<PAGE>

                         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 MARCH 31, 1998

                                         OR

            [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                           THE SECURITIES EXCHANGE ACT OF 1934
                    FOR THE TRANSITION PERIOD FROM      TO

                           COMMISSION FILE NUMBER 0-22173
                                  _______________

                            TOTAL CONTROL PRODUCTS, INC.
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                ILLINOIS                                   36-3209178
 (State or other jurisdiction of                        (I.R.S Employer
  incorporation or organization)                       Identification No.)


       2001 NORTH JANICE AVENUE
           MELROSE PARK, ILLINOIS                              60160
(Address of principal executive offices)                    (Zip Code)
                                       
                               (708) 345-5500
           (Registrant's telephone number, including area code)

         SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:  NONE
            SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                             COMMON STOCK, NO PAR VALUE

     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 
                                ----                ----

     Indicated 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 to this
Form 10-K. [   ]

     AGGREGATE MARKET VALUE, AS OF JUNE 26, 1998, OF COMMON STOCK HELD BY 
NON-AFFILIATES OF THE REGISTRANT: ($76,472,910) BASED ON THE LAST REPORTED SALE 
PRICE ON THE NASDAQ NATIONAL MARKET SYSTEM.

NUMBER OF SHARES OF COMMON STOCK OUTSTANDING ON JUNE 26, 1998: 8,049,780 SHARES

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                                        PART I

ITEM 1.  BUSINESS

Total Control Products, Inc. designs, develops and markets products and 
technology for the control segment of the industrial automation market.  The 
Company's broad range of products are used to define, monitor and maintain 
the operation, sequencing and safety of industrial equipment and machinery on 
the factory floor.  These products range from closed architecture 
programmable logic controller operator interfaces to open architecture 
control software and systems, and are sold primarily through an international 
network of independent distributors with approximately 250 sales locations. 
End-users of the Company's products include Abbott Laboratories, The Boeing 
Company, The Coca-Cola Company, The Dow Chemical Company, Eastman Kodak 
Company, Ford Motor Company, General Motors Corporation, Nabisco, Inc. and 
USX Corporation.  Unless the context otherwise indicates, all references in 
this filing to "Total Control" or the "Company" refer to Total Control 
Products, Inc. and its subsidiaries, including wholly-owned subsidiaries 
Computer Dynamics of Illinois, Inc. and Computer Dynamics Holding Corp. 
(together "Computer Dynamics, Inc." or "CDI"), SensorPulse Corp. 
("SensorPulse" or "SPC") and Taylor Industrial Software, Inc., an Alberta 
corporation ("Taylor"), a company of which 61.5% of the voting shares are 
owned by the Company.  Subsequent to the Company's fiscal year ended March 
31, 1998, the Company acquired the net assets of Deeco Systems, Inc. 
("Deeco"), a designer and manufacturer of panel factory automation products.

THE INDUSTRIAL AUTOMATION INDUSTRY

Industrial manufacturing processes have become increasingly complex and 
difficult to manage, especially at the factory floor level.  While trying to 
respond to such complexities, manufacturers are simultaneously under 
increased competitive pressures to lower costs, increase quality and 
efficiency and meet customer delivery deadlines.  These pressures are often 
further complicated by the additional burden of compliance with governmental 
regulations, safety procedures and internal information reporting needs.   To 
manage the complexity of the manufacturing environment and to satisfy these 
requirements, manufacturers must collect and analyze large amounts of data 
concerning their operations on a timely, comprehensive and efficient basis.  
Industrial automation provides solutions to these challenges.

The industrial automation industry can be divided into three segments: 
planning, execution and control.  Products in the PLANNING segment translate 
information, such as customer orders and material purchases, into a 
comprehensive plan for the manufacture of products.  Products in the 
EXECUTION segment schedule and monitor plant resources to ensure that 
machines produce products in accordance with the production plan.  Products 
in the CONTROL segment, upon which the Company primarily focuses, allow users 
to define, monitor and maintain the operation, sequencing and safety of 
industrial equipment and machinery on the factory floor.

Specifically, control segment functions include supervisory controls, which 
allow individual machines to interact with each other; operator interfaces, 
which allow a human operator to communicate with an individual machine; and 
controllers, including programmable logic controllers ("PLCs") and industrial 
computers, which intelligently control the operation of a machine.  The 
control market is presently dominated by proprietary control products from 
manufacturers of PLCs such as Allen-Bradley, Siemens Energy and Automation, 
Inc. and GE Fanuc Automation North America, Inc.  Proprietary control 
products have many inherent limitations, including fixed, vendor-defined 
functionality and difficulty in programming, integrating and networking with 
other proprietary products and systems.  As manufacturers 

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benefited from the increasing automation of individual machines, difficulties 
remained in integrating proprietary control segment products into different 
parts of the manufacturing process.  With little communication ability among 
these products, multiple "islands of information" within a manufacturing 
operation resulted as products from one vendor could not easily share 
information with products from another vendor, forcing a manufacturer to 
depend upon a single vendor.  For the manufacturer, this resulted in a high 
cost of ownership and the inability to take advantage of the inherent cost 
and performance benefits associated with standards-based products.

In response to these problems, the Company believes end-users in the control 
segment of the industrial automation marketplace are beginning to migrate 
towards open systems-based products.  This migration is occurring gradually 
as manufacturers build new facilities and replace or upgrade existing 
facilities. By moving to interoperable products, manufacturers can benefit 
from standard networking protocols which provide enhanced connectivity, 
intuitive graphical user interfaces, enhanced application software 
functionality and the continued cost reductions associated with general 
purpose hardware.  The availability of a standardized, easy-to-support 
operating system, such as Windows NT, allows industrial automation products 
to be based upon an open architecture platform with widespread market 
acceptance. In addition, the Company believes the advent of relatively low 
cost network computers, linked together through Internet or intranet 
protocols and technologies, will allow manufacturers and end-users greater 
communication and functionality in automation systems.  Eventually, the 
Company believes these trends may result in the development of network 
computer systems which combine PLC and operator interface functionality to 
control the actions of machines on the factory floor.

Distributors are an integral part of the technological evolution occurring in 
the industrial automation marketplace.  Traditionally, a substantial portion 
of industrial automation products have been sold through the use of 
independent distributors because they provide vendors with broad geographic 
and account coverage.  Distributors also provide customers with a broad 
product line and local support and service and generally have well 
established, long-standing relationships with customers.  As competitive 
pressures force distributors to limit the number of vendors and product lines 
they represent, the Company believes distributors will seek to represent 
vendors who offer a comprehensive line of products that will fill the needs 
of customers who have not migrated towards open systems as well as those who 
demand a line of products based on interoperable software and hardware.  
Because distributors base their business on satisfying the demands of their 
customer base, they need to offer a migration path from traditional 
industrial automation technology to products based on open systems technology.

The technology shift in the market for control products is similar to the 
transition in the office environment towards open client/server computing.  
The Company believes that an opportunity exists for vendors that can offer, 
through distribution, control segment products which span the range from 
proprietary, closed architecture products to standards-based open-system 
products.

STRATEGY

The Company's goal is to become a leading worldwide provider of products and 
technology in the control segment of the industrial automation market.  Key 
elements of the Company's strategy are as follows:

LEVERAGE THE SUCCESS OF QUICKPANEL.  The Company's principal product line, 
QuickPanel and other similar products, has gained a leadership position in 
its market.  It has been the Company's most successful product line, 
accounting for 70.7%, 62.4% and  50.3% of net sales in fiscal 1996, 1997 and 

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1998, respectively.  The Company believes that this product line delivers 
price/performance leadership and has allowed the Company to gain visibility 
and enhance its reputation both with distributors and with end-users.

DEVELOP PRODUCTS FOR SALE THROUGH INDEPENDENT DISTRIBUTORS.  The Company 
utilizes an international network of independent distributors that specialize 
in sales of industrial automation products.  The Company believes that, 
because distributors are seeking to make their operations more efficient by 
reducing the number of approved vendors from which they buy products, they 
have come to expect that the Company will provide a broad range of products 
which serve the control segment of the market.  The Company is focused on 
developing industrial automation products that, from price, performance and 
support perspectives, satisfy the selling requirements of its distributors, 
and the Company does not currently anticipate designing or marketing products 
that are not suitable for its existing independent distributors.  As the 
industrial automation industry moves from proprietary systems to open 
architecture technology, the Company anticipates that a wide variety of new 
and existing hardware and software technologies will converge, providing a 
broader range of sales opportunities for both the Company and its 
distributors.

LEVERAGE THE TREND TOWARDS OPEN SYSTEMS.   The Company believes it is 
positioned to gain a leadership position in the next generation of industrial 
automation technologies.  Because the Company is migrating its products to 
object-oriented software products that run in the Microsoft operating 
environment, the Company believes it will be in a position to benefit from 
the expected rapid acceptance of Microsoft Windows NT on the factory floor.  
The Company's goal is to provide cost effective distributed client/server 
products that can improve factory productivity and enhance business 
management and control.

SEEK PRODUCT PORTFOLIO EXPANSION OPPORTUNITIES.  The industrial automation 
industry continues to be highly competitive and fragmented.  The Company 
believes that this fragmentation will allow it to continue to acquire 
companies, assets and product lines in this market, although the Company does 
not currently have any planned acquisitions.  This strategy will allow the 
Company to continue to expand its product portfolio and leverage its 
distribution channel in order to continue to build market share.   The 
Company's acquisition strategy has been and will continue to be to seek 
companies, assets and products that are attractive to the Company's current 
end-user base, require technological understanding similar to the Company's 
current products, and can be easily marketed through its independent 
distributors or an already established direct channel.

FOCUS RESOURCES ON STRATEGIC AREAS.  The Company's strategy is to maximize 
flexibility and efficiency in the development of its products in order to 
quickly and inexpensively bring them to market.  The Company seeks to use the 
most efficient methods available to implement this strategy, including 
building strategic alliances, such as the Company's relationship with Digital 
Electronics Corporation, a corporation located in Osaka, Japan ("Digital 
Electronics").  The Company intends to continue to limit spending in 
non-strategic areas by using third party suppliers for most of its hardware 
and manufacturing needs, thereby eliminating the need to build and maintain 
costly manufacturing infrastructures.

                                       4

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PRODUCTS

The Company's products are used to define, monitor and maintain the 
operation, sequencing and safety of industrial equipment and machinery on the 
factory floor.  The Company offers a wide range of products, from proprietary 
PLC operator interfaces to open architecture control software and systems.  
The Company designs these products to satisfy the price and performance 
characteristics demanded by its distributors and end-users, and sells 
products to its distributors at a discount from the end-user list price for 
such products.

OPERATOR INTERFACE PRODUCTS.  The Company's operator interface products are
described below:

     GRAPHICS-BASED PRODUCTS.  These products are easy-to-use displays which
     allow human machine operators to monitor and program industrial equipment
     by receiving and inputting information through a display screen.  The
     Company has sold over 30,000 units in this class since 1989, and sales from
     these graphics-based product lines represented 70.7%, 62.4% and 50.3% of
     the Company's net sales in fiscal 1996, 1997 and 1998, respectively.

     The Company's products in this category consist of monochrome and color
     graphical displays on either a flat panel or a cathode ray tube ("CRT")
     based screen.  These products offer graphical touchscreen operator
     interfaces that are cost-effective replacements to a variety of discrete
     devices, from push buttons to message centers.  The trend in this product
     class is towards smaller, flat panel-based displays as opposed to the more
     bulky CRT screens.  The QuickPanel flat panel product line has eight
     separate models, while the CRT-based SmartScreen is sold in a variety of
     screen sizes and configurations.  All of these units are designed for
     single operator stations and include connectivity technology to communicate
     with proprietary PLCs.  The Company's graphics-based operator interface
     products can communicate with over 35 major PLCs and PLC networks including
     Allen-Bradley Remote I/O-TM-, Data Highway PLUS-TM-, Modicon Modbus
     Plus-TM-, and GE Genius I/O-TM-.  Consequently, these products are capable
     of serving as bridges to open systems products and technology.

     TEXT-BASED OPERATOR INTERFACES.   These products, such as Grey-Line,
     MessageCenter and QuickMarquee, report on the operation of industrial
     equipment by sending textual messages to the machine operator through the
     use of a digital display apparatus, with display sizes ranging from one
     quarter inch to eight inches.  This allows the machine operator to review
     messages as needed, rather than having to constantly monitor a complicated
     control panel filled with push buttons, pilot lights and selector switches.
     These products, although the most basic types of operator interfaces, are
     still widely popular and allow the Company to provide a broad range of
     products for the control segment of the industrial automation market.

INDUSTRIAL COMPUTER WORKSTATIONS. With the acquisition of Computer Dynamics, 
Inc. on October 5, 1997, the Company significantly expanded its product 
offering into custom designed industrial computer products and monitors.  
Products offered under the Computer Dynamics brand primarily represent 
products custom engineered to meet a specific need of an original equipment 
manufacturer or end-user.  The STD Bus product line provides the strong 
background in board-level products and high-density single board computers 
which make possible the newer product lines such as the PC-compatible Single 
Board Computers (SBC line) and flat panel computer systems (DisplayPacs, 
FP-Kits and VAMPs). These products are primarily sold through a direct sales 
force.

                                       5

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CONTROL PRODUCTS AND SOFTWARE TOOLS.  The Company's control products and 
software tools are described below:

     CONTROL PRODUCTS

     WALTZ.  The Company's Waltz control software is a PC-based control product
     that allows a machine operator to have direct PC control over the operation
     of a machine without the necessity of a PLC.  Waltz runs on Windows NT and
     includes an IEC 1131-3 compatible editor, a controller, communication
     drivers to various types of input/output systems, and an operator interface
     based on the Company's ProcessWindow software.  By utilizing general
     purpose computers and high-performance, real-time operating systems, such
     as Windows NT, this software tool allows manufacturers to reduce dependency
     on proprietary PLCs and shift their operations to open systems technology.

     GRAPHIC LOGIC CONTROLLER.  This product is the first generation of
     graphics-based products to offer the same control and information display
     functionality currently available in the software tools.  Specifically,
     this product combines the machine control functionality of a PLC and the
     operator interface functionality of a graphics-based touchscreen.  The
     Company introduced this product in March 1998.

     OPERATOR INTERFACE SOFTWARE TOOLS

     PROCESSWINDOW.  ProcessWindow is a graphical operator interface software
     program that enhances the man-machine interface ("MMI") that occurs between
     a human operator and a particular piece of factory equipment.  The product
     provides a variety of information management and display capabilities that
     can be programed by the user, runs under Windows 3.1 and NT and is capable
     of communicating with many different control systems.  In addition, it can
     be linked to the Company's ProWorx and Waltz software products.

     QUICKDESIGNER.  QuickDesigner is a Windows compatible software design tool
     used with the Company's flat panel operator interface products.  This
     software tool allows users to configure the display features on the
     graphical flat panel touchscreen to meet their individual needs.

     PLC SOFTWARE TOOLS

     PROWORX.  ProWorx NxT, ProWorxPlus and ProWorx IV are software tools which
     support the operation of PLCs.   These products allow a human operator to
     easily and efficiently program a PLC to control the parameters of a
     machine's operation.  Each of the products in this class run on DOS- or
     Windows-compatible PCs, and support PLCs manufactured by Allen-Bradley and
     Modicon.

     SECURWORX.  Users of multiple PLCs and other programmable devices may be
     faced with hundreds of controllers on a particular site, each containing
     unique application programs, connected by means of a local area network.
     As human operators make changes to the programming of a particular PLC, the
     Company's SecurWorx client/server database management software provides
     version control management as well as password protection.  SecurWorx
     produces an audit trail of the controller program changes and is integrated
     with the Company's ProWorx software.

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SIGNAL CONDITIONING DEVICES.  With the acquisition of SensorPulse on December 
31, 1997, the Company entered the signal conditioning market.  The Company 
has four types of signal processing modules which standardize a signal for 
use with an industrial computer or PLC device.  The MSC Signal Conditioning 
Modules are built on an all-digital design, making them one of the smallest, 
most affordable and highest performing dedicated signal conditioners around.  
The USC Universal Module can be quickly field configured to accept virtually 
any analog signal type.  The MSP Analog I/O Smart Module is engineered with 
an all-digital design to provide a stable, state-of-the-art and cost 
effective solution for allowing analog input and output for any PLC.  
Finally, the Universal SP Analog I/O Module uses Windows-Registered 
Trademark--based software to easily and quickly field configurable to work 
with any input or output signal type.

PRODUCTS UNDER DEVELOPMENT.   The Company intends to continue to focus its 
product development efforts on incorporating the high-end functionality of 
the Company's software tools into its existing text-based and graphics-based 
operator interface products.  The Company's first product in this effort is 
the Graphic Logic Controller described above.  The next product to be 
introduced as a result of this development effort is a QuickPanel product 
that will operate software using a MicroSoft CE operating system.  This 
development would allow the graphics-based products to offer the same control 
and networking functionality that is currently available in the software 
tools.  The Company believes the resulting products would provide enhanced 
price/performance leadership, allowing open architecture to be available at 
the lower end of the product spectrum and providing the end-user the benefit 
of enhanced flexibility, connectivity and functionality without having to 
convert its control systems to PC-based systems.  In particular, the Company 
has invested substantial resources in developing future generations of the 
QuickPanel product line aimed at giving it the functionality of an open 
standards, interoperable network computer.

SERVICE AND SUPPORT.  The Company maintains an inventory of spare parts and 
service stock.  The shipment of spare parts and the performance of repair 
service on out-of-warranty products is a small, but a high margin part of the 
Company's business.  For its software products, the Company offers annual 
customer support contracts that entitle the purchaser to free phone support 
and software upgrades during the length of the contract.

SALES, MARKETING AND SUPPORT

     The Company's products are sold in more than 25 countries, primarily 
through an international network of independent distributors having 
approximately 250 sales locations.  The Company seeks to establish and 
maintain relationships with the leading industrial automation distributors in 
each of the geographic market areas in which it competes, and periodically 
evaluates its distributors' market positions.  The Company's distributors 
typically provide customer training, application engineering and support.  
The Company believes that its commitment to service and support has been and 
will continue to be a significant factor in its success.  As of March 31, 
1998, the Company's sales, marketing and technical support organization 
consisted of 103 employees and 10 independent sales representatives.  This 
organization is managed by regional sales managers located in Atlanta, 
Georgia; Cincinnati, Ohio; San Francisco, California; Pittsburgh, 
Pennsylvania; Melrose Park, Illinois; South Easton, Massachusetts; Edmonton, 
Alberta; and Birmingham, England.  This organization supports the Company's 
independent distributors and complements their selling efforts by targeting 
large end-users, system integrators, original equipment manufacturers and 
others.

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In addition to its network of independent distributors, the Company maintains 
a 40.0%-owned joint venture investment in Pro-face, HMI B.V. ("ProFace"), a 
distributor located in the Netherlands.  ProFace is the European distributor 
of both the Company's and Digital Electronics' products.

The Company's custom designed industrial computer products, manufactured by 
CDI, are primarily sold direct through a sales, marketing and support 
organization of 20 employees located in Greenville, South Carolina.

PRODUCT DEVELOPMENT

The Company maintains an active product development program, including a 
joint development arrangement with Digital Electronics for certain projects.  
The Company's strategy is to develop new product offerings and existing 
product extensions which are responsive to customer demands and satisfy the 
needs of the Company's distributors.  A significant portion of the Company's 
product development expenses are targeted to developing products that will 
provide additional functionality requested by the Company's end-users.

As of March 31, 1998, the Company had a product development staff of 87 
full-time employees, including software, electronic and mechanical design 
engineers, product managers, application engineers and directly associated 
staff members involved in technical documentation and product support.  
During fiscal 1996, 1997 and 1998, research and development expenses were 
7.6%, 9.5% and 8.8 % of net sales, respectively.  The Company anticipates 
that it will continue to commit substantial resources to product development 
efforts in the future.  See Note 1 to the Consolidated Financial Statements 
included in this Form 10-K for a discussion of the Company's policy regarding 
capitalization of software development expenses.

SUPPLY RELATIONSHIP WITH DIGITAL ELECTRONICS

Digital Electronics is the Company's sole supplier of the flat panel screens 
that are the principal hardware component incorporated in its graphics-based 
operator interface products, the Company's best selling product class.  
During fiscal 1996, 1997 and 1998, sales from this product class accounted 
for 70.7%, 62.4% and 50.3%, respectively, of the Company's net sales.  The 
Company has an OEM agreement with Digital Electronics under which Digital 
Electronics agreed to supply to the Company certain computer hardware 
products for market and sale on an exclusive basis in North and South 
America.  The agreement expires on January 31, 2005.  A disruption in the 
supply of products from Digital Electronics or a significant price increase 
could have a material adverse impact on the Company's business, financial 
condition and results of operations until an alternative source of supply 
could be established.  See "Item 1--Risk Factors -- Dependence Upon Digital 
Electronics Corporation" and "Item 13--Other Related Party Transactions."

MANUFACTURING AND SUPPLY

The Company performs final assembly and testing for substantially all of its 
operator interface and control products and software tools at its Melrose 
Park, Illinois and Edmonton, Canada facilities, which are certified under 
ISO-9001, an international quality standard.  The Company's industrial 
computer workstation products are primarily manufactured at its Greenville, 
South Carolina facility. The manufacturing process encompasses PC board 
manufacturing and the assembly of sheet metal parts, keyboards, displays and 
electronic circuit boards into finished goods and the duplication of software 

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products on disks or other electronic media.   The Company subcontracts the 
fabrication of sheet metal and some of the assembly of circuit boards and 
fabrication of front panel bezels. The Company uses a number of firms for 
these subcontracted services and is not materially dependent upon any third 
party that performs these services.

Except for the flat panel displays purchased from Digital Electronics, 
substantially all of the components used in the Company's products are 
available from multiple sources and the Company maintains more than one 
source of supply for all material components.  However, the Company may 
experience supply shortages due to various factors, including increases in 
market demand for certain components and the limited capacity of certain 
suppliers.  Although the Company believes that the partial or complete loss 
of one or more of its suppliers, other than Digital Electronics, is not 
likely to have a material long-term impact on its operations, such a loss 
could in the short term result in significant production delays, require the 
Company to seek alternative sources of supply and increase its cost of goods 
sold and, therefore, could have a material adverse effect on the Company's 
business, financial condition and results of operations.

COMPETITION

Competition in the industrial automation industry is intense and 
characterized by rapidly advancing technologies.  The Company faces 
substantial competition in all of its product lines and competition may 
increase if new competitors enter the market or if existing competitors 
expand their product offerings. Competitors include large PLC manufacturers, 
including Allen-Bradley (a subsidiary of Rockwell International, Inc.), Eaton 
Corp., GE Fanuc Automation North America, Inc. (a joint venture between 
General Electric Corporation and Fanuc Limited), Groupe Schneider S.A. 
(consisting of Modicon, Inc., Schneider S.A., Square D Co. and 
Telemechanique, Inc.) and Siemens Energy and Automation, Inc. (the U.S. 
subsidiary of Siemens A.G.).  Competitors also include software developers, 
such as IDT, Inc. (a subsidiary of Eaton Corp.), Intellution Inc. (a 
subsidiary of Emerson Electric Corporation), Nematron, Inc. and Wonderware, 
Inc. Many of these competitors are larger and have significantly greater 
resources than the Company.  These competitors, as well as potential future 
competitors, may have greater name recognition and a larger installed base 
than the Company. The Company believes that over time this competition may 
have the effect of reducing average selling prices of comparable products, 
and thus, in order to maintain sales, the Company may be forced to increase 
unit volumes or increase the performance of its products in order to offset 
or reduce any decreases in selling prices.  In the event such price 
reductions become necessary, the Company's ability to maintain gross margins 
will depend on its ability to reduce cost of goods sold in an amount 
sufficient to compensate for any decreases in selling prices.  The Company's 
competitors could in the future introduce products with more features and 
lower prices than the Company's product offerings, bundle existing or new 
products with other products or systems to compete with the Company or exert 
leverage or other competitive pressures on distributors to give priority to 
their own products at the expense of the Company's products.  As the market 
for industrial automation and process control solutions develops, a number of 
companies with significantly greater resources than the Company may attempt 
to increase their presence in the market by acquiring and/or forming 
strategic alliances with competitors of the Company. The Company competes on 
the basis of the reliability, price and ease of use of its products, the 
quality and breadth of its distributor network and its customer service.  The 
Company believes that it competes favorably with respect to these factors.

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INTELLECTUAL PROPERTY

The Company's success depends in part on its ability to maintain the 
proprietary and confidential aspects of its products as they are released.  
The Company does not own any significant patents, and relies on a combination 
of copyrights, employee non-disclosure agreements and other means to 
establish and protect its proprietary rights.  There can be no assurance that 
the precautions taken by the Company adequately protect the Company's 
technology.  In addition, many of the Company's competitors have obtained or 
developed, and may be expected to obtain or develop in the future, patents, 
copyrights or other proprietary rights that cover or affect products that 
perform functions similar to the products offered by the Company.  The 
inability of the Company for any reason to protect existing technology or 
otherwise acquire necessary technology could prevent distribution or 
licensing of the Company's products, which would have a material adverse 
effect on the business, financial condition and results of operations of the 
Company.  The Company licenses its software products primarily under "shrink 
wrap" license agreements that are not signed by licensees and, therefore, may 
be unenforceable under the laws of certain foreign jurisdictions.  In 
addition, in some instances the Company licenses its software products under 
agreements that give licensees limited access to the source code of the 
Company's products. Accordingly, despite precautions taken by the Company, it 
may be possible for unauthorized third parties to copy certain portions of 
the Company's products or to obtain and use information that the Company 
regards as proprietary.

Certain technology used in the Company's products is licensed from third 
parties.  These licenses generally require the Company to pay royalties and 
to fulfill confidentiality obligations.  In the future, it may be necessary 
or desirable for the Company to seek additional licenses of intellectual 
property rights held by third parties.  There can be no assurance that such 
licenses will be available on favorable terms, if at all.

The Company believes that, due to the rapid pace of innovation within its 
industry, factors such as the technological and creative skills of its 
personnel are more important to establishing and maintaining a technology 
leadership position than are the various legal protection of its technology.  
The Company believes that its products and technology do not infringe any 
existing proprietary rights of others, although there can be no assurance 
that third parties will not assert infringement claims in the future.

EMPLOYEES

As of March 31, 1998, the Company had a total of 433 full-time employees, of 
which 87 were in product development, 123 were in sales and marketing, 169 
were in manufacturing and operations and 54 were in general and 
administrative functions.  The Company also hires temporary employees as 
needed.  None of the employees are represented by a labor union or subject to 
a collective bargaining agreement.  The Company believes that its employee 
relations are good.

YEAR 2000

The Company has conducted a comprehensive review of its computer systems to 
identify the systems that could be affected by the Year 2000 Issue and is 
developing an implementation plan to resolve the issue.  The Year 2000 Issue 
is the result of computer programs being written using two digits rather than 
four to define the applicable year.  Any of the Company's programs that have 
time-sensitive software may recognize a date using "00" as the year 1900 
rather than the year 2000.  This could result in a major system failure or 
miscalculations. The Company presently believes that, with modifications to 
existing 

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software and converting to new software, the Year 2000 Issue will not pose 
significant operational problems for the Company's computer systems as so 
modified and converted.  However, if such modifications and conversions are 
not completed timely, the Year 2000 Issue may have a material impact on the 
operations of the Company.  The Company is currently evaluating the status of 
significant vendors with respect to Year 2000 compliance status.  In the 
event that any of the Company's significant suppliers does not successfully 
and timely achieve Year 2000 compliance, the Company's business or operations 
could be adversely affected.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The Company cautions readers that certain important factors may affect the
Company's actual results and could cause such results to differ materially from
forward-looking statements which may be deemed to have been made in this Form
10-K, or which are otherwise made by or on behalf of the Company. Such factors
include, but are not limited to, changing market conditions; the availability
and cost of supply materials for the Company's products, the timely development
and market acceptance of the Company's products; and other risks detailed under
the caption "Risk Factors" below or otherwise described herein or detailed from
time to time in the Company's Securities and Exchange Commission filings.

RISK FACTORS

THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN ADDITION TO THE
OTHER INFORMATION IN THIS REPORT ON FORM 10-K IN EVALUATING THE COMPANY AND ITS
BUSINESS.

QUARTERLY VARIATIONS IN OPERATING RESULTS.   Results of the Company's operations
have fluctuated from quarter to quarter in the past, and may fluctuate
significantly in the future.  Such fluctuations may result from a variety of
factors, including the timing of new product introductions by the Company, its
competitors or third parties, the loss of any of its significant distributors,
currency fluctuations, disruption in the supply of components for the Company's
products, changes in product mix or capacity utilization, the timing of orders
from major customers, personnel changes, production delays or inefficiencies,
seasonality and other factors affecting sales and results of operations.  Such
quarterly fluctuations in results of operations may adversely affect the market
price of the Company's Common Stock, no par value (the "Common Stock").  A
substantial portion of the Company's sales for each quarter results from orders
received in that quarter.   Consequently, the Company is dependent upon
obtaining orders for shipment in a particular quarter to achieve its sales
objectives for that quarter.  Furthermore, the Company has often recognized a
substantial portion of its sales in the last month of a quarter, with sales
frequently concentrated in the last weeks or days of a quarter.  A substantial
portion of the Company's operating expenses are primarily related to personnel,
development of new products, marketing programs and facilities.  The level of
spending for such expenses cannot be adjusted quickly, and is based, in
significant part, on the Company's expectations of future revenue.  If actual
revenue levels are below management's expectations, the Company's business,
financial condition and results of operations may be materially adversely
affected.  The Company believes that period-to-period comparisons of its results
of operations are not necessarily meaningful and should not be relied upon as
indicators of future performance.

                                       11

<PAGE>

DEPENDENCE UPON DIGITAL ELECTRONICS CORPORATION.  The Company is 
substantially dependent upon its relationship with Digital Electronics, which 
is the Company's sole supplier of the flat panel displays that are the 
principal hardware component incorporated in the graphics-based operator 
interface products that represent the Company's best selling product line.  
For fiscal 1996, 1997 and 1998, sales from this product line accounted for 
70.7%, 62.4% and 50.3%, respectively, of the Company's net sales.  The 
inability of the Company to obtain this hardware platform from Digital 
Electronics, significant delays or shortages in production or significant 
price increases by Digital Electronics would have a material adverse effect 
on the Company.  The Company currently has no identified alternative supplier 
for the products supplied by Digital Electronics.  At any time, Digital 
Electronics could become a direct competitor of the Company outside of North 
and South America and, upon expiration of the distribution agreement in 
January 2005, Digital Electronics could become a direct competitor of the 
Company in North America and South America.  The Company is also dependent on 
the ability of Digital Electronics to continue to develop its hardware 
technology to meet rapidly changing customer requirements and competing 
technologies.  The Company is currently engaged in certain product 
development efforts with Digital Electronics which are important to the 
Company's future strategic position.  The historic business relationship 
between the Company and Digital Electronics has been based to a significant 
extent on personal relationships between members of the management of the two 
companies and the previous dealings of the entities.   If those relationships 
were to change, or if the management of the Company or Digital Electronics 
were to change, this could result in a material adverse effect on the 
relationship between the Company and Digital Electronics and, in turn, on the 
business, financial condition and results of operations of the Company.  The 
Company believes that the relationship between Digital Electronics and the 
Company has been and remains good.   However, there can be no assurance that 
the relationship will continue on a satisfactory basis.   Digital Electronics 
is not affiliated with Digital Equipment Corporation.  Digital Electronics is 
also a shareholder of the Company and the Company's majority owned 
subsidiary, Taylor Industrial Software, Inc. ("Taylor"), and has certain 
other relationships with the Company.   As of March 31, 1998, the Company 
owned 0.17% of the outstanding common stock of Digital Electronics.  See Item 
13--"Taylor Transaction" and "Other Related Party Transactions."

DEPENDENCE ON DISTRIBUTORS.  Prior to October 1997, the Company derived 
substantially all of its revenue from sales of its products through its 
network of distributors.  Subsequent to October 1997, due to the addition of 
an inside salesforce at CDI, the Company derived 82% of its revenue from 
distributors. The Company expects that sales through its distributors will 
continue to account for a substantial portion of its revenue for the 
foreseeable future. None of the Company's distributors are under the control 
of the Company or sell the Company's products on an exclusive basis, and 
there can be no assurance that future sales by distributors will continue at 
present levels or increase.  Each of the Company's distributors may cease 
marketing the Company's products with limited notice and with little or no 
penalty.  There can be no assurance that the Company's independent 
distributors will continue to offer the Company's products, or that the 
Company will be able to recruit additional or replacement distributors.  The 
loss of one or more of the Company's major distributors could have a material 
adverse effect on the Company's business, financial condition and results of 
operations.  Many of the Company's distributors offer industrial automation 
products that compete with products offered by the Company.   For example, 
the Company believes that approximately 20% and 13% of the Company's net 
sales for fiscal 1997 and 1998, respectively, resulted from sales by 
distributors that also offer products manufactured by Allen-Bradley Co. 
("Allen-Bradley"), a direct competitor of the Company.  There can be no 
assurance that the Company's distributors will give priority to the marketing 
of the Company's products as compared to competitors' products.  Any 
reduction or delay in sales of the Company's products by its distributors 
would have a material adverse effect on the business, financial condition and 
results of operations of the Company.

                                       12

<PAGE>

PRODUCT CONCENTRATION.  Sales from the Company's QuickPanel product and similar
products represented 70.7%, 62.4% and 50.3% of the Company's net sales in fiscal
1996, 1997 and 1998, respectively.  The Company expects that sales of these
products will continue to account for a substantial portion of the Company's net
sales.  Declines in demand for these products, whether as a result of
competition, technological change or otherwise, would have a material adverse
effect on the Company's business, financial condition and results of operations.
See "Item 1--Business-Products."

CURRENCY EXCHANGE RATE FLUCTUATIONS.  The Company experiences foreign currency
exchange gains and losses in the ordinary course of its business due to exchange
rate fluctuations among a variety of currencies.  Purchases of flat panel
screens from Digital Electronics, which constituted 61.6% and 48.4% of the
Company's cost of goods sold for fiscal 1997 and 1998, respectively, are
transacted in Japanese Yen.  As a result, fluctuations in the exchange rate
between the U.S. Dollar and the Yen may have a material impact on the ability of
the Company to maintain its gross margins.  In addition, Taylor is located in
Edmonton, Alberta and, although most of its sales are denominated in U.S.
Dollars, most of its expenses are incurred in Canadian Dollars.  The Company
currently attempts to hedge a portion of its potential risk with respect to
fluctuations in the Yen, and is investigating hedging Canadian Dollars.  While
such foreign currency hedging transactions may moderate the overall effect of
currency fluctuations, the Company expects that such fluctuations will continue,
and there can be no assurance that the Company will be successful in its hedging
activities or that exchange rate fluctuations will not otherwise have a material
adverse effect on the Company's financial condition or results of operations, or
cause significant fluctuations in quarterly results of operations.

EFFECT OF RECENT ACQUISITIONS AND RISKS ASSOCIATED WITH FUTURE ACQUISITIONS.  
In calendar 1996, the Company acquired Cincinnati Dynacomp, Inc. 
("Cincinnati") and a controlling interest in Taylor.  In calendar 1997, the 
Company acquired substantially all of the assets of Computer Dynamics and 
SensorPulse. Subsequent to the Company's fiscal year ended March 31, 1998, 
the Company acquired the net assets of Deeco Systems, Inc. (collectively, the 
"Acquired Businesses").  The Company has no significant history of operations 
on a combined basis with any of the Acquired Businesses.  There can be no 
assurance that the Company will be successful in integrating the operations 
and personnel of the Acquired Businesses into its business, incorporating 
acquired technologies into its product lines, establishing and maintaining 
uniform standards, controls, procedures and policies, avoiding the impairment 
of relationships with employees and customers as a result of changes in 
management or overcoming other problems that may be encountered in connection 
with the integration of the Acquired Businesses.  In connection with the 
acquisition of the Acquired Businesses, the Company recorded goodwill, which 
will be amortized over future periods, and recognized certain one-time 
acquisition-related charges.  A part of the Company's business strategy is to 
continue its growth through strategic acquisitions.  Identifying and pursuing 
future acquisition opportunities and integrating acquired products and 
businesses will require a significant amount of management time and skill.  
There can be no assurance that the Company will be able to identify suitable 
acquisition candidates, consummate any acquisition on acceptable terms or 
successfully integrate any acquired business into the Company's operations.  
If the Company were to proceed with one or more significant future 
acquisitions in which the consideration consists of cash, a substantial 
portion of the Company's available funds could be necessary in order to 
consummate the acquisitions.   If the Company were to consummate one or more 
significant acquisitions in which the consideration consists of stock, 
shareholders of the Company could suffer a significant dilution of their 
interests in the Company.   Many business acquisitions must be accounted for 
as a purchase.  Most of the businesses that might become attractive 
acquisition candidates for the Company are likely to have significant 
goodwill and intangible assets, and acquisition of these 

                                       13

<PAGE>

businesses, if accounted for as a purchase, would typically result in 
substantial goodwill amortization charges to the Company.  In addition, such 
acquisitions could involve acquisition-related charges.

EFFECT OF OBLIGATION TO MAKE CONTINGENT PAYMENTS.   In accordance with the 
Taylor transaction, the Company made a payment of contingent consideration of 
approximately $1.1 million to the former shareholders of Taylor in September 
1997.  Continuing in fiscal 1999, the Company may become obligated under the 
terms of the Taylor Transaction, the Computer Dynamics transaction, the 
SensorPulse transaction and the Deeco transaction to make payments of 
contingent consideration which could be substantial in amount.  The Taylor 
Transaction requires contingent payments based on Taylor's revenue for the 
twelve month period ending September 30, 1998, of up to $4.0 million.  The 
Computer Dynamics transaction requires contingent payments for five years 
ranging from $0 to $3 million each year to the extent that the year over year 
growth in earnings of CDI exceeds 110% to 125% of the base earnings for each 
period.  Of such contingent payments with respect to the Computer Dynamics 
transaction, half are payable in shares of the Company's Common Stock valued 
at its fair market value at such time (up to 347,961 shares), with the 
remainder payable in cash.   The Company intends to seek shareholder approval 
to amend this agreement to remove the limitation of the number of shares that 
can be paid under the CDI Transaction.  The SensorPulse transaction provides 
for a four year annual earn-out payment to SensorPulse based on the year over 
year growth in SensorPulse's earnings before taxes multiplied by: three in 
calendar 1998; two and three quarters in calendar 1999; two in calendar year 
2000; and one and one-half in calendar year 2001,with maximum aggregate 
payments of $23.25 million.  Such earn-out shall be payable 50% in cash and 
50% in common stock of the Company at its then fair market value.  The Deeco 
transaction provides for an earn-out of up to $2 million if Deeco attains 
certain financial targets for the twelve month period ending January 31, 
1999.  These contingent payments may require the Company to borrow against 
its existing credit facility or to seek additional equity or debt financing, 
which could materially adversely affect the Company's business and financial 
position.  There can be no assurance that such capital will be available to 
the Company on favorable terms, if at all.

RISKS OF SERVING CYCLICAL INDUSTRIES.   The end-users of the Company's 
products include manufacturers in a number of industries which are cyclical 
in nature, including the automotive and packaging industries.  Such 
industries have historically experienced periodic downturns as well as 
short-term fluctuations which often have had an adverse effect on the demand 
for industrial machinery and equipment in those industries and on the related 
demand for products like those of the Company that are used to control such 
machinery and equipment. Downturns in these industries could have a material 
adverse effect on the Company's business, financial condition and results of 
operations.

EFFECT OF RAPID GROWTH ON EXISTING RESOURCES.  The Company has grown rapidly 
in recent years.  A continuing period of rapid growth could place a 
significant strain on the Company's management, operations and other 
resources.   The Company's ability to manage its growth will require it to 
continue to invest in its operational, financial and management information 
systems, and to attract, retain, motivate and effectively manage its 
employees.  The inability of the Company's management to attract such new 
employees and manage its growth effectively could have a material adverse 
effect on the business, financial condition and results of operations of the 
Company.

TECHNOLOGICAL CHANGE; DIFFICULTIES AND RISKS ASSOCIATED WITH NEW PRODUCT 
DEVELOPMENT AND INTRODUCTION.  The market for the Company's products is 
characterized by rapidly changing technology, evolving industry standards and 
frequent new product introductions.  The Company's near-term success and 
future growth are substantially dependent upon continuing market acceptance 
of its existing products, and on the Company's ability to develop new 
products to meet changing customer requirements and 

                                       14

<PAGE>

emerging industry standards.  In addition, the Company's growth is in part 
dependent on the ability of Digital Electronics to maintain its development 
and supply of advanced hardware platforms for the Company's graphics-based 
operator interface products.  There can be no assurance that products or 
technologies of the Company's competitors will not render the Company's 
products or technologies noncompetitive or obsolete.  The Company's future 
success is dependent to a significant degree on its ability to develop 
products in a timely manner that operate in an open architecture environment. 
There can be no assurance that the Company will be successful in developing 
new products or product extensions, that unanticipated problems or delays in 
future development and production will not be encountered, or that, once 
developed, the Company's products will meet the requirements of its customers 
or gain market acceptance.

SIGNIFICANCE OF DEVELOPING MARKET.  The market for standards-based, 
interoperable software tools and products in the industrial automation 
industry is new and rapidly evolving.  The Company's future success is 
dependent to a significant degree upon broad market acceptance of the type of 
open architecture products on which the Company is focusing its development 
efforts.  There can be no assurance that the market for such products will 
continue to develop or grow, that the Company's product offerings will gain 
market acceptance, that the Company will be able to offer in a timely manner, 
if at all, further product developments utilizing open architecture 
technology or that the Company's end-users will choose the Company's products 
for use.  The failure of any of these events to occur would have a material 
adverse effect on the business, financial condition and results of operations 
of the Company.

PARTIALLY OWNED SUBSIDIARY.  The Company owns 61.5% of the Class A Shares of
Taylor (the "Taylor Class A Shares"), and Digital Electronics owns the remaining
38.5% of such shares.  Digital Electronics, as the minority shareholder of
Taylor, will be entitled to a portion of the economic benefits of the business
operated by Taylor and will have influence over the business and operations of
Taylor, including certain fundamental corporate transactions requiring
supermajority shareholder approval.  Both the Company and Digital Electronics
pay a royalty to Taylor based on their sales of Taylor software products.
Although the Company owns a majority interest of the outstanding Taylor Class A
Shares, and although Taylor's financial results are consolidated with those of
the Company, the Company will not receive the full economic benefit from
Taylor's sales and operations.   Moreover, the Company may not be able to
unilaterally control decisions regarding the conduct of Taylor's business and
affairs.  A unanimous vote of shareholders is required for the following: change
in business purpose of Taylor; dissolution or liquidation of Taylor; the
amalgamation, merger, consolidation or other similar capital integration of
Taylor with a third party; the acquisition of an interest in any other company
by Taylor which competes with the business of either the Company or Digital
Electronics; or the making of any loan over $500,000 or offering guarantees,
securities, or mortgages in favor of any person other than Taylor itself by
Taylor.

DEPENDENCE ON OUTSIDE SUPPLIERS.  The Company is dependent on outside vendors to
manufacture many of the components and subassemblies used in the Company's
products.  Although substantially all of the components used in the Company's
products are available from multiple sources (other than the flat panel screens
supplied by Digital Electronics), the Company may experience shortages in supply
from its suppliers due to various factors, including increases in market demand
for certain components which occur from time to time and the limited capacity of
certain suppliers.  The Company believes that the partial or complete loss of
one or more of its suppliers is not likely to have a material long-term impact
on its operations.  Such a loss, however, could in the short term result in
significant production delays, require the Company to seek alternative sources
of supply and increase its cost of goods sold and, 

                                       15

<PAGE>

therefore, could have a material adverse effect on the Company's business, 
financial condition and results of operations.

COMPETITION.  Competition in the industrial automation industry is intense and
characterized by rapidly advancing technologies.  The Company faces substantial
competition in all of its product lines and competition may increase if new
competitors enter the market or if existing competitors expand their product
offerings.  The Company believes that over time this competition may have the
effect of reducing average selling prices of comparable products offered by
competitors, and thus, in order to maintain sales, the Company may be forced to
increase unit volumes or increase the performance of its products in order to
offset or reduce any decreases in selling prices.  In the event such price
reductions become necessary, the Company's ability to maintain gross margins
will depend on its ability to reduce its cost of goods sold in an amount
sufficient to compensate for any decreases in selling prices. Certain of the
Company's competitors and potential competitors have substantially greater name
recognition and financial, technical, marketing and other resources than the
Company.  Such competitors or potential competitors may be able to exert
leverage or other competitive pressures on distributors to give priority to
their own products at the expense of the Company's products.  To the extent the
Company is unable to compete effectively against its competitors, its business,
financial condition and results of operations could be materially adversely
affected.  The Company believes its ability to effectively compete in the
industrial automation market depends on factors both within and outside its
control, including the ability of the Company to meet evolving market
requirements, the timing and success of new products developed by the Company
and its competitors, product performance and price, distribution and customer
support, product reputation, customers' assessment of the Company's financial
resources and its technical and service expertise.  There can be no assurance
that the Company will be able to compete successfully with respect to these and
other factors, and such competitive pressures could adversely affect the
Company's business, financial condition and results of operations.

PRODUCT LIABILITY EXPOSURE.  The use of the Company's products in systems that
interact directly on the factory floor, where the failure of the system could
cause substantial property damage or personal injury, could expose the Company
to significant product liability claims.  Although the Company has not
experienced product liability claims to date, the sale and support of its
products may entail the risk of such claims.   A successful product liability
claim brought against the Company, or product recall involving the Company's
products, could have a material adverse effect upon the Company's business,
financial condition and results of operations.  The Company maintains product
liability insurance, but there can be no assurance that such insurance will be
sufficient to cover any claims or that it will continue to be available on
reasonable terms, if at all.  The Company's contracts typically contain
limitations of liability, disclaimers of warranties, damage limitations, and
indemnifications against third party claims, which provisions may not be
effective in all circumstances and jurisdictions.  Taylor's software license
agreements with its customers typically contain similar limitations and
provisions but consist of "shrink wrap" licenses that are not signed by
licensees and, therefore, it is possible that such licenses may be unenforceable
under the laws of certain jurisdictions.

DEPENDENCE ON CHIEF EXECUTIVE OFFICER AND OTHER EXECUTIVE OFFICERS.  The Company
depends to a significant degree on its senior management and other officers and
key employees, especially its Chief Executive Officer, Nicholas Gihl.  The loss
of Mr. Gihl's services, the loss of service of one or more of the Company's
other executive officers or the inability to hire or retain qualified personnel
could adversely affect the Company's business, financial condition and results
of operations.  See "Directors and Executive Officers of the Registrant."

                                       16

<PAGE>

PROPRIETARY TECHNOLOGY AND PRODUCT PROTECTION; POTENTIAL INFRINGEMENT.  The
Company's success depends in part on its ability to maintain the proprietary and
confidential aspects of its products. The Company does not own any significant
patents, and relies on a combination of copyrights, non-disclosure agreements
with certain employees and other means to establish and protect its proprietary
rights.  There can, however, be no assurance that the precautions taken by the
Company adequately protect the Company's technology. In addition, many of the
Company's competitors have obtained or developed, and may be expected to obtain
or develop in the future, patents, copyrights or other proprietary rights that
cover or affect products that perform functions similar to those performed by
products offered by the Company.  The inability of the Company for any reason to
protect existing technology or otherwise acquire necessary technology could
prevent distribution or licensing of the Company's products, which would have a
material adverse effect on the business, financial condition and results of
operations of the Company.  In addition, although the Company believes that its
products do not infringe patents, copyrights, or other proprietary rights of
third parties, there can be no assurance that the Company is aware of all
patents, copyrights or other proprietary rights that may be infringed by the
Company's products, that infringement does not exist or that infringement may
not be alleged by third parties in the future.  If infringement is alleged,
there can be no assurance that the necessary licenses would be available on
acceptable terms, if at all, or that the Company would prevail in any related
litigation.   Intellectual property litigation can be extremely protracted and
expensive even if the Company ultimately prevails, and involvement in such
litigation could have a material adverse effect on the business, financial
condition and results of operations of the Company.

PREFERRED STOCK; STAGGERED BOARD AND ANTI-TAKEOVER EFFECTS OF CORPORATE
PROVISIONS.  The Board of Directors of the Company (the "Board of Directors")
has the authority to issue, without vote or action of the shareholders,
1,000,000 shares of Preferred Stock, no par value ("Preferred Stock"), in one or
more series; to fix the rights, preferences, privileges and restrictions
thereof, including dividend rights, conversion rights, voting rights, terms of
redemption, redemption prices and liquidation preferences; and to determine the
designation and the number of shares constituting any series.  The issuance of
any Preferred Stock may have the effect of delaying, deferring or preventing a
change in control of the Company and may adversely affect the voting and other
rights of the holders of Common Stock.  At present, the Company has no plans to
issue any Preferred Stock.  The Company has also implemented a staggered Board
of Directors consisting of three three-year classes.  These and other provisions
in the Company's Articles of Incorporation and By-laws and of Illinois law could
delay or make more difficult a merger, tender offer or proxy contest involving
the Company.

                                       17

<PAGE>

ITEM 2.  PROPERTIES

The Company's headquarters and principal manufacturing for operator interface 
products facilities are located in Melrose Park, Illinois, in a 39,000 square 
foot leased facility, of which approximately 24,000 square feet is used for 
manufacturing and storage.  The facility is owned by a partnership which is 
controlled by officers and major shareholders of the Company.  See "Item 
13--Other Related Party Transactions."  This facility is leased through April 
2002. Also, the Company leases a 22,000 square foot facility in Edmonton, 
Alberta. The Company also leases sales offices.  As part of the acquisition 
of Cincinnati, the Company became the primary obligor of a 29,670 square foot 
facility in Cincinnati, Ohio. The Company is currently seeking a sublessor of 
this facility through the remainder of the original lease term, which expires 
in August 2000.  The Company believes that its facilities are adequate for 
its current needs.

The Company also leases a 97,000 square foot manufacturing facility for its
industrial computer workstation products located in Greenville, South Carolina,
of which 75,000 square feet is used for manufacturing and storage.  The facility
is owned by a limited liability corporation controlled by an officer/shareholder
of the Company. See "Item 13---Other Related Party Transactions".  This facility
is leased through September 30, 2002.  The Company is currently subletting
32,000 square feet of this facility through February 28, 2001.  The Company has
the right request the sublessee vacate the space within 60 days.

The Company also leases a 9,100 square foot facility for its signal conditioning
operation in South Easton, Massachusetts, of which 5,000 square feet is used for
manufacturing and storage.  The facility is leased through December 31, 1998,
and the Company has the right for two one year renewals at the current rate plus
an increase equal to the adjustment in the consumer price index.

In conjunction with the Deeco transaction, the Company is subleasing a 33,750
square foot facility in Hayward, California, of which approximately 17,000
square feet is used for manufacturing and storage.  The facility is sublet
through January 31, 1999.

ITEM 3.  LEGAL PROCEEDINGS

In 1996, Wesco Distribution Incorporated ("Wesco"), a former distributor of 
Cincinnati, initiated litigation against one of its customers, Joslyn 
Sterilizer, Inc. ("Joslyn")  to collect approximately $50,000 of invoices for 
computer software and equipment purchased by the customer, including 
equipment supplied by Cincinnati.  The customer then filed a counterclaim 
against Wesco alleging that the software and equipment contained defects and 
seeking damages in the amount of approximately $1.6 million.  On February 14, 
1997, Wesco impleaded Tara Products, Inc. ("Tara"), the Company's 
wholly-owned subsidiary which is the successor to Cincinnati, seeking 
indemnification from Tara for damages suffered by Wesco resulting from any 
product defects.  This suit (the "Lawsuit") was filed in the New York Supreme 
Court for Monroe County.  On May 23, 1997, the New York Supreme Court for 
Monroe County dismissed Wesco's third-party complaint against Tara without 
prejudice on the grounds that under a distribution agreement between Wesco 
and Tara's predecessor, any litigation between the two companies must be 
brought in the Court of Common Pleas for Claremont County, Ohio.  Wesco may 
still seek indemnification from Tara in Ohio. While the Company has not 
conducted any formal investigation or taken any discovery, it believes that 
Tara would have a meritorious defense to such an action.

                                       18

<PAGE>

On May 7, 1997, Joslyn filed a complaint against Tara, the Company and Tara's
predecessors, Cincinnati Electrosystems Inc., and Cincinnati Dynacomp, Inc., in
the Supreme Court for Monroe County, New York, alleging substantially the same
facts against those defendants as it did against Wesco in the counterclaim.  In
response to Joslyn's complaint, the defendants filed a motion for summary
judgement which was granted in part and denied in part.  With respect to such
matters that it was unsuccessful, the Company filed a response on January 19,
1998.  Again, while this action is in the preliminary stages and no formal
discovery has been initiated, the Company believes that it and the other
defendants have meritorious defenses, and the Company intends to vigorously
defend this action.  There can be no assurance, however, that the defendants
will prevail in this action.   If the defendants do not prevail, or if they
settle the action, the Company could be required to make payments to Joslyn.
The Company does not, however, believe that any such payments, if required to be
made, would have a material adverse effect on the Company's financial condition
or results of operations.

The Company is not involved in any other material legal proceedings.

                                       19

<PAGE>

ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

     No matters have been submitted to a vote of security holders since the
effective date of the Company's initial public offering on March 11, 1997.

     With respect to the scheduled Annual Meeting of Shareholders of the Company
to be held on August 27, 1998, the Company intends to submit the following items
to a vote of the shareholders:

     1.   Considering and acting upon a proposal to amend Article Fifth of the
          Company's Amended and Restated Articles of Incorporation to provide
          that the number of directors of the Company shall not be less than
          three nor more than eleven directors;

     2.   Electing two persons to the Board of Directors of the Company to serve
          until the annual meeting of the Company in 2001 and until their
          respective successors have been elected and qualified and, if the
          charter amendment described in subparagraph 1 is adopted, electing one
          additional person to the Board of Directors of the Company to serve
          until the annual meeting of the Company in 1999 and until his
          respective successor has been elected and qualified;

     3.   Considering and acting upon a proposal to amend the Company's 1996
          Employee Stock Option Plan in order to increase the number of reserved
          shares of Common Stock for option grants under such Plan from 550,000
          to 1,100,000;

     4.   Considering and acting upon a proposal to approve, pursuant to Nasdaq
          Rule 4460(I), an amendment to the asset purchase agreement in which
          the Company acquired substantially all of the assets of KP One, 
          Inc. (f/k/a Computer Dynamics), a South Carolina corporation, to allow
          the Company to issue in excess of 347,961 shares of Common Stock as
          contingent consideration thereunder; and

     5.   Ratifying the appointment of Arthur Andersen LLP as auditors of the
          Company for fiscal 1999.


                                      PART II.

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

MARKET INFORMATION

Total Control's Common Stock is traded on the Nasdaq National Market under the
symbol "TCPS."  Trading in Total Control's stock commenced on March 11, 1997,
the effective date of its initial public offering.  The initial public offering
price of Total Control's Common Stock was $8.00 per share.

                                       20

<PAGE>

The following table sets forth the reported high and low sale prices for Total
Control's Common Stock for each fiscal quarter during the fiscal year ended
March 31, 1998.  Quotations are as reported by Nasdaq for National Market System
issues.

<TABLE>
<CAPTION>

PERIOD                                        HIGH                LOW
------                                       ------              ------
<S>                                          <C>                 <C>
April 1, 1998 ---- June 30, 1998             $ 8.75              $ 7.00
July 1, 1998 ---- September 30, 1998         $15.00              $ 8.25
October 1, 1998 ---- December 31, 1998       $15.50              $11.63
January 1, 1998 ---- March 31, 1998          $12.25              $ 9.00
</TABLE>

As of June 1, 1998, there were approximately 1,600 holders of record of Total
Control's Common Stock (including individual participants in security position
listings) and the closing bid price of the Common Stock was $8.375 per share.

The transfer agent and registrar for Total Control's Common Stock is Norwest
Bank Minnesota, N.A., Stock Transfer Department, P.O. Box 64854, St. Paul, MN
55164-0854, telephone: 1-800-468-9716.

DIVIDENDS

Total Control presently intends to retain future earnings for its operations and
expansion of its business.  Total Control has never declared or paid any
dividends on its Common Stock and has no plans to do so in the foreseeable
future.  Any determination to pay cash dividends in the future will be at the
discretion of Total Control's Board of Directors and will be dependent upon
Total Control's results of operations, financial condition and other factors
deemed relevant at the time by its Board of Directors.

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated statement of operations data for each of the
three years in the period ended March 31, 1998 and balance sheet data at March
31, 1997 and 1998 have been derived from the consolidated financial statements
of the Company included elsewhere in this Form 10-K and have been audited by
Arthur Andersen LLP, independent public accountants, as indicated by their
report thereon contained elsewhere herein.  The selected consolidated statement
of operations data for the two years in the period ended March 31, 1995 and
balance sheet data as of March 31, 1994, 1995 and 1996 has been derived from
consolidated financial statements of the Company not included in this Form 10-K
that have been audited by Arthur Andersen LLP, independent public accountants.
The selected consolidated financial data should be read in conjunction with the
Consolidated Financial Statements and Notes thereto and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
elsewhere in this Form 10-K.

                                        21
<PAGE>

<TABLE>
<CAPTION>
                                                                                    YEAR ENDED MARCH 31,
                                                             ----------------------------------------------------------------------
                                                               1994             1995           1996           1997           1998
                                                             ---------        --------       --------       --------        -------
                                                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                          <C>              <C>            <C>            <C>             <C>
 STATEMENT OF OPERATIONS DATA:

 Net sales . . . . . . . . . . . . . . . . . . . . . .       $  11,723        $ 17,063        $25,743        $40,821        $60,642

 Cost of goods sold    . . . . . . . . . . . . . . . .           6,304           9,689         15,370         20,664         27,846
                                                             ---------        --------       --------       --------        -------
 Gross profit  . . . . . . . . . . . . . . . . . . . .           5,419           7,374         10,373         20,157         32,796

 Operating expenses:
      Sales and Marketing, Research and
            Development and General and
                    Administrative . . . . . . . . . .           5,259           6,241          8,542         17,081         24,245

      Change in estimated useful life of software
           development costs . . . . . . . . . . . . .             466              --            --            --               --

      Charge for purchased research and
        development. . . . . . . . . . . . . . . . . .             --               --            --          4,893            200

      Charge for restructuring . . . . . . . . . . . .             --               --            --             --          1,337
                                                             ---------        --------       --------       --------        -------
 Income (loss) from operations . . . . . . . . . . . .           (306)           1,133         1,831         (1,817)         7,014

 Interest (expense) and other income, net  . . . . . .            (96)            (164)         (169)          (560)          (387)
                                                             ---------        --------       --------       --------        -------
 Income (loss) before income taxes and
    minority interest  . . . . . . . . . . . . . . . .           (402)             969         1,662         (2,377)         6,627

 Provision from (benefit from) income taxes  . . . . .           (155)             247           665          1,040          2,940
                                                             ---------        --------       --------       --------        -------
 Income (loss) before minority interest  . . . . . . .           (247)             722           997         (3,417)         3,687

 Minority interest in loss of subsidiary . . . . . . .             --               --            --          1,853            380
                                                             ---------        --------       --------       --------        -------
 Net income (loss) . . . . . . . . . . . . . . . . . .           (247)             722           997         (1,564)         4,067

 Accretion to redemption value of
   common stock  . . . . . . . . . . . . . . . . . . .            (76)            (208)       (1,606)        (9,061)            --
                                                             ---------        --------       --------       --------        -------
 Net income (loss) available to common
    shareholders . . . . . . . . . . . . . . . . . . .         $ (323)       $     514       $  (609)      $(10,625)       $ 4,067
                                                             ---------        --------       --------       --------        -------
                                                             ---------        --------       --------       --------        -------

 Basic net income (loss) per share available to
   shareholders(1) . . . . . . . . . . . . . . . . . .         $(0.10)       $    0.11       $ (0.13)     $   (2.15)   $      0.55
                                                             ---------        --------       --------       --------        -------
                                                             ---------        --------       --------       --------        -------

 Diluted net income (loss) per share available to
   shareholders(1) . . . . . . . . . . . . . . . . . .         $(0.10)       $    0.11     $   (0.13)    $    (2.15)    $     0.49
                                                             ---------        --------       --------       --------        -------
                                                             ---------        --------       --------       --------        -------

 Basic shares outstanding(1) . . . . . . . . . . . . .          3,332            4,545         4,648          4,947          7,390
                                                             ---------        --------       --------       --------        -------
                                                             ---------        --------       --------       --------        -------

 Diluted shares outstanding(1) . . . . . . . . . . . .          3,332            4,562         4,648          4,947          8,337
                                                             ---------        --------       --------       --------        -------
                                                             ---------        --------       --------       --------        -------
</TABLE>

                                      22

<PAGE>

<TABLE>
<CAPTION>
                                                                                    YEAR ENDED MARCH 31,
                                                                  ----------------------------------------------------------------
                                                                   1994            1995         1996         1997           1998
                                                                  ------          ------       -------      -------        -------
                                                                                        (IN THOUSANDS)
<S>                                                               <C>             <C>          <C>          <C>            <C>
 BALANCE SHEET DATA:

 Total assets  . . . . . . . . . . . . . . . . . . . . .          $5,462          $7,584       $15,983      $31,462        $60,799

 Long-term debt, net of current
   maturities  . . . . . . . . . . . . . . . . . . . . .             510             500         6,201        2,263         12,989

 Redeemable common stock . . . . . . . . . . . . . . . .           1,000           1,455         3,561           --             --

 Shareholder's equity. . . . . . . . . . . . . . . . . .           1,940           2,454         1,843       19,907         34,425
</TABLE>



__________________

(1)  Computed on the basis described in Note 1 of Notes to Consolidated
     Financial Statements.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

The Company designs, develops and markets products and technology for the
control segment of the industrial automation market.   The Company's broad range
of products are used to define, monitor and maintain the operation, sequencing
and safety of industrial equipment and machinery on the factory floor.  These
products include closed architecture control and PLC operator interface devices,
industrial computers and flat panel monitors and open architecture control
software and systems, and are sold primarily through an international network of
independent distributors with approximately 250 sales locations.

The Company's net sales include revenues from sales of products, software
license fees, software maintenance and services.  The Company's principal
operator interface product line, QuickPanel, accounted for 70.7%, 62.4% and
50.3% of net sales in fiscal 1996, 1997 and 1998, respectively.

A key element of the Company's strategy has been to expand the breadth of its
factory floor automation products offered through its distributor network in
order to provide innovative solutions for automation to end users.  In September
1996, the Company acquired a controlling interest in Taylor, an Edmonton,
Alberta-based developer of PC-control software, client/server program management
software, graphical operator interface software and PLC configuration and
support software.  In October 1997, the Company acquired substantially all of
the net assets of CDI, a South Carolina-based manufacturer of industrial
computers.  Also, on December 31, 1997, the Company acquired substantially all
of the net assets of SensorPulse, a Massachusetts-based designer and developer
of industrial signal conditioning products and networked input/output (I/O)
devices.  Subsequent to the Company's fiscal year ended March 31, 1998, the
Company acquired the net assets of Deeco Systems, Inc., a designer and
manufacturer of flat 

                                      23
<PAGE>

panel factory automation products.  These acquisitions expanded the Company's 
product line, allowing it to capitalize on the growing trends towards 
interoperable technology products, and gave the Company a platform from which 
to develop new products incorporating these new technologies into the 
Company's traditional products.

In connection with these acquisitions, the Company may become obligated to make
payments of contingent consideration which could be substantial in amount.  See
"--Liquidity and Capital Resources."  All of these acquisitions were accounted
for as a purchase in accordance with Accounting Principles Board Opinion No. 16.
In connection with the SensorPulse and Taylor Transactions, approximately
$200,000 ($120,000 net of related income tax benefit) and $4.9 million were
charged as an expense at the acquisition date related to the purchase of
incomplete research and development projects and other acquisition costs.  In
connection with the Company's acquisitions, the Company recorded approximately
$25.8 million of goodwill (which will be increased in the event any future
contingent consideration is paid), which is being amortized on a straight-line
basis over 7 to 17 years.

Following the Taylor Transaction, the Company engaged a broker to commence the
sale of Taylor's labor scheduling software product line.  The revenues, expenses
and resulting net loss associated with this product line since the date of
acquisition have not been reflected in the Company's statement of operations.
On September 26, 1997, Taylor completed the sale of this product line to an
entity principally owned by Neil R. Taylor ("Mr. Taylor").  Mr. Taylor, the
former principal shareholder of Taylor, is a member of the Company's board of
directors.  The sale price was approximately $4 million.

In connection with the transaction, the Company loaned Mr. Taylor $2 million
pursuant to a promissory note dated September 25, 1997.  The note bears interest
at 8% per annum, due annually, and is payable in five equal installments
beginning on September 25, 1999 and ending on September 25, 2003.  The note is
secured by 250,000 shares of Class C exchangeable common stock of Taylor
currently held by Mr. Taylor.  As a result of this transaction, the purchase
price associated with the Taylor acquisition was re-allocated.  The carrying
value of the goodwill previously recorded by the Company related to the Taylor
acquisition increased by approximately $2.5 million, which related to the after
tax difference between the estimated sales price of the product line, previously
recorded as an asset held for sale, and the actual sales price.  This additional
goodwill is being amortized over the remaining useful life of the goodwill (six
years from the date of the transaction).

All of the Company's purchases of QuickPanel operator interface hardware devices
are from Digital Electronics and are transacted in Japanese Yen, while
substantially all of the Company's sales are in U.S. Dollars.  These purchases
from Digital Electronics accounted for 61.6% and 49.8%, respectively, of the
Company's total cost of goods sold for fiscal 1997 and 1998. The Company's
financial performance, including its gross margin, may be substantially impacted
by changes in the Yen/Dollar exchange rate.  The Company attempts to hedge a
portion of this exchange rate risk, but there can be no assurance that the
Company will be successful in its hedging activities or that certain exchange
rate fluctuations will not otherwise have a material adverse effect on the
Company's financial condition or results of operations, or cause significant
fluctuations in results of operations.

To the extent statements in this Item 7 may be considered forward looking,
readers are cautioned to read the "Safe Harbor Statement" and "Risk Factors"
contained in Item 1 hereof.

                                      24
<PAGE>

FISCAL YEARS ENDED MARCH 31, 1998 AND MARCH 31, 1997

NET SALES.   Net sales increased 48.6% to $60.6 million for fiscal 1998 compared
to $40.8 million for fiscal 1997. This increase resulted primarily from the
sales of products acquired as a result of the CDI Transaction of approximately
$10.8 million for the six months ended March 31, 1998 and the growth in sales of
the Company's graphics-based operator interface products of approximately $5.8
million.  Additionally, the increase reflects the results of Taylor for the
entire period in 1998 versus six months in the period ended March 31, 1997 of
approximately $2.9 million.

GROSS PROFIT.  Cost of goods sold consists primarily of expenses for components
and subassemblies, subcontracted labor, direct labor, manufacturing overhead,
and provisions for excess and obsolete  inventory.  Gross profit increased 62.7%
to $32.8 million for fiscal 1998 from $20.2 million for fiscal 1997.  Gross
margin increased to 54.1% for fiscal 1998 from 49.4% in fiscal 1997.  Of this
increase, 1.7 percentage points related to a reduction in the material cost
primarily in the QuickPanel product line due to favorable Yen fluctuations, 2.5
percentage points was related to lower manufacturing overhead costs as a result
of integrating the Cincinnati Dynacomp operation acquired in January 1996 into
the Total Control operation during the latter part of fiscal 1997.  An
additional improvement of .7 percentage points related to an increase in higher
margin Taylor sales as a percentage of total sales for the year, offset by a 0.5
percentage point reduction related to the inclusion of lower margin CDI and
SensorPulse sales in fiscal 1998.

SALES AND MARKETING.  Sales and marketing expenses consist primarily of
personnel costs, sales commissions paid to the Company's independent sales
representatives, advertising, product literature, trade shows, distributor
promotions and depreciation on equipment used for sales related activities.
Sales and marketing expenses increased 43.1% to $13.0 million for fiscal 1998
from $9.1 million for fiscal 1997.  Approximately $1.5 million of the increase
resulted from costs associated with the operations of Taylor for an entire
period versus six months in 1997 and $725,000 of the increase resulted from the
operations CDI.  Approximately $1.0 million of the increase resulted from
increased direct sales headcount. Finally, commissions due to external sales
representative increased as a result of higher sales volume by approximately
$460,000.

RESEARCH AND DEVELOPMENT.  Research and development expenses consist primarily
of personnel costs, engineering supplies, development equipment, depreciation
and overhead costs.  Research and development expenses increased 37.2% to $5.3
million for fiscal 1998 from $3.9 million in fiscal 1997.  Approximately $1.0
million of the increase related to the inclusion of the costs related to Taylor
for the entire period in fiscal 1998 versus six months in fiscal 1997 and
$550,000 of costs related to the operations of CDI for the period from
acquisition to March 31, 1998.  The increase also resulted from an increase in
outside development costs of approximately $100,000 and increases in prototype
supplies and product liability insurance totaling approximately $100,000. These
increases were offset by a reduction in payroll and related costs of
approximately $350,000.

GENERAL AND ADMINISTRATIVE.  General and administrative expenses consist
primarily of personnel costs related to finance, information systems, and
general management functions, as well as professional fees related to legal,
audit and tax services.  General and administrative expenses increased 25.4% to
$4.7 million for fiscal 1998 from $3.7 million for fiscal 1997.  Approximately
$400,000 of the increase related to the inclusion of Taylor for the entire
period in fiscal 1998 versus six months in fiscal 1997 and approximately
$650,000 related to the inclusion of the CDI operation.

                                      25
<PAGE>

AMORTIZATION OF GOODWILL.  Amortization of goodwill relates to the Cincinnati,
Taylor, CDI and SensorPulse acquisitions, which are being amortized over seven
to seventeen years from the date of acquisition.  Amortization expense increased
to $1.2 million for fiscal 1998 from $320,000 for fiscal 1997 due to a full
period of amortization for Taylor and an increase in total Taylor goodwill
related to the $1.1 million earnout payment to the former Taylor shareholders in
fiscal 1998 and the approximately $2.5 million increase related to the sale of
the Company's labor scheduling product line in September 1997.  The remaining
increase related to the inclusion of CDI and SensorPulse from the date of their
respective acquisitions.

CHARGE FOR PURCHASED RESEARCH AND DEVELOPMENT.  Purchased research and
development and other acquisition expenses relating to the acquisition of Taylor
totaled approximately $4.9 million and were charged to expense at the
acquisition date in September 1996.  Of this expense, $4.7 million represents
the estimated fair value of Taylor's incomplete research and development
projects as determined by independent appraisal.  In fiscal 1998, an additional
charge was recorded relating to the acquisition of SensorPulse of $200,000
related to the estimated value of incomplete research and development at
acquisition as determined by independent appraisal.

CHARGE FOR RESTRUCTURING.  During the fourth quarter of fiscal 1998, the
Company's board of directors approved a restructuring plan consisting of a
reorganization of the Company's management and sales channel primarily driven by
the recent expansion of the Company's product offerings, which resulted in a
$1.3 million pre-tax charge to earnings.  This restructuring charge included
termination provisions for certain employees of approximately $944,000,
termination costs related to certain manufacturer's representatives of $155,000
and a further reduction in the utilization of the Company's Cincinnati facility
resulting in a charge for exit costs of $238,000.

INTEREST EXPENSE AND OTHER, NET.  Interest expense and other, net decreased to
$387,000 for fiscal 1998 from $561,000 in fiscal 1997.  The decrease primarily
related to a decrease in average debt outstanding as a substantial portion of
the Company's debt that was outstanding during fiscal 1997 was repaid with a
portion of the proceeds from the Company's initial public offering.

PROVISION FOR INCOME TAXES.  Provision for income taxes increased to 
$2,940,000 for fiscal 1998 from $1,040,000 in fiscal 1997.  The effective tax 
rate for fiscal 1998 was 44.4% as compared to the effective tax rate of 
approximately 44.8% in fiscal 1997, after giving effect to the impact on 
taxable income of the charge for purchased research and development of 
approximately $4.7 million. This decrease was primarily due to a decrease in 
the percentage of the non-deductible portion of goodwill amortization as a 
percentage of total income for fiscal 1998 as compared to fiscal 1997.

MINORITY INTEREST IN LOSS OF SUBSIDIARY.   A minority interest representing
Digital Electronic's 38.5% (39.0% prior to September 30, 1997) share of the net
income or loss of Taylor is recorded on the Company's statements of operations.
The Company's ownership of Taylor Class A Shares may increase by up to an
additional 2.0% based on the amount of contingent consideration paid by the
Company in connection with the acquisition.  To the extent the equity interest
of the Company in Taylor increases, the percentage applied to calculate minority
interest will be reduced by a corresponding amount.  The minority interest
benefit of $380,000 recorded for fiscal 1998 represents the minority interest
share of the loss recorded by Taylor from its operations in fiscal 1998.  In
fiscal 1997, a minority interest benefit of approximately $1.9 million was
recorded.  The minority interest loss for fiscal 1997 primarily resulted from
the charge for purchased research and development of $4.7 million recorded at
Taylor's acquisition date in September 1996.

                                      26

<PAGE>

FISCAL YEARS ENDED MARCH 31, 1997 AND MARCH 31, 1996

NET SALES.   Net sales increased 58.6% to $40.8 million for fiscal 1997 compared
to $25.7 million for fiscal 1996. This increase resulted primarily from the
growth in sales of the Company's graphics-based operator interface products of
approximately $6.6 million and from sales of products acquired as a result of
the Cincinnati Transaction of approximately $3.9 million.  Additionally, the
increase reflects the results of Taylor for the six months ended March 31, 1997
of approximately $4.1 million.

GROSS PROFIT.  Gross profit increased 94.3% to $20.2 million for fiscal 1997
from $10.4 million for fiscal 1996.  Gross margin increased to 49.4% for fiscal
1997 from 40.3% in fiscal 1996.   Of this increase, approximately 7 percentage
points were attributable to a reduction in the material cost primarily in the
QuickPanel product line due to favorable Yen fluctuations, partially offset by
increases in direct labor and manufacturing overhead costs as a percentage of
sales related to the Cincinnati Transaction which reduced gross margin by
approximately 3 percentage points.  In addition, gross margin increased by 5
percentage points from six months sales of higher gross margin Taylor software
products.

SALES AND MARKETING.  Sales and marketing expenses increased 82.8% to $9.1
million for fiscal 1997 from $5.0 million for fiscal 1996.  Approximately $1.6
million of the increase resulted from increased commissions due to higher sales
volume, and increased advertising and distributor promotional programs.
Approximately $1.75 million of the increase resulted from costs associated with
the operations of Cincinnati and Taylor and the remaining increase was due to
increased salary, benefits and related costs attributable to increased sales
support personnel.

RESEARCH AND DEVELOPMENT.  Research and development expenses increased 99.5% to
$3.9 million for fiscal 1997 from $2.0 million in fiscal 1996.  The increase
resulted primarily from increased salary, related benefits and employee
procurement expenses due to increases in personnel headcount, including
approximately $1.2 million of product development costs related to Cincinnati
and Taylor.

GENERAL AND ADMINISTRATIVE.  General and administrative expenses increased
154.1% to $4.1 million for fiscal 1997 from $1.6 million for fiscal 1996.
Approximately $1.6 million of the increase related primarily to additional
personnel and facility costs and goodwill amortization resulting from the
operations of Cincinnati and the six month's operating results of Taylor, with
the remaining increase resulting from higher personnel and associated overhead
costs necessary to support the growth of the Company.

AMORTIZATION OF GOODWILL.  Amortization of goodwill relates to the Cincinnati
and Taylor acquisitions, which are being amortized over seven to fifteen years
from the date of acquisition.  Amortization expense increased to $320,000 for
fiscal 1997 from $23,000 for fiscal 1996 due to a full period of amortization
for Cincinnati.  The remaining increase related to the inclusion of six months
of goodwill amortization related to the Taylor Transaction.


CHARGE FOR PURCHASED RESEARCH AND DEVELOPMENT.  Purchased research and
development and other acquisition expenses relating to the acquisition of Taylor
totaled approximately $4.9 million and were charged to expense at the
acquisition date in September 1996.  Of this expense, $4.7 million represents
the estimated fair value of Taylor's incomplete research and development
projects as determined by independent appraisal.

                                      27
<PAGE>

INTEREST EXPENSE AND OTHER, NET.   Interest expense and other, net increased to
$561,000 for fiscal 1997 from $169,000 in fiscal 1996.  The increase primarily
related to an increase in average debt outstanding used to fund the acquisitions
of Cincinnati and Taylor and increased working capital needs.

PROVISION FOR INCOME TAXES.  Provision for income taxes increased to $1,040,000
for fiscal 1997 from $665,000 in fiscal 1996.  The effective tax rate for fiscal
1997 was 44.8%, after giving effect to the impact on taxable income of the
charge for purchased research and development of approximately $4.7 million, as
compared to the effective tax rate of approximately 40.0% in fiscal 1996.  This
increase was primarily due to non-deductible goodwill amortization.

MINORITY INTEREST IN LOSS OF SUBSIDIARY.  The minority interest benefit of $1.9
million recorded for fiscal 1997 represents the minority interest share of the
loss recorded by Taylor, primarily incurred as a result of the charge for
purchased research and development of $4.7 million recorded at the acquisition
date in September 1996.

ACCRETION TO REDEMPTION VALUE OF COMMON STOCK.   The Company previously issued
redeemable Common Stock and Taylor issued redeemable Taylor Exchangeable shares.
The Company recorded these redeemable shares at their estimated redemption
values at the date of issuance and subsequent changes in such redemption value
in each reporting period were accreted.  The redemption rights automatically
terminated upon the closing of the Company's initial public offering and as a
result, the Company is not required to record a non-cash charge in the future.
The accretion to redemption value of Common Stock increased to $9.1 million for
fiscal 1997 from $1.6 million in fiscal 1996.  Approximately $8.9 million of the
accretion recorded for fiscal 1997 was attributable to an increase in the
estimated fair value of the Common Stock from $2.33 per share to $9.00 per
share. The remaining accretion was due to the increase in redemption value using
the effective interest method for the 767,112 redeemable Taylor Exchangeable
Shares issued in connection with the Taylor Transaction.  The accretion recorded
for fiscal 1996 is based on the increase in the estimated fair market value of
the Common Stock from $1.00 per share to $2.33 per share.


LIQUIDITY AND CAPITAL RESOURCES

     In March 1997, the Company completed an initial public offering of its
Common Stock.  Net proceeds of $11.0 million from this offering were used to
repay certain indebtedness, primarily borrowings under the Company's bank lines
of credit and certain acquisition indebtedness.

     At March 31, 1998, the Company had bank lines of credit aggregating $19.0
million.  Prior to the acquisition of CDI on October 5, 1997, the Company had
bank lines of credit aggregating $10.0 million.  The amount that the Company is
entitled to borrow under such lines of credit is based on 80.0% to 85.0% of
eligible trade accounts receivable and 50.0% of eligible inventory, up to $8.0
million, of its respective operations.  Based on this formula, the Company would
have had approximately $850,000, $7.2 million and $8.4 million of available
borrowings under its line of credit at March 31, 1996, 1997 and 1998,
respectively.  All funds advanced pursuant to the lines of credit are secured by
substantially all of the assets of the Company, and such lines of credit expire
in July 1999.  The interest rate on borrowings under the lines of credit varies
based on certain financial ratios from LIBOR plus 1.5% to LIBOR plus 2%, or in
the case of a $1.0 million the line of credit related to Taylor, the bank's
prime lending rate (See Note 5 to Consolidated Financial Statements).

     In connection with the acquisition of CDI, the Company also entered into a
$4.0 million term 

                                      28

<PAGE>

note with its bank.  Interest is calculated at the bank's prime rate and is 
payable monthly.  Principal of $250,000 is paid quarterly beginning March 31, 
1998, and commencing September 30, 1998, all cash flow in excess of the debt 
service coverage, as defined, shall be applied to pay down the outstanding 
principal balance on the note.  The note is secured by substantially all of 
the Company's assets (See Note 5 to Consolidated Financial Statements).

     The Company is substantially dependent upon its relationship with Digital
Electronics, the sole supplier of the flat panel displays that are the principal
hardware component incorporated in the graphics-based operator interface
products that represent the Company's best selling product line.  For fiscal
year 1997 and 1998, sales from this product line accounted for 62.4% and 50.3%,
respectively, of the Company's net sales.  The inability of the Company to
obtain this hardware platform from Digital Electronics would have a material
adverse effect upon the operating results and liquidity of the Company.

     Cash (used in) provided by operating activities was $(411,000) in fiscal
1996, $(2.1) million for fiscal 1997 and $6.5 million for fiscal 1998.  In
fiscal 1996 and 1997 the Company experienced increases in receivables and
inventory as a result of increases in the Company's sales volume, and a decrease
in accounts payable and accrued expenses which were repaid with a portion of the
proceeds from the Company's initial public offering in fiscal 1997.  In fiscal
1998, the Company's cash flow from operations related primarily to increased
income for the period and non-cash charges related to fixed asset depreciation
and the amortization of acquisition-related goodwill.  Additionally, the Company
experienced a sales volume related increase in accounts receivable, offset by an
increase in accounts payable and accrued expenses.

     Net cash used in investing activities totaled $1.9 million, $6.4 million
and $14.7 million for fiscal 1996, 1997 and 1998, respectively.  In 1996 and
1997, the activities consisted primarily of the purchase of Cincinnati and
Taylor, respectively, for cash and stock.  Additional activities consisted
primarily of purchases of property and equipment.  In 1998, cash was generated
from the sale of the Company's production scheduling software product line, TESS
(discussed below), offset by the acquisitions of CDI and SensorPulse for cash
and common stock, purchases of property and equipment and other assets and cash
paid for an investment in marketable securities.

     Under the terms of the Taylor acquisition, the Company paid approximately
$1.1 million of contingent consideration for the first earn-out period ended
September 30, 1997, on January 2, 1998.  The Company recorded this contingent
consideration payment as additional goodwill at September 30, 1997.  As a result
of the payment of this contingent consideration, the Company's ownership
interest in Taylor increased by approximately 0.5%.

     On September 26, 1997, Taylor completed the sale of its TESS software
product to an entity principally owned by Mr. Neil Taylor.  Mr. Taylor, the
former principal shareholder of Taylor, is a member of the Company's board of
directors.  The sale price was approximately $4 million.

     In connection with the transaction, the Company loaned Mr. Taylor $2
million pursuant to a promissory note from Mr. Taylor dated September 25, 1997.
The note bears interest at 8% per annum (due annually) and is payable in five
equal annual installments beginning on September 25, 1999 and ending on
September 25, 2003. The note is secured by 250,000 shares of Class C
exchangeable common stock of Taylor currently held by Mr. Taylor.

     On October 5, 1997, the Company acquired substantially all of the assets of
CDI, and certain 

                                      29
<PAGE>

other related entities.  Subject to certain adjustments, the consideration 
paid by the Company in connection with the Transaction consisted of 
approximately $12.3 million in cash,  932,039 shares of common stock of the 
Company and a Warrant to purchase 100,000 shares of Common Stock.  The 
Warrant is immediately exercisable at a price of $12.875 per share and shall 
remain outstanding for a period of ten years.

     Additionally, subject to certain adjustments, for five years after the
closing, the Company shall pay CDI an annual payment ranging from $0 to $3.0
million for each year in which the year over year earnings of the acquired
company exceed 110% to 125% of the base earnings for each twelve month period.
Each such payment shall be made 50% in cash and 50% in Common Stock; provided
however, that not more than 347,961 shares of Common Stock may be issued in
connection with the payment of such consideration, and once such number of
shares have been issued, all remaining payments shall be made in cash.  The
Company intends to seek shareholder approval to amend this agreement to remove
the limitation of the number of shares that can be paid under the CDI
Transaction.  Each share of Common Stock shall be valued at the then fair market
value of the Common Stock at the end of each Earn Out Period.

     On December 31, 1997, the Company acquired substantially all of the assets
of SensorPulse for 41,667 shares of common stock of the Company and $1.25
million in cash.  Additionally, the purchase agreement provides for a four year
annual earn-out payment to SensorPulse based upon the year over year growth in
SensorPulse's earnings multiplied by:  three in calendar year 1998; two and
three quarters in calendar year 1999; two in calendar year 2000; and one and
one-half in calendar year 2001, with a maximum aggregate payment of $23.25
million.  Such earn-out shall be payable 50% in cash and 50% in common stock of
the Company at its then fair market value.

     Subsequent to March 31, 1998, the Company acquired substantially all of the
net assets of Deeco, a designer and manufacturer of flat panel factory
automation products, for $5.5 million in cash and an earn out of up to $2
million if Deeco meets certain financial targets for the twelve month period
ending January 31, 1999.  The Company utilized available borrowings under its
existing line of credit arrangement (See Notes 5 and 12 to Consolidated
Financial Statements) to finance the acquisition.

     Net cash provided by financing activities totaled $2.3 million, $8.7
million and $9.9 million for fiscal 1996, 1997 and 1998, respectively.  In
fiscal 1996, the Company increased borrowings to finance the Cincinnati
acquisition.  In fiscal 1997, the Company received $11.6 million in net proceeds
from its initial public offering and an additional $4 million related to the
sale of a minority interest in Taylor.  These funds were used to repay
substantially all of the outstanding debt obligations of the Company.  In fiscal
1998, the Company increased borrowings to finance the acquisitions of CDI and
SensorPulse.

     Management believes funds generated from operations and borrowings
available under the existing bank credit facilities or replacement facilities
will be sufficient to finance the Company's operations for at least the next 12
months.  In the event the Company acquires one or more businesses or products,
the Company's capital requirements could increase substantially, and there can
be no assurance that additional capital will be available on terms acceptable to
the Company, if at all.

                                      30
<PAGE>

NEW ACCOUNTING PRONOUNCEMENTS

In February 1997, the FASB issued Statement No. 128, "Earnings Per Share."  This
statement is effective for fiscal years and interim periods ending after
December 15, 1997.  This statement establishes standards for computing and
presenting earnings per share (EPS) and simplifies the standards for computing
EPS previously found in APB Opinion No. 15.  The Company adopted this statement
effective April 1, 1997.

     In February 1997, the FASB issued Statement No. 129, "Disclosure of
Information about Capital Structure."  This statement expands the capital
structure disclosure requirements and requires that companies disclose pertinent
rights and privileges of all securities other than common stock.  The Company
adopted this statement for the year ended March 31, 1998 with no material impact
on the consolidated financial statement disclosures.

     In June 1997, the FASB issued Statement No. 130, "Reporting 
Comprehensive Income."  This statement defines comprehensive income as net 
income plus non-owner changes in equity.  This statement requires that items 
of comprehensive income previously included in equity be reported in a 
financial statement that is displayed with the same prominence as other 
financial statements.  This statement is effective for the quarter ended June 
30, 1998 with restatement of prior years required.  The Company expects that 
this statement will not have a material impact on the consolidated financial 
statements.

     In June 1997, the FASB issued Statement No. 131, "Disclosures about
Segments of an Enterprise and Related Information."  This statement introduces
an approach to defining the Company's segments for financial reporting purposes
on a basis consistent with how the Company's management evaluates the operations
of the business.  This statement is effective for the Company's fiscal year
ended March 31, 1999 with restatement of prior years required.  The Company is
currently evaluating the impact that this standard will have upon its financial
statement disclosures.

     In February 1998, the FASB issued Statement No. 132, "Employers'
Disclosures About Pensions and Other Post-Retirement Benefits."  This statement
revises and standardizes the required financial statement disclosures with
respect to pension plans and other post-retirement benefit plans.  This
statement is effective for the Company's fiscal year ended March 31, 1999.  The
Company expects that this statement will not have a material impact on the
consolidated financial statements.

ITEM 7a.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Not applicable.



                                      31
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Public Accountants
Consolidated Balance Sheets as of March 31, 1997 and 1998
Consolidated Statements of Operations for the Years Ended March 31, 1996, 1997
  and 1998
Consolidated Statements of Shareholders' Equity for the Years Ended March 31,
  1996, 1997 and 1998
Consolidated Statements of Cash Flows for the Years Ended March 31, 1996, 1997
  and 1998
Notes to Consolidated Financial Statements










                                      32
<PAGE>


To the Shareholders of
Total Control Products, Inc.:

We have audited the accompanying consolidated balance sheets of Total Control
Products, Inc. (an Illinois Corporation) and Subsidiaries as of March 31, 1997
and 1998 and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the three years in the period ended March 31,
1998.  These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.

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

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




/s/ Arthur Andersen LLP
-----------------------
ARTHUR ANDERSEN LLP

Chicago, Illinois
May 8, 1998









                                      33

<PAGE>


                    TOTAL CONTROL PRODUCTS, INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                               MARCH 31, 1997 AND 1998



<TABLE>
<CAPTION>

                   A  S  S  E  T  S                                  1997                1998
                   ----------------                                  ----                ----
<S>                                                              <C>                 <C>
CURRENT ASSETS:
  Cash and cash equivalents                                      $   221,967         $  1,882,735
  Trade receivables, net of allowances of $118,000 and
     $365,000 at March 31, 1997 and 1998, respectively             7,804,823           11,172,301
  Inventory                                                        7,984,041           13,520,537
  Prepaid and deferred expenses-
       Taxes                                                       1,273,696              575,864
       Other                                                         281,280              523,264
                                                             ---------------      ---------------
          Total current assets                                    17,565,807           27,674,701
                                                             ---------------      ---------------
PROPERTY AND EQUIPMENT, net                                        2,393,137            3,885,919

OTHER ASSETS:
  Asset held for sale                                              5,037,139                    -
  Goodwill, net                                                    5,118,212           24,134,357
  Receivables from office                                            191,547            2,285,519
  Other long-term assets                                           1,156,525            2,818,843
                                                             ---------------      ---------------
          Total other assets                                      11,503,423           29,238,719
                                                             ---------------      ---------------
                                                                 $31,462,367          $60,799,339
                                                             ---------------      ---------------
                                                             ---------------      ---------------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements





                                      34
<PAGE>


                TOTAL CONTROL PRODUCTS, INC. AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                         MARCH 31, 1997 AND 1998
                              (Continued)

<TABLE>
<CAPTION>

         LIABILITIES AND SHAREHOLDERS' EQUITY                         1997                 1998
         ------------------------------------                         ----                 ----
<S>                                                             <C>                    <C>
CURRENT LIABILITIES:       
  Current maturities of long-term debt                          $     129,272          $      48,589
  Notes payable-
     Related parties                                                  228,716                      -
     Other                                                            183,577                      -
  Accounts payable                                                  1,962,762              3,661,530
  Accrued expenses-       
     Income taxes                                                      79,483              2,513,956
     Commissions                                                      716,302                693,295
     Payroll                                                          735,271              1,097,314
     Other                                                          1,797,938              2,463,295
  Deferred revenue                                                  1,110,402                997,433
                                                              ---------------        ---------------
          Total current liabilities                                 6,943,723             11,475,412
                                                              ---------------        ---------------


LONG-TERM LIABILITIES:
  Notes payable to bank                                             2,215,229             12,988,616
  Long-term debt, net of current maturities-                           47,711                      -
  Other                                                               827,838                769,119
                                                              ---------------        ---------------
          Total long-term liabilities                               3,090,778             13,757,735
                                                              ---------------        ---------------
       
COMMITMENTS AND CONTINGENCIES (Note 6)

MINORITY INTEREST IN SUBSIDIARY                                     1,521,289              1,141,333


SHAREHOLDERS' EQUITY:
  Common stock, no par value; 22,500,000 shares
   authorized; 6,916,465 and 7,932,185 shares issued and
   outstanding at March 31, 1997 and 1998, respectively            24,613,624             35,053,113

  Class C Exchangeable common stock of subsidiary, no
   par value; unlimited shares authorized; 737,112 shares
   issued and outstanding at March 31, 1997 and 1998                4,641,110              4,641,110

  Accumulated deficit                                              (9,295,658)            (5,228,678)
  Other                                                               (52,499)               (40,686)
                                                              ---------------        ---------------
          Total shareholders' equity                               19,906,577             34,424,859
                                                              ---------------        ---------------
                                                                  $31,462,367            $60,799,339
                                                              ---------------        ---------------
                                                              ---------------        ---------------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements


                                      35
<PAGE>

                TOTAL CONTROL PRODUCTS, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED MARCH 31, 1996, 1997 AND 1998


<TABLE>
<CAPTION>

                                                                 1996                 1997                   1998
                                                                 ----                 ----                   ----
<S>                                                          <C>                   <C>                    <C>
NET SALES                                                    $25,742,519           $40,820,717            $60,642,026

COST OF GOODS SOLD                                            15,369,820            20,663,482             27,846,159
                                                           -------------         -------------          -------------
          Gross profit                                        10,372,699            20,157,235             32,795,867
                                                           -------------         -------------          -------------

OPERATING EXPENSES:
  Sales and marketing                                          4,988,962             9,118,421             13,047,932
  Research and development                                     1,951,515             3,893,155              5,340,714
  General and administrative                                   1,578,607             3,749,021              4,700,221
  Amortization of goodwill                                        23,000               320,000              1,156,316
  Charge for purchased research and development                        -             4,893,000                200,000
  Charge for restructuring                                             -                     -              1,336,812
                                                           -------------         -------------          -------------
          Income (loss) from operations                        1,830,615            (1,816,362)             7,013,872
                                                           -------------         -------------          -------------
OTHER INCOME (EXPENSES):
  Interest, net                                                 (189,864)             (582,911)              (462,887)
  Earnings in foreign joint venture                                    -                79,425                 97,489
  Other income (expense), net                                     21,489               (57,303)               (21,450)
                                                           -------------         -------------          -------------
          Income (loss) before income taxes and minority
            interest                                           1,662,240            (2,377,151)             6,627,024

PROVISION FOR INCOME TAXES                                       665,000             1,040,000              2,940,000
                                                           -------------         -------------          -------------
          Income (loss) before minority interest                 997,240            (3,417,151)             3,687,024

MINORITY INTEREST IN LOSS OF SUBSIDIARY                                -             1,852,711                379,956
                                                           -------------         -------------          -------------
          Net income (loss)                                      997,240            (1,564,440)             4,066,980

ACCRETION TO REDEMPTION VALUE OF COMMON STOCK
                                                              (1,606,204)           (9,061,037)                     -
                                                           -------------         -------------          -------------
          Net income (loss) available to common
            shareholders                                     $  (608,964)          (10,625,477)           $ 4,066,980
                                                           -------------         -------------          -------------
                                                           -------------         -------------          -------------
Basic earnings (loss) per share                              $     (0.13)            $   (2.15)             $    0.55
                                                           -------------         -------------          -------------
                                                           -------------         -------------          -------------
Diluted earnings (loss) per share                            $     (0.13)            $   (2.15)             $    0.49
                                                           -------------         -------------          -------------
                                                           -------------         -------------          -------------
WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT
  SHARES OUTSTANDING
Basic shares                                                   4,647,896             4,947,323              7,389,697
Plus dilutive effect of stock options and Class C
  Exchangeable common stock of subsidiary                             -                      -                947,412
                                                           -------------         -------------          -------------
Diluted shares                                                 4,647,896             4,947,323              8,337,109
                                                           -------------         -------------          -------------
                                                           -------------         -------------          -------------
</TABLE>

The accompanying notes are an integral part of these consolidated 
financial statements.

                                      36
<PAGE>
<TABLE>
<CAPTION>

                                                TOTAL CONTROL PRODUCTS, INC. AND SUBSIDIARIES

                                               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                                              FOR THE YEARS ENDED MARCH 31, 1996, 1997 AND 1998





                                                 Class C
                                              Exchangeable
                                              Common Stock
                                             of Subsidiary,             Common Stock,
                                              No Par Value              No Par Value,
                                            Unlimited Shares          22,500,000 Shares
                                               Authorized                Authorized
                                            --------------------  ------------------------                                 Total
                                             Shares                  Shares                   Accumulated              Shareholders'
                                             Issued       Cost       Issued        Cost          Deficit       Other       Equity
                                             -------   ----------   ---------   -----------   ------------   ---------  -----------
<S>                                           <C>      <C>          <C>         <C>           <C>            <C>         <C>
BALANCE, March 31, 1995                          -     $   -        3,167,421    $  515,093   $ 1,938,783    $   -       $2,453,876
    Net income for the year                      -         -            -            -            997,240        -          997,240
    Accretion of redeemable common stock         -         -            -            -         (1,606,204)       -       (1,606,204)
    Foreign currency translation loss            -         -            -            -             -         (1,442)         (1,442)
                                             -------   ----------   ---------   -----------   ------------   ---------  -----------
BALANCE, March 31, 1996                          -         -        3,167,421       515,093     1,329,819    (1,442)      1,843,470

    Net loss for the year                        -         -            -            -         (1,564,440)       -       (1,564,440)
    Accretion of redeemable common stock         -         -            -            -         (9,061,037)       -       (9,061,037)
    Foreign currency translation loss            -         -            -            -              -       (51,057)        (51,057)
    Issuance of common stock related to
     option exercise                             -         -           29,148        29,148         -            -           29,148
    Issuance of common stock related to
     the conversion of subordinated
     debentures and payment of interest          -         -          435,238       440,000         -            -          440,000
    Issuance of common stock related to
     initial public offering                     -         -        1,650,000    10,998,589         -            -       10,998,589
    Conversion of redeemable common stock    767,112    4,830,000   1,604,658    12,441,904         -            -       17,271,904
    Conversion of Class C Exchangeable
     common stock of subsidiary to
     common stock                            (30,000)    (188,890)     30,000       188,890         -            -           -
                                             -------   ----------   ---------   -----------   ------------   ---------  -----------

BALANCE, March 31, 1997                      737,112    4,641,110   6,916,465    24,613,624    (9,295,658)    (52,499)   19,906,577

    Net income for the year                      -         -            -            -          4,066,980        -        4,066,980
    Foreign currency translation gain            -         -            -            -              -          25,579        25,579
    Unrealized devaluation of investment
     in marketable securities                    -         -            -            -              -         (13,766)      (13,766)
    Issuance of common stock related to
     purchases of assets of Computer
     Dynamics and SensorPulse                    -         -          973,706    10,322,187         -            -       10,322,187
    Issuance of common stock related to
     option exercises and employee stock
     purchase plan                               -         -           42,014       117,302         -            -          117,302
                                             -------   ----------   ---------   -----------   ------------   ---------  -----------
BALANCE, March 31, 1998                      737,112   $4,641,110   7,932,185   $35,053,113   $(5,228,678)   $(40,686)  $34,424,859
                                             -------   ----------   ---------   -----------   ------------   ---------  -----------

                The accompanying notes are an integral part of these consolidated financial statements.

                                                                37
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                         TOTAL CONTROL PRODUCTS, INC. AND SUBSIDIARIES
                                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       FOR THE YEARS ENDED MARCH 31, 1996, 1997 AND 1998


                                                                               1996                  1997                  1998
                                                                            ----------        -------------           ------------
<S>                                                                         <C>               <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss) for the year                                           $  997,240        $  (1,564,440)          $  4,066,980
   Adjustments to reconcile net income (loss) to net cash (used
    in) provided by operating activities-
     Minority interest in loss of subsidiary                                         -           (1,852,711)              (379,956)
     Charge for purchased research and development                                   -            4,893,000                200,000
     Depreciation and amortization                                             288,585              931,358              2,285,842
     Earnings in foreign joint venture                                               -              (79,425)               (97,489)
     Provision (credit) for deferred income taxes                              (34,000)              37,237               (324,000)
     (Gain) loss on sale of property and equipment                             (11,515)                   -                 (3,421)
     Changes in operating assets and liabilities-
       Trade receivables                                                    (1,365,948)          (1,260,582)            (1,864,098)
       Inventory                                                              (195,952)          (2,425,732)                (1,541)
       Prepaid expenses and other assets                                       (78,717)              51,051                642,215
       Accounts payable, accrued expenses and other liabilities                (10,628)          (1,007,418)             1,849,277
       Deferred revenue                                                              -              165,068                101,133
                                                                            ----------        -------------           ------------
         Net cash (used in) provided by operating activities                  (410,935)          (2,112,594)             6,474,942
                                                                            ----------        -------------           ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Cash paid for businesses acquired, net                                     (792,350)          (5,725,788)           (14,328,581)
   Investment in foreign joint venture                                        (243,353)                   -                      -
   Purchases of property and equipment                                        (851,985)            (700,554)            (1,561,234)
   Purchases of other assets                                                   (52,512)             (14,000)              (659,133)
   Proceeds from asset disposals                                                15,616               23,866              2,150,499
   Increase in receivables from officers                                       (14,492)             (13,621)               (93,972)
   Investment in marketable securities                                               -                    -               (242,729)
                                                                            ----------        -------------           ------------
         Net cash used in investing activities                              (1,939,076)          (6,430,097)           (14,735,150)
                                                                            ----------        -------------           ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net increase (decrease) in notes payable to bank                          2,336,073           (3,722,582)             6,564,743
   Proceeds from issuance of debt                                                    -            3,000,000              4,242,729
   Payments of debt                                                            (28,520)          (6,091,638)              (574,772)
   Proceeds from sale of common stock of subsidiary                                  -            4,000,000                      -
   Proceeds from sale of common stock, net of offering costs                         -           11,559,820               (311,724)
   paid
                                                                            ----------        -------------           ------------
         Net cash provided by financing activities                           2,307,553            8,745,600              9,920,976
                                                                            ----------        -------------           ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                               (42,458)             202,909              1,660,768

CASH AND CASH EQUIVALENTS, beginning of year                                    61,516               19,058                221,967
                                                                            ----------        -------------           ------------
CASH AND CASH EQUIVALENTS, end of year                                     $    19,058         $    221,967          $   1,882,735
                                                                            ----------        -------------           ------------
                                                                            ----------        -------------           ------------
SUPPLEMENTAL DISCLOSURE:
   Cash paid during the period for-
     Income taxes                                                         $    873,140         $    597,200          $   1,370,000
     Interest                                                                  201,259              844,200                613,300
                                                                            ----------        -------------           ------------
                                                                            ----------        -------------           ------------
NONCASH INVESTING AND FINANCING ACTIVITIES:
   Issuance of common stock related to businesses acquired                $    500,010              $     -          $  10,322,000
   Note receivable from shareholder in connection with disposal
     of asset held for sale                                                          -                    -              2,000,000
   Conversion of subordinated debentures into 407,239 shares of
     common stock                                                                    -              300,000                      -
   Issuance of 767,112 shares of Class C Exchangeable common
     stock of subsidiary and $2.2 million note in connection with
     the acquisition of Taylor                                                       -            6,850,000                      -
                                                                            ----------        -------------           ------------
                                                                            ----------        -------------           ------------

               The accompanying notes are an integral part of these consolidated financial statements.

                                                                38
</TABLE>
<PAGE>


                    TOTAL CONTROL PRODUCTS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


     (a)  DESCRIPTION OF BUSINESS

          Total Control Products, Inc., an Illinois corporation, together with
          its wholly-owned subsidiaries and its majority-owned subsidiary
          (collectively the "Company"), designs, develops and markets products
          and technology for the control segment of the industrial automation
          marketplace.


     (b)  PRINCIPLES OF CONSOLIDATION

          The consolidated financial statements include the accounts of Total
          Control Products, Inc. and its wholly-owned subsidiary, Tara Products,
          Inc. d/b/a Total Control - Cincinnati, an Illinois corporation, since
          its acquisition on January 29, 1996; its majority-owned subsidiary,
          Taylor Industrial Software, Inc., an Alberta corporation ("Taylor"),
          since its acquisition on September 26, 1996; its wholly-owned
          subsidiaries Computer Dynamics, Inc. and Computer Dynamics Holding
          Company (together "Computer Dynamics" or "CDI"), Illinois
          corporations, d/b/a Computer Dynamics, Inc., since their acquisition
          on October 5, 1997 and its wholly-owned subsidiary SensorPulse Corp.
          ("SensorPulse" or "SPC"), an Illinois corporation, since its
          acquisition on December 31, 1997. In connection with the Taylor
          transaction, the Company sold 39% of the Taylor Class A Shares to
          Digital Electronics Corporation ("Digital Electronics") located in
          Osaka, Japan, which is the Company's largest supplier (see Note 10),
          for an aggregate purchase price of $4.0 million.  Under the terms of
          the purchase agreement (see Note 2), the minority interest ownership
          percentage decreased to 38.5% effective October 1, 1997.  As a result,
          minority interest for 38.5% to 39% of the net income or loss of Taylor
          was recorded in the Company's statement of operations.  The Company's
          ownership may be further increased by up to 2% effective October 1,
          1998 based on the amount of contingent consideration paid by the
          Company related to the Taylor transaction in the future.  All
          intercompany items and transactions have been eliminated in
          consolidation.  Effective March 31, 1998, the Company terminated its
          wholly-owned subsidiary, Tara Products, Inc., and merged that entity
          into Total Control Products, Inc.

          Additionally, the Company accounts for its 40% ownership interest in a
          foreign joint venture on the equity method.

                                          39
<PAGE>


     (c)  REVENUE RECOGNITION

          Net sales include revenues from operator interface and industrial
          computer products, software license fees, software maintenance and
          services. Revenue from product sales and software licenses are
          recognized upon shipment of the product to customers, provided that
          there are no significant obligations remaining and collectibility of
          the revenue is probable. The Company provides for estimated product
          returns upon shipment of the products. Revenue from software
          maintenance contracts is recognized ratably as it is earned over the
          term of the contract, generally one year. Unearned software
          maintenance revenue is included in deferred revenue.  Service revenue
          is recognized as the service is provided.  The Company recognizes
          revenue from software license fees, services and maintenance in
          accordance with the provisions of the American Institute of Certified
          Public Accountants, Statement of Position NO. 97-2 (SOP 97-2),
          SOFTWARE REVENUE RECOGNITION.


     (d)  CASH AND CASH EQUIVALENTS

          Cash and cash equivalents include all highly liquid investments (with
          original maturities of three months or less), principally time
          deposits and other short term securities which are stated at cost,
          which approximates fair value.

     (e)  TRADE RECEIVABLES

          The following summarizes trade receivables allowance activity for
          fiscal 1996, 1997 and 1998:

<TABLE>
<CAPTION>

                                                                    Amount
                                                                -------------
<S>                                                             <C>
          March 31, 1995                                          $   38,000
          Increase to operating expense                               58,842
          Charge to allowance                                        (56,842)
                                                                  ----------
          March 31, 1996                                              40,000
          Reserve related to acquired entity                          41,000
          Increase to operating expense                               68,758
          Charge to allowance                                        (31,758)
                                                                  ----------
          March 31, 1997                                             118,000
          Reserve related to acquired entities                       244,660
          Increase to operating expense                              138,211
          Charge to allowance, net of recoveries                    (135,871)
                                                                  ----------
          March 31, 1998                                          $  365,000
                                                                  ----------
                                                                  ----------

</TABLE>

     (f)  INVENTORY

          Inventory is stated at the lower of first-in, first-out cost or
          market. Inventory at March 31, 1997 and 1998 consisted of the
          following:

<TABLE>
<CAPTION>

                                                            MARCH 31,
                                                   ---------------------------
                                                      1997             1998
                                                   ----------      -----------
          <S>                                      <C>             <C>
          Raw materials                            $2,674,668      $ 5,803,680
          Work in process and finished goods        5,309,373        7,716,857
                                                   ----------      -----------
          Inventory                                $7,984,041      $13,520,537
                                                   ----------      -----------
                                                   ----------      -----------

</TABLE>
                                          40
<PAGE>

     (g)  PROPERTY AND EQUIPMENT

          Property and equipment are as follows:

<TABLE>
<CAPTION>

                                                      March 31,
                                              --------------------------
                                                  1997           1998
                                              -----------    -----------
     <S>                                      <C>            <C>
     Machinery and equipment                  $ 2,807,209    $ 4,867,263
     Furniture and fixtures                       286,288        394,007
     Leasehold improvements                       161,755        204,139
                                              -----------    -----------
                                                3,255,252      5,465,409
     Less - Accumulated depreciation
      and amortization                           (862,115)    (1,579,490)
                                              -----------    -----------
     Property and equipment,net               $ 2,393,137    $ 3,885,919
                                              -----------    -----------
                                              -----------    -----------

</TABLE>

          Expenditures for maintenance and repairs are expensed as incurred.
          Property and equipment are stated at cost and are depreciated using
          the straight-line method over their estimated useful lives as follows:

<TABLE>
<CAPTION>

          Asset Description                           Useful Life
          -----------------                           -----------
          <S>                                         <C>
          Machinery and equipment                      3-10 Years
          Furniture and fixtures                       5-10 Years
          Leasehold improvements              Shorter of asset life or
                                                     life of lease
</TABLE>

     (h)  INTANGIBLE ASSETS

          Intangible assets relating to acquired businesses consist primarily of
          the cost of purchased businesses in excess of the fair  value of net
          assets acquired ("goodwill").  Such goodwill is being amortized on a
          straight-line basis over periods ranging from seven to seventeen
          years.  The accumulated amortization of intangible assets amounted to
          $343,000 and $1.7 million as of March 31, 1997 and 1998, respectively.

          The Company reviews goodwill for impairment whenever events or changes
          in circumstances indicate that its carrying amount may not be
          recoverable.  To date, no such events or changes in circumstances have
          occurred.  If such events or changes in circumstances occur, the
          Company will recognize an impairment loss if the undiscounted future
          cash flows expected to be generated by the acquired business are less
          than the carrying value of the related goodwill.  The impairment loss
          in such circumstances would adjust the goodwill to its fair value.

     (i)  FOREIGN CURRENCY TRANSLATION ADJUSTMENTS

          The Company follows the translation principles established by
          Statement of Financial Accounting Standards ("SFAS") No. 52, "Foreign
          Currency Translation".  The net assets of the Company's majority-owned
          subsidiary and the Company's investment in its foreign joint venture
          are translated at the exchange rate in effect at the end of the
          periods presented.  The revenues and expenses of the Company's
          majority-owned subsidiary and the Company's ownership percentage of
          the


                                          41
<PAGE>

          foreign joint venture's net income are translated at the average rates
          in effect during the period. The Company's foreign joint venture had
          no significant activity for the year ended March 31, 1996.  Included
          in other income is the Company's 40% share of the earnings of the
          foreign joint venture for the years ended March 31, 1997 and 1998 of
          $79,425 and $97,489, respectively.  See Note 6 for a discussion of the
          Company's policy regarding certain foreign currency hedging
          transactions.

     (j)  RESEARCH AND DEVELOPMENT

          The Company records its software development costs in accordance with
          SFAS No. 86.  Accordingly, these costs are expensed until the
          technological feasibility of the software has been established.
          Thereafter, all significant software development costs are capitalized
          until the product is available for general release to customers.
          Subsequently, these costs are reported at the lower of unamortized
          cost or net realizable value.  As a result of market and other
          business conditions, the time between establishment of technological
          feasibility and general release is not significant.  Accordingly, the
          Company has not capitalized any internal software development costs
          during this time.

     (k)  INCOME TAXES

          The Company accounts for income taxes under the provisions of SFAS
          No. 109, "Accounting for Income Taxes."  Deferred taxes are determined
          based on the estimated future tax effects of differences between the
          financial statement and tax basis of assets and liabilities under the
          provisions of the enacted tax laws.

     (l)  MANAGEMENT'S USE OF ESTIMATES

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

     (m)  FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK

          The carrying value for current assets and current liabilities
          reasonably approximates fair value due to the short maturity of these
          items.  Since the Company's receivables from officers and long-term
          debt are not publicly quoted, fair value estimates are based on each
          obligation's characteristics, including remaining maturities, interest
          rate, credit rating, collateral, amortization schedule and liquidity.
          The carrying amounts for receivables from officers, long-term debt and
          notes payable to bank approximate fair value principally due to the
          Company's variable interest rates on the underlying obligations.


                                          42
<PAGE>

          Included in other assets is approximately $250,000 of marketable
          equity securities in a related party (see Note 10), all of which are
          classified as available-for-sale as defined by Statement of Financial
          Accounting Standards No. 115.  As such, these securities are stated at
          market value, based on the available quoted market prices and the
          unrealized gains and losses on such securities are reflected, net of
          tax, as a component of shareholders' equity.

          Financial instruments that potentially subject the Company to
          concentration of credit risk consist principally of cash investments
          and trade receivables.  The Company has cash investment policies that
          limit cash investments to short-term low risk investments.  With
          respect to trade receivables, the Company grants unsecured credit to
          its customers.  In doing so, the Company performs ongoing credit
          evaluations of its customers' financial condition. A substantial
          portion of accounts receivable are from customers located throughout
          the United States. One customer accounted for approximately 10% of the
          Company's net sales for the year ended March 31, 1996.  No customer
          accounted for 10% or greater of Company sales for fiscal years 1997
          and 1998. Additionally, the Company establishes accounts receivable
          allowances based upon factors relating to the credit risk of specific
          customers, historical trends and other information.

          A significant portion of the Company's raw material purchases are
          transacted in Japanese Yen (see Notes 6 and 10).

     (n)  ACCRETION TO REDEMPTION VALUE OF COMMON STOCK

          Accretion to redemption value of redeemable common stock represents
          the change in redemption value of outstanding redeemable common stock
          in each period. The redmemption values for certain common shares have
          been based upon (i) fair market values of the class of stock or (ii)
          fixed amounts. Although management did not obtain an appraisal of the
          fair market value of the Common Stock of the Company, certain equity
          transactions occurred upon which management based its estimate of the
          potential redemption value of the aforementioned shares.  The
          estimated redemption values per share for the shares with redemption
          values equal to fair market value, were $0.83/share, $1.00/share and
          $2.33/share at March 31 1994, 1995 and 1996, respectively and
          $9.00/share at December 31, 1996.  As the redemption features for
          these shares of common stock terminated automatically upon the
          completion of the Company's initial public offering on March 10, 1997,
          no further accretion was required after December 31, 1996.  (See Note
          7).

     (o)  STOCK SPLIT

          In December 1996, the Company's Board of Directors declared a
          three-for-one split of the Company's Common Stock, which has been
          retroactively reflected in the accompanying consolidated


                                          43
<PAGE>

          financial statements.  In December 1996, Taylor's Board of Directors
          declared a three-for-one split of Taylor's Class C Exchangeable Common
          Stock, which has been retroactively reflected in the accompanying
          consolidated financial statements.

     (p)  NET INCOME (LOSS) PER SHARE AVAILABLE TO COMMON SHAREHOLDERS

          The Company adopted Statement of Financial Accounting Standards No.
          128, ("SFAS 128") "Earnings Per Share" during the fiscal year ended
          March 31, 1998.  In accordance with SFAS 128, all previously presented
          earnings per share information has been calculated under the
          provisions of SFAS 128.  Due to the nature of the Company's capital
          structure, there was no difference between diluted earnings per share
          calculated under SFAS 128 and earnings per share previously reported.

          Basic earnings per share has been computed by dividing net income by
          the weighted average number of common shares outstanding.

          Diluted earnings per share has been computed by dividing net income by
          the weighted average number of common and equivalent shares
          outstanding.  Common stock equivalents included in the computation
          represent shares issuable upon exercise of stock options or warrants
          which would have a dilutive effect in periods where there are
          earnings.  Common stock equivalents also include the Class C
          Exchangeable shares of Taylor, as they are convertible on a
          one-for-one basis for common stock of the Company at any time at the
          option of the holder.  Common stock equivalents were anti-dilutive for
          the fiscal years ended March 31, 1996 and 1997.

2.   CORPORATE DEVELOPMENT

     On January 29, 1996, Total Control Products, Inc. acquired 100% of the
     outstanding common stock of Cincinnati Dynacomp, Inc. ("Cincinnati"), a
     manufacturer and distributor of text based operator interface products, for
     $499,990 and 150,003 shares of the Company's Common Stock (which was
     assigned a fair value of $500,010) and merged Cincinnati into its
     wholly-owned subsidiary.  To the extent calendar year 1998, 1999 and 2000
     sales of the Company exceed approximately $32.0 million in any of those
     years, the former majority shareholder of Cincinnati receives 1.25% of such
     excess of which 50% shall be paid in cash and 50% shall be paid in shares
     of the Company valued at their then fair market value, with the agreement
     providing the Company a buy-out option related to this contingent
     consideration ranging from $1.0 million to $2.0 million depending on the
     timing of such prepayment.  All contingent consideration is due 90 days
     after the respective calendar years on which such consideration was based.

     This acquisition was accounted for under the purchase method.  Accordingly,
     the purchase price was allocated to the net assets acquired based on their
     estimated fair values.  This treatment resulted in approximately $1.98
     million of cost in excess of net


                                          44
<PAGE>

     assets acquired at the date of acquisition.  In fiscal 1997, goodwill
     increased by approximately $970,000, primarily as a result of the Company
     revising its estimate of the costs to exit the Cincinnati facility in
     connection with the Company's integration plan established at the
     acquisition date. Such excess (which will increase for any future
     contingent consideration paid) is being amortized on a straight-line basis
     over 15 years.  Cincinnati's results of operations have been included in
     the consolidated results of operations since the date of acquisition.

     In fiscal 1996, the Company made an investment in a foreign joint venture,
     which distributes industrial automation tools, including the Company's
     products.  The Company owns 40% of this joint venture, which is located in
     the Netherlands and sells products throughout Europe, with the remaining
     60% owned by the Company's largest vendor (see Notes 6 and 10) and the
     distributor of this vendor's product (see Note 6).  This investment is
     accounted for under the equity method.


     On September 19, 1996 the Company entered into an agreement to acquire a
     controlling interest in Taylor, a developer and marketer of industrial
     automation software products located in Edmonton, Alberta.  The transaction
     was consummated on September 26, 1996 and the results of operations have
     been included since that date. In exchange for 100% of the outstanding
     voting shares of common stock of Taylor, the Company paid $7,389,817, which
     included $2.2 million in the form of a note payable to the former principal
     shareholder and 767,112 shares of Class C Exchangeable common stock of
     Taylor (convertible into 767,112 shares of the Company's Common Stock; see
     Note 7 for a description of the features of the stock).  A $4.65 million
     value was assigned to the 767,112 shares of Class C Exchangeable common
     stock based on management's estimate of fair value, primarily based on the
     present value of the potential redemption of the security as well as recent
     equity transactions.  Under the terms of the Taylor acquisition, the
     Company may become obligated to make payments of contingent consideration
     based on future revenues of Taylor.  The first contingent payment period
     ended on September 30, 1997, for which the Company paid contingent
     consideration of approximately $1.1 million.  The Company recorded this
     contingent consideration obligation as additional goodwill at September 30,
     1997 and this goodwill is being amortized over the remaining useful life of
     the goodwill of six years from the date recorded.  To the extent the
     revenues of Taylor exceed $8.0 million in the 12 month period ended
     September 30, 1998, the Taylor shareholders will receive $1.0 million due
     90 days after that 12 month period. Additionally, the Taylor shareholders
     will receive cash consideration in the amount of 50% of the revenue of
     Taylor in excess of $10.6 million for the 12 month period ended September
     30, 1998, with the cumulative contingent consideration capped at $3.0
     million.  The Company also incurred approximately $600,000 in direct
     expenses related to the acquisition.  The acquisition was accounted for
     using the purchase method.  Accordingly, the purchase price was allocated
     to assets acquired based on their estimated fair values.


                                          45
<PAGE>

     In connection with the transaction, the Company sold 39% of the Class A
     voting shares of Taylor for $4.0 million to Digital Electronics. The $4.0
     million investment in Taylor by Digital was greater than 39% of the equity
     of the subsidiary, and this difference of approximately $600,000 was
     reflected as a reduction of goodwill to properly reflect the Company's cost
     of the Taylor acquisition.  To the extent the contingent consideration
     described in the paragraph above is earned, the Company is required to
     contribute as equity into Taylor a portion of the earnout payment and
     receive additional equity interest in Taylor  up to a maximum of 4% based
     on a formula outlined in a shareholder agreement between the Company and
     Digital.  In connection with this provision, the Company's ownership
     interest in Taylor increased from 61% to 61.5% effective September 30,
     1998.  A maximum of 2% additional equity interest is still contingent based
     upon the earn-out payment which may be due from the Company for the twelve
     month period ending September 30, 1998.

     In connection with the acquisition of Taylor, the Company engaged a broker
     to commence the sale of one of the developed software product lines
     acquired.  On September 26, 1997, Taylor completed the sale of its TESS
     software product line operation (which had previously been classified as
     "asset held for sale") to an entity principally owned by Neil R. Taylor
     ("Mr. Taylor").  Mr. Taylor, the former principal shareholder of Taylor, a
     member of the Company's board of directors.  The sale price was
     approximately $4 million.

     In connection with the transaction, the Company loaned Mr. Taylor $2
     million pursuant to a promissory note dated September 25, 1997.  The note
     bears interest at 8% per annum, due annually, and is payable in five equal
     annual installments beginning on September 25, 1999 and ending on September
     25, 2003. The note is secured by 250,000 shares of Class C Exchangeable
     common stock of Taylor currently held by Mr. Taylor.  As a result of this
     transaction, the purchase price associated with the Taylor acquisition was
     re-allocated.  The carrying value of the goodwill previously recorded by
     the Company related to the Taylor acquisition increased by approximately
     $2.5 million, which related to the after tax difference between the
     estimated sales price of the TESS product line, previously recorded as an
     asset held for sale, and the actual sales price.  This additional goodwill
     will be amortized over the remaining useful life of the goodwill of six
     years from the date of the transaction.

     Purchased research and development expense and other related acquisition
     expenses relating to the acquisition of Taylor totaled $4.9 million and was
     charged to expense at the acquisition date in September, 1996.  Of this
     expense, approximately $4.7 million was allocated to incomplete research
     and development that had not yet reached technological feasibility and did
     not have a future alternative use, and therefore was charged to expense at
     the acquisition date.  The amount allocated to the purchased incomplete
     research and development projects represents the estimated fair value
     related to those projects determined by an independent appraisal.  Proven
     valuation procedures and techniques were utilized in determining the fair
     market value of each intangible asset.   The


                                          46
<PAGE>

     purchased research and development projects were individually identified
     and were valued based on estimates of discounted future income.
     Consideration was given to the stage of development, the time and resources
     required for completion, as well as the market potential and associated
     risks. To bring these projects to technological feasibility, high-risk
     developmental and testing issues needed to be resolved, which required
     substantial additional effort and testing.

     The remaining excess purchase price over the estimated fair value of
     identified net assets (which will increase for any future contingent
     consideration) of approximately $2.5 million was assigned to goodwill and
     is being amortized over 7 years.

     On October 5, 1997, the Company acquired substantially all of the assets of
     CDI, a South Carolina corporation, and certain other related entities
     pursuant to the terms of an Asset Purchase Agreement dated October 5, 1997.
     The consideration paid by the Company in connection with the purchase of
     CDI, which was accounted for as a purchase, consisted of approximately
     $12.3 million in cash, 932,039 shares of common stock of the Company and a
     warrant to purchase 100,000 shares of common stock of the Company.  The
     warrant is immediately exercisable at a price of $12.875 per share and
     shall remain outstanding for a period of ten years.  The excess of purchase
     price over the fair value of identified net assets acquired of
     approximately $15.6 million has been recorded as goodwill and is being
     amortized over seventeen years from the date of acquisition based upon
     independent appraisal.

     Additionally, subject to certain adjustments, for five years after the
     closing, the Company shall pay CDI an annual payment ranging from $0 to
     $3.0 million for each year in which the year over year earnings of the
     acquired company exceed 110% to 125% of the base earnings for each period.
     Each such payment shall be made 50% in cash and 50% in common stock of the
     Company; provided however, that not more than 347,961 shares may be issued
     in connection with the payment of such consideration, and once such number
     of shares have been issued, all remaining payments shall be made in cash.
     Each of the common shares shall be valued based on their then fair market
     value at the end of each earn out period.  Future payments of contingent
     consideration, if any, will be recorded as additional goodwill and will be
     amortized over the remaining goodwill amortization period.


     On December 31, 1997, the Company acquired substantially all of the assets
     of SensorPulse, a designer and developer of industrial signal conditioning
     products and networked input/output (I/O) devices located in South Easton,
     Massachusetts, for 41,667 shares of common stock of the Company and $1.25
     million in cash in a transaction that was accounted for as a purchase.  At
     the date of acquisition, the Company recorded a charge related to the
     purchase of incomplete research and development of $200,000 ($120,000 net
     of related tax benefit).  The amount allocated to the purchased incomplete
     research and development projects represents the estimated fair value
     related to those projects determined by independent appraisal.  Proven


                                          47
<PAGE>

     valuation procedures and techniques were utilized in determining the fair
     market value of each intangible asset.  The purchased research and
     development projects were individually identified and were valued based on
     estimates of discounted future income.  Consideration was given to the
     stage of development, the time and resources required for completion, as
     well as the market potential and associated risks.  To bring these projects
     to technological feasibility, high-risk developmental and testing issues
     needed to be resolved, which required substantial additional effort and
     testing.

     The excess purchase price over the fair value of identified net assets
     (which will increase for any future contingent consideration) of
     approximately $975,000 was assigned to goodwill and is being amortized over
     fifteen years.

     Additionally, the purchase agreement provides for a four year annual
     earn-out payment to the former shareholders of SensorPulse based upon the
     year over year growth in SensorPulse's earnings before taxes multiplied by:
     three in calendar year 1998; two and three quarters in calendar year 1999;
     two in calendar year 2000; and one and one-half in calendar year 2001, with
     maximum aggregate payments of $23.25 million.  Such earn-out shall be
     payable 50% in cash and 50% in common stock of the Company at its then fair
     market value.

     The following unaudited pro forma results of operations data for fiscal
     1996, 1997 and 1998 assume the Cincinnati acquisition and the Taylor
     acquisition occurred as of April 1, 1995 and the CDI and SPC acquisitions
     occurred as of April 1, 1996 (in thousands except per share amounts):


                                       48
<PAGE>

<TABLE>
<CAPTION>


                                                                  Year Ended March 31,
                                                   -------------------------------------------
                                                       1996             1997          1998
                                                   -----------     ------------    -----------
                                                   (Unaudited)      (Unaudited)    (Unaudited)
     <S>                                           <C>             <C>             <C>
     Net sales                                     $   39,553      $    59,645     $   69,852
     Net income (loss)                                    325              551          3,839
     Net income (loss) available
       to common shareholders                          (1,281)          (8,510)         3,839

     Basic net income (loss) per common
       share                                       $    (0.28)     $     (1.44)    $     0.49
                                                   -----------     ------------    -----------
                                                   -----------     ------------    -----------

     Diluted net income (loss) per common
       share                                       $    (0.28)     $     (1.44)    $     0.43
                                                   -----------     ------------    -----------
                                                   -----------     ------------    -----------

</TABLE>


3.   CHARGE FOR RESTRUCTURING

     During the fourth quarter of fiscal year 1998, the Company's board approved
     a restructuring plan, for which the Company recognized a $1.3 million
     pre-tax charge to earnings.  The restructuring charge is the result of a
     reorganization of the Company's management structure and sales channel
     primarily driven by the expansion of the Company's product offerings in
     connection with the acquisitions of Computer Dynamics in October 1997 and
     SensorPulse in December 1997.  This restructuring charge included the
     recognition of involuntary termination provisions for certain management
     employees of approximately $944,000.  All of the planned employee
     terminations occurred by March 31, 1998.  Additionally, included in the
     restructuring charge were termination costs related to certain
     manufacturer's representatives of $155,000 and a charge for exit costs of
     $238,000, primarily made up of the remaining non-cancelable lease
     obligation for office space and related utilities.

     During fiscal year ended 1998, approximately $249,000 was paid related to
     the restructuring charge, resulting in $618,000 and $470,000 recorded in
     accrued other in current liabilities and other long-term liabilities,
     respectively, on the accompanying March 31, 1998 balance sheet.


4.   INCOME TAXES

     The components of the provision for income taxes for fiscal 1996, 1997 and
     1998 are as follows:

<TABLE>
<CAPTION>


                                                         YEAR ENDED MARCH 31,
                                             -------------------------------------------
      CURRENT PAYABLE:                         1996             1997             1998
                                             --------       ----------       ----------
      <S>                                    <C>            <C>              <C>
           U.S. Federal                      $556,000       $  395,000       $3,059,000
           State                              143,000           94,000          627,000
           Foreign                               -                 -           (422,000)
                                             --------       ----------       ----------
           Total current payable              699,000          489,000        3,264,000
                                             --------       ----------       ----------
      DEFERRED:
           U.S. Federal                       (28,000)         391,000         (159,000)
           State                               (6,000)          93,000          (36,000)
           Foreign                                -             67,000         (129,000)
                                             --------       ----------       ----------
           Total deferred                     (34,000)         551,000         (324,000)
                                             --------       ----------       ----------
           Total provision                   $665,000       $1,040,000       $2,940,000
                                             --------       ----------       ----------
                                             --------       ----------       ----------

</TABLE>

                                          49
<PAGE>

The provision for income taxes differs from the amounts which would result by
applying the applicable Federal income tax rate before income taxes for fiscal
1996, 1997 and 1998 and are reconciled as follows:

<TABLE>
<CAPTION>



                                                            YEAR ENDED MARCH 31,
                                                -------------------------------------------
                                                    1996             1997            1998
                                                -----------      ----------      ----------
     <S>                                        <C>              <C>             <C>
     Provision for (benefit from) income
       taxes computed at Federal statutory
       rate                                     $   565,162      $ (808,231)     $2,253,188
     State income taxes, net of Federal
       tax benefit                                   83,112        (118,858)        331,351
     Permanent differences:
       Charge for purchased
         research and development                       -         1,833,000            -
       Nondeductible goodwill                           -           124,455         371,024
         amortization
       Nontaxable earnings in foreign
         joint venture                                  -           (30,976)        (38,021)
       Other                                         16,726          40,610          22,458
                                                -----------      ----------      ----------
                                                $   665,000      $1,040,000      $2,940,000
                                                -----------      ----------      ----------
                                                -----------      ----------      ----------

</TABLE>


     In conjunction with the Company's acquisition of Cincinnati, the Company
     acquired net deferred tax assets of $795,000.  A portion of the acquired
     deferred tax assets relates to net operating loss carry forwards ("NOLs")
     of approximately $430,000, which begin to expire in 2006. These NOLs will
     be limited to approximately $56,000 per year, and, at such level, it is
     management's opinion that these NOLs will not expire without being fully
     utilized.

     Components of the net deferred income tax assets which are included in
     current deferred tax assets and other long term assets on the accompanying
     consolidated balance sheets, at March 31, 1997 and 1998 are as follows:

<TABLE>
<CAPTION>

                                                              MARCH 31,
                                                     -------------------------
                                                          1997          1998
                                                     ----------     ----------
     Cumulative temporary differences:

        <S>                                           <C>            <C>
        Net operating loss carry forward from
          acquired entities                           $ 286,510      $  167,115
        Accrued expenses                                650,996       1,000,992
        Inventory, primarily reserves                   250,939         728,031
        Accounts receivable                             133,645       (140,750)
        Deferred compensation                            17,186            -
    Depreciation                                        (16,682)        19,462
    Basis difference in intangibles                       5,915        102,198
    Tax credits                                         104,609         40,000
                                                     ----------     ----------
        Total deferred income tax asset              $1,433,118     $1,917,048
                                                     ----------     ----------
                                                     ----------     ----------
</TABLE>

     Generally, undistributed earnings of foreign subsidiaries will not be
     subject to U.S. tax until distributed as dividends.  Since the earnings
     have been or are intended to be indefinitely reinvested in foreign
     operations, no provision has been made for any U.S. taxes on the Company's
     portion of undistributed earnings.  Furthermore, any taxes paid to foreign
     goverments on those earnings may be used, in whole or in part, as credits
     against U.S. tax on any dividends distributed from such earnings.  The
     Company's share of cumulative undistributed earnings of its foreign joint
     venture recorded as of


                                          50
<PAGE>

     March 31, 1997 and 1998 is approximately $79,000 and $176,000,
     respectively.  There were no undistributed earnings from the Company's
     foreign subsidiary.

     Because management believes that the deferred tax asset will be fully
     realized based on current estimates of future taxable income, future
     reversals of existing taxable temporary differences or available tax
     planning strategies, no valuation allowance has been recorded against the
     deferred tax asset.


5.   NOTES PAYABLE TO BANK

          At March 31, 1997, the Company had a revolving line-of-credit
          agreement with a bank which allowed for borrowings up to $9.0 million
          (approximately $7.03 million was available at March 31, 1997) based on
          85% of eligible accounts receivable and 50% of eligible inventory up
          to a maximum of $4.5 million as specified in the agreement.  Interest
          was at LIBOR plus 1.5% or prime, at the Company's option, and was due
          monthly.  In September 1997, the Company amended this line of credit
          agreement with its bank.  The amended line of credit agreement allows
          for borrowings of up to $18.0 million (approximately $7.9 million was
          available at March 31, 1998), subject to borrowing base restrictions
          consistent with the previous agreement, with interest at prime (8.5%
          at March 31, 1998) or varying based on certain financial ratios from
          LIBOR plus 1.5% to LIBOR plus 2% (effectively 7.49% at March 31,
          1998), at the Company's option, payable monthly.  The weighted average
          interest on all short-term borrowing at March 31, 1998 was 7.6%.
          Additionally, the Company entered into a $4.0 million term note with
          its bank ($3.75 million outstanding at March 31, 1998).  Interest is
          calculated at the bank's prime rate (8.5% at March 31, 1998) and is
          payable monthly.  Principal of $250,000 is payable quarterly beginning
          March 31, 1998, and commencing September 30, 1998, all cash flow in
          excess of the debt service coverage, as defined, shall be applied to
          pay down the outstanding principal balance on the note.  As the
          principal due over the next twelve months can be paid with available
          funds from the Company's long-term line of credit, the total amount of
          the term note has been reflected as long-term in the accompanying
          consolidated financial statements.  The note is secured by
          substantially all of the Company's assets.  The amended line of credit
          agreement and term note expire July 31, 1999.

          The Company also has a term note for 32,300,000 Japanese Yen ($242,729
          translated at March 31, 1998) with this bank.  This note is bears
          interest at 2.87%.  Principal and interest are due July 31, 1999.

          Additionally, in conjunction with the acquisition of Taylor the
          Company entered into a line-of-credit agreement with a bank allowing
          for borrowings up to $1.0 million (approximately $494,000 available at
          March 31, 1998) based on 80% of eligible


                                          51
<PAGE>

          accounts receivable of its majority-owned subsidiary.  This revolving
          credit line expires July 31, 1999 and bears interest at prime (8.5% at
          March 31, 1998) which is due monthly.  All amounts under this line are
          secured by the general assets of the Company's majority-owned
          subsidiary.

          All amounts outstanding under these agreements are secured by
          inventory, receivables and all other general assets of the Company.
          Among other things, the agreements require compliance with specific
          financial covenants related to tangible net worth and debt to tangible
          net worth ratio.  As of March 31, 1998, the Company was in compliance
          with these covenants.


6.   COMMITMENTS AND CONTINGENCIES

     The Company has an operating lease for an office and manufacturing facility
     with a partnership owned by the principal shareholder and a
     shareholder/officer.  Monthly rental payments of $12,000 plus property
     taxes, insurance and utilities are due through April 2002, with provisions
     for rent increases tied to increases in the consumer price index.


     The Company also has an operating lease with a limited liability
     corporation controlled by an officer for an office and manufacturing
     facility.  Monthly rental payments of $33,542 plus property taxes,
     insurance and utilities are due through September 2002.  These payments
     were offset during the period from the acquisition of CDI to March 31, 1998
     by sublease income of approximately $64,000 which was offset against the
     related rent expense in the accompanying consolidated financial statements.
     The sublease arrangement expires February 28, 2001 and is cancellable at
     the Company's option upon sixty day notice.  The current sublease
     arrangement calls for the Company to receive $8,667 monthly.

     The Company leases various other office space and office equipment under
     operating leases that expire in various years through 2000. Rent expense
     for fiscal 1996, 1997 and 1998 was approximately $243,000, $588,000 and
     $740,000, respectively. Included in the table below on a net basis is
     sublease income of approximately $131,000 for fiscal 1999, $104,000 for
     fiscal 2000 and $95,000 for fiscal 2001 for a portion of the Greenville
     facility and for two office locations that were leased by Cincinnati.

     Minimum future lease payments under noncancelable operating leases as of
     March 31, 1998 are as follows:

<TABLE>
<CAPTION>

                      Fiscal Year                       Amount
                      -----------                       -------
                      <S>                            <C>
                         1999                        $1,067,229
                         2000                           822,764
                         2001                           627,255
                         2002                           598,537
                         2003                           237,102
                                                     ----------
                                                     $3,352,887
                                                     ----------
                                                     ----------

</TABLE>

                                          52
<PAGE>

     Certain officers and employees of the Company have employment contracts
     through calendar year 2001. The Company's total obligation under these
     contracts in the event of termination without cause as of March 31, 1998
     was approximately $1,920,000.

     Under the terms of various agreements, the  Company is obligated to pay
     royalties on product sales at rates from 3.5% to 5.0%.  The Company has
     made certain advance payments in respect of future royalties.  Prepaid
     royalties are amortized to earnings based on actual sales over the term of
     the applicable royalty agreement.

     To manage its foreign currency risk related to its purchases of inventory
     from a Japanese vendor (see Note 10), the Company hedges firm inventory
     purchase commitments by entering into forward contracts to purchase
     Japanese Yen, as well as call options.  This hedging minimizes the impact
     of foreign exchange rate movements on the Company's operating results.
     Gains and losses on the hedge positions are deferred and included as a
     component of the transaction when it is completed for forward contracts.
     The cost of call options is amortized over the option period.  At March 31,
     1998, the Company had outstanding forward contracts for the purchase of
     Japanese Yen through July 29,1998 of approximately $4.0 million and call
     option unamortized premiums of $30,724 for the purchase of $1,500,000 of
     Japanese Yen through June 26, 1998 to hedge equivalent outstanding
     commitments transacted in Yen.

     The holders of certain shares of common stock have certain rights to cause
     the Company to register those shares under the Securities Act of 1933, as
     amended (the "Securities Act").  By separate agreements, these registration
     rights apply to holders of 1,804,767 shares of Common Stock of the Company
     and the 737,112 shares issuable to the former shareholder of Taylor upon
     the conversion of Taylor Class C Exchangeable common stock (collectively,
     the "Rights Holders").  All of such registration rights agreements provide
     that the Rights Holders' registration rights are subject to certain notice
     requirements and to the condition that, in the case of any piggyback
     registration rights, the underwriters of any offering have the right to
     limit the number of shares included in such registration.  The Company has
     agreed to bear the expenses of all registrations under these registration
     rights agreements, except for underwriting discounts, selling commissions
     and underwriters' expense allowances, which are to be paid by the
     respective rights holders.  Additionally, 973,706 shares of common stock
     have certain piggyback registration rights.

     In 1996, a former distributor of Cincinnati initiated litigation against
     one of its customers.  The customer then filed a counterclaim against the
     former distributor alleging that the equipment contained defects and
     seeking damages.  On February 14, 1997, the former distributor filed a
     third party complaint against Tara, the Company's wholly-owned subsidiary
     which is the successor to Cincinnati, seeking indemnification from Tara for
     damages resulting from any product defects.  This suit was filed in the New
     York Supreme Court for Monroe County.  On May 23, 1997, the New York
     Supreme Court for


                                          53
<PAGE>

     Monroe County dismissed the former distributor's third-party complaint
     against Tara without prejudice on the grounds that under a distribution
     agreement between the former distributor and Tara's predecessor, any
     litigation between the two companies must be brought in the Court of Common
     Pleas for Claremont County, Ohio.  The former distributor may still seek
     indemnification from Tara in Ohio.  While the Company has not conducted any
     formal investigation or taken any discovery, it believes that Tara would
     have a meritorious defense to such an action.

     On May 7, 1997, the customer of the former distributor ("End User") filed a
     complaint against the Company and Tara in the Supreme Court for Monroe
     County, alleging substantially the same facts against those defendants as
     it did against the former distributor in the counterclaim.  In response to
     End User's complaint, the Company filed a motion for summary judgement
     which was granted in part and denied in part.  With respect to such matters
     that it was unsuccessful, the Company filed a response on January 19, 1998.
     Again, while this action is in the preliminary stages and no formal
     discovery has been initiated, the Company believes that it and the other
     defendants have meritorious defenses, and the Company intends to vigorously
     defend this action.  There can be no assurance, however, that the
     defendants will prevail in this action.  If the defendants do not prevail,
     or if they settle the action, the Company could be required to make
     payments to End User.  The Company does not, however, believe that any such
     payments, if required to be made, would have a material adverse effect on
     the Company's financial condition or results of operations.

     The Company is not involved in any other material legal proceedings.



                                          54
<PAGE>

7.   COMMON STOCK RIGHTS

     In previous years, the Company issued shares of Common Stock and the Class
     C Exchangeable shares of Taylor with the right to put the shares to the
     Company at fair market value, as defined in the agreements.  These put
     rights automatically terminated upon the closing of the Company's initial
     public offering in March 1997.

     In connection with the acquisition of Taylor, a portion of the
     consideration exchanged by the Company was 767,112 shares of Class C
     Exchangeable common stock of Taylor to the former holders of the voting
     common stock of Taylor.  This common stock is convertible at the holders'
     option into shares of the Company's Common Stock on a one to one basis.
     This Class C Exchangeable common stock has no rights in the assets or
     earnings of Taylor, has no voting rights and does not have the right to the
     dividends of the Taylor Class A common stock outstanding.  As a result,
     this stock is not considered minority interest in Taylor; rather the stock
     is treated as an equity security of the Company.

8.   STOCK OPTION PLANS

     The Company has four fixed option plans which reserve shares of common
     stock for issuance to management, employees, directors and advisors of the
     Company.  The Company has adopted the disclosure-only provisions of
     Statement of Financial Accounting Standards No. 123, "Accounting for
     Stock-Based Compensation"("SFAS No. 123".)  Accordingly, no compensation
     cost has been recognized for the stock option plans.  Consistent with the
     provisions of SFAS No. 123, compensation cost for the Company's four stock
     option plans has been determined based on the fair value at the grant date
     for awards.  In fiscal 1996, 1997 and 1998, the Company's pro forma net
     income (loss) and net income (loss) per share using the fair value approach
     provided by SFAS No. 123 would have been as follows:

<TABLE>
<CAPTION>


                                                                                 YEAR ENDED MARCH 31,
----------------------------------------------------------------------------------------------------------------------
                                                                          1996               1997              1998
----------------------------------------------------------------------------------------------------------------------
     <S>                                                           <C>                <C>                <C>
     Net income (loss) available to shareholders - as reported     $   (608,964)      $ (10,625,477)     $  4,066,980
     Net income (loss) available to shareholders - pro forma           (612,936)        (10,759,889)        3,814,359
     Diluted earnings (loss) per share - as reported                      (0.11)              (1.83)             0.49
     Diluted earnings (loss) per share - pro forma                        (0.11)              (1.86)             0.46
----------------------------------------------------------------------------------------------------------------------

</TABLE>


     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes option-pricing model with the following weighted average
     assumptions for grants during fiscal 1996, 1997 and 1998: dividend yield of
     0%; expected volatility of 60% in 1996 and


                                          55
<PAGE>

     1997 and 100% in 1998; risk-free interest rate of 6% in 1996 and 1997 and
     5% in 1998; and expected lives of 3 years.

     (a)  1993 STOCK OPTION PLAN

          The Company's 1993 Stock Option Plan (the "1993 Plan") provides for
          the grant of common stock options.

          Under the 1993 Plan, incentive stock options ("ISOs") may be granted
          to any officer or employee of the Company.  Nonqualified stock options
          may be granted to any officer, employee, consultant, director or other
          agent of the Company.  In the case of ISOs, the exercise price paid
          shall be at least 100% (110% in certain cases) of the fair market
          value of the Common Stock on the date of grant.  Options become
          exerciseable generally over three years or as determined by the Board.
          Certain acceleration provisions exist related to a change in control
          of the Company.  In December 1996, the Board determined that no
          additional options will be granted under this plan.

     (b)  1996 STOCK OPTION PLAN

          In December 1996, the Company adopted the 1996 Stock Option Plan under
          which options may be granted to purchase up to 550,000 shares of
          Common Stock to management, employees and advisors of the Company.
          This Plan provides for the grant of ISOs and non-qualified stock
          options.  Options become exerciseable generally over three years or as
          determined by the Board.  Certain acceleration provisions exist
          related to a change in control of the Company.

          The following summarizes option activity related to the 1993 and 1996
          Stock Option plans:

<TABLE>
<CAPTION>



                                                  1993 Option Plan                             1996 Option Plan
                                   --------------------------------------------    -----------------------------------------
                                                                   Weighted Avg                                 Weighted Avg
                                   Shares       Exercise Price      Exercise $     Shares      Exercise Price   Exercise $
                                   -------      --------------      ----------     ------      --------------   ------------
   Outstanding at
   March 31, 1995                  143,316      $0.83 - 1.00        $     0.88        -        $      -         $    -
         Granted                    70,800       2.00 - 3.33              2.34        -               -              -
                                  --------      ------------      ------------     -------     -------------    ----------
   <S>                            <C>           <C>               <C>              <C>         <C>              <C>       
    
   Outstanding at
   March 31, 1996                  214,116       0.83 - 3.33              1.36        -               -              -
         Granted                   111,006       3.33 - 6.66              5.23       297,850             8.00          8.00
         Exercised                 (29,148)             1.00              1.00        -               -              -
         Forfeited                    -               -                  -              (700)            8.00          8.00
                                  --------       -----------      -------------    ----------  -------------    -----------
    Outstanding at
    March 31, 1997                 295,974       0.83 - 6.66              3.04       297,150             8.00          8.00
         Granted                       -              -                  -           269,550     8.00 - 12.00         11.14
         Exercised                 (14,574)             1.00              1.00        (1,999)            8.00          8.00
         Forfeited                 (10,000)             6.66              6.66       (72,752)    8.00 - 12.00          8.34
                                  --------       -----------       ------------      -------     ------------   -----------
    Outstanding at
    March 31, 1998                 271,400      $0.83 - 6.66       $      2.81       491,949    $8.00 - 12.00   $      9.67
                                  --------       -----------       ------------      -------     ------------   -----------
                                  --------       -----------       ------------      -------     ------------   -----------

</TABLE>


     Subject to certain exceptions defined under the stock plans related to an
     employee's death, disability or termination, 

                                          56
<PAGE>

          options expire ten years from the date of grant.  At March 31, 1998,
          options to purchase 308,315 shares were exerciseable.

     (c)  1996 NON-EMPLOYEES DIRECTORS' STOCK OPTION PLAN

          In December 1996, the Company adopted the 1996 Non-Employees
          Directors' Stock Option Plan under which 120,000 shares of Common
          Stock have been authorized for issuance.  All non-employee directors
          receive a stock option to purchase 12,000 shares of Common Stock on
          the day after each annual meeting of shareholders of the Company,
          provided they are then serving as a director of the Company.  All
          grants are non-qualified stock options. Options granted under this
          Plan are exerciseable six months after the date of grant.  No options
          were issued under this plan through March 31, 1997.  In fiscal 1998,
          the Company granted options under this plan to three non-employee
          directors totaling 36,000 shares at a price equal to $8.00 per share
          all of which were exercisable at March 31, 1998.

     (d)  1996 DISCOUNT STOCK PURCHASE PLAN

          In December 1996, the Company adopted the 1996 Discount Stock Purchase
          Plan under which 250,000 shares of Common Stock have been reserved for
          issuance.  Eligible employees of the Company may purchase Common Stock
          of the Company on a quarterly basis.  Eligible employees participate
          in this Plan by authorizing payroll deductions of up to 10% of their
          base compensation.  The purchase price per share is the lesser of (i)
          85% of the fair market value of a share of Common Stock on the date of
          the commencement of the applicable offering period, or (ii) 85% of the
          fair market value of a share of Common Stock on the date of the end of
          such period.  In fiscal 1998, the Company issued 25,441 shares for
          $92,081 under the plan.  There were no issuances under this plan
          during fiscal 1997.

9.   BENEFIT PLANS

     The Company has a 401(k) plan covering all domestic employees of the
     Company. Employees must complete one month of service to participate.
     Employee contributions are supplemented by Company contributions as defined
     in the plan agreement.  Company contributions to the plan totaled
     approximately $29,000, $95,000 and $183,000 for fiscal 1996, 1997 and 1998,
     respectively.  Additionally, the Company can make discretionary
     profit-sharing contributions.  The Company did not make a discretionary
     profit-sharing contribution in fiscal 1996, 1997 or 1998.

     The Canadian employees of the Company's subsidiary, Taylor, may contribute
     on a pre-tax basis to a benefit plan, which does not provide for employer
     sponsored contributions.


                                          57
<PAGE>

10.  SIGNIFICANT VENDOR

     A significant portion of the Company's purchases are made from a related
     party, Digital Electronics.  During fiscal 1996, 1997 and 1998,
     approximately 67%, 56%, and 49%, respectively, of the Company's total raw
     material purchases were made from this vendor. The raw material component
     of cost of sales for fiscal 1996, 1997 and 1998 was approximately 91%, 84%,
     and 85%, respectively.  Additionally, in 1998, the Company's majority-owned
     subsidiary sold approximately $142,000 of software and software related
     services to this vendor.

11.  INITIAL PUBLIC OFFERING

     In December 1996, the Company's Board of Directors authorized an amendment
     to the Company's Articles of Incorporation increasing the number of
     authorized shares of Common Stock to 22,500,000.  The Company completed an
     initial public offering of its common stock on March 10, 1997.  The Company
     issued 1,650,000 shares of common stock for net proceeds of $10,998,589.

12.  UNAUDITED SUBSEQUENT EVENT

     Subsequent to March 31, 1998, the Company acquired substantially all of the
     net operating assets of Deeco Systems, Inc., a designer and manufacturer of
     flat panel factory automation products.  The consideration paid by the
     Company in conjunction with the acquisition consisted of $5.5 million cash
     funded by the Company's existing line of credit facility.  Additionally,
     the Company shall pay an earn-out of up to $2 million if certain financial
     targets are attained for the twelve month period ending January 31, 1999.
     As a result of this transaction, the Company's bank amended the covenants
     related to the Company's existing line of credit agreement (Note 5).  The
     Company was in compliance with these covenants as of the date of
     acquisition.


                                          58
<PAGE>

13.  UNAUDITED SUPPLEMENTAL STATEMENTS OF OPERATIONS DATA

     The following table sets forth certain unaudited consolidated quarterly
     statement of operations data for each of the eight quarters ending with the
     quarter ended March 31, 1998. In the opinion of management, this
     information has been prepared on the same basis as the audited consolidated
     financial statements contained herein and includes all adjustments,
     consisting only of normal recurring adjustments, that the Company considers
     necessary to present fairly this information in accordance with generally
     accepted accounting practices. The Company's operating results for any one
     quarter are not necessarily indicative of the results to be expected for
     any future period.

<TABLE>
<CAPTION>
                                                                             THREE MONTHS ENDED

                                           June 30,   Sept. 30,  Dec. 31,    Mar. 31,    June 30,    Sept. 30,   Dec. 31,   Mar. 31,
     (IN THOUSANDS, EXCEPT PER SHARE        1996        1996        1996        1997        1997        1997        1997       1998
        DATA)
      <S>                               <C>           <C>        <C>         <C>         <C>         <C>         <C>        <C>
      STATEMENT OF OPERATIONS DATA:
      Graphic operator interface            $  6,422    $  5,768    $  6,810   $  7,388  $  8,192    $  8,121    $  7,771  $  8,252
      Industrial computer                        713         640         756        819     1,003         998       6,452     6,138
      Other hardware                           1,459       1,311       1,547      1,203     1,117         808       1,434     1,297
      Software and related                        17          81       1,912      2,148     1,725       1,990       1,462     1,792
      Other                                      466         418         494        449       450         506         585       549
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
        Net sales                              9,077       8,218      11,519     12,007    12,487      12,423      17,704    18,028
      Cost of goods sold                       5,167       4,633       5,398      5,466     5,655       5,255       8,657     8,279
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
      Gross profit                             3,910       3,585       6,121      6,541     6,832       7,168       9,047     9,749
      Operating expenses:
        Sales and marketing                    1,716       1,731       2,737      2,934     3,050       2,959       3,297     3,741
        Research and development                 695         765       1,131      1,302     1,258       1,221       1,436     1,426
        General and administrative               820         798       1,102      1,029     1,102         940       1,276     1,182
        Amortization of goodwill                  33          36         123        128       140         140         530       547
        Charge for purchased research
         and development                           -       4,893          -           -         -           -         200         -
        Charge for restructuring                   -          -           -           -         -           -           -     1,337
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
      Income (loss) from operations              646      (4,638)      1,028      1,148     1,282       1,908       2,308     1,516
      Interest expense and other, net           (103)       (128)       (156)      (174)      (34)         19        (185)     (186)
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
      Income (loss) before income taxes
       and minority interest                     543      (4,766)        872        974     1,248       1,927       2,123     1,330
      Provision for (benefit from)
       income taxes                              218         (26)        407        441       535         837         912       656
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
      Income (loss) before minority
       interest                                  325      (4,740)        465        533       713       1,090       1,211       674
      Minority interest in (income) loss
       of subsidiary                               -       1,835          16          2       136          (2)        131       115
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
      Net income (loss)                          325      (2,905)        481        535       849       1,088       1,342       789
      Accretion to redemption value of
       common stock                           (3,462)     (1,436)     (4,163)         -        -           -           -         -
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
      Net income (loss) available to
       common shareholders                   $(3,137)    $(4,341)    $(3,682)   $   535  $    849      $1,088    $  1,342    $  789
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
     Basic net income (loss) per share
      available to shareholders            $   (0.66)    $ (0.90)    $ (0.76)   $  0.10   $  0.12    $   0.16   $    0.17   $  0.10

                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
     Diluted net income (loss) per
      share available to shareholders        $ (0.66)    $ (0.90)    $ (0.76)   $  0.08   $  0.11    $   0.14   $    0.15   $  0.09
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
     Weighted average number of common
      and common equivalent shares
      outstanding:
          Basic                                4,777       4,840       4,840      5,340     6,916       6,916       7,807     7,926
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
          Diluted                              4,777       4,840       4,840      6,549     7,809       7,878       8,798     8,887
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------
                                           ---------   ---------   ---------   -------- ---------   ---------   ---------   -------

</TABLE>

                                          59
<PAGE>

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

None.

PART III.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth the name, age as of March 31, 1998, and position
of the executive officers and directors of the Company:

<TABLE>
<CAPTION>

NAME                                  AGE    POSITION
<S>                                    <C>   <C>
Nicholas T. Gihl(1)...............    41     Chairman, Chief Executive Officer
                                             and President, Director
Peter A. Nicholson................    34     Senior Vice President and Chief
                                             Financial Officer, Treasurer,
                                             Secretary
Kevin O'Connor....................    38     General Manager - Control Division
Neil R. Taylor(4).................    48     Senior Vice President of Software
                                             Development, Director
Frank Wood........................    50     General Manager - Operator
                                             Interface Division
James Potach......................    36     Senior Vice President of Sales
Kurt S. Priester..................    47     President - Computer Dynamics, Inc. 
Kevin Roach.......................    36     President - SensorPulse, Corp.
Julius J. Sparacino(1)............    60     Director
A.B. Siemer(1)(3).................    60     Director
Edward T. Hurd(2).................    59     Director
Donald J. Kramer(2)(3)............    65     Director

</TABLE>
---------------
 
(1)  Member of the Executive Committee.
(2)  Member of the Compensation Committee.
(3)  Member of the Audit Committee.
(4)  Effective July 1, 1998, Mr. Taylor is resigning as an executive officer. 
     Mr. Taylor will continue as an employee of the Company and serve as a
     consultant to Mr. Gihl on corporate matters.

Mr. Gihl co-founded the Company in 1982, along with Mr. Sparacino, and has
served as President of the Company since April 1994.  From the Company's
founding in 1982 to March 1994, Mr. Gihl served as Executive Vice President. 
Mr. Gihl has served as a director of the Company since the Company's founding. 
Mr. Gihl became Chairman in December 1996.  Prior to co-founding the Company,
from October 1979 to November 1982, Mr. Gihl served in several design
engineering and electronic development positions and as a Design Supervisor at
Mark Controls, a manufacturer of energy management systems.  Mr. Gihl is married
to the daughter of Mr. Sparacino.

Mr. Nicholson has served as Senior Vice President and Chief Financial Officer,
Treasurer and Secretary of the Company since June 1996.  From June 1995 to May
1996, Mr. Nicholson served as Vice President 

                                          60
<PAGE>

of Finance of Mama Tish's Italian Specialties, Inc., a manufacturer and marketer
of frozen dessert products.   From July 1985 to May 1995, Mr. Nicholson was
employed by Arthur Andersen LLP, most recently as a manager in the audit and
business advisory practice area.  Mr. Nicholson is a Certified Public
Accountant.

Mr. O'Connor has served as the General Manager - Control Division since March
1997.  Mr. O'Connor served as the Company's Senior Vice President of Sales from
February 1996 to March 1997. Mr. O'Connor served as the Company's Vice President
of Sales and Marketing from March 1994 to February 1996 and as a regional sales
manager from December 1992 to March 1994.  From August 1983 to December 1992,
Mr.  O'Connor served as a Regional Sales Engineer for McNaughton-McKay Electric
Company, a distributor of industrial automation products.

Mr. Potach has served as Senior Vice President of Sales since March 1997.  He
served as Total Control Products' Vice President of North American Sales from
January 1997 to March 1997 and as the Southeast Regional Sales Manager from
February 1992 to January of 1997.  From February 1988 to February 1992, he
served as a Systems Sales Engineer for PC Design Inc., a factory automation
systems integrator.  He also served as a Sales Engineer for the Allen Bradley
Company from June 1984 to February 1988.

Mr. Priester founded Computer Dynamics, Inc., a manufacturer of flat panel
display systems and board-level computer products, in 1981.  Following Computer
Dynamics' acquisition by Total Control Products in October 1997, Mr. Priester
has remained as Computer Dynamics' President.

Mr. Roach has served as President of SensorPulse since it's acquisition by Total
Control Products in December of 1997.  Mr. Roach founded SensorPulse Corp. in
December of 1989 and served as President and CEO.  From October 1982 to November
1989, Mr. Roach served as Director of Automation for TW Kutter, Inc., a
manufacturer and marketer of automated packaging, assembly and food processing
systems.

Mr. Taylor has served as Senior Vice President of Software Development and a
director of the Company since the consummation of the Taylor Transaction in
September 1996.  Mr. Taylor founded Taylor, a developer and marketer of
industrial automation software products, in 1979.   Mr. Taylor served as the
Chairman of the Board of Taylor from inception to September 1996, and President
of Taylor from inception to September 1991.  Mr. Taylor is resigning as an
executive officer of the Company effective July 1, 1998, but will continue as an
employee and serve as a consultant on corporate matters and as well as a
director.

Mr. Wood has served as General Manager - Operator Interface Division since March
1997.  Mr. Wood served as Senior Vice President of Product Development and
Marketing of the Company from February 1996 to March 1997.  From September 1995
to February 1996, and May 1993 to July 1993, Mr. Wood served as a consultant in
the industrial automation market.  From August 1993 to September 1995, Mr. Wood
served as Vice President of Sales and Marketing of Promise Systems Corp., a
developer and marketer of manufacturing execution systems software.  From
October 1988 to April 1993, Mr. Wood served as Vice President of Marketing for
AEG Modicon, Inc., a developer, manufacturer and marketer of programmable logic
controllers and other industrial automation products.

                                          61
<PAGE>

Mr. Sparacino co-founded the Company in 1982 and has served as a director since
that time.  Mr. Sparacino served as the Chairman from 1982 to December 1996. 
From 1982 to April 1994, Mr. Sparacino served as President of the Company.

Mr. Siemer has served as a director of the Company since December 1993. Mr.
Siemer has been the President of Desco Corporation, an industrial and
manufacturing holding company, for over thirty years.

Mr. Hurd became a director in March 1997.  From 1990 to February 1995, Mr. Hurd
was President of Industrial Control, a division of Honeywell Inc., a worldwide
supplier of automation and control products, systems and services, and served as
Executive Vice President of Honeywell Inc. from February 1995 to April 1996. 
Mr. Hurd has been an independent consultant since April 1996.  Mr. Hurd is also
the Chairman of the Board of Moore Products Co., a manufacturer of industrial
products for the process control industry.

Mr. Kramer became a director in March 1997.  From January 1990 to March 1996,
Mr. Kramer was a Special Limited Partner of TA Associates, a venture capital
investing firm, and was a general partner of TA Associates for the five years
preceding January 1990.  Since March 1996, Mr. Kramer has been a private
investor. Mr. Kramer is also a director of Robotic Vision Systems, Inc., a
designer, manufacturer and installer of machine vision-based products, and Micro
Component Technology, Inc., a supplier of semi-conductor handling equipment.

Executive officers of the Company are appointed by the Board of Directors and
serve, subject to their removal or resignation, until their successors have been
duly elected and qualified.

EMPLOYMENT AGREEMENTS

The Company entered into written employment agreements with Mr. Gihl on 
December 19, 1996, with Mr. Nicholson effective June 1, 1996, with Mr. Taylor 
as of September 19, 1996 , with Mr.  Wood effective February 9, 1996, with 
Mr. Priester effective October 5, 1997 and with Mr. Roach effective January 
1, 1998. The employment agreement for Mr. Wood provides for an initial term 
of one year, while the initial term under Mr. Gihl's employment agreement is 
approximately 54 weeks, the initial employment term for each of Mr. Taylor, 
Mr. Priester and Mr. Roach is three years and Mr. Nicholson's initial 
employment term under his employment agreement is nineteen months.  After the 
expiration of the initial term, the employment agreements automatically renew 
for successive one year periods unless either party delivers written notice 
of its desire to terminate the agreement at least 90 days prior to the 
expiration of the term.  The base salaries for Messrs. Gihl, Nicholson, 
Taylor, Priester and Wood under their respective employment agreements is 
$200,000,  $125,000, $125,000, $125,000, and $125,000, respectively.  The 
base salary for Mr. Roach under his employment agreement is $90,000 for 
calendar year 1998, $110,000 for calendar year 1999 and $125,000 for calendar 
year 2000.

Each of the employment agreements contains a noncompetition covenant whereby the
employee agrees that for a period lasting from the date of the agreement to one
year after the termination of his employment with the Company (Mr. Taylor's
extends for two years from the date of termination), he will not engage in any
business that competes with the Company anywhere in the United States.  In
addition, each employee has agreed to be bound by the terms of a confidentiality
provision requiring the employee to hold the Company's confidential information
in the strictest confidence for the longest period permitted by law.  Under the
terms of these agreements, the employee's employment with the Company may be
terminated prior to the expiration of the term for "cause," as defined in the
agreements.  In the event of termination for cause or if the employee 

                                          62
<PAGE>

voluntarily terminates his employment, the Company's obligations under the 
agreement cease and the employee forfeits all his rights to receive any 
compensation or benefits, except for salary and benefits for services already 
performed as of the date of termination.  In addition, if the Company 
terminates an employee's employment under certain circumstances the Company 
must pay the employee designated severance amounts.   In particular, in the 
event the Company terminates Mr. Gihl's employment for any reason other than 
death, disability or cause, including the decision not to renew the term of 
his employment agreement, Mr. Gihl will be entitled to receive in one lump 
sum payment an amount equal to two years compensation, based upon his highest 
monthly salary during the twelve months immediately preceding the 
termination, plus two times the bonus paid Mr. Gihl for the most recent 
fiscal year.  In addition, all of Mr. Gihl's unvested stock options shall 
vest and become immediately exerciseable and the Company shall continue his 
medical insurance benefits for a period of two years.  Under the terms of Mr. 
Taylor's employment agreement, if Mr. Taylor's employment is terminated by 
the Company for any reason other than death, disability or cause, Mr. Taylor 
shall be entitled to receive his salary for the longer of the remainder of 
the employment term, or twelve months from the date of termination. In the 
event the Company terminates Mr. Wood's employment for any reason other than 
death, disability or cause, including the decision not to renew the term of 
his employment agreement, the Company shall pay Mr. Wood his base salary for 
a period of one year following such termination and will continue his medical 
insurance benefits during such period to the extent Mr. Wood is not entitled 
to receive similar benefits from a subsequent employer.  If the Company 
terminates Mr. Nicholson's employment for any reason other than cause, death, 
disability or within one year after certain circumstances defined as a 
"change of control," but including upon the decision of the Company not to 
renew the term of Mr. Nicholson's employment, the Company shall pay Mr. 
Nicholson in one lump sum an amount equal to six times the greater of his 
monthly salary as of the date of termination or his highest monthly salary 
during the prior twelve month period and continue Mr. Nicholson's medical 
insurance benefits during such six month period to the extent Mr. Nicholson 
is not entitled to receive similar benefits from a subsequent employer.  
Finally, if the Company terminates Mr. Priester's or Mr. Roach's employment  
pursuant to the terms of his respective employment agreement for any reason 
other than death, disability or cause, then the Company will pay such officer 
all unpaid salary through the remainder of his employment term in accordance 
with the Company's practices for salaried employees.  In addition to the 
payment of the amounts set forth above, if the Company terminates Mr. 
Nicholson's employment within one year after a change of control (other than 
for cause) or Mr. Nicholson terminates his employment for good reason (as 
defined in such agreement), the Company is obligated to pay Mr. Nicholson in 
one lump sum an additional amount equal to $25,000.  In the case of Messrs. 
Gihl and Nicholson, the employee may also become entitled to severance under 
other designated circumstances involving his decision to terminate his 
employment with the Company.  Effective June 1, 1998, Mr. Nicholson's 
employment agreement was amended, subject to Compensation Committee approval, 
whereby if Mr. Nicholson terminates his employment for good reason or the 
Company terminates Mr. Nicholson's employment within one year after a change 
of control, the Company shall pay Mr. Nicholson in one lump sum an amount 
equal to the sum of twelve times the greater of his monthly salary as of the 
date of termination or his highest monthly salary during the prior twelve 
months, plus $50,000.  In the event of Mr. Nicholson's termination without 
cause, the Company shall pay Mr. Nicholson in one lump sum an amount equal 
to the sum of twelve times the greater of his monthly salary as of the date 
of termination or his highest monthly salary during the prior twelve months.
     
Under the terms of these agreements, the employees are entitled to bonus amounts
based upon the Company meeting certain financial targets.  Mr. Gihl's agreement
provides for a minimum bonus of $5,000 per quarter and Mr.  Wood's agreement
provides for a minimum bonus of $4,000 per quarter. 
               
               
STAGGERED BOARD OF DIRECTORS

Pursuant to the Company's Articles of Incorporation, the Board of Directors is
divided into three classes of directors serving staggered three-year terms.  The
terms of Class I directors (Messrs. Siemer and Taylor) 

                                          63
<PAGE>

expire in 1998; the terms of Class II directors (Messrs. Sparacino and Kramer)
expire in 1999; and the terms of Class III directors (Messrs. Gihl and Hurd)
expire in 2000.  All directors of each class hold their positions until the
annual meeting of shareholders held during the year in which the terms of the
directors in such class expire, or until their respective successors are elected
and qualified. 

COMPENSATION OF DIRECTORS

Non-Employee directors are paid $1,500 for their attendance of each face-to-face
board meeting and $250 for their attendance at any committee meeting of the
board or telephonic board meeting, plus reimbursement for their out of pocket
expenses incurred to attend each committee or board meeting, up to a total
amount not to exceed $10,000 per director per year.  In addition, non-employee
directors participate in the 1996 Non-Employee Directors' Stock Option Plan, and
options to purchase 12,000 shares of the Company's Common Stock were granted to
each non-employee director effective June 1, 1997, and all such options vested
on December 1, 1997.

DIRECTOR COMMITTEES

The Board of Directors has established an Audit Committee, a Compensation
Committee and an Executive Committee.

The functions of the Audit Committee are to recommend annually to the Board of
Directors the appointment of the independent public accountants of the Company,
to discuss and review the scope and the fees of the prospective annual audit and
to review the results thereof with the Company's independent public accountants,
to review and approve non-audit services of the independent public accountants,
to review compliance with existing major accounting and financial policies of
the Company, to review the adequacy of the financial organization of the Company
and to review management's procedures and policies relative to the adequacy of
the Company's internal accounting controls. Messrs. Kramer and Siemer serve on
the Audit Committee.
 
The functions of the Compensation Committee are to review and approve annual
salaries and bonuses for all executive officers, to review, approve and
recommend to the Board of Directors the terms and conditions of all employee
benefit plans or changes thereto and to administer the Company's various stock
plans. Messrs. Hurd and Kramer  serve on the Compensation Committee.
 
The Executive Committee is empowered to act with all authority granted to the
Board of Directors between board meetings, except with respect to those matters
required by Illinois law or by the Company's Bylaws to be subject to the power
and authority of the Board of Directors as a whole. Messrs. Gihl, Siemer and
Sparacino are the current members of the Executive Committee.

                                          64
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION

The following table sets forth a summary of all compensation paid by the Company
for the past three fiscal years to the Company's Chief Executive Officer and the
Company's four most highly compensated executive officers other than the CEO
(the "Named Executive Officers")

<TABLE>
<CAPTION>

                                 ANNUAL COMPENSATION
                                                                     Other
Name and Principal Position          Year     Salary      Bonus  Compensation(1)
---------------------------          ----     ------      -----  ---------------
<S>                                  <C>     <C>         <C>      <C>
Nicholas T. Gihl
     Chairman, President and Chief 
     Executive Officer               1998   $200,000    $75,000     $12,000
                                     1997    193,867     60,000      12,178
                                     1996    130,000         --       8,229
Peter A. Nicholson
     Senior Vice President and Chief
     Financial Officer               1998    125,000     35,000       6,625
                                     1997     91,667    100,000         831
                                     1996         --         --          --
Kevin O'Connor
     General Manager--
     Control Division                1998    125,000     14,500      12,330
                                     1997    110,000     24,750      11,802
                                     1996    101,250     32,375       4,461

Frank Wood
     General Manager-- 
     Operator Interface Division     1998    125,000     16,000       4,260
                                     1997    110,000     24,750       1,489
                                     1996     15,865         --          --
James Potach
     Senior Vice President 
     of Sales                        1998    120,417         --       8,955
                                     1997    100,000     23,536      10,124
                                     1996    100,000     27,387       6,000

</TABLE>

(1)  Other compensation consists of matching contributions under the Company's
     401(k) plan and amounts paid for car allowance.

                                          65
<PAGE>

                         OPTION GRANTS IN LAST FISCAL YEAR
                                 INDIVIDUAL GRANTS

The following table provides certain specified information concerning the grant
of options under  the 1996 Plan during fiscal 1998 to the Named Executive
Officers.


<TABLE>
<CAPTION>

                                        Number        % of Total
                                      Securities       Options
                                      Underlying      Granted to                                               Grant
                                        Options      Employees in                                               Date
 Name                                   Granted       Fiscal Year     Exercise Price         Expiration        Value
 ----                                 -----------    -------------    ---------------        -----------       -----
<S>                                   <C>            <C>              <C>                    <C>               <C>
 Nicholas T. Gihl                           -              0%                -                    -               -


 Peter A. Nicholson                       5,000            2%              $8.00               5/8/07           $8.00


 Kevin O'Connor                           5,000            2%               8.00               5/8/07            8.00


 Frank Wood                               5,000            2%               8.00               5/8/07            8.00


 James Potach                             10,000           4%              10.00               2/2/08           10.00

</TABLE>


                                          
                    OPTION EXERCISES AND FISCAL YEAR-END VALUES

The following stock table provides certain specified information concerning
fiscal year option exercises and unexercised options at March 31, 1998.


<TABLE>
<CAPTION>




                                                                    Number of Securities           Value of Unexercised In-
                                                                   Underlying Unexercised            the-Money Options At
                                                                  Option at March 31, 1998(#)          March 31, 1998($)
                                                                 ------------------------------    -----------------------------
                                   Shares(#) 
                                  Acquired on      Value($) 
 Name                              Exercise        Realized       Exercisable      Unexercisable        Exercisable    Unexercisable
-----                             ---------       ---------       -----------      -------------        -----------    -------------
<S>                              <C>              <C>             <C>              <C>                  <C>            <C>

 Nicholas T. Gihl                    --              --            16,666              33,334            $41,665       $ 83,335


 Peter A. Nicholson                  --              --            10,000              25,000             71,700        155,900


 Frank Wood                          --              --            52,800               5,000            448,800         12,500


 Kevin O'Connor                      --              --            99,594               5,000            963,074         12,500


 James Potach                        --              --             5,666              15,334             32,845         27,675

</TABLE>



                                          66
<PAGE>


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND 
MANAGEMENT

The following table sets forth certain information regarding beneficial
ownership of Common Stock as of June 1, 1998 by (i) each executive officer of
the Company, (ii) each director of the Company and (iii) all executive officers
and directors as a group.  Other than as set forth below, there are no persons
known by the Company to own beneficially more than 5.0% of the outstanding
Common Stock. 

<TABLE>
<CAPTION>

                                       SHARES BENEFICIALLY OWNED AT JUNE 1, 1998

 EXECUTIVE OFFICERS AND DIRECTORS(1)           NUMBER(2)           PERCENT
<S>                                            <C>                 <C>

                                             
 Nicholas T. Gihl   . . . . . . . . . . . . .    664,336(3)          8.2%


 Peter A. Nicholson   . . . . . . . . . . . .     22,299(4)           *


 Kevin O'Connor   . . . . . . . . . . . . . .    101,260             1.3


 Neil R. Taylor   . . . . . . . . . . . . . .    577,085(5)          6.7


 Frank Wood   . . . . . . . . . . . . . . . .     54,466(6)           *


 Julius J. Sparacino  . . . . . . . . . . . .  1,716,721(7)         21.3


 A.B. Siemer  . . . . . . . . . . . . . . . .  1,146,652(10)        14.2


 Kurt Priester  . . . . . . . . . . . . . . .  1,032,039(8)         12.7


 Kevin Roach . . . . . . . . . . . . . . . .         411              *


 James Potach  . . . . . . . . . . . . . . .       5,666(9)           *


 Edward R. Hurd  . . . . . . . . . . . . . .      12,000(10)          *


 Donald J. Kramer  . . . . . . . . . . . . .      12,000(10)          *


 All executive officers and directors
 as a group (12 persons) . . . . . . . . . .   5,344,935(11)        60.3


 Other 5% Holders

 The Capital Group Companies(13) . . . . . .     525,000             6.5

 Digital Electronics
 Corporation(12) . . . . . . . . . . . . . .     398,001             5.0


</TABLE>
-------------------
 * Less than one percent.

                                          67
<PAGE>


(1)  Unless otherwise indicated, address is c/o Total Control Products, Inc.,
     2001  North Janice Avenue, Melrose Park, Illinois 60160.
(2)  Unless otherwise indicated in the footnotes to this table, the Company
     believes the individuals named in this table have sole voting and
     investment power with respect to all shares of Common Stock reflected in
     this table.
(3)  Includes 575,700 shares held directly by Mr. Gihl, 72,000 shares held
     directly by Mr. Gihl's spouse, and 16,666 shares issuable upon the exercise
     of stock options, all of which are currently exercisable.
(4)  Includes 21,666 shares issuable upon the exercise of options, all of which
     are currently exercisable.
(5)  Represents 513,966 shares issuable upon the conversion of Mr. Taylor's
     Taylor Exchangeable Shares, 61,368 shares issuable upon the conversion of
     Taylor Exchangeable Shares owned by Mr. Taylor's spouse and 1,666 shares
     issuable upon the exercise of options, all of which are currently
     exercisable.  Also includes 85 shares of Common Stock owned by 
     Mr. Taylor's son.  Mr. Taylor disclaims beneficial ownership of the 
     shares issuable upon the conversion of Taylor Exchangeable Shares owned 
     by his spouse.
(6)  Represents 54,466 shares issuable upon the exercise of options, all of
     which are currently exercisable.
(7)  Does not include shares owned by Mr. Sparacino's children, all of whom are
     adults who do not reside with Mr. Sparacino. Mr. Sparacino disclaims
     beneficial ownership of all such shares.
(8)  Includes 233,010 shares owned by Mr. Priester's wife.  Mr. Priester is the
     President of the Company's wholly-owned subsidiary, Computer Dynamics, 
     Inc. Includes a warrant to purchase 100,000 shares of Common Stock of the
     Company, exercisable immediately.
(9)  Includes 5,666 shares issuable upon the exercise of options, all of which
     are currently exercisable.
(10) Includes 12,000 shares issuable upon the exercise of options, all of which
     are currently exercisable.
(11) Includes the shares identified in Notes (3) through (10) above.
(12) Includes 18,000 shares owned by Mr. Keizo Wada, the President of Digital
     Electronics Corporation. Digital Electronic's address is 8-2-52
     Nanko-Higashi, Suminoe-ku, Osaka, 559, Japan.
(13) The Capital Group Companies' address is 333 South Hope Street, 52nd 
     Floor, Los Angeles, CA 90071.


SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers, and persons who own more than 10% of a registered class
of the Company's equity securities, to file with the Securities and Exchange
Commission ("SEC") reports of ownership and changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors and
greater-than-10% shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.

Based solely on review of the copies of such reports furnished to the Company or
written representations that no other reports were required, the Company
believes that, during the 1998 fiscal year, all filing requirements applicable
to its officers, directors and greater-than-10% beneficial owners were complied
with, except that Mr. Dennis Marrano, the former Senior Vice President of 
Operations, was late with a single Form 4 filing.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TAYLOR TRANSACTION

In September 1996, the Company completed a series of transactions resulting in
its holding 61.0% of the Class A Shares of Taylor.  In the first step of this
transaction, the Company acquired all of the voting stock of Taylor in exchange
for aggregate consideration of $7.4 million, the right to receive contingent
consideration as described below and 767,112 Taylor Exchangeable Shares.  Of the
$7.4 million, $2.2 million was in the form of a promissory note from Taylor to
Neil R. Taylor, the former majority shareholder of Taylor, which was repaid in
full with a portion of the proceeds of the Company's initial 

                                          68
<PAGE>

public offering, and the remainder was paid in cash at the closing.  The 767,112
Taylor Exchangeable Shares are convertible into 767,112 shares of Common Stock
of the Company at any time at the election of the holders of such shares.

Mr. Taylor and the former shareholders of Taylor also hold certain registration
rights with respect to their shares of Common Stock issuable upon conversion of
their Taylor Exchangeable Shares.

Under the Taylor Transaction, the former shareholders of Taylor are also
entitled to receive certain contingent consideration pursuant to an earn-out
formula.  Under such formula, Taylor paid the former shareholders an aggregate
amount of approximately $1.1 related to the year ended September 30, 1997.  For
the period between October 1, 1997 and September 30, 1998, if Net Revenues
exceed $8.0 million, Taylor will pay to the former shareholders an aggregate
amount equal to $1.0 million, and to the extent that Net Revenues during such
period exceed $10.6 million, the Company will pay to the former shareholders an
aggregate amount, not to exceed $3.0 million, equal to 50.0% of such excess. 
The Company has guaranteed the payment of all amounts of contingent
consideration by Taylor to the former shareholders of Taylor.

Digital Electronics originally loaned the Company an aggregate of $5.0 million
in order to consummate the Taylor Transaction.  Immediately thereafter, $4.0
million of the loan was converted into 3,900 Taylor Class A Shares, representing
39.0% of the aggregate amount of such shares.  The remaining $1.0 million of
indebtedness was repaid in full with a portion of the proceeds from the
Company's initial public offering.

Pursuant to an arrangement with Digital Electronics, the Company agreed that to
the extent Taylor is required to make any payment of contingent consideration to
the former shareholders of Taylor, the Company will transfer funds to Taylor in
an amount equal to such contingent consideration.  To the extent the Company
funds a portion of a contingent payout, the Company is permitted to cause Taylor
to issue additional Taylor Class A Shares to the Company in order to increase
the Company's ownership interest in the outstanding Taylor Class A Shares by the
following percentage:  2.0% multiplied by a fraction, the numerator of which is
the entire contingent consideration payable to the shareholders and the
denominator of which is $4.0 million.  If the entire amount of contingent
consideration is paid to the former Taylor shareholders, Digital Electronics'
ownership interest in Taylor will be decreased to 36.5% and the Company's
interest will be increased to 63.5%.

In connection with the payment of contingent consideration for the period ended
September 30, 1997, the Company's ownership interest in Taylor increased from
61.0% to 61.5% and Digital Electronics ownership percentage decreased from 39.0%
to 38.5%.

TESS TRANSACTION

On September 25, 1997, the Company's majority-owned subsidiary, Taylor
Industrial Software, Inc. completed the sale of its TESS software product line
operation (which had previously been classified as "asset held for sale") to an
entity principally owned by Mr. Taylor.

Mr. Taylor, the former principal shareholder of Taylor, is a member of the
Company's board of directors.  The sale price was approximately $4 million.

                                          69
<PAGE>

In connection with this transaction, the Company loaned Mr. Taylor $2 million
(U.S.) pursuant to a promissory note (the "Taylor Note") dated September 25,
1997.  The Taylor Note bears interest at 8% per annum and is payable in five
equal annual installments beginning on September 25, 1999 and ending on
September 25, 2003.  The Taylor Note is secured by 250,000 Taylor Exchangeable
Shares currently held by Mr. Taylor.

CDI TRANSACTION

On October 5, 1997, the Company acquired substantially all of the assets of 
Computer Dynamics and certain other related entities pursuant to the terms of 
an Asset Purchase Agreement (the "Agreement") dated October 5, 1997 (the "CDI 
Transaction").  The consideration paid by the Company in connection with the 
CDI Transaction consisted of approximately $12.3 million in cash, 932,039 
shares of common stock of the Company and a warrant (the "Warrant") to 
purchase 100,000 shares of common stock of the Company.  The Warrant is 
immediately exercisable at a price of $12.875 per share and shall remain 
outstanding for a period of ten years.

Additionally, subject to certain adjustments, for five years after the 
closing, the Company shall pay CDI an annual payment ranging from $0 to $3.0 
million for each year in which the year over year earnings of the acquired 
company exceed 110% to 125% of the base earnings for each period (each an 
"Earn Out Period"). Each such payment shall be made 50% in cash and 50% in 
common stock of the Company; provided however, that not more than 347,961 
shares may be issued in connection with the payment of such consideration, 
and once such number of shares have been issued, all remaining payments shall 
be made in cash.  The Company intends to seek shareholder approval to amend 
this agreement to remove the limitation of the number of shares that can be 
paid under the CDI Transaction.  Each of the shares of Common Stock shall be 
valued based on their then fair market value at the end of each Earn Out 
Period.

Furthermore, the Company entered into a Registration Rights Agreement with CDI
and its former majority shareholder, Mr. Kurt Priester, pursuant to which the
portion of the shares of common stock of the Company issued to Mr. Priester and
CDI in connection with the Transaction or issued pursuant to the Warrant are
subject to certain piggy-back registration rights.

SENSORPULSE TRANSACTION

On December 31, 1997 the Company acquired substantially all of the assets of 
SensorPulse pursuant to the terms of an Asset Purchase Agreement among 
SensorPulse, Kevin Roach, Charles Harlfinger, and the Company.  Subject to 
certain adjustments, the consideration paid by the Company consisted of 
41,667 shares of Common Stock, approximately $1.25 million in cash and a four 
year earn out based upon income growth in the business conducted by 
SensorPulse prior to the closing.


                                          70
<PAGE>

OTHER RELATED PARTY TRANSACTIONS

The Company is party to a lease agreement, dated March 26, 1992, as amended in
December, 1996, with J&N Partnership, an Illinois general partnership owned by
Messrs. Sparacino and Gihl and Mr. Sparacino's sons and daughter (Mr. Gihl's
spouse), pursuant to which the Company leases its principal 39,000 square foot
office and manufacturing facility located in Melrose Park, Illinois.  Annual
rent under the lease is $144,000 plus property taxes, insurance and utilities,
and the lease terminates in April 2002.  The Company has also agreed pursuant to
the terms of the lease agreement to pay all expenses relating to occupancy and
maintenance of the leased premises.

The Company is party to a lease agreement, dated October 5, 1997, with Pelham
Capital LLC, a limited liability corporation controlled by Kurt Priester, an
officer/shareholder of the Company, pursuant to which the Company leases a
97,000 square foot manufacturing facility for its industrial computer
workstation products located in Greenville, South Carolina.  Annual rent under
the lease is approximately $400,000, plus property taxes, insurance and
utilities, and the lease terminates in September 2002.  The Company currently
subleases 32,000 square feet of this facility to a third party for approximately
$100,000 annually through February 28, 2001.  The Company has the right to
request the sublessee vacate the space upon 60 days notice.

At March 31, 1998, Mr. Gihl, an executive officer and significant shareholder of
the Company, was indebted to the Company in the amount of $203,327 pursuant to
two promissory notes bearing interest at a rate per annum equal to 1.0% above
the prime rate, maturing on December 16, 1998.  Interest is being accrued
quarterly under these notes, and all amounts outstanding under these notes are
secured by a pledge of Mr. Gihl's shares of Common Stock.

The Company purchases all of the flat panel display screens that are the
principal hardware component incorporated in its graphics-based operator
interface product line from Digital Electronics, which owns 380,001 shares of
Common Stock, representing 5.0% of the outstanding Common Stock, and owns 38.5%
of the Taylor Class A Shares.  Keizo Wada, the President and Chairman of Digital
Electronics, owns 18,000 shares of the Common Stock of the Company.  Hardware
purchases by the Company from Digital Electronics totaled $8.8 million, $10.2
million and $14.6 million for fiscal 1996, 1997 and 1998, respectively.  Mr.
Gihl is a member of the Board of Directors of Digital Electronics since June of
1996.  Digital Electronics is permitted to have a representative present at all
regularly scheduled quarterly board meetings of the Company.  Such
representative does not vote, and receives $2,500 for each board meeting
attended plus reimbursement for all out-of-pocket costs and expenses.  The
Company has nominated this representative of Digital Electronics for election to
the Company's Board of Directors for fiscal 1999.

In November 1996, Taylor entered into a two-year consulting agreement with
Digital Electronics whereby Digital Electronics has agreed to provide certain
product development and marketing consulting services to Taylor in exchange for
compensation of $200,000 per year.  This agreement terminates in October 1998.

On September 12, 1997, the Company entered into an Original Equipment
Manufacturer's Purchase Agreement (the "OEM Agreement"), dated as of April 1,
1997, with Digital Electronics, Moritani America, Inc. and Inde Electronics,
Inc.  The Agreement modifies the terms of the Original Equipment Manufacturer's
Purchase Agreement among the same parties dated January 1, 1991.  Pursuant to
the OEM Agreement, Digital Electronics, the Company's principal hardware
supplier, agreed to supply to the Company certain computer hardware products for
market and sale on an exclusive basis in North and

                                          71
<PAGE>


South America.  The Agreement extends the arrangement between the Company and 
Digital Electronics until January 31, 2005.  Effective April 1, 1997, The 
Company and Digital Electronics also entered into an agreement regarding the 
operation and conduct of Taylor's business.

In March 1997, the Company acquired 10,000 shares of the outstanding common
stock of Digital Electronics (1,000 of which the transaction to acquire the
shares closed on April 1, 1998), or 0.17% of the outstanding common stock.  Mr.
Gihl individually owns 10,000 shares of Digital Electronics' common stock, or
0.17% of the outstanding common shares.  The Company has accounted for this
investment using the cost method of accounting and included in the Company's
consolidated balance sheet as of March 31, 1998 is an investment of Digital
Stock of approximately $250,000.

In November 1995, the Company purchased a 40% interest in ProFace, a joint
venture among the Company, Digital Electronics and Moritani America, Inc.
("Moritani America").  Moritani America (which, together with its parent,
Moritani & Co., owns an aggregate of 291,501 shares of the Company's Common
Stock) acts as the import broker of Digital Electronics' products on behalf of
the Company.  ProFace, an industrial automation products distributor located in
the Netherlands, distributes the Company's and Digital Electronics' products in
Europe.  This investment is accounted for by the Company under the equity
method.  ProFace did not have significant operations during fiscal 1996.  For
fiscal 1997 and 1998, respectively, the Company's share of net earnings of the
joint venture was $79,425 and $97,489.

Neil Taylor, a director of the Company, together with his wife, received a $2.2
million note (which was repaid with a portion of the proceeds of the initial
public offering), $3.7 million in cash, 575,334 Taylor Exchangeable Shares and
the right to receive certain contingent consideration in connection with the
Taylor Transaction.  Prior to the Taylor Transaction, Neil Taylor and his wife
loaned Taylor an aggregate of $230,000.  This loan was repaid in full during 
fiscal 1998.

The Company's Board of Directors has adopted a policy that any future
transactions between the Company and its officers, directors, affiliates or
controlling shareholders will be on terms which are considered to be no less
favorable to the Company than those obtainable in arm's length transactions with
unaffiliated third parties and must be approved by a majority of the
disinterested directors.

                                          72
<PAGE>
                                          
                                      PART IV.

ITEM 14.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 
 
(a)  Documents Filed With This Report:

1.   Financial Statements.  The financial statements filed as a part of this
     report are listed in Item 8, "Financial Statements and Supplementary
     Data," herein. 

2.   Financial Statement Schedules.  There are no financial statement schedules
     filed as part of this report, since the required information is included
     in the financial statements, including notes thereto, or the
     circumstances requiring inclusion of such schedules are not present.

3.   Exhibits. See Item (c) below.

(b)  Reports of Form 8-K.

     The Company filed a Current Report on Form 8-K (date of report, August 4,
1997), covering item 5 to report the execution of a letter of intent regarding
the sale of the TESS product line.

     The Company filed a Current Report on Form 8-K (date of report, September
22, 1997), covering item 5 to report the execution of a letter of intent
regarding the CDI transaction.
     
     The Company filed a Current Report on Form 8-K (date of report, September
12, 1997), covering item 5 to report the OEM Agreement with Digital.

     The Company filed a Current Report on Form 8-K (date of report, September
25, 1997), covering item 5 to report the consummation of the sale of the sale of
the TESS product line.

     The Company filed a Current Report on Form 8-K (date of report, October 5,
1997), covering item 2 to report the consummation of the acquisition of CDI.

     The Company filed an Amendment to its Current Report on Form 8-K (date of
report, October 5, 1997), covering item 7 which included audited financial
statements of CDI and unaudited pro forma financial information regarding the
Company and CDI.

     The Company filed a Current Report on Form 8-K (date of report, December
31, 1997), covering item 5 to report the consummation of the acquisition of
certain assets of SensorPulse Corp.

     Subsequent to the end of the period covered by this Report, the Company
filed a Current Report on Form 8-K (date of report, June 8, 1998), covering item
5 to report the consummation of the acquisition of certain assets constituting
the Deeco Systems division of Lucas Automation and Control Engineering, Inc.

(c)  Exhibits

The following exhibits are filed herewith or incorporated by reference as
indicated. Exhibit numbers refer to Item 601 of Regulation S-K. As used in the
list of Exhibits below, "Registrant" and the "Company" refers to Total Control.

                                       73

<PAGE>
<TABLE>
<CAPTION>
                                   Exhibit Index.

Exhibit No.         Description
----------          -----------
<S>            <C>
 * 3.1         Restated and Amended Articles of Incorporation of the Registrant
 
 * 3.2         Amended and Restated By-laws of the Registrant
 
 * 4.1         Articles of Incorporation and By-laws of the Company (included in
               Exhibits 3.1 and 3.2)

 * 4.2         Form of Stock Certificate
 
 * 10.1        1996 Employee Stock Option Plan, as amended
 
 * 10.2        1996 Non-Employee Director Stock Option Plan

 * 10.3        1996 Employee Discount Stock Purchase Plan, as amended
 
 * 10.4        1993 Employee Stock Option Plan, as amended

 * 10.5        Employment Agreement by and between the Company and Nicholas Gihl

 * 10.6        Employment Agreement by and between the Company and Neil R.
               Taylor
 
 * 10.7        Employment Agreement by and between the Company and Frank Wood
 

 * 10.8        Employment Agreement by and between the Company and Peter
               Nicholson

   10.8.1      First Amendment to Employment Agreement by and between the
               Company and Peter Nicholson (Incorporated by reference to Exhibit
               10.11.1 to the Registrant's Annual Report on Form 10-K for the
               fiscal year ended March 31, 1997).

   10.8.2      Second Amendment to Employment Agreement by and between the
               Company and Peter Nicholson 

 * 10.9        Employment Agreement by and between the Company and Dennis
               Marrano
 
 * 10.10       Employment Agreement by and between Tara Products, Inc. and John
               Sheridan, as amended
 
 * 10.11       Loan and Security Agreement by and between the Company and
               American National Bank

   10.11.1     Letter Amendment to Loan and Security Agreement (Incorporated by
               reference to Exhibit 10.11.1 to the Registrant's Annual Report on
               Form 10-K for the fiscal year ended March 31, 1997).

 * 10.12       Promissory Note between American National Bank and Trust Company
               of Chicago and Taylor Industrial Software Inc.
 
                                       74

<PAGE>

 * 10.13       Basic Agreement by and between the Company and Digital
               Electronics Corporation
 
 * 10.14       Development Agreement by and between the Company and Digital
               Electronics Corporation
 
 * 10.15       Consulting Agreement by and between Taylor Industrial Software
               Inc. and Digital Electronics Corporation
 
 * 10.16       Stock Purchase Agreement by and among the Company and the
               stockholders of Taylor Industrial Software Inc.
 
 * 10.17       Exchange Agreement by and among the Company, Taylor Industrial
               Software Inc., Neil R. Taylor, Dennis Radage and Merle Taylor, as
               amended
 
 * 10.18       Support Agreement by and between the Company and Taylor
               Industrial Software Inc.
 
 * 10.19       Merger Agreement by and among Tara Products, Inc., the
               Company, Cincinnati Dynacomp, Inc. and each of the stockholders
               of Cincinnati Dynacomp, Inc.

 * 10.20       Registration Rights Agreement by and between the Company and A.B.
               Siemer.
 
 * 10.21       Registration Rights Agreement by and among the Company, Neil R.
               Taylor, Dennis Radage and Merle Taylor.
 
 * 10.22       Registration Rights Agreement by and between the Company and John
               Sheridan
 
 * 10.23       $111,486.36 Promissory Note of Nicholas Gihl payable to the
               Company

 * 10.26       $35,767.25 Promissory Note of Nicholas Gihl payable to the
               Company
 
 * 10.27       Lease Agreement, by and between First National Bank of La Grange,
               as Trustee u/t/a #3081 and the Company, as extended
 
 * 10.28       Agreement by and between the Company and Digital Electronics
               Corporation

   10.29       Original Equipment Manufacturer's Purchase Agreement dated as of
               April 1, 1997, by and among the Company, Digital Electronics
               Corporation, Moritani America, Inc. and Inde Electronics, Inc.
               (Incorporated by reference to Exhibit 10.1 to the Registrant's
               Current Report on Form 8-K for an Event Dated September 12,
               1997). 

                                       75

<PAGE>

   10.30       Asset Purchase Agreement dated as of August 1, 1997 by and among
               the Registrant, Taylor Industrial Software, Inc., an Alberta
               corporation, Taylor Industrial Software (USA), Inc., a Nevada
               corporation, Taylor Manufacturing Systems, Inc., a Georgia
               corporation and Neil Taylor. (Incorporated by reference to
               Exhibit 10.1 to the Registrant's Current Report on Form 8-K for
               an Event Dated September 25, 1997). 

   10.31       Promissory Notes dated September 25, 1997, executed by Neil
               Taylor.  (Incorporated by reference to Exhibit 10.2 to the
               Registrant's Current Report on Form 8-K for an Event Dated
               September 25, 1997). 

   10.32       Asset Purchase Agreement dated October 5, 1997 by and among the
               Registrant, Kurt Priester, Priester Charitable Remainder
               Unitrust, Priester Foundation, Computer Dynamics, Inc., Computer
               Dynamics Services, Inc., Computer Dynamics Mfg., Inc., Sue
               Priester d/b/a Lines Unlimited, SC Acquisition #1 and SC
               Acquisition #2. (Incorporated by reference to Exhibit 10.1 to the
               Registrant's Current Report on Form 8-K for an Event Dated
               October 5, 1997). 

   10.32       Warrant dated October 5, 1997 by and between the Registrant and
               Kurt Priester. (Incorporated by reference to Exhibit 10.2 to the
               Registrant's Current Report on Form 8-K for an Event Dated
               October 5, 1997). 

   10.33       Registration Rights Agreement dated October 5, 1997 by and among
               the Registrant, Kurt Priester and Computer Dynamics, Inc.  
               (Incorporated by reference to Exhibit 10.3 to the Registrant's
               Current Report on Form 8-K for an Event Dated October 5, 1997). 


   10.34       Employment Agreement dated October 5, 1997 by and between SC
               Acquisition #1, Inc. and Kurt Priester.   (Incorporated by
               reference to Exhibit 10.3 to the Registrant's Current Report on
               Form 8-K for an Event Dated October 5, 1997). 

   10.35       Asset Purchase Agreement dated December 31, 1997 by and among the
               Registrant, SensorPulse Corp., Kevin Roach, Charles Harlfinger
               and SPC Acquisition, Inc.    (Incorporated by reference to
               Exhibit 10.1 to the Registrant's Current Report on Form 8-K for
               an Event Dated December 31, 1997). 

   10.36       Acquisition Agreement dated as of June 8, 1998 by and between VA
               Acquisition Corp., an Illinois corporation, and Lucas Automation
               and Control Engineering, Inc., a Virginia corporation.     
               (Incorporated by reference to Exhibit 10.1 to the Registrant's
               Current Report on Form 8-K for an Event Dated June 8, 1998). 

   10.37       Guaranty Agreement dated as of June 8, 1998 executed by
               Registrant.   (Incorporated by reference to Exhibit 10.2 to the
               Registrant's Current Report on Form 8-K for an Event Dated June
               8, 1998). 

                                       76

<PAGE>

   11.1        Statement regarding computation of per share earnings
 
   21.1        Subsidiaries of the Registrant

   23.1        Consent of Arthur Anderson, LLP, dated June 26, 1998

   27.1        Financial Data Schedule (EDGAR only)
</TABLE>
-----------------------
  *    Incorporated by reference to Total Control's Registration Statement on 
       Form S-1, File No. 333-18539.


                                          77
<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.

                       TOTAL CONTROL PRODUCTS, INC.
                             (Registrant)

                         By:  /s/ Nicholas T. Gihl        
                            -------------------------------------
                            Nicholas T. Gihl
                            Chairman and Chief Executive Officer
                            (Principal Executive Officer)   


                         By: /s/ Peter A. Nicholson
                            -------------------------------------
                            Peter A. Nicholson
                            Senior Vice President and Chief Financial Officer
                            (Principal Accounting and Financial Officer)


Date:    June 26, 1998

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

<TABLE>
<CAPTION>

         Signature            Title                             Date
         ----------           ------                            -----
<S>                           <C>                               <C>
     /s/ Nicholas T. Gihl     Chairman, President, Chief        June 26, 1998
---------------------------   Executive Officer and Director
   Nicholas T. Gihl        
     
    /s/ Neil R. Taylor        Director                          June 26, 1998
---------------------------   
   Neil R. Taylor             

   /s/ Edward Hurd            Director                          June 26, 1998
---------------------------   
    Edward Hurd          

  /s/ Donald Kramer           Director                          June26, 1998
---------------------------   
     Donald Kramer

  /s/ Julius J. Sparacino     Director                          June 26, 1998
---------------------------   
   Julius J. Sparacino   

  /s/ A. B. Siemer            Director                          June 26, 1998
---------------------------   
    A. B. Siemer
</TABLE>

                                          78