U.S. SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549

                       FORM 10-KSB/A (No.1)
                      ----------------------              
(Mark One)

                   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
     X             SECURITIES EXCHANGE ACT OF 1934 [Fee Required]

                         For the fiscal year ended March 31, 1998

                   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
     __            THE SECURITIES EXCHANGE ACT OF 1934 [No Fee   
                   Required]                                     

                         For the transition period from _________
                         _________________ to ___________________

                  Commission file number 1-6299


                  EMCEE BROADCAST PRODUCTS, INC.          
          (Name of small business issuer in its charter)

             DELAWARE                       13-1926296           
(State or other jurisdiction of   (I.R.S. Employer Identification
 incorporation or organization)    Number)

 SUSQUEHANNA STREET EXTENSION,
WEST, PO BOX 68, WHITE HAVEN, PA              18661-0068         
(Address of principal executive               (Zip Code)
 offices)

Issuer's telephone number: (717) 443-9575

                               ////

Securities registered under Section 12(b) of the Exchange Act:

Title of each class:         Name of each exchange on which registered:       
Common                     NASDAQ National Market             
                             
Securities registered under Section 12(g) of the Exchange Act:

                               None                               
                         (TITLE OF CLASS)

Check whether the issuer (1) filed all reports required to be filed by Section 
13 or 15(d) of the Exchange Act during the past twelve (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 ninety (90)
days.
                                        Yes   X    No      

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be




<PAGE>
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.__

State issuer's revenues for its most recent fiscal year. $9,187,868.

The aggregate market value of the voting stock held by non-affiliates of the
Registrant is $10,963,767 computed by reference to the closing bid price
of the stock at June 23, 1998. This computation is based on the number of
issued and outstanding shares held by persons other than directors and
officers of the Registrant.

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:

                CLASS                  OUTSTANDING AT JUNE 23, 1998
Common stock, par value $.01-2/3              4,033,397
 per share

               DOCUMENTS INCORPORATED BY REFERENCE
     
          Items 9, 10, 11 and 12 in Part III of this report are incorporated
by reference from the Proxy Statement expected to be filed within one hundred
twenty (120) days of the close of the Registrant's fiscal year ended March 31,
1998.

Transitional Small Business Disclosure Format (Check One) 

                                        Yes      ;  No   X  .

In accordance with Rule 12b-15 of the Exchange Act, the Registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                         EMCEE Broadcast Products, Inc.


                                         /s/ James L. DeStefano
                                        --------------------------
                                         James L. DeStefano, President/CEO
                                         Date: July 9, 1998  
   
                                         /s/ Allan J. Harding
                                         -------------------------
                                         Allan J. Harding, Vice President -    
                                         Finance
                                    Date: July 9, 1998













<PAGE>
                   Independent Auditors' Report



Board of Directors
EMCEE Broadcast Products, Inc.
White Haven, Pennsylvania

We have audited the consolidated balance sheets of EMCEE Broadcast Products,
Inc. and subsidiaries as of March 31, 1998 and 1997 and the related
consolidated statements of income, shareholders' equity and cash flows for the
years then ended.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of EMCEE
Broadcast Products, Inc. and subsidiaries as of March 31, 1998 and 1997, and
the results of their operations and their cash flows for the years then ended,
in conformity with generally accepted accounting principles.


Kronick, Kalada, Berdy & Co
Kingston, Pennsylvania
May 19, 1998







<PAGE>
<TABLE>
<CAPTION>
        EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
                  CONSOLIDATED BALANCE SHEETS 
              YEARS ENDED MARCH 31, 1998 AND 1997 
                              ASSETS                                           
                   
                                      March 31,       March 31,    
                                         1998           1997  
                                      --------------------------- 
 <S>                                        <C>            <C>
Current assets:
  Cash and equivalents                   $ 2,529,594 $   681,335
  U.S. Treasury Bills                      2,269,549   1,679,164
  Accounts receivable, net of 
   allowance for doubtful accounts 
   (1998, $35,000; 1997,$100,000)          1,214,651     933,535
  Inventories                              3,438,599   3,627,803
  Prepaid expenses                           115,292     379,358
  Deferred income taxes                       80,000
  Note receivable                                      2,500,000
                                           ------------------------

          Total current assets             9,647,685   9,801,195
                                           ------------------------
                                                                
Property, plant and equipment:  
  Land and land improvements                 246,841     246,841
  Building                                   618,686     629,212
  Machinery                                1,956,085   2,019,717
                                           ------------------------
                                           2,821,612   2,895,770
  Less accumulated depreciation            1,995,946   1,836,630
                                           ------------------------
                                             825,666   1,059,140
                                           ------------------------
Other assets                                 211,450     108,173
                                           ------------------------
Note receivable                              500,000     500,000
  Less deferred portion                   (  500,000) (  500,000)
                                           -------------------------
                                                   0           0

          Total assets                    $10,684,801 $10,968,508
                                          --------------------------
                                          --------------------------
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>

                 EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES           
                       LIABILITIES AND SHAREHOLDERS' EQUITY
                       YEARS ENDED MARCH 31, 1998 AND 1997

                                      March 31,   March 31,
                                        1998        1997   
                                     ----------------------
 <S>                                      <C>         <C>
Current liabilities:
  Current portion of long-term debt   $  117,000  $  108,000
  Accounts payable                       311,424     355,401
  Accrued expenses:
    Payroll and related expenses         276,826     206,612
    Other                                118,625     130,172
  Deposits from customers                260,048     121,195
  Deferred income taxes                              554,000
                                       ----------------------           
          

Total current liabilities               1,083,923   1,475,380
                                        ----------------------    

Long-term debt, net of current portion    746,888     807,189
                                       -----------------------   
Shareholders' equity:
  Common stock, $.01 - 2/3 par; 
   authorized 9,000,000 shares; issued
   4,384,161 shares, 1998; 4,378,364
   shares, 1997                             73,084    72,987
  Additional paid-in capital             3,502,092  3,562,523
  Retained earnings                      6,927,987  6,412,703
                                        -----------------------
                                        10,503,163 10,048,213

  Less shares held in treasury, at cost
   (1998, 320,764; 1997, 212,763)        1,649,173  1,362,274
                                       ------------------------- 
                                         8,853,990   8,685,939
                                       -------------------------
          Total liabilities and equity $10,684,801 $10,968,508
                                       ==========================
<FN> 
 Notes to consolidated financial statements.
</FN>
</TABLE>










<PAGE>
<TABLE>
<CAPTION>
         EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF INCOME
               YEARS ENDED MARCH 31, 1998 AND 1997

                                          March 31,       March 31,
                                             1998           1997     
                                          ------------------------
 <S>                                            <C>           <C>   
Net sales                                 $ 9,187,868  $12,522,811
Costs of products sold                      6,118,332    8,023,300
                                           -----------------------         
Gross profit                                3,069,536    4,499,511
                                           -----------------------         
Operating expenses:                                    
  Selling                                   1,409,927    1,484,962
  General and administrative                1,098,909    1,186,329
  Research and development                    377,557      444,669
                                           ------------------------           
                                            2,886,393    3,115,960
                                           ------------------------           
Income from operations                        183,143    1,383,551
                                           ------------------------          
Other income (expense), net:                              
  Interest expense                         (    83,714)(   92,909)
  Interest income                              259,704    109,976
  Gain on sale of equity securities            277,324    210,069
  Settlement of note receivable                         2,500,000
  Other                                         25,237     32,015
                                           ------------------------
                                               478,551  2,759,151
                                           ------------------------
Income before income taxes                     661,694  4,142,702
                                     
Income taxes                                   146,410  1,126,800
                                            ------------------------
Net income                                  $ 515,284$ 3,015,902
                                            =========================          
Basic income per share                            $.12       $.72
                                            =========================
Diluted income per share                          $.12       $.71
                                            ==========================
<FN>
          See notes to consolidated financial statements.
</FN>
</TABLE>                                                                  









<PAGE>
<TABLE>
<CAPTION>            EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                             YEARS ENDED MARCH 31, 1998 AND 1997
     
                     Common stock         Additional      Retained             
                  Shares       Amount   paid-in capital  earnings   
 <S>                 <C>         <C>           <C>           <C>
Balance, 
March 31, 1996    4,359,381   $ 72,653    $ 3,517,778   $ 3,396,801    

Common stock 
issued under 
stock option plan    18,983        334         44,745                          
 

Treasury stock
purchased      
Net income for 
the year                                                  3,015,902            
                 -----------------------------------------------------
Balance, 
March 31, 1997    4,378,364     72,987      3,562,523     6,412,703   

Common stock
issued                5,797         97     (   60,431) 

Treasury stock
purchased                                             
  
Net income for 
the year                                                    515,284  
                -----------------------------------------------------      
Balance, 
March 31, 1998  4,384,161     $ 73,084     $3,502,092   $ 6,927,987    
                =====================================================
<FN>
                       See notes to consolidated financial statements.
</FN>
</TABLE>                                               
<PAGE>
<PAGE>
<TABLE>
                                 Treasury Stock        Total
                              Shares    Amount         ------
                              -----------------                  
 <S>                            <C>         <C>          <C> 

Balance, March 31, 1996        7,325 $   (52,064)    $6,935,168 

Common stock issued under
  stock option plan                                      45,079
        
Treasury Stock Purchased     205,438 ( 1,310,210)    (1,310,210)          


Net income for the year                               3,015,902
                            -----------------------------------     
Balance, March 31, 1997      212,763 ( 1,362,274)     8,685,939

Common stock issued         ( 12,763)     99,774         39,440

Treasury stock purchased     120,764 (   386,673)     (386,673)    

Net income for the year                                 515,284
                             -----------------------------------
Balance, March 31, 1998      320,764 $(1,649,173)    $8,853,990             
          
                             ===================================
  
<FN>
                       See notes to consolidated financial statements.
</FN>
</TABLE>                                              

<PAGE>
<TABLE>
<CAPTION>
             
             EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS
                YEARS ENDED MARCH 31, 1998 AND 1997
           
                                                        March 31,    March 31,
                                                           1998         1997   
                                                        ----------------------
     <S>                                                    <C>       <C>  
Cash flows
from operating activities:
  Net income                                         $   515,284   $ 3,015,902
  Adjustments:                                         
    Depreciation                                         264,313       242,625
    Provision for doubtful accounts                       25,000        35,000
    Common stock issued for 
      compensation                                        39,440
    Recognition of note receivable                                 (2,500,000)
    Gain from sale of equity securities              (  277,324)   (  210,069)
    (Increase) decrease in:                            
      Accounts receivable                            (  306,116)       850,453
      Inventory                                          189,204   (  251,902)
      Prepaid expenses                                   264,066   (  131,425)
      Deferred income taxes                          (   80,000)       226,000
      Other assets                                   (  209,277)           727
    Increase (decrease) in:                            
      Accounts payable                               (   43,977)   (  429,758)
      Accrued expenses                                    58,667   (  215,722)
      Deposits from customers                            138,853   (  405,004)
      Deferred income taxes                          (  554,000)       554,000
                                                     -------------------------
    Net cash provided by operating activities             24,133       780,827
                                                     ------------------------- 
       
Cash flows from investing activities:                         
  Purchases of:
    Property, plant and equipment                    (   30,839)   (  355,023)
    U.S. Treasury Bills                              (3,990,385)   (2,310,138)
  Proceeds from maturities of:
    U.S. Treasury Bills                                3,400,000     2,200,000
    Note receivable                                    2,500,000
  Proceeds from sale of equity securities                383,324       316,069
                                                      ------------------------
   Net cash provided by(used in)investing activities   2,262,100   (  149,092)
                                                      ------------------------
Cash flows from financing activities:                         
  Acquisition of treasury stock                      (  386,673)   (1,310,210)
  Proceeds from issuance of:
    Long-term debt                                        70,000       887,000
    Common stock                                                        45,079

<PAGE>
  Repayment of long-term debt                        (  121,301)   (1,110,028)
                                                     ------------------------- 
                                                              
   Net cash used in financing activities             (  437,974)   (1,488,159)
                                                     ------------------------- 
       
Net increase (decrease) in cash and equivalents        1,848,259   (  856,424)
                                                              
Cash and equivalents, beginning                          681,335     1,537,759
                                                     ------------------------- 
       
Cash and equivalents, ending                         $ 2,529,594   $   681,335
                                                     =========================
<FN>
Supplemental disclosures of cash flow information:
Cash paid for interest expense amounted to $84,000 and $95,000 in 
  1998 and 1997, respectively.  Cash paid for income taxes was $646,000 and
 $531,000 in 1998 and 1997, respectively.
                                
         See notes to consolidated financial statements.
</FN>
</TABLE>

<PAGE>
          EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                YEARS ENDED MARCH 31, 1998 AND 1997
                                 
1.  Summary of significant accounting policies:

Principles of consolidation:
The consolidated financial statements include the accounts of EMCEE Broadcast
Products, Inc. and its subsidiaries, all of which are wholly-owned (together,
the Company).  All significant intercompany accounts and transactions have
been eliminated.

Revenue recognition, sale of license:
During 1992, a rural cellular license was sold for $3,100,000.  The initial
payment was $845,000, net of closing costs of $155,000.  The $2,100,000
balance, which bore interest at 7% payable at maturity, was due in December
1996.  None of the deferred payment and the related interest income was
recognized prior to 1997 because of their extended collection period and
because there was not a reasonable basis to evaluate the likelihood of
collection.  On April 3, 1997 the Company collected $2,500,000 and received a
non-interest bearing, unsecured $500,000 note receivable as settlement of the
original note. The $500,000 note receivable is due and payable upon the
occurrence of any one or more of certain specified events involving the debtor
including, but not limited to, acquisition, merger, bankruptcy, and
insolvency.  None of the specified events relate to the debtor's normal
operations.  The note receivable is fully reserved because it has no definite
collection period and because there is not a reasonable basis to evaluate the
likelihood of collection.

Cash, equivalents and U.S. Treasury Bills:
The Company considers cash equivalents to be all highly liquid investments
purchased with an original maturity of three months or less.  U.S. Treasury
Bills with an original maturity of more than three months are considered to be
investments.  All U.S. Treasury Bills are stated at cost which approximates
market and are considered as available for sale.  All U.S. Treasury Bills  not
included as cash equivalents had contracted maturities of at least six months.

Inventories:
Inventories are stated at the lower of standard cost which approximates
current actual cost (on a first-in, first-out basis) or market (net realizable
value).

Property, plant and equipment and depreciation:
Property, plant and equipment are stated at cost.  Depreciation is provided on
the straight-line method over the estimated useful lives of the assets.
    
Advertising:
These expenses are recorded when incurred.  They amounted to $78,000 and
$75,000 for 1998 and 1997, respectively.

Fair value:
The fair value of long-term debt that is variable rate debt that reprices
regularly, the notes receivable of $2,500,000 which were collected in April

<PAGE>
1997 and U.S. Treasury Bills approximates the amounts recorded in the
financial statements.  It was not practicable to estimate the fair value of
the $500,000 note receivable  because the Company was unable to estimate the
timing and form of the ultimate settlement of the amount due to it.  The
Company has fully provided for any potential loss resulting from the
non-payment of this receivable.
Use of estimates:
Management uses estimates and assumptions in preparing financial statements. 
Those estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities and the
reported revenues and expenses.

Reclassifications:
Certain amounts reported in the 1997 financial statements have been
reclassified to conform with the 1998 presentation.
2. Income per share:

Basic income per share is computed by dividing earnings applicable to common
shareholders by the weighted average number of common shares outstanding. 
Diluted income per share  is similar to basic income per share except that the
weighted average of common shares outstanding is increased to include the
number of additional common shares that would have been outstanding if the
dilutive potential common shares had been issued.  There were no dilutive
potential common shares in 1998 because the assumed exercise of the options
would be anti-dilutive.  Income per share for 1997 has been restated based
upon the provisions of a revised accounting standard that become effective in
the current year.
The following table presents the basic and diluted EPS computations:
                                        March 31, 1998 
                               -----------------------------------             
                                                       Per-share
                                Income       Shares      amount 
   Basic EPS
   Net income which is income
    available to common
    stockholders              $  515,284   4,134,780     $ .12
                              =================================
                                             1997               
                               ----------------------------------     
                                                       Per-share
                                Income       Shares      amount 
   Basic EPS
   Net income which is income
    available to common
    stockholders              $3,015,902   4,188,743     $ .72

   Effect of dilutive
    securities, stock options                 36,132       .01
                               --------------------------------
   Diluted EPS
   Income available to common
    stockholders              $3,015,902   4,224,875     $ .71
                              =================================

<PAGE>
          EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 YEARS ENDED MARCH 31, 1998 AND 1997

3. Cash and equivalents:

At March 31, 1998, cash held at a brokerage corporation in the amount of
$2,095,000 is not insured.

4.Industry, sales and accounts receivable concentration information:

The Company's primary activity is in one segment which consists of the
assembly and sale of equipment for the domestic and foreign television
broadcasting industry.  Major customers are those that individually account
for more than 10% of the Company's consolidated revenues.  For the years ended
March 31, 1998 and 1997, one customer with total sales of $939,000 and two
customers with total sales of $3,476,000, respectively,  qualified as  major
customers.  Worldwide export sales amounted to $5,563,000 and $7,056,000 for
1998 and 1997, respectively.  At March 31, 1998 and 1997, there were no
significant accounts receivable concentrations.  The Company performs ongoing
credit evaluations of its customers and typically requires deposits and a
letter of credit on foreign sales and deposits on domestic sales. 
Historically, the Company's uncollectible accounts receivable have been
immaterial.  

5.Inventories:
                                                    1998          1997   
                                                 --------------------------
Finished goods                                    $  454,000    $  399,000
Work-in-process                                      777,000       738,000
Raw materials                                      1,323,000     1,574,000
    Manufactured components                          884,599       916,803
                                                 ---------------------------   
                                                  $3,438,599    $3,627,803
                                                 ============================
6.  Line of credit:

The Company has a line of credit agreement with a bank aggregating $2,000,000
collateralized by inventories, accounts receivable and all property, plant and
equipment.  The line of credit agreement requires monthly interest payments at
 .50% below the bank's prime rate of interest or 1.75% above LIBOR  which was
5.625% at March 31, 1998.  There were no principal borrowings during the years
ended March 31, 1998 and 1997.

The loan agreement contains restrictive covenants when amounts are outstanding
which, among other things, require the Company to maintain a maximum total
liabilities to net worth ratio, a minimum current ratio and a debt coverage
ratio.  The Company is allowed to pay dividends on its common stock if it is
in compliance with the financial covenants and ratios.
<PAGE>
<PAGE>  
        EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 YEARS ENDED MARCH 31, 1998 AND 1997

7.Long-term debt:
                                                        1998          1997   
                                                  --------------------------
Term loan, bank                                   $  686,000    $  735,000
    Equipment loans                                  177,888       152,000
    Other                                                           28,189
                                                  --------------------------
                                                     863,888       915,189
    Less current portion                             117,000       108,000
                                                  --------------------------
                                                  $  746,888    $  807,189
                                                  ===========================

The term loan, bank at March 31, 1998 matures in 2012 and requires principal
payments of $4,083, plus interest.  Interest is calculated at 2.25% above
LIBOR which was 5.625% at March 31, 1998.  The bank has the option of
adjusting the monthly payments required under this loan to provide for changes
in the interest rates.  The term and equipment loans are cross-collateralized
with and have the same restrictive covenants as the line of credit (see Note
6).

Principal payments on long-term debt, based on current interest rates, are as
follows:

                       1999             $  117,000
                       2000                100,000
                       2001                 80,000
                       2002                 80,000
                       2003                 50,000
                     Thereafter            436,888
                                        -----------
                                        $  863,888 
                                       ============    
8. Defined contribution pension plan:

A defined contribution pension plan covers all full time employees who meet
age and service requirements.  Contributions to the plan, determined at the
discretion of the Board of Directors, were $28,000 and $29,000 in 1998 and
1997,respectively.  

9. Common stock:
Nonqualified stock option plans provide for the grant of options to purchase
up to 300,000 shares.  Upon the termination or expiration of any stock options
granted, the shares covered by such terminated or expired stock options will
be available for further grant; 38,587 options were available for grant at
March 31, 1998.  The Board of Directors, at the date of grant of an option,
determines the number of shares subject to the grant and the terms of such
option.  All outstanding options granted expire after 5 years and vest over
two years.

<PAGE>
         EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 YEARS ENDED MARCH 31, 1998 AND 1997

9.  Common stock (continued):

Changes in outstanding common stock options granted are summarized below:
<TABLE>
<CAPTION>
                                 1998                    1997       
                            Number   Average        Number   Average
                             of     exercise         of     exercise
                          shares    price         shares    price  
   <S>                       <C>       <C>            <C>       <C>  
  Balance at beginning
     of year              163,250    $ 5.36         80,083   $ 2.82
    Options granted                                115,200     6.16
                          163,250                  195,283
    Options exercised                               18,983     2.37
    Options expired        11,375      3.44         13,050     1.31
    Balance at end of
     year                 151,875    $ 5.50        163,250   $ 5.36
    Options exercisable
     at year-end           36,675    $ 3.44         48,050   $ 3.44
    Weighted-average grant
     date fair value of
     options granted   
     during the year                                $ 3.09
</TABLE>

At March 31, 1998, 36,675 and 115,200 options had an exercise price of $3.44
and $6.16, respectively.  Such options had remaining contractual lives of 2.3
years and 3.7 years, respectively.

The Company in accordance with an election under generally accepted accounting
principles for stock options has recorded no compensation cost for its stock
options in the accompanying consolidated financial statements.

Had compensation cost for stock options been determined based on the fair
value at the grant dates for awards under the plans, the Company's net income
and income per share would have been reduced to the proforma amounts disclosed
below:
<TABLE>
<CAPTION>
                                                1998                1997   
                                          ----------------------------------
 
   <S>                                        <C>                    <C> 
  Net income: 
     As reported                         $  515,284               $3,015,902
     Proforma                               445,284                2,972,000



<PAGE>
   Basic income per share:

     As reported                          $     .12                $     .72
     Proforma                                   .11                      .71

   Diluted income per share:
     As reported                          $     .12                $     .71
     Proforma                                   .11                      .70
</TABLE>

Proforma net income does not reflect options granted before April 1, 1995. 
Therefore, the full impact of calculating compensation cost for stock options
is not reflected in the proforma  amounts presented above because compensation
cost is reflected over the options' vesting period of two years and compensa-
tion cost for options granted in the year ended March 31, 1995 are not consid-
ered for the year ended March 31, 1997.

The fair values were determined using the Black-Scholes option-pricing model
with the following weighted average assumptions:

                                      1998             1997  
                                      ----------------------
    Dividend yield                       .0%            .0%
    Risk free interest rate            5.84%          5.84% 
    Expected life                     5 Years        5 Years
    Volatility                        17.54%         48.88%

During 1997, warrants to purchase 200,000 shares of common stock at $9.76 a
share were issued and remain outstanding at March 31, 1998.

10.Income taxes:

The following table sets forth the current and deferred amounts of the
provisions for income taxes for the years ended March 31, 1998 and 1997:

                                         1998       1997    
                                 -------------------------
        Current                  $   780,410    346,800
        Deferred                  (  634,000)   780,000
                                 -------------------------
                                 $   146,410 $1,126,800
                                 =========================

The provisions for income taxes at the Company's effective rate differed from
the provision for income taxes at the statutory Federal rate of 34% for the
years ended March 31, 1998 and 1997 as
follows:
<PAGE>
<TABLE>
<CAPTION>
                                                  1998          1997   
                                              ---------------------------      
       <S>                                             <C>         <C> 
   Federal income tax at the statutory rate   $   225,000 $ 1,408,000
    Foreign sales corporation benefit          (   74,000) (  180,000)
    Federal income tax credit                  (   15,000) (   50,000)
   Stock compensation                          (   43,590) (   51,200)
   Adjustment to prior year's
    tax liability                                  54,000   _         
                                               -------------------------

   Provision for income taxes                 $   146,410 $ 1,126,800
                                              ==========================
</TABLE>  

The tax effects of temporary differences that give rise to deferred income
taxes at March 31, 1998 and 1997 are presented in the table below:
<TABLE>
<CAPTION>                                                          
                                                         1998         1997   
                                                 ----------------------------
     <S>                                                    <C>       <C>
  Deferred tax assets:                                 
      Inventory                                       $   41,000 $  101,000
      Employee benefits                                   51,000     51,000
     Other differences                                    11,000     35,000
       Total gross deferred tax assets                   103,000    187,000
   Deferred tax liabilities, 
      Note receivable                                             ( 714,000)
      Property and equipment                           (  23,000) (  27,000)
                                                      -----------------------
   Net deferred tax asset (liability)                 $   80,000 $( 554,000)
                                                      =======================
</TABLE>
11. Litigation:
In the normal course of business, there are various outstanding legal pro-
ceedings.  In the opinion of management, after consultation with legal
counsel, the consolidated financial statements of the Company will not be
materially affected by the outcome of such legal proceedings.

12. Year 2000:
The Company recognizes the need to ensure its operations will not be adversely
impacted by Year 2000 software failures.  Software failures due to processing
errors potentially arising from calculations using the Year 2000 date are a
known risk.  The Company is addressing this risk to the availability and
integrity of financial systems and the reliability of operating systems.  The
Company has established processes for evaluating and managing the risks and
costs associated with this problem.  The total cost of compliance and its
effect on the Company's future results of operations is being determined as
part of the detailed conversion planning.