<PAGE>
-------------------------------------------------------------------------------

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549

                                   ---------
                                   FORM 10-Q
                                   ---------

(Mark One)

[X]      Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001

OR

[ ]      Transition report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934


                        COMMISSION FILE NUMBER: 0-21773


                        FIREARMS TRAINING SYSTEMS, INC.
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                         <C>
           DELAWARE                                     57-0777018
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>

                            7340 MCGINNIS FERRY ROAD
                             SUWANEE, GEORGIA 30024
                    (Address of principal executive offices)

                        TELEPHONE NUMBER (770) 813-0180
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                         Yes [X]       No [ ]

    As of November 14, 2001, there were 70,153,139 shares of the Registrant's
Class A Common Stock outstanding.


                                    Page 1
<PAGE>


                        FIREARMS TRAINING SYSTEMS, INC.
                                     INDEX


<TABLE>
<CAPTION>
                                                                                          Page number
                                                                                          -----------

<S>           <C>                                                                         <C>
PART I.       FINANCIAL INFORMATION

ITEM 1.       CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

              Condensed Consolidated Statements of Operations
              Three and six months ended September 30, 2001 and 2000                          3

              Condensed Consolidated Balance Sheets
              September 30, 2001 and March 31, 2001                                           4

              Condensed Consolidated Statements of Cash Flows
              Six months ended September 30, 2001 and 2000                                    5

              Notes to Condensed Consolidated Financial Statements                            6


ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                   9


ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES                                       14
              ABOUT MARKET RISK


PART II.      OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS                                                              14

ITEM 6.       EXHIBITS AND REPORTS ON FORM 10-K                                              14

              SIGNATURES                                                                     15
</TABLE>


                                    Page 2
<PAGE>


PART I.  FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                        FIREARMS TRAINING SYSTEMS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
         (unaudited and in thousands, except unaudited per share data)


<TABLE>
<CAPTION>
                                                                 Three months ended               Six months ended
                                                                    September 30,                   September 30,
                                                             2001              2000             2001            2000
                                                            --------         --------         --------         --------

<S>                                                         <C>              <C>              <C>              <C>
Revenues                                                    $ 15,863         $  7,368         $ 26,911         $ 17,639
Cost of Revenues                                              11,457            9,531           18,246           16,815
                                                            --------         --------         --------         --------
Gross margin                                                   4,406           (2,163)           8,665              824
Operating expenses:
   Selling, general and administrative expenses                3,051            2,040            5,696            4,076
   Research and development expenses                             563            1,151            1,577            2,471
   Depreciation and amortization                                 459              589              939            1,177
                                                            --------         --------         --------         --------
     Total operating expenses                                  4,073            3,780            8,212            7,724

Operating income (loss)                                          333           (5,943)             453           (6,900)

Other income (expense), net:
   Interest income                                                22               38              187               53
   Interest expense                                              (11)          (2,263)             (18)          (4,624)
   Other income (expense), net                                   (76)            (284)             (56)            (306)
                                                            --------         --------         --------         --------
        Total other income (expense), net                        (65)          (2,509)             113           (4,877)

Income (loss) before provision for income taxes                  268           (8,452)             566          (11,777)
Provision (benefit) for income taxes                              91               54              312              (62)
                                                            --------         --------         --------         --------

Net income (loss)                                                177           (8,506)             254          (11,715)

Accretion of preferred stock                                     (67)             (74)            (132)            (140)
Gain on extinguishment of Preferred Stock                          0            1,729                0            1,729
                                                            --------         --------         --------         --------

Net income (loss) applicable to common shareholders         $    110         $ (6,851)        $    122         $(10,126)
                                                            ========         ========         ========         ========

Basic earnings (loss) per common share                      $   0.00         $  (0.13)        $   0.00         $  (0.27)
                                                            ========         ========         ========         ========

Diluted earnings (loss) per common share                    $   0.00         $  (0.13)        $   0.00         $  (0.27)
                                                            ========         ========         ========         ========

Weighted average common shares outstanding - basic            70,153           53,472           70,150           37,383
                                                            ========         ========         ========         ========

Weighted average common shares outstanding - diluted          70,894           53,472           70,635           37,383
                                                            ========         ========         ========         ========
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
statements


                                    Page 3
<PAGE>


                        FIREARMS TRAINING SYSTEMS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)


<TABLE>
<CAPTION>
                                                              September 30,          March 31,
                                                                  2001                 2001
                                                              -------------          ---------
                                                                        (unaudited)
<S>                                                             <C>                   <C>
                           ASSETS

Current assets:
  Cash and cash equivalents                                     $   2,818             $   1,864
  Restricted cash                                                     482                   628
  Accounts receivable, net                                         11,279                 8,591
  Unbilled receivables                                              1,021                 2,835
  Income tax receivable                                                 0                   809
  Inventories                                                      13,865                12,526
  Prepaid expenses and other current assets                         1,251                 1,117
                                                                ---------             ---------
                   Total current assets                            30,716                28,370

Property and equipment, net                                         2,065                 2,647
Other noncurrent assets                                                30                     0
Goodwill, net                                                       1,064                 1,156
                                                                ---------             ---------
                       Total assets                             $  33,875             $  32,173
                                                                =========             =========

          LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable                                              $   5,186             $   2,902
  Accrued liabilities                                               4,142                 3,895
  Accrued interest                                                    942                   954
  Income tax payable                                                  496                     0
  Deferred revenue                                                  1,535                 1,910
  Warranty and contract costs provision - current                   1,828                 2,816
                                                                ---------             ---------
                   Total current liabilities                       14,129                12,477

Long-term debt                                                     43,305                43,990
Noncurrent deferred income taxes                                      312                   223
Warranty and contract costs provision - noncurrent                  1,780                 1,724
Other noncurrent liabilities                                        1,029                   796
                                                                ---------             ---------
Total liabilities                                                  60,555                59,210

Mandatory redeemable preferred stock                               27,180                27,049

Stockholders' deficit:
  Stock warrants                                                      613                   613
  Additional paid-in-capital                                      122,314               122,273
  Accumulated deficit                                            (176,564)             (176,686)
  Cumulative foreign currency translation adjustment                 (223)                 (286)
                                                                ---------             ---------
               Total stockholders' deficit                        (53,860)              (54,086)
                                                                ---------             ---------
       Total liabilities and stockholders' deficit              $  33,875             $  32,173
                                                                =========             =========
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
statements


                                    Page 4
<PAGE>


                        FIREARMS TRAINING SYSTEMS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (unaudited and in thousands)


<TABLE>
<CAPTION>
                                                                         Six months ended
                                                                           September 30,
                                                                    ----------------------------
                                                                      2001                2000
                                                                    -------             --------

<S>                                                                 <C>                 <C>
OPERATING ACTIVITIES:
Net income (loss)                                                   $   122             $(10,126)
Adjustments to reconcile net income (loss) to net cash
  provided by operating activities:
      Employee stock compensation plan - 401(k) plan                      6                   35
      Employee compensation - other                                       4                    0
      Gain on extinguishment of Series A preferred stock                  0               (1,729)
      Noncash reduction of debt restructuring liability              (1,756)                (293)
      Noncash financing cost                                              0                  250
      Amortization of deferred stock-based compensation                   0                  133
      Accretion of mandatory redeemable preferred stock                 132                  140
      Depreciation                                                      846                1,040
      Amortization of goodwill                                           93                  137
      Amortization of loan costs                                          0                  332
      Gain on disposal of assets                                        (45)                  (7)
      Deferred income taxes                                              88                    9
      Changes in assets and liabilities:
         Accounts receivable, net                                    (2,704)                (121)
         Unbilled receivables                                         1,825                1,208
         Inventories                                                 (1,337)               1,606
         Prepaid expenses and other current assets                     (134)                 254
         Accounts payable                                             2,278                  583
         Accrued liabilities                                          1,498                3,631
         Income taxes payable / receivable                            1,307                1,137
         Deferred revenue                                              (374)                (202)
         Warranty and contracts costs provision                        (931)                   6
         Noncurrent liabilities                                         233                2,655
                                                                    -------             --------
            Total adjustments                                         1,029               10,804
                                                                    -------             --------
            Net cash provided by operating activities                 1,151                  678
                                                                    -------             --------
Cash flows from investing activities:
      Change in restricted cash                                         146                  296
      Additions to property and equipment, net                         (263)                (578)
      Proceeds from disposal of property and equipment                   45                    0
                                                                    -------             --------
            Net cash used in investing activities                       (72)                (282)
                                                                    -------             --------
Cash flows from financing activities:
      Repayments of long-term debt                                     (170)                   0
                                                                    -------             --------
            Net cash used in financing activities                      (170)                   0
                                                                    -------             --------
Effect of changes in foreign exchange rates                              45                  115
                                                                    -------             --------
Net Increase in Cash and Cash Equivalents                               954                  511
Cash and Cash Equivalents at the Beginning of the Period            $ 1,864             $  1,886
                                                                    -------             --------
Cash and Cash Equivalents at the End of the Period                  $ 2,818             $  2,397
                                                                    =======             ========
Supplemental disclosures of cash paid (received) for:
      Interest                                                      $   547             $      0
                                                                    -------             --------
      Income taxes                                                  $(1,020)            $ (1,442)
                                                                    =======             ========
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
statements


                                    Page 5
<PAGE>


                        FIREARMS TRAINING SYSTEMS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.       BASIS OF PRESENTATION.

         The accompanying condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, considered necessary
for a fair presentation have been included. Operating results for the
three-month period ended September 30, 2001 are not necessarily indicative of
the results that may be expected for the year ended March 31, 2002. For further
information, refer to the Company's consolidated financial statements and
footnotes thereto for the year ended March 31, 2001.

         For fiscal year 2002, the Company began classifying commissions paid
to its agents in cost of revenues. The corresponding amount of $230,000 for the
six months ended September 30, 2000 has been reclassified from selling,
general, and administrative expenses to cost of revenues.

2.       INVENTORY.

         Inventories consist primarily of simulators, computer hardware,
projectors, and component parts. Inventories are valued at the lower of cost on
a moving weighted average or market basis. Cost includes materials, labor, and
factory overhead. Market is defined as net realizable value.

         Inventories consist of the following (in thousands):


<TABLE>
<CAPTION>
                         September 30,        March 31,
                            2001                2001
                         -------------        -------
<S>                      <C>                  <C>
Raw materials              $ 8,236            $ 6,969
Work in process              4,489              3,998
Finished Goods               1,140              1,559
                           -------            -------
   Total                   $13,865            $12,526
                           =======            =======
</TABLE>

3.       LONG-TERM DEBT

         At September 30, 2001 and March 31, 2001, long-term debt consisted of
the following (in thousands):


<TABLE>
<CAPTION>
                                      September 30,        March 31,
                                          2001                2001
                                      -------------        -------
<S>                                   <C>                  <C>
Working capital - borrowings            $    30            $   200
Long-term debt - Senior                  12,000             12,000
Long-term debt - Junior                  26,007             24,765
Long-term accrued interest                5,268              7,025
                                        -------            -------
   Total                                $43,305            $43,990
                                        =======            =======
</TABLE>


         As of September 30, 2001, the Company was out of compliance with the
capital expenditure covenants of its debt agreements. The Company has obtained
a waiver from the banks.

4.       RELATED PARTY TRANSACTIONS

         The Company has entered into a consulting agreement with Sugarman &
Company, LLP, a company in which Randy Sugarman is the managing partner and has
an 80% ownership interest. Under the agreement, the consulting company's main
focus is to provide managerial and strategic guidance in accordance with the
terms of the Restructure Agreement. Since May 16, 2001, Mr. Sugarman has served
as Interim Chief Executive Officer and


                                    Page 6
<PAGE>


President of the Company. As of September 30, 2001, the Company incurred
consulting fees of $201,915, plus expenses of $39,869, for consulting services
under the agreement for the fiscal year 2002.

5.       NEW ACCOUNTING STANDARDS

         In July 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 141, "Business Combinations"
(SFAS No. 141) and Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets" (SFAS No. 142).

         SFAS No. 141 addresses financial accounting and reporting for business
combinations. This statement requires the purchase method of accounting to be
used for all business combinations, and prohibits the pooling-of-interests
method of accounting. This statement is effective for all business combinations
initiated after June 30, 2001 and supercedes APB Opinion No. 16, "Business
Combinations" as well as FASB Statement of Financial Accounting Standards No.
38, "Accounting for Preacquisition Contingencies of Purchased Enterprises."

         SFAS No. 142 addresses how intangible assets that are acquired
individually or with a group of other assets should be accounted for in
financial statements upon their acquisition. This statement requires goodwill
to be periodically reviewed for impairment rather than amortized, for fiscal
years beginning after December 15, 2001. SFAS No. 142 supercedes APB Opinion
No. 17, "Intangible Assets". As of September 30, 2001, the Company has
$1,064,000 of recorded net goodwill, which will be subject to the new
standards. The Company is currently recording goodwill amortization expense of
$182,000 per year. Such amortization expense will no longer be recorded upon
adoption of this statement. However, the Company will be required to test the
goodwill for impairment. The Company will adopt this standard in the first
quarter of fiscal year 2003.

         SFAS No. 143 addresses financial accounting and reporting for legal
obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. In June 2001 the Financial Accounting
Standards Board approved Statement of Financial Accounting Standard No. 143,
"Accounting for Asset Retirement Obligations." The statement is effective for
the Company's 2004 fiscal year and is not expected to have a material effect on
its financial position or results of operations.

         SFAS No. 144 addresses financial accounting and reporting for the
impairment or disposal of long-lived assets and establishes a single accounting
model for the impairment or disposal of long-lived assets. In August 2001 the
Financial Accounting Standards Board approved Statement of Financial Accounting
Standard No. 144, "Accounting for the Impairment or Disposal of Long-lived
Assets." The statement supersedes FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
and supercedes accounting and reporting under APB Opinion No. 30 for the
disposal of a segment of a business. The statement is effective for the
Company's 2003 fiscal year and is not expected to have a material effect on its
financial position or results of operations.


                                    Page 7
<PAGE>


6.       NET INCOME (LOSS) PER COMMON SHARE

Net income (loss) per share for the three and six months ended September 30,
2001 and 2000 were as follows: (in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                          Three months ended  Three months ended  Six months ended  Six months ended
                                                             September 30,       September 30,      September 30,     September 30,
                                                                 2001              2000                 2001              2000
                                                          ------------------  ------------------  ----------------  ----------------

<S>                                                       <C>                 <C>                 <C>               <C>
Basic:
Net income (loss) attributable to common shareholders           $   110           $ (6,851)           $   122           $(10,126)
Weighted average common shares outstanding                       70,153             53,472             70,150             37,383
                                                                -------           --------            -------           --------
Per share amount                                                $  0.00           $  (0.13)           $  0.00           $  (0.27)

Diluted:
Net income (loss) attributable to common shareholders           $   110           $ (6,851)           $   122           $(10,126)
Weighted average common shares outstanding                       70,153             53,472             70,150             37,383
Shares assumed issued upon exercise of dilutive
  stock options using the treasury stock method                     235                  0                232                  0
Shares assumed issued upon exercise of dilutive
  stock warrants using the treasury stock method                    506                  0                253                  0
                                                                -------           --------            -------           --------
Total                                                            70,894             53,472             70,635             37,383
                                                                -------           --------            -------           --------
Per share amount                                                $  0.00           $  (0.13)           $  0.00           $  (0.27)
</TABLE>

     Basic and diluted earnings per common share were computed by dividing net
loss by the weighted average number of shares of common stock outstanding
during the year. Stock options to purchase 2,291,200 shares of common stock as
well as warrants to purchase 3,246,164 shares of common stock were excluded for
the three months ended September 30, 2001 as they were all anti-dilutive. The
effect of all of the stock options and warrants was excluded for the three and
six months ended September 30, 2000 as a loss was recorded and amounts were
anti-dilutive.


                                    Page 8
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         This Management's Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the Company's most recently filed Form 10-K for the fiscal year
ended March 31, 2001.


RESULTS OF OPERATIONS

Three Months Ended September 30, 2001 and 2000:

         Net Revenues: Revenues increased $8.5 million, or 115.3%, to $15.9
million for the three months ended September 30, 2001 as compared to $7.4
million for the three months ended September 30, 2000. Sales to U.S. military
customers for the three months ended September 30, 2001, increased by $6.0
million, or 350.4%, to $7.7 million. The increase in military sales is due to
several large deliveries of items to customers, that were in the Company's
backlog of sales as of June 30, 2001. Sales to U.S. law enforcement customers
for the three months ended September 30, 2001 increased $0.7 million, or 45.8%
to $2.0 million. Sales to international customers for the three months ended
September 30, 2001 increased $2.1 million, or 52.1%, to $6.0 million.

         Cost of Revenues: Cost of revenues increased $1.9 million, or 20.2%,
to $11.4 million for the three months ended September 30, 2001 as compared to
$9.5 million for the three months ended September 30, 2000. As a percentage of
revenues, cost of revenues for the three months ended September 30, 2001
decreased to 72.2% as compared to 129.0% for the three months ended September
30, 2000. The decrease in cost of revenues as a percentage of revenues is
attributable to a higher volume of revenues to cover fixed costs; provision of
an accrual of approximately $2.7 million for the three months ended September
30, 2000 that was associated with costs to complete the warranty provisions of
certain contracts as well as to accrue for anticipated losses on existing
contracts; and a $0.5 million write-off of inventory in fiscal year 2001 that
was determined to be unrealizable due to changes in anticipated sales volume
related to a particular product. For fiscal year 2002, the Company began
classifying commissions paid to its agents in cost of revenues. The
corresponding amount of $26,000 for the three months ended September 30, 2000
has been reclassified from selling, general, and administrative expenses to
cost of revenues.

         Gross Profit: As a result of the foregoing, gross profit increased
$6.5 million, or 303.7%, to $4.4 million, or 27.8% of revenues, for the three
months ended September 30, 2001 as compared to ($2.1) million, or (29.4%) of
revenues, for the three months ended September 30, 2000.

         Total Operating Expenses: Total operating expenses increased $0.3
million, or 7.8%, for the three months ended September 30, 2001. As a
percentage of revenues, total operating expenses decreased to 25.7% for the
three months ended September 30, 2001 as compared to 51.3% for the three months
ended September 30, 2000. Selling, general and administrative ("SG&A") expenses
increased $1.0 million, or 49.6%. This increase in SG&A is due primarily to
increases in employee compensation costs, including a provision for severance
costs for personnel reduction at the Company's Simtran subsidiary and a reserve
for legal fees regarding recent claims made by certain customers of the
Company's former subsidiary, Dart International concerning the DVD component of
the electronic archery system. Management intends to defend these and any
similar claims related to Dart products vigorously. In the opinion of
management, these proceedings will not have a material adverse effect on the
Company's financial position, liquidity or results of operations.

         Research and development expenses decreased $0.6 million, or 51.1%,
primarily attributable to the Company's reduction in expenditures for research
and development activities relating to new products and product lines.
Depreciation and amortization expense decreased $0.1 million due to the
impairment of long-lived assets in fiscal year 2001, which lowered the basis of
long-lived assets and goodwill.

         Operating Income: As a result of the foregoing, operating income
increased $6.2 million to an income of $0.3 million, or 2.1% of revenues, for
the three months ended September 30, 2001 as compared to an operating loss of
$5.9 million or (80.7%) of revenues, for the three months ended September 30,
2000.

         Other Income (Expense), net: Net interest income totalled $11,000, or
0.1% of revenues for the three months ended September 30, 2001 as compared to
interest expense of $2,263,000, or 30.2% of revenues for the three


                                    Page 9
<PAGE>


months ended September 30, 2000. The reduction in interest expense is
attributable to the debt restructuring completed by the Company in August 2000.
In conjunction with the debt restructuring, the Company's outstanding
indebtedness was exchanged for new borrowings, common stock, and mandatory
redeemable preferred stock. The sum of all future principal and interest
payments due under the new agreements exceeded the carrying value of the old
debt, and thus no gain was recognized on the transaction in accordance with
SFAS No. 15. The excess of the carrying amount of the old borrowings exceeded
the fair value of the new borrowings, common stock, and mandatory redeemable
preferred stock and was allocated proportionately to the new debt and preferred
stock. During the three months ended September 30, 2001, the excess amount
allocated to debt was reduced by approximately $878,000, resulting in a
corresponding reduction of interest expense. Interest expense for the three
months ended September 30, 2000 also included fees associated with the debt
restructuring of approximately $606,000. Interest expense will continue to be
recognized at a much lower effective interest cost until the debt matures in
March of 2003.

         Provision for Income Taxes: The effective tax rate increased to 34.0%
of income before taxes for the three months ended September 30, 2001 as
compared to 0.6% of loss before taxes for the three months ended September 30,
2000. The Company has not recorded a tax benefit for the majority of its
operating losses due to uncertainty of future realization in both periods;
however, certain of the Company's foreign subsidiaries had higher operating
income in fiscal year 2001 and fiscal year 2002, resulting in additional tax
provisions.

         Net Income: As a result of the foregoing, net income increased $8.7
million to a net income of $0.2 million, or 1.1% of revenues for the three
months ended September 30, 2001 as compared to a net loss of $8.5 million, or
(115.4%) of revenues for the three months ended September 30, 2000.

         Accretion of Preferred Stock: The expense for the accretion of the
preferred stock issued in August 2000 was a total of $67,000 for the three
months ended September 30, 2001 as compared to $74,000 for the three months
ended September 30, 2000 for the preferred stock issued in November, 1998 and
exchanged in August 2000 for new preferred stock..

         Net Income applicable to common shareholders: The net income
applicable to common shareholders increased $7.0 million to $0.1 million ($0.00
per share) or 0.7% of revenue. This compares to a loss of $6.9 million ($0.13)
per share or (93.0%) of revenue for the three months ended September 30, 2000,
which included a gain on extinguishment of preferred stock of $1.7 million.

Six Months Ended September 30, 2001 and 2000:

         Net Revenues: Revenues increased $9.3 million, or 52.6%, to $26.9
million for the six months ended September 30, 2001 as compared to $17.6
million for the six months ended September 30, 2000. Sales to U.S. military
customers for the six months ended September 30, 2001, increased by $10.0
million, or 303.1%, to $13.3 million. Sales to U.S. law enforcement customers
for the six months ended September 30, 2001 decreased $0.4, million, or 11.1%
to $3.5 million. Sales to international customers for the six months ended
September 30, 2001 increased $0.2 million, or 1.7%, to $9.8 million.

         Cost of Revenues: Cost of revenues increased $1.4 million, or 8.5%, to
$18.2 million for the six months ended September 30, 2001 as compared to $16.8
million for the six months ended September 30, 2000. As a percentage of
revenues, cost of revenues decreased to 67.8% for the six months ended
September 30, 2001 as compared to 95.3% for the six months ended September 30,
2000. The decrease in cost of revenues as a percentage of revenues is
attributed to a higher volume of revenues to cover fixed costs; the inclusion
of an accrual of approximately $2.7 million in fiscal year 2001, that was
associated with costs to complete the warranty provisions of certain contracts
as well as to accrue for anticipated losses on existing contracts; and a $0.5
million write-off of inventory during the second quarter of fiscal year 2001
that was determined to be unrealizable due to changes in anticipated sales
volume related to a particular product. For fiscal year 2002, the Company began
classifying commissions paid to its agents in cost of revenues. The
corresponding amount of $230,000 for the six months ended September 30, 2000
has been reclassified from selling, general, and administrative expenses to
cost of revenues.

         Gross Profit: As a result of the foregoing, gross profit increased
$7.9 million, or 951.6%, to $8.7 million, or 32.2% of revenues, for the six
months ended September 30, 2001 as compared to $0.8 million, or 4.7% of
revenues, for the six months ended September 30, 2000.


                                    Page 10
<PAGE>


         Total Operating Expenses: Total operating expenses increased $0.5
million, or 6.3%, for the six months ended September 30, 2001. As a percentage
of revenues, total operating expenses decreased to 30.5% for the six months
ended September 30, 2001 as compared to 43.8% for the six months ended
September 30, 2000. Selling, general and administrative ("SG&A") expenses
increased $1.6 million, or 39.7%. This increase in SG&A is due primarily to
increases in employee compensation costs, including $0.3 million related to the
separation agreement with the Company's former President and CEO and a
provision for severance costs for personnel reduction at the Company's Simtran
subsidiary and a reserve for legal fees regarding recent claims made by certain
customers of the Company's former subsidiary, Dart International concerning the
DVD component of the electronic archery system. Management intends to defend
these and any similar claims vigorously. In the opinion of management, these
proceedings will not have a material adverse effect on the Company's financial
position, liquidity or results of operations. Research and development expenses
decreased $0.2 million, or 20.2%, primarily attributable to the Company's
reduction in expenditures for research and development activities relating to
new products and product lines. Depreciation and amortization expense decreased
$0.2 million due to the impairment of long-lived assets in fiscal year 2001,
which lowered the basis of long-lived assets and goodwill.

         Operating Income: As a result of the foregoing, operating income
increased $7.4 million to an income of $0.5 million, or 1.7% of revenues, for
the six months ended September 30, 2001 as compared to an operating loss of
$6.9 million or (39.1%) of revenues, for the six months ended September 30,
2000.

         Other Income (Expense), net: Net interest income totalled $0.2
million, or 0.6% of revenues for the six months ended September 30, 2001 as
compared to interest expense of ($4.6) million, or (25.9%) of revenues for the
six months ended September 30, 2000. The reduction in interest expense is
attributable to the debt restructuring completed by the Company in August 2000.
In conjunction with the debt restructuring, the Company's outstanding
indebtedness was exchanged for new borrowings, common stock, and mandatory
redeemable preferred stock. The sum of all future principal and interest
payments due under the new agreements exceeded the carrying value of the old
debt, and thus no gain was recognized on the transaction in accordance with
SFAS No. 15. The excess of the carrying amount of the old borrowings exceeded
the fair value of the new borrowings, common stock, and mandatory redeemable
preferred stock and was allocated proportionately to the new debt and preferred
stock. During the six months ended September 30, 2001, the excess amount
allocated to debt was reduced by approximately $1.8 million, resulting in a
corresponding reduction of interest expense. Interest expense for the six
months ended September 30, 2000 also included fees associated with the
restructuring of approximately $606,000. Interest expense will continue to be
recognized at a much lower effective interest cost until the debt matures in
March of 2003.

         Provision for Income Taxes: The effective tax rate increased to 55.1%
of income before taxes for the six months ended September 30, 2001 as compared
to 0.5% of loss before taxes for the six months ended September 30, 2000. The
Company has not recorded a tax benefit for the majority of its operating losses
due to uncertainty of future realization in both periods; however, certain of
the Company's foreign subsidiaries had higher operating income in fiscal year
2001 and fiscal year 2002, resulting in additional tax provisions.

         Net Income: As a result of the foregoing, net income increased $12.0
million to a net income of $0.3 million, or 0.9% of revenues for the six months
ended September 30, 2001 as compared to a net loss of $11.7 million, or (66.8%)
of revenues for the six months ended September 30, 2000.

         Accretion of Preferred Stock: The expense for the accretion of the
preferred stock issued in August 2000 was a total of $132,000 for the six months
ended September 30, 2001 as compared to $140,000 stock for the six months ended
September 30, 2000 for the preferred stock issued in November, 1998 and
exchanged in August 2000 for new preferred.

         Net Income applicable to common shareholders: The net income
applicable to common shareholders increased $10.2 million to $0.1 million
($0.00 per share) or 0.5% of revenue. This compares to the six months ended
September 30, 2000 of a loss of $10.1 million ($0.27 per share) or (57.4%) of
revenue, which included a Gain on Extinguishment of Preferred Stock of $1.7
million.

ANALYSIS OF BACKLOG

         Backlog represents customer orders that have been contracted for
future delivery. Accordingly, these orders have not yet been recognized as
revenue, but represent potential revenue. As of September 30, 2001, the Company
had a backlog of approximately $45.8 million, as compared to $39.0 million as
of September 30, 2000, comprised of


                                    Page 11
<PAGE>


$18.8 million from international customers of FATS, $1.3 from Simtran's
Canadian customers, $25.5 million from FATS U.S. military and law enforcement
customers and $0.2 million from FATS Hunter and Sports customers. Approximately
$28.9 million of the contracted orders are scheduled for delivery during fiscal
year 2002.

LIQUIDITY AND CAPITAL RESOURCES AND GOING CONCERN CONSIDERATIONS

         The Company's continuation as a going concern is dependent upon its
ability to (a) continue production work on existing contracts; (b) obtain new
contracts for future delivery; and (c) generate sufficient cash flow to meet
working capital obligations on a timely basis.

         Management's plans in response to the above objectives are (1)
continue to reinforce cost control measures through implementation of Lean
Enterprise concepts to assure operations are conducted at the lowest cost
possible at all locations; (2) remain focused on revenue maximization of
standard products with higher margin potentials within the domestic and
international law enforcement business segment; (3) minimize capital
expenditures in non-strategic areas; (4) continue to improve inventory turns
and lower inventory investment; and (5) continually negotiate more favorable
contract terms and conditions to reduce extended or prolonged payment cycles.

         As of September 30, 2001, the Company had working capital of $16.6
million compared to $15.8 million as of September 30, 2000. The Company's
spending year-to-date as of September 30, 2001 for capital expenditures was
$0.3 million. As of September 30, 2001, the Company was out of compliance with
the capital expenditure covenants of its debt agreements. The Company has
obtained a waiver from the banks. The expenditures were primarily for
manufacturing machinery, data processing equipment and software.

         The Company had a net increase in cash and cash equivalents of $0.9
million for the six months ended September 30, 2001 compared to a net increase
of $0.5 million for the six months ended September 30, 2000. For the period
ended September 30, 2001, the Company's operating activities generated cash of
approximately $1.2 million. Cash flow from operations increased despite the
increase in expenditures for inventory in the current fiscal year as compared
to the same period in the prior fiscal year. Also, the Company is recording a
reduced amount of interest expense as discussed in the "Other Income (Expense),
net" section under "RESULTS OF OPERATIONS." The Company's investing activities
used cash of approximately $0.3 million for capital expenditures.

CONCENTRATION OF CREDIT RISK

         At September 30, 2001, approximately $6.7 million in accounts
receivable or 59.1% of total accounts receivable was due from the Company's top
ten customers, $1.5 million of which was secured by performance letters of
credit. The remaining $5.2 million is due from governmental entities.

NEW ACCOUNTING PRONOUNCEMENTS

         In July 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 141, "Business Combinations"
(SFAS No. 141) and Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets" (SFAS No. 142).

         SFAS No. 141 addresses financial accounting and reporting for business
combinations. This statement requires the purchase method of accounting to be
used for all business combinations, and prohibits the pooling-of-interests
method of accounting. This statement is effective for all business combinations
initiated after June 30, 2001 and supercedes APB Opinion No. 16, "Business
Combinations" as well as FASB Statement of Financial Accounting Standards No.
38, "Accounting for Preacquisition Contingencies of Purchased Enterprises."

         SFAS No. 142 addresses how intangible assets that are acquired
individually or with a group of other assets should be accounted for in
financial statements upon their acquisition. This statement requires goodwill
to be periodically reviewed for impairment rather than amortized, for fiscal
years beginning after December 15, 2001. SFAS No. 142 supercedes APB Opinion
No. 17, "Intangible Assets". As of September 30, 2001, the Company has
$1,064,000 of recorded net goodwill, which will be subject to the new
standards. The Company is currently recording goodwill amortization expense of
$182,000 per year. Such amortization expense will no longer be


                                    Page 12
<PAGE>


recorded upon adoption of this statement. However, the Company will be required
to test the goodwill for impairment. The Company will adopt this standard in
the first quarter of fiscal year 2003.

         SFAS No. 143 addresses financial accounting and reporting for legal
obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. In June 2001 the Financial Accounting
Standards Board approved Statement of Financial Accounting Standard No. 143,
"Accounting for Asset Retirement Obligations." The statement is effective for
the Company's 2004 fiscal year and is not expected to have a material effect on
its financial position or results of operations.

         SFAS No. 144 addresses financial accounting and reporting for the
impairment or disposal of long-lived assets and establishes a single accounting
model for the impairment or disposal of long-lived assets. In August 2001 the
Financial Accounting Standards Board approved Statement of Financial Accounting
Standard No. 144, "Accounting for the Impairment or Disposal of Long-lived
Assets." The statement supersedes FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
and supercedes accounting and reporting under APB Opinion No. 30 for the
disposal of a segment of a business. The statement is effective for the
Company's 2003 fiscal year and is not expected to have a material effect on its
financial position or results of operations.

CERTAIN FORWARD LOOKING STATEMENTS

         Certain statements in this filing, and elsewhere (such as in other
filings by the Company with the Commission, press releases, presentations by
the Company or its management and oral statements) constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among other things, (i) those
described above including the timing and size of, and the Company's success in
competing for, new contracts awarded by military and other government
customers; (ii) significant variability in the Company's quarterly revenues and
results of operations as a result of variations in the number and size of the
Company's shipments in a particular quarter while a significant percentage of
its operating expenses are fixed in advance; (iii) concentrations of revenues
from a few large customers who vary from one period to the next; (iv) the high
percentage of sales to military and law enforcement authorities whose orders
are subject to extensive government regulations and termination for a variety
of factors and budgetary constraints; (v) a significant proportion of
international sales which may be subject to political, monetary and economic
risks, including greater credit risks; (vi) the potential for increased
competition; (vii) the Company's ability to attract and retain key personnel
and adapt to changing technologies; and (viii) other factors described in the
Company's Form 10-K for the fiscal year ended March 31, 2001 under the caption
Part I. No assurance can be given that actual revenues, operating income or net
income will not be materially different than those reported above. Prospective
investors are cautioned that actual results and experience may differ
materially from the forward-looking statements as a result of many factors,
possibly including changes in economic conditions, competition, fluctuations in
raw materials, and other unanticipated events and conditions.


                                    Page 13
<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company is exposed to a number of market risks in the ordinary
course of business, such as, foreign currency exchange risk in the fulfillment
of international contracts and interest rate risk associated with non trading
assets utilized to manage the interest rate cost of the outstanding long term
liabilities. The majority of the Company's contracts are denominated in U.S.
dollars, thus reducing foreign exchange risk. The Company's net exposure to
interest rate risk consists of its floating rate senior debt and working
capital borrowings which are tied to changes in the prime rate.


PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         The Company is involved in legal proceedings in the ordinary course of
its business, which in the opinion of management will not have a materially
adverse effect on the Company's financial position, liquidity, or results of
operation.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         NONE

(b)      No reports on Form 8-K were filed during the quarter ended September
         30, 2001.


                                    Page 14
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements 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.


DATED:  November 14, 2001


                                    FIREARMS TRAINING SYSTEMS, INC.
                                    (Registrant)


                                    /S/ Randy Sugarman
                                    -------------------------------------------
                                    Randy Sugarman
                                    Chairman of the Board of Directors
                                    Interim Chief Executive Officer and
                                    President



                                    /S/ John A. Morelli
                                    -------------------------------------------
                                    John A. Morelli
                                    Chief Operating and Financial Officer and
                                    Treasurer (Principal Financial and
                                    Accounting Officer)


                                    Page 15