<PAGE>
    In lieu of a separate annual report, this Form 10-K includes all financial
statements of the corporation.
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                   FORM 10-K

(Mark One)

    [X]           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
            OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001

                                       OR

    [ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
            OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from              to
                               ------------    ------------

Commission file number 0-11527

                                MPSI SYSTEMS INC.
             (Exact name of registrant as specified in its charter)

             DELAWARE                                     73-1064024
   (State or other jurisdiction of                     (I.R.S. Employer
    incorporation or organization)                    Identification No.)

               4343 SOUTH 118TH EAST AVENUE, TULSA, OKLAHOMA 74146
              (Address of principal executive offices and zip code)

        Registrant's telephone number, including area code (918) 877-6774

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:


                          COMMON STOCK, $.05 PAR VALUE
                                (Title of Class)

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
      Yes  X      No
          ---         ---

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements or
any amendment to this Form 10-K. [X]

      The aggregate market value of common stock held by non-affiliates of the
registrant on September 30, 2001 was approximately $733,000.

      The number of shares outstanding of the registrant's common stock was
2,911,781 shares of $0.05 Par Value Common Stock as of September 30, 2001.

================================================================================

<PAGE>

                                MPSI SYSTEMS INC.
                                    FORM 10-K

                                    CONTENTS

<Table>
<Caption>
                                                                                                           PAGE
                                                                                                           ----
<S>                 <C>                                                                                   <C>
PART I

         ITEM 1.     Business....................................................................            3

         ITEM 2.     Properties..................................................................           12

         ITEM 3.     Legal proceedings...........................................................           12

         ITEM 4.     Submission of matters to a vote of security holders.........................           12

PART II

         ITEM 5.     Market for the registrant's common equity and related
                     stockholder matters.........................................................           13

         ITEM 6.     Selected financial data.....................................................           14

         ITEM 7.     Management's discussion and analysis of financial
                     condition and results of operations.........................................           14

         ITEM 7A.    Disclosures about market risk ..............................................           18

         ITEM 8.     Financial statements and supplementary data.................................           19

         ITEM 9.     Changes in and disagreements with accountants on accounting and
                     financial disclosure........................................................           35

PART III

         ITEM 10.    Directors and executive officers of the registrant..........................           35

         ITEM 11.    Executive compensation......................................................           37

         ITEM 12.    Security ownership of certain beneficial owners and management..............           39

         ITEM 13.    Certain relationships and related transactions..............................           40

PART IV

         ITEM 14.    Exhibits, financial statement schedules, and
                     reports on Form 8-K.........................................................           40

Signatures           ............................................................................           44

Index to Exhibits    ............................................................................           45
</Table>

                                                                               2
<PAGE>

                                     PART I

All statements other than statements of historical fact included in this Form
10-K, including without limitation statements under "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business"
regarding the Company's financial position, business strategy and plans and
objectives of management of the Company for future operations, are
forward-looking statements. When used in this Form 10-K, words such as
"anticipate," "believe," "estimate," "expect" "intend," and similar expressions,
as they relate to the Company or its management, identify forward-looking
statements. Such forward-looking statements are based on the beliefs of the
Company's management as well as assumptions made by and information currently
available to the Company's management. Actual results could differ materially
from those contemplated by the forward-looking statements as a result of certain
factors, including but not limited to technological change, product development
risks, competitive factors, pricing pressures and general economic conditions.
Such statements reflect the current views of the Company with respect to future
events and are subject to these and other risks, uncertainties, and assumptions
relating to the operations, results of operations, growth strategy, and
liquidity of the Company.

ITEM 1.    BUSINESS

GENERAL

    The operations of MPSI are comprised of three business segments wherein it
provides decision support products and services. These business segments are
designated as Convenience Retailing, Pricing, and Business Development. MPSI's
core competency spanning all business units is computer modeling, which
encompasses (a) the development of computer software to model consumer behavior
in convenience retail situations, and (b) the development of strategic
geographic information systems ("GIS") databases concerning specified markets
("Market Studies") designated by clients. These products and services are
designed to meet retail network planning requirements of the Company's clients,
who have traditionally been petroleum-oriented convenience retailers.

    From its inception in 1970, the Company's decision support services have
been directed primarily at planning requirements for petroleum companies and
other multi-outlet retailers who were concerned with retail site selection and
retail network optimization. MPSI products provided computerized models of
specified retail markets which enabled its clients to predict sales volumes at
proposed new retail sites, while at the same time indicating the effects of each
new outlet on sales volumes at both the client's and competitors' existing
outlets. The Company's operations have been characterized by geographic
diversification, centralized management, centralized market study production and
significant dependence on the petroleum industry.

    With the 1983 capital infusion from its initial public offering, the
operating plan of the Company expanded. In order to diversify and maintain
growth, management initiated programs intended to expand the Company's
geographic presence and its client mix. Accordingly, during the period from 1983
to 1987, MPSI expanded its European operations and opened new offices in
Singapore, Japan and Brazil. This expansion led to decentralization of
management and market study production. In the late 1980's, MPSI also attempted
to diversify its product set and target industries through acquisitions. Such
acquisitions utilized all remaining funds from the initial public offering and
were supplemented by corporate debt. Ultimately, the burden of multi-faceted
product diversification was too great; and, when compounded by the negative
effect of the Persian Gulf War on the core petroleum business, the Company was
forced to substantially scale back and reorganize in the early 1990's. The
reorganization resulted in (1) sale of the two acquired companies, (2)
downsizing of foreign database production facilities in Singapore and Bristol,
England, (3) substantial personnel reductions (approximately 50%), and (4) an
equity infusion, the proceeds of which liquidated the remaining bank debt.
Subsequently, the Company redirected funding from debt service to product
development.

    Beginning in 1994 and in response to client input, MPSI committed
substantial funding and development efforts toward release of a new generation
of MPSI decision support products. Early versions of these products were
completed for commercial release in North America during fiscal year 1995 (see
discussion of CAPS(TM) and PVO(R) software under "Product Development"). New
versions of CAPS for European and South American clients were released in 1996.
While these products performed well in the marketplace, development costs,
global maintenance costs and high data acquisition costs contributed to high
price tags that ultimately penalized MPSI in its increasingly competitive market
niche.

                                                                               3

<PAGE>

    In 1997, MPSI undertook a complete strategic re-evaluation of its product
direction, competitive position, pricing structure, and cost structure. This
strategic planning, headed by an expert external consultant identified several
key issues and corrective initiatives which management began to implement in
fiscal 1998 in accordance with a three-year transformation plan. Among other
things, the Company undertook to completely re-engineer its core "retail
planning" software suite such that a modular and generic software architecture
would reduce development/maintenance costs and open new market segments for its
software applications. Additionally the Company sought new sales channels in
order to leverage its considerable data warehouse of business location and
operational information. These initiatives were designed to make MPSI the
"one-stop" shop for clients whose retail planning needs span the gamut from raw
data through sophisticated applications software, to the ultimate "solution"
(rather than the tools and data to develop a solution in house).

    Economic factors such as deregulation in certain foreign petroleum markets
and merger activity among a number of MPSI's traditional clients, have hampered
implementation of the transformation process. Management was able to focus on
development of significant new technology together with internal process
improvements, cost reductions, and industry diversification during fiscal 1999,
2000 and 2001 as set forth below.

    o     The roll out of new Retail Explorer ("REX"(TM)) software for U.S.
          customers in 1999, combined with the introduction of new price
          management and modeling software for global use positioned MPSI to
          grow revenues in spite of significant price pressure and client merger
          activities from 1999 through 2001. The modeling methodology inherent
          in the REX and pricing software made it possible for MPSI to reduce
          the amount/types of data necessary for model development. As a result,
          the Company was able to streamline its retail database (market
          studies) production process, which allowed for a 30% reduction in
          staff during 2000.

    o     The October 1998 formation of DataMetrix Inc. (see further discussions
          hereinafter) was intended to leverage MPSI's retail data warehouse as
          a vehicle whereby the Company could begin serving a more diverse
          population of clients outside its traditional petroleum-oriented
          convenience retailing niche. Product and brand development occupied
          most of the interval through January 2000, at which time the data
          suite of products was commercially released. The revenue growth rate
          has been disappointing for DataMetrix, and the burden on corporate
          liquidity (both internally generated and from outside sources) was
          substantial over the two-year start-up period. (See additional
          discussion regarding liquidity and bank financing issues in
          Management's Discussion and Analysis and Note 5 to the Consolidated
          Financial Statements.) In response to these issues, MPSI significantly
          downsized this operation in several phases throughout fiscal 2000 with
          the final reductions occurring in October 2000. MPSI expects to
          continue DataMetrix product sales as part of the MPSI product suite
          going forward.

    o     In fiscal 2001 the REX product was rolled out internationally to all
          MPSI service regions except for Japan. The combination of expanded
          customer use of REX and the market database cost efficiencies
          associated with that software, have allowed MPSI to substantially
          reduce its pricing in line with competitive pressures. Despite these
          positive aspects, however, MPSI sustained a significant operating loss
          in fiscal 2001 primarily because many of its key historical customers
          were involved in mergers. Customer orders and revenues declined
          significantly as these customers focused on merger transition to the
          detriment of normal retail planning activities. Prospects going into
          fiscal 2002 are improved in the opinion of management because most of
          the merger activities have been completed and the brand combinations
          will likely spur significant need in the client marketplaces for
          capital investment and retail planning expertise.

PRODUCTS AND SERVICES

    The Company markets its services in the United States, Europe, Africa,
Canada, South America, Central America, the Caribbean Basin and the Pacific Rim.
See Note 7 to the Consolidated Financial Statements for financial information
addressing foreign and domestic operations and export sales. Generally, the
Company's marketing activities center on personal presentations to existing and
prospective clients, client referrals, proposal submissions, selective mailings,
limited print advertising, seminars and trade show participation. Most of the


                                                                               4

<PAGE>

Company's clients are presently identified by the Company's direct sales force.
In the future, use of the Internet and business partnerships (value-added
resellers) are expected to play an increasingly significant role in sales and
marketing (as well as product delivery) activities.

    The Company's operating cycle and cash flow are dependent upon the timing of
client orders for market studies. Many studies are high dollar projects and,
consequently, the timing of market study production and the resulting revenues
are subject to a degree of quarterly fluctuation. Quarterly/annual revenues can
also be impacted by the timing of software license agreements. Accordingly,
management believes that quarterly results may not be indicative of results for
full fiscal years and that the comparability of annual revenues and
profitability should also be evaluated giving effect to the potential impact of
contract timing.

    Economic conditions throughout the world have varying degrees of impact on
the Company's products. Volatile oil prices and unsettled economic conditions in
the Pacific Rim negatively affected the Company's volume of new business in
fiscal 1998. The Company experienced a resurgence from the Pacific Rim region
during 1999, but alternate-year market study patterns resulted in softer
revenues in fiscal 2000 not only from the Pacific Rim but also in South America.
However, the 1999 introduction of REX and new pricing products fueled
significant growth in North American market studies in fiscal 2000, despite
price reductions in that region of 20% - 40% in response to competition.

    More than 97% of consolidated revenues were derived from the petroleum
industry during the fiscal years ended September 30, 2001, 2000, and 1999. In
each of those fiscal years, MPSI derived revenues representing 10% or more of
consolidated revenues from certain clients, together with their affiliates, as
set forth below (in millions of dollars):

<Table>
<Caption>
                               2001               2000            1999
                         --------------     ------------    --------------
                         AMOUNT      %      AMOUNT    %     AMOUNT      %
                         ------      --     ------    --    ------      --
<S>                      <C>        <C>    <C>       <C>    <C>        <C>
ExxonMobil...........     $ 4.5      29     $ 4.6     25     $4.4       23
BP Amoco.............         *       *       2.6     14        *        *
Nisseki-Mitsubishi...       1.6      11         *      *        *        *
</Table>

               *Below 10% for this period.

     The Company may be adversely affected if certain petroleum industry clients
curtailed their long-term usage of MPSI products. For example, in October 2001
ExxonMobil notified MPSI that it would explore alternatives to certain MPSI
convenience retailing products over the next twelve months. Should ExxonMobil be
successful with that internal development effort, MPSI might expect to lose $2 -
$3 million in annual revenues from this historical source. While the concurrent
growth of business from other clients is expected to offset this potential loss
of business in fiscal 2002 and thereafter, this decision by ExxonMobil may lower
MPSI's revenue growth expectations.

    The following table shows the percentage of total revenue from operations
that the Company derived from various sources during each of the last three
fiscal years.

               REVENUE DERIVED FROM KEY PRODUCTS AND SERVICES (%)

<Table>
<Caption>
                                          2001   2000   1999
                                         -----  -----  -----
<S>                                      <C>    <C>    <C>
Market information databases.........       64     70     65
Software licenses ...................        1      2      3
Software maintenance agreements......        4      3      3
Other services.......................       31     25     29
                                         -----  -----  -----
                                           100    100    100
</Table>

    Described below are the computer applications software, information
databases and other services currently provided by the Company.

Convenience Retailing Segment

    Until 1995, the Company's primary convenience retailing applications
software was the mainframe computer-based Retail Planning System(R) ("RPS"). See
"Product Development" for discussion of major enhancements of RPS commercially
released beginning in fiscal year 1995. Long-term capital investment and retail
operational issues


                                                                               5
<PAGE>

were traditionally addressed using the Capital Planning System ("CAPS(R)"). This
software was replaced with the Retail Explorer ("REX(TM)") software, the initial
version of which was released in the U.S. in September 1999. REX versions were
released in all MPSI service regions, except for Japan, by the end of fiscal
2001. REX allows clients to maximize their investment planning in the areas of
(1) new retail site location where the system provides an objective measure for
comparing available sites based on competition and convenience to demand, (2)
identification of outlets to divest where the system isolates and evaluates
client locations that have poor performance, (3) identification of outlets to be
rebuilt by identifying sales potential to be realized by remodeling or
reformatting specified outlets and (4) assessing multiple profit centers by
forecasting the potential benefits of retailing complementary products and
services.

    Software licensing agreements for the RPS, CAPS and REX software (including
ancillary products) generally have encompassed multi-year (primarily five-year
agreements), noncancellable terms. These agreements offered the client an
installment payment option requiring a payment upon execution and annual
payments on the succeeding anniversary dates of the agreement. Beginning in
fiscal 2001, MPSI changed its software licensing and maintenance contracting
methods. Henceforth, most software products will be perpetually licensed in a
fashion that mandates up-front payment of the license fees. Maintenance will
henceforth be an optional annual commitment by clients who wish to obtain future
upgrades without additional cost. The software can be used by the client for a
particular industry (such as petroleum) and a particular geographic market (such
as Japan). The Company's software license agreements contain broad restrictions
on the use and disclosure of the software by the client. See "Trademarks,
Copyrights, and Licenses" below. Modifying the software typically involves
changes in the weighting of various supply and demand factors or the addition of
a new factor as the result of changes in the marketplace.

    MPSI provides full maintenance (postcontract customer support) services for
the CAPS software in Japan and REX software globally and, where necessary,
training of and consultation with client staff. Prices for these software
products are based upon formulas which address geographical boundaries,
population, number retail outlets, number of automobiles and other factors.

Information Databases for use with Convenience Retailing Software

    The Company also constructs customized market study databases that are the
primary informational sources used by the retail planning and pricing software.
The database construction process involves (a) acquisition of digitized
geographic street maps, traffic counts, and demographic demand data from
governmental agencies or independent suppliers, (b) on-site field survey of
retail outlet supply information by MPSI personnel or contract surveyors, (c)
collation of all demographic demand and supply information into specified data
layout, (d) data editing and quality control checking, and (e) preparation of
the client-specific deliverables. Separate contracts govern each database order
by a client and generally require advance payments ranging from 35 percent to 70
percent of the total sales value. The amount of the required prepayment is
determined principally by the client's delivery requirements. There is no
retainage provision relative to these production-type contracts. These databases
are available in the following forms:

        Multi-Year Study Program. These multi-year, noncancelable studies are
    used by clients who possess a large number of retail sites and who wish to
    analyze market conditions and evaluate site locations in metropolitan areas
    on a regular basis. The supply and demand data used in this type of study is
    collected by the Company. This type of study provides clients with a series
    of consecutive database updates over a specific time period, generally five
    years. Each deliverable is essentially a stand-alone project with billing
    and revenue recognition handled in the same fashion applicable to one-off
    market study projects. The multi-year commitment is tailored to individual
    client needs, and pricing is determined in part by the number of other
    client subscribers to the particular market during the commitment period and
    offers clients discounts for their multi-year commitments.

        Market Area Studies ("MAS"). These studies are similar to the multi-year
    studies except they may contain client-specific information and are
    therefore sold only to a single client. They generally carry a higher price
    than a multi-year study of the same market because MPSI has fewer leverage
    opportunities. Portions of the demographic data can generally be used as a
    major part of other studies in the same market for clients in the same or
    comparable retail industries.


                                                                               6
<PAGE>

        Mini-Market Area Studies. These studies are similar to the MAS except
    the area studied does not contain more than 75 outlets. Likewise, the
    accompanying study deliverables are scaled down.

        Single Site Studies. These studies are used to evaluate market
    conditions or the effects of various operating decisions at a specific
    location within a specified geographic area.

    Licensed software clients generally use the PC-based software (as discussed
hereinafter) on laptop or desktop computers but may also utilize the models in
workstation environments to facilitate multi-user access. For this type of
activity, clients may utilize the retail planning software and information
databases on their own computer facilities, may dial in to MPSI's computers and
use the software interactively (subject to certain usage restrictions), or may
elect to have MPSI run tactics (that is, pose "what if" questions) on MPSI's
computers. In cases where software is installed on client networks, the Company
may charge for installation of the software and training the client's personnel.
A client may then run unlimited tactics on its own equipment. If tactics are run
on the Company's computers, the client pays a fee per tactic. The Company also
provides consulting services to its convenience retailing clients which include
specialized data acquisitions (e.g., consumer research); competitive analyses to
identify key competitors; brand value assessment; market entry/exit strategies;
and litigation support.

Pricing Segment

    Pricing software is generally licensed on a perpetual basis for each retail
outlet utilizing the software. Revenue on these perpetual licenses is recognized
upon delivery to the client. The contracts provide that subsequent upgrades will
be provided as MPSI determines them to be necessary for a given geographic
region and the client will receive such upgrades upon payment for the enhanced
modules, albeit at a discount for licensed users. Post-installation maintenance
and support services are offered to clients through separate optional
agreements. Revenue associated with annual maintenance agreements is recognized
ratably over the life of the agreement (generally one year). Revenue recognition
on support services, such as training, is recognized as completed.

    In the pricing segment, MPSI offers decision support software to meet
several client planning needs. Price Zones(TM) software ("PZS") allows a client
to establish different pricing zones within major markets relative to supplying
its dealer networks with petrol fuels. Price Volume Optimizer ("PVO"(R)) allows
a client to react to competitive price changes on a daily/hourly basis at the
individual outlet level in order to set prices for the ultimate consumer. MPSI's
newest product, the StreetBack Pricing(TM) ("SBP") system incorporates Price
Zone methodology in order to group outlets for the purpose of identifying
competition. Once competition is identified, the client selects representative
outlets for price tracking surveys and then formats that pricing data into a
data set to feed the SBP software. Based on competitive factors and the client's
desired margins by product, SBP determines the price at which desired sales
volume to the dealers can be achieved. During fiscal year 2001, MPSI replaced
PVO with a significantly enhanced product, PriceIt! Pro(TM).

    As with convenience retailing products, MPSI provides not only the pricing
products geared to a client's needs, but in many cases, also provides portions
of the market information necessary for the pricing software to perform. MPSI's
PriceTracker(TM) service is an example of customized data collection. MPSI
performs customized pricing surveys which allow clients to obtain high quality,
timely retail pricing information on a recurring basis in order to track pricing
trends in the marketplace.

Business Development Segment - Generic Information Databases

     During fiscal year 1999, MPSI began the development of a new suite of GIS
database products with the formation of its new DataMetrix subsidiary. This
suite of market information data products contains many of the data components
inherent in MPSI's traditional market study databases, but is designed to go
significantly beyond those traditional products in the scope of geographic
coverage. MPSI initially concentrated development on a national database for the
U.S. This initiative was undertaken in an effort to (a) leverage the customized
data sets the Company already had available in major markets by repackaging them
with other information into a data product which will be amenable in both price
and content to a broader segment of the Company's traditional petroleum-oriented
convenience retailing target market, and (b) allow the Company to attract
customers in other industries who may also be retail oriented.

                                                                               7
<PAGE>

      The principal product offered by DataMetrix is StreetMetrixPlus(TM), which
encompasses the entire U.S. and contains, among other things, the latest road
network, consumer demographics, automobile traffic counts, and key topographical
features. All of the basic geophysical information required by a spatially
oriented business client is contained in this database. If a client only wants
the traffic information or the geophysical information, they can obtain a subset
of StreetMetrixPlus. Should a customer be involved in petroleum or convenience
retailing, an add-on data set called PointMetrix(TM) gives them geocoded and
plotted information about existing petroleum retail outlets and convenience
stores in many major markets. Late in fiscal 2000, MPSI released an interactive
Internet product, SiteMetrix Plus, which allows subscribers to customize a
geographic area of interest (state, county, trade area, etc.) and obtain
detailed road network, demographic, traffic and retail outlet information
anywhere in the U.S. Revenue is recognized on these products ratably over the
life of the subscription.

    Despite the substantial investments in DataMetrix products during 1999 and
2000, this unit's growth trend was disappointing; and, at September 30, 2000,
the unit had not yet achieved critical mass. Accordingly, in October 2000, MPSI
substantially downsized this unit resulting in the amalgamation of its assets
and processes into the Business Development segment.

COMPETITION

    Since its inception in 1970 the Company has provided comprehensive
applications software and database systems, primarily to the retail petroleum
industry, and currently has more than 100 multinational clients in more than 60
countries. There has recently been a worldwide trend toward competitive product
development of this type due to the availability of computer resources and
acceptance of retail modeling theory. The Company believes its competition lies
in two areas: first and foremost, in the information technology and market
research staffs of petroleum companies or potential customers who develop and
manage their own software and data; and second, in consulting firms and data
companies which compete for portions of the Company's business.

    The Company has found that the market research staffs of some large
petroleum companies, supported by their internal IT groups, continue to
concentrate on in-house data gathering and customized site selection methods,
while other companies with more limited resources must consider low cost
alternatives for obtaining market information. To be successful, MPSI must
overcome the desire of its customers for total control on the one hand and cost
sensitivity on the other. It has been MPSI's experience that clients often
encounter substantial cost barriers relative to internally-developed systems.
Without the economies of scale, data gathering expertise and modeling
sophistication that MPSI has obtained during its 30-year existence, clients
often find that systems developed in house may be more customized to their
particular situation and may appear to cost less to develop initially (i.e.,
incremental pricing methods do not generally include costs of their internal
development personnel), but are expensive to maintain given changing market
conditions, require market information with an inherent degree of accuracy which
is difficult to obtain with internal resources, and the results of such systems
do not justify the associated costs and effort. Additionally, as clients or
potential clients struggle to manage operating costs and consider outsourcing
certain activities where economically feasible, the capabilities of companies
like MPSI offer an attractive alternative to internal systems.

     Because of the trend in large companies to outsource certain functions and
because of the growth in business consulting generally, independent consulting
and research companies have challenged certain products the Company offers such
as demographic data collection, geographic databases, retail outlet surveys,
retail consulting, pricing applications, and single site studies. Occasionally,
such consultants are engaged to develop a proprietary internal model for their
clients. Often competitive services of this type are offered by independent
consultants as part of a larger consulting project wherein pricing for the
retail planning segment can be very competitive with MPSI's pricing. Certain of
such companies are offering computerized tools and services which, the Company
believes, are not as sophisticated as MPSI products but may be attractive to
customers willing to sacrifice accuracy for a lower cost solution to their
business needs.

    The Company believes it competes with the internal solution and the external
consulting firms by providing generic, high-quality, sophisticated software and
reliable, accurate databases at a reasonable cost. MPSI further believes its
historical expertise and success in the areas of volume projections and retail
network planning provide a substantial barrier to entry for competitors in the
petroleum and convenience retailing sectors. Further, MPSI's

                                                                               8
<PAGE>

maintenance programs and its service to multiple clients in multiple geography
result in products that reflect the most up-to-date decision support
methodologies and market information available. The Company attributes its
ability to provide these quality products and services to the expertise and
experience of its personnel.

    By focusing on PC-oriented products and services, the Company believes it is
also well positioned to challenge "lower cost competitors." New data collection
techniques, implemented in late 1999, allow more timely and regular updating of
market data using handheld data collection technology and PC-based data
transmission and delivery technology. These processes have reduced MPSI's data
collection costs relative to market studies and thereby allowed the Company to
leverage data already collected or to collect custom data for clients who may
not require full market study information. The Company believes it is
competitive with other companies who have targeted customers with limited retail
market resources.

    In addition to addressing low-cost competitors, MPSI regularly evaluates
potential strategic alliances with independent companies who will allow MPSI to
offer a wider variety of integrated products and/or provide a wider product
distribution system. The target firms will be those who service industries in
which MPSI has historical expertise (e.g., petroleum, government/postal, and
banking). Such alliances can also provide MPSI the opportunity to sub-contract
portions of larger consulting projects thereby establishing MPSI's credibility
with the client and allowing interface with customer personnel who are
potentially valuable sales contacts for future business. As an integrated
service provider and trusted advisor that can draw on both its own resources and
also bring to bear specific expertise of its business partners to meet a
client's needs for a variety of retail decision support information and
services, MPSI can combat both the small competitor's pricing pressure (because
the client can identify the added value of MPSI's multi-purpose data and
software as compared to the individual product or service pricing by a
competitor) and the larger consulting firm's encroachment on retail business
segments (by offering particular industry expertise and a proven track record in
our retail planning niche which the larger firms cannot equal).

BACKLOG

    The Company's September 30, 2001 and 2000 backlog consisted principally of
orders for market information databases (2001 -- $9,541,000, 2000 -- $8,219,000)
and multi-year commitments by customers for software and maintenance services
(2001 -- $1,031,000, 2000 -- $1,451,000). The Company expects that the market
information databases in backlog at September 30, 2001 will be recognized in
fiscal year revenues as follows: 2002 -- $5,192,000, 2003 -- $1,843,000, 2004 --
$1,429,000, 2005 -- $1,024,000, and beyond -- $53,000. Maintenance and support
services in backlog are the result of noncancelable client contractual
obligations to purchase support services generally over periods of three to five
years. Such revenues will be recognized, and backlog accordingly reduced, on a
ratable basis over the life of each underlying agreement. Of the aggregate
software and maintenance backlog at September 30, 2001, future fiscal year
revenues are expected to be recognized as follows: 2002 -- $483,000, 2003 --
$209,000, 2004 -- $205,000, 2005 -- $110,000, and 2006 -- $24,000.

EMPLOYEES

    As of September 30, 2001, the Company employed 120 people, including 109 in
the convenience retail segment, 2 in the Business Development segment, and 9 in
the pricing segment. Of the total employees, there are 48 in marketing (which
includes sales and client services); 31 in research and development (which
includes software development and system support); 24 in database analysis,
consulting, and production; and 17 in management, administration, and finance.
Of these, 98 are employed in the United States and 22 are employed in foreign
countries. In October 2000, MPSI completed its multi-phase reduction in force
with the release of twenty additional staff, primarily in the DataMetrix and
database production groups.

PRODUCT DEVELOPMENT

    MPSI's product development cycle consists of four primary stages. During the
product specification phase the Company identifies the initial requirements of
the software, determines the functional requirements and begins the initial
design. During this stage, the Company sets forth the database requirements as
well as the hardware, operating systems, third-party imbedded software and
general functional requirements. From this information a business plan,
conceptual prototype and a project plan are developed. The prototypes developed
during this stage are not fully

                                                                               9

<PAGE>

functional prototypes, but are designed to present the "look and feel" of the
end product. Upon completion of this phase, the Company has generally completed
a detailed program design and, accordingly, established the technological
feasibility of the project. Following the product specification phase, the
project enters the build phase where actual software programming takes place.
Once coding is complete, the project enters the quality assurance phase which
encompasses various internal systems testing and user acceptance testing. Once
testing is complete, the project enters the implementation phase where hardware
and software installation procedures and user documentation are finalized.

    Software development costs incurred prior to completion of the detailed
program design are expensed as research and development costs. Costs incurred
during the build, quality assurance and implementation phases are generally
capitalized. At the point where the software product is ready for general
release to the customers, capitalization of costs ceases.

    Over the last five years, the major development efforts of the Company have
been directed toward (1) enhancement of retail planning products in order to
extend petroleum utilization around the world, (2) portation of the software to
a variety of workstation/PC platforms, and (3) incorporation of internally
developed or third-party software in order to enhance the user interface, speed
and efficiency of this software.

    From 1994 until 1999, the CAPS software and related databases were the
premier MPSI product set. The CAPS software for North America was released in
January 1995, and from that time until 1999, MPSI had developed and released
CAPS and PVO so that those products were capable of serving all MPSI operating
regions. In 1999, MPSI began to replace CAPS with new REX technology. In fiscal
2000, the Company began to develop PriceIt! Pro to replace PVO.

    REX and PriceIt! Pro were released for all MPSI operating regions during
2001, except for Japan as previously noted. Implicit in the REX design is (1)
less expensive and less complex client deliverables, (2) modular architecture
which will yield maximum flexibility for interface with existing client
technology and maximum flexibility for MPSI to apply its technology to
industries other than retail petroleum, (3) a substantially reduced data
requirement thereby significantly reducing data gathering costs, (4) a higher
degree of predictive accuracy in geographic areas of sparse housing density
(high transient areas) and (5) improved predictive capabilities with respect to
convenience stores. As of September 30, 2001, the Company has capitalized
approximately $1 million of development costs related to the global versions of
REX. Additional development costs which may be associated with utilization of
this new technology to service industries other than retail petroleum may
require external funding beginning in fiscal year 2002.

    The initial commercial version of PVO was completed in August of 1995 with
Price Zones following the next year. These products represent a continuing
opportunity for MPSI to leverage its retail data warehouse and allows the
Company to expand its services to other management units within our clients'
retail groups. Although acceptance of this new price-prediction technology was
slow initially, the pricing segment was profitable in 1998, and enjoyed revenue
growth and profitability in fiscal 1999. Revenues and profitability declined in
fiscal 2000 and 2001 as the result of general market conditions, principally
associated with client merger activities. During fiscal 1999, MPSI developed two
spin-off products from PVO -- PriceIt that will take this technology to the
smaller user and is potentially the first Internet pricing offering by MPSI, and
StreetBack Pricing software for petroleum franchisee pricing. StreetBack Pricing
contributed to international expansion in 2001 and is expected to expand MPSI's
pricing penetration during fiscal 2002. Resource constraints have delayed the
roll out of PriceIt.

    In addition to the enhancements to retail planning and pricing product lines
noted above, the Company has undertaken development of two new products aimed at
(a) expanding usage of retail modeling within the petroleum industry by smaller
customers, and (b) positioning the Company to begin penetrating retail-oriented
industries other than petroleum. In February 1999, the Company acquired
exclusive rights to market the most recent retail/customer analysis software
product developed by Dr. David Huff. This new data mining tool allows clients to
analyze customer segments for target marketing, product segmentation and a
variety of other merchandising purposes. The first commercial roll out of the
Huff Market Area Planner software product ("Huff") took place in mid-2000. The
Company has also formed the DataMetrix business segment, whose primary mission
is to develop and market a suite of U.S.-market data products. These products
include road networks, traffic density, demographic and retail outlet


                                                                              10
<PAGE>
characteristics, which should allow clients in a variety of industries to
evaluate competition, analyze consumers and plan retail spending. Initial
versions of the data products were commercially available in July 1999, but with
the release of version 2.0 in January 2000, the Company was better positioned
versus data competitors. However, the unit's failure to achieve critical mass
ultimately led management to significantly reduce the staff and cost structure
of the unit.

    Management committed resources in fiscal 2001 to development of certain
software and data products for use and/or delivery via the Internet. Not only
will this initiative allow the Company to reach a much broader client base, it
will have significant impact on product development and support costs in future
periods.

    During the years ended September 30, 2001, 2000, and 1999, the Company spent
$2,055,000, $2,467,000, and $3,101,000, respectively, on research and
development or enhancement of new products and the maintenance of existing
products. The amounts spent on research and development were primarily Company
sponsored, meaning there was no material amount of direct recoupment of expenses
from clients.

TRADEMARKS, COPYRIGHTS, AND LICENSES

    The Company holds a number of trademarks, some of which are registered at
the U.S. Patent and Trademark Office. To date, registrations have been sought
only in the United States. Set forth below are the Company's trademarks and
final filing dates required to renew trademark status.

<Table>
<Caption>
                                            STATUS OF
                 PRODUCT                       MARK             EXPIRATION
---------------------------------------     ----------          ----------
<S>                                        <C>                <C>
MPSI's Site Evaluation System..........     Registered         October 25, 2001
MPSI and Design........................     Registered         February 5, 2002
MPSI...................................     Registered         January 29, 2002
MPSI's OPS.............................     Registered         November 9, 2004
Retail Planning System.................     Registered           August 7, 2005
Location Volume........................     Registered            July 23, 2006
Facility/Location Volume...............     Registered        February 11, 2007
MPSI's CAPS............................     Registered        November 12, 2007
Retail Explorer........................     Trademark         Common Law Rights
PVO....................................     Registered            April 2, 2006
Price Volume Optimizer.................     Registered        February 11, 2007
PriceIt!...............................     Trademark         Common Law Rights
PriceTracker...........................     Trademark         Common Law Rights
PriceIt! Pro...........................     Trademark         Common Law Rights
Price Zones............................     Trademark         Common Law Rights
StreetBack Pricing.....................     Trademark         Common Law Rights

DataMetrix.............................     Registered        November 13, 2010
StreetMetrix...........................     Trademark          October 31, 2010
StreetMetrixPlus.......................     Trademark          October 31, 2010
TrafficMetrix..........................     Trademark         December 19, 2010
</Table>

    The Company does not hold any patents or registered copyrights. The
Company's long-term software license agreements require customer acknowledgment
of the proprietary nature of the Company's software. The Company relies on these
agreements, together with trade secret laws, internal nondisclosure safeguards,
and international treaties, to protect its products. To date, the Company has
had no indication of any material breach in the security of its products. Should
a material breach in the security of the Company's software products occur, it
might have the impact of reducing the current barriers to entry for competitors
and thus adversely affect long-term results of Company operations. The Company's
modeling methodology, mathematical modeling algorithms and data gathering
processes have been developed over an extensive period of time and would, in the
absence of a material breach in the security, require potential competitors a
substantial period of time to duplicate. Even in the event that a material
breach did occur, such as a reverse engineering of an MPSI software product, the
Company believes that because of the annual change in technology, the retail
markets served, and the regular software upgrades potentially associated
therewith, such breach would not result in a material adverse effect on the
Company's short-term business because new versions of its products would likely
reduce the competitive value of older versions breached by potential
competitors.


                                                                              11
<PAGE>

ITEM 2.   PROPERTIES

    All office facilities are leased, including the headquarters lease that
expires in June 2003. The Company's principal facility and corporate
headquarters in Tulsa, Oklahoma (56,000 square feet) is the primary location for
software development and market study production. The Bristol, England facility
encompasses 500 square feet, and the Rio de Janeiro, Brazil office encompasses
1,500 square feet. Both foreign offices do single site and special project work
in addition to their primary marketing role. Regional sales offices in
Singapore; Capetown, South Africa; Tokyo, Japan; Seoul, South Korea and
Shanghai, China remained the Company's principal client liaison facilities in
those areas at September 30, 2001. Management believes that the various
facilities are properly sized to meet anticipated business levels.

ITEM 3.    LEGAL PROCEEDINGS

         There are no material pending legal proceedings at September 30, 2001
which meet the criteria for disclosure under this item.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.


                                                                              12
<PAGE>

                                     PART II

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

    The Company's Common Stock was delisted from The NASDAQ SmallCap Market
tier of The Nasdaq Market (hereafter NASDAQ) on February 22, 2001, and is
currently trading OTC on the pink sheets (described in more detail below). The
trading symbol is "MPSI." Information in the table below reflects the high and
low sales prices reported by NASDAQ and Pink Sheets LLC. Over-the-counter
quotations reflect inter-dealer prices without retail mark-up, mark-down or
commission and may not represent actual transactions.

<Table>
<Caption>
                                                               LOW      HIGH
                                                               ---      ----
<S>                                                           <C>      <C>
   Fiscal 2000
     First Quarter Ended December 31, 1999 ...............     1.06     3.25
     Second Quarter Ended March 31 .......................     1.81     5.69
     Third Quarter Ended June 30 .........................     1.16     3.06
     Fourth Quarter Ended September 30  ..................     1.19     2.31

   Fiscal 2001
     First Quarter Ended December 31, 2000 ...............     0.31     1.75
     Second Quarter Ended March 31 .......................     0.44     1.56
     Third Quarter Ended June 30 .........................     0.61     1.13
     Fourth Quarter Ended September 30  ..................     0.25     0.61
</Table>

    The 2,911,781 shares of Common Stock outstanding at September 30, 2001, were
held by 896 stockholders of record. At that date, an additional 70,000 shares
were subject to options to purchase Common Stock (See Note 8 to the Consolidated
Financial Statements). The per share bid and ask prices on September 30, 2001,
were $0.25 and $0.60, respectively.

    Nasdaq advised the registrant on January 17, 2001 that it would de-list the
registrant's securities from The Nasdaq Stock Market on January 26, 2001 unless
the registrant filed its annual report on Form 10-K for the year ended September
30, 2000 on or before January 25, 2001. As the registrant intended to file its
Form 10-K upon securing an alternative credit facility, the registrant filed an
appeal with Nasdaq, but was unable to file the financial statements with the SEC
in time to avoid being de-listed. Accordingly, effective close of business
February 22, 2001, MPSI's stock was de-listed from The Nasdaq Stock Market and
subsequently trades Over the Counter on Pink Sheets. The Form 10-Q's for the
quarters ended December 31, 2000, March 31, 2001, and June 30, 2001, were also
not filed on a timely basis due to the continuing banking uncertainty.
Therefore, no shares of Common Stock could be sold pursuant to Rule 144 under
the 1933 Act as of September 30, 2001. As of the date of filing this Form 10-K,
the Company has obtained satisfactory extension of its bank financing, and all
previously deferred financial statements have been filed. See Note 5 to the
Consolidated Financial Statements.

    The Company intends to reinvest its earnings in its business and therefore
does not anticipate paying any cash dividends in the foreseeable future. The
Company has not paid cash dividends since its inception.

                                                                              13
<PAGE>

ITEM 6.    SELECTED FINANCIAL DATA

                             SELECTED FINANCIAL DATA
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>
                                                                       FOR THE YEAR ENDED SEPTEMBER 30,
                                                       ---------------------------------------------------------------
                                                         2001          2000          1999         1998          1997
                                                       --------      --------      --------     --------      --------
<S>                                                    <C>           <C>           <C>          <C>           <C>
OPERATING DATA:
Revenues .........................................     $ 15,411      $ 18,283      $ 19,332     $ 19,101      $ 23,438
Net income (loss) ................................       (1,091)         (267)           87       (1,499)        1,103

Per share:
   Basic income (loss) per common share ..........     $   (.37)     $   (.09)     $    .03     $   (.53)     $    .39
   Weighted average common shares outstanding ....        2,912         2,886         2,849         2,844        2,798
   Diluted income (loss) per common and
     common equivalent share .....................     $   (.37)     $   (.09)     $    .03     $   (.53)     $    .39
   Weighted average shares of common stock
     and dilutive common stock equivalents
     outstanding .................................        2,912         2,886         2,894        2,844         2,820

BALANCE SHEET DATA:
Total assets .....................................     $  6,896      $  9,603      $ 10,518     $  9,490      $ 11,638
Noncurrent deferred revenue ......................          548           712         1,146        1,346         1,634
Noncurrent deferred income taxes .................          121           121            86           86           442
Other noncurrent liabilities .....................           44            96           133          172            37
Long-term debt ...................................          550            --            --           --            --
</Table>

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

    The following table sets forth (in thousands), for the periods indicated,
certain items in the consolidated statements of operations.

<Table>
<Caption>
                                                     YEAR ENDED SEPTEMBER 30
                                              ------------------------------------
                                                2001          2000          1999
                                              --------      --------      --------
<S>                                           <C>           <C>           <C>
Revenues ................................     $ 15,411      $ 18,283      $ 19,332
Cost of sales ...........................        6,219         7,542         8,245
                                              --------      --------      --------
  Gross profit ..........................        9,192        10,741        11,087
                                              --------      --------      --------
Operating expenses:
  General and administrative ............        3,195         3,653         3,184
  Marketing and client services .........        5,216         5,925         6,235
  Research and development ..............        1,317         1,189         1,216
                                              --------      --------      --------
          Total operating expenses ......        9,728        10,767        10,635
                                              --------      --------      --------
Operating income (loss) .................         (536)          (26)          452
Other income (expense), net .............         (438)          (53)          (58)
                                              --------      --------      --------
Income (loss)  before income taxes ......         (974)          (79)          394
Income taxes ............................          117           188           307
                                              --------      --------      --------
Net income (loss) .......................     $ (1,091)     $   (267)     $     87
                                              ========      ========      ========
</Table>

RESULTS OF OPERATIONS

         CONSOLIDATED OPERATIONS. MPSI reported a net loss of $1,091,000 or $.37
per share on revenues of $15,411,000 for its fiscal year ended September 30,
2001 compared with a net loss of $267,000 or $.09 per share on revenues of
$18,283,000 in fiscal 2000 and net income of $87,000 or $.03 per share on
revenues of $19,332,000 in fiscal 1999. The trend of consolidated revenues was
impacted in fiscal 2000 by reductions in retail database prices to meet
competition. Further, revenues in fiscal 2001 and 2000 were negatively impacted
by disruptions in order patterns due to client mergers or post-merger
transitions.

                                                                              14

<PAGE>

         The Company presently operates in three business segments. Generally,
MPSI has experienced positive performance in the Convenience Retailing segment
of its business (traditional core operations), which accounts for more than 80%
of consolidated revenues in 2001, 2000 and 1999. One of the Company's younger
divisions, the Pricing segment, dedicated to retail pricing products and
services, experienced revenue growth during fiscal 1999 but was also impacted by
the generally unsettled merger events affecting the major oil companies in 2001
and 2000. The Company's newest business segment, Business Development (formerly
DataMetrix) has not yet achieved critical mass, and the resultant losses have
masked positive contribution by the core Convenience Retailing segment.

         CONVENIENCE RETAILING SEGMENT. This segment accounted for revenues of
$12,857,000, $15,337,000 and $16,372,000 in fiscal years 2001, 2000 and 1999,
respectively. During fiscal 2001 and the latter half of 2000, seven out of
MPSI's top 10 customers were involved in merger activities which has slowed MPSI
retail planning activities. While the initial release of the Company's new
premier retail modeling software, Retail Explorer ("REX") to US customers in
1999, and the subsequent release of REX globally in the early months of fiscal
2001, had a positive impact on the number of markets studied for clients between
1999 and 2001, competitive price reductions and more importantly the client
mergers have limited leverage of production costs and thereby caused
profitability to decline over the three-year period. Management expects
resurgent orders and revenues in fiscal 2002 and 2003 as the merger transitions
are completed and network rationalization becomes the customer focus.

         The revenue decline of $2,480,000 from fiscal 2000 to fiscal 2001
impacted the Company's ability to leverage its market study production costs.
Consequently, gross margin dollars declined $1,826,000 or 18% in 2001. However,
as a percent of revenues, the fiscal 2001 gross margins remained relatively
constant when compared with fiscal 2000, and improved by 12% over 1999
principally because of production cost efficiencies that MPSI was able to
realize as the REX technology was released globally. As a result, operating
profit for this segment declined approximately $1.3 million.

         In October 2001, MPSI's largest customer notified the Company that it
would explore other convenience retailing technology. Should that customer
ultimately decide to change technology, MPSI could lose $2 - $3 million in
annual revenue from this historical source. While the concurrent growth of
business from other clients is expected to offset this potential loss in fiscal
2002 and thereafter, this decision could ultimately lower MPSI's revenue growth
expectations.

         PRICING SEGMENT. As noted above, this business unit experienced a
slight decline in revenues of 4% ($97,000) in fiscal 2001 and a flattening of
revenues between fiscal 2000 and 1999, principally for the same environmental
reasons noted above. Customer focus during merger/transitions was not on
implementation of new technologies. However, one particular product set dealing
with price zone formulation took a significant positive step in fiscal 2001
based in part upon increased activity from a substantial US customer. Revenues
related to that activity were more than $750,000 from the top five customers in
fiscal 2001 compared with $313,000 and $556,000 in fiscal years 2000 and 1999,
respectively. Further, the Company's largest customer executed a master
agreement in 2001 whereby it licensed the PriceZone technology for global use.
On that basis, management expects increased PriceZone activity outside the US in
fiscal 2002 and beyond. Operating results declined approximately $522,000 in
fiscal 2001 primarily because of the mix of product sales being weighted more
heavily toward pure software revenues in fiscal years 2000 and 1999. The costs
associated with delivery of software are considerably less than the costs
associated with PriceZone and other pricing products.

         BUSINESS DEVELOPMENT. This unit's mission, which in previous reports
related principally to the development, maintenance and sales of street files,
demographics and traffic information under the DataMetrix brand, was expanded at
the end of fiscal 2001 to focus on industry diversification opportunities into
fiscal 2002. This action was taken not only to help MPSI become less
"one-dimensional" but also in recognition that subsequent to product release in
1999, the unit had not achieved operating goals. Revenues from these activities
fell 40% or $295,000 in fiscal 2001 compared with relatively constant revenues
of just over $700,000 in both fiscal 2000 and 1999. This decline was
attributable to a significant geocoding special project that fed both 2000 and
1999 but was not a significant factor in fiscal 2001. Despite the disappointing
revenue trends and the lower revenues in 2001, the unit substantially reduced
its operating loss to $719,000 in fiscal 2001 compared with losses of $2,047,000
in fiscal 2000 and $1,169,000 in fiscal 1999 during which periods the unit
carried a heavy product development burden. Fiscal 2001 amortization expense was
$504,000 (a full year's amortization compared with a partial-year charge of
$264,000 in fiscal 2000, the first year of product rollout). Other than that
amortization, the unit's activities and


                                                                              15
<PAGE>

headcount were scaled back as part of the general staffing reductions in 2001
and 2000, leaving in place resources necessary to support the Convenience
Retailing data unit.

         CONSOLIDATED OPERATING EXPENSES. In total, operating expenses declined
$1,039,000 or 10% in fiscal 2001 compared with 2000. This is principally
reflective of corporate sizing actions initiated in late 1999 and in a series of
events completed in October 2000. During that period MPSI reduced its staff by
approximately 30% which lowered the cost base approximately $2 million. Of that
amount, approximately half of the savings were reflected in 2001 operating
expenses (the other half is reflected in cost of sales). Only nominal beneficial
impact was reflected in fiscal 2000 compared with 1999 as reduction timing,
severance and other related reduction costs masked the lower staffing in fiscal
2000. Fiscal 2001 general and administrative expenses are $458,000 lower than in
fiscal 2000. Mainly this is due to high severance costs in fiscal 2000, which
also explains the increase in that year compared with fiscal 1999. In addition
to the severance differential, however, MPSI also benefited in fiscal 2001 from
lower employee insurance costs and rent reduction in the headquarters facility
associated with the smaller headcount. The bulk of the savings associated with
the re-sizing efforts are reflected in marketing expenses that declined $709,000
or 12%. Fewer personnel in the client services and sales support areas coupled
with lower travel and advertising costs account for the change between fiscal
2001 and 2000. A similar reduction of $310,000 occurred between fiscal 2000 and
1999 as the result of downsizing the DataMetrix unit. Research and development
expense increased $128,000 or 11% in fiscal 2001 compared with 2000, and the
same category of expenses remained essentially constant between fiscal 2000 and
1999. The fiscal 2001 increase related to the lower number of capital
development projects in progress due to the Company having completed its global
REX release earlier in the year (more staff focus on maintenance and new product
research). Development of the REX technology and new pricing products spanned
both 1999 and 2000 and accounts for the changes in those years, respectively.

         OTHER INCOME / EXPENSE. In fiscal 2001, the Company incurred
approximately $385,000 more net expenses in this category than it experienced in
fiscal 2000. The principal difference was a $440,000 swing in exchange
transactions (net loss of $160,000 in fiscal 2001 versus net gain of $337,000 in
fiscal 2000). MPSI closed its Australian operation in fiscal 2000 which was
principally responsible for the transaction gains then reported. Other than that
associated with the office closure, exchanges gains and losses result from MPSI
transactions denominated in currencies other than US Dollars to accommodate
clients in certain markets (principally denominated in Japanese Yen, Singapore
Dollars or British Pounds). Although MPSI anticipates continuing exposure from
these sources in fiscal 2002, the incremental change is not expected to
materially increase as the Company now limits the number of contracts
denominated in foreign currencies.

         There was no appreciable difference in the net expense in this category
between 2000 and 1999. However, the Company did incur $171,000 more interest
expense in fiscal 2000 than in 1999 due to higher debt balances and supplier
charges necessary to fund the DataMetrix losses. Interest costs in fiscal 2001
were $25,000 lower than in fiscal 2000 as the result of debt reductions during
2001, which took place partly at the expense of slower payment to suppliers
whose carrying charges to MPSI increased. As a result, the net reduction in
interest expense was not commensurate with the $1.1 million of debt reduction
during the 2001 fiscal year.

         MPSI further experienced a decline of $83,000 in interest income from
long-term software license agreements. In fiscal 2001, MPSI adopted new
perpetual licensing contract methods which, over time, will curtail interest
income but will reflect higher up-front software revenues as new licenses are
executed.

         INCOME TAXES. Income taxes in fiscal 2001 declined $71,000 compared to
2000 because the Company experienced an operating pretax loss in fiscal 2001 for
which no provisions were required (although net operating loss carryforwards
increased - see Note 7 to Consolidated Financial Statements). Further, foreign
income tax withholding by customers was lower as the result of the 2001 revenue
decline. Incomes taxes decreased $119,000 in fiscal 2000 compared with 1999
principally because of (1) a decline in pretax earnings, (2) lower foreign
income tax withholdings at the source by clients making remittances to the US,
and (3) settlement of an IRS exam in fiscal 2000 for an incremental tax less
than previously accrued.


                                                                              16
<PAGE>

 FINANCIAL CONDITION AND LIQUIDITY

         Working capital decreased to $90,000 at September 30, 2001 compared
with $113,000 at September 30, 2000. Primarily, the change is attributable to
(1) the $1.1 million reduction in the Company's bank debt during 2001, (2) the
reclassification to noncurrent of $550,000 of the debt at September 30, 2001
(see Note 5 to Consolidated Financial Statements) and (3) a reduction of trade
accounts payable. These changes were offset by a decrease of $1,996,000 or 44%
in outstanding receivable balances at year-end 2001 compared with year-end 2000.
This decline in receivables reflects the reduction in revenues during fiscal
2001 as the result of client merger activities, as well as improved collections
near the end of fiscal 2001.

         Despite the loss from operations in 2001 of $1,091,000, the Company
generated approximately $1,943,000 of cash flow from operations and was able to
reduce trade payable obligations. Comparatively, MPSI also generated positive
cash flow from operations in fiscal 2000 and 1999 ($1,353,000 and $1,038,000,
respectively). It should be noted that operating results included non-cash
charges for depreciation and amortization of $1,238,000 in fiscal 2001 compared
with $1,215,000 and $556,000 in fiscal 2000 and 1999, respectively. In large
measure, the generation of substantial cash flow from operations was
attributable to the cost saving measures implemented during fiscal 2001 and 2000
(as previously discussed) and to improved collection of accounts receivable.

         EXTERNAL FINANCING. In June 2000, the Company's principal bank, Bank of
America, announced its internal plans to substantially reduce its lending
exposures in certain industries and to certain customer categories. MPSI fell
within the criteria and, accordingly, was notified effective June 30, 2000 that
it must either liquidate or move its line of credit. The outstanding balance at
that time was $2,000,000, and the Company was given 120 days to effect a change.
Subsequent to that notice, MPSI has diligently worked this issue on two fronts:
(1) investigation of alternative financing sources, and (2) regular pay down of
the debt from operating cash flows. Although no acceptable financing alternative
has been identified, the outstanding balance has been steadily reduced from
$2,000,000 at September 30, 2000 to $900,000 at September 30, 2001 as a result
of (1) cash generated from operations, (2) installment payments received on
long-term software license agreements (where revenue had been recognized in
previous years), and (3) lower capital software development costs following the
release of REX globally in the first half of fiscal 2001. The pay downs have
continually pressured MPSI's operating liquidity and prevented accumulation of
additional cash reserves even though the Company had generated positive cash
flow from operations of more than $1.9 million in fiscal 2001. Largely on the
basis of the Company's diligent efforts at liquidation, Bank of America has
granted extensions of the credit maturity effective October 2000, January 2001,
April 2001, May 2001 and October 2001. With each extension, except October 2001,
the Bank also waived the $3,500,000 minimum net worth covenant requirement with
which the Company had not been in compliance. The latest extension by Bank of
America, effective January 6, 2002, was granted concurrent with a $250,000 pay
down by the Company and set the new maturity date at October 1, 2002. See Note 5
to the consolidated financial statements for additional information about the
extension. This action significantly lengthened the Bank's commitment to MPSI
when compared with previous extension periods and provided for an adjustment of
the minimum net worth covenant, with which the Company had not been in
compliance, down to $1.7 million.

     In the absence of an alternative banking solution that provided some
measure of working capital draw capability, MPSI had to deal with peaks and
valleys in cash flow by adjusting payments to suppliers and other creditors. On
occasion during 2001, this situation caused the Company to fall behind with
timely payment of payroll taxes, 401(k) matching contributions and some
operational overheads such as insurance premiums. Thus far, MPSI has been able
to manage these situations satisfactorily such that no significant exposure or
loss of critical suppliers has resulted. Additionally, as of the date of the
latest extension by the bank, the Company had significantly improved the payment
timing to its suppliers and other creditors. Management expects that cash flow
from operations will be sufficient to meet operating requirements and liquidate
the remaining bank debt in fiscal 2002. However, if the Company is unable to
maintain the minimum net worth covenant or to maintain an adequate collateral
level as determined through a defined borrowing base computation, the bank could
call the note before its maturity date. The bank has not taken such action to
date. If this were to occur, the Company may not have sufficient cash to repay
the note requiring management to take such actions as delaying payments to
suppliers or reducing operating expenditures. Such actions, if necessary, could
have an adverse effect on the Company's operations or financial condition.
Management will continue to seek cost-effective alternate financing sources, not
only as a means of accelerating liquidation of the current note, but also to
provide back-up working capital availability.

         NONCURRENT ASSETS AND LIABILITIES. Long-term receivables related to
five-year software license agreements executed in prior years have steadily
declined from $1,756,000 at September 30, 1999 to $539,000 at September 30, 2001
($912,000 at September 30, 2000). This is reflective of market conditions that
caused the Company to re-tool its software technology (REX development in
1999/2000). During the roll-out period, no significant new software licenses
were signed.



                                                                              17


<PAGE>
         Property and Equipment of $1,004,000, net of accumulated depreciation
at September 30, 2001, declined $42,000 compared with $1,046,000 at September
30, 2000. The net decline was primarily composed of $308,000 depreciation taken
in 2001, less $267,000 of additions. The Company has routinely cycled its
computer equipment each year as necessary to meet operational demands. It is
anticipated that operating system software costing as much as $100,000 may
require upgrades in fiscal 2002 over and above normal new equipment additions.
The needs will be funded out of operating cash flow.

         Capitalized product development costs declined $381,000 from $1,885,000
at September 30, 2000 to $1,504,000 at September 30, 2001. As set forth in the
Consolidated Statements of Cash Flow, amortization of previously capitalized
product development (initial REX versions and certain pricing software)
increased by $131,000 to $930,000 in fiscal 2001 compared with $799,000 in
fiscal 2000. This reflects completion of the global REX product and new pricing
technology at an incremental cost of $548,000 in fiscal 2001. Now that REX has
been globally released, management anticipates new capital development in fiscal
2002 to be more consistent in costs with 2001 than with either 2000 or 1999
during which a complete software and data set re-tooling was undertaken.

         Other Noncurrent Liabilities declined by 53% ($51,000) compared with
the September 30, 2000 balance as the result of a cost saving measure whereby
MPSI reduced its headquarters lease obligation by relinquishing approximately
12,000 square feet of office space. This should save the Company approximately
$100,000 annually including utility costs.

         EQUITY. In December 2000, management delayed filing its Form 10-K for
fiscal year 2000 due to a material uncertainty which then existed relative to
the ultimate intentions of its principal bank regarding the upcoming maturity of
$2 million in bank debt. The filing deferral ultimately led to the February 2001
de-listing of MPSI's stock by NASDAQ. While the de-listing had no direct impact
on MPSI's operations, it did have the effect of reducing visibility of MPSI
stock in the market place (subsequently traded over the counter via the "pink
sheets") and exacerbating the daily susceptibility of the stock to market
fluctuations based on nominal trading volume. MPSI is exploring alternative
scenarios wherein MPSI stock might be listed on an exchange in 2002/2003.

         BACKLOG. MPSI's backlog was approximately $10.6 million at September
30, 2001 compared with $9.7 million at September 2000. The increase was
principally attributable to additional market study orders that will affect
future periods, all influenced by global release of REX technology. The backlog
contains a number of recurring future studies under multi-year client
commitments. Management believes that its backlog continues to indicate
substantial commitment to MPSI technology on the part of its customers, in spite
of the fact that, subsequent to September 30, 2001, MPSI's largest customer
notified the Company that it would explore alternative technology to certain
MPSI software over the next twelve months. Committed business from that
customer, together with pending orders, indicates no substantial negative impact
on MPSI during fiscal 2002. New business prospects are expected to replace any
lost revenue in fiscal 2002 and beyond, should it occur, but MPSI's growth rate
in fiscal 2003 may be lower than would otherwise have been expected.

ITEM  7A.   DISCLOSURES ABOUT MARKET RISK

         The Company is exposed to the impact of interest rate fluctuations as a
result of current borrowings under its revolving line of credit with an interest
rate of Bank of America prime plus 3% (See Note 5 to the Consolidated Financial
Statements included elsewhere herein). The Company believes the fair market
value of the revolving line of credit approximates its carrying amount. The
impact on the Company's results of operations of a one-point interest rate
change on the outstanding balance under the revolving line of credit as of
September 30, 2001 would not be material. The Company denominates certain of its
transactions in currencies other than the U.S. Dollar to accommodate clients in
certain foreign markets. The Company does not utilize derivative financial
instruments to hedge its foreign currency or interest rate risks.

                                                                              18

<PAGE>

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

       INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL SCHEDULES

<Table>
<Caption>
                                                                               PAGE NO.
                                                                               --------
<S>                                                                            <C>
CONSOLIDATED FINANCIAL STATEMENTS:

Report of Independent Auditors............................................        20

Consolidated Statements of Operations for the Years Ended September 30,
2001, 2000 and 1999.......................................................        21

Consolidated Balance Sheets at September 30, 2001 and 2000................        22

Consolidated Statements of Cash Flow for the Years Ended September 30,
2001, 2000 and 1999.......................................................        23

Consolidated Statements of Stockholders' Equity - Years Ended
September 30, 2001, 2000 and 1999.........................................        24

Notes to Consolidated Financial Statements................................        25

FINANCIAL STATEMENT SCHEDULE:

Schedule VIII - Valuation and Qualifying Accounts.........................        43
</Table>


All other schedules are omitted because they are not applicable or the required
information is shown in the Consolidated Financial Statements or Notes thereto.


                                                                              19
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders MPSI Systems Inc.

    We have audited the accompanying consolidated balance sheets of MPSI Systems
Inc. and subsidiaries as of September 30, 2001 and 2000, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the three years in the period ended September 30, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of MPSI Systems
Inc. and subsidiaries at September 30, 2001 and 2000, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended September 30, 2001 in conformity with accounting principles
generally accepted in the United States.




                                                      ERNST & YOUNG LLP


Tulsa, Oklahoma
February 25, 2002


                                                                              20



<PAGE>

                       MPSI SYSTEMS INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<Table>
<Caption>
                                                                          YEAR ENDED SEPTEMBER 30,
                                                             ------------------------------------------------
                                                                 2001              2000              1999
                                                             ------------      ------------      ------------
<S>                                                          <C>               <C>               <C>
Revenues:
   Information services and software maintenance .......     $ 15,304,000      $ 17,968,000      $ 18,772,000
   Software licensing ..................................          107,000           315,000           560,000
                                                             ------------      ------------      ------------
       Total revenues ..................................       15,411,000        18,283,000        19,332,000
                                                             ------------      ------------      ------------
Cost of sales:
   Information services and software maintenance .......        5,684,000         7,004,000         8,088,000
   Software licensing (Note 4) .........................          535,000           538,000           157,000
                                                             ------------      ------------      ------------
       Total cost of sales .............................        6,219,000         7,542,000         8,245,000
                                                             ------------      ------------      ------------
       Gross profit ....................................        9,192,000        10,741,000        11,087,000
Operating expenses:
   General and administrative ..........................        3,195,000         3,653,000         3,184,000
   Marketing and client services .......................        5,216,000         5,925,000         6,235,000
   Research and development ............................        1,317,000         1,189,000         1,216,000
                                                             ------------      ------------      ------------
       Total operating expenses ........................        9,728,000        10,767,000        10,635,000
                                                             ------------      ------------      ------------
      Operating income (loss) ..........................         (536,000)          (26,000)          452,000
Other income (expense):
   Interest income .....................................           96,000           179,000           240,000
   Interest expense ....................................         (389,000)         (414,000)         (243,000)
   Foreign exchange gains (losses) .....................         (160,000)          280,000           (57,000)
   Other, net ..........................................           15,000           (98,000)            2,000
                                                             ------------      ------------      ------------
       Income (loss) before income taxes ...............         (974,000)          (79,000)          394,000
Income taxes ...........................................          117,000           188,000           307,000
                                                             ------------      ------------      ------------
       Net income (loss) ...............................     $ (1,091,000)     $   (267,000)     $     87,000
                                                             ============      ============      ============
Per share (Note 11):
   Basic and diluted income (loss) per common
    share ..............................................     $       (.37)     $       (.09)     $        .03
</Table>



          See accompanying notes to consolidated financial statements.

                                                                              21
<PAGE>

                       MPSI SYSTEMS INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                              SEPTEMBER 30,
                                                                       ------------------------------
                                                                          2001              2000
                                                                       ------------      ------------
<S>                                                                    <C>               <C>
                                     ASSETS

Current assets:
  Cash and cash equivalents ......................................     $    905,000      $    876,000
  Short-term investments, at cost ................................            3,000             3,000
  Receivables (Note 2):
     Trade .......................................................        2,111,000         3,310,000
     Current portion of long-term receivables, net of
      unamortized discount .......................................          469,000         1,266,000
  Work in process inventory ......................................          110,000            47,000
  Prepayments ....................................................           90,000            88,000
                                                                       ------------      ------------
     Total current assets ........................................        3,688,000         5,590,000
Long-term receivables, net of unamortized discount (Note 2) ......          539,000           912,000
Property and equipment, net (Note 3) .............................        1,004,000         1,046,000
Capitalized product development costs, net (Note 4) ..............        1,504,000         1,885,000
Other assets .....................................................          161,000           170,000
                                                                       ------------      ------------
     Total assets (Note 5) .......................................     $  6,896,000      $  9,603,000
                                                                       ============      ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of note payable to bank (Note 5) ...............     $    350,000      $  2,000,000
  Accounts payable ...............................................          775,000         1,006,000
  Accrued liabilities (Notes 6 and 8) ............................        1,112,000         1,187,000
  Deferred revenue ...............................................        1,361,000         1,284,000
                                                                       ------------      ------------
     Total current liabilities ...................................        3,598,000         5,477,000
Long-term debt (Note 5) ..........................................          550,000                --
Noncurrent deferred revenue ......................................          548,000           712,000
Noncurrent deferred income taxes (Note 6) ........................          121,000           121,000
Other noncurrent liabilities .....................................           44,000            96,000
                                                                       ------------      ------------
          Total liabilities ......................................        4,861,000         6,406,000
                                                                       ------------      ------------
Stockholders' equity (Note 8):
  Preferred Stock, $.10 par value, 1,000,000 shares authorized,
     none issued or outstanding ..................................               --                --
  Common Stock, $.05 par value, 20,000,000 shares authorized,
     2,912,000 shares issued and outstanding at September 30, 2001
     and 2000 ....................................................          146,000           146,000
  Junior Common Stock, $.05 par value, 500,000 shares authorized,
     none issued or outstanding ..................................               --                --
  Additional paid-in capital .....................................       13,145,000        13,145,000
  Deficit ........................................................      (11,630,000)      (10,539,000)
  Other accumulated comprehensive income .........................          374,000           445,000
                                                                       ------------      ------------
          Total stockholders' equity .............................        2,035,000         3,197,000
                                                                       ------------      ------------
          Total liabilities and stockholders' equity .............     $  6,896,000      $  9,603,000
                                                                       ============      ============
</Table>

          See accompanying notes to consolidated financial statements.


                                                                              22

<PAGE>

                       MPSI SYSTEMS INC. AND SUBSIDIARIES

         CONSOLIDATED STATEMENTS OF CASH FLOW (SEE ALSO NOTES 1 AND 10)


<Table>
<Caption>
                                                                       YEAR ENDED SEPTEMBER 30,
                                                             ---------------------------------------------
                                                                 2001             2000             1999
                                                             -----------      -----------      -----------
<S>                                                          <C>              <C>              <C>
Income (loss) from operations ..........................     $(1,091,000)     $  (267,000)     $    87,000
Adjustments to reconcile income (loss) from
     operations to cash provided by operations:
     Depreciation and amortization of property and
         equipment .....................................         308,000          416,000          403,000
     Amortization of capitalized product
         development ...................................         930,000          799,000          153,000
     Deferred income taxes .............................              --           35,000               --
     Loss on sale of assets ............................          (1,000)         (10,000)          (1,000)
     Foreign exchange gain .............................              --         (330,000)              --
Changes in assets and liabilities:
     Decrease (increase) in assets:
         Receivables ...................................       2,173,000        1,419,000          718,000
         Inventories ...................................         (63,000)          60,000               --
         Other assets ..................................           7,000           45,000          (91,000)
     Increase (decrease) in liabilities:
         Trade payables, accruals and other
           liabilities .................................        (431,000)         (75,000)         319,000
         Taxes payable .................................           2,000          (27,000)          17,000
         Deferred revenue ..............................         109,000         (712,000)        (567,000)
                                                             -----------      -----------      -----------
              Net cash provided by operating
                 activities ............................       1,943,000        1,353,000        1,038,000
                                                             -----------      -----------      -----------

Cash flows from investing activities:
     Purchase equipment ................................        (148,000)         (83,000)        (386,000)
     Software developed for internal use ...............        (119,000)        (107,000)        (353,000)
     Capitalized product development costs .............        (548,000)      (1,095,000)      (1,453,000)
     Proceeds from disposition of assets ...............           1,000           17,000            1,000
                                                             -----------      -----------      -----------
             Net cash used by investing activities .....        (814,000)      (1,268,000)      (2,191,000)
                                                             -----------      -----------      -----------
Cash flows from financing activities:
     Net proceeds from bank line of credit .............              --          425,000        1,225,000
     Cash used for debt service ........................      (1,100,000)              --               --
     Proceeds from exercised stock options .............              --           70,000               --
                                                             -----------      -----------      -----------
             Net cash provided (used) by
                financing activities ...................      (1,100,000)         495,000        1,225,000
                                                             -----------      -----------      -----------

Increase in cash and cash equivalents ..................          29,000          580,000           72,000
Cash and cash equivalents at beginning of period .......         876,000          296,000          224,000
                                                             -----------      -----------      -----------
Cash and cash equivalents at end of period .............     $   905,000      $   876,000      $   296,000
                                                             ===========      ===========      ===========
</Table>

          See accompanying notes to consolidated financial statements.

                                                                              23


<PAGE>

                       MPSI SYSTEMS INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 YEARS ENDED SEPTEMBER 30, 2001, 2000, AND 1999

<Table>
<Caption>

                                          COMMON STOCK                                             OTHER
                                     ------------------------    ADDITIONAL                     ACCUMULATED            TOTAL
                                                   CARRYING       PAID-IN                       COMPREHENSIVE      STOCKHOLDERS'
                                      SHARES         VALUE        CAPITAL        DEFICIT           INCOME             EQUITY
                                     ---------   ------------   ------------   ------------    ---------------   ---------------
<S>                                              <C>            <C>            <C>             <C>               <C>
BALANCE - SEPTEMBER 30, 1998 ......  2,849,000   $    142,000   $ 13,079,000   $(10,359,000)   $       683,000   $     3,545,000
COMPREHENSIVE INCOME:
   Net income .....................         --             --             --         87,000                 --            87,000
   Other accumulated compre-
      hensive income:
      Foreign currency
         translation
         adjustment ...............         --             --             --             --             81,000            81,000
TOTAL COMPREHENSIVE INCOME ........                                                                              $       168,000
                                     ---------   ------------   ------------   ------------    ---------------   ---------------
BALANCE - SEPTEMBER 30, 1999 ......  2,849,000        142,000     13,079,000    (10,272,000)           764,000         3,713,000
COMPREHENSIVE INCOME:
  Net loss ........................         --             --             --       (267,000)                --          (267,000)
  Other accumulated compre-
    hensive income:
    Foreign currency
        translation
        adjustment ................         --             --             --             --           (319,000)         (319,000)
TOTAL COMPREHENSIVE LOSS ..........                                                                              $      (586,000)
    Stock options exercised .......     63,000          4,000         66,000             --                 --            70,000
                                     ---------   ------------   ------------   ------------    ---------------   ---------------
BALANCE - SEPTEMBER 30, 2000 ......  2,912,000        146,000   $ 13,145,000    (10,539,000)           445,000         3,197,000
  Net loss ........................         --             --             --     (1,091,000)                --        (1,091,000)
  Other accumulated compre-
    hensive income
    Foreign currency
     translation
     adjustment ...................         --             --             --             --            (71,000)          (71,000)
TOTAL COMPREHENSIVE LOSS ..........                                                                              $    (1,162,000)
                                     ---------   ------------   ------------   ------------    ---------------   ---------------
BALANCE - SEPTEMBER 30, 2001 ......  2,912,000   $    146,000   $ 13,145,000   $(11,630,000)   $       374,000   $     2,035,000
                                     =========   ============   ============   ============    ===============   ===============
</Table>

          See accompanying notes to consolidated financial statements.


                                                                              24
<PAGE>

                       MPSI SYSTEMS INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

    Nature of Operations: MPSI Systems Inc. is a United States-based,
multinational corporation whose principal line of business is providing decision
support software, information databases and consulting services to businesses
which have an investment in retail outlet networks. The Company markets its
products and services in North America, the Pacific Rim, Latin America, Europe
and South Africa through a direct sales force located in various foreign
countries. As discussed more fully in Note 7, over 48% of consolidated revenues
are generated from foreign customers, and portions of such revenues are billed
in foreign currencies. Most of the Company's business comes from the petroleum
industry, including several customers who individually account for a significant
portion of consolidated revenues. Services are also provided for clients in the
banking, convenience food, quick service restaurant and government postal
industries. All software development and substantially all of the information
database preparation are performed at the Company's headquarters facility in
Tulsa, Oklahoma.

    Principles of Consolidation: The accompanying consolidated financial
statements include the accounts of MPSI Systems Inc. and its wholly owned
subsidiaries. All significant intercompany transactions and accounts have been
eliminated in consolidation. Prior year amounts have been restated to conform
with current year presentation.

    Revenue Recognition: Revenues and costs related to production of market
information databases are recorded based upon the ratio of costs incurred to
total estimated completion costs (percentage-of-completion method). Revenues and
costs related to single site studies, mini-market studies and other projects
which are completed in a short time period are recognized at completion.
Anticipated losses on contracts are charged against earnings at the time such
losses are identified.

    Effective October 1, 1999, the Company adopted the provisions of the
Accounting Standards Executive Committee's Statement of Position 97-2 ("SOP
97-2") entitled "Software Revenue Recognition" (as amended by SOP 98-9). Under
the terms of SOPs 97-2 and 98-9, companies are required to defer all revenue
from multiple-element software arrangements if sufficient vendor specific
objective evidence does not exist for the allocation of revenue to the various
elements of the arrangement. As a result, the Company now recognizes revenue on
multi-year software license agreements ratably over the life of the arrangement.
If the provisions of these SOPs had been adopted in fiscal 1999, $398,000 of
software licensing revenue would have been deferred to future periods.

    Prior to the adoption of SOP 97-2 as amended by SOP 98-9, software license
revenues equal to the present value of the aggregate annual license installments
were recognized at the latter of contract execution or software delivery when
collection was probable. When it could not be determined that collection was
probable, or if a contract contained cancellation options, software revenues
were deferred. The long-term receivables and deferred maintenance revenue from
contracts entered into were stated at the discounted present value of annual
license and maintenance payments to be received over the contract term based
upon the prime rate of interest on the effective date of each contract. The
present value discount, related to installments due after one year, was
amortized to interest income using an accelerated method that equated interest
earnings with outstanding receivable balances.

    At the time revenue is recognized, the Company has no remaining obligations
under the software license and maintenance contracts other than providing
post-contract customer support services related to the maintenance portion of
the contract and performance obligations under any optional and separately
priced training or consulting arrangements. Maintenance revenues are recognized
ratably over the term of the contracts as the post-contract customer support
services are provided and the related costs incurred and recognized. Optional
training and consulting represents service transaction on which revenue and
expense are recognized when the earnings process is substantially complete.

     Beginning in fiscal 2001, MPSI changed its software licensing and
maintenance contracting methods. Henceforth, most software products will be
perpetually licensed in a fashion that mandates upfront payment of the license
fees. Maintenance will henceforth be an optional annual commitment by clients
who wish to obtain future upgrades without additional cost. This change in
licensing did not materially impact fiscal 2001.

    Statement of Cash Flows: For purposes of the statement of cash flows, the
Company considers all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.



                                                                              25
<PAGE>

    Property and Equipment: Property and equipment, including the capitalized
cost of software developed for internal use, is stated at cost. Depreciation is
provided using the straight-line method, over the estimated useful lives of the
respective assets, except for leasehold improvements which are amortized over
the lesser of the lease term or the economic life of the underlying asset. Since
such assets are employed in all facets of the Company's operations, depreciation
expense is reflected in cost of sales as well as in each category of operating
expenses. The Company charges the cost of repairs and maintenance to expense as
incurred and capitalizes the cost of replacements, renewals and betterments.
When property or equipment is retired, the cost and accumulated depreciation are
removed from the accounts, and the resulting gain or loss on the disposition is
reflected in other income (expense).

    Capitalized Product Development Costs: Cost of software held for resale
(which was either purchased with the intent to incorporate the acquired software
in MPSI products or developed internally) are presented net of accumulated
amortization.

    The costs of internally developed software held for resale include direct
labor, materials and overhead, and relate to significant enhancements to
existing software or to development of new software products. All costs incurred
to establish the technological feasibility of internally developed software are
charged to research and development expense as incurred. Royalties, which may
become payable because of ongoing proprietary interests related to third-party
software imbedded in MPSI products, are charged to cost of sales-software
licensing as applicable software sales are recognized.

    The annual amortization of software products is computed on a
product-by-product basis and is the greater of the amount determined using (1)
the ratio that current gross revenues for a product bear to the total of current
and anticipated future gross revenues for that product or (2) the straight-line
method over the remaining economic life of the product. Historically, the
straight-line method has resulted in a greater amount of amortization in each
accounting period and has, therefore, been the basis for amortization in the
current period and in prior periods. Amortization starts when a product is
available for general release to customers and is reflected in cost of
sales-software licensing.

    In the event that capitalized product development costs are subsequently
determined not to be fully recoverable from future operations, the carrying
value of such software is reduced to an amount equal to its net realizable value
less costs of marketing and distribution. The reduction in carrying value is
recorded in cost of sales.

    Inventory: Work-in-process is composed of direct labor, costs of gathering
demographic data, indirect costs and overhead. Indirect costs and overhead are
allocated to each contract based upon the direct labor incurred.

    Income Taxes: The Company applies the liability method of accounting for
income taxes. Under this method, deferred income taxes are recognized for the
tax consequences of "temporary differences" by applying enacted statutory tax
rates applicable to future years to differences between the financial statement
carrying amounts and the tax bases of existing assets and liabilities. The
effect on deferred taxes of a change in tax rates is recognized in the results
of operations during the period that includes the enactment date.

    Earnings Per Share: Basic earnings per share is based upon the average
number of common shares outstanding. Diluted earnings per share consider the
dilutive effect of common stock equivalents.

    Foreign Currency Translation: Assets and liabilities of the Company's
foreign operations, except Brazil, are translated from the foreign operating
currency to the U.S. Dollar equivalent for consolidated reporting purposes using
the applicable exchange rates at the balance sheet date. Revenues and expenses
are translated at average rates for the year. Exchange differences from these
translations are included in other comprehensive income. Where amounts
denominated in a foreign currency are, or are expected to be, converted into
dollars by remittance or repayment, the realized exchange differences are
reflected in the results of operations. Brazil transactions and accounting
records are maintained in U.S. Dollar equivalents. During fiscal 2000, the
Company substantially liquidated its Australian subsidiary and reported the net
effect of accumulated translation adjustments of $330,000 in other income.



                                                                              26
<PAGE>

    Advertising: Costs of advertising were $147,000, $292,000, and $87,000 in
fiscal years 2001, 2000, and 1999, respectively, and are expensed as incurred.

    Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expense during the reporting period. Actual
results could differ from those estimates.

2.  RECEIVABLES:

    Trade accounts receivable include unbilled amounts of $400,000 at September
30, 2001 and $675,000 at September 30, 2000. These amounts represent market
study revenues recognized under the percentage-of-completion method in excess of
amounts billed and will generally be billable during the succeeding twelve
months upon completion of the respective studies.

    Current and noncurrent receivables also include unbilled amounts of
$1,030,000 at September 30, 2001 and $2,173,000 at September 30, 2000 (before
present value discount and excluding $108,000 and $93,000 which had been billed
at September 30, 2001 and 2000, respectively) related to multi-year software
license and maintenance agreements. Since these agreements contain annual
installment billing provisions, the unbilled receivable balance for some
contracts is as much as four years' future annual billings. Of the September 30,
2001 unbilled amounts, $519,000 (compared with $1,240,000 at September 30, 2000)
will be billed in the succeeding twelve months, and the remainder will be billed
thereafter at such future dates as are specified in the respective contracts.
The portion of such future billings related to software and maintenance services
not yet performed is offset by corresponding amounts in deferred revenue. The
current portions of long-term receivables are reduced by unamortized present
value discount of $20,000 and $66,000 at September 30, 2001 and 2000,
respectively. Noncurrent long-term receivables are presented net of unamortized
present value discount in the amount of $2,000 and $22,000 at September 30, 2001
and 2000, respectively. The present value discount is imputed based upon the New
York prime rate on the effective date of each agreement. Interest income related
to these agreements was $66,000, $149,000, and $225,000 in fiscal years 2001,
2000, and 1999, respectively.

    A significant portion of the Company's business activity is with the major
multinational oil companies. At September 30, 2001, 95% ($2,979,000) of the
Company's receivables (before present value discounts) were from petroleum
clients ($5,239,000 or 94% at September 30, 2000). The receivable portfolio is
well diversified geographically which tends to mitigate the potential impact of
fluctuations in petroleum activities which may otherwise result if receivables
were confined to a particular geographic area. Software license agreements are
payable over several years (generally five-year agreements) and are expected to
be paid from operating cash flows of the customers. The Company does not require
collateral or other security to support these contractual receivables. The
carrying value of long-term receivables, net of unearned discount, approximates
market value.

3.  PROPERTY AND EQUIPMENT:

    Property and equipment consists of:

<Table>
<Caption>
                                                                                SEPTEMBER 30,
                                                         USEFUL LIFE    ------------------------------
                                                          IN YEARS          2001              2000
                                                         -----------    ------------      ------------
<S>                                                     <C>             <C>               <C>
         Leasehold improvements .....................      Various      $    150,000      $    190,000
         Computer equipment and
              internal-use software .................        4-5           4,495,000         4,585,000
         Office furnishings and equipment ...........       3-10             905,000           999,000
                                                                        ------------      ------------
                                                                           5,550,000         5,774,000
         Accumulated depreciation ...................                     (4,546,000)       (4,728,000)
                                                                        ------------      ------------

                   Net property and equipment .......                   $  1,004,000      $  1,046,000
                                                                        ============      ============
</Table>



                                                                              27
<PAGE>

    The provision for depreciation was $308,000, $416,000, and $403,000 for the
years ended September 30, 2001, 2000, and 1999, respectively. At September 30,
2001, fully depreciated assets with an aggregate original cost of approximately
$3,770,000 remain in use.

4.  CAPITALIZED PRODUCT DEVELOPMENT COSTS:

<Table>
<Caption>
                                                                             SEPTEMBER 30,
                                                                     ------------------------------
                                                                         2001              2000
                                                                     ------------      ------------
<S>                                                                  <C>               <C>
         Software held for resale ..............................     $  6,215,000      $  5,669,000
         U.S. geographic database ..............................        1,187,000         1,187,000
                                                                     ------------      ------------

              Total capitalized costs ..........................     $  7,402,000      $  6,856,000
         Accumulated amortization ..............................       (5,898,000)       (4,971,000)
                                                                     ------------      ------------

              Net capitalized product development costs ........     $  1,504,000      $  1,885,000
                                                                     ============      ============
</Table>

    Amortization of capitalized product development costs is generally based
upon useful lives of 18 to 36 months. The provision for amortization totaling
$930,000, $799,000 and $153,000 for the fiscal years ended September 30, 2001,
2000 and 1999, respectively, is reflected in cost of sales-software licensing
(2001 - $534,000, 2000 - $535,000 and 1999 - $153,000) and cost of
sales-information services and software (2001 - $396,000 and 2000 - $264,000).
Based upon current sales forecasts, capitalized product development costs are
projected to be recoverable. However, these sales forecasts are subject to
certain vulnerabilities which could potentially affect the recoverability of
those costs.

5.  NOTE PAYABLE TO BANK, SUBSEQUENT EVENTS:

     At September 30, 2001 and 2000, the Company owed $900,000 and $2,000,000,
respectively, to Bank of America under a loan agreement secured by accounts and
contracts receivable, inventory, general intangibles and certain cash accounts
with a net book value of approximately $3,703,000 at September 30, 2001. The
note bears interest at Bank of America floating prime rate plus 5% (11.5% at
September 30, 2001). The annual weighted average interest rates were 11.97% in
fiscal year 2001 and 10.02% in fiscal year 2000.

     In June 2000, Bank of America notified the Company that it must either
liquidate or move its line of credit. The outstanding balance at that time was
$2,000,000, and the Company was given 120 days to effect a change. Subsequent to
that notice, MPSI has diligently worked this issue on two fronts: (1)
investigation of alternative financing sources, and (2) regular pay down of the
debt from operating cash flows. Although no acceptable financing alternative has
been identified, the outstanding balance has been steadily reduced from
$2,000,000 at September 30, 2000 to $900,000 at September 30, 2001. Bank of
America has granted extensions of the credit maturity effective October 2000,
January 2001, April 2001, May 2001 and October 2001. With each extension, except
October 2001, the Bank also waived the minimum net worth covenant requirement of
$3,500,000. The latest extension by Bank of America, effective January 6, 2002,
was granted concurrently with a $250,000 pay down by the Company and set the new
maturity date at October 1, 2002. A further debt payment of $100,000 is required
on or before April 1, 2002. In connection with that extension, the Bank revised
the $3.5 million minimum net worth covenant with which the Company had not been
in compliance. Henceforth, the Company will be required to maintain a minimum
net worth of $1,700,000. Balances outstanding under the extension bear interest
at Bank of America floating prime plus 7% (approximately 13% presently).
Additionally, the extension agreement eliminated subjective acceleration clauses
from the original agreements which remain in effect except to the extent amended
by the extension documents.

     If the Company is unable to maintain the revised minimum net worth covenant
or if the Company fails to maintain an adequate collateral level as determined
through a defined borrowing base computation, the bank could call the note
before its maturity date. If this were to occur, the Company may not have
sufficient cash to repay the note requiring management to take actions such as
delaying payments to suppliers or reducing operating expenditures. Such actions,
if necessary, could have an adverse effect on the Company's operations or
financial condition.



                                                                              28
<PAGE>

6.  INCOME TAXES:

<Table>
<Caption>
                                                                                 YEAR ENDED SEPTEMBER 30,
                                                                     ------------------------------------------------
                                                                         2001              2000              1999
                                                                     ------------      ------------      ------------
         Income (loss) before income taxes:
<S>                                                                  <C>               <C>               <C>
           Domestic ............................................     $  (527,000)      $    (18,000)     $    111,000
           Foreign .............................................        (447,000)           (61,000)          283,000
                                                                     -----------       ------------      ------------
                   Total .......................................     $  (974,000)      $    (79,000)     $    394,000
                                                                     ===========       ============      ============
         Income taxes (benefits):
           Current:
              Federal ..........................................     $    12,000       $      4,000      $     15,000
              State ............................................           2,000            (34,000)           45,000
              Foreign ..........................................         103,000            183,000           247,000
                                                                     -----------       ------------      ------------
                   Current income taxes ........................         117,000            153,000           307,000
           Deferred:
              Federal ..........................................              --             35,000                --
              State ............................................              --                 --                --
              Foreign ..........................................              --                 --                --
                                                                     -----------       ------------      ------------
                   Deferred income taxes .......................              --             35,000                --
                                                                     -----------       ------------      ------------
                        Provision for total income taxes .......     $   117,000       $    188,000      $    307,000
                                                                     ===========       ============      ============
</Table>

    A reconciliation of the provision for income taxes at the applicable Federal
statutory income tax rate to the actual provision for income taxes follows:

<Table>
<Caption>
                                                                  YEAR ENDED SEPTEMBER 30,
                                                      ------------------------------------------------
                                                          2001              2000              1999
                                                      ------------      ------------      ------------
<S>                                                   <C>               <C>               <C>
         Expense (benefit) at statutory rate ....     $   (341,000)     $    (28,000)     $    138,000
         Foreign income taxes, net ..............           89,000           213,000            78,000
         State income taxes .....................            2,000           (34,000)           45,000
         Increase (decrease) in valuation
             allowance ..........................          268,000           211,000           (47,000)
         Other, net .............................           99,000          (174,000)           93,000
                                                      ------------      ------------      ------------
             Income taxes (benefit) .............     $    117,000      $    188,000      $    307,000
                                                      ============      ============      ============
</Table>

    Income taxes of $14,000 were payable at September 30, 2001 ($4,000
receivable at September 30, 2000). The Company does not accrue income taxes on
undistributed earnings of certain foreign subsidiaries which are permanently
invested. At September 30, 2001 and 2000, the amount of undistributed earnings
for which taxes have not been accrued was insignificant.

    At September 30, 2001, the Company has foreign tax credits of $584,000 which
expire between 2002 and 2006. The Company also has minimum tax credits of
$218,000 which carry forward indefinitely. At September 30, 2001, certain
foreign subsidiaries have net operating loss carryforwards of approximately
$8,738,000 which may be utilized in future years.

    Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets are as follows:

<Table>
<Caption>
                                                                                  SEPTEMBER 30,
                                                                          -----------------------------
                                                                              2001             2000
                                                                          ------------     ------------
         Deferred tax liabilities:
<S>                                                                       <C>              <C>
            Software revenue ........................................     $    745,000     $  1,005,000
            Depreciation ............................................          103,000          123,000
            Other ...................................................          121,000          121,000
                                                                          ------------     ------------
                   Total deferred tax liabilities ...................          969,000        1,249,000
                                                                          ------------     ------------
         Deferred tax assets:
            Accrued liabilities and other miscellaneous items .......          277,000          302,000
            U.S. and foreign loss carryforwards .....................        3,176,000        3,070,000
            U.S. tax credit carryforwards ...........................          440,000          533,000
                                                                          ------------     ------------
                   Total deferred tax assets ........................        3,893,000        3,905,000
         Valuation allowance for deferred tax assets ................        3,045,000        2,777,000
                                                                          ------------     ------------
                   Net deferred tax assets ..........................          848,000        1,128,000
                                                                          ------------     ------------
                        Net deferred tax liabilities ................     $    121,000     $    121,000
                                                                          ============     ============
</Table>



                                                                              29
<PAGE>

    Utilization of the Company's tax credit and loss carryforwards is dependent
on realizing taxable income in the appropriate tax jurisdiction. Deferred tax
assets for these carryforwards have been reduced by the valuation allowance to
an amount that is more likely than not to be realized.

7.  BUSINESS SEGMENT AND REVENUE FROM MAJOR CUSTOMERS:

    The Company identifies segments based upon line of business that results in
three reportable segments: Convenience Retailing, Pricing, and Business
Development segments. (Due to the reduced postal activity and overlapping skill
sets, the previous Postal and DataMetrix segments were combined during fiscal
year 2000 into the Business Development segment.) The Convenience Retailing
segment derives its revenues from providing decision support software,
information databases and consulting services to businesses which have an
investment in retail outlet networks, primarily in the petroleum industry. In
many cases, pricing products are sold within the same customer base applicable
to Convenience Retailing. However, Pricing services are directed more towards
operational issues rather than retail site location or operation. The Business
Development segment derives its revenues primarily from the sales of visual
mapping information for cities in the United States. The Company's measure of
segment profit is operating income. Amortization is specifically assigned to
each reported segment as capitalized development costs are written off to
segmented cost of sales over their useful economic life. Development of the
Business Development U.S. geographic database was not completed as of September
30, 1999 and, therefore, no amortization was recorded. Depreciation is allocated
to each reported segment through pre-determined corporate percentages.
Identifiable assets in the Convenience Retailing, Pricing, and Business
Development segments, which are recorded in the Convenience Retailing segment,
are shared resources which are not specifically allocated. All assets acquired
are managed as shared resources and are not identifiable to specific reporting
segments.

    Comparative business segment information has been reclassified herein to
conform with fiscal year 2001 disclosure formats. Information on segments and a
reconciliation to income before taxes are as follows:

<Table>
<Caption>
                                                                         SEGMENTS
                                             ------------------------------------------------------------------
                                             CONVENIENCE                          BUSINESS
                                              RETAILING          PRICING         DEVELOPMENT          TOTAL
                                             ------------      ------------      ------------      ------------
<S>                                          <C>               <C>               <C>               <C>
YEAR ENDED SEPTEMBER 30, 2001
Revenues:
    Information services and
       software maintenance ............     $ 12,788,000      $  2,089,000      $    427,000      $ 15,304,000
    Software licensing .................           69,000            22,000            16,000           107,000
                                             ------------      ------------      ------------      ------------
         Total revenues ................     $ 12,857,000      $  2,111,000      $    443,000      $ 15,411,000
                                             ============      ============      ============      ============
    Operating income (loss) ............     $    591,000      $   (408,000)     $   (719,000)     $   (536,000)
                                             ============      ============      ============
    Other expense ......................                                                               (438,000)
                                                                                                   ------------
    Loss before income tax .............                                                           $   (974,000)
                                                                                                   ============

    Amortization of capitalized
         product development ...........     $    381,000      $     48,000      $    105,000      $    534,000
    Amortization of U.S.
         geographic database ...........               --                --           396,000           396,000
    Depreciation .......................          278,000            15,000            15,000           308,000
    Identifiable assets ................        6,896,000                --                --         6,896,000
    Additions to long-lived assets  ....          267,000                --                --           267,000
</Table>


(See continuation of table on next page)



                                                                              30
<PAGE>

<Table>
<Caption>
                                                                         SEGMENTS
                                             -----------------------------------------------------------------
                                             CONVENIENCE                         BUSINESS
                                              RETAILING          PRICING        DEVELOPMENT          TOTAL
                                             ------------      ------------     ------------      ------------
<S>                                          <C>               <C>              <C>               <C>

YEAR ENDED SEPTEMBER 30, 2000
Revenues:
    Information services and
       software maintenance ............     $ 15,281,000      $  1,950,000     $    737,000      $ 17,968,000
    Software licensing .................           56,000           258,000            1,000           315,000
                                             ------------      ------------     ------------      ------------
         Total revenues ................     $ 15,337,000      $  2,208,000     $    738,000      $ 18,283,000
                                             ============      ============     ============      ============
    Operating income (loss) ............     $  1,907,000      $    114,000     $ (2,047,000)     $    (26,000)
                                             ============      ============     ============
    Other income (expense) .............                                                               (53,000)
                                                                                                  ------------
    Loss before income tax .............                                                          $    (79,000)
                                                                                                  ============

    Amortization of capitalized
         software development ..........     $    482,000      $     11,000     $     42,000      $    535,000
    Amortization of U.S.
         geographic database ...........               --                --          264,000           264,000
    Depreciation .......................          374,000            21,000           21,000           416,000
    Identifiable assets ................        9,603,000                --               --         9,603,000
    Additions to long-lived assets .....          190,000                --               --           190,000
YEAR ENDED SEPTEMBER 30, 1999
Revenues:
    Information services and
       software maintenance ............     $ 15,998,000      $  2,062,000     $    712,000      $ 18,772,000
    Software licensing .................          374,000           186,000               --           560,000
                                             ------------      ------------     ------------      ------------
         Total revenues ................     $ 16,372,000      $  2,248,000     $    712,000      $ 19,332,000
                                             ============      ============     ============      ============
    Operating income (loss) ............     $  1,170,000      $    451,000     $ (1,169,000)     $    452,000
                                             ============      ============     ============
    Other income (expense) .............                                                               (58,000)
                                                                                                  ------------
    Income before income tax ...........                                                          $    394,000
                                                                                                  ============

    Amortization .......................     $    130,000      $     23,000     $         --      $    153,000
    Depreciation .......................          325,000            13,000           65,000           403,000
    Identifiable assets ................       10,518,000                --               --        10,518,000
    Additions to long-lived assets .....          739,000                --               --           739,000
</Table>

    The Company's principal production facility in the United States is
supported by satellite production facilities in England and Brazil. Foreign
sales offices or representatives are currently maintained in Brazil, Japan,
South Africa, South Korea, Shanghai, the United Kingdom and Singapore. The
following table sets forth the revenues by each of the Company's three
production centers, export sales from the United States and long-lived assets.



                                                                              31
<PAGE>

<Table>
<Caption>
                                                            YEAR ENDED SEPTEMBER 30
                                                 ----------------------------------------------
                                                     2001             2000             1999
                                                 ------------     ------------     ------------
<S>                                              <C>              <C>              <C>
Revenues from external customers:
    United States ..........................     $ 14,907,000     $ 17,606,000     $ 18,992,000
    Europe .................................          277,000          243,000          181,000
    South America ..........................          227,000          434,000          159,000
                                                 ------------     ------------     ------------
Total revenues .............................     $ 15,411,000     $ 18,283,000     $ 19,332,000

Export sales from the United States:
    Canada .................................     $    289,000     $    587,000     $    264,000
    Central America ........................          320,000           52,000          326,000
    South America ..........................          463,000          360,000          776,000
    Europe .................................          766,000          185,000          546,000
    Asia/Pacific Rim .......................        4,896,000        5,703,000        7,506,000
    Africa .................................          340,000          837,000          312,000
                                                 ------------     ------------     ------------
Total export sales .........................     $  7,074,000     $  7,724,000     $  9,730,000
                                                 ============     ============     ============

Long-lived assets:
    United States ..........................     $  3,021,000     $  3,756,000     $  4,478,000
    Foreign offices ........................          187,000          257,000          341,000
                                                 ------------     ------------     ------------
Total long-lived assets ....................     $  3,208,000     $  4,013,000     $  4,819,000
                                                 ============     ============     ============
</Table>

    More than 97% of total revenues from continuing operations were derived from
the petroleum industry during each of the years ended September 30, 2001, 2000,
and 1999. Individual customers accounted for MPSI revenues that were in excess
of 10% of consolidated revenues in those years as follows (in millions of
dollars):

<Table>
<Caption>
                                               2001                      2000                      1999
                                       ---------------------     ---------------------     ---------------------
                                        AMOUNT         %          AMOUNT         %          AMOUNT         %
                                       --------     --------     --------     --------     --------     --------
<S>                                    <C>          <C>          <C>          <C>          <C>          <C>

         ExxonMobil ..............     $    4.5           29     $    4.6           25     $    4.4           23
         BP Amoco ................            *            *          2.6           14            *            *
         Nisseki-Mitsubishi ......          1.6           11            *            *            *            *
</Table>

                           *Below 10%  for this period.

     Although the Company would be adversely affected if certain petroleum
industry customers curtailed their long-term usage of MPSI products or, in the
event of a significant long-term economic downturn in the petroleum industry
generally, the Company's petroleum clients are well diversified geographically
which reduces the long-term risk attendant with its industry dependence.

     In October 2001, MPSI's largest customer notified the Company that it would
explore other convenience retailing technology. Should that customer ultimately
decide to change technology, MPSI could lose $2 - $3 million in annual revenue
from this historical source. While the concurrent growth of business from other
clients is expected to offset this potential loss in fiscal 2002 and thereafter,
this decision could ultimately lower MPSI's revenue growth expectations.

8.  EMPLOYEE BENEFITS:

    Under an employee stock ownership and investment plan, all qualifying U.S.
employees may contribute up to 16% of their annual earnings. Subject to certain
limitations, the Company will contribute in cash or Common Stock



                                                                              32
<PAGE>
 an amount equal to but not less than 50% or more than 100% of a participant's
salary deferral contributions that are not in excess of 6% of the participant's
earnings for the year. Contributions may be invested in various equity or
fixed-income funds. The Company recorded expense related to its matching
contribution of $123,000, $138,000, and $166,000 in fiscal years 2001, 2000, and
1999, respectively. At September 30, 2001 and 2000, the Company had accrued
$238,000 and $273,000, respectively, of liabilities for matching contributions
to the 401(k) plan (which in the case of September 30, 2001, included the
unfunded matching contribution of $109,000 for the Plan year ended December 31,
2001 and $129,000 for the Plan year ended December 31, 2000). During fiscal year
2001, the Company liquidated its matching contribution liability for the Plan
year ended December 31, 1999 in cash. The matching contribution for Plan year
2000 was paid before December 31, 2001 and the matching contribution for Plan
year 2001 will be paid before December 31, 2002.

    The Company had reserved 750,000 shares of Common Stock for issuance of
stock options under a 1988 stock option plan covering all employees that expired
in November 1998. At September 30, 2001, 3,000 options granted under that plan
remain outstanding, are fully vested, and will not expire until 2002. An
additional 750,000 shares are reserved under a 1998 stock plan. Options of
67,000 are outstanding under the 1998 plan, expire from 2003 to 2005, and also
vest one-third annually over a three-year period.

    The Company has elected to follow Accounting Principals Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB 25) and related
interpretations in accounting for its employee stock options because the
alternative fair value accounting provided under FASB Statement 123, "Accounting
for Stock-Based Compensation," requires the use of option valuation models that
were not developed for use in valuing stock options. Under APB 25, the Company
only recognizes compensation expense when the exercise price of the Company's
employee stock options is less than the market price of the underlying stock on
the date of grant.

     Pro forma information regarding net income and earnings per share is
required by FASB 123 and has been determined as if the Company had accounted for
its employee stock options under the fair value method of that Statement. The
fair value for these options was estimated at the date of the grant using a
Black-Scholes option-pricing model. The fair value of the options was estimated
at the date of the grants with the following average assumptions: expected life
of the stock options 4 years; volatility of the expected market price of the
Company's common stock price of 123%, and 109% in 2000 and 1999, respectively;
risk-free interest rate of 5.73% and 5.81% in 2000 and 1999, respectively, and a
no-dividend yield. There were no grants in fiscal 2001.

    The Black-Scholes option valuation model was developed for use in estimating
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those traded options and because changes in the subjective input
assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

    For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows:

<Table>
<Caption>
                                                    2001                            2000                            1999
                                        ----------------------------    ----------------------------    ---------------------------
                                         PRO FORMA        REPORTED       PRO FORMA        REPORTED       PRO FORMA       REPORTED
                                        ------------    ------------    ------------    ------------    ------------   ------------
<S>                                     <C>             <C>             <C>             <C>             <C>            <C>

       Net income (loss) ............   $ (1,118,000)   $ (1,091,000)   $   (313,000)   $   (267,000)   $     24,000   $     87,000
       Basic and diluted income
          (loss) per share ..........   $       (.38)   $       (.37)   $       (.11)   $       (.09)   $        .01   $        .03
</Table>



                                                                              33
<PAGE>

    A summary of the Company's stock option activity and related information for
the years ended September 30 follows:

<Table>
<Caption>
                                                                           WEIGHTED-AVERAGE
                                                   OPTIONS                  EXERCISE PRICE                EXERCISABLE
                                                   -------                 ----------------               -----------
<S>                                              <C>                      <C>                           <C>

     AT SEPTEMBER 30, 1998                         159,819                       $4.75                       153,597
         Granted..............                     121,500                        1.41
         Exercised............                          --                          --
         Forfeited............                      (4,867)                       4.99
         Expired..............                     (10,000)                       3.60
     AT SEPTEMBER 30, 1999                         266,452                        3.31                       141,952
         Granted..............                      13,000                        1.17
         Exercised............                     (61,900)                       1.11
         Forfeited............                     (28,900)                       4.53
         Expired..............                     (21,051)                       3.00
     AT SEPTEMBER 30, 2000                         167,601                        3.79                       116,066
         Granted..............                          --                          --
         Exercised............                          --                          --
         Forfeited............                      (4,000)                       2.02
         Expired..............                     (94,101)                       5.40
     AT SEPTEMBER 30, 2001                          69,500                        1.73                        42,998
</Table>

         The weighted average grant date fair value for options granted during
2000 and 1999 were $1.16 and $1.33, respectively.

         The following table summarizes information about stock options
outstanding as of September 30, 2001:

<Table>
<Caption>
                                                    Weighted                      Weighted
                                                    average                       average
                                     Weighted       exercise                      exercise
                    Number of        average        price of      Number of       price of
   Range of          options        remaining       options        options      exercisable
exercise prices    outstanding    life in years   outstanding    exercisable      options
---------------    -----------    -------------   -----------    -----------    -----------
<S>                <C>            <C>             <C>            <C>            <C>
$1.00 to 1.19        34,000           2.65           $1.06          18,332        $1.04
 2.19 to 3.25        35,500           2.52            2.36          24,666         2.39
---------------    -----------    -------------   -----------    -----------    -----------
$1.00 to 3.25        69,500           2.59           $1.73          42,998        $1.82
---------------    -----------    -------------   -----------    -----------    -----------
</Table>

    The Company accrued $50,000 at September 30, 2001 ($4,000 accrued at
September 30, 2000); in connection with incentive award programs for certain
employees. The awards were accrued based upon the Company's achievement of
certain revenue and operating income objectives and the respective contributions
of certain employees to the achievement of those objectives. The various
incentive plans specify cash settlement of the accrued liability prior to
December 31, 2001.

    At September 30, 2001 and 2000, the Company had accrued $442,000 and
$558,000, respectively, related to employee vacations earned but not yet taken.

9.  COMMITMENTS AND CONTINGENCIES:

    The Company leases office space and equipment under various agreements,
substantially all of which have been accounted for as operating leases. Rental
expense, including the leases described above, of $1,032,000 was recorded during
the year ended September 30, 2001 ($1,123,000 in 2000 and $1,126,000 in 1999).
Aggregate future rentals under these commitments are as follows: 2002 --
$842,000, 2003 -- $593,000, 2004 -- $35, 000, 2005 -- $2,000, 2006 -- $1,000,
and thereafter -- $1,000.

10. SUPPLEMENTAL CASH FLOW INFORMATION:

    The Company paid interest of $389,000 during fiscal year 2001, $414,000
during fiscal year 2000, and $243,000 during fiscal year 1999. Income taxes of
$114,000, $179,000, and $290,000 were paid during fiscal years 2001, 2000, and
1999, respectively.



                                                                              34
<PAGE>

11. BASIC AND DILUTED EARNINGS PER SHARE:

    The following sets forth the computation of basic and diluted earnings
(loss) per share for the years ended September 30:

<Table>
<Caption>
     In thousands (except per share data):           2001            2000            1999
                                                  ----------      ----------      ----------
<S>                                               <C>             <C>             <C>

     Basic weighted-average shares ..........          2,912           2,886           2,849
     Effect of dilutive stock options .......             --              --              45
     Diluted weighted-average shares ........          2,912           2,886           2,894

     Net income (loss): .....................     $   (1,091)     $     (267)     $       87
     Basic and diluted earnings (loss)
          per common share ..................     $     (.37)     $     (.09)     $      .03
                                                  ----------      ----------      ----------
</Table>

         Exercisable antidilutive options for 43,000 and 108,000 shares were
outstanding at September 30, 2001 and 2000, respectively.

12. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):

<Table>
<Caption>
                                            1ST           2ND           3RD            4TH
                                         QUARTER       QUARTER        QUARTER        QUARTER
                                        ----------    ----------    ----------     ----------
<S>                                     <C>           <C>           <C>            <C>
                  2001
Revenues..............................  $4,087,000    $3,871,000    $3,505,000     $3,948,000
Income (loss) before income taxes.....     131,000      (353,000)     (450,000)      (302,000)
Net income (loss).....................     123,000      (376,000)     (473,000)      (365,000)
Basic net income (loss) per share.....        0.04         (0.13)        (0.16)         (0.12)
Diluted Net Income (loss) per share...        0.04         (0.13)        (0.16)         (0.12)

                  2000
Revenues..............................  $3,801,000    $4,703,000    $5,443,000     $4,336,000
Income (loss) before income taxes.....    (402,000)     (149,000)      574,000       (102,000)
Net income (loss).....................    (368,000)     (182,000)      560,000       (277,000)
Basic net income (loss) per share.....       (0.13)        (0.06)         0.19          (0.09)
Diluted Net Income (loss) per share...       (0.13)        (0.06)         0.19          (0.09)
</Table>

         Results for the fourth quarter of 2000 include a foreign currency gain
of $330,000 related to the liquidation of the Australian branch operations.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

         There were no changes in accountants or disagreements with accountants
on matters related to accounting or financial disclosure during the fiscal years
ended September 30, 2001 and 2000.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a) and (b) Identification of directors and officers.

         The directors and executive officers of the Company are as follows:

<Table>
<Caption>
                      NAME                       AGE               POSITION
                      ----                       ---               --------
<S>                                             <C>        <C>
             Ronald G. Harper (1)                 63       Chairman of the Board of Directors,
                                                           President and Chief Executive Officer
             Bryan D. Porto                       52       Executive Vice President and Director
             Bryan D. Gross                       44       Vice President, Technology
             J. Scott Smathers                    40       Vice President, Business Development
             James C. Auten                       53       Vice President, Chief Financial Officer
             William H. Webb                      61       Gen. Mgr., Corporate Human Resources
             John C. Bumgarner, Jr. (1)(2)        59       Director
             Dr. David L. Huff (1)                70       Director
             Joseph C. McNay (1)(2)               67       Director
             John J. McQueen (2)                  80       Director
</Table>

             (1) Member of the Compensation Committee

             (2) Member of the Audit Committee

(c) Identification of certain significant employees.

         Not applicable.



                                                                              35
<PAGE>

(d) Family relationships.

        Not applicable.

(e) Business experience.

        Mr. Harper, who founded the Company in 1970, has served as its
    President, Chairman of the Board and Chief Executive Officer since
    inception.

        Mr. Porto was appointed Executive Vice President of MPSI's Petroleum
    Service Division in 1998. He previously served as Sr. Vice President -
    Retail Petroleum and has served in marketing and network planning positions
    since joining MPSI in the Rio de Janeiro office in 1985. Mr. Porto was named
    to MPSI's Board of Directors in June 1998.

        Dr. Gross was appointed Vice President of Technology in November 1999.
    Prior to this position, he led the Core Product Re-engineering effort and
    Corporate Research activities. Dr. Gross joined MPSI in 1984 as Project
    Supervisor in Network Planning. He joined QuikTrip Corporation in 1991 as
    Manager of Statistical Research and Site Selection, returning to MPSI in
    1997 as General Manager of Corporate Technology.

        Mr. Smathers is currently serving in the position of Vice President of
    Business Development. He is responsible for developing diversification
    markets, implementing MPSI's Internet initiative and the Systems Department.
    He joined MPSI in 1984 and has served on several international assignments,
    including Australia and England. Prior to his current position, Mr. Smathers
    was Vice President of Operations and Software Development.

        Mr. Auten was appointed Vice President and Chief Financial Officer in
    1996. Mr. Auten joined MPSI in 1984 as Corporate Controller and held such
    position until December 1992 when he was appointed Principal Accounting
    Officer. Prior to joining MPSI, Mr. Auten was with KPMG Peat Marwick
    accounting firm.

        Mr. Webb joined MPSI as General Manager, Corporate Human Resources on
    April 8, 1996. Previously, Mr. Webb spent 14 years with Amerada Hess
    Corporation as Manager of Personnel Administration.

        Mr. Bumgarner serves in the following capacities for The Williams
    Companies, Inc., a Tulsa-based conglomerate - Senior Vice President,
    Corporate Development and Planning; President, Williams International;
    President, Strategic Investments, Williams Communications Group; and
    President, Williams Headquarter Building Group. He has been employed by The
    Williams Companies, Inc. since 1977. He is also a director of TRANSCO, James
    River Coal Company and several privately held companies. He has served on
    MPSI's Board since 1982.

        Dr. Huff has been a member of the faculty at the University of Texas
    since 1968. He has been a Fulbright Lecturer and has published numerous
    books and articles, including "Market Area Analysis, A Graphical Index of
    Consumer Expectation," "Measures of Market Area Overlap," and "Retail
    Location Theory." He is an expert in computer modeling techniques. He has
    served on MPSI's Board since 1982.

        Mr. McNay has been the President, Director and Chairman of the Board of
    Essex Investment Management Company, Inc., a company engaged in investment
    and advisory services, since 1976. Mr. McNay is also a director of Softech,
    Inc. and Alpha 1 Biomedical, Inc., which are publicly held companies. He has
    served on MPSI's Board since 1982.

        Mr. McQueen has been in the private practice of law in the Tulsa area
    since 1959. He has also served as a certified public accountant with KPMG
    Peat Marwick, as a tax specialist with Warren Petroleum Corp., and as



                                                                              36
<PAGE>

    controller of Davis Investments, a company engaged in oil and real estate
    activities. He has served on MPSI's Board since 1982.

(f) Involvement in certain legal proceedings.

        Not applicable.

(g) Promoters and control persons.

        Not applicable.

(h) Compliance with Section 16(a) of the Exchange Act.

        Based upon a review of Forms 3, 4 and 5 furnished to the Company with
    respect to its most recent fiscal year, the Company has determined that
    reports required pursuant to Section 16(a) of the Securities Exchange Act of
    1934, as amended, were filed on a timely basis.

ITEM 11. EXECUTIVE COMPENSATION

         Summary Compensation Table. The following table summarizes the
compensation paid over the last three completed fiscal years to the Company's
CEO and the other executive officers of the Company who received compensation of
$100,000 or more during the fiscal year ended September 30, 2001:

                           SUMMARY COMPENSATION TABLE

<Table>
<Caption>
                                                                           LONG TERM COMPENSATION
                                                                       ------------------------------
                                             ANNUAL COMPENSATION              AWARDS          PAYOUTS
                                        ----------------------------   --------------------   -------
                                                              OTHER                                      ALL
                                                             ANNUAL                                     OTHER
                                                             COMPEN-   RESTRICTED              LTIP     COMPEN-
          NAME AND                                  BONUS    SATION       STOCK    OPTIONS/   PAYOUTS   SATION
     PRINCIPAL POSITION         YEAR    SALARY($)    ($)     ($) (1)     AWARDS    SARS (#)     ($)     ($) (2)
     ------------------         ----    ---------   ------   -------   ----------  --------   -------   -------
<S>                             <C>     <C>         <C>      <C>       <C>         <C>        <C>      <C>

Ronald G. Harper..........      2001    $220,298        --    $9,000         --          --      --    $  6,218
Chairman of the Board,          2000     246,195        --     8,716         --          --      --       6,218
President & CEO                 1999     252,531        --     7,885         --          --      --      10,682

Bryan D. Porto............      2001    $145,002        --        --         --          --      --    $  1,021
Executive Vice President,       2000     172,329        --        --         --          --      --       1,021
Petroleum                       1999     159,390        --        --         --      10,000      --       5,821

James C. Auten............      2001    $105,482        --        --         --          --      --    $  1,021
Vice President and              2000     114,851        --        --         --          --      --       1,021
Chief Financial Officer         1999     117,185        --        --         --          --      --       2,720

Bryan D. Gross............      2001    $145,340    10,000        --         --          --      --    $  1,021
Vice President Technology       2000     147,275        --        --         --       3,000      --         898
                                1999      90,848    10,000        --         --       8,000      --       3,403
</Table>

(1)       Represents automobile lease paid to or on behalf of Mr. Harper.

(2)       The components of "All Other Compensation" for the fiscal years ended
          September 30, 2001, 2000, and 1999 include (a) Company matching
          contributions to the Company's 401(k) defined contribution plan (Mr.
          Harper--$5,000, $0, and $4,800; Mr. Porto -- $4,698, $0, and $4,800;
          Mr. Auten--$1,753, $0, and $1,699; and Dr. Gross--$3,219, $0 and
          $2,544 in 2001, 2000 and 1999, respectively); and (b) supplemental
          life insurance premiums paid by the Company (Mr. Harper--$6,218,
          $6,218, and $5,882, Mr. Porto--$1,021, $1,021, and $1,021; Mr.
          Auten--$1,021, $1,021, and $1,021, and Dr. Gross--$1,021, $898 and
          $859 in 2001, 2000 and 1999, respectively).



                                                                              37
<PAGE>

    Options Exercised Table. The following table sets forth information
concerning each exercise of stock options by the named executive officers during
the last completed fiscal year together with information concerning unexercised
options held by the named executive officers:

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                         AND FY-END OPTIONS/SAR VALUES

<Table>
<Caption>
           (a)                    (b)          (c)                  (d)                           (e)


                                                            Number of Securities          Value of Unexercised
                                Shares                     Underlying Unexercised      In-the-Money Options/SARs
                               Acquired       Value      Options/SARs at FY-End (#)          at FY-End ($)
                              on Exercise   Realized
Name                              (#)          ($)       Exercisable/Unexercisable     Exercisable/Unexercisable
----                          -----------   --------     -------------------------     -------------------------
<S>                           <C>          <C>          <C>                            <C>

James C. Auten                     *            *                 -- / --                       -- / --
Bryan D. Porto                     *            *               6,666/3,334                     -- / --
William D. Webb                    *            *                 -- / --                       -- / --
Bryan D. Gross                     *            *              12,666/6,334                     -- / --
J. Scott Smathers                  *            *               2,000/1,000                     -- / --
</Table>

    *None exercised during the period.

EMPLOYMENT CONTRACTS AND SEVERANCE ARRANGEMENTS

    The Company maintains a severance policy applicable to all full-time regular
employees with at least one year of full-time service. Eligible employees are
those who are terminated as the result of (1) a reduction of the Company's work
force, (2) elimination of a job or position, (3) inability to satisfactorily
perform required responsibilities, or (4) relocation of applicable Company
facilities. The amount of severance paid is based upon the employee's base
salary and length of service, and includes payment for vested but unused
vacations and pro rated automobile allowances, if applicable. The only named
executive officer who would receive aggregate severance in excess of $100,000
under the current policy is Mr. Ronald G. Harper. Mr. Harper's aggregate
severance would be approximately $115,000 at September 30, 2001.



                                                                              38
<PAGE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

    Ronald G. Harper, Chief Executive Officer of the Company, is the only member
of the Compensation Committee who is also an employee or officer of the Company.

DIRECTORS' COMPENSATION

    Members of the Board of Directors who are employees of the Company receive
no additional compensation as a result of their service as directors. Directors
who are not employees of the Company are compensated at the rate of $1,500 for
each board meeting attended and are reimbursed for any out-of-pocket expenses
incurred in attending meetings.

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The following table sets forth information as of September 30, 2001, as to
shares of Common Stock beneficially owned by the directors (all of whom are
nominees for another term), certain executive officers, the directors and
officers of the Company as a group, and certain persons known to the Company to
own beneficially more than five percent of the Common Stock. Except as otherwise
indicated, each person has sole investment and voting power with respect to the
shares shown. Ownership information is based upon information furnished by the
respective individuals.

<Table>
<Caption>
                                                                  BENEFICIAL OWNERSHIP
                                                                    OF COMMON STOCK
                                                            --------------------------------
                                                               NUMBER              PERCENT
NAME OF COMMON STOCKHOLDER                                   OF SHARES            OF CLASS
--------------------------                                  ------------        ------------

<S>                                                         <C>                 <C>
Ronald G. Harper (2) ..................................        1,223,966(1)               42%
  4343 South 118th East Avenue
  Tulsa, Oklahoma 74146

John C. Bumgarner, Jr .................................          222,322                   8%
  4900 Bank of Oklahoma Tower
  One Williams Center
  Tulsa, Oklahoma 74172

Joseph C. McNay .......................................          242,722                   8%
  125 High Street, 29th Floor
  Boston, Massachusetts 02110

Bank of Oklahoma, N.A .................................          284,714                  10%
  P. O. Box 2300
  Tulsa, Oklahoma 74192

RS Investment Management Co., LLC (3) .................          225,838                   8%
  388 Market Street, Suite 200
  San Francisco, California 94111

Sanford Orkin .........................................          222,222                   8%
  3414 Peachtree Road, N.E., Suite 236
  Atlanta, Georgia 30326

James C. Auten (2) ....................................            1,854                   *
Bryan D. Porto (2) ....................................            7,236                   *
J. Scott Smathers (2) .................................            4,200                   *
Bryan D. Gross (2) ....................................            7,227                   *
All officers and directors as a group (7 persons) .....        1,709,527                  59%
</Table>

*  Less than 1%.



                                                                              39
<PAGE>

ITEM 12 (continued)

(1)       Includes 373,910 shares of Common Stock held in trust for the benefit
          of Mr. Harper's family and 479,209 shares held in trust for the
          benefit of certain charities. Mr. Harper has sole voting and
          investment power over all of the trust shares except for 135,637
          shares over which he shares investment or voting power and 235,773
          shares over which he has no investment or voting power. Mr. Harper
          disclaims beneficial ownership of these trust shares.

(2)       The indicated individuals are executive officers of the Company.

(3)       As reported in the Schedule 13G filed by the named person (among
          others), voting and dispositive power over the listed shares may be
          deemed shared among the RS Value Group, RSIM, LP, the RS Orphan Fund,
          LP and the RS Orphan Offshore Fund and the named person by reason of
          corporate relationships. Each such beneficial owner has the same
          address as that set forth above for the named person.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    In February 1999, the Company obtained an exclusive license to incorporate
in a new suite of products a software modeling engine, Huff 2000, developed by
Dr. David L. Huff. Dr. Huff has been a director of MPSI since 1982. The
five-year license agreement provides that MPSI shall be responsible for all
sales and marketing as well as the development of user interfaces. The Company
and Dr. Huff shall each share 50% in any net software revenues derived from
utilization of this new software technology.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) (1) The response to this portion of ITEM 14 is submitted as a separate
        section of this report under ITEM 8.

    (2) The response to this portion of ITEM 14 is set forth in ITEM 14(d)
        below.

    (3) Exhibits.

<Table>
<Caption>
 EXHIBIT
  NUMBER                                    DESCRIPTION
 -------                                    -----------

<S>             <C>
      *3.1  --  Certificate of Incorporation of MPSI Systems Inc., as amended,
                filed as the same numbered exhibit with the Company's Form 10-Q
                dated March 31, 1987, File No. 0-11527.

      *3.2  --  By-laws, as amended, filed as Exhibit 3.1 with the Company's
                Form 10-Q dated June 30, 1987, File No. 0-11527.

      *3.3  --  Certificate of Designation dated September 23, 1993 establishing
                the rights conferred on $.10 Par Value Convertible Preferred
                Stock, Series 1993, filed as the same numbered exhibit with the
                Company's 1993 Form 10-K, File No. 0-11527.

      *3.4  --  Amendment to Certificate of Incorporation dated November 16,
                1993 to reflect a one-for-ten reverse stock split, filed as the
                same numbered exhibit with the Company's 1993 Form 10-K, File
                No. 0-11527.
</Table>



                                                                              40
<PAGE>

    (3) Exhibits. (Continued)

<Table>
<Caption>
 EXHIBIT
  NUMBER                                    DESCRIPTION
 -------                                    -----------

<S>             <C>
    *10.1   --  MPSI Systems Inc. 1998 Stock Plan, filed as the same numbered
                exhibit with the Company's 1998 Form 10-K, File No. 0-11527.

    *10.7   --  Real property lease dated February 11, 1998, between American
                Southwest Properties, Inc., as lessor, and the Company, as
                lessee, relating to the Company's Tulsa, Oklahoma facility,
                filed as the same numbered exhibit with the Company's 1998 Form
                10-K, File No. 0-11527.

    *10.15  --  Indemnification Agreements with Directors and Officers of MPSI
                Systems Inc. filed as the same numbered exhibit with the
                Company's 1986 Form 10-K, File No. 0-11527.

    *10.16  --  MPSI Systems Inc. Amended and Restated 1988 Stock Option Plan,
                effective November 29, 1988, filed as Exhibit 4.5 with the
                Company's 1994 Form S-8, File No. 0-11527.

    *10.17  --  Stock Option Agreement pursuant to MPSI Systems Inc. Amended and
                Restated 1988 Stock Option Plan, filed as Exhibit 4.6 with the
                Company's 1994 Form S-8, File No. 0-11527.

    *10.20  --  MPSI Systems Inc. Matching Investment Plan, effective January 1,
                1990, filed as Exhibit 4(c) with Pre-effective Amendment No. 1
                to the Company's Form S-8, filed on December 29, 1989, File No.
                0-11527.

      21.1  --  List of Subsidiaries.

      23.1  --  Consent of Independent Auditors -- Ernst & Young LLP.
</Table>

----------

* Incorporated by reference.

(b) Form 8-K - No Form 8-K was filed by the Company during or applicable to the
    quarter ended September 30, 2001.

    On October 30, 2001, the Company filed a Form 8-K that changes the Company's
    fiscal year from September 30 to December 31. The first fiscal year affected
    will end December 31, 2002.

(c) Exhibits - The response to this ITEM is submitted as a separate section of
    this report.

(d) Financial Statement Schedules - The response to this Item is submitted as a
    separate section of this report.



                                                                              41
<PAGE>

         REPORT OF INDEPENDENT AUDITORS ON FINANCIAL STATEMENT SCHEDULE


We have audited the consolidated financial statements of MPSI Systems Inc. and
subsidiaries as of September 30, 2001 and 2000, and for each of the three years
in the period ended September 30, 2001, and have issued our report thereon dated
February 25, 2002, (included elsewhere in this Form 10-K). Our audits also
included the financial statement schedule included in this Form 10-K. This
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.



                                                ERNST & YOUNG LLP



Tulsa, Oklahoma
February 25, 2002



                                                                              42
<PAGE>

                                                                   SCHEDULE VIII


                       MPSI SYSTEMS INC. AND SUBSIDIARIES

                        VALUATION AND QUALIFYING ACCOUNTS

                      THREE YEARS ENDED SEPTEMBER 30, 2001

<Table>
<Caption>
              COLUMN A                        COLUMN B                 COLUMN C                  COLUMN D            COLUMN E
             -----------                    ------------    ----------------------------       ------------        ------------
                                                                     ADDITIONS
                                                            ----------------------------
                                             BALANCE AT      CHARGED TO                           OTHER              BALANCE
                                             BEGINNING       COSTS AND      REDUCTION OF       (DEDUCTIONS)         AT END OF
             DESCRIPTION                     OF PERIOD        EXPENSES        REVENUES          ADDITIONS             PERIOD
             -----------                    ------------    ------------    ------------       ------------        ------------
<S>                                         <C>             <C>             <C>                <C>                <C>

FOR THE YEAR ENDED SEPTEMBER 30, 1999
  Accumulated depreciation .............    $  5,576,000    $    403,000    $         --       $ (1,041,000)(2)    $  4,938,000
  Accumulated amortization .............       4,019,000         153,000              --                 --           4,172,000
  Unamortized discount on software
    license agreements .................         360,000              --         102,000(1)        (225,000)(1)         237,000
FOR THE YEAR ENDED SEPTEMBER 30, 2000
  Accumulated depreciation .............    $  4,938,000    $    416,000    $         --       $   (626,000)(2)    $  4,728,000
  Accumulated amortization .............       4,172,000         799,000              --                 --           4,971,000
  Unamortized discount on software
    license agreements .................         237,000              --              --           (149,000)(1)          88,000
FOR THE YEAR ENDED SEPTEMBER 30, 2001
  Accumulated depreciation .............    $  4,728,000    $    308,000    $         --       $   (490,000)(2)    $  4,546,000
  Accumulated amortization .............       4,971,000         930,000              --                 --           5,901,000
  Unamortized discount on software
    license agreements .................          88,000              --              --            (66,000)(1)          22,000
</Table>

----------

(1) Reduction of unamortized discount on long-term receivables represents
    current period interest income recognition (see Note 2 to Consolidated
    Financial Statements). Increases to unamortized discount represent the
    present-value-discount on new software license agreements net of adjustment
    for any contract cancellations or revisions.

(2) Reduction is due to retirement of fully amortized assets and to assets sold
    or otherwise disposed.






                                                                              43
<PAGE>

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant, a corporation organized and existing under
the laws of the State of Delaware, has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Tulsa,
State of Oklahoma, on the 25th day of February, 2002.

                                        MPSI SYSTEMS INC.


                                         By           /s/ Ronald G. Harper
                                            -----------------------------------
                                                        Ronald G. Harper
                                                     Chairman of the Board,
                                                       President and Chief
                                                        Executive Officer

    Pursuant to the requirements of the Securities Act of 1934, this Report has
been signed below by the following persons on behalf of the Registrant, in the
capacities and on the date indicated.

<Table>
<S>                                           <C>                                <C>
            /s/ Ronald G. Harper              Chairman of the
Board,              February 25, 2002
-----------------------------------------       President and Chief
              Ronald G. Harper                  Executive Officer



             /s/ James C. Auten               Vice President and Chief--          February 25, 2002
-----------------------------------------       Financial Officer
               James C. Auten


        /s/ John C. Bumgarner, Jr.            Director                            February 25, 2002
-----------------------------------------
           John C. Bumgarner, Jr.


             /s/ David L. Huff                Director                            February 25, 2002
-----------------------------------------
               David L. Huff


            /s/ Joseph C. McNay               Director                            February 25, 2002
-----------------------------------------
              Joseph C. McNay


            /s/ John J. McQueen               Director                            February 25, 2002
-----------------------------------------
              John J. McQueen


             /s/ Bryan D. Porto               Director                            February 25, 2002
-----------------------------------------
               Bryan D. Porto
</Table>




                                                                              44
<PAGE>

                                INDEX TO EXHIBITS


<Table>
<Caption>
   EXHIBIT
    NUMBER                                   EXHIBIT
   -------                                   -------


<S>             <C>
     21.1       -- List of Subsidiaries

     23.1       -- Consent of Independent Auditors -- Ernst & Young LLP
</Table>






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