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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)
(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