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SECURITIES AND EXCHANGE COMMISSION

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

OR

For the transition period from          to

Commission file number 0-9318

SHOPSMITH, INC.

Registrant’s telephone number, including area code: (937) 898-6070

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

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

Common Shares

          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.

          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]

          The aggregate market value of the voting stock held by non-affiliates of the registrant as of September 28, 2002 was $911,832.

               Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of May 15, 2003. Common Shares, without par value: 2,605,233 shares.

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DOCUMENTS INCORPORATED BY REFERENCE

          Shopsmith, Inc. Annual Report to Shareholders for the year ended April 5, 2003 – Only such portions of the Annual Report as are specifically incorporated by reference under Part I and II of this Report shall be deemed filed as part of this Report.

          Shopsmith, Inc. Proxy Statement for its Annual Meeting of Shareholders to be held July 30, 2003 – Definitive copies of the Proxy Statement will be filed with the Commission within 120 days after the end of the Company’s fiscal year. Only such portions of the Proxy Statement as are specifically incorporated by reference under Parts II and III of this Report shall be deemed filed as part of this Report.

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PART I

     ITEM 1. Business

          Shopsmith, Inc., an Ohio corporation organized in 1972 (the “Company”), is engaged in the production and marketing of power woodworking tools designed primarily for the home workshop. The principal line of power tools marketed under the name “Shopsmith,” a registered trademark, dates back to 1946 and was purchased by the Company in 1972.

          The line is built around the Shopsmith MARK V, a multi-purpose tool, and includes separate function special purpose tools that may be mounted on the MARK V or used independently. The Company distributes these tools directly to consumers through demonstration programs (at which sales representatives solicit orders), telephone sales solicitation, Internet and mail order. During the fiscal year ended April 5, 2003, Shopsmith branded products accounted for substantially all of the net sales of the Company. The Company manufactures a substantial majority of products sold (as measured by sales dollar volume).

Shopsmith MARK V, Special Purpose Tools and Major Accessories

          The Shopsmith MARK V is a compact power woodworking tool which performs the functions of five separate tools: a table saw, a wood lathe, a disc sander, a horizontal boring machine, and a vertical drill press. The engineering of the MARK V is such that special purpose tools may be mounted on and powered by the MARK V. The special purpose tools, a jointer, a beltsander, a bandsaw, a planer, a scroll saw, and a strip sander, may also be operated as free standing tools with a stand and power system.

          Other products include MARK V accessories such as a lathe duplicator, which allows a woodworker to duplicate original turnings and a dust collector that, when used with the appropriate fixtures for the MARK V and other Shopsmith products, provides for virtually dust- free woodworking.

          The Company also offers a line of accessories to its power tool line. These accessories, only a few of which are manufactured by the Company, include casters, custom saw blades, and molding attachments. Shopsmith accessories are sold directly to the consumer through the same marketing channels used for the Shopsmith power tool line.

Seasonality and Working Capital

          The Company’s business is seasonal, with the rate of incoming orders being lowest during the summer months. Consequently, cash requirements are higher during this period of the fiscal year and the Company generally experiences a tightening of its liquidity position.

Raw Materials and Components

          The principal components and materials used by the Company in the production of its products include aluminum die-castings, iron sand castings, metal stampings, screw machine products, plastics and electric motors. The Company relies on sole sources of supply for some of its components and materials. To reduce costs, the Company uses foreign producers as sources for some parts and products.

Competition

          The power woodworking equipment business is highly competitive and the MARK V and the Company’s other products must compete against the single purpose tools sold by Delta, Power Matic, Black and Decker, Sears and other domestic and foreign corporations.

          The Company considers quality, customer service, method of marketing, price and value to be the principal bases of competition in the power woodworking equipment industry.

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Research and Development

          From time to time, the Company engages in limited research and development programs to develop new products, and to improve existing products and current operating methods. Research and development costs were not material in 2003, 2002, and 2001.

Employees

          The total number of persons employed by the Company (both full and part time) as of May 15, 2003 was 117. The Company considers its employee relations to be satisfactory, and to date the Company has not experienced a work stoppage due to a labor dispute. The Company has no collective bargaining contracts.

Environmental Compliance

          The Company believes that it materially complies with all statutory and administrative requirements related to the environment and pollution control. For a discussion of certain environmental related contingencies to which the Company is subject, reference is made to Note 11 to the Consolidated Financial Statements which are incorporated into this Report pursuant to Item 8 below.

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ITEM 2. Properties

          Information concerning the facilities of the Company is set forth below.

          The buildings and the Company’s machinery and equipment are well maintained. The Company’s production facility currently operates one shift per day. The Company purchased its manufacturing and headquarters building from its former landlord in December 1998.

ITEM 3. Legal Proceedings

The Company is not a party to any legal proceedings other than litigation which, under the instructions to this item, need not be described. For a discussion of certain environmental related contingencies to which the Company is subject, reference is made to Note 11 to the Consolidated Financial Statements which are incorporated into this Report pursuant to Item 8 below.

ITEM 4. Submission of Matters to a Vote of Security Holders

     None.

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EXECUTIVE OFFICERS OF THE COMPANY

          Officers are elected annually by the Board of Directors. The executive officers of the Company are as follows:

          John R. Folkerth is the founder of the Company and has been a director and the Chief Executive Officer of the Company since 1972.

          Robert L. Folkerth was named President and Chief Operating Officer in July 2001. He was Vice President of Sales and Marketing from 1996 to July 2001. Before accepting that position with the Company, Mr. Folkerth was Vice President of Finance of Digitron, a manufacturer of automotive components, from 1991 until 1996. He has been a director of the Company since 1994.

          Lawrence R. Jones was named Vice President of Operations in August 1999. He served as president of Superay Tool Co., a manufacturer of Air tools from 1996 through 1998. After 1998 and before employment with the Company, Mr. Jones served as President of ZLL Marketing, a consulting/sourcing firm.

          Mark A. May was named Vice President of Finance and Chief Financial Officer in February 2000. Mr. May has served the Company’s finance department since 1980.

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PART II

          ITEM 5. Market for Registrant’s Common Equity and Related Stockholder Matters.

          The market and shareholder information required by Item 5 is set forth under the heading “Shareholders’ Information” p.25 in the Company’s Annual Report to Shareholders for the year ended April 5, 2003 (which report is included as Exhibit 13.1 to this Report). Such information is incorporated herein by reference.

          The Company paid no dividends in the fiscal years ended April 5, 2003 and March 30, 2002.

          As more fully indicated in Note 6 to the consolidated financial statements included in the Company’s Annual Report to Shareholders for the year ended April 5, 2003, during the fiscal years ended March 31, 2001, March 30, 2002, and April 5, 2003 the Company issued to certain key employees and non-employee directors stock options to purchase Common Shares of the Company under the Company’s 1995 Stock Option Plan, 1997 Stock Option Plan and 2000 Director Stock Option Plan. Shares issuable under the 1997 Stock Option Plan and the 2000 Director Stock Option Plan have not been registered under the Securities Act of 1933, and none of the options under either of such plans has as yet been exercised. The grant of options pursuant to the 1997 Stock Option Plan and the 2000 Director Stock Option Plan was exempt from the registration provisions of the Securities Act of 1933 (i) as a transaction not involving a sale of securities, since no investment decision was required on the part of the option recipients, and/or (ii) under Section 4(2) of such Act as a transaction not involving a public offering. It is anticipated that the Common Shares subject to the options will be registered under the Securities Act of 1933 prior to exercise of the options.

ITEM 6. Selected Financial Data

     The information required by Item 6 is set forth under the heading “Selected Financial Data” (p.24) in the Company’s Annual Report to Shareholders for the year ended April 5, 2003 and is incorporated herein by reference.

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

          The information required by Item 7 is set forth under the heading “Management’s Discussion and Analysis” (p.21) of the Company’s Annual Report to Shareholders for the year ended April 5, 2003 and is incorporated herein by reference.

ITEM 7A. Quantitative and Qualitative Disclosure about Market Risk

          Not Applicable.

ITEM 8. Financial Statements and Supplementary Data

          The information required by Item 8 is set forth at pages 3 through 10 and under the heading “Selected Financial Data” p.24 of the Company’s Annual Report to Shareholders for the year ended April 5, 2003 and is incorporated herein by reference.

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

          Not applicable.

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PART III

ITEM 10. Directors and Executive Officers of the Registrant

          The information required by Item 10 is incorporated herein by reference from the Company’s Proxy Statement for its Annual Meeting of Shareholders to be held July 30, 2003 except for certain information concerning the executive officers of the Company which is set forth in Part I of this Report.

ITEM 11. Executive Compensation

          The information required by Item 11 is incorporated herein by reference from the Company’s Proxy Statement for its Annual Meeting of Shareholders to be held July 30, 2003.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity Compensation Plan Information

          The following table shows certain information as of April 5, 2003 with respect to compensation plans under which common shares of the Company are authorized for issuance:

          The remaining information required by Item 12 is incorporated herein by reference from the Company’s Proxy Statement for its Annual Meeting of Shareholders to be held July 30, 2003.

ITEM 13. Certain Relationships and Related Transactions

          The information required by item 13 is incorporated herein by reference from the Company’s Proxy Statement for its Annual Meeting of Shareholders to be held July 30, 2003.

ITEM 14. Controls and Procedures.

          (a) Evaluation of Disclosure Controls and Procedures

          The Company’s Chairman and Chief Executive Officer, John R. Folkerth, and the Company’s Chief Financial Officer, Mark A. May, have evaluated the Company’s internal controls and disclosure controls systems within 90 days of the filing of this report. Messrs. Folkerth and May have concluded that the Company’s disclosure controls systems are functioning effectively to provide reasonable assur-

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ance that the Company can meet its disclosure obligations. The reporting process is designed to ensure that information required to be disclosed by the Company in the reports that it files or submits with the Commission is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Since Messrs. Folkerth’s and May’s most recent review of the Company’s internal controls systems, there have been no significant changes in internal controls or in other factors that could significantly affect these controls.

          (b) Changes in Internal Controls

          There were no significant changes in the Company’s internal controls or in other factors that could significantly affect the Company’s disclosure controls and procedures subsequent to the Evaluation Date, nor any significant deficiencies or material weaknesses in such disclosure controls and procedures requiring corrective actions. As a result, no corrective actions were taken.

ITEM 15. Principal Accountant Fees and Services

          The information required by item 15 is incorporated herein by reference from the Company’s Proxy Statement for its Annual Meeting of Shareholders to be held July 30, 2003.

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PART IV

ITEM 16. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)

1.

Financial Statements

The following consolidated financial statements of Shopsmith, Inc. and its subsidiaries are incorporated by reference as part of this Report at Item 8 hereof.

			Report of Independent Auditors.
			Consolidated Balance Sheets as of April 5, 2003 and March 30, 2002.
			Consolidated Statements of Operations for the years ended April 5, 2003, March 30, 2002, and March 31, 2001.
			Consolidated Statements of Changes in Shareholders’ Equity for the years ended April 5, 2003, March 30, 2002, and March 31, 2001.
			Consolidated Statements of Cash Flows for the years ended April 5, 2003, March 30, 2002, and March 31, 2001.
			Notes to Consolidated Financial Statements.

	2.	Financial Statement Schedules

The following Financial Statement Schedule for the years ended April 5, 2003, March 30, 2002, and March 31, 2001 are included in this report.

Report of Independent Auditors Schedule II- Valuation and Qualifying Accounts

		Other schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto.
		Individual financial statements of the registrant have been omitted since the registrant is primarily an operating company and all consolidated subsidiaries are wholly owned.

3.

Exhibits

			The Exhibits that are filed with this Report are listed in the Exhibit Index. All management contracts or compensatory plans or arrangements are indicated on the Exhibit Index.

(b)	Reports on Form 8-K

During the quarter ended April 5, 2003, the Company did not file any reports on Form 8-K.

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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.

SHOPSMITH, INC.

By/s/ John R. Folkerth

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.

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I, John R. Folkerth, certify that:

	1.     I have reviewed this annual report on Form 10-K of Shopsmith, Inc.;
	2.     Based on my knowledge, this quarterly report does not contain any untrue statements of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
	3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for the periods presented in the quarterly report;
	4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

		a)     designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
		b)     evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
		c)     presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

		a)     all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
		b)     any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.     The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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I, Mark A. May, certify that:

	1.     I have reviewed this annual report on Form 10-K of Shopsmith, Inc.;
	2.     Based on my knowledge, this quarterly report does not contain any untrue statements of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
	3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for the periods presented in the quarterly report;
	4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

		a)     designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
		b)     evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
		c)     presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

		a)     all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
		b)     any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.     The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:		June 3, 2003

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REPORT OF INDEPENDENT AUDITORS ON FINANCIAL STATEMENT SCHEDULE

Shareholders and Board of Directors
Shopsmith, Inc.
Dayton, Ohio

Our audits of the consolidated financial statements referred to in our report dated May 14, 2003 appearing in the Annual Report to Shareholders of Shopsmith, Inc. for the year ended April 5, 2003 (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedule listed in Item 16(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

Crowe Chizek and Company LLC

Columbus, Ohio
May 14, 2003

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VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED April 5, 2003, March 30, 2002, and March 31, 2001

Transfers are made from the accrued recourse liability account to the allowance for doubtful accounts receivable as accounts financed by the Company with Household Retail Services on a recourse basis are purchased by the Company.

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SHOPSMITH, INC.

INDEX TO EXHIBITS

Exhibit No. and Document

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