<PAGE>   1

                     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, 1999
                                            ----------------------

         [ ]      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.  $15,944,000
                                                                  --------------

         The aggregate market value of the voting stock held by non-affiliates
of the issuer on June 1, 1999, based upon the average bid and ask prices for
such stock on that date was $4,182,187. The number of shares of Common Stock of
the issuer outstanding as of June 1, 1999 was 2,230,500.

         Documents incorporated by reference:

         -        Portions of the Proxy Statement for the Annual Meeting of
                  Shareholders to be held September 21, 1999, are incorporated
                  by reference into Part III.





<PAGE>   2

                                     Part I

Item 1. DESCRIPTION OF BUSINESS

(A) BUSINESS DESCRIPTION

Airport Systems International, Inc. (the Company) 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.

The Company's 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. The Company's sales are
largely dependent upon government construction and procurement contracts. The
majority of the Company's revenues in any single quarter is typically derived
from relatively few 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 the Company. Historically, the Company has not had any
contracts which have required significant product development efforts, however,
the Company 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 the Company's products are
incorporated. The Company generally provides a limited product warranty with its
equipment. Warranty costs are tracked by the Company and have historically not
varied materially from management's estimates.

The Company was incorporated in Kansas on May 1, 1991, and completed an initial
public offering on November 30, 1993. In that offering, 1,550,000 shares of
common stock were sold, including an over-allotment of 150,000 shares, 700,000
shares being sold by the Company and 850,000 shares being sold by certain
existing stockholders.





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(B) BUSINESS OF THE COMPANY

Products, Markets and Distribution

The Company's 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.

An ILS system provides the close-in navigation support to an aircraft during the
approach to landing phase. An ILS consists of three separate navaids: the
localizer provides lateral guidance to the left and right of the runway
centerline; the glide-slope provides vertical guidance above and below a
glidepath which intersects the runway touchdown point at about a three degree
angle; and between one and three marker beacon transmitters which provide an
indication of the aircraft's position at specific points on the approach path.
The Company manufactures and sells null reference and capture effect ILS
configurations, offering both single and dual transmitters. The null reference
configuration is less expensive, while the capture effect configuration is used
when difficult terrain conditions are present near the runway. Single
transmitter systems prevail in the United States, while dual systems are
generally required at international sites to provide redundancy.

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). Position accuracy is a function of range
from the ground station, since a VOR provides angular bearings with an accuracy
of plus or minus one degree. The Company offers both conventional and doppler
effect VOR. A doppler effect VOR typically is used where difficult terrain
conditions can affect signal quality.

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. The Company 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.





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The Company 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, the
Company 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, the Company 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.

Airfield signage is used to direct aircraft along runways, taxiways, and to
terminals. The signs offer value-added design features, which reduce airfield
activity disruption, and readily adapt to all categories and sizes of airports.
The signs incorporate a unique two-post swinging design, which reduces damage
from jet blasts and lowers installation costs when compared with traditional
fixed-position signs.

The Company 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 the
Company's 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. The Company sells
either directly to these international organizations through a network of
representatives and distributors, or through prime contractors. The Company has
over 33 independent sales representatives covering over 31 countries. The
Company's international sales were 80% and 75%, of total sales for the fiscal
years ended April 30, 1999, and 1998, 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. The Company 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. The Company's
United States non-federal sales were 17% and 13%, of total sales for the fiscal
years ended April 30, 1999, and 1998, 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. The Company's
sales to the United States Government were approximately 3% and 12%, of total
sales for the fiscal periods ended April 30, 1999, and 1998, respectively. The
Company has, to date, approached this market as both a subcontractor and direct
provider.

Competition

The Company 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




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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.

The Company's 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 the Company 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, the Company has competed against several navaids suppliers,
including Airsys ATM and the navigation aids division of Alcatel, a French
aerospace and communications company. In 1998, as part of a larger transaction
between Alcatel and Thomson CSF, the navigational aids division of Alcatel was
acquired by Thomson CSF and merged into Airsys ATM. As a result of this merger
the Company only has one competitor which has a full line of navigational aid
products. In addition, the Company competes against several other smaller
companies, none of which carry a full line of products.

The Company has several visual aids competitors both domestically and
internationally. Domestically, the Company's 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 two customers which, in the aggregate, accounted for
47% of total sales in fiscal 1999, and sales to two customers which accounted
for 46% of total sales in fiscal 1998. 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.

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. The Company's material intellectual
property consists of drawings, plans, software,



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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
transferrable, 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 Products, Markets and
Distributions.

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.

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 1100 model ILS
and DME products are approved by the FAA for AIP funded contracts. The Company
expects the FAA to approve its Model 2100 ILS for AIP projects by the end of the
second quarter of fiscal 2000. 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.




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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

During fiscal 1999, approximately 52% of the Company's engineering staff time
was spent on research and development activities, none of which was borne by the
customer. In fiscal 1998, the amount of engineering time spent on research and
development was 53%, none of which was borne by the customer.

Total Number of Employees

At April 30, 1999, the Company had 103 full time employees. Of these, 54 are
engaged in manufacturing, 9 in sales and marketing, 16 in engineering, 6 in
quality assurance and 18 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 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



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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 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 - The Company 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. See "Business of the Company -
Competition."

Dependence on FAA Approvals - The Company's 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 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 1999, 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




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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.

International Currency Devaluations - The current economic difficulties in
Southeast Asia that have resulted in tighter monetary and fiscal policies
following the currency devaluations in Indonesia, Thailand, Korea, Malaysia and
the Philippines have had and will for the foreseeable future, have an impact on
the Company's operations.

While the Company has reallocated its marketing resources to other regions of
the world, the Company is susceptible to currency devaluations in these other
regions. Further currency devaluations and tighter monetary and fiscal policy
may make the Company's products too expensive in these international markets and
delay funding of government programs.

Dependence on Key Personnel - The future success of the Company is highly
dependent upon several executive officers. The Company has signed employment
agreements with two 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 NASDAQ
National Market and the American Stock Exchange has been limited.

Dependence on Fixed-Price Contracts - Sales are typically made pursuant to fixed
price contracts and cost overruns, if any, are assumed by the Company. 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 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
$6 million under its current bank facility, subject to collateral availability.
At April 30, 1999 the Company had cash advances on its bank facility of $1. 3
million, as well as $3.6 of standby letters of credit. At April 30, 1999, the
Company had $6 million of collateral availability, leaving $1.1 million
available under the




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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. Any issuance of
equity securities by the Company may result in a dilution of shareholders'
equity. In addition, additional debt may have an adverse impact on operating
results.

Item 2.   DESCRIPTION OF PROPERTY

Real Estate. The Company conducts all of its operations from its 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,
1999, was $1,186,000 with a final payment of approximately $788,200 due at
maturity assuming no prepayments. The Company believes its existing facility
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.

The Company conducts production of airfield signage as well as some navaids
production from a leased facility at 8920 Bond in Overland Park, Kansas, which
consists of approximately 7,200 square feet. The Company has a two year
renewable lease for this facility. The Company believes this facility will
provide adequate capacity for the remaining lease term.

Manufacturing and Engineering Equipment. The Company's 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, 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 not a party to any lawsuits, but is subject to contract disputes
arising in the ordinary course of business, which the Company believes will not
have, either individually or in the aggregate, a material adverse effect on the
Company's business.



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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, 1999.










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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 Nasdaq National Market. No cash dividends have been declared.
As of April 30, 1999, Airport Systems 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>
1999                               High                  Low
                                 -------               -------
<S>                             <C>                   <C>
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

1998                               High                  Low
                                 -------               -------
First Quarter                    $ 8 1/8               $ 5 7/8
Second Quarter                     9                     6 1/2
Third Quarter                     10                     7 1/2
Fourth Quarter                     7 5/8                 4 3/4
For the Year                      10                     4 3/4
</TABLE>
















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Item 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The following table sets forth for the years indicated, certain income statement
data:

<TABLE>
<CAPTION>
                                                     Year Ended                 Year Ended
                                                    April 30,1999             April 30, 1998
                                                 --------------------      --------------------
<S>                                              <C>           <C>         <C>           <C>
(Dollars in Thousands)
Sales                                            $ 15,944      100.0%      $ 23,846      100.0%
Cost of products sold                              12,623       79.2%        16,631       69.7%
                                                 --------      ------       -------      ------
Gross margin                                        3,321       20.8%         7,215       30.3%
Selling, general and administrative expenses        4,383       27.5%         4,255       17.8%
Research and development expenses                   1,900       11.9%         1,491        6.3%
Asset impairment                                    1,299        8.1%            --
                                                 --------      ------       -------      ------
Operating income (loss)                            (4,261)     (26.7)%        1,469        6.2%
Interest expense                                     (119)       (.6)%         (107)       (.4)%
Other income, net                                      48         .1%           116         .4%
                                                 --------      ------       -------      ------
Income before income taxes                         (4,332)     (27.2)%        1,478        6.2%
Provision for income taxes                           (779)      (4.9)%          498        2.1%
                                                 --------      ------       -------      ------
Net income                                       $ (3,553)     (22.3)%     $    980        4.1%
                                                 ========      ======       =======      ======
</TABLE>

Sales in 1999 were $15.9 million, or 33% lower than sales in 1998. Of the $15.9
million, approximately $7.5 million, or 47%, represented deliveries to two
customers. The decrease in sales compared to 1998 was due to a decrease in the
number of units shipped primarily as a result of lower beginning year backlog
and decreased bookings during the year.

Gross margin was $3.3 million, or 21% of sales, down approximately 54% from $7.2
million, or 30% of sales, in 1998. Gross margin decreased due to decreased
sales, higher production and installation costs associated with the Company's
new design instrument landing system (ILS) and under-utilized manufacturing
capacity. In addition, there has been a softening of the navaids market since
late fall of 1997 due primarily to the economic difficulties experienced in
Southeast Asia. This has led to lower prices as a result of increased
competition over fewer procurement opportunities.





Page 12
<PAGE>   14

Selling, general and administrative ("SG&A) expenses increased $128,000, or 3%
in 1999, reflecting an increase in costs attributable to increased marketing
efforts related to the introduction of new product line and the expanding
marketing efforts to other geographic markets. SG&A expenses, as a percent of
sales, increased to 28% in 1999 from 18% in 1998 reflecting increased marketing
costs and lower sales.

Research and development expenses increased $409,000, or 27% in 1999 reflecting
continued work on enhancements to the Company's current product line which
includes its Category II/III Instrument Landing System (ILS). In addition, the
Company incurred costs to obtain Federal Aviation Administration (FAA)
certification of its airfield lighting products. During 1999, the Company
completed substantially all research and development efforts on the Category
II/III ILS. The FAA granted type certification for the system in July 1999. The
Company expects to incur additional expenses to make minor enhancements to its
ILS in fiscal 2000. The Company has received certification for its elevated
lights and precision approach path indicator (PAPI). Additional expense will be
incurred in fiscal 2000 to make additional enhancements to its airfield lighting
line to meet competitive and regulatory requirements. With the completion of the
Category II/III ILS and the progress made on the airfield lighting line, the
Company expects a reduced level of research and development activities in fiscal
2000.

Pursuant to Statement of Financial Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets to Be Disposed Of," the
Company evaluated the recoverability of the long-lived assets (primarily
goodwill) of the signage product line. While the signage line will continue to
be an important part of the Company's overall product development strategy, the
market demand for signs has been significantly lower than originally expected.
Additional investments in the product line will also be required to meet
regulatory and competitive demands. In the fourth quarter of 1999, concurrent
with the Company's annual planning process, the Company determined the signage
line's estimated future undiscounted cash flows were below the carrying value of
the related long-lived assets (including goodwill), resulting in a non-cash
write-down of goodwill of $1,118,000. In addition, the Company wrote off
inventory and fixed assets related to the signage line totaling $181,000. In
determining the amount of the impairment charges that were made, the Company
developed its best estimate of future operating cash flows. Undiscounted cash
flows were compared to the carrying value of the assets to ascertain that an
impairment had occurred. Estimated future cash flows, excluding interest
charges, then were discounted using a 15% discount rate. Sales were estimated to
remain unchanged from fiscal 1999 levels, and gross margins were held constant
as a percent of sales. Gross margins were reduced for projected investments in
product design and production equipment. These projections resulted in
discounted cash flows that supported the amounts recorded. These projections
were prepared solely to determine the appropriate amount of write-off, based on
assumptions management believed to be reasonable at the time; however, no
assurance can be given that such projections will be accurate.

Other income, net decreased $68,000 in 1999, due primarily to decreased interest
income from lower average cash and investment balances as compared to 1998.

The Company's effective income tax rate declined to approximately 18% in 1999
compared to approximately 34% for 1998 due primarily to valuation reserves
established against deferred tax assets.



Page 13
<PAGE>   15

These deferred tax assets related primarily to net operating loss carry
forwards, tax credit carry forward, and the write-off of goodwill related to the
asset impairment discussed above. The net operating losses will be used to
offset future taxable income.

As a result of the above, the net loss for 1999 was $3,553,000 or 22% of sales,
compared to net income of $980,000, or 4% of sales, in 1998.


Backlog

         The following table sets forth the domestic and international backlog
as of the dates indicated:

<TABLE>
<CAPTION>
(In Thousands)      April 30, 1999        April 30, 1998
                  -----------------     ------------------

<S>               <C>         <C>       <C>          <C>
Domestic          $1,123      22.9%     $ 1,328      12.6%

International     $3,779      77.1%     $ 9,246      87.4%
                  ------     ------     -------     ------
TOTAL             $4,902     100.0%     $10,574     100.0%
</TABLE>

The Company's backlog decreased $5.7 million or 54% to $4.9 million at April 30,
1999, compared to $10.6 million at April 30, 1998. Approximately 51% of the
backlog at April 30, 1999 consisted of two contracts. Of the April 30, 1999
backlog, 31% represents a contract with a major U.S. air traffic control
contractor for the delivery of multiple ILS systems into South America while 20%
of the backlog represents a contract with the Republic of Cambodia for
communication equipment, training and installation services. All of the backlog
at April 30, 1999 is expected to be completed and shipped in fiscal 2000.

The decrease in backlog, as compared to April 30, 1998, is primarily the result
of bookings not keeping pace with shipments. Bookings for the year totaled $10.5
million, down $4.9 million or 32% from 1998 bookings of $15.4 million. The
economic difficulties experienced in Southeast Asia, which began in fiscal 1998,
continued to impact the overall demand for navaids throughout 1999, thus
significantly contributing to the decline in orders during 1999. In reaction to
this, the Company shifted its focus from Southeast Asia to other geographic
regions. Though there was no noticeable positive growth resulting from these
changes in 1999, the Company expects this, combined with completion of the CAT
II/III ILS and the addition of the airfield lighting line will increase its
geographic penetration in its markets as well as improve its competitive
position on future tenders. Because of this, the Company is optimistic about its
ability to capture additional market share in the future. 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, 1999. 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:



Page 14
<PAGE>   16



<TABLE>
<CAPTION>
                                       Three Months Ended

(Dollars in thousands)     July 31,  October 31,   January 31,    April 30,
                             1998        1998          1998         1998
                            ------     -------       -------      -------
<S>                        <C>        <C>           <C>          <C>
Sales                       $4,727     $ 3,241       $ 4,080      $ 3,896

Gross margin                 1,577         568           714          462

Operating income (loss)         22      (1,115)         (793)      (1,076)

Net income (loss)           $   14     $  (714)      $  (525)     $(2,328)

Gross margin %              33.4 %        17.5%       17.5 %         12.4%
</TABLE>

The Company has experienced quarterly fluctuations in operating results and
anticipates 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 $3.4 million was used by operations in 1999 compared to $277,000
provided in 1998. The decrease was principally the result of the net loss for
the year and decreases in accrued expenses and customer deposits, partially
offset by decreases in inventory and accounts receivable, reflecting lower sales
levels. Accrued expenses were down principally due to reduction in commission
payable and accrued contract costs. This reflected the reduction in backlog and
reduced sales. Customer deposits were down reflecting the reduction in backlog
and the low level of bookings.

Cash used in investing activities was $282,000 for 1999 compared to $258,000 in
1998 reflecting an consistent level of purchases of fixed assets.

Cash provided by financing activities was $1.3 million in 1999 compared to
$692,000 used in financing activities in 1998. The increase is due primarily to
increased borrowings on the Company's bank line of credit.




Page 15
<PAGE>   17

The Company expects 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, as amended by SFAS No. 137. 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. The Company has not yet determined
what the effect of SFAS No. 133 will be on the earnings and financial position
of the Company.

The Company has considered the impact of Year 2000 issues on its internal
computer systems and applications, and has developed a remediation plan. The
Company has completed the implementation of new internal software and hardware
and its internal computer systems do function properly with respect to dates in
the year 2000 and thereafter. The cost of the project was approximately
$165,000, of which approximately $125,000 was capitalized for the purchase of
new software and hardware, and $40,000 of which was expensed as incurred and was
funded through working capital.

The Company has considered the impact of Year 2000 issues on the navigation and
landing systems it has sold and installed. The Company did a formal evaluation
and testing of certain of its equipment for the FAA, and an informal evaluation
and testing on its other equipment and found no Year 2000 issues critical to
flight safety. Some of the Company's older navigation and landing systems have
computers with programs written using two digits rather than four to define the
applicable year. As a result, those computer programs have time-sensitive
software that recognize a date using "00" as the year 1900 rather than the year
2000. No system failures are expected to occur as a result of Year 2000 issues
as navigational guidance is not dependent on this function. The Company responds
to requests from its customers regarding Year 2000 issues as described herein
and does not believe it will incur any costs with regard to this issue which
will be material to the Company's consolidated financial statements.

The Company has considered the impact of Year 2000 issues on vendor/supplier
software as well as software imbedded in facility systems and has developed a
remediation plan. The Company is requiring certification from all significant
vendors that they will be Year 2000 compliant. The Company is inventorying all
facility systems for Year 2000 issues. In both cases, the Company will determine
the extent of any exposure to Year 2000 issues based upon responses from vendors
and suppliers and its inventory of facility systems and develop corrective
action plans. The Company does not believe it will incur any costs with regard
to this issue which will be material to the Company's consolidated financial
statements.





Page 16
<PAGE>   18

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 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.

Item 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Part IV, Item 13, pages F1 through F19 immediately following.

Item 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                            AND FINANCIAL DISCLOSURE

There have been no changes in, or disagreements with, the Company's independent
accountants on accounting or financial disclosure matters.







Page 17
<PAGE>   19


                                    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 1999 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 1999
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            45     President, Chief Executive Officer and Director

Thomas C. Cargin          44     Vice President-Finance and Administration, Secretary and Director

Anthony G. Bommarito      47     Vice President-Engineering

Michael M. Warner         45     Vice President-Business Development

John R. Wharton           57     Vice President-Sales

Gregory C. Brand          49     Vice President-Field Operations and Training

Wayne S. Howard           59     Vice President-Indonesia Programs

Ronald E. Peck            38     Vice President-Manufacturing
</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 25
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 an 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, 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






Page 18
<PAGE>   20

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 22 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 26 years in engineering experience.

Michael M. Warner has served as Vice President-Business Development since
January, 1995. Prior to that, he held the position of Director-Business
Development with Harris Corporation from 1993 to 1995. From 1982 to 1993 he held
various positions with Hughes Aircraft Company, last serving as Manager, New
Business Development. He has over 17 years experience in marketing and managing
air traffic control systems projects.

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 for over 20 years. Mr. Wharton has over 35 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, Inc. Mr. Brand has over 22 years experience in field
installation and program management.

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 31 years of electronic
components manufacturing and program management experience.

Ronald E. Peck has served as Vice President of Manufacturing since May, 1999.
Prior to that he served as 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 16 years of quality assurance experience.

Item 10.  EXECUTIVE COMPENSATION

The information required by Item 10 will be set forth in the Company's
definitive Proxy Statement for its 1999 Annual Meeting of Shareholders and such
information is incorporated herein by reference.

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




Page 19
<PAGE>   21
its 1999 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, 1999 and 1998 .................     F2

Consolidated Statements of Operations for each of the two
     years in the period ended April 30, 1999 .............................     F4

Consolidated Statements of Stockholders' Equity for each
     of the two years in the period ended April 30, 1999 ..................     F5

Consolidated Statements of Cash Flows for each of the two
     years in the period ended April 30, 1999 .............................     F6

Notes to Consolidated Financial Statements for the two
     years ended April 30, 1999 ...........................................     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.

(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:

 NUMBER                    DESCRIPTION
 ------                    -----------

  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.






Page 20
<PAGE>   22

 NUMBER                    DESCRIPTION
 ------                    -----------

 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)      A copy of the warrant issued by the Company
                                    to Fahnestock & Company, Inc., attached as
                                    Exhibit 4.7 of the Company's Registration
                                    Statement, Form SB-2, filed November 29,
                                    1993 with the Securities and Exchange
                                    Commission, is incorporated herein by
                                    reference.

                           (c)      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.

                            (d)     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.

                           (e)      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.






Page 21
<PAGE>   23

 NUMBER                    DESCRIPTION
 ------                    -----------


                           (f)      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.

                           (g)      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.

                           (h)      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.

                           (i)      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.

                           (j)      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.

                           (k)      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.

                           (l)      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.





Page 22
<PAGE>   24

 NUMBER                    DESCRIPTION
 ------                    -----------

                           (m)      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.

                           (n)      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.

                           (o)      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.

                           (p)      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.

                           (q)      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.

                           (r)      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.

                           (s)      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.





Page 23
<PAGE>   25

 NUMBER                    DESCRIPTION
 ------                    -----------

                           (t)      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.

                           (u)      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.

                           (v)      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.

                           (w)      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.

                           (x)      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.

                           (y)      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.

                           (z)      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.

                           (aa)     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.

                           (bb)     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.

                           (cc)     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,
                                    1999.






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<PAGE>   26


 11.              STATEMENT OF COMPUTATION OF PER SHARE EARNINGS

 13.              ANNUAL REPORT TO SHAREHOLDERS FOR THE FISCAL YEAR ENDED APRIL
                  30, 1999 (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)

(c)  REPORTS ON FORM 8-K:  None






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<PAGE>   27


                                   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, 1999

         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, 1999
-----------------------------------------
Keith S. Cowan
President, and Director
(Chief Executive Officer)



/s/ Thomas C. Cargin                                   Date:  July 28, 1999
-----------------------------------------
Keith S. Cowan
Director
(Vice President-Finance and
Administration, Principal Financial
Officer, and Secretary)



/s/ Michael J. Meyer                                   Date:  July 28, 1999
-----------------------------------------
Michael J. Meyer
Director



/s/ David G. Gatchell                                  Date:  July 28, 1999
-----------------------------------------
David G. Gatchell
Director





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<PAGE>   28


                                  EXHIBIT INDEX

       Number     Description
       ------     -----------

         10.cc    AMENDMENT OF THE COMPANY'S RESTATED 1991 STOCK OPTION PLAN

         11.      STATEMENT OF COMPUTATION OF PER SHARE EARNINGS

         13.      ANNUAL REPORT TO SHAREHOLDERS FOR THE FISCAL YEAR ENDED APRIL
                  30, 1999 (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)



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