SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the year ended October 31, 2001 Commission file number 0-13880 ENGINEERED SUPPORT SYSTEMS, INC. (Exact name of Registrant as specified in its charter) Missouri 43-1313242 (State of Incorporation) (IRS Employer Identification No.) 201 Evans Lane, St. Louis, Missouri 63121 (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (314) 553-4000 Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934: Name of each exchange on Title of each class which registered ------------------- ------------------------ Common stock, $.01 par value Over the counter National Market System National Association of Security Dealers No securities are registered pursuant to Section 12(g) of the Securities Exchange Act of 1934. 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 requirement for the past 90 days. Yes X No . ----- ----- Based on the closing price on January 17, 2002, the aggregate market value of the voting stock held by non-affiliates of the Registrant was approximately $289,654,000. The number of shares of the Registrant's common stock, $.01 par value, outstanding at January 17, 2002 was 10,233,407. DOCUMENTS INCORPORATED BY REFERENCE Parts I and II incorporate by reference portions of the Engineered Support Systems, Inc. Annual Report to Shareholders (the Annual Report) for the year ended October 31, 2001. Part III incorporates by reference portions of the Engineered Support Systems, Inc. Proxy Statement for the Annual Shareholders Meeting to be held on March 5, 2002 (the Definitive Proxy Statement) to be filed within 120 days after the close of the year ended October 31, 2001. PART I ITEM 1. BUSINESS - ------- -------- Engineered Support Systems, Inc. is a holding company for six wholly-owned subsidiaries: Systems & Electronics Inc. (SEI), Engineered Air Systems, Inc. (Engineered Air), Keco Industries, Inc. (Keco), Engineered Coil Company, d/b/a Marlo Coil (Marlo Coil), Engineered Electric Company, d/b/a Fermont (Fermont) and Engineered Specialty Plastics, Inc. (ESP). Engineered Support Systems, Inc. and its subsidiaries (Company) are a leading designer and manufacturer of military support equipment and electronics for the United States armed forces. The Company also engineers and manufactures air handling and heat transfer equipment, material handling equipment and custom molded plastic products for commercial and industrial users. Engineered Air was incorporated under the laws of the State of Missouri on December 24, 1981 and acquired the assets of the Defense Systems Division of Allis-Chalmers Corporation on March 30, 1982. The Company was incorporated under the laws of the State of Missouri in December 1983, and exchanged all of its outstanding common stock for two-thirds of the common stock of Engineered Air held by the Company's founders. The Company purchased the remaining one-third of the common stock of Engineered Air in January 1984, effective as of November 1, 1983. The Company became a publicly owned corporation on August 21, 1985. On March 9, 1993, the Company purchased all of the outstanding stock of Associated Products, Inc. (subsequently changed to Engineered Specialty Plastics, Inc.). Effective February 1, 1998, Engineered Coil Company acquired substantially all of the net assets of Nuclear Cooling, Inc., d/b/a Marlo Coil. On June 24, 1998, the Company acquired all of the outstanding common stock of Keco. On February 22, 1999, Engineered Electric Company acquired substantially all of the net assets of the Fermont Division of Dynamics Corporation of America, d/b/a Fermont. On September 30, 1999, the Company acquired all of the outstanding common stock of SEI. PRODUCTS Products are manufactured by the Company within four operating segments: heavy military support equipment, electronics and automation systems, light military support equipment and plastic products. The heavy military support equipment segment engineers and manufactures load management and transport systems primarily for the U.S. Department of Defense (DoD). Segment products include aircraft load management equipment, tank transport systems and bridging systems. The electronics and automation systems segment engineers and manufactures radar and electronic warfare systems, fire support systems and avionics test equipment primarily for the DoD. The segment also engineers and manufactures material handling equipment primarily for the U.S. Postal Service and for the pharmaceutical industry throughout the United States. The light military support equipment segment engineers and manufactures a broad range of military support equipment primarily for the DoD, as well as related heat transfer and air handling equipment for domestic commercial and industrial users. Segment products include environmental control systems, generator sets, petroleum and water systems, chemical and biological protection systems and other multipurpose military support equipment. The plastic products segment manufactures injection molded resin products, as well as a proprietary line of plastic faucets, primarily for commercial customers in the south-central United States. See pages 6 through 20 of the 2001 Annual Report which are incorporated herein by reference. 2 ENGINEERING AND DESIGN The Company employs 396 people engaged in the design and development of new products and the improvement of existing products. The majority of these development activities are conducted pursuant to, and funded by, DoD contracts in response to designated performance specifications. The Company's expenditures on research and development were approximately $1.1 million, $0.8 million and $0.2 million for the years ended October 31, 2001, 2000 and 1999. The Company anticipates that unfunded internal research and development will exceed $1.0 million in fiscal year 2002. The Company believes that its engineering expertise gives it a significant competitive advantage. The Company's engineering capabilities are in the areas of systems, electro-mechanics, electro-chemical, mechanics, electrical systems and electronics, and acoustics, as well as expertise in thermodynamics, air flow, liquid pumping, stress analysis, liquid fuel combustion, dynamic and climatic environmental engineering, biological and chemical decontamination, non-pyrotechnic smoke generation, and filtration of chemically and biologically contaminated air. The Company's design and development of support equipment is enhanced by computer-aided design and manufacturing (CAD/CAM) systems used by engineers and draftsmen to design complex products and component parts in three-dimensional view. The Company's engineering technologies and expertise provide it with the ability to adapt its production process to new product needs on a timely basis. The Company also has the capability to provide complete technical data support for the products it manufactures. This includes integrated logistics support, spare parts provisioning and preparation of technical manuals. MARKETING The Company's marketing of military equipment and services focuses, in part, on determining the current and future needs of the DoD. To identify those needs, the Company gathers information from primary sources such as the DoD budget and its supporting documents, and military requirement documents such as the Air Force's Statement of Need, the Navy's Operational Requirements and the Army's Required Operational Capability, along with direct interface with its customers. The Company analyzes this data through an established new business opportunity procedure and then determines whether or not to bid on specific projects based upon determinations of potential profitability and the likelihood of being awarded the contract. For its defense products, the Company maintains a domestic field marketing/sales network with offices located in the Washington, D.C. area and at several major U.S. Government defense procurement centers. The Washington, D.C. office carries out legislative activities, and conducts customer liaison activities with all branches of the U.S. armed services and with foreign government offices in the Washington, D.C. area. The primary responsibility for individual products or programs is handled within the product line organizations, with the field organization providing closely coordinated assistance. 3 In addition, the Company supplies electronic sorting and material handling equipment to the U.S. Postal Service and other customers. Sales of custom commercial, industrial and marine air handling units and coils are effected both directly and through sales representatives located primarily in the United States, parts of Canada, and Puerto Rico, with the pharmaceutical, telecommunications and healthcare industries representing a significant portion of current sales volume. Principal customers for injection molded custom and specialty plastic products include large, well-established producers of consumer and industrial products. Sales of injection molded plastic products are effected both directly and through sales representatives. The Company's sales of its proprietary line of kitchen and lavatory faucets are effected primarily through sales representatives. PURCHASED COMPONENTS AND RAW MATERIALS The Company's products require a wide variety of components and materials. Although the Company has multiple sources of supply for most of its material requirements, sole-source vendors supply certain components, and the Company's ability to perform certain contracts depends on their performance. In the past, these required raw materials and various purchased components generally have been available in sufficient quantities. GOVERNMENT CONTRACTING The Company's government contracts are obtained through the DoD procurement process as governed by the Federal Acquisition Regulations and related agency supplements, and are typically fixed-price contracts. This means that the price is agreed upon before the contract is awarded and the Company assumes complete responsibility for any difference between estimated and actual costs. Under the Truth in Negotiations Act of 1962 (Negotiations Act), the U.S. government has the right for three years after final payment on certain negotiated contracts, subcontracts and modifications thereto, to determine whether the Company furnished the U.S. government with complete, accurate and current cost or pricing data as defined by the Negotiations Act. In the event the Company fails to satisfy this requirement, the U.S. government has the right to adjust a contract or subcontract price by the amount of any overstatement as defined by the Negotiations Act. U.S. government contracts typically contain terms permitting the contract to be terminated at the convenience of the U.S. government. In the event of such termination, the Company is entitled to reimbursement for certain expenditures and overhead as provided for in applicable U.S. government procurement regulations. Generally, this results in the contractor being reasonably compensated for work actually done, but not for anticipated profits. The U.S. government may also terminate contracts for cause if the Company fails to perform in strict accordance with contract terms. The Company has never had a contract terminated by the U.S. government for failure to perform in accordance with contract terms. Termination of, or elimination of appropriation for, a significant government contract could have a material adverse effect on the Company's business, financial condition and results of operations in subsequent periods. Similarly, U.S. government contracts typically permit the U.S. government to change, alter or modify the contract at its discretion. If the U.S. government were to exercise this right, the Company would be entitled to reimbursement of all allowable and allocable costs incurred in making the change plus a reasonable profit. 4 The U.S. government typically finances a substantial portion of the Company's contract costs through progress payments. The Company receives progress payments in accordance with DoD contract terms which provide progress payments at 75% to 90% of costs incurred. INTELLECTUAL PROPERTY The Company owns various patents and other forms of intellectual property. From time to time, the Company develops proprietary information and trade secrets regarding the design and manufacture of various products. The Company considers its proprietary information and intellectual property to be valuable assets. However, the Company's business is not materially dependent on their protection. COMPETITION The markets for all of the Company's products are highly competitive. In order to obtain U.S. government contracts, the Company must comply with detailed and complex procurement procedures adopted by the DoD pursuant to regulations promulgated by the U.S. government. The regulations and procurement procedures are adopted to promote competitive bidding. In addition, the Company competes with a number of businesses with plastic injection molding capabilities and competes with a large number of suppliers to commercial and industrial air handling customers. In all phases of its operations, the Company competes in both performance and price with companies, some of which are considerably larger, more diversified and have greater financial resources than the Company. BACKLOG The Company records its backlog as either funded or unfunded backlog. The Company's funded backlog as of October 31, 2001 was approximately $291.7 million. The Company's funded backlog is subject to fluctuations and is not necessarily indicative of future sales. Funded backlog represents products the customer has committed by contract to purchase from the Company. Unfunded backlog includes products the customer has the option to purchase under contract with the Company, including, with respect to contracts which include a maximum amount purchasable by the customer thereunder, such maximum amount, and with respect to contracts without a specified maximum amount, the Company's estimate of the amount it expects the customer to purchase using the Best Estimated Quantity (BEQ) as a guide where a BEQ is specified. There are no commitments by the customer to purchase products included in unfunded backlog and there can be no assurance that any or all amounts included therein will generate revenue for the Company. Moreover, cancellations of purchase orders or reductions of product quantities in existing contracts could substantially reduce the Company's funded backlog and, consequently, future net revenues. Failure of the Company to replace canceled or reduced backlog, whether funded or unfunded, could have a material adverse effect on the Company's business, financial condition and results of operations in subsequent periods. 5 The following table summarizes funded and unfunded defense backlog (in millions) as of the indicated dates: Funded Unfunded Defense Backlog Defense Backlog --------------- --------------- October 31, 2001 $291.7 $681.8 October 31, 2000 307.3 598.1 October 31, 1999 286.8 850.5 October 31, 1998 85.8 319.6 October 31, 1997 44.1 155.0 EMPLOYEES As of October 31, 2001, the Company employed 2,174 persons, of which 1,305 were engaged in manufacturing activities, 396 in engineering activities, and 473 in office administration and management functions. District No. 9 of the International Association of Machinists and Aerospace Workers (AFL-CIO) represents approximately 346 employees under a collective bargaining agreement, which expires March 18, 2003. Lodge 1012 of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers (AFL-CIO) represents approximately 90 employees under a collective bargaining agreement, which expires January 31, 2002. The Company believes it will be able to negotiate a new collective bargaining agreement with this union. The Company considers its overall employee relations to be satisfactory. 6 ITEM 2. PROPERTIES - ------- ---------- The Company conducts its business from 11 manufacturing and office facilities. All owned facilities are owned by the Company and are subject to deeds of trust in favor of the Company's lender. Leased or Location Description Square Feet Owned -------- ----------- ----------- --------- St. Louis County, Manufacturing/Office 171,000 Owned Missouri Hot Springs, Manufacturing/Office 110,000 Owned Arkansas Bossier City, Manufacturing 80,000 Owned Louisiana High Ridge, Manufacturing/Office 185,000 Owned Missouri Florence, Kentucky Manufacturing/Office 174,000 Leased Blue Ash, Ohio Manufacturing 132,000 Owned West Plains, Missouri Manufacturing 405,000 Owned St. Louis County, Missouri Office 260,000 Owned Sanford, Florida Manufacturing 177,000 Owned Bridgeport, Connecticut Manufacturing/Office 109,000 Owned Bridgeport, Connecticut Manufacturing 26,000 Leased The Company believes that its current facilities are sufficient for the conduct of its current level of operations. ITEM 3. LEGAL PROCEEDINGS - ------- ----------------- The Company and its subsidiaries are from time to time parties to various legal proceedings arising out of their business. Management believes that there are no such proceedings pending or threatened against them which, if determined adversely, would have a material adverse effect on the business or financial condition of the Company. 7 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS - ------- ----------------------------------------------- There were no matters submitted to a vote of shareholders during the fourth quarter of the year ended October 31, 2001. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED - ------- ---------------------------------------------------- SHAREHOLDER MATTERS ------------------- Information concerning the principal market on which the Company's common stock is traded and the high and low sales prices for such stock during 2001 is shown in Supplemental Information on page 40 of the 2001 Annual Report, incorporated herein by reference. The Company currently pays a semi-annual dividend. The most recently declared dividend was in the amount of $.018 per share payable January 31, 2002 to shareholders of record as of December 31, 2001. ITEM 6. SELECTED FINANCIAL DATA - ------- ----------------------- Financial data required under this section is shown in the Summary of Selected Financial Data on page 2 of the 2001 Annual Report, incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION - ------- ----------------------------------------------------------- AND RESULTS OF OPERATIONS ------------------------- Management's Discussion and Analysis of Financial Condition and Results of Operations, shown on pages 22 through 26 of the 2001 Annual Report, is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - ------- ------------------------------------------- The following consolidated financial statements of Engineered Support Systems, Inc. included in the Annual Report for the year ended October 31, 2001 at the pages indicated, are incorporated herein by reference: Consolidated Balance Sheets, October 31, 2001 and 2000, page 27. Consolidated Statements of Income, years ended October 31, 2001, 2000 and 1999, page 28. Consolidated Statements of Shareholders' Equity, years ended October 31, 2001, 2000 and 1999, page 28. Consolidated Statements of Cash Flows, years ended October 31, 2001, 2000 and 1999, page 29. Notes to Consolidated Financial Statements, pages 30 through 38. The quarterly financial information included in Supplementary Information on page 40 of the 2001 Annual Report is incorporated herein by reference. All other schedules are omitted because they are not applicable or the required information is included in the consolidated financial statements or the notes thereto. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING - ------- ----------------------------------------------------------- AMD FINANCIAL DISCLOSURES ------------------------- None. 8 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - -------- -------------------------------------------------- The directors, executive officers and key employees of the Company as of January 17, 2002 are as follows: Name Age Position ---- --- -------- Michael F. Shanahan, Sr. (1) 62 Chairman, Chief Executive Officer and Director Gerald A. Potthoff (1) 61 President, Chief Operating Officer and Director Gary C. Gerhardt (1) 56 Vice Chairman - Administration, Chief Financial Officer and Director William H. T. Bush (2) 63 Director General Michael P. C. Carns (2) 64 Director MG George E. Friel (2) 59 Director Thomas J. Guilfoil (3) 82 Director S. Lee Kling (2) 73 Director LTG Kenneth E. Lewi (3) 71 Director General Charles T. Robertson, Jr. 55 Director General Crosbie E. Saint 65 Director Michael F. Shanahan, Jr. (1)(3) 35 Director Earl W. Wims (3) 62 Director Ronald W. Davis 55 Vice President - Planning and Development Larry K. Brewer 59 Senior Vice President - Business Development Dan D. Jura 49 Vice President - Sales Allan K. Kaste 55 Vice President - Human Resources Robert L. Klautzer 57 Vice President - Management Information Systems Steven J. Landmann 42 Vice President - Controller David D. Mattern 43 Secretary and General Counsel 9 John R. Wootton 54 Vice President - Technology John E. Capeless 56 President (ESP) Thomas G. Cornwell 46 President (Engineered Air) Gerald A. Nicholson 55 President (Marlo Coil) Daniel A. Rodrigues 46 President (SEI) Thomas C. Santoro 48 President (Fermont) Marvin L. Smith 64 President (Keco) <FN> (1) Member of Executive Committee of the Board (2) Member of Audit Committee of the Board (3) Member of Compensation Committee of the Board EXECUTIVE OFFICERS - ------------------ The officers serve at the discretion of the Board of Directors, subject to the terms and conditions of their employment agreements. Michael F. Shanahan, Sr. has been a director of the Company since its formation. Mr. Shanahan was named Chief Executive Officer of the Company in 1985. He was named Chairman of the Company in 1987. Gerald A. Potthoff has been a director of the Company since October 1999. At the same time, he was named President and Chief Operating Officer of the Company. Prior thereto, he served as President of SEI from October 1991 to July 2000. Gary C. Gerhardt has been a director of the Company since March 1998. He was named Vice Chairman-Administration of the Company in October 1999 and prior thereto served as Executive Vice President of the Company since 1994. He has been Chief Financial Officer of the Company since 1993. Ronald W. Davis has been Vice President-Planning and Development of the Company since December 1999. Prior thereto, he served as Vice President-Marketing for the Company since April 1999 and for Engineered Air since 1990. Larry K. Brewer has been Senior Vice President-Business Development of the Company since February 2000. Prior thereto, he served SEI as Vice President-Business Development since 1998, Vice President-Corp. Marketing & Washington DC Operations since 1997 and as Vice President-Government Relations since 1995. Dan D. Jura has been Vice President-Sales of the Company since April 1999. Prior thereto, he served as Vice President-Sales for Engineered Air since 1993. Allan K. Kaste has been Vice President-Human Resources of the Company since May 2000. He has served as Vice President-Human Resources for SEI since 1994. 10 Robert L. Klautzer has been Vice President-Management Information Systems of the Company since May 2000. He has served as Vice President-Management Information Systems for SEI since 1997 and, prior thereto, as its Director-Management Information Systems since 1988. Steven J. Landmann has been Vice President-Controller of the Company since December 1999. Prior thereto, he served as Controller for the Company since September 1998 and for Engineered Air since 1994. David D. Mattern was appointed Secretary and General Counsel of the Company in December 1999. Prior thereto, he served as the Company's Secretary since 1992 and as outside counsel to the Company. John R. Wooton has been Vice President-Technology of the Company since February 2000. He has served as Vice President-Technology for SEI since 1997 and, prior thereto, as its Director-Technology since 1994. John E. Capeless has been President of ESP since April 1999. Prior thereto, he served as Vice President and General Manager of ESP since 1996. Thomas G. Cornwell has been President of Engineered Air since September 2000. Prior thereto, he served as Director-Program Management for SEI since 1992. Gerald A. Nicholson was named President of Marlo Coil in January 2001. Prior thereto, he was Executive Vice President for the Tweco/Arcair and Coyne Cylinder divisions of Thermadyne Industries from 1995 to 1998. Daniel A. Rodriques has been President of SEI since July 2000. Prior thereto, he served as Senior Vice President and General Manager of SEI since July 1999 and as Vice President of Program Administration since October 1995. Thomas C. Santoro has been President of Fermont since February 1995. Marvin L. Smith has been President of Keco since April 1999. Prior thereto, he served as Keco's Executive Vice President since 1990. 11 NON-EMPLOYEE DIRECTORS - ---------------------- William H. T. Bush has been a director of the Company since March 2000. He is Chairman of the St. Louis - based investment firm, Bush O'Donnell & Co. which he founded in 1986. General Michael P. C. Carns (U.S. Air Force, Retired) has been a director of the Company since March 2000. He retired as Vice Chief of Staff of the Air Force in 1994 after 35 years of service in the U.S. Air Force. MG George E. Friel (U.S. Army, Retired) has been a director of the Company since September 1998. He retired from the U.S. Army in July 1998 after 38 years of service. In the six years preceding his retirement, he headed the U.S. Army Chemical and Biological Defense Command (CBDCOM). Thomas J. Guilfoil has been a director of the Company since 1993. He is the senior and founding partner of the St. Louis law firm of Guilfoil, Petzall & Shoemake and serves as Vice Chairman of the Arizona Football Cardinals. S. Lee Kling has been a director of the Company since March 2000. He is Chairman of Kling Rechter Company, a merchant banking company formed in 1991. LTG Kenneth E. Lewi (U.S. Army, Retired) has been a director of the Company since 1990. He retired from the U.S. Army in August 1989 after 34 years of service. His career in the U.S. Army centered primarily on providing logistical support to U.S. armed forces. General Charles T. Robertson, Jr. (U.S. Air Force, Retired) has been a director of the Company since December 2001. He retired from the U.S. Air Force in November 2001 after 33 years of service. Prior to his retirement, he served as commander in chief, U.S. Transportation Command, and commander, Air Mobility Command, Scott Air Force Base, since 1998. Prior thereto, he served as commander, 15th Air Force, Travis Air Force Base, since 1996. General Crosbie E. Saint (U.S. Army, Retired) has been a director of the Company since August 2000. He retired as Commander in Chief, United States Army, Europe and Seventh Army in 1992 after 33 years of service in the U.S. Army. Michael F. Shanahan, Jr. has been a director of the Company since 1994. He has been Executive Vice President of Lockton Companies, an insurance concern, since November 2000. Prior thereto, he was a Producer for Lockton Companies since October 1994. Earl W. Wims has been a director of the Company since 1991. He has been Chairman of Marketing Horizons, a marketing research and consulting firm, since 1986. ITEM 11. EXECUTIVE COMPENSATION - -------- ---------------------- Information concerning executive compensation is shown in the Company's Definitive Proxy Statement (to be filed within 120 days after the close of the fiscal year ended October 31, 2001) incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND - -------- --------------------------------------------------- MANAGEMENT ---------- Information relating to the ownership of the Company's securities by certain beneficial owners and management is shown in the Definitive Proxy Statement (to be filed within 120 days after the close of the year ended October 31, 2001) incorporated herein by reference. 12 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - -------- ---------------------------------------------- Information on certain relationships, related transactions and affiliation of directors is shown in the Definitive Proxy Statement (to be filed within 120 days after the close of the year ended October 31, 2001) incorporated herein by reference. 13 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON - -------- -------------------------------------------------------- FORM 8-K -------- (a) (1) and (2) Index of Financial Statements and Financial Statement Schedules The following consolidated financial statements of Engineered Support Systems, Inc., included in the 2001 Annual Report of the registrant to its shareholders, are incorporated by reference in Item 8: Report of Independent Accountants Consolidated Balance Sheets-October 31, 2001 and 2000 Consolidated Statements of Income-years ended October 31, 2001, 2000 and 1999 Consolidated Statements of Shareholders' Equity-years ended October 31, 2001, 2000 and 1999 Consolidated Statement of Cash Flows-years ended October 31, 2001, 2000 and 1999 Notes to Consolidated Financial Statements-October 31, 2001 The following financial statement schedule and independent accountants report are included as Exhibit 99: Valuation and Qualifying Accounts (Schedule II)-years ended October 31, 2001, 2000 and 1999 All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. 3.0 Lists of Exhibits (listed by numbers corresponding to exhibit table of Item 601 in regulation S-K) 3.1 Articles of Incorporation of Engineered Support Systems, Inc. (1) 3.2 Amendment of Articles of Incorporation (2) 3.3 Amended and Restated By-Laws of Engineered Support Systems, Inc. (2) 4.1 Credit Agreement dated as of September 30, 1999 among Engineered Support Systems, Inc., Bank of America, National Association, as Agent and as Swing Line Lender, and the Other Financial Institutions Party Hereto (5) 4.2 Engineered Air Systems, Inc. Employee Stock Ownership Plan, subsequently renamed the Engineered Support Systems, Inc. Employee Stock Ownership Plan (4) 4.3 Trust Agreement for the Engineered Air Systems, Inc. Employee Stock Ownership Trust (4) 4.4 Engineered Support Systems, Inc. 2000 Stock Option Plan (6) 4.5 Engineered Support Systems, Inc. 2000 Stock Option Plan for Nonemployee Directors (7) 14 4.6 Engineered Support Systems, Inc. Employee Stock Purchase Plan (8) 4.7 Engineered Support Systems, Inc. Stock Purchase Plan for Nonemployee Directors (9) 10.1 Employee Agreement with Michael F. Shanahan, Sr. (3) 10.2 Form of Indemnification Agreement with Directors (2) 11 Statement Re: Computation of Earnings Per Share 13 Engineered Support Systems, Inc. Annual Report for the year ended October 31, 2001 (the Annual Report). Except for the portions incorporated herein by reference as evidenced in the Form 10-K, the Annual Report is furnished for the information of the Securities and Exchange Commission and is not deemed filed as part of this 10-K 21 Subsidiary of Registrant (1) 23 Consent of PricewaterhouseCoopers LLP, Independent Accountants 99 Valuation and Qualifying Accounts (Schedule II) 15 (1) This information is incorporated herein by reference from Form S-1 Registration Statement filed on July 10, 1985, registration number 2-98909 as amended on August 13, 1985 and August 21, 1985. (2) This information is incorporated herein by reference from Form 10-K Annual Report filed on January 30, 1989. (3) This information is incorporated herein by reference from Form 10-K Annual Report filed on January 29, 1990. (4) This information is incorporated herein by reference from Form S-8 registration statement, effective June 11, 1987, registration number 33-14504. (5) This information is incorporated herein by reference from Form 8-K/A filed on December 14, 1999. (6) This information is incorporated by reference from Form S-8 registration statement, effective September 1, 2000, registration number 333-45022. (7) This information is incorporated by reference from Form S-8 registration statement, effective September 1, 2000, registration number 333-45020. (8) This information is incorporated by reference from Form S-8 registration statement, effective June 29, 2001, registration number 333-64126. (9) This information is incorporated by reference from Form S-8 registration statement, effective July 20, 2001, registration number 333-65490. (b) During the fourth quarter of 2001, the Company filed no reports on Form 8-K. (c) Exhibits The response to this portion of Item 14 is submitted as a separate section of this Report. (d) Financial Statement Schedules The response to this portion of Item 14 is submitted as a separate section of this Report. 16 SIGNATURES - ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. ENGINEERED SUPPORT SYSTEMS, INC. Dated: January 29, 2002 By: /s/ Gary C. Gerhardt ---------------------- ----------------------------------- GARY C. GERHARDT Vice Chairman-Administration and Chief Financial Officer Pursuant to the requirements of the Securities and 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. SIGNATURE TITLE DATE --------- ----- ---- /s/ Michael F. Shanahan, Sr. Chairman of the Board January 29, 2002 - -------------------------------------------- of Directors and ---------------- MICHAEL F. SHANAHAN, SR. Chief Executive Officer /s/ Gary C. Gerhardt Vice Chairman-Administration and January 29, 2002 - -------------------------------------------- Chief Financial Officer ---------------- GARY C. GERHARDT 17 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. DIRECTORS --------- /s/ Michael F. Shanahan, Sr. January 29, 2002 /s/ Thomas J. Guilfoil January 29, 2002 - ---------------------------------------- ---------------- ---------------------------------------- ---------------- MICHAEL F. SHANAHAN, SR. THOMAS J. GUILFOIL /s/ Gerald A. Potthoff January 29, 2002 /s/ S. Lee Kling January 29, 2002 - ---------------------------------------- ---------------- ---------------------------------------- ---------------- GERALD A. POTTHOFF S. LEE KLING /s/ Gary C. Gerhardt January 29, 2002 /s/ Kenneth E. Lewi January 29, 2002 - ---------------------------------------- ---------------- ---------------------------------------- ---------------- GARY C. GERHARDT KENNETH E. LEWI /s/ William H.T. Bush January 29, 2002 /s/ Charles T. Robertson, Jr. January 29, 2002 - ---------------------------------------- ---------------- ---------------------------------------- ---------------- WILLIAM H.T. BUSH CHARLES T. ROBERTSON, JR. /s/ Michael P.C. Carns January 29, 2002 /s/ Crosbie E. Saint January 29, 2002 - ---------------------------------------- ---------------- ---------------------------------------- ---------------- MICHAEL P.C. CARNS CROSBIE E. SAINT /s/ George E. Friel January 29, 2002 /s/ Michael F. Shanahan, Jr. January 29, 2002 - ---------------------------------------- ---------------- ---------------------------------------- ---------------- GEORGE E. FRIEL MICHAEL F. SHANAHAN, JR. /s/ Earl W. Wims January 29, 2002 ---------------------------------------- ---------------- EARL W. WIMS 18 ENGINEERED SUPPORT SYSTEMS, INC. EXHIBIT INDEX Page No. -------- 11. Statement Re: Computation of Earnings Per Share 13. Engineered Support Systems, Inc. Annual Report for year ended October 31, 2001 (the Annual Report). Except for the portions incorporated herein by reference as evidenced in the Form 10-K, the Annual Report is furnished for the information of the Securities and Exchange Commission and is not deemed filed as part of this Form 10-K. 23. Consent of PricewaterhouseCoopers LLP, Independent Accountants 99. Valuation and Qualifying Accounts (Schedule II) 19