<PAGE>
                                                                    Page 1 of 17


                                  FORM 10-Q
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

(Mark One)

[x]Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934

For the quarterly period ended September 29, 2001

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

Commission File Number  1-3985

                               EDO CORPORATION
        (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                     <C>
      New York                                          No. 11-0707740
(State or other jurisdiction                            (I.R.S. Employee
of incorporation or organization)                       Identification No.)


60 East 42nd Street, Suite 5010, New York, NY            10165
  (Address of principal executive offices)              (Zip Code)


Registrant's telephone number, including area code      (212) 716-2000
</TABLE>


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

                                                        Yes   X     No
                                                            -----      -----


Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.


<TABLE>
<CAPTION>
              Class                            Outstanding at September 29, 2001
-------------------------------------          ---------------------------------
<S>                                            <C>
Common shares, par value $1 per share                 14,850,672
</TABLE>
<PAGE>
                                                                          Page 2


                               EDO CORPORATION

                                    INDEX


<TABLE>
<CAPTION>
                                                                     Page  No.

<S>                                                                  <C>
Face Sheet                                                              1

Index                                                                   2

Part I            Financial Information

  Item 1.         Financial Statements

                  Consolidated Balance Sheets  -
                     September 29, 2001 and
                     December 31, 2000                                  3


                  Consolidated Statements of Earnings -
                     Three Months Ended
                     September 29, 2001 and                             4
                     September 30, 2000


                  Consolidated Statements of Earnings -                 5
                     Nine Months Ended
                     September 29, 2001 and
                     September 30, 2000


                  Consolidated Statements of Cash Flows  -
                     Nine Months Ended
                     September 29, 2001 and
                     September 30, 2000                                 6


                  Notes to Consolidated Financial Statements           7-10


  Item 2.         Management's Discussion and Analysis
                     of Financial Condition and Results
                     of Operations                                    10-16


Part II           Other Information


  Item 6.         Exhibits and Reports on Form 8-K                      16


Signature                                                               17
</TABLE>
<PAGE>
                                                                          Page 3


PART I - FINANCIAL INFORMATION
Item 1.     Financial Statements

                       EDO Corporation and Subsidiaries
                         Consolidated Balance Sheets
              (in thousands, except share and per share amounts)

<TABLE>
<CAPTION>
                                              September 29, 2001   December 31, 2000
Assets                                           (unaudited)
<S>                                           <C>                  <C>
Current assets:
  Cash and cash equivalents                       $   6,163        $   2,208
  Marketable securities                                 189           14,413
  Accounts receivable, less allowances               69,684           69,023
  Inventories                                        25,931           24,914
  Deferred tax asset, net                             3,302            3,333
  Prepayments and other                               2,652            4,840
                                                  ---------        ---------
     Total current assets                           107,921          118,731
Property, plant and equipment, net                   61,255           57,485
Notes receivable                                      3,073            3,254
Cost in excess of fair value of net
 assets acquired, net                                10,173           14,724
Other assets                                         24,201           20,060
                                                  ---------        ---------
                                                  $ 206,623        $ 214,254
                                                  =========        =========
Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable and accrued liabilities        $  46,950        $  44,060
  Contract advances and deposits                     14,586           31,719
  Current portion of note payable                       429              429
  Current portion of long-term debt                   3,800            4,971
                                                  ---------        ---------
     Total current liabilities                       65,765           81,179
Note payable                                            463              463
Borrowings under revolver                             6,000               -
Long-term debt                                       32,736           37,800
Deferred income taxes, net                            1,239            1,239
ESOT loan obligation                                     --            5,781
Postretirement benefits obligations                  20,118           19,973
Environmental obligation                              1,685            2,001

Shareholders' equity:
Preferred shares, par value $1 per share
 (liquidation preference $213.71 per share
 or $10,521 in the aggregate in 2000),
 authorized 500,000 shares, 49,229 issued in
 2000                                                   --                49
Common shares, par value $1 per share, authorized
 25,000,000 shares, issued 16,074,377 in 2001
 and 15,007,096 in 2000                              16,074           15,007
Additional paid-in capital                           57,170           58,614
Retained earnings                                    43,048           34,803
Accumulated other comprehensive loss                     --              (61)
                                                  ---------        ---------
                                                    116,292          108,412
Less: Treasury shares at cost
       (1,223,705 shares in 2001 and
        1,370,222 shares in 2000)                   (16,539)         (19,388)
      ESOT loan obligation                              -             (5,781)
      Unearned ESOP shares                          (19,901)         (15,782)
      Deferred compensation under
        Long-Term Incentive Plan                       (390)            (423)
      Management group receivable                      (845)          (1,220)
                                                  ----------        ---------
      Total shareholders' equity                     78,617           65,818
                                                  ----------        ---------
                                                  $ 206,623        $ 214,254
                                                  =========        =========
</TABLE>


See accompanying Notes to Consolidated Financial Statements.
<PAGE>
                                                                          Page 4


                        EDO Corporation and Subsidiaries
                       Consolidated Statements of Earnings
                    (in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                        For the three months ended
                                                     Sept. 29, 2001    Sept. 30, 2000
                                                               (unaudited)

<S>                                                  <C>               <C>
Net sales                                               $ 60,353          $ 59,979

Costs and expenses
  Cost of sales                                           43,520            45,213
  Selling, general and administrative                      7,800             8,595
  Research and development                                 1,875             1,766
  Write-off of purchased in-process research
   and development and merger-related costs                   --               932
                                                        --------          --------
                                                          53,195            56,506
                                                        --------          --------
Operating earnings                                         7,158             3,473

Non-operating income (expense)
 Interest income                                             101               414
 Interest expense                                           (889)           (1,527)
 Other, net                                                  (82)              196
                                                        --------          --------
                                                            (870)             (917)
                                                        --------          --------
Earnings before income taxes                               6,288             2,556
Income tax expense                                        (2,455)           (2,518)
                                                        --------          --------
Earnings                                                   3,833                38
Dividends on preferred shares                                 --              (212)
                                                        --------          --------
Net earnings (loss) available for common shares         $  3,833          $   (174)
                                                        ========          ========

Earnings (loss) per common share:
  Basic                                                 $   0.32          $  (0.02)
  Diluted                                               $   0.30          $  (0.02)

Weighted average common shares outstanding:
  Basic                                                   12,107            10,934
                                                        ========          ========
  Diluted                                                 13,431            10,934
                                                        ========          ========
</TABLE>


See accompanying Notes to Consolidated Financial Statements.
<PAGE>
                                                                          Page 5


                        EDO Corporation and Subsidiaries
                       Consolidated Statements of Earnings
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                          For the nine months ended
                                                       Sept. 29, 2001   Sept. 30, 2000
                                                                (unaudited)

<S>                                                    <C>              <C>
Net sales                                               $ 187,280          $ 145,574

Costs and expenses
  Cost of sales                                           138,288            110,291
  Selling, general and administrative                      24,085             18,604
  Research and development                                  5,857              3,902
  Write-off of purchased in-process research
   and development and merger-related costs                 1,318              9,875
                                                        ---------          ---------
                                                          169,548            142,672
                                                        ---------          ---------
Operating earnings                                         17,732              2,902

Non-operating income (expense)
 Interest income                                              688              1,290
 Interest expense                                          (2,516)            (3,167)
 Other, net                                                   117                224
                                                        ---------          ---------
                                                           (1,711)            (1,653)
                                                        ---------          ---------
Earnings before income taxes                               16,021              1,249
Income tax expense                                         (6,250)            (2,400)
                                                        ---------          ---------
Earnings (loss)                                             9,771             (1,151)
Dividends on preferred shares                                (194)              (670)
                                                        ---------          ---------
Net earnings (loss) available for common shares         $   9,577          $  (1,821)
                                                        =========          =========

Earnings (loss) per common share:
  Basic                                                 $    0.80          $   (0.20)
  Diluted                                               $    0.77          $   (0.20)

Weighted average common shares outstanding:
  Basic                                                    11,972              9,119
                                                        =========          =========
  Diluted                                                  13,594              9,119
                                                        =========          =========
</TABLE>


See accompanying Notes to Consolidated Financial Statements.
<PAGE>
                                                                          Page 6


                        EDO Corporation and Subsidiaries
                      Consolidated Statements of Cash Flows
                                 (in thousands)

<TABLE>
<CAPTION>
                                                              For the nine months ended
                                                           Sept. 29, 2001   Sept. 30, 2000
                                                                     (unaudited)
<S>                                                        <C>              <C>
 Operating activities:
  Earnings (loss)                                             $  9,771          $ (1,151)
  Adjustments to earnings (loss) to arrive
   at cash provided (used) by continuing operations:
    Depreciation                                                 7,133             5,182
    Amortization                                                   827             1,039
    Write-off of purchased in-process research
     and development                                                --             6,700
    Bad debt expense                                               350               151
    Gain on repurchase of debentures                              (171)             (201)
    Gain on sale of property, plant and equipment                  (39)               (7)
    Gain on sale of marketable securities                          (81)               --
    Deferred compensation expense                                  181               526
    ESOP compensation expense                                    1,406             1,029
    Non-cash compensation expense                                  278                --
    Common shares issued for directors' fees                       122                67
    Real estate tax assessment adjustment                        7,846                --
  Changes in, excluding effects of acquisition:
    Accounts receivable                                           (826)           (1,496)
    Inventories                                                 (1,017)           (1,513)
    Prepayments and other assets                                (3,677)           (2,228)
    Accounts payable and accrued liabilities                      (227)           (6,467)
    Contract advances and deposits                             (17,133)           (4,130)
                                                              --------          --------
Cash provided (used) by continuing operations                    4,743            (2,499)
Net cash provided by discontinued operations                        --             8,641
Investing activities:
  Cash paid for acquisition of AIL                                  --           (15,004)
  Payments received on notes receivable                            259                 7
  Purchase of property, plant and equipment                    (11,101)           (2,273)
  Proceeds from sale of property, plant and equipment              236             4,404
  Purchase of marketable securities                                (58)             (760)
  Sale or redemption of marketable securities                   14,455             1,528
                                                              --------          --------
Cash provided (used) by investing activities                     3,791           (12,098)
Financing activities:
  Proceeds from exercise of stock options                        2,518                63
  Proceeds from management group receivables                       375                --
  Borrowings under revolver                                      6,000             7,000
  Repayments of borrowings under revolver                           --            (5,000)
  Repayments of long-term debt                                  (2,850)           (2,620)
  Repurchase of debentures                                      (3,184)           (1,808)
  Purchase of treasury shares                                   (1,021)               --
  Payment of EDO ESOP loan obligation                           (4,891)               --
  Payment of common share cash dividends                        (1,332)           (1,019)
  Payment of preferred share cash dividends                       (194)             (670)
                                                              --------          --------
Cash used by financing activities                               (4,579)           (4,054)

Net increase (decrease) in cash and cash equivalents             3,955           (10,010)
Cash and cash equivalents at beginning of year                   2,208            13,799
                                                              --------          --------
Cash and cash equivalents at end of period                    $  6,163          $  3,789
                                                              ========          ========
Supplemental disclosures:
 Cash paid for: Interest                                      $  1,787          $  2,204
                Income taxes                                  $  4,770          $  2,350
</TABLE>

See accompanying Notes to Consolidated Financial Statements.
<PAGE>
                                                                          Page 7


                   Notes to Consolidated Financial Statements


Unaudited Consolidated Financial Statements

The accompanying unaudited, consolidated financial statements have been prepared
in accordance with instructions to Form 10-Q and, therefore, do not include all
information and footnotes normally included in consolidated financial statements
prepared in conformity with generally accepted accounting principles. They
should be read in conjunction with the consolidated financial statements of EDO
Corporation and Subsidiaries (the "Company") for the fiscal year ended December
31, 2000 filed by the Company on Form 10-K with the Securities and Exchange
Commission on April 2, 2001.

The accompanying consolidated financial statements are unaudited and include all
adjustments (consisting of normal recurring adjustments and accruals) that
management considers necessary for a fair presentation of its consolidated
financial position and results of operations for the interim periods presented.
The results of operations for the interim periods are not necessarily indicative
of the results that may be expected for the entire year.


Acquisition

On April 28, 2000, a wholly owned subsidiary of the Company merged with AIL
Technologies, Inc. (the "EDO-AIL Merger"). In connection with the EDO-AIL
merger, the Company issued 6,553,194 of its common shares valued at $39.4
million, and made cash payments aggregating $13.3 million in exchange for all of
the outstanding common and preferred shares of AIL Technologies, Inc. In
addition, the Company incurred $2.7 million in transaction costs. The merger was
accounted for using the purchase method and is included in the Company's results
of operations since the date of acquisition. The transaction resulted in
goodwill of $2.8 million, which is being amortized over fifteen years.

Unaudited pro forma results of operations, assuming the acquisition had been
made at the beginning of 2000, which include adjustments to interest expense,
amortization expense and income tax expense are as follows:

<TABLE>
<CAPTION>
                                                          Nine months ended
                                                            Sept. 30, 2000
                                                           (in thousands)

<S>                                                       <C>
Net sales from continuing operations                          $ 188,832

Net loss from continuing operations
 available for common shares                                  $  (7,120)

Basic loss per share from continuing
 operations                                                   $   (0.63)
</TABLE>
<PAGE>
                                                                          Page 8


Inventories

  Inventories are summarized by major classification as follows:


<TABLE>
<CAPTION>
                                        Sept. 29, 2001   Dec. 31, 2000
                                                (in thousands)

<S>                                     <C>              <C>
  Raw materials and supplies            $  7,635            $  7,431
  Work-in-process                         17,298              16,170
  Finished goods                             998               1,313
                                         -------             -------
                                        $ 25,931            $ 24,914
                                        ========            ========
</TABLE>


Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per
share.

<TABLE>
<CAPTION>
                                           Three months ended       Nine months ended
                                          Sept. 29,    Sept. 30,   Sept. 29,   Sept.30,
                                             2001        2000        2001       2000
                                               (in thousands)          (in thousands)
<S>                                       <C>          <C>         <C>       <C>
Numerator:
 Earnings (loss) available for
  common shares                            $  3,833    $   (174)     9,577     (1,821)
 Impact of assumed conversion
  of preferred shares                            --          --          6         --
 Interest expense avoided related to
  assumed conversion of subordinated
  debentures                                    238          --        822         --
                                           --------    --------   --------   --------
Numerator for diluted
  calculation                              $  4,071    $   (174)    10,405     (1,821)
                                           ========    ========   ========   ========
Denominator:
 Weighted average common
  shares outstanding                         12,107      10,934     11,972      9,119
 Dilutive effect of stock
   options                                      309          --        249         --
 Dilutive effect of conversion
   of preferred shares                           --          --        206         --
 Dilutive effect of conversion
   of subordinated debentures                 1,015          --      1,167         --
                                           --------    --------   --------   --------
Denominator for diluted
  calculation                                13,431      10,934     13,594      9,119
                                           ========    ========   ========   ========
</TABLE>
<PAGE>
                                                                          Page 9


Employee Stock Ownership Plan and Trust

At the end of 2000, the Company sponsored two Employee Stock Ownership Plans,
the existing EDO Employee Stock Ownership Plan ("EDO ESOP"); and the AIL
Employee Stock Ownership Plan ("AIL ESOP") that was acquired in connection with
the EDO-AIL merger. These two plans were merged into a single plan effective as
of January 1, 2001, and the existing preferred shares in the former EDO ESOP
were converted into 1,067,281 common shares on March 8, 2001. The merged ESOP
provides retirement benefits to substantially all employees.


Comprehensive Income

As of September 29, 2001, accumulated other comprehensive income (loss) included
in the accompanying consolidated balance sheet represents unrealized holding
gains (losses) on available-for-sale marketable securities. There was no
comprehensive income for the three-month period ended September 29, 2001.
Comprehensive income for the nine-month period ended September 29, 2001 was
$9,863,000. Comprehensive income (loss) for the three- and nine-month periods
ended September 30, 2000 was $168,000 and $(1,051,000), respectively.


Business Segments

EDO Corporation is a leading supplier of sophisticated, highly engineered
products for defense, aerospace and industrial applications. The Company
believes that its advanced electronic, electromechanical systems, information
systems and engineered materials are mission-critical standard equipment on a
wide range of military aircraft. The Company has three reporting segments:
Defense, Communications and Space Products, and Engineered Materials.

The Defense segment provides integrated defense systems and components including
electronic warfare systems, subsystems and test equipment, aircraft stores
suspension and release systems, airborne mine countermeasures systems,
integrated combat systems and undersea warfare sonar systems for military forces
and governments worldwide. The Communications and Space Products segment
supplies antenna products and space sensor communications products for the
remote sensing, communication, and navigation industries. The Engineered
Materials segment supplies electro-ceramic products and advanced fiber composite
and structural products for the communication, navigation, chemical,
petrochemical, paper and oil industries for the commercial infrastructure and
military markets.

<TABLE>
<CAPTION>
                                           Three months ended    Nine months ended
                                          Sept. 29,  Sept. 30,   Sept. 29,  Sept. 30,
                                             2001      2000         2001      2000
<S>                                       <C>        <C>         <C>        <C>
Net sales:
Defense                                    $44,146    $41,796    $137,912   $103,222
Communications and Space Products            7,097      9,230      22,160     16,854
Engineered Materials                         9,110      8,953      27,208     25,498
                                           -------    -------     --------   -------
                                           $60,353    $59,979    $187,280   $145,574
                                           =======    =======     ========   ========
</TABLE>
<PAGE>
                                                                         Page 10


<TABLE>
<S>                                         <C>        <C>       <C>         <C>
Operating earnings (loss):
Defense                                     $ 5,606    $ 4,592   $15,297     $10,504
Communications and Space Products               371     (1,778)     (404)     (9,255)
Engineered Materials                          1,181        659     2,839       1,653
                                            -------    -------   -------     -------
                                              7,158      3,473    17,732       2,902
Net interest expense                           (788)    (1,113)   (1,828)     (1,877)
Other, net                                      (82)       196       117         224
                                            -------    -------   -------     -------
Earnings before income taxes                $ 6,288    $ 2,556   $16,021     $ 1,249
                                            =======    =======   =======     =======
</TABLE>



Merger-related costs attributable to the EDO-AIL Merger are included in the
segments as follows:

<TABLE>
<CAPTION>
                                               Nine months ended    Nine months ended
                                                 Sept. 29, 2001       Sept. 30, 2000

<S>                                            <C>                  <C>
Defense                                          $   898              $  2,194
Communications and Space Products                    208                 7,185
Engineered Materials                                 212                   496
                                                 -------              --------
Total                                            $ 1,318              $  9,875
                                                 =======              ========
</TABLE>



Subsequent Events

On October 9, 2001, the Company acquired all of the outstanding stock of Dynamic
Systems, Inc., a privately-held company based in Alexandria, Virginia, for $13.8
million in cash. This acquisition will expand the Company's range of
professional and information technology services provided primarily to the
Department of Defense and other government agencies. The acquisition will be
accounted for as a purchase, and accordingly, the operating results of Dynamic
Systems will be included in the Company's consolidated financial statements from
the date of acquisition.

On October 31, 2001, the Company sold 3,716,100 newly-issued common shares in a
public offering for net proceeds of approximately $82.5 million, which will be
used for retirement of debt, future acquisitions, and general corporate
purposes. As part of the offering, the ESOP also sold 1,458,900 currently
outstanding common shares.



Item 2.

                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

Results of Operations

The following information should be read in conjunction with the Consolidated
Financial Statements as of and for the period ended September 29, 2001, which
reflect the results of operations of the Company including the EDO-AIL merger,
as described below, from April 28, 2000. The results of the Company's operations
for the three- and nine- months ended September 29, 2001 and the Company's
financial condition as of September 29, 2001 are significantly affected by this
acquisition.
<PAGE>
                                                                         Page 11


Merger with AIL Technologies, Inc.

On April 28, 2000, the Company's wholly-owned subsidiary merged with AIL
Technologies Inc., referred to as AIL. This merger, referred to as the EDO-AIL
merger, was accounted for as a purchase and is included in the Company's results
of operations from that date. The results of operations for the periods
presented are materially affected by the timing of the EDO-AIL merger.

Under the merger agreement and share purchase agreements with certain AIL
shareholders, all of the outstanding shares of common stock and preferred stock
of AIL were exchanged for 6,553,194 newly-issued EDO common shares valued at
$39.4 million. In addition, the AIL stockholders received a cash payment
totaling $13.3 million. The merged company also assumed AIL debt of $29.7
million. Of the newly-issued shares, 5.3 million were held in trust by AIL's
Employee Stock Ownership Plan, referred to as the AIL ESOP.


As of the closing of the EDO-AIL merger, the AIL ESOP was the Company's largest
shareholder holding about 39% of the Company's outstanding common shares. As of
January 1, 2001, the AIL ESOP and the existing EDO ESOP were merged into a
single plan. As of March 8, 2001, the existing preferred shares in the EDO ESOP
were converted into about 1.1 million common shares. As a result of the
Company's October 2001 public offering and the sale in the offering of 1,458,900
common shares by the ESOP, at October 31, 2001, the ESOP held approximately 25%
of the Company's outstanding common shares.


Results of Operations

Comparison of three months ended September 29, 2001 and September 30, 2000

Net sales for the three months ended September 29, 2001, increased to $60.4
million from $60.0 million for the comparable period of 2000. This increase
comprised sales growth of $2.3 million for the Defense segment and $0.2 million
for the Engineered Materials segment, offset by a decrease of $2.1 million for
the Communications and Space Products segment. In the Defense segment, there
were increases in sales of aircraft stores suspension and release equipment and
integrated combat systems and sonar systems. In the Engineered Materials
segment, there were increases in sales of electro-ceramic products, partially
offset by decreases in sales of advanced fiber composite structural products. In
the Communications and Space Products segment, there were decreases in sales of
space products, partially offset by increases in sales of antenna products.

Operating earnings in the three months ended September 29, 2001 (before
considering one-time EDO-AIL merger-related costs of $0.9 million in the three
months ended September 30, 2000) increased to $7.2 million or 11.8% of net sales
from $4.4 million or 7.3% of net sales for the comparable period of 2000. The
increase in operating earnings was attributable to increased sales, program mix
and contract closeouts in the Defense segment, as well as increases in operating
earnings in the Communications and Space Products segment which, for the three
months ended September 29, 2001, had operating earnings of $0.4 million compared
to an operating loss of $1.8 million in the comparable period of 2000. In
addition, there were reductions in selling, general and administrative expenses,
as discussed below. For the three months ended September 29, 2001, net earnings
available for common shares increased to $3.8 million, or $0.30 per diluted
common share, on 13.4 million diluted shares from a net
<PAGE>
                                                                         Page 12


loss of $0.2 million, or $0.02 per diluted common share, on 10.9 million diluted
shares in the comparable period of 2000.

Selling, general and administrative expenses in the three months ended September
29, 2001 decreased to $7.8 million, or 12.9% of net sales, from $8.6 million, or
14.3% of net sales, for the comparable period of 2000. This decrease is due
primarily to reductions in expenses at the Deer Park facility.

Research and development expense in the three months ended September 29, 2001
increased slightly to $1.9 million, or 3.1% of net sales, from $1.8 million, or
2.9% of net sales, for the comparable period of 2000.

Interest expense in the three months ended September 29, 2001 decreased to $0.9
million from $1.5 million for the comparable period of 2000. This decrease is
attributable to lower average debt levels, partially due to the repurchase of
debentures, as well as lower interest rates.

Income tax expense for the three months ended September 29, 2001 reflected the
Company's estimated effective rate of 39% for the year ending December 31, 2001.
The third quarter of 2000 reflected a cumulative adjustment to the Company's
estimated effective tax rate for the year ended December 31, 2000 resulting from
a reduction in anticipated merger-related costs for the year.

There were no dividends on preferred shares for the three months ended September
29, 2001, compared to $0.2 million for the same period of 2000, due to the
conversion of all outstanding preferred shares into 1,067,281 common shares on
March 8, 2001. No preferred shares are outstanding, and no preferred dividends
were paid after March 8, 2001.


Comparison of nine months ended September 29, 2001 and September 30, 2000

Net sales for the first nine months of 2001 increased $41.7 million to $187.3
million from $145.6 million for the comparable period of 2000. This increase
comprised sales growth of $34.7 million for the Defense segment, $5.3 million
for the Communications and Space Products segment, and $1.7 million for the
Engineered Materials segment. The sales growth for the first nine months of 2001
over the first nine months of 2000 attributable to the EDO-AIL merger was $26.9
million in the Defense segment and $5.3 million in the Communication and Space
Products segment. Since the EDO-AIL merger was completed at the end of April
2000, the first nine months of 2000 reflected five months of combined
operations, while the first nine months of 2001 reflected a full nine months of
combined operations. In addition, there were increases in sales of aircraft
stores suspension and release equipment, integrated combat systems, technology
services, electro-ceramic products and advanced fiber composite structural
products in the first nine months of 2001 compared to the first nine months of
2000.

Operating earnings in the first nine months of 2001 (before considering one-time
EDO-AIL merger-related costs of $1.3 million) increased to $19.1 million or
10.2% of net sales from $12.8 million or 8.8% of net sales for the comparable
period of 2000(before considering one-time EDO-AIL merger-related costs of $9.9
million). The increase in operating earnings was primarily attributable to
additional business resulting from the EDO-AIL merger, and the other sales
increases described above. For the nine months ended September 29, 2001, net
earnings available for common shares increased to $9.6 million, or $0.77 per
diluted common share, on 13.6 million diluted shares from a net loss of $1.8
million, or $0.20 per diluted common share, on 9.1 million diluted shares in the
comparable period of 2000.

Selling, general and administrative expenses in the first nine months of 2001
increased to $24.1 million, or 12.9% of net sales, from $18.6 million, or 12.8%
of
<PAGE>
                                                                         Page 13


net sales, for the comparable period of 2000. This increase was primarily
attributable to the EDO-AIL merger.

Research and development expense in the first nine months of 2001 increased to
$5.9 million, or 3.1% of net sales, from $3.9 million, or 2.7% of net sales, for
the same period of 2000. The increase was primarily attributable to expenditures
in the Communications and Space Products segment, relating to fiber optics
product development.

Interest expense in the first nine months of 2001 decreased to $2.5 million from
$3.2 million for the comparable period of 2000. This decrease is attributable to
lower average debt levels, partially due to the repurchase of debentures, as
well as lower interest rates.

Income tax expense for the first nine months of 2001 reflected the Company's
estimated effective rate of 39% for the year ending December 31, 2001. The
higher effective rate for the first nine months of 2000 was principally
attributable to a write-off in the second quarter of 2000 of $6.7 million of
purchased in-process research and development and other expenses associated with
the EDO-AIL merger that were not deductible for income tax purposes.

Dividends on preferred shares in the first nine months of 2001 decreased to $0.2
million compared to $0.7 million for the same period of 2000, due to the
conversion of all outstanding preferred shares into 1,067,281 common shares on
March 8, 2001.


Liquidity and Capital Resources

Balance Sheet

Cash, cash equivalents and marketable securities decreased to $6.4 million at
September 29, 2001 from $16.6 million at December 31, 2000. This decrease was
due to $11.1 million for purchases of capital equipment, $4.9 million for
payment in full of the EDO ESOP loan obligation, $3.2 million for the repurchase
of subordinated debentures, $2.8 million payment of long-term debt and $1.5
million for payment of common and preferred dividends. These decreases were
partially offset by $4.7 million provided by operations, $6.0 million in
borrowings under the revolving line of credit and $2.5 million of proceeds from
exercises of stock options.

Accounts receivable increased to $69.7 million at September 29, 2001 from $69.0
million at December 31, 2000.

Inventories increased to $25.9 million at September 29, 2001 from $24.9 million
at December 31, 2000 primarily due to increases in work-in-progress in the
Communications and Space Products segment.

The notes receivable of $3.4 million at September 29, 2001 (of which $0.3
million was in current assets) were comprised of the $1.1 million note related
to the sale of property at Deer Park in June 2000 and $2.3 million in notes
related to the sale of our former College Point facility in January 1996. The
Deer Park facility note is due in monthly installments through July 2015 and
bears interest at a rate of 7.5% per annum. The College Point notes are due in
annual amounts through September 2004 with a final payment of $1.3 million due
on December 31, 2004 and bear interest at 7.0% per annum. The latter notes
receivable are secured by a mortgage on the facility.
<PAGE>
                                                                         Page 14


Financing Activities

As of September 29, 2001, the Company had outstanding $22.3 million of 7%
Convertible Subordinated Debentures due 2011. Commencing in 1996 and until
retirement of these debentures, the Company is making annual sinking fund
payments of $1.8 million, which are due each December 15. As of September 29,
2001, the Company had $3.9 million of these debentures in treasury to be used to
satisfy our annual sinking fund requirements.

As described above under "Merger with AIL Technologies, Inc.," as of January 1,
2001, the AIL ESOP and the existing EDO ESOP were merged into a single plan, and
the preferred shares issued by the Company and held by the EDO ESOT were
converted into 1,067,281 shares of our common shares effective March 8, 2001. As
of June 30, 2001, the merged ESOP restructured its direct loan from the Company
to extend the maturity date to December 31, 2017. As a result of the conversion
of the preferred shares, debt service on the ESOP will be funded through
dividends paid by the Company on the Company's common shares and cash
contributions from the Company. As part of this restructuring, the EDO ESOP loan
obligation with a balance of $4.9 million was paid in full on July 30, 2001.

During the third quarter of 2000, the Company completed negotiations for a new
$69 million long-term credit facility with a consortium of banks co-led by
Mellon and EAB. The credit facility includes $19 million in five-year term debt,
payable in quarterly installments of $950,000, and $50 million in revolving
debt. Borrowings under the agreement bear interest based on LIBOR plus
applicable margin of up to 2.00% depending on the consolidated leverage ratio as
defined in the agreement. Borrowings are secured by our accounts receivable,
inventories and property, plant and equipment. Proceeds from the term debt were
used to repay existing term debt acquired in the EDO-AIL merger. The current
portion of the term debt of $3.8 million at September 29, 2001 reflects the
amounts due in the next twelve months. At September 29, 2001, the Company was in
compliance with its debt covenants. At September 29, 2001, there were $6.0
million of borrowings under the revolving credit facility of $50.0 million and
there were outstanding letters of credit of $20.8 million, leaving available
borrowing capacity of $23.2 million.

In October 2001, the Company raised $82.5 million from the public offering of
its common shares.

Capital expenditures in the first nine months of 2001 increased to $11.1 million
from $2.3 million for the same period of 2000. The increase was due primarily to
expenditures at our owned 726,000 square foot facility located in Deer Park, NY,
in anticipation of its potential sale and leaseback.

The Company believes that it has adequate liquidity and sufficient capital to
fund its currently anticipated requirements for working capital, capital
expenditures, research and development expenditures and principal and interest
payments.


Backlog

The backlog of unfilled orders at September 29, 2001, increased to $293.3
million from $265.5 million at September 30, 2000 and $252.9 million at December
31, 2000.
<PAGE>
                                                                         Page 15


New Accounting Standards

Accounting for Derivative Instruments and Hedging Activities

Effective January 1, 2001, the Company adopted Statement of Financial Accounting
Standards, or FASB, No. 133, "Accounting for Derivative Instruments and Hedging
Activities" and Statement No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities -- an Amendment to FASB Statement No.
133." These statements require all derivatives to be recorded on the balance
sheet at fair value. Derivatives that are not hedges must be adjusted to fair
value through income. The effect of the adoption of these statements on the
Company's financial position and results of operations was immaterial.


Business Combinations and Goodwill and Other Intangible Assets

In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, "Business Combinations," and No. 142,
"Goodwill and Other Intangible Assets," effective for fiscal years beginning
after December 15, 2001. Under the new rules, goodwill and other intangible
assets deemed to have indefinite lives will no longer be amortized but will be
subject to annual impairment tests in accordance with the Statements. Other
intangible assets will continue to be amortized over their useful lives. In
addition, Statement 141 eliminates the pooling-of-interests method of accounting
for business combinations.

The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. Application of the
nonamortization provisions of Statement 142 is expected to result in a decrease
in amortization expense in 2002 of approximately $0.7 million. In addition,
goodwill recorded as a result of any acquisitions completed subsequent to the
issuance of Statement 142 during 2001 would not be amortized. During 2002, the
Company will perform the first of the required impairment tests of goodwill and
indefinite lived intangible assets as of January 1, 2002. The Company has not
yet determined what the effect of these tests will be on the Company's earnings
and financial position.


"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995

The statements in this quarterly report and in oral statements that may be made
by representatives of the Company relating to plans, strategies, economic
performance and trends and other statements that are not descriptions of
historical facts may be forward-looking statements with the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27(a) of the
Securities Act of 1933 and Section 21(e) of the Securities Exchanges Act of
1934. Forward-looking statements are inherently subject to risks and
uncertainties, and actual results could differ materially from those currently
anticipated due to a number of factors, which include but are not limited to the
following for each of the types of information noted below.


U.S. and international military program sales, follow-on procurement, contract
continuance, and future program awards, upgrades and spares support are subject
to: U.S. and international military budget constraints and determinations; U.S.
congressional and international legislative body discretion; U.S. and
international government administration policies and priorities; changing world
military threats, strategies and missions; competition from foreign
manufacturers of platforms and equipment; NATO country determinations regarding
participation in common programs; changes in U.S. and international government
procurement timing, strategies and practices; and the general state of world
military readiness and deployment.
<PAGE>
                                                                         Page 16


Commercial satellite programs and equipment sales, follow-on procurement,
contract continuance and future program awards are subject to: establishment and
continuance of various consortiums for satellite constellation programs; delay
in launch dates due to equipment, weather or other factors beyond the control of
the Company; and development of sufficient customer base to support a particular
satellite constellation program.

Commercial product sales are subject to: success of product development programs
currently underway or planned; competitiveness of current and future product
production costs and prices and market and consumer base development of new
product programs.

Achievement of margins on sales, earnings and cash flow can be affected by:
unanticipated technical problems; government termination of contracts for
convenience; decline in expected levels of sales; underestimation of anticipated
costs on specific programs; and risks inherent in integrating recent
acquisitions into the Company's overall structure. Expectations of future
Federal income tax rates can be affected by a variety of factors, including
amounts of profits relating to foreign sales.

The Company has no obligation to update any forward-looking statements.



                           PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K.

      (a) Exhibits

           10(l) Stock Purchase Agreement dated as of October 9, 2001 by and
                 between EDO Acquisition II, Inc. and Dynamic Stystems, Inc.

      (b)    Reports on Form 8(K)

              The Company did not file any reports on Form 8-K during the
quarter ended September 29, 2001.

              The Company filed a current report on Form 8-K with a report date
of October 9, 2001 to disclose under Item 5 the acquisition of Dynamic Systems,
Inc.

              The Company furnished a current report on Form 8-K with a report
date of October 22, 2001 to disclose under Item 9 the announcement of
preliminary financial results for its quarter ended September 29, 2001.
<PAGE>
                                                                         Page 17


                                    SIGNATURE


          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.


                                EDO Corporation
                                -----------------------------------------
                                (Registrant)


                            by: D.L. Reed
                                -----------------------------------------
                                D.L. Reed - Vice President- Finance
                               (Principal Financial Officer)


Date: November 9, 2001