EX-99.3 8 exh99p3.txt VALUATION AND QUALIFYING ACCOUNTS REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE To the Board of Directors of Engineered Support Systems, Inc.: Our audits of the consolidated financial statements referred to in our report dated December 10, 2002 appearing in this Annual Report on Form 10-K also included an audit of the financial statement schedule listed in Item 15(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. /s/ PricewaterhouseCoopers LLP ----------------------------------- PricewaterhouseCoopers LLP St. Louis, MO December 10, 2002 50 EXHIBIT 99.3 ENGINEERED SUPPORT SYSTEMS, INC. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (in thousands)
Additions ----------------------- Balance at Charged to Charged to Balance beginning costs and other at end of Description of period expenses accounts Deductions period ----------------------------------------------------------------------------------------------------- Year ended October 31, 2002 Allowance for doubtful accounts $147 $ 152 $ 5 $ 23 $281 Inventory reserves 1,125 5 311 819 Year ended October 31, 2001 Allowance for doubtful accounts $113 $ 63 $ 29 $147 Inventory reserves Year ended October 31, 2000 Allowance for doubtful accounts $194 $ 89 $170 $113 Inventory reserves 320 (320)
51 SUPPLEMENTAL INFORMATION ------------------------------------------------------------------------ THE TABLE BELOW PRESENTS UNAUDITED QUARTERLY FINANCIAL INFORMATION IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS, FOR THE YEARS ENDED OCTOBER 31, 2002 AND 2001:
QUARTER ENDED JANUARY 31 APRIL 30 JULY 31 OCTOBER 31 ----------------------------------------------------------------------------------------------------------------------------- 2002 2001 2002 2001 2002 2001 2002 2001 ----------------------------------------------------------------------------------------------------------------------------- RESULTS OF CONTINUING OPERATIONS Net revenues $91,286 $86,130 $91,780 $94,550 $106,599 $91,332 $118,280 $93,186 Gross profit 19,912 17,377 21,762 18,684 25,791 18,823 27,713 20,730 Net income 5,902 3,805 6,564 4,360 6,933 4,649 8,267 5,455 Basic earnings per share $ 0.38 $ 0.28 $ 0.42 $ 0.32 $ 0.44 $ 0.33 $ 0.52 $ 0.37 Diluted earnings per share $ 0.37 $ 0.26 $ 0.41 $ 0.29 $ 0.43 $ 0.29 $ 0.50 $ 0.34 -----------------------------------------------------------------------------------------------------------------------------
AMOUNTS FOR THE QUARTERS ENDED JANUARY 31, 2002 AND 2001 DIFFER FROM THOSE PREVIOUSLY REPORTED IN FORM 10-Q DUE SOLELY TO THE IMPACT OF THE DISCONTINUED OPERATIONS OF ESP. AMOUNTS PREVIOUSLY REPORTED FOR THE QUARTERS ENDED JANUARY 31, 2002 AND 2001, RESPECTIVELY, INCLUDED NET REVENUES OF $94,116 AND $91,101, GROSS PROFIT OF $19,846 AND $17,970, NET INCOME OF $5,524 AND $3,841, BASIC EARNINGS PER SHARE OF $0.36 AND $0.28, AND DILUTED EARNINGS PER SHARE OF $0.35 AND $0.27. EARNINGS PER SHARE CALCULATIONS ARE BASED ON THE AVERAGE BASIC AND DILUTED COMMON SHARES OUTSTANDING FOR EACH QUARTER AND, THEREFORE, THE SUM OF THE QUARTERS MAY NOT NECESSARILY BE EQUAL TO THE FULL YEAR BASIC AND DILUTED EARNINGS PER SHARE AMOUNTS. DIVIDENDS THE COMPANY CURRENTLY PAYS A SEMI-ANNUAL DIVIDEND. THE MOST RECENTLY DECLARED DIVIDEND WAS IN THE AMOUNT OF $.018 PER SHARE PAYABLE JANUARY 31, 2003 TO SHAREHOLDERS OF RECORD ON DECEMBER 31, 2002. MARKET DATA THE COMPANY'S COMMON STOCK TRADES ON THE NASDAQ STOCK MARKET UNDER THE SYMBOL EASI. AS OF DECEMBER 31, 2002, THE APPROXIMATE NUMBER OF COMMON SHAREHOLDERS WAS 9,300. THE FOLLOWING TABLE SETS FORTH THE HIGH AND LOW STOCK PRICES FOR EACH QUARTER AS PROVIDED BY THE NASDAQ STOCK MARKET.
2002 2001 ----------------------------------------------------------- HIGH LOW HIGH LOW ----------------------------------------------------------- QUARTER ENDED: January 31 $35.67 $19.39 $15.97 $ 9.80 April 30 34.16 23.03 21.13 10.92 July 31 35.96 27.77 28.52 17.47 October 31 41.23 30.00 38.67 18.67
TRANSFER AGENT AND REGISTRAR MELLON INVESTOR SERVICES, LLC 85 CHALLENGER ROAD RIDGEFIELD PARK, NJ 07660 INDEPENDENT ACCOUNTANTS PRICEWATERHOUSECOOPERS LLP 800 MARKET STREET ST. LOUIS, MO 63101 SECRETARY AND GENERAL COUNSEL DAVID DOUGLASS MATTERN 201 EVANS LANE ST. LOUIS, MO 63121 ANNUAL MEETING MARCH 4, 2003 ENGINEERED SUPPORT SYSTEMS, INC. 201 EVANS LANE ST. LOUIS, MO 63121 INVESTOR INFORMATION YOU MAY CONTACT THE COMPANY AT: INVESTOR RELATIONS ENGINEERED SUPPORT SYSTEMS, INC. 201 EVANS LANE ST. LOUIS, MO 63121 YOU MAY VIEW ONLINE AND REQUEST ADDITIONAL COPIES OF THE COMPANY'S ANNUAL REPORT AND FORM 10-K ON THE COMPANY'S WEB SITE AT WWW.ENGINEEREDSUPPORT.COM.