<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, 1997
                                            ------------------------------------

         [ ]      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.  $20,098,000
                                                                  --------------

         The aggregate market value of the voting stock held by non-affiliates
of the issuer on June 1, 1997, based upon the average bid and ask prices for
such stock on that date was $14,219,437. The number of shares of Common Stock of
the issuer outstanding as of June 1, 1997 was 2,230,500.

         Documents incorporated by reference:

                  - Portions of the Annual Report to Shareholders for the year
                    ended April 30, 1997, are incorporated by reference into
                    Part II.
                                   
                  - Registrant's definitive proxy statement to be filed 
                    pursuant to Regulation 14A promulgated by the
                    Securities and Exchange Commission under the Securities
                    Exchange Act of 1934, which definitive proxy statement
                    is anticipated to be filed within 120 days after the
                    end of Registrant's fiscal year ended April 30, 1997,
                    is incorporated by reference in Part III hereof.




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                                     Part I

Item 1. DESCRIPTION OF BUSINESS

(A)      BUSINESS DEVELOPMENT

The Company engages in the design, manufacture, marketing and installation of
ground-based navaids as well as DGPS (differential global positioning systems).
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. DGPS is a ground-based station
that measures GPS signal error from a precisely known ground location and
transmits correction to approaching aircraft.

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 six 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 on May 1, 1991, by Allsop Venture Partners III,
L.P. ("AVP"), Kansas Venture Capital, Inc. ("KVCI") and Fernau Holdings, Ltd.
("FHL"), a United Kingdom-based navaids manufacturer, for the purpose of
acquiring substantially all of the assets (the "Acquisition") of Aviation
Systems, Inc. The closing of the Acquisition occurred on May 21, 1991, and the
Company commenced operations on May 22, 1991.


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In September, 1991, Mr. Keith Cowan, the Company's President and Chief Executive
Officer, commenced employment with Airport Systems. During its first fiscal year
following the Acquisition, the Company recruited an experienced management team,
developed domestic and international marketing and distribution networks, made
significant design improvements to the products acquired in the Acquisition,
instituted a total quality management system, and enhanced the credibility of
the Company with customers and vendors.

The Company completed an initial public offering on November 30, 1993, at which
time 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.

In September 1994, the Company acquired from Vomar International, Inc. and Vomar
Products, Inc. ("Vomar") certain contracts, inventories, machinery, and
intangibles relating to the Vomaglow line of airfield signage used to direct
aircraft along runways, taxiways and to terminals. The Company has been engaged
in the design, manufacture, marketing, and installation of airfield signage
subsequent to this date.

(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 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
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.


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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 and II 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.

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 31 independent sales representatives covering over 35 countries. The
Company's international sales were 88% and 72%, of total sales for the fiscal
years ended April 30, 1997, and 1996, 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-


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federal sales were 11% and 23%, of total sales for the fiscal years ended April
30, 1997, and 1996, 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 1% and 5%, of total
sales for the fiscal periods ended April 30, 1997, and 1996, respectively. The
Company has, to date, approached this market as both a subcontractor and direct
provider.

Status of Publicly Announced New Product

Satellite-based navigation systems for aircraft navigation and landing is an
emerging technology in the navaids industry. The Global Positioning System
("GPS"), controlled jointly by the Department of Defense and Department of
Transportation, uses 24 orbiting satellites and is the only such system
currently operating. Approach-to-landing satellite guidance, however, is
currently affected by accuracy and integrity limitations.

The Company entered into a strategic alliance during fiscal 1995 with a leading
manufacturer of military global positioning system products, Interstate
Electronics Corporation ("Interstate"). The Company is jointly developing with
Interstate a Differential Global Positioning System ("DGPS") that measures GPS
signal errors from a precisely known ground location and transmits corrections
to approaching aircraft. As part of a contract awarded in 1995 by Crossair AG, a
subsidiary of Swissair, and Swisscontrol, the Company has installed an interim
ground station at Lugano, Switzerland. This system is being used by Crossair AG
and Swisscontrol to collect flight test data and design an approach to the
airport at Lugano using DGPS. The basic design work for the final system has
been completed, and the Company and Interstate are currently engaged in
integrating hardware and software components. Initial flight tests have been
completed. As part of its review, the FAA has requested and will receive an
evaluation system for use in completing certification of the system in the
United States.


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 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 ICAO approvals.

The Company's principal conventional navaid competitor in the United


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States non-federal market is 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).

To date, the Company is unaware of any DGPS equipment that has been certified
for use by commercial aviation either domestically or internationally. The
Company is aware of a number of major electronic and air traffic control
equipment manufacturers who have publicly announced they are pursuing
development of DGPS equipment. The Company is unable to determine the extent to
which these potential competitors will effect the competitive future of the DGPS
product.

The Company has several competitors both domestically and internationally in
airfield signage. Domestically, the Company's primary competitors are ADB Alnaco
(a division of Siemens, Inc.), Crouse Hinds (a division of Cooper Industries)
and Standard Signs, Inc. (a privately held company). Internationally, the
Company competes primarily against ADB Alnaco 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 four customers which, in the aggregate, accounted for
54% of total sales in fiscal 1997, and sales to two customers which accounted
for 33% of total sales in fiscal 1996. 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, 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's strategic alliance with Interstate for the development and sale of
DGPS equipment provides that each party shall develop and own certain
intellectual property which is incorporated into the DGPS equipment. Generally,
the Company's portion is focused on radio frequency transmission and reception,
and Interstate's portion is focused on differential correction software and
hardware.

Government Approvals

All navigation aids to be installed in the United States, whether purchased by
airport owners, local or state governments or the FAA,


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require FAA and United States Federal Communications Commission ("FCC")
approval. The Company has received all applicable FCC 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 the 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 are 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 ILS and DME
products are approved by the FAA for AIP funded contracts. To the Company's
knowledge, there is only one 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. Airfield signage must meet the requirements of
FAA Circular AC150/5345-44F. The Company's airfield signage line meets these
requirements.

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 1997, approximately 43% of the Company's engineering staff time
was spent on research and development activities, none of


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which was borne by the customer. In fiscal 1996, the amount of engineering time
spent on research and development was 42%, none of which was borne by the
customer.

Total Number of Employees

At April 30, 1997, the Company had 129 full time employees. Of these, 67 are
engaged in manufacturing, 8 in sales and marketing, 28 in engineering, 7 in
quality assurance and 19 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 10KSB, 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 annual reports on
Form 10-KSB, 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 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 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


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navaids industry. The Company's ability to develop a GPS-based landing system
depends to some degree on the success of a teaming agreement it has entered into
with Interstate Electronics Corporation. See "Business of the Company - Status
of Publicly Announced New Product."

Competition - The Company is in direct competition with one other supplier of
navaids in the United Sates. This competitor, Wilcox Electric, Inc. ("Wilcox"),
is a subsidiary of Thomson-CSF, a French defense and electronics company
partially owned by the French government. Thomson-CSF has substantially greater
resources than the Company, and Wilcox has been, for many years, the principal
supplier of navaids to the FAA. In the international market, there are several
foreign competitors for one or more of the products produced by the Company,
most of which are substantially larger and have greater resources than the
Company. See "Business of the Company - Competition."

The market potential for satellite based landing systems has resulted in
alliances being formed between industry participants and companies not
historically involved in ground-based navigation and will over time result in
additional competitors. 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 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. To date, this has not had an
adverse effect on the Company's ability to compete for international projects.
If the United States dollar gains 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 three executives and has purchased key man life insurance on
five executive officers. There can be no


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assurance that 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 has been limited due to the relatively few number of
shareholders and shares outstanding.

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 that 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 - Although at April 30, 1997 the Company had
$3,122,000 in cash, the financing requirements of all of the various
opportunities it is currently considering, if funded solely by the Company, may
exceed this amount. This includes working capital to meet current and future
contract obligations 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 that 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


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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, 1997, was $1,220,000, with a
final payment of approximately $788,200 due on the due date assuming no
prepayments. The Company believes that 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 that it has a range of suitable alternatives for future expansion.

The Company conducts production of airfield signage from a leased facility at
8920 Bond in Overland Park, Kansas, which consists of approximately 7,200 square
feet. The Company has a 2 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.


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, 1997.

Supplementary Item - EXECUTIVE OFFICERS OF THE COMPANY

The following are the executive officers of the Company:

<TABLE>
<CAPTION>
      NAME                 AGE        POSITION
----------------          -----     --------------------------------------------
<S>                        <C>      <C>
Keith S. Cowan             43       President, Chief Executive Officer and
                                    Director

Thomas C. Cargin           42       Vice President-Finance and Administration,
                                    Secretary and Director
</TABLE>


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<TABLE>
<S>                         <C>     <C>
John C. Roos                56      Vice President-Engineering

Michael M. Warner           43      Vice President-Business Development

John R. Wharton             55      Vice President-Sales

Gregory C. Brand            47      Vice President-Field Operations and Training

Wayne S. Howard             57      Vice President-Indonesia Programs

Karl B. Gemperli            33      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 23
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
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 20 years of public accounting and private industry accounting
experience. He is also a licensed pilot holding an instrument rating.

John C. Roos has served as Vice President-Engineering of the Company since
December, 1991. Prior to joining the Company, Mr. Roos was an employee of AIL
Systems, Inc., a subsidiary of Eaton Corporation, for more than five years, last
serving as Manager of Design Engineering. Mr. Roos has over 31 years in
engineering management experience in radio frequency design, government
contracting and engineering project management.

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 15 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


Page 12
<PAGE>   13
has over 33 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 20 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 28 years of electronic
components manufacturing and program management experience.

Karl B. Gemperli has served as Vice President of Manufacturing since March,
1996. 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 12 years of electronic
manufacturing experience.






Page 13
<PAGE>   14
                                     Part II

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

The information required by Item 5 is set forth on the inside back cover of the
Company's 1997 Annual Report to shareholders and such information is
incorporated herein by reference.


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

The information required by Item 6 is set forth on pages 8 through 10 of the
Company's 1997 Annual Report to Shareholders and such information is
incorporated herein by reference.


Item 7.  FINANCIAL STATEMENTS 

The information required by Item 7 is set forth on pages 11 through 19 of the
Company's 1997 Annual Report to Shareholders and such information is
incorporated herein by reference.


Item 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

None.






Page 14
<PAGE>   15
                                    Part III


Item 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information relating to the Company's Directors required by Item 9 is set
forth on pages 5 to 6 of the Company's Proxy Statement for its 1997 Annual
Meeting of Shareholders and such information is incorporated herein by
reference.

The information relating to filing of Forms 3, 4, and 5 required by Item 9 is
set forth on page 4 of the Company's Proxy Statement for its 1997 Annual Meeting
of Shareholders and such information is incorporated herein by reference.

Information relating to the Company's Executive Officers, as required by Item 9,
is set forth under the heading Supplementary Item - Executive Officers of the
Company, pages 11 through 13 of Part I of this Form 10-KSB.

Item 10. EXECUTIVE COMPENSATION

The information required by Item 10 is set forth on pages 6 through 8 of the 
Company's definitive Proxy Statement for its 1997 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 is set forth on pages 3 and 4 of the
Company's definitive Proxy Statement for its 1997 Annual Meeting of Shareholders
and such information is incorporated herein by reference.

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by Item 12 is set forth on pages 8 and 9 of the 
Company's definitive Proxy Statement for its 1997 Annual Meeting of 
Shareholders and such information is incorporated herein by reference.

Item 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)   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.
</TABLE>




Page 15
<PAGE>   16
<TABLE>
<CAPTION>
NUMBER                                 DESCRIPTION                                 
------   -----------------------------------------------------------------------   
 <S>     <C>                                                                      
  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.

         (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.
</TABLE>


Page 16
<PAGE>   17
<TABLE>
<CAPTION>
NUMBER                                 DESCRIPTION                               
------   ----------------------------------------------------------------------- 
<S>      <C>                                                                      

         (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.

         (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
</TABLE>


Page 17
<PAGE>   18
<TABLE>
<CAPTION>
NUMBER                                 DESCRIPTION                               
------   ----------------------------------------------------------------------- 
 <S>     <C>                                                                     
                  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.

         (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
                  10u, of this form 10KSB.

         (v)      Stock Option Agreement dated February 13, 1997, by and between
                  the Company and Karl B. Gemperli, attached as Exhibit 10v, of
                  this form 10KSB.

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


 11.     STATEMENT OF COMPUTATION OF PER SHARE EARNINGS

 13.     ANNUAL REPORT TO SHAREHOLDERS FOR THE FISCAL YEAR ENDED APRIL 30, 1997
         (pages 1 through 7 of such report shall not be deemed filed).

 21.     SUBSIDIARIES OF THE COMPANY

 23.     CONSENT OF INDEPENDENT AUDITORS

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


(b)   REPORTS ON FORM 8-K: None




Page 18
<PAGE>   19
                                     PART IV


                                   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 29, 1997


         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 29, 1997
------------------------------------
Keith S. Cowan
President, and Director
(Chief Executive Officer)



/s/ Thomas C. Cargin                                  Date: July 29, 1997
------------------------------------
Thomas C. Cargin
Director
(Vice President-Finance and
Administration, Principal Financial
Officer, and Secretary)



/s/ Michael J. Meyer                                  Date: July 29, 1997
------------------------------------
Michael J. Meyer
Director



/s/ Thomas C. Blackburn                               Date: July 29, 1997
------------------------------------
Thomas C. Blackburn
Director




Page 19
<PAGE>   20
EXHIBIT INDEX



<TABLE>
<CAPTION>
Number                              Description                                
------                              -----------                                
<S>               <C>                                                          
10.(u)            COVENANT NOT TO COMPETE dated March 20, 1997,                
                  by and between the Company and Michael M. Warner.            

10.(v)            STOCK OPTION AGREEMENT dated February 13, 1997,
                  by and between the Company and Karl B. Gemperli.


11.               STATEMENT OF COMPUTATION OF PER SHARE EARNINGS

13.               ANNUAL REPORT TO SHAREHOLDERS FOR THE FISCAL YEAR ENDED
                  APRIL 30, 1997 (pages 1 through 7 of such report
                  shall not be deemed filed).

21.               SUBSIDIARIES OF THE COMPANY


23.               CONSENT OF INDEPENDENT AUDITORS

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






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