computed based on discounted cash flows  and  charged
     against current operations.

     Revenue Recognition:
        The  Company  recognizes  revenue when products  are  shipped  and  the
     customer  takes  ownership and assumes risk of  loss,  collection  of  the
     relevant  receivable is probable, persuasive evidence  of  an  arrangement
     exists and the sales price is fixed or determinable.  Service revenues are
     recognized  when the services are performed.  Deferred revenues  represent
     cash  received from customers in advance of revenues being recognized  for
     the related payment.

     Research and Development and Advertising:
        Research  and development and advertising expenditures are  charged  to
     expense  as  incurred.  Research and development expenses  are  separately
     disclosed  in the consolidated statements of operations while  advertising
     costs  were  $278,327,  $333,695, and $440,757 in  2003,  2002  and  2001,
     respectively.

     Income Taxes:
        Income  taxes  are accounted for under the asset and liability  method.
     Deferred  tax  assets and liabilities are recognized for  the  future  tax
     consequences  attributable to differences between the financial  statement
     carrying  amounts of existing assets and liabilities and their  respective
     tax  bases and operating loss and tax credit carryforwards.  Deferred  tax
     assets  and  liabilities are measured using enacted tax rates expected  to
     apply  to taxable income in the years in which those temporary differences
     are  expected  to  be recovered or settled.  The effect  on  deferred  tax
     assets and liabilities of a change in tax rates is recognized in income in
     the period that includes the enactment date.

     Financial Instruments:
        Financial  instruments that potentially subject the Company  to  credit
     risk  consist principally of short-term investments and trade receivables.
     The  Company  places substantially all of its investments in mutual  funds
     holding  federal, state and local government obligations and,  by  policy,
     limits the amount of credit exposure in any one investment.  The Company's
     Musical Instruments segment sells most of its products through established
     dealer  networks.   The  Data Communications segment  sells  most  of  its
     products  direct to customers, to distributors worldwide and to  a  lesser
     extent under OEM agreements with other data communications companies.  The
     credit  risk  associated with related receivables is limited  due  to  the
     large number of dealers and distributors and their geographic dispersion.

     Reclassifications:
        Certain  amounts  in the 2002 and 2001 financial statements  have  been
     reclassified to conform to the 2003 presentation.

     New Accounting Standards:
        Effective  January  1,  2002,  the  Company  adopted  SFAS   No.   142.
     Accordingly,   no   amortization  of  goodwill  was  recognized   in   the
     accompanying consolidated financial statements of operations for the years
     ended  December 31, 2003 and 2002, compared to $52,666 for the year  ended
     December  31,  2001.  In accordance with the provisions of SFAS  No.  142,
     management  has  performed the required transitional  impairment  test  of
     goodwill and has determined that no impairment loss need be recognized  in
     the  year ended December 31, 2003 and 2002.  As required by SFAS No.  142,
     prior  results have not been restated.  A reconciliation of the previously
     reported  net  loss and loss per common share for the year ended  December
     31, 2001, as if SFAS No. 142 had been adopted as of January 1, 2001, is as
     follows:

           Reported net (loss) income            $(4,083,810)
           Add back: Goodwill amortization,
            net of related tax effect                 32,165
           Adjusted net (loss) income            $(4,051,645)

           Basic and diluted (loss) earnings
            per share, as reported               $     (3.49)
           Impact of goodwill amortization,
            net of tax                                  0.03
           Adjusted basic and diluted (loss)
            earnings per share                   $     (3.46)

        In  December 2002, the FASB finalized EITF Issue No. 00-21, "Accounting
     for  Revenue  Arrangements  with Multiple Deliverables".   This  Issue  is
     applicable  to  agreements entered into in fiscal periods beginning  after
     June 15, 2003.  This Issue addresses how to determine whether arrangements
     involve the delivery or performance of multiple products, services, and/or
     rights  to use assets.  The adoption of this Issue did not have a material
     effect on the Company's concolidated financial statements.
        During  2003  the  Financial  Accounting  Standards  Board  issued  the
     following  new  statements  that are applicable  to  the  Company.   These
     statements  did  not  have  a material effect on the  Company's  financial
     statements.
        SFAS  132  (revised), "Employers Disclosures about Pensions  and  Other
     Postretirement  Benefits" - revises employers' disclosures  about  pension
     plans  and other postretirement benefit plans.  This additional disclosure
     is included in Note 16.
        SFAS  149,  "Amendment of Statement 133 on Derivative  Instruments  and
     Hedging  Activities"  -  amends  and clarifies  financial  accounting  and
     reporting for derivative instruments under SFAS 133.  The Company  has  no
     derivative instruments or hedges.
        SFAS   150,   "Accounting  for  Certain  Financial   Instruments   with
     Characteristics  of  both Liabilities and Equity" - establishes  standards
     for  how  an  issuer classifies and measures certain financial instruments
     with characteristics of both liabilities and equity.  The Company does not
     have any financial instruments to which this would be applicable.
        FASB  Interpretation  No.  45, "Guarantor's Accounting  and  Disclosure
     Requirements for Guarantors, Including Indirect Guarantees of Indebtedness
     to  Others, an interpretation of FASB Statements No. 5, 57 and 107  and  a
     rescission  of  FASB  Interpretation No. 34", requires  that  a  guarantor
     recognize, at inception of a guarantee, a liability for the fair value  of
     the  obligation undertaken and enhances the disclosures to be  made  by  a
     guarantor.   See  Note  13  for disclosure of the Company's  guarantee  of
     financing  arrangements of certain customers and Note 12  for  disclosures
     related  to  the  Company's  product warranties.   The  adoption  of  this
     Interpretation   did  not  have  a  material  effect  on   the   Company's
     consolidated financial statements.

Stock-Based Compensation:
        The  Company accounts for its stock-based compensation plans using  the
     accounting  prescribed  by Accounting Principles  Board  Opinion  No.  25,
     "Accounting  for  Stock Issued to Employees".  Since the  Company  is  not
     required  to adopt the fair value based recognition provisions  prescribed
     under  Statement of Financial Accounting Standards No. 123, as amended  by
     SFAS  No.  148,  "Accounting  for  Stock-Based  Compensation",  only   the
     disclosure requirements set forth in the Statements are presented.
        Had  compensation  cost  been determined on the  basis  of  fair  value
     pursuant  to  SFAS No. 123, as amended by SFAS No. 148, net income  (loss)
     and earnings per share would have been decreased as follows:

                                            2003         2002          2001
        Net income (loss)
         As reported                     $1,396,896   $2,685,357   $(4,083,810)
          Deduct: Total stock-based
           employee compensation expense
           determined under fair value
           based method for all awards,
           net of related tax effects       (31,457)     (69,374)      (39,447)
             Pro forma                   $1,365,439   $2,615,983   $(4,123,257)

        Basic and diluted earnings
         (loss) per share
           As reported                        $1.20        $2.29        $(3.49)
           Pro forma                          $1.18        $2.23        $(3.52)

        The  fair  value of each option granted is estimated on the grant  date
     using  the  Black-Scholes option pricing model.  The following assumptions
     were  made in estimating the fair value of options granted under the Allen
     Organ  Company stock option plan in 2002; dividend yield of  1.40%,  risk-
     free  interest  rate of 2.50%, expected life of seven years  and  expected
     volatility  of  10%.  There were no option grants under  the  Allen  Organ
     Company stock option plan in 2003 and 2001.

NOTE 2  Business Acquisition
        On  July  24,  2003, the Company's subsidiary, Eastern  Research,  Inc.
     (ERI),  purchased the assets of Avail Networks, Inc. (Avail)  in  exchange
     for  $200,000  in  cash and contingent payments based  on  future  revenue
     related to the sale of Avail products during the first 30 months after the
     acquisition.
        Avail's   intelligent  last-mile  broadband  solutions  enable  service
     providers  to deliver more revenue-generating services to their enterprise
     customers  from  a  single customer located platform across  metro  fiber,
     traditional  wireline  and  wireless access  networks.   Avail's  flagship
     FronteraT  products  deliver multiple services  to  end-user  sites  in  a
     variety  of  subscriber locations and configurations.  In  addition,  this
     acquisition  gives  ERI  access  to  Avail's  advanced  ATM  (Asynchronous
     Transmission Mode) technology.
        Avail's  sales  prior to the acquisition date were minimal.   As  such,
     pro-forma financial information is not required for this acquisition.  Due
     to  lengthy sales cycles, these products did not add significant  revenues
     in 2003.
        The  purchase  price was allocated $114,300 to property  and  equipment
     and $85,700 to intangibles.

NOTE 3   Investments
       The  cost  and  fair value of investments in debt and equity  securities
       are as follows:
                                                 Gross      Gross
                                   Amortized  Unrealized  Unrealized    Fair
                                      Cost       Gains      Losses      Value
      December 31, 2003
       Available for sale
        Equity securities        $    29,310  $     --    $     50  $    29,260
        Mutual Funds
         Short Term Gov't Funds    2,281,775        --      36,422    2,245,353
         Municipal Bond Funds     14,840,033        --       6,593   14,833,440
         Equity Funds                 35,832        --         714       35,118
       Totals                    $17,186,950  $     --    $ 43,779  $17,143,171

      December 31, 2002
       Available for sale
        Equity securities           $ 39,310  $     --    $  5,139  $    34,171
        Mutual Funds
         Short Term Gov't Funds    2,218,717        620      7,931    2,211,406
         Municipal  Bond Funds    14,891,036      9,612        --    14,900,648
         Equity Funds                 34,929        --       4,404       30,525
       Totals                    $17,183,992  $  10,232   $ 17,474  $17,176,750

        Marketable  debt  securities have an average  contractual  maturity  of
     approximately 1 year or less.
        Realized gains and losses are determined based on the original cost  of
     these  investments using a first-in, first-out method.  During 2003,  2002
     and 2001, sales proceeds and gross realized gains and losses on securities
     classified as available for sale were:

                                     2003           2002           2001

     Sales proceeds               $ 526,866     $30,633,381    $18,682,314
     Gross realized losses        $   4,000     $   379,804    $   216,546
     Gross realized gains         $    --       $   536,052    $   282,181

        The  change  in  net  unrealized  holding  (loss)  gain  on  securities
     available  for sale of $(36,537), $55,961, and $283,786, net  of  deferred
     tax  (benefit)  expense  of $(12,134), $20,842, and  $104,213,   has  been
     included  in accumulated other comprehensive loss in stockholders'  equity
     for the years ended December 31, 2003, 2002, and 2001, respectively.

NOTE 4  Inventories
                                               December 31,
                                            2003         2002
         Finished goods                 $ 3,945,007  $ 5,064,803
         Work in process                  5,525,106    5,707,215
         Raw materials                    4,456,060    5,451,664
          Total                         $13,926,173  $16,223,682

NOTE 5  Property, Plant and Equipment
                                                                   Estimated
                                               December 31,         Useful
                                            2003         2002        Lives
         Land and improvements          $ 2,369,298  $ 2,369,298       10 yrs
         Buildings and improvements       9,085,523    9,030,910   2 - 40 yrs
         Machinery and equipment         11,263,861   10,855,793   5 - 10 yrs
         Office furniture and equipment   5,385,231    4,886,443   3 - 8  yrs
         Vehicles                           179,369      186,187       4  yrs
          Sub-total                      28,283,282   27,328,631
         Less accumulated depreciation   18,116,278   16,471,137
          Total                         $10,167,004  $10,857,494

           Depreciation   expense   charged  to   operations   was   $1,846,367
       $2,158,302 and $2,303,209 in 2003, 2002 and 2001, respectively.

NOTE 6  Note Receivable
           The  Company  has  entered  into  two  split-dollar  life  insurance
       agreements  with  its President, who is the insured  and  owner  of  the
       policies.   The  policy  owner is required to pay  the  portion  of  the
       premiums  equal  to  the  value of the economic  benefit  determined  in
       accordance  with  applicable  IRS  Revenue  Rulings.     Due  to   rules
       included  in the Sarbanes-Oxley Act of 2002 prohibiting the  payment  of
       these  types of premiums, the Company did not pay any insurance premiums
       in  2003  related to these split-dollar agreements.  In  the  past,  the
       Company  paid  the  balance  of  the net  premiums,  which  approximates
       $450,000 annually.
           The  agreements  provide  that  the Company  shall  be  entitled  to
       recover the amount of premiums paid out of the built up cash value  upon
       termination  of the agreement or out of the proceeds upon the  death  of
       the  insured.   As security for repayment, the Company is  a  collateral
       assignee  of the policy to the extent of any such unreimbursed premiums.
       The  note receivable is also secured by the personal obligation  of  its
       President.   The  note receivable exceeds the cash  surrender  value  of
       these  policies by approximately $431,000 and $445,000 at  December  31,
       2003  and 2002, respectively.  However, the Company's President  has  an
       adequate level of personal net assets to cover these amounts.

NOTE 7  Intangible Assets
           Intangible assets subject to amortization are as follows:

                           December 31, 2003    December 31, 2002
                                                                      Weighted
                                                                      Average
                          Gross   Accumulated   Gross   Accumulated Amortization
                         Amount   Amortization Amount   Amortization   Period

       Customer Lists  $  105,679 $   87,583 $  105,679 $   82,015   7 years
       Developed
        Technology      4,660,509  3,515,220  4,269,406  2,862,463   5 years
       Trademark          278,396     93,959    278,396     80,039  20 years
          Total        $5,044,584 $3,696,762 $4,653,481 $3,024,517

        Amortization expense was $672,245, $643,210 and $671,689 in 2003,  2002
     and  2001, respectively.  Estimated amortization expense for the next five
     years is as follows:

              2004                    $462,473
              2005                     178,004
              2006                     119,752
              2007                      84,328
              2008                      34,464

        As  discussed in Note 2,  ERI  acquired  the assets  of Avail  Networks
     for  $200,000,  which included $85,700 of intangible assets  allocated  to
     developed technology and will be amortized over five years.  In  addition,
     intangible assets of $305,403, $53,670 and $459,965 were recorded in 2003,
     2002 and 2001, respectively, in  connection with stock  transactions  with
     minority stockholders of ERI.
        Upon  adoption  of SFAS No. 142, the Company was required  to  evaluate
     its existing intangible assets and goodwill that were recorded in purchase
     business  combinations,  and  to make any necessary  reclassifications  in
     order to conform with the new classification criteria in SFAS No. 141  for
     recognition  separate  from goodwill.  The Company was  also  required  to
     reassess  the  useful lives and residual values of all  intangible  assets
     acquired,  and make any necessary amortization period adjustments  by  the
     end  of  the  first  interim period after adoption. For intangible  assets
     identified as having indefinite useful lives, the Company was required  to
     test  those  intangible  assets  for impairment  in  accordance  with  the
     provisions of SFAS No. 142 within the first interim period. Impairment was
     measured  as  the  excess of carrying value over  the  fair  value  of  an
     intangible asset with an indefinite life. The results of this analysis did
     not  require the Company to recognize an impairment loss or to change  the
     classification of intangible assets and amortization lives.

NOTE 8  Plant Closure Costs and Impairment Charges
        During  2001  the  Company recorded a charge to operating  expenses  of
     $1,400,000  related  to  the  impairment in  the  value  of  goodwill  and
     intangibles which arose in connection with the previous acquisition of  an
     entity.   This  write down was attributable to the downturn  in  the  data
     communications  industry in which the entity operated, the combination  of
     this  entity into another subsidiary and closure of the entity's facility,
     all of which reduced expectations of future cash flows.
        In  connection with the consolidation of the operations  of  these  two
     subsidiaries and the closure of one plant, the Company recorded  a  charge
     of  $530,000  (including  employee severance  and  benefits  for  nineteen
     employees and other exit costs).  All of these costs were paid by December
     31, 2002.

NOTE 9  Notes Payable - Bank
        In  June  2000  ERI obtained a term loan and revolving line  of  credit
     from  a  bank.   During  June 2001 ERI repaid all outstanding  bank  loans
     totaling $12,000,000 with funds provided by Allen Organ Company.

NOTE 10 Accrued Expenses
                                                        December 31,
                                                     2003        2002
           Accrued salaries and commissions       $1,876,287  $1,930,782
           Accrued warranty costs                    970,000     120,000
           Deferred revenue                          405,959     297,103
           Other                                     558,779     290,371
             Total                                $3,811,025  $2,638,256

NOTE 11 Deferred and Other Noncurrent Liabilities
                                                       December 31,
                                                     2003        2002
           Deferred compensation
            expense (see Note 16)                 $1,190,549  $  848,785
           Deferred revenue                          516,147       --
           Accrued warranty costs                    240,000     180,000
             Total                                $1,946,696  $1,028,785

NOTE 12 Warranty Costs
        The  Company  provides  a warranty covering manufacturing  defects  for
     certain of its products for varying lengths of time.  The Company's policy
     is  to accrue the estimated cost of warranty coverage at the time the sale
     is  recorded.   The  activity in the warranty  accrual  is  summarized  as
     follows:
                                                       December 31,
                                                     2003       2002
           Accrual at beginning of year          $  300,000 $  300,000
           Additions charged to warranty expense  1,080,357    223,086
           Claims paid and charged against
             the accrual                           (170,357)  (163,086)
           Accrual at end of year                $1,210,000 $  300,000

NOTE 13 Commitments and Contingencies
        As  of  December  31, 2003, the Company is contingently  liable  for  a
     maximum  amount  of  approximately  $1,309,000  in  connection  with   the
     financing arrangements of certain customers.
        Under the terms of an agreement with the wife of the late Chairman  and
     principal  shareholder  of the Company, the Company  may  be  required  to
     purchase  within eight months of her death, at the option of her  personal
     representative, an amount of Class B Common Shares then owned  by  her  or
     includable in her estate for Federal Estate Tax purposes sufficient to pay
     estate  taxes and costs, subject to the limitations of Section 303 of  the
     Internal  Revenue  Code.  At December 31, 2003, the shareholder  owned  or
     would  have  includable in her estate 263,382 shares  of  Class  B  Common
     Stock.   The Company's obligation under this agreement is limited  to  the
     insurance  proceeds  to  be  received by the  Company  on  life  insurance
     purchased on the life of the shareholder, which policy has a face value of
     $6,000,000.
        In  connection with the purchase of Avail Networks (see  Note  2),  ERI
     agreed  to  pay royalties of 5% of total net sales of qualifying  products
     through  January 2006 in excess of $1,500,000.  The royalties are  payable
     quarterly.  There were no royalty payments made during 2003.
        ERI  leases  its  offices and production facility under  non-cancelable
     operating leases which expire at various dates through August 2005.   Rent
     expense  for  all  Company  operating leases was $453,414,  $413,733,  and
     $495,816  in  2003,  2002  and 2001, respectively.   Minimum  annual  rent
     payments  for  the operating leases are $372,876 in 2004 and  $241,312  in
     2005.

NOTE 14 Accumulated Other Comprehensive Loss
                                                          December 31,
                                                       2003         2002
           Unrealized loss on investments, net    $   (28,867) $    (4,464)
           Minimum pension liability adjustment    (3,803,827)  (3,455,999)
             Total                                $(3,832,694) $(3,460,463)

NOTE 15 Export Sales
        In  2003,  2002 and 2001, net sales by the Musical Instruments  segment
     include  export sales, principally to Canada, Europe and the Far  East  of
     $3,348,158,  $3,248,480, and $3,759,129, respectively.  Net sales  by  the
     Data Communications segment include export sales principally to Europe and
     Asia  Pacific of $6,769,565 for 2003, $10,428,899 for 2002, and $3,342,587
     for  2001.  Net sales by the Audio Equipment segment include export  sales
     principally  to Europe and the Far East of $119,780 for 2003, $69,222  for
     2002, and $219,315 for 2001.

NOTE 16 Retirement Plans
        The  Company sponsors two noncontributory defined benefit pension plans
     which  cover  substantially all of its employees.  Salaried plan  benefits
     are  generally  based on the employee's years of service and  compensation
     levels.   Hourly  plan benefits are based on various monthly  amounts  for
     each  year  of  credited  service.  The Company's  funding  policy  is  to
     contribute  amounts  to the plans sufficient to meet the  minimum  funding
     requirements set forth in the Employee Retirement Income Security  Act  of
     1974,  plus  such  additional amounts as the Company may determine  to  be
     appropriate from time to time.
        Effective December 31, 2003, the Company froze future benefit  accruals
     under  both  the salaried and hourly defined benefit pension  plans.   The
     Company will continue to fund the plans and may terminate the plans in the
     future.   The  Company  has replaced  the  retirement  benefit  previously
     provided  to its employees under the defined benefit pension plan  with  a
     discretionary  contribution to the Allen Organ Company Saving  and  Profit
     Sharing  Plan.   The  discretionary  contribution  will  be  allocated  to
     employee accounts based on their salary.
           Following are reconciliations of the pension benefit obligation and
     the value of plan assets:
                                           2003          2002          2001
      Pension benefit obligation
      Balance, beginning of year       $17,468,426   $16,112,915   $15,194,233
      Service cost                         436,305       393,927       353,266
      Interest cost                      1,089,526     1,085,299     1,055,508
      Benefits paid to participants     (1,112,879)   (1,117,494)   (1,012,126)
      Increase due to changes
       in data/assumptions                  64,574       993,779       522,034
         Balance, end of year          $17,945,952   $17,468,426   $16,112,915

      Plan assets
      Fair value, beginning of year    $11,514,344   $13,398,564   $15,689,627
      Actual investment returns            820,634    (1,663,508)   (1,278,937)
      Company contributions              1,030,000       852,041         --
      Benefits paid to participants     (1,112,879)   (1,072,753)   (1,012,126)
         Fair value, end of year       $12,252,099   $11,514,344   $13,398,564

           The funded status of the plans is as follows:
                                                           December 31,
                                           2003          2002          2001
      Excess of the value of plan
       assets over the benefit
       obligation                      $(5,693,853)  $(5,954,082)  $(2,714,351)
      Unrecognized net actuarial loss    6,105,269     6,509,847     3,095,047
      Adjustment to recognize
       minimum liability                (6,105,269)   (5,562,313)   (2,128,736)
      (Accrued) prepaid benefit cost   $(5,693,853)  $(5,006,548)  $(1,748,040)

        The   adjustment  to  recognize  the  minimum  pension   liability   of
     $6,105,269,  net of deferred tax benefit of $2,301,442, has been  included
     in  other  comprehensive income (loss) in stockholders' equity at December
     31, 2003.
        The  following  weighted-average rates were  used  in  determining  the
     above plan information:
                                                    2003     2002     2001

      Discount rate on the benefit obligation       5.75%    6.25%    6.75%
      Expected long-term rate of return
       on plan assets                               7.00%    7.00%    8.00%
      Rate of long-term compensation increase       5.00%    5.00%    6.00%

        The  Company's overall expected long-term rate of return on  assets  is
     7.0  percent.   The  expected long-term rate of return  is  based  on  the
     portfolio  that management expects to maintain as a whole and not  on  the
     sum  of  the returns on individual asset categories.  The return is  based
     exclusively on historical returns, without adjustments.

           Pension expense is comprised as follows:
                                           2003          2002          2001

      Service cost                     $  436,305    $  393,927    $  353,266
      Interest cost                     1,089,526     1,085,299     1,055,508
      Expected return on plan assets     (768,716)   (1,036,157)   (1,210,756)
      Amortization of net gain from
       prior periods                        --          133,903         --
      Amortization of transition asset      --            --          (72,012)
        Net pension cost               $1,174,349    $  576,972    $  126,006

        The  foregoing net amounts regarding the pension benefit obligation and
     the value of plan assets are based on a combination of both overfunded and
     underfunded  plans.  The aggregate amounts relating to  underfunded  plans
     are as follows:
                                                     December 31,
                                          2003          2002          2001

      Projected benefit obligation    $17,945,952   $17,468,424   $16,112,915
      Accumulated benefit obligation   17,945,952    16,520,892    15,146,604
      Fair value of plan assets        12,252,099    11,514,344    13,398,564

        The  allocation  of  the  fair value of plan assets  of  the  Company's
     pension plans at December 31, 2003, 2002 and 2001 were as follows:
                                                    December 31,
                                           2003         2002          2001

           Equity Security Funds            20%          --            61%
           Debt Security Funds              --           --            39%
           Stable Asset Fund                34%          --            --
           Cash and Equivalents Fund        46%         100%           --
             Total                         100%         100%          100%

        The  Company's  investment  policies and  strategies  for  the  pension
     benefit  plans  do  not  use target allocations for the  individual  asset
     categories.   The  Company expects to increase its  allocation  to  Equity
     Security Funds to approximately 50% while decreasing its allocation to the
     Cash  and Equivalents Fund to approximately 30%.  Management will continue
     to  monitor market conditions and make changes in asset allocation that it
     feels  are appropriate to balance the risk and return on plan investments.
     The Company's investment goals are to maximize returns subject to specific
     risk management policies.  Its risk management policies permit investments
     in  mutual  funds  and  prohibit direct investments  in  debt  and  equity
     securities  and  derivative financial instruments.  The Company  addresses
     diversification  by  the use of mutual fund investments  whose  underlying
     investments are in domestic and international fixed income securities  and
     domestic  and  international equity securities.  These  mutual  funds  are
     readily marketable and can be sold to fund benefit payment obligations  as
     they become payable.
        The  Company expects to contribute a total of $1,000,000 to its pension
     plans in 2004.
        The  Company provides a 401(k) deferred compensation and profit sharing
     plan  for  the  benefit of eligible employees.  The plan  allows  eligible
     employees  to  defer a portion of their annual compensation,  pursuant  to
     Section  401(k) of the Internal Revenue Code. Profit-sharing contributions
     to  the  plan  are discretionary as determined by the Company's  board  of
     directors.   The Company contributions were $58,325, $85,658 and  $248,650
     in 2003, 2002 and 2001, respectively.
        The  Company provides supplemental executive retirement plans (deferred
     compensation)  for  three  of  its  officers.   These  plans  provide  for
     discretionary Company contributions, which vest over a five  year  period,
     accrue interest at the prime rate, not to exceed 9%, and are payable  upon
     the   executive's   death  or  retirement.   Expense  related   to   these
     arrangements  was  $72,318, $70,871 and $78,303 in 2003,  2002  and  2001,
     respectively.  The accrued benefits were $405,174 and $332,856 at December
     31, 2003 and 2002, respectively.

NOTE 17 Investment Income
                                                       December 31,
                                              2003        2002         2001

       Interest Income                     $ 429,440   $ 550,697   $  910,144
       Dividend Income                         6,959       9,390      173,653
       Gain (Loss) on Sale of Investments     (4,000)    156,248      (65,635)
         Total                             $ 432,399   $ 716,335   $1,018,162

NOTE 18 Income Taxes
           The provision for income taxes consists of the following:
                 2003                    2002                     2001

          Currently              Currently               Currently
           Payable   Deferred     Payable    Deferred     Payable     Deferred

Federal   $439,000  $(448,000)  $1,252,000  $(456,000) $(1,347,000) $(1,014,000)
State      132,000   (198,000)     417,000   (102,000)     179,000     (178,000)
 Total    $571,000  $(646,000)  $1,669,000  $(558,000) $(1,168,000) $(1,192,000)

           A  reconciliation  of  the  provision  for  income  taxes  with  the
       statutory rate follows:
                                2003              2002              2001
   Statutory provision for
   federal income tax     $449,000  34.0%  $1,291,000  34.0% $(2,180,000)(34.0)%
   State taxes, net of
    federal tax benefits   106,000   8.0      143,000   3.8     (549,000) (8.6)
   Tax credits            (347,000)(26.3)    (311,000) (8.2)    (363,000) (5.7)
   Tax-exempt income       (56,000) (4.2)     (64,000) (1.7)     (96,000) (1.5)
   Exempt income of
    foreign sales
    corporation           (104,000) (7.9)    (136,000) (3.6)    (100,000) (1.6)
   Other items, net         27,000   2.0       18,000   0.5       28,000   0.4
   Effect of change in
    valuation allowance of
    deferred tax assets:
     Federal                 --       --      105,000   2.8      350,000   5.4
     State                (150,000)(11.3)      65,000   1.7      550,000   8.6
                          $(75,000) (5.7)% $1,111,000  29.3% $(2,360,000)(36.8)%

           The  following temporary differences give rise to the net  deferred
     tax asset at December 31, 2003 and 2002.

                                                           2003          2002
        Deferred Tax Assets
         Excess of book depreciation/amortization
          over tax depreciation/amortization           $  375,529    $  479,305
         Excess of book over tax pension expense        1,766,324     1,831,377
         Loss on investments not recognized
          for tax purposes                                 14,913        36,839
         Deferred compensation not recognized
          for tax purposes                                447,759       330,424
         Net operating loss and credit carryforwards    1,872,221     1,876,210
         Other liabilities                                646,331       361,453
         Reserve for bad debts                            227,846       194,586
         Warranty reserve                                 454,989       115,959
         Inventory reserve                              1,448,493     1,358,989
           Sub-total                                    7,254,405     6,585,142
         Valuation Allowance                           (1,020,000)   (1,170,000)
           Total Deferred Tax Assets                   $6,234,405    $5,415,142

        Deferred  taxes are included in the Company's financial  statements  as
     follows:
                                                          2003          2002
             Current deferred tax asset                $2,741,167    $1,992,694
             Non-current deferred tax asset             3,493,238     3,422,448
               Total deferred tax asset                $6,234,405    $5,415,142

        At   December   31,  2003,  the  Company  has  available  approximately
     $2,337,000 of unused federal and $15,132,000 of unused state net operating
     loss  carryforwards that may be applied against future taxable income  and
     that  expire in various years from 2004 to 2023.  In addition, the Company
     has  $750,000  in  state tax credit carryforwards that expire  in  various
     years  from  2008  to  2018.   The Company has a  valuation  allowance  of
     $1,020,000  for  the  deferred tax assets related to  the  uncertainty  of
     realizing   state   net   operating  loss  carryforwards,   state   credit
     carryforwards  and federal net operating losses of a subsidiary  prior  to
     inclusion in the consolidated federal income tax return.  The decrease  in
     the 2003 valuation allowance is primarily related to the loss of VIR,Inc's
     state  net  operating  loss carryforwards, which   were  previously  fully
     reserved.
        In  assessing  the  realizability of deferred  tax  assets,  management
     considers whether it is more likely than not that some portion or  all  of
     the deferred tax assets will not be realized.  The ultimate realization of
     deferred  tax  assets is dependent upon the generation of  future  taxable
     income  during  the  periods in which those temporary  differences  become
     deductible.   Management considers the scheduled reversal of deferred  tax
     liabilities, projected future taxable income, and tax planning  strategies
     in  making  this  assessment.  Based upon the level of historical  taxable
     income and projections for future taxable income over the periods in which
     the  deferred tax assets are deductible, management believes  it  is  more
     likely  than  not  that  the Company will realize the  benefits  of  these
     deductible  differences,  net  of  the existing  valuation  allowances  at
     December  31,  2003.   The  amount of the deferred  tax  asset  considered
     realizable,  however, could be reduced in the near term  if  estimates  of
     future taxable income during the carryforward period are reduced.
NOTE 19 Earnings Per Share
        The  following shows the amounts used in computing earnings  per  share
     and the effect on weighted average number of shares for dilutive potential
     common stock.
                                               2003       2002       2001

          Weighted average number of
           common shares used in basic
           earnings per share                1,160,008  1,170,191  1,170,480
          Effect of stock options                  473      --         --
          Weighted average number of
           common shares use in diluted
           earnings per share                1,160,481  1,170,191  1,170,480

        Outstanding  stock options to purchase 12,000 shares  of  common  stock
     were  not  included in computing earnings per share for 2002  because  the
     effect was antidilutive.  There were no stock options outstanding in 2001.

NOTE 20 Stock Option Plans
        In   July   2002,  the  Company  established  an  employee  stock-based
     compensation  plan to assist in attracting and retaining  personnel.   The
     maximum  number of the Company's Class B shares that may be  issued  under
     the plan approximates a 9% interest in the Company.  Options are issued at
     the  fair  market  value on the date of grant.  The maximum  term  of  the
     options is ten years, and generally vest equally over four years.
        As  of  December  31, 2003, total options issued represent  1%  of  the
     shares  currently  outstanding.   Vested options  represent  0.4%  of  the
     currently outstanding shares.
        Following is a summary of the activity under the plan:
                                                        December 31,
                                                 2003                2002
                                                    Weighted            Weighted
                                                     Average             Average
                                         Number of  Exercise Number of  Exercise
                                           Shares     Price   Shares      Price

       Outstanding at beginning of year    12,000    $39.00      --      $  --
       Granted                               --        --      12,000     39.00
       Exercised                             --        --        --         --
       Forfeited                             --        --        --         --
       Outstanding at end of year          12,000    $39.00    12,000    $39.00

         Weighted average fair value
          of options granted
          during the year                  $  --               $ 5.03

        Following  is  a  summary  of  the status  of  options  outstanding  at
     December 31, 2003:
                  Options Outstanding                  Options Exercisable
                     Weighted Avg.
                      Remaining    Weighted Avg.
Exercise   Number    Contractual     Exercise       Number        Weighted Avg.
 Price   Outstanding    Life          Price       Exercisable    Exercise Price

 $39.00    12,000     8.56 years     $39.00         4,800            $39.00

         ERI  also provides an employee stock-based compensation plan to  assist
     in  attracting and retaining personnel.  The maximum number of  subsidiary
     shares  that  may be issued under the plan approximates a 15% interest  in
     the subsidiary.  Options are generally issued at the estimated fair market
     value.   The maximum term of the options is six years, and generally  vest
     equally over four years.
        As  of December 31, 2003, total options issued represents 9% of the ERI
     shares  currently  outstanding.  Vested  options  consist  of  5%  of  the
     currently outstanding shares of ERI.
        ERI recognized compensation expense of $144,875 in 2003 and $59,375  in
     both  2002 and 2001 related to options granted with an exercise price less
     than the fair market value on the date of grant.
        See  Note 1 for the pro forma effects on net income (loss) and earnings
     per share had compensation cost been determined on the basis of fair value
     pursuant to SFAS No. 123, as amended by SFAS No. 148.

NOTE 21 Related Party Transactions
        A  member  of the Company's Board of Directors is a principal in  firms
     providing  legal and financial advisory services.  Legal  fees  paid  were
     $153,149,  $45,851  and  $75,094 in 2003,  2002  and  2001,  respectively.
     Financial advisory fees paid were $6,000 in both 2003 and 2002 and $11,753
     in 2001.

NOTE 22 Industry Segment Information
        The  Company's  operations are classified into four industry  segments:
     Musical Instruments, Data Communications, Electronic Assemblies and  Audio
     Equipment.   The  Musical Instruments segment is comprised  of  operations
     principally involved in the design, manufacture, sale and distribution  of
     electronic  keyboard  musical instruments, primarily  digital  organs  and
     related  accessories.  Musical instruments are sold  primarily  to  retail
     dealers worldwide.
        The  Data  Communications segment is involved in the design,  sale  and
     distribution   of  data  communications  equipment.   Data  communications
     products are sold direct to customers and distributors worldwide and to  a
     smaller extent under OEM agreements with some customers.
        The  Electronic Assemblies segment is involved in the manufacture, sale
     and  distribution  of  electronic assemblies for  outside  customers  used
     primarily  as  control  devices  and other circuitry  in  their  products.
     Subcontract  assembly  services  are  provided  primarily  to   industrial
     concerns in Pennsylvania and New Jersey.
        The  Audio  Equipment (Legacy Audio, Inc.) segment is involved  in  the
     design,  manufacture,  sale  and  distribution  of  high  quality  speaker
     cabinets  and  related  equipment  for  hi-fi  stereo  and  home   theater
     applications.   Legacy's  products are sold  worldwide  primarily  through
     independent retail dealers and, to a lesser extent, directly to individual
     customers.
        Intersegment sales are generally priced at cost plus a percentage mark-
     up,  and  are generally marginally less than prices which would be charged
     for  the  same product to unaffiliated customers.  Intersegment sales  are
     excluded   from  net  sales  reported  in  the  accompanying  consolidated
     statements  of  income.  Identifiable assets by segment are  those  assets
     that  are  used in the Company's operations within that segment.   General
     corporate assets consist principally of cash and short-term investments.
        The  Electronic  Assemblies segment derived 61% of its 2003  net  sales
     from  two  customers and 73% and 82% of its net sales from three customers
     in  2002  and 2001, respectively.  The Data Communications segment derived
     16% of its 2003 net sales from one customer, 40% of its net sales from two
     customers in 2002 and 13% of its net sales from one customer in 2001.  The
     Company's  Musical  Instrument  and  Audio  Equipment  segments  are   not
     dependent on any single customer.
        In  October  2002,  Legacy  Audio, Inc. sold  its  manufacturing  plant
     located  in  Springfield, Illinois for $285,000 (net of selling  expenses)
     and  recognized a gain on the sale of approximately $7,000.  Legacy ceased
     operations at this facility effective August 31, 2002 and consolidated all
     of  its  production into the Company's manufacturing facility in Macungie,
     PA.
        Following  is  a  summary of segmented information for 2003,  2002  and
     2001.

                                                      December 31,
                                           2003           2002          2001
            Net Sales to
            Unaffiliated Customers
              Musical Instruments       $20,381,904   $24,942,925   $24,375,642
              Data Communications        36,022,256    36,536,174    25,909,885
              Electronic Assemblies       2,819,640     4,750,143     8,382,021
              Audio Equipment             1,564,258     1,510,306     1,822,965
               Total                    $60,788,058   $67,739,548   $60,490,513

            Intersegment Sales
              Musical Instruments       $   823,199   $   435,915   $    91,820
              Data Communications            84,418         --          193,664
              Electronic Assemblies         344,553       131,540        79,651
              Audio Equipment                88,205        88,909        87,777
               Total                    $ 1,340,375   $   656,364   $   452,912

            Income (Loss) from Operations
              Musical Instruments       $  (764,639)  $ 2,024,144   $ 2,174,970
              Data Communications         2,446,213     2,091,520    (8,425,231)
              Electronic Assemblies        (457,366)     (401,165)      125,000
              Audio Equipment              (334,711)     (634,477)     (988,353)
               Total                    $   889,497   $ 3,080,022   $(7,113,614)

            Identifiable Assets
              Musical Instruments       $16,762,054   $17,301,133   $17,664,908
              Data Communications        26,164,502    25,868,894    19,596,306
              Electronic Assemblies       2,065,776     2,373,162     3,377,712
              Audio Equipment             1,541,238     1,623,546     2,795,550
               Sub-total                 46,533,570    47,166,735    43,434,476
              General corporate assets   25,416,706    26,196,133    23,037,776
               Total                    $71,950,276   $73,362,868   $66,472,252

            Capital Expenditures
              Musical Instruments       $   155,195   $ 1,037,338   $   528,998
              Data Communications           904,861       670,320       736,538
              Electronic Assemblies           --          188,487       188,272
              Audio Equipment                 3,175         2,441         4,425
               Total                    $ 1,063,231   $ 1,898,586   $ 1,458,233

            Depreciation and Amortization
              Musical Instruments       $   765,196   $   759,689   $   690,084
              Data Communications         1,596,862     1,864,921     2,093,476
              Electronic Assemblies         120,679       126,321       113,027
              Audio Equipment                35,875        50,581        78,311
               Total                    $ 2,518,612   $ 2,801,512   $ 2,974,898

            Income Tax Expense (Benefit)
              Musical Instruments       $   (20,000)  $ 1,240,000   $ 1,186,000
              Data Communications           312,000       138,000    (3,565,000)
              Electronic Assemblies        (204,000)     (152,000)       47,000
              Audio Equipment              (163,000)     (115,000)      (28,000)
               Total                    $   (75,000)  $ 1,111,000   $(2,360,000)

NOTE 23 Quarterly Financial Data (Unaudited)

                   First       Second       Third        Fourth
         2003     Quarter      Quarter      Quarter      Quarter      Total
Net Sales      $13,874,464  $12,725,880  $14,932,091  $19,255,623  $60,788,058
Gross Profit     5,274,954    5,222,827    6,588,075    8,008,589   25,094,445
Net Income
 (Loss)            (19,808)    (149,898)     200,923    1,365,679    1,396,896
Easrnings (Loss)
 per Share           (0.02)       (0.13)        0.17         1.18         1.20

         2002
Net Sales      $15,977,488  $17,403,733  $15,705,708  $18,652,619  $67,739,548
Gross Profit     6,628,428    7,158,583    5,755,644    6,233,054   25,775,709
Net Income         931,539    1,009,634      528,362      215,822    2,685,357
Earnings per Share    0.80         0.86         0.45         0.18         2.29

         2001
Net Sales      $13,259,398  $15,119,294  $15,385,870  $16,725,951  $60,490,513
Gross Profit     3,381,851    3,890,162    5,173,502    6,337,581   18,783,096
Net (Loss)
 Income         (2,625,492)  (1,565,281)    (263,425)     370,388   (4,083,810)
(Loss) Earnings
 per Share           (2.24)       (1.34)       (0.23)        0.32        (3.49)

<PAGE>
                                 PART III

Item 10.    Directors and Executive Officers of the Registrant.

                 (a)            Identification of Directors
                                                               Time Period
                              Date Term                         Position
Name                           Expires       Age  Position         Held

Steven Markowitz             Next Annual     50   Director     Since 1980
                           Meeting in 2004
Eugene Moroz (1)             Next Annual     80   Director     Since 1968
                           Meeting in 2004
Leonard W. Helfrich          Next Annual     74   Director     1964 - 1968
                           Meeting in 2004                     and 1972 to
                                                               present
Orville G. Hawk (1)          Next Annual     86   Director     Since 1989
                           Meeting in 2004
Albert F. Schuster           Next Annual     84   Director     Since 1989
                           Meeting in 2004
Martha Markowitz             Next Annual     82   Director     Since 1991
                           Meeting in 2004
Jeffrey L. Schucker (1)      Next Annual     49   Director     Since 1996
                           Meeting in 2004
Ernest Choquette             Next Annual     50   Director     Since 1998
                           Meeting in 2004
Michael F. Doyle             Next Annual     49   Director     Since 2001
                           Meeting in 2004

   (1)  Audit Committee member.

           (b)  Identification of Executive Officers.
                    Date Term                                  Time Period
Name                 Expires       Age   Position             Position Held

Steven Markowitz   Next Annual     50    President            1990 to present
                 Meeting in 2004

Barry J. Holben    Next Annual     51    Vice President-Sales October 1995 to
                 Meeting in 2004                              present

Dwight A. Beacham  Next Annual     57    Vice President-      October 1995 to
                 Meeting in 2004         Product Development  present

Nathan S. Eckhart  Next Annual     40    Vice President-      May 1996 to
                 Meeting in 2004         Finance, Treasurer,  present
                                         Secretary

                  (c)  Identification of Certain Significant Employees.
                       Not applicable.

                  (d)  Family Relationships.
                        Except  for Martha Markowitz and Steven  Markowitz,
                  who  are  mother and son, there is no family relationship
                  between any officers or directors of the Company.

                  (e)  Business Experience.
                             (1)   Steven  Markowitz, Barry Holben,  Dwight
                       Beacham  and Nathan Eckhart, have been employees  of
                       the Company in executive capacities for at least the
                       last five years.
                                  Mr. Moroz was employed by the Company for
                       over 50 years, having last held the position of Vice
                       President.  He retired from active employment in May
                       1998  and  continues  to  serve  on  the  Board   of
                       Directors.
                                  Mr.  Helfrich was employed by the Company
                       for  nearly  40 years as Vice President-Finance  and
                       Secretary   before  retiring  in  March   2000   and
                       continues to serve on the Board of Directors.
                                  Mr.  Hawk, who has been retired more than
                       five  (5) years, was formerly Chairman of the  Board
                       and President of First National Bank of Allentown.
                                 Mr. Schuster is a church director of music
                       and prior to his retirement more than five (5) years
                       ago was a supervisor at Bethlehem Steel Corporation.
                                  Mrs.  Markowitz  is the widow  of  Jerome
                       Markowitz, the Company's founder, and she represents
                       the family's interest in the Company.
                                  Mr.  Schucker  is  a  Vice  President  at
                       National  Penn Bank.  Prior to joining the bank,  he
                       worked  as  an  investment banker at  various  firms
                       including  Managing Director with Griffin  Financial
                       Group,  President of Middle Market Capital Advisors,
                       L.L.C. (MMCA) and Vice President of Meridian Capital
                       Markets.
                                 Mr. Choquette has been a member of the law
                       firm of Stevens & Lee, Reading PA, for over 20 years
                       and   currently  serves  as  Co-Chairman  of   their
                       Corporate  Group.  Stevens & Lee serves  as  general
                       counsel to the Company.
                                  Mr.  Doyle is President of the  Company's
                       subsidiary, Eastern Research, Inc.  Prior to joining
                       ERI   in  May  of  1997,  Mr.  Doyle  had  20  years
                       experience  in  the  data  communications   industry
                       including positions at Infotron Systems, Inc., Dowty
                       Communications,  Inc., Teleos  Communications,  Inc.
                       and Madge Networks, Inc.

                  (f)    Involvement  in  Certain  Legal   Proceedings   by
                   Directors or Officers.

                       None.

                  (g)    Section   16(a)  Beneficial  Ownership   Reporting
                  Compliance.

                        Based  on  a review of forms required to  be  filed
                  under  Section 16 of the Securities and Exchange  Act  of
                  1934  and  furnished to the Company as  required  by  SEC
                  rules,  no  person subject to Section 16 of the  Exchange
                  Act  failed to file on a timely basis any forms  required
                  by such Section during 2003.

                  (h)  Audit Committee Financial Expert

                       The Company's Board of Directors has determined that
                  Jeffrey L. Schucker is a financial expert serving on  the
                  Company's  audit  committee and that  he  is  independent
                  within the meaning of NASDAQ listing standards.

                  (i)  Code of Ethics.

                        The  Company has adopted a Code of Business Conduct
                  and   Ethics  that  applies  to  all  company   employees
                  including its principle executive and principal financial
                  officers.   A  copy of the Code of Business  Conduct  and
                  Ethics is filed as Exhibit 14 to this form 10-K.

Item 11.    Executive Compensation.
                 Deleted paragraphs and/or columns are not applicable.

             (b)  SUMMARY COMPENSATION TABLE:
                                                        Long Term
                                                       Compensation
                                   Annual Compensation  Securities   All Other
                                      Salary   Bonus    Underlying Compensation
Name  and  Principal  Position  Year     $       $      Options(#)      $

Steven A. Markowitz, President  2003  151,675    -           -       38,886 (1)
  (Chief Executive Officer)     2002  147,855    -           -       20,969
                                2001  140,616    -           -       48,739

Dwight A. Beacham,              2003  104,850    -           -       17,052 (2)
  Vice President - Product      2002  101,918    -        4,000      12,049
   Development                  2001   99,209    -           -        8,985

Barry J. Holben,                2003  106,628    -           -       17,052 (2)
  Vice President - Sales        2002  104,008    -        4,000      12,049
                                2001   99,964    -           -        8,985

Nathan S. Eckhart,              2003  107,630    -           -       13,533 (2)
  Vice President - Finance,     2002  102,823    -        4,000       9,527
  (Treasurer and Secretary)     2001   99,586    -           -       13,699

(1)-Value  of  split  dollar life insurance policy.  See  Note  16  to  the
accompanying  Consolidated Financial Statements for additional  information
on this arrangement.

(2)-Value   of  vested  deferred  compensation  earned  under  supplemental
executive  retirement plans.  See Note 16 to the accompanying  Consolidated
Financial Statements for additional information on these arrangements.

             (c)  OPTION GRANTS IN LAST FISCAL YEAR:
                     There  were  no  stock  options granted  or  exercised
                     during  2003  under  the  Allen  Organ  Company  stock
                     option plan.

             (d)  AGGREGATE OPTIONS EXERCISED IN LAST  YEAR
                   AND DECEMBER 31, 2003 OPTION VALUE:

                                Number of Securities        Value of
                                    Underlying          Unexercised In-The
                                Unexercised Options     Money Options at
                Shares          at December 31, 2003    December 31, 2003
        Acquired on   Value               (#)                   ($)
          exercise  Realized                              (1)          (1)
   Name      (#)      ($)   Exercisable Unexercisable Exercisable Unexercisable

Dwight A.
 Beacham      0        0       1,600        2,400       $9,600       $14,400
Barry J.
 Holben       0        0       1,600        2,400       $9,600       $14,400
Nathan S.
 Eckhart      0        0       1,600        2,400       $9,600       $14,400

      (1) Based on market value of $45.00 per share for Allen Organ Company
Class B common stock at December 31, 2003

             (f)  Defined Benefit or Actuarial Plan Disclosure.

                                  As  discussed in Note 16 to the Company's
                  financial  statements included in Item 8, future  benefit
                  accruals under the Company's defined benefit pension plan
                  were  frozen as of December 31, 2003.  Based on the  2003
                  actuarial  report  fro  the  Plan  the  estimated  annual
                  retirement  benefit under the Plan to each of  the  named
                  executive  officers  would  be  as  follows:   Steven  A.
                  Markowitz (age 50) - $30,985; Dwight A. Beacham (age  57)
                  -  $19,557; Barry J. Holben (age 51) - $13,876; Nathan S.
                  Eckhart (age 40) - $12,015.


             (g)  Compensation of Directors:

                                  Non-employee directors receive  $450  for
                  each Board and committee meeting attended plus reasonable
                  expenses   in   connection  with  attendance.    Employee
                  directors  receive no additional compensation  for  their
                  services as a director.

             (h)  Employment Contracts and Termination  of Employment
                   and Change in Control Arrangements:

                                  There are no employment contracts between
                  the  Company and any of the Company's executive officers.
                  The Company has established an Executive Bonus Program in
                  the  form of executive supplemental retirement plans  for
                  the  benefit of Mr. Beacham, Mr. Holben and Mr.  Eckhart.
                  These    plans   provide   for   discretionary    Company
                  contributions, which vest over a five year period, accrue
                  interest  at  the prime rate, not to exceed 9%,  and  are
                  payable upon the executives death or retirement.



Item 12.    Security Ownership of Certain Beneficial Owners and Management

             (a)   Voting securities of the registrant owned of  record  or
             beneficially by each person who owns of record, or is known by
             the registrant to own beneficially, more than five percent  of
             any   class  of  such  securities.   Class  A  Common   Shares
             constitute   the   only   securities   with   voting   rights.
             Information as of February 28, 2003.
                                          Amount and
                                          Nature of
            Names and           Title of  Beneficial   % of
            Addresses             Class   Ownership    Class
            Jerome Markowitz        A     81,531       97.22%
            Trust (2)                     (1)
            821 N. 30th St.
            Allentown, PA

               (1)  Sole voting and investment power

               (2)   The  shares are held by Trustees under an Inter  Vivos
               Trust  established by Mr. Markowitz, who  died  in  February
               1991,  for the benefit of his family, principally his widow,
               Martha   Markowitz.   The  Trustees  are  Steven  Markowitz,
               President  and  a  Director  of  the  Company,  and   Martha
               Markowitz, a Director of the Company.

           (b)    Each   class  of  equity  securities  of  the  registrant
           beneficially  owned  directly  or indirectly  by  all  directors
           naming them and directors and officers of the registrant,  as  a
           group,  without  naming  them.   Directors  not  named  in   the
           following  table  do not beneficially own any equity  securities
           of the registrant.  Information as of December 31, 2003.

                                                    Percent  Percent
                                        Nature of     of       of
                 Class     Class        Beneficial  Class    Class
Directors          A         B          Ownership     A        B

Steven Markowitz     58                 (1) (3)      .07 %
                           13,562       (1) (3)               1.26%
                81,531*                 (2) (4)    97.22 %
                         242,016*       (2) (4)              22.57%

Eugene Moroz                6,290       (1) (3) as
                                        to 6,290
                            6,000       (2) (4) as
                                        to 6,000              1.15%

Leonard W. Helfrich           258       (2) (4)                .02%

Orville G. Hawk                50       (2) (4)                .005   %

Martha Markowitz           21,366       (1) (3)               1.99%
                81,531*                 (2) (4)    97.22 %
                         242,016*       (2) (4)              22.57%


                                                    Percent  Percent
All Directors                                         of       of
and Officers       Class     Class                   Class    Class
as a Group           A         B                       A        B

     12           81,589**  289,542**               97.29%** 26.61%


              (1)   Sole voting power
              (2)   Shared voting power
              (3)   Sole investment power
              (4)   Shared investment power

                     *     Shares owned by the Jerome Markowitz Trust  for
                  which   Martha  Markowitz  and  Steven  Markowitz,   Co-
                  Trustees,  have shared voting and investment power,  and
                  of which Martha Markowitz is the primary beneficiary and
                  Steven Markowitz is one of the residuary beneficiaries.

                    **   The shares held by the Jerome Markowitz Trust are
                  not duplicated in the totals for the Class A and Class B
                  Shares.

             (c)  Changes in Control.  Not applicable.

             (d)  Securities  authorized for issuance under equity  compensation
                  plans:

     Plan category  Number of          Weighted-average   Number of
                    securities to be   exercise price of  securities
                    issued upon        outstanding        remaining
                    exercise of        options, warrants  available for
                    outstanding        and rights         future issuance
                    options, warrants                     under equity
                    and rights                            compensation plans
                                                          (excluding
                                                          securities
                                                          reflected in
                                                          column (a))
                       (a)                 (b)                (c)
     Equity
     compensation
     plans
     approved by
     security
     holders           12,000             $39.00             88,000

     Equity
     compensation
     plans not
     approved by
     security
     holders             --                 --                 --

     Total             12,000             $39.00             88,000

Item 13.    Certain Relationships and Related Transactions

            See Note 13 to the Consolidated Financial Statements concerning
            an  agreement  between  the Company  and  Martha  Markowitz,  a
            Director of the Company.
            Ernest Choquette, a member of the Company's Board of Directors,
            is  a principal in firms providing legal and financial advisory
            services.   Legal fees paid were $153,149, $45,851 and  $75,094
            in  2003, 2002 and 2001, respectively.  Financial advisory fees
            paid were $6,000 in both 2003 and 2002 and $11,753 in 2001.

Item 14.    Principal Accountant Fees and Services
                                                    2003       2002
            (1) Audit Fees                        $116,000   $121,551
            (2) Audit-Related Fees                  13,500     17,500
            (3) Tax Fees                           116,200    113,250
            (4) All Other Fees                        -          -
                 Total Fees                       $245,700   $252,301

            Audit-Related Fees include assurance services provided for  the
            Company's   retirement  plans  and  other   fees   related   to
            understanding   and   implementing  new  Financial   Accounting
            Standards.

            Tax  Fees include fees for compliance services, assistance with
            compliance  documentation and various  other  tax  issues  that
            arise from time to time.

            The  audit committee of the Board of Directors pre-approves all
            audit  and  permissible  non-audit  services  provided  by  the
            Company's  independent auditors.  All of the services  provided
            by the Company's independent auditors set forth above were pre-
            approved by the audit committee.

                                  PART IV
Item 15.    Exhibits, Financial Statement Schedules and Reports on Form 8-K
            (a)  (1)  Financial Statements
                       The  following consolidated financial statements  of
                 Allen  Organ Company and its subsidiaries are included  in
                 Part II, Item 8:
                      Independent Auditors' Report.
                       Consolidated Balance Sheets as of December 31,  2003
                 and 2002.
                      Consolidated Statements of Income for the years ended
                 December 31, 2003, 2002, and 2001.
                       Consolidated Statements of Stockholders' Equity  for
                 the years ended December 31, 2003, 2002, and 2001.
                       Consolidated Statements of Cash Flows for the  years
                 ended December 31, 2003, 2002, and 2001.
                      Notes to Consolidated Financial Statements.
                        The   individual   financial  statements   of   the
                 Registrant's subsidiaries have been omitted, as  they  are
                 all  included  in  the  Consolidated Financial  Statements
                 referred to above.
                 (a)  (2) Financial Statement Schedules
                       Schedule II.  Valuation and Qualifying Accounts  for
                 the three years ended December 31, 2003.
                                            Schedules   other  than   those
                           listed  above  are  omitted  because  they   are
                           either  not required, are not applicable or  the
                           required   information  is  presented   in   the
                           Consolidated Financial Statements.
                 (a)  (3) Exhibits
                      Exhibit No.    Description
                      2(4)      Plan of acquisition
                      3.1(1)    Articles of Incorporation, as amended
                      3.2(2)    Bylaws, as amended
                      10.1(7)   Allen Organ Company Stock Option Plan
                      10.2(3)   Agreement of Amendment between the Company
                                and Martha Markowitz
                      10.3(5)   Executive Bonus Program  and
                                Endorsement  Split  Dollar  Life   Insurance
                                Agreements  between the Company  and  Dwight
                                A.  Beacham, Nathan S. Eckhart and Barry  J.
                                Holben
                      14        Code  of Business Conduct and Ethics
                      21        Subsidiaries of the registrant
                      31.1      Rule      13a-14(a)/15d-14(a)
                                Certification - Chief Executive Officer
                      31.2      Rule      13a-14(a)/15d-14(a)
                                Certification - Chief Financial Officer
                      32        Section 1350 Certifications
                      99.1(6)   Audit Committee Charter

                1. Incorporated  by  reference  to  the  exhibit
                   filed with the Registrants Annual Report on Form  10-K
                   for the year ended December 31, 1984.
                2. Incorporated  by  reference  to  the  exhibit
                   filed  with the Registrants Quarterly Report  on  Form
                   10-Q for the period ended September 30, 1996.
                3. Incorporated  by  reference  to  the  exhibit
                   filed with the Registrants Annual Report on Form  10-K
                   for the year ended December 31, 1992.
                4. Incorporated by reference to the exhibit filed with the
                   Registrants Current Report on Form 8-K dated August 1, 1995.
                5. Incorporated by reference to the exhibit filed with the
                   Registrants Quarterly Report on Form 10-Q for the period
                   ended September 30, 1999.
                6. Incorporated by reference to the exhibit filed with the
                   Registrants Annual Report on Form 10-K for the year ended
                   December 31, 2000.
                7. Incorporated by reference to the exhibit filed with the
                   Registrants Quarterly Report on Form 10-Q for the period
                   ended September 30, 2002.

                 (b)   Reports on Form 8-K.  None filed during  the  fourth
                 quarter of 2003.

<PAGE>
SIGNATURES

Pursuant  to  the  requirements of Section 13 or 15 (d) 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.


                                     ALLEN ORGAN COMPANY



Date:  March 26, 2004                /s/STEVEN A. MARKOWITZ
                                     Steven A. Markowitz
                                     Chief Executive Officer,
                                     President and Director


Date:  March 26, 2004                /s/NATHAN S. ECKHART
                                     Nathan S. Eckhart
                                     Vice President-Finance,
                                     Chief Financial and
                                     Principal Accounting Officer


Date:  March 26, 2004                /s/LEONARD W. HELFRICH
                                     Leonard W. Helfrich
                                     Director


Date:  March 26, 2004                /s/MARTHA MARKOWITZ
                                     Martha Markowitz
                                     Director


Date:  March 26, 2004                /s/ERNEST CHOQUETTE
                                     Ernest Choquette
                                     Director


Date:  March 26, 2004                /s/MICHAEL F. DOYLE
                                     Michael F. Doyle
                                     Director
<PAGE>
     Allen Organ Company and Subsidiaries

     Schedule II - Valuation and Qualifying Accounts

     For the Years Ended December 31, 2003, 2002 and 2001



                                Additions  Additions     Write       Balance
                    Balance at   Charged    Charged       Offs         at
                    Beginning      to       to Other      And         End
    Description      Of Year     Expense    Accounts   Recoveries    Of Year


  Year Ended
   December 31, 2003
  Allowance for
   Doubtful
    Accounts       $ 502,209      $174,614    $   -     $ (71,328) $  605,496
  Valuation
   Allowance
   Deferred Tax
   Asset           1,170,000          -           -      (150,000)  1,020,000

  Year Ended
   December 31, 2002
  Allowance for
   Doubtful
    Accounts       $ 350,492      $234,117    $   -     $ (82,400) $  502,209
  Valuation
   Allowance
   Deferred Tax
   Asset           1,000,000       170,000        -         -       1,170,000

  Year Ended
   December 31, 2001
  Allowance for
   Doubtful
   Accounts        $ 428,791      $ 96,259     $  -     $(174,558) $  350,492
  Valuation
   Allowance
   Deferred Tax
   Asset             100,000       900,000        -          -      1,000,000