SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2002

OR

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

For the transition period from Not Applicable to Not Applicable

Commission file number: 0-147

HICKOK INCORPORATED

(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code: (216) 541-8060

Securities registered pursuant to

Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:

Class A Common Shares, $1.00 par value
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No[ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation 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.[X]

Indicate by check mark whether the registrant is an accelerated filer ( as defined in Exchange Act Rule 12b - 2 ).Yes [ ] No[X]

As of December 16, 2002, the Registrant had 764,884 voting shares of Class A Common Stock outstanding and 454,866 voting shares of Class B Common Stock outstanding. As of such date, non-affiliates held 709,553 shares of Class A Common Stock and 233,098 shares of Class B Common Stock. As of December 13, 2002, based on the closing price of $4.57 per Class A Common Share on the Nasdaq Small Cap Market, the aggregate market value of the Class A Common Stock held by such non-affiliates was approximately $3,242,657. There is no trading market in the shares of Class B Common Stock.

Documents Incorporated by Reference:

Except as otherwise stated, the information contained in this Form 10-K is as of September 30, 2002.

Table of Contents

PART I.

ITEM 1. DESCRIPTION OF BUSINESS
ITEM 2. DESCRIPTION OF PROPERTIES
ITEM 3. LEGAL PROCEEDINGS
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 10. EXECUTIVE OFFICERS OF THE REGISTRANT*

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
ITEM 6. SELECTED FINANCIAL DATA
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
F-1: INDEPENDENT AUDITORS' REPORT
F-2: CONSOLIDATED BALANCE SHEET
F-3: LIABILITIES AND STOCKHOLDERS' EQUITY
F-4: CONSOLIDATED STATEMENT OF INCOME
F-5: CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
F-6: CONSOLIDATED STATEMENT OF CASH FLOWS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3. SHORT-TERM FINANCING
4. LEASES
5. STOCK OPTIONS
6. CAPITAL STOCK, TREASURY STOCK, AND CONTRIBUTED CAPITAL
7. INCOME TAXES
8. EARNINGS PER COMMON SHARE
9. EMPLOYEE BENEFIT PLANS
10. ACQUISITION
11. RESTRUCTURING CHARGE
12. SEGMENT AND RELATED INFORMATION
13. QUARTERLY DATA (UNAUDITED)

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

PART IV.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON REPORT 8-K
SIGNATURES
EXHIBIT INDEX
REPORT OF INDEPENDENT AUDITORS AS TO CONSOLIDATED SCHEDULES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE IX - SHORT-TERM BORROWINGS

PART I

ITEM 1. DESCRIPTION OF BUSINESS

General Development of Business

Hickok Incorporated was organized in 1915 as an Ohio corporation, and first offered its securities to the public in 1959. Except as otherwise stated, the terms "Company" or "Hickok" as used herein mean Hickok Incorporated and its two wholly-owned subsidiaries.

In February 1995 the shareholders approved a change in the Company's name to Hickok Incorporated from The Hickok Electrical Instrument Company. Hickok develops and manufactures products used by companies in the transportation industry. Primary markets served are automotive, aircraft, and locomotive with sales to both original equipment manufacturers (OEM's) and to the automotive aftermarket.

Until the mid 1980's Hickok was known primarily for its ability to develop and manufacture electronic instruments for electronic servicers, precision indicating instruments for aircraft, locomotive, and industrial applications, and electronic teaching systems for vocational schools. For the past seventeen years the Company has used this expertise to develop and manufacture electronic diagnostic tools and equipment used by automotive technicians in the automotive market. This is now the Company's largest business segment.

The Company has made three acquisitions in the last nine fiscal years as part of a strategic program to expand both its customer base and its productline utilizing its existing expertise. A new product family, primarily for theautomotive market, was added in February, 1994 when the Company acquired the fastening systems business from Allen-Bradley Company, Inc. The fastening systems business was fully integrated into Hickok's operations by June 1994. This business provides computerized equipment to control tools that tighten threaded fasteners on cars, trucks, and heavy equipment to enable high quality joint control. Until recently when other customers were added, General Motors was the primary customer for these systems.

In January 1996 the Company added new products and customers within the indicating instrumentation area with the acquisition of the Beacon Gage Division of Maradyne Corporation. Beacon Gage manufactures specialty pressure gauges for railroads and transit cars. The gauge business was fully integrated into Hickok's operations by May 1996.

In February 1998 the Company added new products and customers within the automotive aftermarket with the acquisition of Waekon Industries, a privately owned company in Kirkwood, Pennsylvania. Waekon manufactured a variety of testing equipment used by automotive technicians. The Waekon name is used by the Company as a trademark to market its products to technicians in the automotive aftermarket. For cost reduction purposes the Company closed its manufacturing facility in Kirkwood, Pennsylvania in July 2000 and moved all production of Waekon products to the Company's manufacturing facility in Greenwood, Mississippi. The Company incurred a restructuring charge of $434,015which was recouped by accompanying cost reductions by the end of fiscal 2001.

The Company's operations are currently concentrated in the United States of America. Sales are primarily to domestic customers although the Company also makes sales to international customers through domestically based distribution companies. The Company established select market international service center arrangements during fiscal 1995.

Operating Segment Information

The Company's operations are combined into two reportable business segments: 1) indicators and gauges and 2) automotive diagnostic tools andequipment. Reference is made to "Segment and Related Information" incorporated in the following financial statements.

Indicators and Gauges

For over seventy years the Company has developed and manufactured precision indicating instruments used in aircraft, locomotives and other applications. In recent years the Company has specialized in aircraft and locomotive cockpit instruments. Within the aircraft market, instruments are sold primarily to manufacturers of business and pleasure aircraft. Within the locomotive market, indicators are sold to both original equipment manufacturers and to operators of railroad equipment. The Company added pressure gauges to its offerings to locomotive customers in 1996. Indicators and gauges represented approximately 15% of the Company's sales for fiscal 2002 and for fiscal 2001. A new grouping of products, DIGILOG Instruments, were certified with the FAA during fiscal 2002. The DIGILOG instrument is a customizable indicator that is a combination analog/digital indicator for the aircraft market. It can be adapted to display a wide variety of aircraft parameters. The Company expects these instruments to have broad appeal in the aircraft retrofit market, a new market for the Company.

Automotive Diagnostic Tools and Equipment

In the mid 1980's the Company began to concentrate on designing and marketing instruments used to diagnose automotive electronic systems. These products were initially sold to Ford Motor Company but are now sold both to Ford and to the aftermarket using jobbers,wholesalers and mobile distributors. The Company increased its aftermarket business with the acquisition, in February 1998, of Waekon Industries, a manufacturer of a variety of testing equipment used by automotive technicians. Leveraging on this acquisition, the Company has designed and introduced a number of new products that increased product offerings in the Waekon product line significantly. The acquisition added new distribution resources and new products for the American aftermarket market coverage. Additional distribution resources have been added since the acquisition and the Company now has full North American aftermarket market coverage. The aftermarket currently accounts for approximately 53% of automotive diagnostic and specialty tool sales. In fiscal 2001 it represented approximately 39%. As a whole, automotive diagnostic tools and equipment represented approximately 85% of the Company's sales for fiscal 2002 and for fiscal 2001.

Fastening control systems are some of the automotive products sold by the Company. The product category resulted from the acquisition of the fastening systems business from Allen-Bradley in February 1994. Fastening instrumentation is used to monitor and control pneumatic and electric tools that tighten threaded fasteners in order to provide high quality joint control and documentation. The equipment and software, especially large networked systems, have historically been sold primarily to General Motors. With the introduction of products such as the pulse tool control and Windows based user station software the Company has begun to expand itscustomer base to include tool distributors and heavy equipment manufacturers. Recently single spindle air and pulse tool controls, first introduced in 1999, have become an important product grouping that is expanding the Company's penetration into heavy equipment manufacturers.

New products are an important part of the marketing package that enables growth in the aftermarket. The Company maintains a substantial engineering staff skilled in electronic and packaging design and in diagnosing vehicle systems. In late fiscal 2001 and in fiscal 2002 the Company introduced seven new products. Two actually included a family of items considered a single product. The Company determined to use the Waekon brand for products that are primarily expected to sell to the individual technician. It established a new brand, Waekon/Hickok, for products primarily targeted toward shop purchase. The Hickok brand is used for shop type products that concentrate on high-level diagnostics technologies generally single OEM focused. Three products, two of them product families, were introduced using the Waekon brand during fiscal 2002. Three products branded Waekon/Hickok and one branded Hickok were introduced. One of the Waekon products, the EFI Probe (Electronic Fuel Injector Quick Probe) won the prestigious Motor Magazine Top Twenty Tools Award for 2002.

Packaging, sales collateral for both users and sales channels, and field support have become an important element of the "product packages" the Company offers. In the past several years the Company has increased its skills in these disciplines and now offers greatly enhanced "product packages" as compared to the requirements for OEM sales. The "product packages" include extensive use of the Internet for product technical details, sales support, customer communications, and product registration. During fiscal 2003 the Company will be adding to this capability including automated sales lead processing and reporting, business to business capability for representatives and distributors, and several other electronic initiatives designed to enable further penetration of the aftermarket.

NGS is a diagnostic tool primarily used on Ford vehicles to diagnose electronic systems. This unit and software upgrades for the unit represent over 38% of the Company's sales. The Flash Kit, an accessory for the NGS Tester, was introduced in late fiscal 2000. The unit reprograms a Ford automobile's PCM (Powertrain Control Module) which is the "brain" of the car. PCM updates are released periodically by Ford to improve engine performance. Because of Federal mandates, the aftermarket must have access to the same capabilities Ford offers their dealerships. The NGS unit provides aftermarket shops the same capability dealerships have for diagnosing and servicing vehicles. In addition, the Flash kit enables a shop to reprogram a PCM to factory specifications. This capability includes the ability to program transponder keys for security systems on the vehicles. The Company offers a version of NGS to the locksmith industry specifically for this purpose.

The Company is introducing two new versions of NGS for the aftermarket, in the first quarter of fiscal 2003, that offer enhanced capability for both vehicle technicians and locksmiths. In addition, four more products are in final stages of marketing and introduction package development. These products will be announced during the second quarter of fiscal 2003. Several other products are in various stages of design and are planned for introduction in the second half of the year. The Company believes these product introductions along with revenue growth of the products introduced last year will have a positive influence on customers recognition of the various product brands and further penetration of sales channels to the aftermarket.

Sources and Availability of Raw Materials

Raw materials essential to the business are acquired from a large number of United States of America manufacturers and some materials are now purchased from European and South East Asian sources. Materials acquired from the electronic components industry include transistors, integrated circuits, resistors, capacitors, switches, potentiometers, microcontrollers, and other passive parts. Fabricated metal or plastic parts are generally purchased from local suppliers or manufactured by the Company from raw materials. In general, the required materials are available, if ordered with sufficient lead times, from multiple sources at current prices.

Importance of Patents, Licenses, Franchises, Trademarks and Concessions

The Company presently has several patents and patent applications that relate to certain of its products. It does not consider that any one patent orgroup of patents is material to the conduct of its business as a whole. It believes that its position in the industry is dependent upon its present level of engineering skill, research, sales relationships, production techniques and service rather than upon its ownership of patents. Other than the names "Hickok" and "Waekon", the Company does not have any material licenses, trademarks, franchises or concessions.

Seasonality

The Company believes that with the growing importance of the automotive aftermarket to its business there is a modest seasonality affecting its revenues. Typically the first and fourth quarters tend to be weaker than the other two quarters. Although there were no such orders in fiscal 2002 certain products can be subject to large order amounts that are dependent upon customer release dates. As a result any seasonality aspect to revenues can be overwhelmed by delivery of these large orders and operating results can fluctuate widely from quarter to quarter. There were several such order completions in fiscal 2001 that had an influence on quarterly results.

Practices Relative to Working Capital Items

The nature of the Company's business requires it to maintain sufficient levels of inventory to meet rapid delivery requirements of customers. The Company provides its customers with payment terms prevalent in the industry.

Dependence on Single or Few Customers

During the fiscal year ended September 30, 2002, sales to Ford and General Motors Corporation accounted for approximately 24% and 9% respectively of the consolidated sales of the Company. This compares with 33% and 12% respectively during the prior fiscal year. The Company has no long-term contractual relationships with either Ford or General Motors, and the loss of business from either one without a corresponding increase in business from new or existing customers would have a material adverse effect on the Company.

Backlog

At September 30, 2002, the unshipped customer order backlog totaled $1,580,000 in contrast to $1,850,000 at September 30, 2001 and $4,640,000 at September 30, 2000. The decrease in fiscal 2002 is primarilydue to lower orders forindicators and gauges of $233,000. The decrease in fiscal 2001 was due to lower orders for indicators and gauges, automotive diagnostic products, and fastening control products.

Government Contract Renegotiation

No major portion of the business is open to renegotiation of profits or termination of contracts or subcontracts at the election of the Government. Theamount of revenue derived from Government contracts is currently minimal and notmaterial.

Competitive Conditions

The Company is engaged in a highly competitive industry and faces competition from domestic and international firms. Several of the Company's competitors have greater financial resources and larger sales organizations than the Company. Competition with respect to the Company's diagnostic tool business arises from the existence of a number of other significant manufacturers in the field, such as Snap-On, SPX Corporation, Teradyne, and Vetronix which dominate the total available market in terms of total sales. With regard to fastening systems products, competition comes from both companies that make the equipment to control fastening tools and from tool makers themselves. Specific companies include Atlas Copco, Cooper Tool, and Stanley. The instrumentation industry is composed primarily of companies which specialize in the production of particular items as compared to a full line of instruments. The Company believes that its competitive position in this field is in the area of smaller, specialized products, an area in which the Company hasoperated since 1915 and in which the Company has established itself competitively by offering high-quality, high-performance products in comparison to high-volume, mass-produced items.

Research and Development Activities

The Company expensed as incurred product development costs of $1,874,858 in 2002, $2,343,684 in 2001, and $2,740,315 in 2000. These expenditures included engineering product support and development of manuals forboth of the Company's business segments.

Compliance with Environmental Provisions

The Company's capital expenditures, earnings and competitive position are not materially affected by compliance with federal, state and local environmental provisions which have been enacted or adopted to regulate the distribution of materials into the environment.

Number of Persons Employed

Total employment by the Company at September 30, 2002 was 166 employees. None of the employees are represented by a union. The Company considers its relations with its employees to be good.

Financial Information Concerning Foreign and Domestic Operations and Export Sales

During the fiscal year ended September 30, 2002, all manufacturing,research and development and administrative operations were conducted in the United States of America. Revenues derived from export sales approximated $566,000 in 2002, $692,000 in 2001, and $1,304,000 in 2000. Shipments to Canada make up the majority of export sales.

ITEM 2. DESCRIPTION OF PROPERTIES

As of December 1, 2002 the Company had facilities in the United States of America as shown below:

ITEM 3. LEGAL PROCEEDINGS

The Company is not a party to any material legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable.

ITEM 10. EXECUTIVE OFFICERS OF THE REGISTRANT*

The following is a list of the executive officers of the Company as of September 30, 2002. The executive officers are elected each year and serve at the pleasure of the Board of Directors. Mr. Robert Bauman was elected Chairmanby the Board of Directors in July 1993 and served as chairman until May 2001. He has been President since 1991 and Chief Executive Officer since 1993. For atleast five years prior to 1991 he held the office of Vice President. The Board of Directors elected Mr.Gregory Zoloty Vice President of Finance and Chief Financial Officer in May 2001. Mr. Zoloty was Vice President of Accounting and Chief Accounting Officer since 1994. He joined the Company in 1986. Mr. Thomas Bauman was elected Vice President of Sales and Marketing by the Board of Directors in May 1999. He joined the Company in April 1998. In 1996 and 1997 he was President and CEO of C&K Manufacturing. Mr. Robert Bauman and Mr. Thomas Bauman are brothers.

*The description of Executive Officers called for in this Item is included pursuant to Instruction 3 to Section (b) of Item 401 of Regulation S-K.

PART II

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

a) MARKET INFORMATION

The Registrant's Class A Common Shares are traded on The Nasdaq Small Cap Market under the symbol HICKA. There is no market for the Registrant's Class B Common Shares.

The following table sets forth the range of high and low closing prices for the Registrant's Class A Common Shares for the periods indicated, which prices reflect inter-dealer prices without retail markup, markdown or commissions. Data was supplied by Nasdaq.

b) HOLDERS

As of December 13, 2002, there were approximately 388 holders of record of the Company's outstanding Class A Common Shares and 5 holders of record of the Company's outstanding Class B Common Shares.

c) DIVIDENDS

In fiscal 2002 and 2001 the Company paid no dividends on its Class A and Class B Common Shares. In fiscal 2000 the Company paid a special dividend of $.10 per share on its Class A and Class B Common Shares on March 31, 2000. The declaration and payment of future dividends is restricted, under certain circumstances, by the provisions of the Company's bank credit agreement when borrowings are outstanding. Such restriction is not expected to materially limit the Company's ability to pay dividends in the future, if declared. In addition, pursuant to the Company's Amended Articles of Incorporation, no dividends may be paid on Class B Common Shares until cash dividends of ten cents per share per fiscal year are paid on Class A Common Shares. Any determination to pay cash dividends in the future will be at the discretion of the Board of Directors after taking into accountvarious factors, including the Company's financial condition, results of operations and current and anticipated cash needs.

ITEM 6. SELECTED FINANCIAL DATA

FOR THE YEARS ENDED SEPTEMBER 30

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

Introduction

Until the mid 1980's Hickok was known primarily for its ability to develop and manufacture electronic instruments for electronic servicers, precision indicating instruments for aircraft, locomotive, and industrial applications, and electronic teaching systems for vocational schools. For the past seventeen years the Company has used this expertise to develop and manufacture electronic diagnostic tools and equipment used by automotive technicians in the automotive market. This is now the Company's largest business segment.The Company currently generates approximately 53% of its revenue from designing and manufacturing diagnostic tools for the automotive aftermarket. These tools enable automotive service technicians to identify problems in the rapidly increasing number of electronics systems in automobiles.

Approximately nine years ago the Company initiated a strategy to use existing expertise to diversify its customer base and add new products within its various product classes. The strategy has been implemented usingacquisitions and modifying the organization to a market orientation.

In February 1998 the Company increased its automotive aftermarket business with the acquisition of Waekon Industries, a privately owned company in Kirkwood, Pennsylvania. Sales of aftermarket products now account for 53% of automotive diagnostic and specialty tool sales, 39% in fiscal 2001. Waekon manufactured a variety of automotive diagnostic equipment and specialty tools used by automotive technicians. The acquisition cost $2,221,302 and was recorded as an asset purchase. Because of its positive reputation in the industry the Waekon name has become the trademark used by the Company to market certain of its products to the automotive aftermarket.

In July 2000 the Company closed its production and sales facility in Kirkwood, Pennsylvania pursuant to a restructuring plan. For the year ended September 30, 2002 the Company achieved the savings that were anticipated from this restructuring.

In April 2001 management took steps to reduce non-direct product related expenses throughout the Company by an estimated 20%. The steps included a substantial reduction in personnel and expenditure restrictions in most aspects of the Company's operations. Savings in fiscal 2002 from this reduction were approximately $1,500,000.

The timing of order releases in the Company's automotive diagnostic equipment business can cause wide fluctuations in the Company's operating results, particularly on a quarter-to-quarter basis. Orders for such equipment can be large, are subject to customer release, and may result in substantialvariations in quarterly sales and earnings. There were no large orders of this nature in either of the past two fiscal years although previous large orders were completed in fiscal 2001. A reason for this is the Company's efforts in recent years to diversify its customer base. However, in future years the receipt of large orders could result in a significant increase in order levels which may result in substantial variations in quarterly sales and earnings. Any foreign sales are made in United States of America Dollars.

Introduction of new automotive diagnostic products to the aftermarket on a regular basis is very important for the ongoing success of this business segment. Consequently, expenditures for product development have been and will continue to be significant to the Company's operations. Although expenditures for product development have been reduced for the past several years, management feels the current levels are adequate to support new product needs.

The Company's order backlog as of September 30, 2002 totaled $1,580,000 as compared to $1,850,000 as of September 30, 2001 and $4,640,000 as of September 30, 2000. The decrease in fiscal 2002 is due primarily to lower orders for indicators and gauges of $233,000. Most of the backlog at September 30, 2002 is expected to be shipped by the end of the current fiscal year. The decrease in fiscal 2001 is due to lower orders for indicators and gauges of $335,000, completion of the balance of a large diagnostic product order, reduced orders for automotive diagnostic products of $1,785,000 and fastening control products of $670,000.

Reportable Segment Information

Effective September 30, 1999, the Company adopted Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information. The Standard requires segment information disclosures based on how management evaluates operating performance and resource allocations. The Company has determined that it has two reportable segments: 1)indicators and gauges and 2) automotive related diagnostic tools and equipment.

Indicators and Gauges

This segment consists of products manufactured and sold primarily to companies in the aircraft and locomotive industry. Within the aircraft market,the primary customers are those companies that manufacture business and pleasure aircraft. Within the locomotive market, indictors and gauges are sold to both original equipment manufacturers and to operators of railroad equipment.

Automotive Diagnostic Tools and Equipment

This segment consists primarily of products designed and manufactured to support the servicing of automotive electronic systems. These products are sold to OEM's and to the aftermarket using a variety of distribution methods. The acquisition of Waekon Industries in 1998 added new products and distribution sources for the aftermarket. Included in this segment are fastening control products used primarily by large manufacturers to monitorand control the nut running process in assembly plants. This equipment provides high quality joint control and documentation.

Results of Operations

Sales for the fiscal year ended September 30, 2002 declined to $12,391,642, a decrease of approximately 19% from fiscal 2001 sales of $15,261,149. This decrease in sales was volume-driven and attributable primarily to lower product sales of approximately $2,800,000. Service sales in fiscal 2002 remained relatively flat compared to fiscal 2001. The reduction in product sales occurred in the automotive diagnostic equipment segment, primarily sales to OEM accounts as the Company continues to emphasize its aftermarket business. Aftermarket sales increased by approximately $1,000,000 in fiscal 2002 for several reasons. Sales of emissions products increased by approximately $600,000 and new product introductions of approximately $400,000. The Company anticipates that overall product sales will increase modestly in fiscal 2003. The current level of service revenue is expected to continue for fiscal 2003.

Sales for the fiscal year ended September 30, 2001 declined to $15,261,149, a decrease of approximately 16% from fiscal 2000 sales of $18,274,626. This decrease in sales was volume-driven and attributable primarily to lower product sales of approximately $3,700,000. The decline in product sales was partially offset by an increase in service revenue of approximately $700,000. The reduction in product sales occurred in the automotive diagnostic equipment segment, primarily sales to OEM accounts, as the Company emphasizes its aftermarket business.

Cost of products sold in fiscal 2002 was $5,247,825 or 50.6% of net product sales compared to $8,016,562 or 60.7% of net product sales respectively in fiscal 2001. Cost of products sold during fiscal 2000 was $9,423,727 or 55.8% of net product sales. The decrease in the percentage of cost of products sold to product sales between fiscal 2002 and fiscal 2001 was due primarily to a more favorable product mix and manufacturing cost reductions. The increase in the percentage of cost of products sold between fiscal 2001 and 2000 was due primarily to product mix as sales of lower margin automotive diagnostic products to the aftermarket and other markets represented a larger portion of total product sales offset in part by the expense reductions implemented in April 2001. The 2002 cost of products sold percentage is expected to continue in fiscal 2003.

Cost of services sold in fiscal 2002 was $1,136,324 or 56.1% of net service sales compared to $1,470,011 or 71.6% respectively in fiscal 2001. Cost of services sold during fiscal 2000 was $1,087,177 or 78.6 % of net service sales. The decrease in the cost of services sold as a percentage of net services sales is due primarily to a higher sales volume due to price adjustments for chargeable repairs, cost reductions implemented in April 2001 and lower warranty related costs associated with the automotive diagnostic products. The decrease in the cost of services sold as a percentage of net service sales between fiscal 2001 and fiscal 2000 was primarily due to a higher sales volume coupled with a favorable product mix and expense reduction measures implemented in April 2001 offset in part by a slight increase in warranty related costs associated with the automotive diagnostic products. The percentage of cost of services sold relative to net service sales is expected to increase slightly in fiscal 2003.

Product development expenditures in fiscal 2002 were $1,874,858 which was 20% lower than expenditures of $2,343,684 in fiscal 2001. The dollar decrease is due primarily to a full year of expense reductions implemented in April 2001, efficiency improvements, and to cost savings from the closing of the Kirkwood, Pennsylvania facility. Product development expenditures in fiscal 2001 were $2,343,684 which was 15% lower than expenditures of $2,740,315 in fiscal 2000. This decrease reflects savings from the closing of the Kirkwood, Pennsylvania facility and expense reductions implemented in April 2001. It is anticipated that the amount spent on product development in fiscal 2002 will continue at current levels in fiscal 2003 while continuing to support the ongoing need to develop a steady flow of new diagnostic products for the automotive aftermarket.

Marketing and administrative expenses amounted to $3,894,173 which was 31.4% of net sales in fiscal 2002, $4,570,170 or 29.9% of net sales in fiscal 2001, and $5,357,063, or 29.3% of net sales in fiscal 2000. Expenditures in fiscal 2002 were 15% lower than fiscal 2001 due to lower marketing and administrative expenses as a result of expense reduction measures implemented in April 2001 and to a lesser extent to expenses applicable to the closing of the Kirkwood, Pennsylvania facility in July 2000 offset in part by an increase in commissions and royalties associated with certain aftermarket product sales. Expenditures in fiscal 2001 were 15% lower than fiscal 2000 due to lower marketing and administrative expenses as a result of expense reduction measures implemented in April 2001 and to a lesser extent to expenses applicable to closing the Kirkwood, Pennsylvania facility in July 2000. The Company anticipates that marketing and administrative expenses will continue at present levels in fiscal 2003.

Interest charges were $7,706 in fiscal 2002 compared with $49,057 in fiscal 2001 and $60,367 in fiscal 2000. The decrease in interest charges in fiscal 2002 compared to fiscal 2001 was due to no short-term borrowing requirements during the current fiscal year. The decrease in interest charges in fiscal 2001 compared to fiscal 2000 was due to a reduction in short-term borrowings. The Company anticipates interest expense will decrease from the current levels in fiscal 2003 due to reductions in employees deferred compensation account balances and end of lease termination in February 2003.

In fiscal 2000, a restructuring charge of $434,015 was recorded due to the closing in July, 2000 of the Company's manufacturing facility in Kirkwood, Pennsylvania. These charges were composed of $228,375 of future lease payments, $111,750 of losses on the abandonment of the plant facility and equipment and $93,890 of employee severance and related expenses. The Company expected to realize pre-tax operating cost savings of approximately $600,000 annually as the facility in Greenwood, Mississippi has taken over all manufacturing formerly performed in Kirkwood. For the fiscal year ended September 30, 2002 the Company achieved the savings anticipated.

Other income of $30,850 in fiscal 2002 compares with other income of $40,929 in fiscal 2001. The change was primarily due to losses on fixed asset disposals in fiscal 2002. Other income in fiscal 2002 consisted primarily of interest income on short-term investments and discounts on purchases. Other income of $40,929 in fiscal 2001 compares with other expense of $6,366 in fiscal 2000. The change was primarily due to losses on fixed asset disposals.

Income taxes in fiscal 2002 were $17,200 which represents a 6.6% effective tax rate. Income taxes in fiscal 2001 were a negative $485,300 which represents a recovery of income taxes at a 42.3% effective tax rate. In fiscal 2000 income taxes were negative $423,800 which represents a recovery of income taxes at a 50.8% effective tax rate. The tax rate in fiscal 2002 was lower than the normal tax rate of 37% due to the utilization of prior years research and development tax credits. The recovery rate in fiscal 2001 and 2000 exceeded the normal tax rate of 37% due to the recognition of both current and prior year research and development tax credits. It is anticipated that the effective tax rate in fiscal 2003 will be consistent with 2002. Management anticipates that future business will generate sufficient taxable income during the carryforward period to fully realize the deferred tax benefits. The deferred tax benefits begin to expire in 2019.

Net income in fiscal 2002 was $244,406, or $.20 per share which was an increase of $906,512 as compared with the net loss of $662,106, or $.54 per share, in fiscal 2001. The net loss in fiscal 2000 was $410,604, or $.34 per share. The change in fiscal 2002 versus fiscal 2001 was primarily due to improved gross product and service margins and cost reduction measures. The change in fiscal 2001 versus fiscal 2000 was primarily due to lower sales offset in part by the cost saving measure of the Kirkwood, Pennsylvania plant closing in July 2000 and the expense reduction measures implemented in April 2001.

Liquidity and Capital Resources

Current assets of $8,792,622 at September 30, 2002 were 8.2 times current liabilities and the total of cash and receivables was 4.4 times current liabilities. These ratios compare to 7.0 and 3.2 respectively at the end of fiscal 2001. Total current assets were up approximately $515,000 from the previous year end due primarily to a $1,685,000 increase in cash and cash equivalents. The increase in cash and cash equivalents was offset by a reduction in accounts receivable and inventory of approximately $770,000 and $405,000 respectively. The decrease in accounts receivable and inventory was due primarily to improved collection activities, lower sales volume, and management's emphasis on inventory reductions.

Working capital at September 30, 2002 was $7,720,012 as compared to $7,095,604 a year ago. The increase was due primarily to retention of earnings and an increase in cash and cash equivalents of $1,685,000, offset by a reduction in accounts receivable and inventory of approximately $770,000 and $405,000 respectively and a reduction in current liabilities of approximately $110,000.

During the fiscal year the Company's business may require an increase in inventory of work-in-process and finished goods in order to meet anticipated delivery schedules. Whenever there may be a requirement to increase inventory in fiscal 2003 there will be a negative but temporary impact on liquidity. The Company believes that internally generated funds and a $1,000,000 revolving line of credit will provide sufficient liquidity to meet ongoing working capital requirements.

Internally generated funds in fiscal 2002 were $1,924,625 and were adequate to fund the Company's primary non-operating cash requirements consisting of capital expenditures of $206,534 and debt payments of$37,575. The primary reason for the positive cash flow from operations was net income of $244,406 and thereduction in accounts receivable and inventory. In fiscal 2001 internally generated funds were $1,083,049 and were adequate to fund the Company's primary non-operating cash requirementsconsisting of capital expenditures and debt payments of $131,289 and $702,699 respectively. The primary reason for the positive cash flow in fiscal 2001 was the reduction in inventory. In fiscal 2000 internally generated funds were $220,557 and were not adequate to fund the Company's prime non-operating cash requirement consisting of capital expenditures and long-term debt payments of $405,703 and $466,936 respectively. The primary reason for the negative cash flow from operations was the net loss of $410,604 and a $281,144 reduction in accounts payable. The Company expects internally generated funds in fiscal 2003 from operating activities to be adequate to fund approximately $250,000 of capital expenditures and $11,000 due on debt payments. Most of the capital expenditures will be made to upgrade information technology and manufacturing equipment.

In February 2002 the Company renewed its credit agreement with its financial lender. The agreement expires in February 2003 and provides for a secured revolving credit facility of $1,000,000 with interest at the prime commercial rate. Throughout fiscal 2002 the Company had no outstanding balance under this loan facility. The agreement is secured by the Company's accounts receivable, inventory, equipment and general intangibles. The credit agreement contains affirmative covenant requirements related to working capital and tangible net worth minimums of $5,500,000 and $7,500,000 respectively. The revolving credit facility is subject to annual review by the Company's lender. In addition, management has determined a revolving credit facility is important to the Company. Although no determination has been made to seek renewal of the credit agreement, the Company believes that, given its current financial condition, renewal at the existing amount can be obtained on acceptable terms.

Critical Accounting Policies

The Company describes its significant accounting policies in the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K. However, In response to the SEC's Release No. FR-60, "Cautionary Advice Regarding Disclosure About Critical Accounting Policies", issued December 12, 2001, the Company has identified the policies it believes are most critical to an understanding of the Company's financial statements. Since application of these accounting policies involves the exercise of judgement and use of estimates, actual results could differ from those estimates.

Revenue Recognition - Revenue is recognized as manufactured items are shipped to customers, legal title has passed, and all significant contractual obligations of the Company have been satisfied. Revenue from development contracts is recorded as agreed upon milestones are achieved.

Inventory Valuation and Reserves - Inventories are valued at the lower of cost or market using the first-in, first-out (FIFO) method. The Company's business may require an increase in inventory of component parts, work-in-process and finished goods in order to meet anticipated delivery schedules of customers. However, we are responsible for excess and obsolete inventory purchases in excess of inventory needed to meet customer demand forecasts, as well as inventory purchases generally not covered by supply agreements, or parts that become obsolete before use in production. If our forecasts change or excess inventory becomes obsolete, the inventory reserves included in our financial statements may be understated.

Deferred Taxes - Deferred income taxes are provided for temporary differences between financial and tax reporting in accordance with the provisions of Financial Accounting Standards Board Statement No. 109, "Accounting for Income Taxes." Significant factors considered by the Company in estimating the probability of the realization of deferred taxes include expectations of future earnings and taxable income, as well as application of tax laws in the jurisdictions in which the Company operates.

The Company does not have off-balance sheet arrangements, financing, or other relationships with unconsolidated entities or persons, also known as "special purpose entities" (SPEs).

Impact of Inflation

In recent years, inflation has had a minimal effect on the Company because of low rates of inflation and the Company's policy minimizing the acceptance of long-term fixed rate contracts without provisions permitting adjustment for inflation.

Forward-Looking Statements

The foregoing discussion includes forward-looking statements relating to the business of the Company. These forward-looking statements, or other statements made by the Company, are made based on management's expectations and beliefs concerning future events impacting the Company and are subject touncertainties and factors (including, but not limited to, those specified below)which are difficult to predict and, in many instances, are beyond the control of the Company. As a result, actual results of the Company could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) the Company's dependence upon a limited number of customers, including Ford and General Motors, (b) the highly competitive industry in which the Company operates, which includes several competitors with greater financial resources and larger sales organizations, and(c) the acceptance in the marketplace of new products and/or services developed or under development by the Company including automotive diagnostic products,fastening systems products and indicating instrument products, and (d) the ability of the Company to further establish distribution and a customer base in the automotive aftermarket.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to certain market risks from transactions that are entered into during the normal course of business. The Company has not entered into derivative financial instruments for trading purposes. The Company's primary market risk exposure relates to interest rate risk. The Company's only debt subject to interest rate risk is its revolving credit facility. The Company has a balance of $-0- on its revolving credit facility at September 30, 2002, which is subject to a variable rate of interest based on the prime commercial rate. As a result, the Company believes that the market risk relating to interest rate movements is minimal.

INDEPENDENT AUDITORS' REPORT

SHAREHOLDERS AND BOARD OF DIRECTORS
HICKOK INCORPORATED
CLEVELAND, OHIO

We have audited the accompanying consolidated balance sheets of HICKOK INCORPORATED as of September 30, 2002 and 2001, and the related consolidatedstatements of income, stockholders' equity and cash flows for each of the three years in the period ended September 30, 2002. These financial statements are theresponsibility 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing 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 financial statements referred to above present fairly, in all material respects, the consolidated financial position of Hickok Incorporated as of September 30, 2002 and 2001, and the consolidated results of their operations and their cash flows for each of the three years in the periodended September 30, 2002 in conformity with accounting principles generally accepted in the United States of America.

/s/ Meaden & Moore, Ltd.

MEADEN & MOORE, Ltd.
CERTIFIED PUBLIC ACCOUNTANTS

NOVEMBER 22, 2002
CLEVELAND, OHIO

F-1

CONSOLIDATED BALANCE SHEET
HICKOK INCORPORATED
SEPTEMBER 30

ASSETS

See accompanying summary of accounting policies and notes to financial statements.

F-2

LIABILITIES AND STOCKHOLDERS' EQUITY