##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 March 31, 2003

or

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period
from       to

Commission File Number: 001-8988

ECC International Corp.

(Exact name of registrant as specified in its charter)


|                                                                               |  |                                                
|------------------------------------------------------------------------------ |  | -----------------------------------------------
|Delaware
(State or other jurisdiction of incorporation or organization)        |  | 23-1714658
(I.R.S. Employer Identification No.)
|                                                                               |  |                                                
|2001 West Oak Ridge Road, Orlando, FL
(Address of principal executive offices) |  | 32809-3803
(Zip Code)                          

(407) 859-7410
(Registrants telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

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 twelve 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.

[X] Yes  [   ] No

Indicate by check mark whether the Registrant is an accelerated filer as
defined in Rule 12b-2 of the Securities Exchange Act of 1934.

[   ] Yes  [X] No

As of
May 13, 2003, there were 7,902,197 shares of the Registrants Common
Stock, $.10 par value per share, outstanding.





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TABLE OF CONTENTS



|                                                                                              |  |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|PART I. FINANCIAL STATEMENTS                                                                 
|ITEM 1. FINANCIAL STATEMENTS                                                                 
|CONSOLIDATED STATEMENTS OF OPERATIONS NINE MONTHS ENDED MARCH 31, 2003 AND 2002              
|CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2003 AND 2002             
|CONSOLIDATED BALANCE SHEETS                                                                  
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                                        
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                   
|ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|PART II. OTHER INFORMATION                                                                   
|ITEM 5. OTHER INFORMATION                                                                    
|SIGNATURES                                                                                   
|CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER                                                 
|CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER                                                 
|CEO CERTIFICATION                                                                            
|CFO CERTIFICATION                                                                            
|LETTER AGREEMENT                                                                             



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PART I. FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED MARCH 31, 2003 AND 2002
(In Thousands Except Per Share Data)
(Unaudited)

|                                          |                                      |                              |        |             |       |             |        |       |       | 
|----------------------------------------- | ------------------------------------ | ---------------------------- | ------ | ----------- | ----- | ----------- | ------ | ----- | ----- | 
|                                          |                                      |                              |        | Nine Months |       | Nine Months
|                                          |                                      |                              |        | Ended       |       | Ended      
|                                          |                                      |                              |        | 3/31/2003   |       | 3/31/2002  
|                                          |                                      |                              |        |             |       |            
|Sales                                     |                                      | $                            | 23,177 |             |       | $           | 22,035 |      
|Cost of Sales                             |                                      |                              | 15,425 |             |       |             | 14,998 |      
|                                          |                                      |                              |        |             |       |             |        |      
|Gross Profit                              |                                      |                              | 7,752  |             |       |             | 7,037  |      
|                                          |                                      |                              |        |             |       |             |        |      
|Expenses:                                 |                                      |                              |        |             |       |             |        |      
|                                          | Selling, General & Administrative    |                              |        | 4,396       |       |             |        | 4,574 |      
|                                          | Independent Research and Development |                              |        | 961         |       |             |        | 1,201 |      
|                                          |                                      |                              |        |             |       |             |        |      
|                                          |                                      | Total Expenses               |        |             | 5,357 |             |        |       | 5,775 | 
|                                          |                                      |                              |        |             |       |             |        |      
|Operating Income                          |                                      |                              | 2,395  |             |       |             | 1,262  |      
|                                          |                                      |                              |        |             |       |             |        |      
|Other Income/(Expense):                   |                                      |                              |        |             |       |             |        |      
|                                          | Interest Income                      |                              |        | 64          |       |             |        | 171   |      
|                                          | Interest Expense                     |                              |        | (63         | )     |             |        | (132  | )    
|                                          | Other  Net                          |                              |        | (3          | )     |             |        | 58    |      
|                                          |                                      |                              |        |             |       |             |        |      
|                                          |                                      | Total Other Income/(Expense) |        |             | (2    | )           |        |       | 97    | 
|                                          |                                      |                              |        |             |       |             |        |      
|Income Before Income Taxes                |                                      |                              | 2,393  |             |       |             | 1,359  |      
|(Benefit)/Provision for Income Taxes      |                                      |                              |       |             |       |             | (215   | )    
|                                          |                                      |                              |        |             |       |             |        |      
|Net Income                                |                                      | $                            | 2,393  |             |       | $           | 1,574  |      
|                                          |                                      |                              |        |             |       |             |        |      
|Net Income Per Common Share-Basic/Diluted |                                      | $                            | 0.30   |             |       | $           | 0.20   |      
|                                          |                                      |                              |        |             |       |             |        |      

See accompanying notes to the consolidated financial statements.

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ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(In Thousands Except Per Share Data)
(Unaudited)

|                                          |                                      |                              |       |              |       |              |       |       |       | 
|----------------------------------------- | ------------------------------------ | ---------------------------- | ----- | ------------ | ----- | ------------ | ----- | ----- | ----- | 
|                                          |                                      |                              |       | Three Months |       | Three Months
|                                          |                                      |                              |       | Ended        |       | Ended       
|                                          |                                      |                              |       | 3/31/2003    |       | 3/31/2002   
|                                          |                                      |                              |       |              |       |             
|Sales                                     |                                      | $                            | 8,851 |              |       | $            | 9,139 |      
|Cost of Sales                             |                                      |                              | 6,151 |              |       |              | 5,995 |      
|                                          |                                      |                              |       |              |       |              |       |      
|Gross Profit                              |                                      |                              | 2,700 |              |       |              | 3,144 |      
|                                          |                                      |                              |       |              |       |              |       |      
|Expenses:                                 |                                      |                              |       |              |       |              |       |      
|                                          | Selling, General & Administrative    |                              |       | 1,723        |       |              |       | 1,410 |      
|                                          | Independent Research and Development |                              |       | 333          |       |              |       | 320   |      
|                                          |                                      |                              |       |              |       |              |       |      
|                                          |                                      | Total Expenses               |       |              | 2,056 |              |       |       | 1,730 | 
|                                          |                                      |                              |       |              |       |              |       |      
|Operating Income                          |                                      |                              | 644   |              |       |              | 1,414 |      
|                                          |                                      |                              |       |              |       |              |       |      
|Other Income/(Expense):                   |                                      |                              |       |              |       |              |       |      
|                                          | Interest Income                      |                              |       | 17           |       |              |       | 137   |      
|                                          | Interest Expense                     |                              |       | (21          | )     |              |       | (44   | )    
|                                          | Other  Net                          |                              |       | (2           | )     |              |       | 12    |      
|                                          |                                      |                              |       |              |       |              |       |      
|                                          |                                      | Total Other Income/(Expense) |       |              | (6    | )            |       |       | 105   | 
|                                          |                                      |                              |       |              |       |              |       |      
|Income Before Income Taxes                |                                      |                              | 638   |              |       |              | 1,519 |      
|(Benefit)/Provision for Income Taxes      |                                      |                              |      |              |       |              | (215  | )    
|                                          |                                      |                              |       |              |       |              |       |      
|Net Income                                |                                      | $                            | 638   |              |       | $            | 1,734 |      
|                                          |                                      |                              |       |              |       |              |       |      
|
|Net Income Per Common Share-Basic/Diluted |                                      | $                            | 0.08  |              |       | $            | 0.22  |      
|                                          |                                      |                              |       |              |       |              |       |      

See accompanying notes to the
consolidated financial statements.

3



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ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)

|                                    |                                                                             |                      |        |             |        |           |        |       |        | 
|----------------------------------- | --------------------------------------------------------------------------- | -------------------- | ------ | ----------- | ------ | --------- | ------ | ----- | ------ | 
|                                    |                                                                             |                      |        | (Unaudited) |        | (Audited)
|                                    |                                                                             |                      |        | 3/31/2003   |        | 6/30/2002
|                                    |                                                                             |                      |        |             |        |          
|ASSETS                              |                                                                             |                      |        |             |        |           |        |      
|Current Assets:                     |                                                                             |                      |        |             |        |           |        |      
|                                    | Cash                                                                        |                      | $      | 6,759       |        |           | $      | 6,280 |       
|                                    | Accounts Receivable                                                         |                      |        | 2,286       |        |           |        | 2,152 |       
|                                    | Costs and Estimated Earnings in Excess
of Billings on Uncompleted Contracts |                      |        | 13,408      |        |           |        | 9,458 |       
|                                    | Inventories                                                                 |                      |        | 605         |        |           |        | 920   |       
|                                    | Prepaid Expenses and Other                                                  |                      |        | 164         |        |           |        | 274   |       
|                                    |                                                                             |                      |        |             |        |           |        |      
|                                    |                                                                             | Total Current Assets |        |             | 23,222 |           |        |       | 19,084 | 
|                                    |                                                                             |                      |        |             |        |           |        |      
|Property, Plant and Equipment  Net |                                                                             |                      | 11,137 |             |        |           | 11,823 |      
|                                    |                                                                             |                      |        |             |        |           | .      |      
|Other Assets                        |                                                                             |                      | 28     |             |        |           | 32     |      
|                                    |                                                                             |                      |        |             |        |           |        |      
|                                    |                                                                             | Total Assets         |        | $           | 34,387 |           |        | $     | 30,939 | 
|                                    |                                                                             |                      |        |             |        |           |        |      

Continued .  .  .

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ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(In Thousands Except Share and Per Share Data)

|                                   |                                                                                                                                            |                                          |    |             |        |           |    |        |        | 
|---------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------- | -- | ----------- | ------ | --------- | -- | ------ | ------ | 
|                                   |                                                                                                                                            |                                          |    | (Unaudited) |        | (Audited)
|                                   |                                                                                                                                            |                                          |    | 3/31/2003   |        | 6/30/2002
|                                   |                                                                                                                                            |                                          |    |             |        |          
|LIABILITIES & STOCKHOLDERS EQUITY |                                                                                                                                            |                                          |    |             |        |           |    |       
|Current Liabilities:               |                                                                                                                                            |                                          |    |             |        |           |    |       
|                                   | Accounts Payable                                                                                                                           |                                          | $  | 3,209       |        |           | $  | 2,121  |       
|                                   | Accrued Expenses and Other                                                                                                                 |                                          |    | 1,680       |        |           |    | 1,972  |       
|                                   |                                                                                                                                            |                                          |    |             |        |           |    |       
|                                   |                                                                                                                                            | Total Current Liabilities                |    |             | 4,889  |           |    |        | 4,093  | 
|Deferred Income Taxes              |                                                                                                                                            |                                          | 61 |             |        |           | 61 |       
|                                   |                                                                                                                                            |                                          |    |             |        |           |    |       
|                                   |                                                                                                                                            | Total Liabilities                        |    |             | 4,950  |           |    |        | 4,154  | 
|                                   |                                                                                                                                            |                                          |    |             |        |           |    |       
|COMMITMENTS AND CONTINGENCIES      |                                                                                                                                            |                                          |    |             |        |           |    |       
|Stockholders Equity:              |                                                                                                                                            |                                          |    |             |        |           |    |       
|                                   | Preferred Stock, $.10 par; 1,000,000 shares
authorized; none issued and outstanding                                                        |                                          |    |            |        |           |    |       |       
|                                   | Common Stock, $.10 par; 20,000,000 shares authorized;
issued and outstanding, 8,621,197 and 7,894,197
(8,577,608 and 7,850,608 at 6/30/02) |                                          |    | 862         |        |           |    | 858    |       
|                                   | Note Receivable from Stockholder                                                                                                           |                                          |    |            |        |           |    | (168   | )     
|                                   | Capital in Excess of Par                                                                                                                   |                                          |    | 25,580      |        |           |    | 25,493 |       
|                                   | Retained Earnings                                                                                                                          |                                          |    | 5,904       |        |           |    | 3,511  |       
|                                   | Treasury Stock, at cost (727,000 shares)                                                                                                   |                                          |    | (2,909      | )      |           |    | (2,909 | )     
|                                   |                                                                                                                                            |                                          |    |             |        |           |    |       
|                                   |                                                                                                                                            | Total Stockholders Equity               |    |             | 29,437 |           |    |        | 26,785 | 
|                                   |                                                                                                                                            |                                          |    |             |        |           |    |       
|                                   |                                                                                                                                            | Total Liabilities & Stockholders Equity |    | $           | 34,387 |           |    | $      | 30,939 | 
|                                   |                                                                                                                                            |                                          |    |             |        |           |    |       

See accompanying notes to the consolidated financial statements.

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ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED MARCH 31, 2003 AND 2002
(In Thousands)
(Unaudited)

|                                                    |                                                                             |   |             |        |             |   |       |        |  
|--------------------------------------------------- | --------------------------------------------------------------------------- | - | ----------- | ------ | ----------- | - | ----- | ------ | -
|                                                    |                                                                             |   | Nine Months |        | Nine Months
|                                                    |                                                                             |   | Ended       |        | Ended      
|                                                    |                                                                             |   | 3/31/2003   |        | 3/31/2002  
|                                                    |                                                                             |   |             |        |            
|Cash Flows From Operating Activities:               |                                                                             |   |             |        |             |   |       |       
|Net Income                                          |                                                                             | $ | 2,393       |        |             | $ | 1,574 |       
|Items Not Requiring Cash:                           |                                                                             |   |             |        |             |   |       |       
|                                                    | Depreciation                                                                |   |             | 931    |             |   |       | 1,466  |  
|                                                    | Amortization                                                                |   |             | 48     |             |   |       | 75     |  
|                                                    | Loss/(Gain) on Disposal of Equipment                                        |   |             | 150    |             |   |       | (5     | )
|Changes in Certain Assets and Liabilities:          |                                                                             |   |             |        |             |   |       |       
|                                                    | Accounts Receivable                                                         |   |             | (134   | )           |   |       | (907   | )
|                                                    | Costs and Estimated Earnings in Excess
of Billings on Uncompleted Contracts |   |             | (3,949 | )           |   |       | 652    |  
|                                                    | Inventories                                                                 |   |             | 315    |             |   |       | 84     |  
|                                                    | Prepaid Expenses and Other                                                  |   |             | 66     |             |   |       | (8     | )
|                                                    | Accounts Payable                                                            |   |             | 1,088  |             |   |       | (525   | )
|                                                    | Accrued Expenses and Other Long-Term Liabilities                            |   |             | (293   | )           |   |       | (348   | )
|                                                    |                                                                             |   |             |        |             |   |       |       
|Net Cash Provided By Operating Activities           |                                                                             |   | 615         |        |             |   | 2,058 |       
|                                                    |                                                                             |   |             |        |             |   |       |       
|Cash Flows From Investing Activities:               |                                                                             |   |             |        |             |   |       |       
|                                                    | Proceeds from Sales of Assets                                               |   |             | 27     |             |   |       | 5      |  
|                                                    | Additions to Property, Plant and Equipment                                  |   |             | (422   | )           |   |       | (302   | )
|                                                    |                                                                             |   |             |        |             |   |       |       
|Net Cash Used In Investing Activities               |                                                                             |   | (395        | )      |             |   | (297  | )     
|                                                    |                                                                             |   |             |        |             |   |       |       
|Cash Flows From Financing Activities:               |                                                                             |   |             |        |             |   |       |       
|                                                    | Proceeds From Issuance of Common Stock and
Options Exercised                |   |             | 91     |             |   |       | 10     |  
|                                                    | Note Receivable from Stockholder                                            |   |             | 168    |             |   |       |       |  
|                                                    | Borrowings Under Revolving Credit Facility                                  |   |             |       |             |   |       | 4,873  |  
|                                                    | Repayments Under Revolving Credit Facility                                  |   |             |       |             |   |       | (5,030 | )
|                                                    |                                                                             |   |             |        |             |   |       |       
|Net Cash Provided By/(Used In) Financing Activities |                                                                             |   | 259         |        |             |   | (147  | )     
|                                                    |                                                                             |   |             |        |             |   |       |       
|Net Increase in Cash                                |                                                                             |   | 479         |        |             |   | 1,614 |       
|Cash at Beginning of the Period                     |                                                                             |   | 6,280       |        |             |   | 39    |       
|                                                    |                                                                             |   |             |        |             |   |       |       
|Cash at End of the Period                           |                                                                             | $ | 6,759       |        |             | $ | 1,653 |       
|                                                    |                                                                             |   |             |        |             |   |       |       
|Continued....                                      

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ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED MARCH 31, 2003 AND 2002 (Continued)
(In Thousands)
(Unaudited)

|                                                        |                                          |  |             |    |             |  |   |     | 
|------------------------------------------------------- | ---------------------------------------- |  | ----------- | -- | ----------- |  | - | --- | 
|                                                        |                                          |  | Nine Months |    | Nine Months
|                                                        |                                          |  | Ended       |    | Ended      
|                                                        |                                          |  | 3/31/2003   |    | 3/31/2002  
|                                                        |                                          |  |             |    |            
|Supplemental Disclosure of Cash Flow Information:       |                                          |  |             |    |             |  |   |    
|Cash Paid During the Year For:                          |                                          |  |             |    |             |  |   |    
|                                                        | Interest                                 |  | $           | 63 |             |  | $ | 145 | 
|Supplemental Schedule of Non Cash Financing Activities: |                                          |  |             |    |             |  |   |    
|                                                        | Issuance of Director Equity Compensation |  | $           |   |             |  | $ | 8   | 

See accompanying notes to the consolidated financial statements.

7



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ECC INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



|1. |  | The accompanying consolidated financial statements are unaudited and
have been prepared by ECC International Corp. (the Company) pursuant to
the rules and regulations of the Securities and Exchange Commission. The
June 30, 2002 consolidated balance sheet was derived from audited
consolidated financial statements but does not include all disclosures
required by generally accepted accounting principles. In the opinion of
management, the accompanying unaudited consolidated financial statements
contain all adjustments, consisting of only normal recurring adjustments,
necessary to present fairly the consolidated financial position, results
of operations, comprehensive income and cash flows for the interim
presented. These unaudited consolidated financial statements should be
read in conjunction with the consolidated financial statements and
footnotes thereto in the Companys Annual Report on Form 10-K for the
fiscal year ended June 30, 2002.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Company has no Comprehensive Income other than Net Income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|2. |  | New Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   |  | Effective January 1, 2003, the Company adopted SFAS No. 146, Accounting
for costs associated with Exit or Disposal Activities, which addresses the recognition,
measurement and reporting of costs that are associated with exit and
disposal costs. SFAS 146 is effective for exit or disposal activities
that are initiated after December 31, 2002. Severance costs incurred
during the quarter ended March 31, 2003 have been recorded as incurred in
accordance with the Standard.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |  | In December 2002, the Financial Accounting Standards Board issued SFAS No.
148 Accounting for Costs Associated with Stock Based Compensation  Transition and Disclosure -
an Amendment of FAS 123 which amends SFAS No. 123 Accounting for Stock
Based Compensation, to provide alternative methods of transition for a
voluntary change to the fair value method of accounting for stock-based
employee compensation. In addition, this statement amends the disclosure
requirements of SFAS 123 to require prominent disclosure of the method of
accounting for stock based compensation and the effect of the method on
reported results. The interim disclosure requirements are effective for
quarters beginning after December 15, 2002 and have been included in the
following table:                                                                                                                                                                                       

|                        |                                                                                                                             |   |              |      |             |   |       |      | 
|----------------------- | --------------------------------------------------------------------------------------------------------------------------- | - | ------------ | ---- | ----------- | - | ----- | ---- | 
|                        |                                                                                                                             |   | Three Months |      | Nine Months
|                        |                                                                                                                             |   | Ended        |      | Ended      
|                        |                                                                                                                             |   | 3/31/2003    |      | 3/31/2002  
|                        |                                                                                                                             |   |              |      |            
|Net Income, as reported |                                                                                                                             | $ | 638          |      |             | $ | 2,393 |     
|Deduct:                 |                                                                                                                             |   |              |      |             |   |       |     
|                        | Total stock-based employee
compensation expense determined
under fair value based method for
all awards, net of related tax |   |              | 7    |             |   |       | 61   | 
|                        |                                                                                                                             |   |              |      |             |   |       |     
|Pro Forma Net Income    |                                                                                                                             | $ | 631          |      |             | $ | 2,332 |     
|                        |                                                                                                                             |   |              |      |             |   |       |     
|Earnings Per Share:     |                                                                                                                             |   |              |      |             |   |       |     
|                        | Basic- as reported                                                                                                          |   | $            | 0.08 |             |   | $     | 0.30 | 
|                        | Basic  pro forma                                                                                                           |   | $            | 0.08 |             |   | $     | 0.30 | 
|                        | Diluted  as reported                                                                                                       |   | $            | 0.08 |             |   | $     | 0.30 | 
|                        | Diluted  pro forma                                                                                                         |   | $            | 0.08 |             |   | $     | 0.29 | 

|
|
|

|                  |  |                |     |           |  |   |       |  
|----------------- |  | -------------- | --- | --------- |  | - | ----- | -
|                  |  | (In Thousands)
|                  |  | 3/31/2003      |     | 6/30/2002
|                  |  |                |     |          
|Work in Process   |  | $              | 101 |           |  | $ | 187   |  
|Raw Materials     |  |                | 566 |           |  |   | 1,343 |  
|                  |  |                |     |           |  |   |       |  
|Total Gross Value |  |                | 667 |           |  |   | 1,530 |  
|Reserves          |  |                | (62 | )         |  |   | (610  | )
|                  |  |                |     |           |  |   |       |  
|Net Value         |  | $              | 605 |           |  | $ | 920   |  
|                  |  |                |     |           |  |   |       |  



|   |  | Due to the recent reconfiguration of the Company operations into a smaller
area, the Company disposed of a portion of its excess and obsolete raw
materials inventory which had been fully reserved in prior years.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Work in process inventory is valued using the specific identification cost
method, but not in excess of net realizable value. The Company values raw
materials at the lower of average cost or market. On a quarterly basis,
inventory items are evaluated to identify slow-moving, excess or obsolete
parts. An assessment of potential use on future programs including spare
parts orders, repairs and warranty work, is the basis for the establishment
of a reserve for excess and obsolete inventory.                                                                                                                                                       
|  
|4. |  | Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |  | On June 24, 1999, the Company entered into a revolving credit facility
(Credit Facility) with Mellon Bank, N.A., which was subsequently
purchased by LaSalle Business Credit, totaling $12.5 million and expires on
June 24, 2003. The Credit Facility was amended in November 2001 to reduce
the line of credit to $5.0 million. Available borrowings are based on a
formula of receivables and property, as defined in the Credit Facility.
As of March 31, 2003, there was no outstanding balance under the Credit
Facility and the Company is in compliance with the covenants. Based on the
positive cash balance since July 13, 2001 and the positive cash

8



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##### Table of Contents





|   |  | projections
for the balance of fiscal year 2003, management believes that operational
cash requirements can be funded internally through the next fiscal year.
The Company is in discussions with several banks regarding a new Credit
Facility.                                                                                                                                                                                                                                                                                                                                               
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Credit Facility includes a subjective acceleration clause as well as a
lockbox requirement under the control of the lender, whereby all
collections of trade receivables are used to immediately reduce any
outstanding balance under the Credit Facility.                                                                                                                                                                                                                                                                                                                                 
|  
|5. |  | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   |  | The Company has approximately $12.3 million of cumulative federal net
operating loss carryforwards, which expire between 2019 and 2022. In
addition, the Company had available at June 30, 2002, cumulative net
operating loss carryforwards of $18.0 million for Florida state income tax
purposes, which expire between 2019 and 2022. This amount is prior to an
adjustment resulting from current year profit. A 100% valuation allowance
is recorded against these deferred tax assets due to the uncertainty of
their ultimate realization.                                              
|  
|6. |  | Unusual Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |  | Dr. James C. Garrett, former President and Chief Executive Officer of the
Company resigned in June 2002. Severance costs totaling approximately
$255,000 were recorded in June 2002, and are included in Accrued Expenses
and Other. These costs are being paid during fiscal year 2003. On July 1,
2002, Dr. Garrett repaid in full an outstanding Promissory Note owed the
Company, which included the principal balance of $146,250 and accrued
interest through June 30, 2002 of $33,000 for a total of $179,250.                                                                          
|  
|   |  | In July 2002, the Company reduced its operating cost by eliminating 15
employees or 11% of the employees. The employee termination benefits
associated with the reductions were approximately $202,000 and were
recorded in the first quarter of fiscal year 2003. Annual compensation
savings associated with these actions were approximately $1.2 million.                                                                                                                                                                                                                                  
|  
|   |  | During the first quarter of fiscal year 2003, retention agreements were
implemented in order to temporarily retain 11 key employees whose jobs will
be outsourced due to the consolidation of the workforce into a smaller
space. Severance payments and retention bonuses will be earned as the
employees are terminated based on the employees remaining with the Company
through completion dates ranging from November 2002 through March 2003. As
of March 31, 2003, all of these key employees left the Company and
severance payments and retention bonuses totaling $100,000 were paid.
|  
|   |  | Effective January 1, 2003, the Company adopted SFAS No. 146, Accounting
for Exit or Disposal Activities, which addresses the recognition,
measurement and reporting of costs that are associated with exit and
disposal costs. SFAS 146 is effective for exit or disposal activities
that are initiated after December 31, 2002. Severance costs incurred
during the quarter ended March 31, 2003 have been recorded as incurred in
accordance with the Standard.                                                                                                                            
|  
|   |  | The following table sets forth the details and the cumulative activity
associated with the accrual of these termination costs (In Thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                  

9



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##### Table of Contents



|                                                  |  |   |      |  
|------------------------------------------------- |  | - | ---- | -
|Accrued Employee Termination Benefits at 6/30/02  |  | $ | 255  |  
|Cash Payments                                     |  |   | (193 | )
|Employee Termination Benefits Incurred            |  |   | 202  |  
|                                                  |  |   |      |  
|Accrued Employee Termination Benefits at 9/30/02  |  |   | 264  |  
|Cash Payments                                     |  |   | (129 | )
|                                                  |  |   |      |  
|Accrued Employee Termination Benefits at 12/31/02 |  |   | 135  |  
|Cash Payments                                     |  |   | (108 | )
|Employee Termination Benefits Incurred            |  |   | 45   |  
|                                                  |  |   |      |  
|Accrued Employee Termination Benefits at 3/31/03  |  | $ | 72   |  
|                                                  |  |   |      |  



|7. |  | Business Segment Information                                                                                       
|-- |  | -------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Company operates only in the training segment which includes the design
and manufacture of training simulators.
|  
|   |  | Sales by Class of Customer (In Thousands):                                                                         

|                                              |  |                   |                |                    |  |           |              |           |  |   |             |  |  |   |           | 
|--------------------------------------------- |  | ----------------- | -------------- | ------------------ |  | --------- | ------------ | --------- |  | - | ----------- |  |  | - | --------- | 
|                                              |  | Nine Months Ended |                | Three Months Ended
|                                              |  |                   |                |                   
|                                              |  | 3/31/2003         |                | 3/31/2002          |  | 3/31/2003 |              | 3/31/2002
|                                              |  |                   |                |                    |  |           |              |          
|U.S. Department of Defense
Direct
Subcontract |  |                   | $12,112
11,064 |                    |  | $         | 4,479
17,556 |           |  | $ | 6,040
2,811 |  |  | $ | 975
8,164 | 
|                                              |  |                   |                |                    |  |           |              |           |  |   |             |  |  |   |           | 
|Total Sales                                   |  |                   | $23,176        |                    |  | $         | 22,035       |           |  | $ | 8,851       |  |  | $ | 9,139     | 
|                                              |  |                   |                |                    |  |           |              |           |  |   |             |  |  |   |           | 



|   |  | Export Sales from the U.S. were not material for the three-month and
nine-month periods ended March 31, 2003 and March 31, 2002. Export sales
do not include Foreign Military Sales through U.S. Government Agencies and
prime contractors of $454,755 and $694,849 during the three-month and
nine-month periods ended March 31, 2003, respectively.                                                 
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Since a substantial portion of the Companys revenues are attributable to
long-term contracts with various government agencies, any factor affecting
procurement of long-term government contracts such as changes in
government spending, cancellation of weapons programs and delays in
contract awards could have a material impact on the Companys financial
condition and results of operations.
|  
|   |  | Sales by Geographic Area                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |  | All of the Companys Revenues, Operating Income and Long-Lived Assets are
within the United States.                                                                                                                                                                                                                                                                                                   
|  
|8. |  | Earnings Per Share                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |  | Basic earnings per common share is computed by dividing net earnings
available to common stockholders by the weighted-average number of common
shares outstanding during
the period. Diluted earnings per share is computed by dividing net
earnings available to common                                                                                                                              

10



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| |  | stockholders by the weighted-average number of
common shares outstanding during the period adjusted for the number of
shares that would have been outstanding if the dilutive potential common
shares resulting from the exercise of stock options had been issued. The
diluted earnings per share does not assume the exercise of stock options
that would have an antidilutive effect on earnings per share.                                                   
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The Companys dilutive potential common shares consist of stock options.
In calculating diluted earnings per share, 110,012 and 42,998 dilutive
potential common shares were included for the three-month and the
nine-month periods ended March 31, 2003, respectively. For the three-month
and nine-month periods ended March 31, 2002, the calculation of diluted
earnings per share included 9,934 and 16,987 dilutive potential common
shares, respectively.
|
| |  | The weighted-average number of common shares outstanding for each period
presented is as follows:                                                                                                                                                                                                                                                                                                                                                                

|        |  |                   |           |                    |  |           |           |           |  |  |           |  |  |  |           | 
|------- |  | ----------------- | --------- | ------------------ |  | --------- | --------- | --------- |  |  | --------- |  |  |  | --------- | 
|        |  | Nine Months Ended |           | Three Months Ended
|        |  |                   |           |                   
|        |  | 3/31/2003         |           | 3/31/2002          |  | 3/31/2003 |           | 3/31/2002
|        |  |                   |           |                    |  |           |           |          
|Basic   |  |                   | 7,870,643 |                    |  |           | 7,832,896 |           |  |  | 7,883,064 |  |  |  | 7,836,844 | 
|Diluted |  |                   | 7,913,641 |                    |  |           | 7,849,883 |           |  |  | 7,993,076 |  |  |  | 7,846,778 | 



|9. |  | Commitments and Contingencies                                                                                                                                                                                                                                                                  
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | During the first quarter of fiscal year 2003, retention agreements were
implemented in order to temporarily retain 11 key employees whose jobs will
be outsourced due to the consolidation of the workforce into a smaller
space. See Note 5 of the Notes to Consolidated Financial Statements.
|  
|   |  | The Company is party to various legal proceedings arising from normal
business activity. Management believes that the ultimate resolution of
these matters will not have an adverse material effect on the Companys
financial condition, cash flow, or results of operations.                 

11



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##### Table of Contents






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



|   |  | Overview                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | This Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended, and Section 27A of the Securities Act of 1933, as amended.
For this purpose, any statements contained herein that are not statements
of historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, the words believes, anticipates,
plans, expects, and similar expressions are intended to identify
forward-looking statements. There are a number of factors that could
cause the Companys actual results to differ materially from those
indicated by such forward-looking statements. These factors include,
without limitation, those set forth below under the caption Certain
Factors That May Affect Future Operating Results.
|  
|a) |  | Material Changes in Financial Condition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   |  | During the nine-month period ended March 31, 2003, the Companys principal
source of cash was from operations. The Companys cash balance increased
by $479,000 to $6,759,000 since fiscal year end 2002 due primarily to
lower working capital requirements to support operations. The Companys
working capital increased $3,342,000 since fiscal year end 2002 primarily
due to an increase in the unbilled receivables (costs and estimated
earnings in excess of billings on uncompleted contracts.)                                                                                                                                                                                                                                                                                                                                          
|  
|   |  | Liquidity and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |  | As of March 31, 2003, the Company is in compliance with the Credit
Facility covenants. See Note 3 of the Notes to Consolidated Financial
Statements for more information on the Credit Facility. Based on the
positive cash balance since July 13, 2001 and the positive cash
projections for the balance of fiscal year 2003, management believes that
operational cash requirements can be funded internally through the next
fiscal year. The current Credit Facility expires on June 24, 2003. The
Company is in discussions with several banks regarding a new Credit
Facility.                                                                                                                                                                                                                                                               
|  
|   |  | During the nine-month period ended March 31, 2003, the Company spent
approximately $400,000 to consolidate into 90,000 square feet of the
Orlando facility and to purchase new machinery and equipment. No material
additional funds are expected to be spent on this effort during the
remainder of the fiscal year. The Company is continuing to offer the real
estate for sale with a partial leaseback and is also evaluating the
prospect of upgrading the vacant portion of the facility and leasing it to
potential tenants.                                                                                                                                                                                                                                                                                                                
|  
|   |  | In July 2002, the Company reduced its operating cost by eliminating 15
employees or 11% of the employees. The employee termination benefits
associated with the reductions were approximately $202,000 and were
recorded in the first quarter of fiscal year 2002. Annual compensation
savings associated with these actions were approximately $1.2 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

13



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|   |  | During the first quarter of fiscal year 2003, retention agreements were
implemented in order to temporarily retain 11 key employees whose jobs
will be outsourced due to the consolidation of the workforce into a
smaller space. Severance payments and retention bonuses will be earned as
the employees are terminated based on the employees remaining with the
Company through completion dates ranging from November 2002 through March
2003. As of March 31, 2003, all of these key employees left the Company
and severance payments and retention bonuses totaling $100,000 were paid.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Managements plans to improve future profitability include: (1) a
continuation of both direct and indirect cost reduction initiatives and
improvement of operating performance, (2) an aggressive focus on
obtaining follow-on awards to existing business, and (3) the
implementation of strategies to procure new business and penetrate new
markets.                                                                                                                                                                                                                                        
|  
|   |  | Other than as stated above, the Company currently has no other material
commitments for capital expenditures. Management believes that with the
funds available under its projected cash flows, the Company will have
sufficient resources to meet planned operating commitments through the
next fiscal year.                                                                                                                                                                                                                                                                                 
|  
|b) |  | Material Changes in Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  | Sales increased 5% or $1,142,000 for the nine-month period ended March 31,
2003, compared to the same period a year ago due primarily to increased
revenues resulting from EST Lot 3 and the SIMNET Visuals program awards.                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |  | Gross margin as a percentage of sales was 31% for the three-month period
ended March 31, 2003 compared to 34% for the same period a year ago. This
difference in gross margin results primarily from higher volume on the EST
and SIMNET programs which have lower margins compared to the Javelin
programs. Gross margin for the nine-month periods ended March 31, 2003
and 2002 was 33% and 32%, respectively.                                                                                                                                                                              
|  
|   |  | Selling, general and administrative expenses increased 22% or $313,000 for
the three-month period ended March 31, 2003, compared to the same period a
year ago due primarily to increased bid and proposal activities to pursue
new contracts. Selling, general and administrative expense decreased 4% or
$178,000 during the nine-month period ended March 31, 2003 compared to the
same period a year ago due primarily to the aggressive cost reduction
actions.                                                                                                                           
|  
|   |  | Independent research and development expenses decreased 20% or $240,000
during the nine-month period ended March 31, 2003, compared to the same
period a year ago primarily due to reduced activities related to the EST
2000 product.                                                                                                                                                                                                                                                                                                                                                         
|  
|   |  | The Company has approximately $12.3 million of cumulative federal net
operating loss carryforwards, which expire between 2019 and 2022. A full
valuation allowance has been provided for these net operating loss
carryforwards which were subject to uncertainty as to their ultimate
realization. No tax provision was recorded for the three-month period
ended March 31, 2003, as the Company anticipates utilization of the net
operating loss carryforwards with a reduction in the valuation allowance.                                                                                 

Certain Factors That May Affect Future Operating Results

14



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| |  | The following important factors, among others, could cause actual results
to differ materially from those indicated by forward-looking statements
made in this Quarterly Report on Form
10-Q and presented elsewhere by management from time to time. All
forward-looking statements included in this Form 10-Q are based on
information available to the Company on
the date hereof, and the Company assumes no obligation to update such
forward-looking statements.                                                                                                                                                                                                                                            
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | A number of uncertainties exist that could affect the Companys future
operating results including, without limitation, general economic
conditions, changes in government spending, borrowing availability under
and compliance with the Credit Facility, cancellation of weapons
programs, delays in contract awards, delays in the acceptance process of
contract deliverables, the Companys continued ability to develop and
introduce products, the introduction of new products by competitors,
pricing practices of competitors, the cost and availability of parts and
the Companys ability to control costs.                                                                                           
|
| |  | To date, a substantial portion of the Companys revenues have been
attributable to long-term contracts with various government agencies. As
a result, any factor adversely affecting procurement of long-term
government contracts could have a material adverse effect on the
Companys financial condition and results of operations.                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Because of these and other factors, past financial performance should not
be considered an indication of future performance. The Companys future
quarterly operating results may vary significantly. Investors should not
use historical trends to anticipate future results and should be aware
that the trading price of the Companys Common Stock may be subject to
wide fluctuations in response to quarterly variations in operating
results and other factors, including those discussed above.                                                                                                                                                                                                           
|
| |  | Critical Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | The Company considers that certain accounting policies are critical due to
the estimation process involved in each of them. The assumptions and
judgement utilized in developing these estimates are based on the
information available at the time including an assessment of the risks and
uncertainties. These estimates and assumptions affect the reported amounts
of assets and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the periods presented. The
significant accounting policies, which the Company believes are the most
critical to aid in fully understanding and evaluating its reported
financial results, include the following:
|
| |  | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | Contract sales and anticipated profits are recognized using the percentage
of completion method measured by the ratio of costs incurred to date to
estimated total costs. The Company reevaluates the estimated costs to
complete on the entire contract on a quarterly basis. Any revisions in
estimated costs or contract value during the progress of the work may
affect the estimated gross margin percentage for the contract. Estimated
costs may be adjusted favorably or unfavorably based on projected changes
in areas such as labor efficiencies, material price negotiations, supplier
delivery schedules, design and development progress and overhead rate
projections.                            

15



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##### Table of Contents





| |  | Changes in gross margin percentages have the effect of adjusting the
current period earnings applicable to performance in prior periods.                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Anticipated losses on contracts in progress are recorded in the period in
which the losses are identified. Claims would be included as a component
of contract value for purposes of revenue recognition at such time as the
amount is reasonably determinable and probable.                                                                                                                                                                                                                                                                           
|
| |  | Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | The Company values raw materials at the lower of average cost or market.
On a quarterly basis, inventory items are evaluated to identify
slow-moving, excess or obsolete parts. An assessment of potential use on
future programs including spare parts orders, repairs and warranty work,
is the basis for the establishment of a reserve for excess and obsolete
inventory. Potential usage assessments may be impacted favorably or
unfavorably by changes in the Companys projected contracts, parts
obsolescence and level of spares and repairs.
|
| |  | Deferred Tax Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | The Company has provided a full valuation reserve against its deferred tax
assets. In the future, if sufficient evidence of the Companys ability to
generate future taxable income becomes apparent, the Company may reduce
its valuation allowances resulting in income tax benefits in the Companys
consolidated statement of operations. Management evaluates the
realizability of the deferred tax assets quarterly and assesses the
valuation allowance quarterly.                                                                              

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is subject to interest rate risk on its borrowings under the
Credit Facility. The Credit Facility has a floating interest rate based on
prevailing market rates. Accordingly, the carrying value of the debt is
generally not affected by fluctuations in interest rates. However, such
changes in interest rates could affect future interest expense and hence
earnings and cash flows.

ITEM 4. Controls and Procedures

Based on their evaluation, as of a date within 90 days of the filing of this
Form 10-Q, the Companys Chief Executive Officer and Chief Financial Officer
have concluded the Companys disclosure controls and procedures (as defined in
Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934) are
effective. There have been no significant changes in internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

16



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##### Table of Contents









PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
ECC INTERNATIONAL CORP. AND SUBSIDIARIES

ITEM 5. Other Information

On March 6, 2003, the Company announced the appointment of Robert L. Collins
as Chief Executive Officer at an annual salary of $200,000. He also received
an option to purchase 50,000 shares of common stock which will vest over a
four year period at 25% per year.

ITEM 6. Exhibits and Reports on Form 8-K

a.     Exhibits

|     |  |                                                                                                        
|---- |  | -------------------------------------------------------------------------------------------------------
|99.1 |  | Certification of Chief Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002     
|99.2 |  | Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002     
|99.3 |  | Letter Agreement dated February 20, 2003 by and between ECC International Corp.,
and Robert L. Collins.

b.     Reports on Form 8-K

A Current Report on Form 8-K under Item 5 was filed on March 6, 2003,
announcing the appointment
of Robert L. Collins as Chief Executive Officer. In addition, the Form 8-K
included a letter agreement between the Company and Mr. Collins regarding his
offer of employment.

17



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##### Table of Contents






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.

|                   |  |                                                
|------------------ |  | -----------------------------------------------
|                   |  | ECC INTERNATIONAL CORP.                        
|                   |  |                                                
|Date: May 14, 2003 |  | /s/ Melissa Van Valkenburgh                    
|                   |  |                                                
|                   |  | Melissa Van Valkenburgh
Chief Financial Officer

18



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##### Table of Contents






ECC INTERNATIONAL CORP.

a Delaware corporation

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Section 302 Certification

I, Robert L. Collins certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of ECC
International Corp.;                                                                                                                                                                                                                                                
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and we have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors
(or persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        

19



---



##### Table of Contents





|6. |  | The registrants other certifying officers and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                   |  |                                              
|------------------ |  | ---------------------------------------------
|Date: May 14, 2003 |  | /s/ Robert L. Collins                        
|                   |  |                                              
|                   |  | Robert L. Collins
Principal Executive Officer

20



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##### Table of Contents






ECC INTERNATIONAL CORP.

a Delaware corporation

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Section 302 Certification

I, Melissa Van Valkenburgh, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of ECC
International Corp.;                                                                                                                                                                                                                                                
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and we have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors
(or persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        

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|6. |  | The registrants other certifying officers and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                   |  |                                                    
|------------------ |  | ---------------------------------------------------
|Date: May 14, 2003 |  | /s/ Melissa Van Valkenburgh                        
|                   |  |                                                    
|                   |  | Melissa Van Valkenburgh
Principal Financial Officer

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