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                     U.S. Securities and Exchange Commission
                                Washington, D.C.

                                   FORM 10-KSB
(Mark One)

    [X]   ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
          EXCHANGE ACT OF 1934 [FEE REQUIRED]

          For the Fiscal year ended April 30, 2000
                                    --------------

    [ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
          EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

          For the transition period from             to
                                         -----------    ----------

          Commission file number 0-22760
                                 -------

                       Airport Systems International, Inc.
                -------------------------------------------------
                 (Name of small business issuer in its charter)

                    Kansas                              48-1099142
         -------------------------------            ------------------
         (State or other jurisdiction of             (I.R.S. Employer
         incorporation or organization)             Identification No.)

               11300 West 89th Street, Overland Park, Kansas 66214
         -------------------------------------------------------------
         (Address of principal executive offices)        (Zip Code)

Issuer's telephone number (913) 495-2600
                          --------------
Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

                           Common Stock, $.01 par value
                      -------------------------------------
                                (Title of class)

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

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB. [X]

         State issuer's revenues for its most recent fiscal year. $15,128,000
                                                                   ----------

         The aggregate market value of the voting stock held by non-affiliates
of the issuer on June 1, 2000, based upon the average bid and ask prices for
such stock on that date was $5,640,083. The number of shares of Common Stock of
the issuer outstanding as of June 1, 2000 was 2,578,913.

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         Documents incorporated by reference:
              -    Portions of the Proxy Statement for the Annual Meeting of
                   Shareholders to be held September 12, 2000, are
                   incorporated by reference into Part III.

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                                     Part I

Item 1.  BUSINESS

                                     GENERAL

Airport Systems International, Inc. (the "Company" or "Airport Systems") is a
designer and manufacturer of electronic components, sub-assemblies and systems
and a marketer of electronic contract assembly services. Airport Systems, as the
parent company operates two business segments, electronic components
manufacturing (ECM) and aerospace. The ECM unit operates as a wholly owned
subsidiary, DCI, Inc. (DCI) and manufactures custom liquid crystal display (LCD)
devices as well as panel meter and heat-seal equipment. In addition, the ECM
unit also provides contract manufacturing services. Its products are used in
aerospace, medical, industrial and home applications. Sales are made primarily
to customers within the United States. The aerospace unit designs, manufactures
and installs ground-based radio navigation and landing systems (navaids) and
airfield lighting. Its customers consist of civil aviation authorities in the
United States and throughout the world. The aerospace unit is operated through
Airport Systems while the ECM unit is operated through DCI.

In fiscal 2000, Airport Systems implemented a new strategic direction,
leveraging its core competency as a manufacturer of high quality electronics to
other vertical markets. The new initiative is focused, primarily through
acquisition, on diversifying into the manufacture and sale of electronic
components and systems of both a proprietary and contract assembly nature.
Contract electronic manufacturing (CEM) is a large and growing market. Industry
reports estimate the market at $30 billion, growing at 20%+ annually. This is
driven by manufacturers of all sizes outsourcing their electronics
manufacturing, allowing them to focus on core business competencies such as
product design and marketing. These trends have generated steady annual sales
growth at DCI. The world-wide market for navaids, by comparison, is only
$120-150 million annually, and cyclical.

The first phase of the new strategy began with the acquisition of DCI in
February. DCI is located in Lenexa, Kansas and had sales for the calendar year
ended December 31, 1999, of approximately $8.1 million. The acquisition was
accretive to Airport Systems' historical earnings on a pro forma basis. The
acquisition of DCI repositions the Company as a reputable electronic
manufacturing service provider and consolidator, offering a platform for future
acquisitions. Airport Systems has ISO 9001 certification and a rigorous quality
assurance program critical to CEM operations. In pursuing its acquisition
strategy, the Company can judiciously utilize equity as acquisition currency.
The Company plans to focus its CEM on customers which can use design assistance
and shorter production runs, and need proprietary product lines such as LCD
displays. This differentiated strategy has been successful for DCI and led to
its historical growth.

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The Company was incorporated in Kansas on May 1, 1991, and completed an initial
public offering on November 30, 1993.

To better define the Company's business, as well as the businesses operated by
its business units, the Company is proposing to change its name to Elecsys
Corporation contingent upon the approval of the shareholders at its 2000 Annual
Meeting scheduled for September 12, 2000 and subject to the status of the
application to register the name with the United States Patent and Trademark
Office. Once approved, a new subsidiary will be created and the assets of the
aerospace unit (essentially the assets of Airport Systems today) will be
transferred to it in a tax-free exchange. This new subsidiary will take with it
the name Airport Systems International, Inc.

                                BUSINESS SEGMENTS

ECM

DCI performs circuit board and module manufacturing as well as liquid crystal
display (LCD) manufacturing. It's products and services include custom LCD's,
LCD modules, panel meters and heat seal equipment; as well as providing design
and contract electronic manufacturing services. DCI's circuit board
manufacturing capabilities include automated surface mount assembly and
soldering, automated through-hole insertion and wave soldering and wire bonded
chip on board assembly. DCI operates out of a 35,000 sq. foot manufacturing
facility with state of the art equipment allowing low through moderate volume
capability. DCI's manufacturing and design capabilities allows it to offer their
customers a "one-stop" shop capability for all their electronic needs, including
manufacture and test; design; miniaturization of concept; design and manufacture
of the LCD device, electronics and display; and packaging. Substantially all of
DCI's sales are domestic customers, using in-house sales personnel and outside
reps.

LCD's are a display device in which liquid crystal (LC) material is sealed
between two plates of conductively coated glass. The conductively coated glass
is etched with images on both the front and back plates. The glass and LC is
then polarized. In it's passive state the LC material is transparent, however,
when voltage is applied across both plates, the molecules in the LC material
align themselves and the material becomes opaque, thus creating the desired
displayed information. When the voltage is removed, the molecules re-align
themselves to their original transparent state and no display is shown. LCD's
are used to display information a variety of applications from commercial and
industrial to consumer products where low energy consumption is required (as
opposed to light emitting diodes (LED's) which use more current to display
information, and thus require more power to operate). DCI sells LCD's to
original equipment manufacturers (OEMs) in medical, industrial, commercial,
consumer and military markets, focusing on low to moderate volume specialty
applications. For high volume projects, DCI contracts with an off-shore
manufacturer to achieve the required cost reductions needed to be competitive.
DCI is one of a few companies in the United States capable of designing and
manufacturing the complete display module (the display attached to the
electronics). This is a significant "one-stop" feature and a competitive
advantage. DCI recently completed an advanced clean room in its Lenexa facility
which enhances its LCD manufacturing capabilities. This clean room was built to
Class 10000 specifications and includes self-contained HVAC systems,
hepa-filters (fine micron filters) on all vents, separate cap and gown and
changing rooms with air shower. The clean room also includes high-end glass
scribe and photo-imaging process equipment. Addition of this clean

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room allows DCI to produce LCD's with tighter tolerances allowing higher yields
and better quality. DCI believes the new clean room will allow it to effectively
compete for more advanced and profitable LCD business. Sales are made to
customers principally in the United States. LCD and LCD module sales current
comprise approximately 38% of total ECM sales.

Panel meter instruments are used in process, laboratory and quality control
applications including research labs, ground support equipment in the aerospace
industry, waste water treatment and power generation plants. Sales are made to
end users and OEM's principally in the United States. These instruments measure
a number of different types of process or flow information, including
revolutions per minute (RPM's), dwell pressure, fluid and electrical volumes and
torque. They can operate as standalone equipment or interface to programmable
computers. Metering equipment and panel instrument sales current comprise
approximately 10% of total ECM sales.

Contract electronic manufacturing services includes assisting the customer with
specific design issues as well as manufacturing electronic assemblies to their
specifications. DCI's facility is ideally situated to handle customers low to
moderate volume manufacturing requirements. This includes high speed placement
of surface mount components, automated through hole axial lead equipment,
controlled solder paste applications, testing services and low to moderate
volume surface mount runs. Contract manufacturing sales currently comprise
approximately 52% of total ECM sales.

Aerospace

The aerospace unit (Airport Systems) engages in the design, manufacture,
marketing and installation of ground-based navaids and visual aids, which
include airfield lighting and airfield signage. Navaids provide enroute and
approach to landing guidance to aircraft, allowing them to safely navigate and
land in poor visibility conditions. Navaids are required by the United States
Federal Aviation Administration ("FAA") and the International Civil Aviation
Organization ("ICAO") regulations at all airports in the world that conduct
all-weather operations. Visual aids are used to direct aircraft along runways,
taxiways and to terminals.

Airport Systems' primary products are Instrument Landing Systems (ILS), Very
High Frequency Omni-Range Transmitters (VOR), Distance Measuring Equipment
(DME), and Airfield Lighting and Signage. ILS, VOR, and DME's are generally
referred to as navaids. Navaid products, such as those manufactured by the
Company, are an integral part of the air traffic control system used worldwide
for navigation of aircraft operating in Instrument Meteorological Conditions
(IMC) under Instrument-flight Rules (IFR). Signals generated by these products
are received by electronic avionics equipment installed in all aircraft equipped
for IFR. The avionics include cockpit displays which provide navigational
guidance to the pilot. Most navaids are radio frequency devices which use
measurement of angles and distance to establish aircraft position coordinates.

Airport Systems' revenues are generated principally from sales of its products
and services to government agencies internationally and in the United States.
The products are sold directly to such agencies or through prime contractors for
integration into systems procured by those agencies. Airport Systems' sales are
largely dependent upon government construction and procurement contracts. The
majority of Airport Systems' revenues in any single quarter is typically derived
from relatively few

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customers and quarterly revenue will, therefore, fluctuate based on a number of
factors, including the timing and magnitude of orders, customer installation
schedules, and political and economic factors.

Sales are typically made pursuant to fixed price contracts and cost overruns, if
any, are assumed by Airport Systems. Historically, Airport Systems has not had
any contracts which have required significant product development efforts,
however, Airport Systems may, in the future, enter into fixed price contracts
which require significant product development efforts. See "Certain Factors That
May Effect Future Results - Dependence on Fixed Price Contracts."

Generally, the time from when an order is accepted until the first equipment is
shipped is approximately one to three months. Training is normally completed
during the production of the equipment. Final acceptance of the installed
equipment (and thus completion of the installation portion of the contract)
normally occurs two to four months after the equipment is shipped. Installation
time can vary, however, with weather and site conditions, and the progress of
other portions of the construction project into which Airport Systems' products
are incorporated. Airport Systems generally provides a limited product warranty
with its equipment. Warranty costs are tracked by Airport Systems and have
historically not varied materially from management's estimates.

An ILS system provides the close-in navigation support to an aircraft during the
approach to landing phase. An ILS is certified for use according to criteria
which specify the applicable landing decision height which is required for a
particular approach procedure. Decision height is that point above the approach
end of the runway at which the pilot must either establish positive visual
contact with the runway, or execute a missed approach. Category I ILS permits a
landing decision height of 200 feet; Category II ILS permits a landing decision
height of 100 feet; and Category III ILS permits a landing decision height of 50
feet or less. The Company produces Category I, II, and III ILS.

VOR, in combination with DME, provide the principal means for enroute navigation
currently used in the air traffic control system. A VOR located either at an
airport or at enroute points between airports provides a line of bearing from a
ground station to an aircraft based on 360 specific radials (each radial
representing a point on the compass).

A DME provides distance measurement from the aircraft to the DME with an
accuracy of approximately 500 feet. A DME uses a pulsed system, like radar, in
which the ground-based DME station replies with a pulse to an interrogating
signal received from an aircraft. The distance is computed by measuring the time
between signals. Airport Systems manufactures and sells a low power DME for use
at airports and a high power DME for use enroute. A DME can be used in place of
marker beacons in an ILS to provide distance information to the pilot.

Airport Systems announced in July of 1998 that it had signed a marketing and
manufacturing agreement with Idman Airfield Products ("Idman"), a manufacturer
of airport lighting products based in Finland. Idman, a wholly owned subsidiary
of Philips Electronics, N.V., manufactures a complete line of airport lighting
including approach, taxiway and runway lights, precision approach path indicator
(PAPI), as well as control equipment. Under the terms of the agreement, Airport
Systems has exclusive marketing and manufacturing rights for these products in
North and South America and non-exclusive distribution rights in a number of
other major international markets. During fiscal 1999,

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Airport Systems obtained FAA certification for Idman's elevated runway and
taxiway lights. In July, 1999 Idman's PAPI (Precision Approach Path Indicator)
was certified by the FAA.

Airport Systems serves three primary markets: international; United States
non-federal; and the United States government.

The international market consists of all sales where the installation of
products is outside the United States. Almost all countries have civil aviation
authorities which regulate the airways within their borders and procure
equipment for their air traffic control systems and airports. Airport Systems
sells either directly to these international organizations through a network of
representatives and distributors, or through prime contractors. Airport Systems
has over 35 independent sales representatives covering over 35 countries.
Airport Systems' international sales were 72% and 80%, of total consolidated
sales for the fiscal years ended April 30, 2000, and 1999, respectively.

The United States non-federal market is comprised primarily of state and local
governmental entities which have responsibility for airport development,
improvement and management. Airport Systems either contracts directly with the
governmental entity constructing or improving an airport for the navaids portion
of the project, or acts as a subcontractor to a prime contractor. Airport
Systems' United States non-federal sales were 12% and 17%, of total consolidated
sales for the fiscal years ended April 30, 2000, and 1999, respectively.

The United States government market includes all governmental agencies, which
have a need for navaid products for installation in the United States. The
primary customer for Airport Systems in this market is the FAA. Sales to the
United States Government were approximately 5% and 3%, of total consolidated
sales for the fiscal periods ended April 30, 2000, and 1999, respectively.
Airport Systems has, to date, approached this market as both a subcontractor and
direct provider.

                                   COMPETITION

ECM

DCI competes against different competitors for each of its lines of products.
There are a limited number of LCD competitors in the United States. These
include Planar/Standish, LXD, Crystaloid and Polytronics. Panel meter
competitors include Newport Labs, Red Lion, Digitec, Non-linear Systems, Lincoln
Instruments, Doric Instruments, Analogic, and Kessler Ellis. The electronic
manufacturing services industry is very competitive. DCI competes against
numerous domestic and foreign manufacturing service providers, some of whom are
substantially larger than DCI with greater financial, operating, manufacturing
and marketing resources. Some have broader geographic breadth, broader ranges of
services and more established overseas operations. In addition, DCI faces
competition from the manufacturing operations of its current and potential
customers who continually evaluate the relative benefits of internal
manufacturing versus outsourcing. DCI believes that the principal competitive
factors in its target markets are product quality, flexibility and timeliness in
responding to design and schedule changes, reliability in meeting product
delivery schedules, pricing, technological sophistication, and geographic
location. To remain competitive, DCI must continue to provide technologically
advanced manufacturing services, maintain quality levels, offer flexible deliver

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schedules, deliver finished products on a reliable basis and compete effectively
on price. See also Certain Risk Factors That May Affect Future
Results-Competition.

Aerospace

Airport Systems competes against several large multi-national companies which
provide a broad spectrum of products and which serve a wide customer base. Most
contracts in the navaid and sign markets are awarded through a sealed bid or
competitive request for proposal process. The principal competitive factors in
these markets are (i) product conformance with FAA and ICAO specifications, (ii)
quality of product manufactured and ease of customer usability and maintenance,
(iii) delivery time, (iv) customer training and support, and (v) price. To date,
the international and United States non-federal markets have accounted for a
substantial portion of the Company's revenues. It is the Company's belief that
significant barriers to entry into the markets for its existing products are
presented by the difficulty and expense of developing the products and obtaining
FAA and international approvals.

Airport Systems principal navaid competitor in the United States non-federal
market is Airsys ATM (previously Wilcox Electric Company), which is, to the
Company's knowledge, the only other United States manufacturer of ground-based
navaids of the type sold by Airport Systems that has products certified for use
in projects partially funded by the Airport Improvement Program (AIP). Airsys
ATM is a joint venture, approximately 60% owned by Thomson CSF and 40% owned by
Siemens A. G., a German defense and electronics company.

Internationally, Airport Systems has competed against several navaids suppliers,
including Airsys ATM, the only competitor which has a full line of navigational
aid products. In addition, Airport Systems competes against several other
smaller companies, none of which carry a full line of products.

Airport Systems has several visual aids competitors both domestically and
internationally. Domestically, Airport Systems primary competitors are ADB
Alnaco (a division of Siemens A.G.), Crouse Hinds (a division of Cooper
Industries), Honeywell and Standard Signs, Inc. (a privately held company).
Internationally, the Company competes primarily against Siemens ADB and local
indigenous sign manufacturers.

        SOURCES AND AVAILABILITY OF RAW MATERIALS AND PRINCIPLE SUPPLIERS

Raw materials used in the manufacture of the Company's products are readily
available from a number of sources in the United States.

                   DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS

The Company had sales to one customer which, in the aggregate, accounted for 13%
of total sales in fiscal 2000, and sales to two customers which accounted for
47% of total sales in fiscal 1999. Because of the nature of the Company's
business, it is possible that future revenues could be dependent on one or a few
major customers.

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                          PATENTS, TRADEMARKS, LICENSES

The Company holds no United States or foreign patents. The Company's only
trademark is the "AIRPORT SYSTEMS" name and design which is registered with the
United States Patent and Trademark office. However, the Company has a pending
trademark application to register the name Elecsys Corporation with the United
States Patent and Trademark Office. The Company's material intellectual property
consists of drawings, plans, software, specifications and engineering and
manufacturing know how which the Company maintains as confidential proprietary
information. In November, 1992, the Company paid Fernau Avionics, Ltd. $217,225
for an irrevocable, fully transferable, non-exclusive perpetual royalty-free
license to manufacture, sell and maintain products using DME technology owned by
FAL, replacing an earlier license agreement. In addition, the Company has been
granted a full manufacturing license to the current design with the ability to
make future enhancements to the product that resulted from joint work with
Interstate Electronics Corporation (Interstate) for the development and sale of
DGPS equipment. The Company also has a license to manufacture certain airfield
lighting products from Idman Oy as discussed under Aerospace.

In conjunction with the purchase of DCI, the Company obtained an non-exclusive
license and know-how for research and development of Fast Response Multistable
Liquid Crystal Display Technology (FMLCD) from Advance Display Systems, Inc. The
license commenced January 1, 1999 and continues through the duration of any
valid patents covering the licensed products. The agreement calls for a minimum
base royalty of $10,000 per annum and certain royalties once defined revenue
levels are achieved. The Company has received a contract from a major aerospace
contractor to develop and provide custom LCD's based on this technology.

                              GOVERNMENT APPROVALS

All navigation aids to be installed in the United States, whether purchased by
airport owners, local or state governments or the FAA, require FAA and United
States Federal Communications Commission ("FCC") approval. The Company has
received all applicable approvals for the products it sells in the United
States.

FAA approval takes different forms depending on how the equipment is procured.
When the FAA purchases equipment it typically issues a detailed specification
describing the functional performance requirements and the design and production
methods. FAA design and production requirements historically have contained more
detailed specifications than those required in the international and United
States non-federal markets, resulting in products which are more costly to
produce.

Local or state governments typically procure equipment in accordance with the
technical requirements of FAA Federal Airways Regulations ("FAR") Part 171. FAR
Part 171 is a functional performance requirement which does not include specific
design and construction methods. Because no design or construction
specifications are required to be met, products sold in the United States
non-federal market cost less than similar products procured by the FAA. The
types of ILS, VOR and DME sold by the Company in the United States non-federal
market have been approved in accordance with FAR Part 171 by the FAA.

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In addition, certain local or state airport projects for which the Company
contracts are partially funded by the AIP, a United States government trust-fund
program funded by airport user fees. When ILS or DME equipment is procured under
a program funded by the AIP, the buyer of the equipment typically transfers
ownership, maintenance and operation of the equipment to the FAA after
installation is complete. There is an additional FAA approval process required
for AIP funded contracts which requires demonstration that the FAA can
successfully maintain and operate the equipment. The Company's 2100 and 1100
model ILS and DME products are approved by the FAA for AIP funded contracts. To
the Company's knowledge, Airsys ATM is the only other company in the United
States with approval to supply ILS and DME equipment for AIP funded contracts.

The ICAO is a United Nations chartered organization which establishes
international standards for navigation equipment, and member countries' navaids
must conform with ICAO functional standards. Equipment for international
procurement normally is tested after installation to insure conformance with
ICAO standards. In some cases, international programs may require proof of FAA
FAR 171 approval prior to bid.

     EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE BUSINESS

The Company is subject to federal, state and local regulations concerning the
environment, occupational safety and health. The Company has not experienced any
difficulty in complying with such regulations, and compliance has not had a
material impact on the Company's business or its financial results.

                            RESEARCH AND DEVELOPMENT

Substantially all research and development occurs in the aerospace unit. During
fiscal 2000, approximately 46% of Airport Systems' engineering staff time was
spent on research and development activities, none of which was borne by the
customer. In fiscal 1999, the amount of engineering time spent on research and
development was 52%, none of which was borne by the customer.

                            TOTAL NUMBER OF EMPLOYEES

At April 30, 2000, the Company had 171 full time employees. Of these, 110 are
engaged in manufacturing, 11 in sales and marketing, 16 in engineering, 10 in
quality assurance and 24 in administration. The Company's employees are not
represented by a labor organization.

                 CERTAIN FACTORS THAT MAY EFFECT FUTURE RESULTS

This annual report on Form 10-KSB contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. In addition, from time
to time, the Company or its representatives have made or may make
forward-looking statements, orally or in writing. Such forward-looking
statements

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may be included in, but are not limited to, various filings made by the Company
with the Securities and Exchange Commission, press releases or oral statements
made by or with the approval of an authorized executive officer of the Company.
Forward-looking statements consist of any statement other than a recitation of
historical fact and can be identified by the use of forward-looking terminology
such as "may," "expect," "anticipate," "estimate," or "continue" or the negative
thereof or other variations thereon or comparable terminology. Actual results
could differ materially from those projected or suggested in any forward-looking
statements as a result of a wide variety of factors and conditions, including,
but not limited to, the factors summarized below and the factors and conditions
which are described under the headings "Backlog," and "Quarterly Results" in the
discussion of "Results of Operations" contained in Management's Discussion and
Analysis of Financial Condition and Results of Operations under Item 6 of this
Form 10-KSB, as well as those which have been included in other documents the
Company files from time to time with the Securities and Exchange Commission,
including the Company's quarterly reports on Form 10-QSB and current reports on
Form 8-K, and holders of the Company's securities are specifically referred to
these documents with regard to the factors and conditions that may affect future
results. The reader or listener is cautioned that the Company does not have a
policy of updating or revising forward-looking statements and thus he or she
should not assume that silence by management of the Company over time means that
actual events are bearing out as estimated in such forward-looking statements.

Emerging Technology - The Company's aerospace products are based upon proven
ground-based radio technology which has been the standard for navaids worldwide
and is the technology used in the vast majority of navaids currently in service.
However, currently there are potentially competitive technologies being procured
or actively considered by the FAA, ICAO and civil aviation authorities around
the world, the most significant of which is Global Positioning Satellite
Navigation Systems (GPS). Based on future FAA, ICAO and other civil aviation
authorities' actions with regard to satellite technologies, the long-term
ability of the Company to compete successfully will depend in large measure on
its ability to acquire or develop products which are compatible with
technological changes and advances in the navaids industry. While the emergence
of GPS navigation technologies may impact the Company's business, plans
currently in development at the FAA call for a substantial infrastructure of the
Company's current products to remain in place for the foreseeable future as an
augmentation and risk reducing backup to GPS. When standards for GPS based
landing systems are firmly defined and a market develops, the Company may elect
to invest in the modification of the GPS landing system developed in conjunction
with Interstate, or to develop a new design. Standards and market development is
not expected to be finalized for at least three years.

Competition - Airport Systems is in direct competition with one other supplier
of navaids in the United Sates. This competitor, Airsys ATM (formerly Wilcox
Electric, Inc.), is a joint venture between Thomson-CSF, a French defense and
electronics company partially owned by the French government, and Siemens A.G.,
a German defense and electronics company. Both Thomson-CSF and Siemens A.G. have
substantially greater resources than the Company, and Airsys ATM has been, for
many years, the principal supplier of ILS equipment to the FAA. Additionally, in
the international market, there are several foreign competitors for one or more
of the products produced by the Company. DCI competes against a variety of
companies for each of the services it provides. Some of these competitors, some
of which are international, have greater corporate resources than DCI, as well
as geographic breath and a broader range of services. See "Business of the
Company - Competition."

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Dependence on FAA Approvals - The Company's aerospace products used in the
United States' national airspace system have been approved by the FAA. These
approvals are required in order for the Company to sell its navaids to public
use airports in the United States. Furthermore, although not specifically
required, FAA approval of the Company's navaids is a very strong selling point
in international sales. While the Company has no reason to expect withdrawal of
FAA approvals of the Company's navaids, withdrawal of any such approvals would
have an adverse impact on the ability of the Company to sell its products both
domestically and internationally. See "Business of The Company - Government
Approvals."

Product Liability - The Company currently carries a $50 million product
liability insurance policy, however, it is possible that judgment(s) in an
amount greater than the policy limits could be awarded in the event the
Company's aerospace equipment was found to have been a contributing cause to an
aircraft crash. Any judgment in excess of the Company's product liability
insurance limits could have a material adverse effect on the Company.

The United States Dollar Exchange Rates - The Company competes internationally
with competitors from Europe and Japan and is thus subject to the effects of
changes in United States dollar exchange rates. Prior to 2000, this had not had
an adverse effect on the Company's international competitiveness. Should the
United States dollar gain strength against the currencies of its principal
competitors, it could impede the marketing of the Company's products by making
them relatively more expensive in international markets compared to competitors'
products. The Company's contracts are denominated in United States dollars.

Dependence on Key Personnel - The future success of the Company is highly
dependent upon several executive officers. The Company has signed employment
agreements with four executives and has purchased key executive life insurance
on five executive officers. There can be no assurance the loss of any one of
these individuals would not have a material adverse effect on the Company's
operations or profits. See "Executive Officers of the Company."

Possible Volatility of Stock Price - Company's Trading Volume Historically
Limited - The trading price of the Common Stock could be subject to significant
fluctuations in response to announcements of developments related to the
Company's business, the Company's financial results, general conditions in the
industry, the United States dollar exchange rates and the general economy.
Historically, the trading volume of the Company's Common Stock on the American
Stock Exchange has been limited.

Dependence on Fixed-Price Contracts - Airport Systems sales are typically made
pursuant to fixed price contracts and cost overruns, if any, are assumed by
Airport Systems. Revenues from fixed-price contracts are recognized using
percentage-of-completion units of delivery method. Revisions in revenue and
profit estimates are reflected in the period in which the conditions that
require the revision become known and are estimable. Therefore, adjustments for
profits or losses may have a material effect on results for the quarter in
question. The risks inherent in fixed-price contracts include the forecasting of
costs and schedules, while the recognition of contract revenues relates to
delivery of equipment and completion of contract services.

Competitive Bidding - Airport Systems generally obtains its contracts through
the process of

Page 12


<PAGE>   13

competitive bidding. There can be no assurance that the Company will continue to
be successful in having its bids accepted or, if accepted, that awarded
contracts will generate sufficient revenues to result in profitability for the
Company. To the extent actual costs exceed the projected costs on which bids or
contract prices were based, the Company's profitability could be materially
adversely affected.

Additional Financing Requirements - The Company has available to it a total of
$8 million under its current bank facility, subject to collateral availability.
At April 30, 2000 the Company had cash advances on its bank facility of $4.3
million, as well as $2.1 of standby letters of credit. At April 30, 2000, the
Company had $7.8 million of collateral availability, with $2.6 million available
under the bank facility. The financing requirements of all of the various
opportunities it is currently considering could exceed this. This includes
working capital to meet current and future contract obligations, line of credit
capacity in order to issue additional standby letters of credit, as well as
funding for product expansion either through acquisition or internal
development. The extent of such total capital requirements cannot be quantified
at this time since many of these opportunities are at an early stage of
consideration. In order to fully fund all such projects, the Company may need to
issue debt or equity securities or engage in other financing activities. There
can be no assurance such financing will be available on favorable terms or on a
timely basis, if at all.

Item 2.   DESCRIPTION OF PROPERTY

Real Estate. The Company conducts its ECM operations from a 33,000 square feet
facility at 15301 West 109th Street, Lenexa, Kansas. The Company has a leasehold
interest in this property subject to City of Lenexa, Kansas Variable Rate Demand
Industrial Development Revenue Bonds (DCI Project) Series 1998. The amount
outstanding on the bond at April 30, 2000 was $2,570,000 and is due in annual
payments of $100,000 to $200,000 through 2018. Approximately 20,000 square feet
is used for manufacturing while the remaining 13,000 square feet is used for
engineering, administration and marketing. The building is located on 4 acres of
ground. The aerospace unit conducts operations from a facility at 11300 West
89th Street in Overland Park, Kansas, which consists of approximately 50,000
square feet. Approximately 26,000 square feet is used for manufacturing,
approximately 17,000 is used for engineering and training, while the remaining
7,000 square feet is used for administration and marketing. The building and the
seven acres on which it is located are owned by the Company, subject to a
mortgage due June, 2011. The principal balance of the mortgage at April 30,
2000, was $1,164,000 with a final payment of approximately $788,200 due at
maturity assuming no prepayments. The Company believes its existing facilities
provides adequate capacity for growth for the foreseeable future. No specific
plans have been formed at the present time for expanding the facility, however,
the Company believes it has a range of suitable alternatives for future
expansion.

Manufacturing and Engineering Equipment. The Company's ECM manufacturing
capability includes equipment for high speed, as well as low to moderate volume,
insertion of surface mount components, automated through-hole axial lead
equipment, controlled solder paste applications and advanced clean-room
capabilities. The Company's aerospace manufacturing equipment, including
automatic lead forming/cutting and wave solder capability, is suitable for its
low volume electronics production. Through-hole components are manually placed
with the assistance of semi-automatic component insertion equipment. Surface
mount components are manually placed and attached. The test department is
equipped with general purpose and automatic test equipment such as network
analyzers, spectrum analyzers and vector voltmeters. Hot mock-up test beds are
used to ensure subassembly functionality,

Page 13


<PAGE>   14

with all navaid assemblies tested environmentally in a temperature chamber. The
Company's engineering department is equipped with state of the art design and
test equipment, including advanced computer-aided design systems, radio
frequency signal modeling software and necessary test and design equipment.

Item 3.   LEGAL PROCEEDINGS

The Company is a party to several lawsuits, all of which the Company believes
not to be material.

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

The Company did not submit any matter to a vote of security holders, through a
solicitation of proxies or otherwise, during the fourth quarter of the Company's
fiscal year ended April 30, 2000.

Part II

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

Stock Trading - The Company's common stock trades on the American Stock Exchange
under the symbol ASY. Prior to June 3, 1999, the Company traded on the Nasdaq
National Market under the symbol ASII.

Common Stock Price Range and Dividend Information - The prices in the table
below represent the high and low sales prices for Airport Systems common stock
as reported by the American Stock Exchange. No cash dividends have been
declared. As of April 30, 2000, the Company had approximately 2,000 stockholders
based on the number of holders of record and an estimate of the number of
individual participants represented by security position listings.

<TABLE>
<CAPTION>
                         High         Low
                       --------    ---------
<S>                    <C>         <C>
2000
First Quarter          $2 1/8      $ 1 11/16
Second Quarter          3 15/16      2  1/16
Third Quarter           2 15/16      2  1/16
Fourth Quarter          2 13/16      2   1/8
For the Year            3 15/16      1 11/16

<CAPTION>

                         High         Low
                       --------    ---------
<S>                    <C>         <C>
1999
First Quarter          $  5 3/4    $ 4   3/4
Second Quarter            4 7/8      2   7/8
Third Quarter             3 1/8      1 13/16
Fourth Quarter            2 5/8      1   3/4
For the Year              5 3/4      1   3/4
</TABLE>


Page 14

<PAGE>   15
Item 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

                                    OVERVIEW

Airport Systems International, Inc. (the "Company" or "Airport Systems"),
together with its subsidiaries, is a designer and manufacturer of electronic
components, sub-assemblies and systems and a marketer of electronic contract
assembly services. Airport Systems, as the parent company, along with its
wholly-owned subsidiary, DCI, Inc. (DCI) operates two business segments,
aerospace and electronic components manufacturing (ECM). The aerospace unit is
operated through Airport Systems while the ECM unit is operated through DCI. The
aerospace unit designs, manufactures and installs ground-based radio navigation
and landing systems (navaids) and airfield lighting. Its customers consist of
civil aviation authorities in the United States and throughout the world. The
ECM unit manufactures custom liquid crystal display (LCD) devices as well as
panel meter and heat-seal equipment. In addition, the unit also provides
contract manufacturing services. Its products are used in aerospace, medical,
industrial and home applications. Sales are made primarily to customers within
the United States.

In February, 2000, the Company acquired all of the issued and outstanding stock
of DCI in exchange for $1,234,000 in cash, 150,000 shares of its common stock
(valued at $239,000) and a four year promissory note in the amount of
$1,248,000. In connection with this acquisition, DCI immediately acquired
certain assets and assumed certain liabilities of KHC of Lenexa, L.L.C. (KHC)
which was owned by the shareholders of DCI. DCI paid $1,290,000 in cash as
consideration for the net assets acquired from KHC.

Since the acquisition, the Company has sold a 16,000 square foot building
acquired in the acquisition. This building, located in Olathe, Kansas had housed
all of the ECM's operations until January 1999, when all operations, except LCD
manufacturing, were moved to the Lenexa, Kansas facility (purchased in September
1998). Renovations at the Lenexa facility were completed in April 2000. This
included the completion of a 2,000 square foot advanced clean-room. The addition
of this clean room and high-end glass scribe and photo imaging process equipment
allows DCI to produce LCD's with tighter tolerances allowing higher yields and
better quality, thereby allowing DCI to effectively compete for more advanced
and profitable LCD business.

With the completion of the renovation, the LCD manufacturing operation was
moved into the Lenexa facility in April 2000. DCI also began manufacturing all
boards and module assemblies for Airport Systems in February 2000. As a result,
approximately 20 employees from Airport Systems were transferred to DCI. This
move was done to consolidate core manufacturing competencies of the two units
and to take advantage of DCI's surface mount and other electronics
manufacturing capabilities. The Company expects to see lower per unit costs as
its navaid assemblies are integrated into DCI's manufacturing process.

DCI is also converting its computer system to the enterprise resource planning
system (ERP) installed by the Company in 1999. As a result, both of the
Company's operating units will be on the same system and DCI will have access
to a fully integrated manufacturing, planning and financial management system.
This conversion is expected to be completed in the second quarter of 2001. DCI


Page 15

<PAGE>   16

also began working to achieve its ISO 9001 certification, which is expected to
be completed in fiscal 2001.

The following summarized financial information is being presented to assist the
reader in understanding the impact DCI had on operations in fiscal 2000:

<TABLE>
<CAPTION>
                                                 2000                                 1999
                           --------------------------------------------------       --------
                           AEROSPACE       ECM      INTERSEGMENT        TOTAL         TOTAL
                           ---------       ---      ------------        -----       --------
<S>                        <C>          <C>         <C>               <C>           <C>
Sales                       $ 13,483    $ 1,792       $ (147)         $ 15,128      $ 15,944
GROSS MARGIN                   3,516        836          (17)            4,335         3,321
% of Sales                        26%        47%                            29%           21%
Operating Income (loss)       (1,163)       228          (17)             (952)       (4,261)
</TABLE>

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements (SAB
101), which, among other guidance, clarifies certain conditions to be met in
order to recognize revenue. After reexamining the terms underlying certain
transactions of the aerospace unit, the Company determined that revenue related
to these transactions, which was recorded in the preceding quarters of fiscal
2000, should be reversed. In view of the cumulative effect of the unrecorded
adjustment on the fiscal year 2000 results, as well as future periods, the
Company restated its quarterly consolidated financial statements. The
restatements were required to reverse sales that the Company recorded as bill
and hold sales when the manufacturing process was substantially complete, but
before the rights of ownership of the equipment, factory acceptance tests and
the physical delivery of the underlying equipment had occurred. The restated
financial statements reflect sales when final delivery of the underlying
equipment occurred. As these adjustments relate to the timing of revenue
recognition, all reversals are recognized in later periods. The aggregate
effect of the adjustment on fiscal 2000 was to reduce revenue and gross margin
by $1.5 million and $579,000 respectively. In the first quarter, a number of
the units were delivered to customers (with related revenues of $1.1 million
and gross margins of $423,000) in the first quarter of fiscal 2001, with the
balance expected to be delivered in fiscal 2001. The financial statements and
related notes set forth in this Annual Report reflect all such restatements.


Page 16

<PAGE>   17

RESULTS OF OPERATIONS

The following table sets forth for the years indicated, certain statement of
operations data (Dollars in Thousands):

<TABLE>
<CAPTION>
                                                             Year Ended                 Year Ended

                                                            April 30,2000              April 30, 1999
                                                        --------------------        --------------------
<S>                                                     <C>            <C>          <C>            <C>
Sales                                                   $ 15,128       100.0%       $ 15,944       100.0%
Cost of products sold                                     10,793        71.3%         12,623        79.2%
                                                        --------       -----        --------       -----
Gross margin                                               4,335        28.7%          3,321        20.8%
Selling, general and administrative expenses               4,456        29.5%          4,383        27.5%
Research and development expenses                            831         5.5%          1,950        11.1%
Asset impairment                                              --          --          (1,299)       (8.1)%
                                                        --------       -----        --------       -----
Operating loss                                              (952)       (6.3)%        (4,261)      (26.7)%
INTEREST EXPENSE                                             377         2.5%            119          .6%
Other income, net                                              9          .1%             48          .1%
                                                        --------       -----        --------       -----
Income before income taxes                                (1,320)       (8.7)%        (4,332)      (27.2)%
Income tax benefit                                            --          --            (779)       (4.9)%
                                                        --------       -----        --------       -----
Net Loss                                                $ (1,320)       (8.7)%      $ (3,553)      (22.3)%
                                                        ========       =====        ========       =====
</TABLE>

Consolidated sales in 2000 were $15.1 million, or 5% lower than sales in 1999.
DCI sales after intercompany elimination totaled $1.8 million and included sales
from February 7, 2000 (the date DCI, Inc. was acquired) to April 30, 2000.
Airport Systems sales were $13.4 million, or 15.4% lower than in 1999 due to a
decrease in the number of units shipped resulting from continued soft demand in
the navaids market, as well as delays in the shipment of equipment in the fourth
quarter. Though the equipment was complete and ready for shipment, the customer
could not schedule factory acceptance testing until the first quarter of fiscal
2001. Of the $13.4 million, approximately $2.0 million, or 15%, represented
deliveries to one customer.

Consolidated gross margin was $4.3 million, or 29% of sales, up approximately
31% from $3.3 million, or 21% of sales in 1999. Consolidated gross margin
increased as a result of the acquisition of DCI, Inc., the shipment of higher
gross margin contracts and reduced production and installation costs. DCI
generated gross margins of $819,000, or 50% of ECM sales. The higher gross
margin contracts shipped by the aerospace unit consisted of several large
spares orders as well as contracts which were the result of either a sole
source competition, or were the result of Airport Systems offering greater
flexibility regarding manufacturing and installation schedules, as well as
vendor financing, thus resulting in sole source procurements and higher gross
margins. Despite these contracts, Airport Systems continued to experience a
soft navaid market, which continued to lead to lower prices as a result of
increased competition over fewer procurement opportunities.


Page 17

<PAGE>   18

Selling, general and administrative ("SG&A") expenses increased $73,000, or 2%
in 2000, SG&A expenses related to DCI totaled $608,000. Airport Systems' SG&A
expenses of $3.8 million are down $535,000 or 15% from fiscal 1999, reflecting
cost reductions initiated by the Company in the areas of administration and
marketing personnel, travel and other related costs. As a percent of sales,
SG&A expenses increased from 27.5% to 29.5% primarily as a result of lower
Airport Systems sales.

Research and development expenses decreased $1.1 million or 56% in 2000 to
$831,000 reflecting decreased labor and expenses related to development work on
the new Category II/III Instrument Landing System. Expenditures made during
fiscal 2000 were primarily to obtain FAA approval of the new system (and
certain variants of the new system), approval for FAA maintenance takeover, and
to reduce production costs. Approval of the new system was obtained in fiscal
2000. With the completion of the ILS, the Company expects additional reductions
in research and development in fiscal year 2001, with activities limited to
product enhancements as well as obtaining Category III certification of the new
ILS from the FAA.

Interest expenses increased from $119,000 to $377,000 due to higher average
borrowings to finance increased working capital, the DCI acquisition and higher
average interest rates.

No income tax provision or benefit was recorded for fiscal 2000 (compared to an
effective tax benefit rate in 1999 of approximately 18%) due primarily to net
operating losses for the year as well as the establishment of valuation
reserves against deferred tax assets related to those net operating loss carry
forwards. The tax benefits will be recognized in the future when used to offset
future taxable income.

As a result of the above, the net loss for 2000 was $1,320,000 or 9% of sales,
compared to a net loss of $3,553,000, or 22.0% of sales, in 1999.

Backlog

The following table sets forth the domestic and international backlog of
Airport Systems as of the dates indicated (In thousands):

<TABLE>
<CAPTION>
                             April 30, 2000           April 30, 1999
                          -------------------       ------------------
<S>                       <C>           <C>         <C>          <C>
Domestic                  $    351        6.4%      $  1,123      22.9%

International                5,115       93.6%         3,779      77.1%
                          --------      -----       --------     -----

TOTAL                     $  5,466      100.0%      $  4,902     100.0%
</TABLE>

Airport Systems' backlog increased $564,000 or 11% to $5.5 million at April 30,
2000, compared to $4.9 million at April 30, 1999. Approximately 65% of the
backlog at April 30, 2000 consists of two contracts. Twenty-two percent of the
backlog represents a contract with a major U.S. air traffic control contractor
for the delivery of multiple ILS systems into South America while 43% of the
backlog represents a contract with the Airport Authority of Jamaica for navaid
and communication equipment, as well as civil works, training, flight check and
installation services. The entire Airport


Page 18

<PAGE>   19

Systems backlog at April 30, 2000 is expected to be completed and shipped in
fiscal 2001.

Airport Systems' backlog increased over the prior year's backlog of $4.9 million
due primarily to increased bookings. Bookings totaled $14.0 million, up 28% from
1999 bookings of $10.5 million. Though bookings were up for the year, several
significant orders were not received in time to be shipped in fiscal 2000, thus
contributing to the lower sales discussed earlier. The increase in bookings is
due to several factors.

First, Airport Systems continues to see improving worldwide demand for navaid
products. This increase in demand is being driven by several factors,
specifically the delay in the implementation of a viable and reliable GPS-based
navigation system. Civil aviation authorities are beginning to once again
recognize navaids as a safe, low-cost and reliable air navigation system.
Accordingly, they are beginning to plan for and execute the procurement of
navaids to replace aged navigation systems, as well as to enhance and upgrade
their air traffic control capacity.

Second, the completion of the new Category II/III ILS and the addition of the
airfield lighting line has allowed Airport Systems to participate in and win
more procurement opportunities in both its traditional market, and new markets
during fiscal 2000.

Third, Airport Systems booked over $1.6 million in spares orders, reflecting
the maturity of systems installed in previous years. Spares orders have
typically averaged less than $1 million per year, but have been increasing,
reflecting the growing installed base of navaid products. Airport Systems is
optimistic that these sales will continue to grow.

Finally, Airport Systems booked orders from not only existing customers
(reflecting their satisfaction with our products), but also new customers in
South America and the Caribbean, reflecting growing acceptance of the Company's
products.

Although the Company is optimistic about the prospects for both its aerospace
and ECM units, any delays and or cancellation of procurement opportunities,
particularly in its aerospace unit, will negatively impact the Company's
revenue in fiscal 2001, and could result in operating losses or breakeven
operating results. The amount of net income, net losses or the ability to
achieve breakeven operating results is difficult to ascertain due to
uncertainties in the timing of the receipt of orders. The Company expects
backlog and bidding activities as well as contract awards to continue to
fluctuate due to the size and timing of contract programs.

Quarterly Results

The following table sets forth selected unaudited financial information for the
Company for the four fiscal quarters of the year ended April 30, 2000. This
unaudited information has been prepared on the same basis as the annual
financial statements contained elsewhere in this Annual Report and, in the
opinion of the Company, reflects all adjustments necessary for a fair
presentation thereof. The unaudited quarterly financial data for each of the
first three quarters of fiscal 2000 has been restated to reflect the revenue
recognition adjustments as previously discussed (In thousands):


Page 19

<PAGE>   20

<TABLE>
<CAPTION>
                                 July 31      October 31   January 31     April 30
                                ---------     ----------   ----------     --------
                                Unaudited      Restated     Restated      Restated
<S>                             <C>           <C>          <C>            <C>
Sales                           $ 2,770        $ 4,566      $ 4,366       $ 3,426

Gross margin                        710          1,309        1,317           999

Operating income (loss)            (549)           118          150          (671)

Net income (loss)                  (593)            76           88          (891)

Gross margin %                     25.6%          28.7%        30.2%         29.2%
</TABLE>

The effect of the restatement, all of which is reflected above, was to reduce
sales and net income in the quarter ended July 31, 1999 by $1,480,000 and
$677,000, respectively. For the quarter ended October 31, 1999, sales were
reduced by $58,000 and net income was increased by $26,000. For the quarter
ended January 31, 2000, sales and net income were increased by $74,000 and
$2,000, respectively. The aggregate effect of these adjustments for the year
ended April 30, 2000 was to reduce sales by $1.5 million and net income by
$579,000.

The Company has experienced quarterly fluctuations in operating results and
anticipates that these fluctuations will continue. Fluctuations in quarterly
sales are caused by a number of factors, including the timing of contract
awards, delivery schedules, construction or funding delays, customers' budget
cycles, changes in procurement patterns and shifting political and economic
factors of the Company's customers. Profitability on contracts also will vary
depending upon the product mix, the geographical location of the customer, the
market served and the pricing strategies of competitors.

Inflation

The effect of inflation on the Company has not been significant over the past
several years. However, an extended period of inflation could be expected to
have an impact on the Company's earnings by causing interest rates, as well as
material and labor rates to increase faster than prices could be increased on
new contracts.

Liquidity and Capital Resources

Net cash of $582,000 was used by operations in 2000 compared to net cash used
in operations of $3.4 million in 1999. The improvement was principally the
result of a lower net loss for the year and decreases in accounts receivable
and income tax refund receivables; increases in accounts payable and customer
deposits, partially offset by increases in inventory. The decrease in accounts
receivable reflects lower sales levels in the aerospace unit, as well as the
completion of several long-term projects and the collection of related
milestone payments. Inventory was up due primarily to units completed and held
for customers at the aerospace unit's facility at April 30, 2000. The units
were either awaiting the witnessing of factory acceptance tests by the customer
or the customer's delivery instructions. For this reason, revenue could not be
recognized (and inventory reduced) because the units had not yet,


Page 20

<PAGE>   21

under terms of the underlying contract, been accepted for delivery. This
inventory totaled $1.3 million. Of this, 1.1 million was delivered to customers
in the first quarter of fiscal 2001, with the balance expected by the end of
fiscal 2000. Accrued expenses were up principally due to an increase in
customer deposits, reflecting the increase in backlog bookings.

Cash used in investing activities increased to $2.8 million for 2000 compared
to $282,000 in 1999 reflecting the purchase of DCI, Inc. as well as increased
property and equipment expenditures reflecting building improvements and test
equipment related to the new ILS product line. The company also sold a building
purchased as part of the DCI, Inc. acquisition. The building was sold for
$582,000 (the value it was recorded at at the time of the acquisition).
Pursuant to the sale, loans totaling $324,000 were paid off.

Cash provided by financing activities was $3.3 million in 2000 compared to $1.3
million used in financing activities in 1999. The increase is due primarily to
increased borrowings on the Company's bank line of credit (to fund the
acquisition of DCI, Inc. and working capital needs), and proceeds from the
issuance of common stock and subordinated debt through a private placement.

The Company expects that it will meet ongoing requirements for working capital
and capital expenditures from a combination of cash expected to be generated
from operations, existing cash and cash equivalents, and available borrowings
under the existing line of credit facility.


New Accounting Pronouncements and Other

SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities",
was issued in June 1998 and is required to be adopted in years beginning after
June 15, 2000. The Statement permits early adoption as of the beginning of any
fiscal quarter. The Statement will require the Company to recognize all
derivatives on the balance sheet at fair value. Derivatives that are not hedges
must be adjusted to fair value through income. If the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value derivatives
will either be offset against the change in fair value of the hedged assets,
liabilities, or firm commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be immediately
recognized in earnings. This Statement is effective for the Company's fiscal
2002 financial statements and is not expected to have a material effect on the
earnings and financial position of the Company.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition in Financial
Statements. SAB 101 provides guidance for revenue recognition under certain
circumstances. SAB 101 is effective for the fourth quarter of our fiscal year
beginning May 1, 2000. Management of the Company does not expect that the
effect of SAB 101 will be material to the Company's financial position or
results of operations.

The Company invested approximately $165,000 during fiscal 1999 in order to
ensure that the many aspects of its business that are computer-dependent would
not be inconvenienced or disabled by computers that could not recognize the
difference between the years 1900 and 2000. To date, the Company has
experienced no problems relating to Y2K computer date sensitive issues.


Page 21

<PAGE>   22

Forward Looking Comments

The discussions set forth under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and other statements may contain
forward-looking comments based on current expectations that involve a number of
risks and uncertainties. Actual results could differ materially from those
projected or suggested in the forward-looking comments. The difference could be
caused by a number of factors, including, but not limited to the factors and
conditions which are described under the headings "Results of Operations," and
"Backlog," as well as the competitive and pricing pressures related to all
contracts, either already in the Company's backlog, or which the Company is
pursuing. Further information on the factors that could affect the Company's
financial results are included in the Company's other Securities and Exchange
Commission filings. The reader is cautioned that the Company does not have a
policy of updating or revising forward-looking statements and thus he or she
should not assume that silence by management of the Company over time means
that actual events are bearing out as estimated in such forward-looking
statements.


Page 22

<PAGE>   23

                                    Part III


Item 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information relating to the Company's Directors required by Item 9 will be
set forth in the Company's Proxy Statement for its 2000 Annual Meeting of
Shareholders and such information is incorporated herein by reference.

The information relating to Section 16(a) Beneficial Ownership Reporting
Compliance will be set forth in the Company's Proxy Statement for its 2000
Annual Meeting of Shareholders and such information is incorporated herein by
reference.

The information relating to the Company's Executive Officers, as required by
Item 9, is set forth in the following table and description of backgrounds:

<TABLE>
<CAPTION>
     NAME                     AGE         POSITION
     ----                     ---         --------
<S>                           <C>         <C>
Keith S. Cowan                46          President, Chief Executive Officer and Director

Thomas C. Cargin              45          Vice President-Finance and Administration, Secretary and Director

Anthony G. Bommarito          48          Vice President-Engineering & Manufacturing

John R. Wharton               58          Vice President-Sales

Gregory C. Brand              50          Vice President-Field Operations and Training

Wayne S. Howard               60          Vice President-Indonesia Programs

Ronald E. Peck                39          Vice President-Quality

Karl B. Gemperli              36          President-DCI, Inc.
</TABLE>


Each of the executive officers is a full-time employee of the Company. Set
forth below are descriptions of the backgrounds of the executive officers of
the Company.

Keith S. Cowan has served as President and a Director of the Company since
September, 1991, and as Chief Executive Officer of the Company since August,
1993. Prior to joining the Company, Mr. Cowan was an employee of the Teledyne
Controls Division of Teledyne, Inc. for more than five years, last serving as
Vice President, Airport and Instrumentation Products. Mr. Cowan has over 26
years of system engineering, project management and corporate experience in the
development, manufacturing and sale of electronic systems. He is also a
licensed pilot holding a commercial and instrument rating.

Thomas C. Cargin has served as Vice President-Finance and Administration of the
Company since December, 1991, as its Secretary since March, 1993, and as a
Director of the Company since October,


Page 23

<PAGE>   24

1993. Prior to joining the Company, Mr. Cargin was a partner in the accounting
firm of Ifft & Barber since 1989 and prior to that was an employee of DYMON,
Inc., a specialty chemical manufacturer located in Kansas City, Kansas, since
1983, last serving as Vice President of Finance and Chief Financial Officer.
Mr. Cargin is a Certified Public Accountant with over 23 years of public
accounting and private industry accounting experience. He is also a licensed
pilot holding an instrument rating.

Anthony G. Bommarito has served as Vice President-Engineering of the Company
since June, 1998. Prior to joining the Company, Mr. Bommarito was an employee
of Airsys ATM, Inc. (formerly Wilcox Electric), for more than 18 years, last
serving as Director of Engineering and Product Development. Mr. Bommarito has
over 27 years in engineering experience.

John R. Wharton has served as Vice President-Sales of the Company since May,
1991. Prior to joining the Company, Mr. Wharton was employed by Aviation
Systems, Inc., since 1988, last serving as Vice President of Marketing, and
prior thereto by Wilcox Electric for over 20 years. Mr. Wharton has over 36
years experience in marketing airport navigation aids both in the United States
and internationally.

Gregory C. Brand has served as Vice President-Field Operations and Training
since May, 1997. Prior to that, he was Manager of Field Services since
September, 1996. Prior to joining the Company, Mr. Brand was an employee of
Wilcox Electric. Mr. Brand has over 23 years experience in field installation
and program management. He is also a licensed pilot holding an instrument
rating.

Wayne S. Howard has served as Vice President-Indonesia Programs since January,
1997. Prior to that he was Vice President of Manufacturing Operations of the
Company since March, 1994. Prior to joining the Company, Mr. Howard was an
employee of New Bedford Panoramics Corporation for more than five years, last
serving as Manufacturing Manager. Mr. Howard has over 32 years of electronic
components manufacturing and program management experience.

Ronald E. Peck has served as Vice President of Quality since February 2000.
Prior to that he served as Vice President of Manufacturing since May, 1999 and
prior to that Vice President of Quality since May, 1998 and Director of Quality
since April 1997. Prior to joining the Company, Mr. Peck was an employee of
Raytheon Company, last serving as a Principal Quality Assurance Engineer. Mr.
Peck has over 17 years of quality assurance experience.

Karl B. Gemperli has served as President of DCI, Inc. since February 2000.
Prior to joining the Company, Mr. Gemperli was an employee of Catalyst, Inc.,
last serving as Regional Manager from March 1999 to December 1999. From March
1996 to March 1999, Mr. Gemperli was an employee of the Company, last serving
as Vice President of Manufacturing. Prior to joining the Company, Mr. Gemperli
was an employee of BF Goodrich Aerospace, Test Systems Division for more than
five years, last serving as Director of Manufacturing. Mr. Gemperli has over 15
years of electronic manufacturing experience.


Item 10.  EXECUTIVE COMPENSATION

The information required by Item 10 will be set forth in the Company's
definitive Proxy Statement for its 2000 Annual Meeting of Shareholders and such
information is incorporated herein by reference.


Page 24

<PAGE>   25

Item 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

The information required by Item 11 will be set forth in the Company's
definitive Proxy Statement for its 2000 Annual Meeting of Shareholders and such
information is incorporated herein by reference.


Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There are no transactions of the type required to be disclosed by Item 12.


                                    Part IV

Item 13.  EXHIBITS AND REPORTS ON FORM 8-K:

(a)      Financial Statements

<TABLE>
<S>                                                                                 <C>
Report of Independent Auditors .................................................    F1

Consolidated Balance Sheets as of April 30, 2000 and 1999 ......................    F2

Consolidated Statements of Operations for each of the two
     years in the period ended April 30, 2000 ..................................    F4

Consolidated Statements of Stockholders' Equity for each
     of the two years in the period ended April 30, 2000 .......................    F5

Consolidated Statements of Cash Flows for each of the two
     years in the period ended April 30, 2000 ..................................    F6

Notes to Consolidated Financial Statements for the two
     years ended April 30, 2000 ................................................    F8
</TABLE>

All 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.


Page 25

<PAGE>   26

(b)      Exhibits: The following exhibits have been previously filed or are
         being filed herewith, and are numbered in accordance with Item 601 of
         Regulation S-B:

<TABLE>
<CAPTION>
NUMBER   DESCRIPTION
------   -----------
<S>      <C>
 3.1     ARTICLES OF INCORPORATION

         The amended Articles of Incorporation of the Company dated September
         14, 1994, attached as Exhibit 3.1 pages 19-55 of the Company's Form
         10-KSB, filed July 31, 1995 with the Securities and Exchange
         Commission is incorporated herein by reference.

 3.2     BY-LAWS

         The Restated By-Laws of the Company dated October 1, 1993, attached as
         Exhibit 3.2, of the Company's Registration Statement, Form SB-2, filed
         November 29, 1993 with the Securities and Exchange Commission, are
         incorporated herein by reference.


   4     INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS

         A specimen stock certificate representing shares of the common stock,
         par value $.01 per share, attached as Exhibit 4.1 of the Company's
         Registration Statement, Form SB-2, filed November 29, 1993 with the
         Securities and Exchange Commission, is incorporated herein by
         reference.

  10     MATERIAL CONTRACTS

         (a)      Teaming agreement between Airport Systems International, Inc.
                  and Interstate Electronics Corporation (Portions omitted
                  pursuant to a request for confidential treatment) attached as
                  exhibit 10.1 of the Company's Form 10-QSB, filed March 17,
                  1995 with the Securities and Exchange Commission, is
                  incorporated herein by reference.

         (b)      Restated 1991 Stock Option Plan attached as Exhibit 10.5 of
                  the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.

         (c)      Stock Option Agreement dated September 3, 1991, by and
                  between the Company and Keith S. Cowan, as amended, attached
                  as Exhibit 10.6 of the Company's Registration Statement, Form
                  SB-2, filed November 29, 1993 with the Securities and
                  Exchange Commission, is incorporated herein by reference.
</TABLE>


Page 26

<PAGE>   27

<TABLE>
<CAPTION>
NUMBER   DESCRIPTION
------   -----------
<S>      <C>

         (d)      Stock Option Agreement dated January 15, 1992, by and between
                  the company and Thomas C. Cargin, attached as Exhibit 10.7 of
                  the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.


         (e)      Stock Option Agreement dated January 15, 1992, by and between
                  the Company and John C. Roos, attached as Exhibit 10.8 of the
                  Company's Registration Statement, Form SB-2, filed November
                  29, 1993 with the Securities and Exchange Commission, is
                  incorporated herein by reference.


         (f)      Stock Option Agreement dated January 15, 1992, by and between
                  the Company and John R. Wharton, attached as Exhibit 10.9 of
                  the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.


         (g)      Stock Option Agreement dated June 25, 1993, by and between
                  the Company and Keith S. Cowan, attached as Exhibit 10.11 of
                  the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.


         (h)      Stock Option Agreement dated June 25, 1993, by and between
                  the Company and Thomas C. Cargin, attached as Exhibit 10.12
                  of the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.

         (i)      Stock Option Agreement dated June 25, 1993, by and between
                  the Company and John C. Roos, attached as Exhibit 10.13 of
                  the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.

         (j)      Stock Option Agreement dated June 25, 1993, by and between
                  the Company and John R. Wharton, attached as Exhibit 10.14 of
                  the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.
</TABLE>


Page 27

<PAGE>   28

<TABLE>
<CAPTION>
NUMBER   DESCRIPTION
------   -----------
<S>      <C>
         (k)      Stock Option Agreement dated October 1, 1993, by and between
                  the Company and Keith S. Cowan, attached as Exhibit 10.15 of
                  the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.

         (l)      Stock Option Agreement dated October 1, 1993, by and between
                  the Company and Thomas C. Cargin, attached as Exhibit 10.16
                  of the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.

         (m)      Stock Option Agreement dated October 1, 1993, by and between
                  the Company and John C. Roos, attached as Exhibit 10.17 of
                  the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.

         (n)      Stock Option Agreement dated October 1, 1993, by and between
                  the Company and John R. Wharton, attached as Exhibit 10.18 of
                  the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.

         (o)      Stock Option Agreement dated October 1, 1993, by and between
                  the Company and Barry L. Harris, attached as Exhibit 10.19 of
                  the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.

         (p)      Stock Option Agreement dated April 15, 1994, by and between
                  the Company and Wayne Howard, attached as Exhibit 10 of the
                  Company's Form 10-KSB, filed July 28, 1994 with the
                  Securities and Exchange Commission, is incorporated herein by
                  reference.

         (q)      Stock Option agreement dated January 23, 1995, by and between
                  the Company and Michael M. Warner, attached as exhibit 10.1
                  of the Company's Form 10-QSB, filed March 17, 1995 with the
                  Securities and Exchange Commission, is incorporated herein by
                  reference.

         (r)      Employment Agreement dated June 22, 1993, by and between the
                  Company and Keith S. Cowan, attached as Exhibit 10.1 of the
                  Company's Registration Statement, Form SB-2, filed November
                  29, 1993 with the Securities and Exchange Commission, is
                  incorporated herein by reference.
</TABLE>


Page 28

<PAGE>   29

<TABLE>
<CAPTION>
NUMBER   DESCRIPTION
------   -----------
<S>      <C>
         (s)      Employment Agreement dated October 11, 1993, by and between
                  the Company and Thomas C. Cargin, attached as Exhibit 10.2 of
                  the Company's Registration Statement, Form SB-2, filed
                  November 29, 1993 with the Securities and Exchange
                  Commission, is incorporated herein by reference.

         (t)      Covenant Not To Compete Agreement dated March 20, 1997, By
                  and between the Company and Michael M. Warner, attached as
                  Exhibit 10.(u) of the Company's Form 10-KSB, filed July 31,
                  1997 with the Securities and Exchange Commission, is
                  incorporated herein by reference.

         (u)      Stock Option Agreement dated February 13, 1997, by and
                  between the Company and Karl B. Gemperli, attached as Exhibit
                  10.(v), of the Company's Form 10-KSB, filed July 31, 1997
                  with the Securities and Exchange Commission, is incorporated
                  herein by reference.

         (v)      Sales contract by and between the Company and the Government
                  of Indonesia attached as Exhibit 5 of the Company's Form 8-K,
                  filed November 15, 1996 with the Securities and Exchange
                  Commission, is incorporated herein by reference.

         (w)      Employment Agreement dated June 12, 1998, by and between the
                  Company and Anthony G. Bommarito, attached as Exhibit 10.1 of
                  the Company's Form 10-QSB filed September 14, 1998, is
                  incorporated herein by reference.

         (x)      Distribution Agreement between Idman OY and the Company,
                  attached as Exhibit 10.2 of the Company's Form 10-QSB filed
                  September 14, 1998, is incorporated herein by reference.

         (y)      Stock Option Agreement dated September 15, 1998, by and
                  between the Company and Michael J. Meyer, attached as Exhibit
                  10.1 of the Company Form 10-QSB, filed December 15, 1998,
                  with the Securities and Exchange Commission is incorporated
                  herein by reference.

         (z)      Stock Option Agreement dated September 15, 1998, by and
                  between the Company and Walter H. Stowell, attached as
                  Exhibit 10.2 of the Company's Form 10-QSB, filed December 15,
                  1998, with the Securities and Exchange Commission is
                  incorporated herein by reference.

         (aa)     Stock Option Agreement dated September 15, 1998, by and
                  between the Company and Robert D. Taylor, attached as Exhibit
                  10.3 of the Company's Form 10-QSB, filed December 15, 1998,
                  with the Securities and Exchange Commission is incorporated
                  herein by reference.

         (bb)     Amendment of the Company's Restated 1991 Stock Option Plan,
                  increasing the number of shares of Common Stock subject to
                  option thereunder from 375,000 shares to 475,000 approved by
                  the shareholders at the annual stockholders meeting held
                  September 15, 1998, attached as Exhibit 10(cc) of the
                  Company's Form 10-KSB filed July 29, 1999 with the Securities
                  and Exchange Commission, is incorporated herein by reference.
</TABLE>


Page 29

<PAGE>   30

<TABLE>
<CAPTION>
NUMBER   DESCRIPTION
------   -----------
<S>      <C>
         (cc)     Employment agreement dated December 6, 1999, by and between
                  the Company and Karl Gemperli.

         (dd)     Stock option agreement dated December 6, 1999, by and between
                  the Company and Karl Gemperli.


 11.     STATEMENT OF COMPUTATION OF PER SHARE EARNINGS

 13.     ANNUAL REPORT TO SHAREHOLDERS FOR THE FISCAL YEAR ENDED APRIL 30, 2000
         (only those portions of such Annual Report to Shareholders which are
         specifically incorporated by reference into this Form 10-KSB shall be
         deemed filed with the Commission)

 21.     SUBSIDIARIES OF THE COMPANY

 27.     FINANCIAL DATA SCHEDULE (for SEC use only)
</TABLE>


(c)      REPORTS ON FORM 8-K:       The following were reports filed in Form
                                    8-K or 8-K/A during the last quarter of the
                                    fiscal year:

<TABLE>
<CAPTION>
         Date of Filing             Item 2
         --------------             ------
         <S>                        <C>
         February 15, 2000          Form 8K, reporting on the description of, and documents related
                                    to, the acquisition of the stock of DCI, Inc. and certain assets
                                    of KHC of Lenexa, L.L.C.

         April 17, 2000             Amendment of Form 8-K filed on February 15, 2000 with the Securities
                                    and Exchange Commission reporting the filed audited financial and
                                    proforma financial information.
</TABLE>


Page 30

<PAGE>   31

                                   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.

                                          AIRPORT SYSTEMS INTERNATIONAL, INC.

                                     By:

                                          /s/ Keith S. Cowan
                                          -------------------------------------
                                          Keith S. Cowan
                                          President and Chief Executive Officer

Date:  July 28, 2000

         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 date indicated:




/s/ Keith S. Cowan                                  Date:  July 28, 2000
---------------------------------------
Keith S. Cowan
President, and Director
(Chief Executive Officer)



/s/ Thomas C. Cargin                                Date:  July 28, 2000
---------------------------------------
Thomas C. Cargin
Director
(Vice President-Finance and
Administration, Principal Financial
Officer, and Secretary)



/s/ Michael J. Meyer                                Date:  July 28, 2000
---------------------------------------
Michael J. Meyer
Director



/s/ Robert D. Taylor                                Date:  July 28, 2000
---------------------------------------
Robert D. Taylor
Director


Page 31

<PAGE>   32

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
Number   Description
------   -----------
<S>      <C>
 10(cc)  Employment agreement dated December 6, 1999, by and between the Company
         and Karl Gemperli.

 10(dd)  Stock option agreement dated December 6, 1999, by and between the
         Company and Karl Gemperli.

 11.     STATEMENT OF COMPUTATION OF PER SHARE EARNINGS

 13.     ANNUAL REPORT TO SHAREHOLDERS FOR THE FISCAL YEAR ENDED APRIL 30, 2000
         (only those portions of such Annual Report to Shareholders which are
         specifically incorporated by reference into this Form 10-KSB shall be
         deemed filed with the Commission)

 21.     SUBSIDIARIES OF THE COMPANY

 27.     FINANCIAL DATA SCHEDULE (FOR SEC USE ONLY)
</TABLE>


Page 32