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                       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

For the fiscal year ended December 31, 2001

                                       OR

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

                         Commission file number: 0-1298

                        ADVANCED TECHNICAL PRODUCTS, INC.
             (Exact name of registrant as specified in its charter)

                Delaware                                    11-1581582
      (State or other jurisdiction                       (I.R.S. Employer
    of incorporation or organization)                   Identification No.)

                         200 Mansell Ct. East, Suite 505
                             Roswell, Georgia 30076
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (770) 993-0291

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

       Title of Each Class            Name of Each Exchange on Which Registered
  Common Stock, $0.01 par value            Nasdaq / National Market System

     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
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

     [X]

     The aggregate  market value of the voting stock held by  non-affiliates  of
the registrant on March 29, 2002 was  $116,268,326  (4,387,484  shares at $26.50
per share,  the closing  price of the  registrant's  common  stock on the Nasdaq
National  Market on March 28, 2002).  As of that date,  5,886,997  shares of the
Company's Common Stock were outstanding.

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                                     PART I

ITEM 1.                             BUSINESS

General

     Advanced  Technical  Products,  Inc.  (ATP or the  Company)  is a  Delaware
corporation  that  manufactures  advanced  composite  structures,  chemical  and
biological detection and protection products,  and specialty vehicle electronics
through four business units: Intellitec, Lincoln Composites, Lunn Industries and
Marion Composites.  These products are categorized into three principal business
segments:  (i) Aerospace and Defense, (ii) Commercial Composites and (iii) Other
Products.  The Aerospace and Defense segment designs,  develops and manufactures
advanced composite material products,  including radomes,  aircraft  components,
missile and satellite  composite  structures,  engine  components,  rocket motor
cases,  pressure vessels,  relocatable  shelters,  missile launch tubes,  torque
shafts and fuel tanks,  as well as a wide range of  integrated  defense  systems
including   electro-optical  systems,  chemical  and  biological  detection  and
protection  systems,  ordnance  delivery  systems  and  light-weight  camouflage
systems.  The Commercial  Composites segment produces compressed natural gas and
hydrogen  fuel tanks,  oilfield  tubular  products used in the  exploration  and
production of oil and gas and other  composite-based  commercial  products.  The
Other  Products  operating  segment  primarily  consists  of a  manufacturer  of
electrical   power   switching   products  for  specialty   vehicles   including
recreational vehicles,  motor homes,  conversion vans,  over-the-road trucks and
leisure  boats.  See  Note 4 to the  Consolidated  Financial  Statements  of the
Company for a summary of selected  financial  data of each  reportable  business
segment.  Through June 14, 2001, the Company also  manufactured  structural core
materials  through  its  former  Alcore  business  unit,  which is  treated as a
discontinued operation for financial reporting purposes.

Aerospace and Defense Segment

     Composite Based Products

     Radomes. ATP manufactures radomes,  which are aerodynamic and environmental
covers made of composite  materials that shelter the antenna assembly of a radar
set, for airplanes,  missiles, and unmanned aerial vehicles. Management believes
that ATP has approximately a 75% share of the domestic military high-performance
radome market and is the sole supplier of radomes for military  aircraft such as
the EA6B,  AV-8B,  B-1, B-1B,  C-5B,  C-17,  C-130,  F-4, F-5, F-14, F-15, F-16,
F/A-18 and the JSF. In 2001, ATP received a contract to produce  radomes for the
Boeing 747-400, 757 and Next-Generation 737 commercial aircraft.

     Additionally,  ATP  owns  ceramic  radome  manufacturing  technology  which
enables  it to  manufacture  high  temperature,  high  performance  radomes  for
interceptor missile  applications.  ATP has manufactured Patriot Missile radomes
since 1971, and management  believes that ATP has been the sole supplier for the
past 17 years.

     Sales of radomes for each of 2001, 2000 and 1999 constituted 7.1%, 9.4% and
10.1%, respectively, of the total consolidated revenues of ATP.

     Aircraft Components.  ATP manufactures high performance composites for both
military and commercial aircraft programs. The types of composite-based products
ATP manufactures for aerospace  programs are canopies,  doors,  fuel tanks, wing
and floor panels,  fairings and other primary and secondary aircraft components.
ATP has also participated in developmental projects that include radar absorbing
materials,  radar absorbing  structures and frequency selective surfaces for low
observable applications.


                                       2
<PAGE>

     ATP currently  fabricates flap panels,  winglets and landing gear doors, in
addition to the nose and tail  radomes,  for the C-17.  Management  believes the
C-17 is a  high-priority  program for the U.S. Air Force and that the production
of these C-17 components will provide a stable stream of revenue for ATP for the
foreseeable future.

     ATP's  program  to  supply  flap  track  fairings  to  The   Aerostructures
Corporation is currently in production,  and 150 shipsets have been delivered as
of the end of 2001.  These  parts  are  installed  on the  Airbus  A330 and A340
aircraft.   This  "life  of  the  program"  contract  is  anticipated  to  cover
approximately 500 Airbus aircraft.

     In December  1997,  ATP entered into a long-term  production  alliance with
General Electric  Aircraft Engines (GE) pursuant to which ATP is manufacturing a
composite  inlet  device for the GE F414-400  turbofan  engine to be used in the
U.S. Navy's newest fighter,  the F/A-18E/F Super Hornet. In June 1998, GE placed
an order with an  estimated  value of $65 million over five years as the initial
step in the GE-ATP  alliance.  In 2001,  this entire GE order was released  into
backlog.

     Sales of aircraft  components for each of 2001,  2000 and 1999  constituted
20.1%, 24.3% and 22.0%, respectively, of the total consolidated revenues of ATP.

     Rocket Motor Cases.  ATP  manufactures  a variety of filament  wound rocket
motor cases used in solid  propellant  propulsion  systems that are incorporated
into strategic  (long-range)  and tactical  missile  systems as well as orbiting
commercial satellites and deep-space  penetration  spacecraft.  ATP manufactures
rocket motor cases for use in strategic  missiles such as the D-5 Trident II, as
well as for tactical missile systems such as the Patriot  Advanced  Capability-3
(PAC-3)  and  man-launched   anti-tank  or  bunker  defeat  systems.   ATP  also
manufactures  the ORBUS-21D rocket motor case, which is used in conjunction with
the space shuttle and other unmanned  launch  vehicles to place  satellites into
earth's orbit, and is also used on deep space missions.

     Pressure  Vessels.  ATP produces  filament wound pressure  vessels that are
used predominantly in aircraft, launch vehicles, space applications, and missile
systems where weight minimization is critical.  These high-performance  pressure
vessels  are  typically  used as a storage  container  for  pressurized  helium,
hydrogen,  nitrogen,  xenon and other gases  which are used in  critical  system
applications,  including  emergency  power,  crew capsule  impact and flotation,
maneuvering,  environmental,  fuel feed and purge systems.  Management  believes
that ATP has been a leader in the integration of filament winding  technology in
combination  with metal  liners  that  results  in  vessels  that meet or exceed
structural requirements. A number of existing pressure vessel configurations are
currently  qualified by prime contractors and the military.  This  qualification
reduces competition for follow-on orders and provides a variety of products that
can be  offered  for  new  applications  with  minimal  capital  investment  and
production lead-time. ATP manufactures pressurant tanks for Airborne Laser (ABL)
and  Theater  High  Altitude  Area  Defense  (THAAD),  which  are  two  critical
components of the nation's Ballistic Missile Defense Program.

     Fuel Tanks. ATP produces external fuel tanks which are used by the military
to provide  aircraft with  additional  operating  range.  The military  requires
all-composite  external  fuel  tanks  because  they offer a  significant  weight
advantage  and  improved  crash  survivability,  greater  safety in a fire,  and
improved gunfire protection.  Management believes that ATP is currently the only
qualified producer of the tank liner for the 230-Gallon Apache (AH-64) and Black
Hawk  (UH-60)  fuel tanks for the U.S.  Army.  ATP  continues  to deliver  under
contracts  for the  production  of the  480-gallon  external  fuel tanks for the
F/A-18E/F. Deliveries extend through 2003 under the current contract.


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<PAGE>

     Vehicle/Missile  Structures.  ATP's vehicle/missile  structure product line
includes  composite  products used for various  structural  applications such as
launch vehicles,  space, marine and aircraft applications.  Products included in
this product line are missile  warheads,  radar  housings,  missile  structures,
aircraft  and  missile  control  surfaces  and  aircraft  engine  ducts.   These
structures  must be light weight and have  excellent  structural  properties  in
order to  replace  conventional  metal  products.  These  projects  are  usually
obtained   from  various   aerospace  and  defense   companies  and   government
laboratories that need to develop prototype hardware to demonstrate capabilities
of advanced composites.

     Tubular Products.  ATP's tubular product line includes missile launch tubes
and torque  shafts.  The primary  products  in the launch tube line  include the
Multiple  Launch Rocket System (MLRS) and the launch  canister for the submarine
based  Tomahawk  Missile.  While  management  believes  that the MLRS program is
important to the U.S. Army as an effective, low-cost weapon system, the Army has
a large  inventory  of these  missiles,  and the funding  level for this program
remains low. Composites offer desirable properties for torque shafts for various
aerospace  and  defense  applications  and are  presently  being  used in Boeing
Vertol's 234 helicopter and the USMC's V-22 aircraft.

     Resin Transfer Molding.  Resin transfer molding (RTM) is the fabrication of
a  composite   component   formed  by  pumping  resin  into  a  mold  containing
reinforcement  material.  The rough  product is then  removed  from the mold and
finished.  While use of this  manufacturing  process is primarily  driven by its
lower cost,  recent  advances in materials and equipment have helped to make the
process  a  viable  choice  for  fabricating  composite  aircraft  and  military
structures.  ATP supplies 200 RTM parts on the Air Force's F-22 Raptor. In 2001,
ATP entered into a five year contract with The Boeing  Company to produce 40 RTM
parts per aircraft for the F/A-18E/F Super Hornet.  Also in 2001, ATP received a
contract from Honeywell Engines and Systems to produce fan by-pass ducts for the
TFE731-20/-40 engine.

     ATP has diversified  into Vacuum Assisted Resin Transfer  Molding  (VARTM),
which is similar to RTM except the resin is drawn into a mold  through  use of a
vacuum,  rather than pumped in under pressure.  In 2001, ATP received a contract
from Sikorsky to produce VARTM composite parts for the Comanche helicopter.

     Recently ATP entered into an agreement with Lockheed Martin as the selected
source for RTM components on the Joint Strike Fighter (JSF). Management believes
that this agreement ensures that ATP will have considerable  activity on the JSF
through the  development  and production  life of this program.  It is projected
that there will be in excess of 3,000 JSF aircraft produced.

     Metal  Bonding.  ATP  supplies  metal  bonded  products  through  its  Lunn
Industries division. ATP possesses the technology and qualifications required by
The Boeing Company for Phosphoric Acid Anodizing (PAA) and structural bonding to
BAC 5555.  This PAA  capability  allows ATP to service the  commercial  aircraft
market. Numerous other qualifications allow ATP to provide products and services
to the space flight,  defense and industrial markets.  ATP metal bonded products
can be found in the Boeing 777,  747,  757, 767 and 727  commercial  aircraft as
well as numerous defense and satellite applications.

     Other Defense Systems

     Chemical  and  Biological  Defense.  In  1999,  ATP  entered  into a unique
Partnership  Agreement  with the U.S.  Army's  Soldier and  Biological  Chemical
Command (SBCCOM). All subsequent contracts awarded by SBCCOM to ATP will include
an  individually  designed  and  tailored  Partnering  Agreement  geared  toward
successful contract  performance and continuous product and process improvement.
Management  believes that this agreement is evidence of ATP's strong position in
this market and the confidence developed between the Company and its customer.


                                       4
<PAGE>

     ATP is a leader in remote chemical  detection,  which management expects to
be a growth market for the next several  years based on the latest U.S.  defense
budgets.  ATP is  currently  performing  under a contract  to develop  the Joint
Services  Lightweight  Standoff Chemical Agent Detector  (JSLSCAD).  The JSLSCAD
contract,  awarded in 1997,  consists  of a  cost-plus  development  phase worth
approximately  $42 million  through  2003,  plus  options for  production  units
potentially worth over $200 million.

     The  Company  continues  to produce the  Improved  Chemical  Agent  Monitor
(ICAM), a hand-held  monitoring system designed to detect surface  contamination
on a wide variety of objects.  Full-scale  production of the ICAM is expected to
continue through October 2002 under the current contract with the U.S. Army.

      ATP is  also  actively  involved  in the  development  and  production  of
collective protection systems. Collective protection systems provide a clean and
over-pressured  environment for soldiers to conduct their  missions.  Management
believes  that  ATP's  collective  protection  systems,  such as the  internally
developed  Bio-Chem  Filter Blower Unit (BFBU),  are the  collective  protection
systems of choice for several of the next generation vehicle systems.

     With the need for lighter weight  vehicles in the medium sized brigade that
the U.S.  Army  has  announced  it is  seeking  to  better  equip,  ATP also has
developed the Chemical  Agent Filter Unit (CAFU),  which has been geared to meet
the needs of this new Army initiative.

     ATP is the producer of the M28  Deployable  Medical  Collective  Protection
Equipment (DEPMEDS) and the Chemically  Protected  Expeditionary  Support System
(CP-EMEDS).  These products provide a clean environment for field hospital units
for both the U.S.  Army and U.S.  Air Force,  respectively.  ATP is currently in
production of the CP-EMEDS which will complete in first quarter 2002. Management
continues to identify  further  opportunities  for ATP's  collective  protection
systems and plans to pursue these opportunities throughout 2002.

     In 2000, the Company grew its defensive  systems segment into the detection
of biological  warfare  agents.  ATP was awarded a contract by the U.S. Army for
low rate initial  production  of the Joint  Biological  Point  Detection  System
(JBPDS).   This  system  provides  automatic  detection  and  identification  of
biological warfare agents at very low levels,  triggers local and remote warning
systems,  and  communicates  threat  information  over  standard   communication
systems.  Management believes the JBPDS could play a major role in U.S. national
defense and homeland security.

     Sales of chemical and biological  defense systems and related  products for
each of 2001, 2000 and 1999 constituted 24.5%, 22.1% and 21.7%, respectively, of
the total consolidated revenues of ATP.

     Shelters/Shelter  Integration.  ATP designs,  develops and produces  mobile
military  shelters and has developed  leading  design and  automated  production
capabilities for honeycomb as well as foam and beam sandwich panel  construction
relocatable  shelters.  Management  believes  that most of the  shelters  in the
inventory of the  Department  of Defense (DOD) were designed and produced by ATP
or its  predecessors.  The Army  Standard  Family  (ASF)  Shelter is a honeycomb
shelter  uniquely  produced by ATP. The Lightweight  Mobile Shelter (LMS),  also
produced and patented by ATP, is a broadly used shelter type for the U.S. Army's
High Mobility Multipurpose Wheeled Vehicle (HMMWV).

     ATP currently  produces the Light Medium  Tactical  Vehicle (LMTV) shop van
for  Stewart &  Stevenson.  This foam and beam  shelter  is mounted on Stewart &
Stevenson's 2 1/2 ton truck currently being fielded by the U.S. Army.


                                       5
<PAGE>

     ATP has recently  broadened its product line with  production of the unique
Chemical Biological Protection System Shelter (CBPSS), initial award of Type III
& IV Cargo Bed Covers (CBC),  and  introduction of the patented Height Reducible
Electronic  Enclosure (HREE).  Designed for mounting on the U.S. Army's newest 2
1/2 ton truck,  management believes that the HREE affords tremendous improvement
in warfighter  mobility and logistics,  a key thrust of U.S. Army  modernization
plans. ATP also provides shelters to Motorola / General Dynamics under long term
agreements.

     In 2001, ATP received a $132 million contract from the U.S. Army to produce
Standardized  Integrated  Command Post System (SICPS) shelters.  This shelter is
mounted  on  the  HMMWV  and  used  for  a  variety  of  mobile   communications
applications.  Production  on the contract is scheduled to begin in 2002 and run
for five years.

     Ordnance.  ATP has been  the  sole  manufacturer  of the  Volcano  launcher
system.  Customers  for this  system  include the U.S.  Army and  defense  prime
contractors.  The Company's  current focus is on support to fielded  systems and
the development of alternative applications of this proven delivery system.

     Tactical  Deception.  In 2001,  ATP was awarded a contract  for  additional
Lightweight  Camouflage  Screen Systems  (LCSS) by the U.S. Army  Communications
Electronics Command (CECOM) of Ft. Monmouth, New Jersey. Production of LCSS will
continue  through  mid-year  2002.  Based on its  review of the  market for such
products,  management  believes  that  ATP is a  leading  producer  of  tactical
deception  products for the U.S. Armed Forces and other  military  customers and
has delivered approximately one million modules of U.S. military LCSS.

Commercial Composites Segment

     Natural Gas Vehicle (NGV) Fuel Tanks

     ATP  believes it  maintains  the  dominant  market share in the delivery of
all-composite  fuel tanks that contain  compressed  natural gas and hydrogen for
use as a vehicle fuel.  The demand for  alternatively  fueled  vehicles in North
America continues to be driven by the public's demand for a reduction in exhaust
fumes, and federal  legislation that provides  incentives or tax credits for the
use of alternative fuels. Management believes that increased emphasis on relying
on more  environmentally-friendly  energy  sources and on reducing the country's
dependence on foreign oil imports continue to associate  national  security with
greater use of alternate fuels.  Primary  customers  include original  equipment
manufacturers  (OEMs) that design and build light duty  sedans,  transit  buses,
school buses and high fuel use fleet vehicles.  Other customers  include vehicle
up-fitters or modifiers who install  natural gas fueling and storage  components
to existing vehicles.  ATP performs  particularly valuable custom design work to
allow ease of tank  installation and mounting  provisions.  The Company believes
that its  background  in  aerospace  projects  provides the  foundation  for the
successful  design,  development  and production of fuel storage systems (versus
tanks alone) that can contain  natural gas or hydrogen in a fashion that couples
very  high  reliability  with  light  weight.  Also,  the  international  market
continues to offer  increased  revenue  potential.  In 2001,  ATP introduced the
largest  natural gas vehicle fuel tank in the world.  This tank was developed in
direct response to industry  request and offers the industry  reduced weight and
increased  range  advantages.  In 2001  the  Company  also  announced  that  its
Tuffshell(TM) fuel tank design had been selected by a major Japanese OEM for use
in its  prototype  Fuel Cell  Vehicle  program  as the  container  for  on-board
hydrogen  storage.  ATP believes that demand for its pressure vessel  technology
will increase as Hybrid Electric Fuel Cells will require storage  pressures that
approach 10,000 psi.

     Sales of NGV fuel tanks and  related  products  for each of 2001,  2000 and
1999 constituted 9.2%, 13.0%, and 9.7%, respectively,  of the total consolidated
revenues of ATP.


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<PAGE>

     Oil and Gas Exploration Products

     Current deepwater oil completion and production  technology  utilizes heavy
steel tubular  systems that require  expensive  tensioning and buoyancy  systems
whose designs are often governed by fatigue considerations.  Management believes
that composite marine risers provide  advantages over conventional  steel risers
because  composite  materials  are lighter  weight,  more fatigue and  corrosion
resistant, better thermal insulators and can be designed for improved structural
and mechanical  performance.  Overall,  production  platform cost reductions are
possible as a result of the lower  weight and greater  compliance  of  composite
risers,  along with  improvements in system  reliability.  ATP has completed the
development  of a composite  rigid riser for use in deepwater oil production and
is  currently  exploring  field  testing  opportunities  for  oilfield  products
including:  production risers,  tubing risers,  drill risers, choke & kill lines
and auxiliary lines.

     ATP applied the NGV all-composite tank technology to develop an accumulator
tank for the Production Riser Tensioning  system on off-shore  platforms.  There
are as many as four  accumulators per well, and the new platforms have in excess
of 25 wells per  platform.  The  all-composite  accumulator  is lighter  weight,
non-corrosive  and  competitively  priced with all-steel  accumulators.  The ATP
accumulator  meets ASME Code X, and management  believes that currently there is
not a qualified  competitor  for this  product.  These  accumulators  offer some
significant  advantages for the platform,  and, as a result, the related revenue
is expected to increase over the next several years.

Other Products Segment

     The Company's  Specialty Vehicle  Electronics (SVE) group is engaged in the
design and manufacture of electronic  products for the specialty  vehicle market
that are primarily used to distribute and control  electrical  power  throughout
the vehicles.  This market includes  recreational vehicles (RVs), trucks, buses,
boats,   emergency   response,   and  other  vehicles.   Currently,   ATP  sells
approximately 250 different products, most of which have been introduced to meet
a customer's request to solve a particular problem.

     ATP's  products in this  segment fall into three main  categories:  battery
run-down protection and charging,  power switching and control,  and 120 volt AC
energy management. Many of the battery run-down protection and charging products
are centered  around ATP's patented  disconnect  relay.  The power switching and
distribution  products center on ATP's unique patented  multiplex system.  ATP's
patented 120 volt AC energy management  products are used in RVs to minimize the
overloading of circuit breakers.  Management  believes that all major motor home
OEMs currently utilize ATP's electrical products.

     ATP is currently  directing  efforts at increasing  its market  penetration
into the truck, bus and marine  industries and increasing sales to major vehicle
fleet  operators.  ATP has an agreement with Waltco Truck  Equipment Co., one of
the world's largest manufacturers of lift gates, to be their exclusive source of
electronic  and electrical  components.  The initial  products  include a unique
weatherproof   "Super  Switch"  and  a  controller  to  prevent  damage  to  the
electro-hydraulic  pump motor  caused by overuse  of the lift  gate.  Also,  ATP
supplies unique energy management systems to Fleetwood Enterprises, Monaco Corp.
and  Winnebago  Industries,  the three  largest  manufacturers  of motor  homes.
Management  believes that approximately half of all motor homes being built have
ATP's energy management systems installed.

     The  Company  supplies  its  Programmable   Multiplex   Control  (PMC)  for
production  buses to Marshall Bus in the United  Kingdom.  Prototype buses using
this system have been built in the U.S. and are currently being road tested. The
PMC, a new system that simplifies  wiring in  transportation  and commuter buses
worldwide,  is the world's first user programmable multiplex system intended for
use in


                                       7
<PAGE>

vehicles.  A patent on this system has been issued.  The system is also suitable
for other specialty vehicles, such as emergency and maintenance equipment.

     During  1999,  the  Company  signed  an  exclusive  agreement  with  Horton
Ambulance,  a premier emergency vehicle builder,  to supply  electronics for all
Horton emergency vehicles. Production started in the beginning of 2000.

     The Company  also  continued  to make major  inroads to the fleet market by
supplying its battery  run-down  protection  for use on all new Federal  Express
trucks being built.

Discontinued Operations

     After adopting a formal plan to sell its Structural Core Materials segment,
which  consisted  of the  operations  of its Alcore and Alcore  Brigantine  S.A.
subsidiaries, on June 14, 2001, the Company completed the sale of certain assets
of Alcore and 100% of the stock of the Alcore  Brigantine  S.A.  subsidiary to a
subsidiary of the M.C. Gill Corporation.

Competition and Markets

     ATP  competes  with  many  manufacturers  that,  depending  on the  product
involved,   range  from  large  diversified  enterprises  to  smaller  companies
specializing  in  particular  products.  Management  believes  that factors that
affect ATP's competitive  posture are the quality of products and services,  the
ability to employ certain  technologies and pricing strategies.  ATP competes by
defining and understanding  customer and market needs, using its technology base
to develop new product  applications  that meet those needs,  communicating  and
demonstrating the technical  advantage of its products,  and building  long-term
relationships with its customers.

     There are many companies that compete with ATP in the aerospace and defense
industry.  While ATP's management  believes that it has an approximate 75% share
of the  domestic  high-performance  radome  market and is a leading  supplier of
radomes in the domestic and international markets, ATP competes with a number of
other  companies in the  production  of  composite  based  products  used in the
aerospace  and  defense  industries.  Also,  ATP  believes it is a leader in the
design and  production of chemical and  biological  detection  equipment.  While
ATP's  market  share  varies  with  respect to its other  aerospace  and defense
products  such as rocket  motor  cases,  fuel tanks and  pressure  vessels,  ATP
overall has only a minor share of the total aerospace and defense markets.

     Some of ATP's  commercial  products  are highly  specialized  and face less
competition in their respective markets.  ATP's management believes that ATP has
approximately  90% of the NGV  all-composite  fuel tank  market and is a leading
supplier of battery  run-down  protection  and the power  switching  and control
devices for the motor home and van conversion OEM markets.  Additionally,  while
there are numerous  producers of standard  drill pipe and casing and  fiberglass
tubulars, management believes that ATP has a leading position in the application
of advanced composites in the oil and gas industry.

Marketing and Customers

     ATP markets its  aerospace and defense  products  directly to its customers
through its sales force,  active  membership in various industry groups,  and by
participation in industry trade shows.  ATP's aerospace and defense products are
sold  primarily to agencies of the United  States  government  and to commercial
customers  in the  aerospace  industry.  In 2001 and 2000,  sales to the  United
States  government  either  directly or by subcontract  constituted 74% and 69%,
respectively, of ATP's total


                                       8
<PAGE>

consolidated  revenue.  Major  customers  include The Boeing  Company,  Lockheed
Martin  Corporation  and  General  Electric  (GE  Aircraft  Engines).   Combined
aerospace  and  defense  product  sales to these  customers,  most of which  are
included above as United States  government  sales by  subcontract,  represented
approximately  34% of ATP's  total  consolidated  revenues  during  2001.  ATP's
aerospace and defense products are generally  designed and developed to customer
specifications.

     ATP  markets  and sells NGV fuel tanks and  specialty  vehicle  electronics
primarily  to vehicle  manufacturers.  ATP sells a  significant  majority of its
specialty  vehicle products to a few major  customers,  the loss of any of which
would have an adverse impact on ATP's specialty vehicle products group.

     In  the  commercial  composites  business,  it  is  necessary  to  carry  a
reasonable  raw  material  and  finished  goods  inventory  to allow for a rapid
customer response. The average days sales outstanding of accounts receivable for
the commercial  products run somewhat  longer than for comparable  aerospace and
defense  products.  Also,  there is a greater risk of bad debt  associated  with
commercial products.

     The Company  provides  warranties on products for material and  workmanship
based on standard  industry  practice.  Though ATP has  endeavored  to design an
extremely safe and durable  product,  the NGV tank and  production  riser have a
potential for greater  product  liability  than  standard  aerospace and defense
products.  ATP believes  that it has  adequate  product  liability  insurance to
offset these risks.

Patents

     ATP owns numerous patents and patent applications,  some of which, together
with licenses  under patents  owned by others,  are utilized in its  operations.
While  such  patents  and  licenses  are,  in the  aggregate,  important  to the
operation  of ATP's  business,  no  existing  patent,  license or other  similar
intellectual  property right is of such  importance that its loss or termination
would, in the opinion of management, materially affect ATP's business.

Backlog

     ATP's total backlog of contracts as of December 31, 2001 was  approximately
$714 million as compared to approximately  $559 million as of December 31, 2000.
These year-end  backlogs  include options or unreleased  orders of approximately
$515  million  and $403  million  for 2001 and 2000,  respectively.  The backlog
predominantly  relates to the aerospace and defense  segment.  Released  backlog
represents the estimated value of contracts for which ATP is authorized to incur
costs, but for which revenue has not yet been  recognized.  The released backlog
consists of firm contracts,  and although they can be and sometimes are modified
or terminated,  the amount of modifications  and  terminations  historically has
been limited compared to total contract volume.

Government Contracts

     Because sales are predominantly derived from contracts with agencies of the
United  States  government  and its prime  subcontractors,  ATP's  revenues  are
directly affected by the government's budget process,  and inadequate funding of
the  operation and  maintenance  portion of the DOD budget or a reduction in the
budgeted amount for certain programs could have an adverse impact on the revenue
of ATP. All government contracts,  and, in general,  subcontracts thereunder are
subject  to  termination  in whole or in part at the  convenience  of the United
States  government as well as for default.  Long-term  government  contracts and
related  orders are subject to  cancellation  if  appropriations  for subsequent
performance periods become unavailable.  However, with respect to most contracts
involving the military,  ATP would be entitled to receive cancellation  payments
upon cancellation of such contracts.


                                       9
<PAGE>

Raw Materials and Supplies

     Raw materials  essential to the conduct of all of ATP's  business  segments
generally are available at competitive  prices. To date, ATP has not experienced
significant  difficulties  in its  ability  to obtain  raw  materials  and other
supplies  needed  in its  manufacturing  processes,  nor  does ATP  expect  such
difficulties  to arise in the future.  ATP  ordinarily  acquires  components and
materials  through  purchase orders  typically  covering ATP's  requirements for
periods averaging 90 to 120 days.

Research and Development

     Excluding costs  reimbursed under federally funded research and development
contracts, ATP has spent $721,000,  $208,000 and $417,000 for each of 2001, 2000
and  1999,  respectively,   on  research  and  development.   The  research  and
development expenses predominantly relate to the aerospace and defense segment.

Seasonality

     No material  portion of ATP's  business is  considered  seasonal.  However,
revenues in the second half of the year have exceeded revenues in the first half
of the year for three of the last five  years,  and  operating  earnings  in the
second half of the year have  exceeded  operating  earnings in the first half of
the year for four of the last five years.  Factors that may affect the timing of
revenues include the timing of government  contract awards,  the availability of
government funding and customer delivery and acceptance schedules.

Foreign Operations

     Sales to customers outside the United States totaled  approximately  10.7%,
11.0%  and 8.4% of  ATP's  total  revenues  for  each of  2001,  2000 and  1999,
respectively. See Note 4 to the Consolidated Financial Statements of the Company
for additional disclosure of geographical financial data.

Environmental Regulation

     ATP's operations are subject to numerous local,  state and federal laws and
regulations  concerning  the  containment  and disposal of hazardous  materials,
pursuant to which ATP has incurred compliance costs. Such costs to date have not
been material. As described in greater detail under "Item 3. Legal Proceedings",
ATP has received notice that its Lunn  Industries  operation has been identified
as a potentially  responsible party for certain  environmental  cleanup expenses
associated with a municipal landfill in Babylon, New York. ATP at present cannot
predict with precision what exposure it may face in this matter,  but, otherwise
does not presently  anticipate the need for  significant  expenditures to ensure
continued compliance with current environmental  protection laws. Regulations in
this area are subject to change and there can be no  assurance  that future laws
or regulations will not have a material adverse effect on ATP.

Employees

     At December 31, 2001, ATP had 1,405 employees.  Approximately  38% of ATP's
employees are covered by four separate  collective  bargaining  agreements  with
various  international  and local unions.  ATP's management  considers  employee
relations  generally to be good and believes that the probability is remote that
renegotiating  these  contracts  will  have a  material  adverse  effect  on its
business.


                                       10
<PAGE>

ITEM 2. PROPERTIES

     ATP's  principal  executive  offices are located in Roswell,  Georgia.  ATP
maintains various  facilities  nationwide and considers all of its facilities to
be in relatively  good operating  condition and adequate for their present uses.
ATP believes that it has sufficient capacity to meet its current and anticipated
manufacturing  requirements.  The  following  table sets forth  ATP's  principal
manufacturing plants:

                                                     Approximate      Leased
                                                       Square           or
                                                       Footage         Owned
                                                       -------         -----
     Marion Composites Division:
         Marion, Virginia..........................   1,019,000        Owned

     Intellitec Division:
         Deland, Florida...........................     353,000        Owned

     Lincoln Composites Division:
         Lincoln, Nebraska.........................     226,000        Owned
         Lincoln, Nebraska.........................     126,000       Leased

     Lunn Industries Division:
         Glen Cove, New York.......................      93,000       Leased

     The manufacturing facilities of the Marion Composites Division and the Lunn
Industries  Division are used exclusively in connection with ATP's aerospace and
defense segments.  While  predominantly  used in connection with ATP's aerospace
and defense segments,  the facilities of the Intellitec Division and the Lincoln
Composites  Division are used to some extent in connection with ATP's commercial
segments.

     ATP pays  approximately  $612,000 in annual rental  expense with respect to
its principal leased manufacturing  facilities,  of which approximately $294,000
relates to facilities in Lincoln,  Nebraska,  and $318,000 relates to facilities
in Glen Cove, New York.

     Leases covering ATP's leased  facilities  expire at varying dates generally
within the next 12 years.  ATP  anticipates  no difficulty  in either  retaining
occupancy  through  lease  renewals,  month-to-month  occupancy  or purchases of
leased   facilities,   or  replacing  the  leased   facilities  with  equivalent
facilities.

     The above table  excludes a lease of a  manufacturing  facility  located in
Jessup,  Maryland which is no longer being used by ATP in its operations.  As of
December 31, 2001,  the Company has  subleased  substantially  all of the Jessup
facility.  Management  has  estimated the amount of remaining  lease  obligation
costs in excess of anticipated future sublease income to be $221,000 at December
31, 2001,  and a liability of the same amount is included as an accrued  expense
on the Company's Consolidated Balance Sheet at December 31, 2001.

ITEM 3. LEGAL PROCEEDINGS

     On October 7, 1999, the New York Office of the Attorney General,  on behalf
of the New York State Department of Environmental  Conservation (NYSDEC), sent a
letter to the Company,  claiming that the  Company's  Lunn  Industries  division
(Lunn) is a potentially responsible party (PRP) with respect to contamination at
the Babylon Landfill in Babylon,  New York.  NYSDEC alleges that Lunn sent waste
to


                                       11
<PAGE>

the Babylon  Landfill  and that Lunn is jointly and  severally  liable under the
Comprehensive  Environmental  Response,  Compensation and Liability Act (CERCLA)
for  NYSDEC's  response  costs in addition to interest,  enforcement  and future
costs.  According  to NYSDEC,  there are  currently 13 PRPs  identified  for the
Babylon Landfill.  NYSDEC documents indicate that Lunn did transmit waste to the
Babylon  Landfill,  although  it  is  currently  unclear  to  what  extent  Lunn
contributed  to  contamination  of the  landfill.  As a PRP,  the Company may be
required to pay a portion of the costs of  evaluation  and cleanup of this site.
Lawsuits and claims involving  additional  environmental  matters may arise from
time to time.  The New York  Attorney  General's  investigation  of the inactive
CERCLA site in Babylon,  New York is in a  preliminary  stage,  and as a result,
management has based its assessment of potential liability and remediation costs
on  currently  available  facts,  the number of PRPs  identified,  documentation
available,  currently anticipated and reasonably identifiable remediation costs,
existing  technology,  presently enacted laws and regulations and other factors.
While  the  Company  may have  rights of  contribution  or  reimbursement  under
insurance  policies,  such issues are not factors in management's  estimation of
liability.  The Company cannot presently  determine the extent of its liability,
if any, however, based on the foregoing factors,  management believes that it is
unlikely  that the  resolution of the matter at the inactive  Babylon,  New York
site will have a material adverse effect on the Company's consolidated financial
position,  results of operations or cash flows. The Company has not recorded any
liability for the contingency as of December 31, 2001.

     During  January  2000,  the  Company  learned of  possible  accounting  and
financial  reporting  irregularities  at its  subsidiary,  Alcore,  when certain
financial  records were seized in connection with a search warrant issued by the
United States  District  Court - District of Maryland as part of a  governmental
investigation.  Additionally,  in January  2000,  the Company was notified of an
investigation  by the United States  Securities  and Exchange  Commission  (SEC)
regarding these matters.  The Company and management are cooperating  fully with
these investigations.

     On July 23, 2001,  the United States  Attorney for the District of Maryland
unsealed a criminal  indictment  against Alcore's former chief executive officer
(CEO),  alleging  that he  engaged in  securities  fraud and other  offenses.  A
criminal  information  was also  filed by the  United  States  Attorney  against
Alcore's former chief financial officer,  who pleaded guilty on October 4, 2001,
to one count of conspiracy  to make false  statements.  Simultaneously,  the SEC
filed a civil complaint against the two individuals,  alleging  securities fraud
and other  offenses.  The employment of these  individuals was terminated by the
Company in March 2000.  Alcore was sold by the Company in June 2001. The Company
retained  Alcore's  liabilities,  including any liabilities  associated with the
Government's  investigations.  Neither  the  Company  nor  Alcore was named as a
defendant in the  proceedings  brought  against the two  individuals by the U.S.
Attorney and the SEC.

     In  June  2001,  the  Company  was  notified  by the SEC  staff  that it is
evaluating whether to recommend that the SEC bring an action against the Company
and  members  of its  management  for  violations  of the  antifraud  and  other
provisions  of the  federal  securities  laws based on failure to  discover  the
activities at Alcore referred to above. In July 2001, the Company, James Carter,
a former Chairman and CEO of the Company and a current  director of the Company,
and Garrett  Dominy,  the current CEO and a director of the  Company,  each made
so-called  "Wells  submissions"  to the SEC stating why they  believe  that they
should  not be  charged  with  violations  of the  federal  securities  laws  in
connection with the Alcore  investigation.  Additional  submissions were made in
September  and October of 2001 and  February  of 2002.  The outcome of the SEC's
investigation  of the Company is  uncertain at this time.  Based on  information
currently available,  however, the Company believes that the SEC's investigation
will not have a material  adverse  impact on its  financial  position  or future
results of operations.

     The Company and certain of its Officers and Directors  have been named in a
number of lawsuits filed


                                       12
<PAGE>

during July 2000 in the United States  District Court for the Northern  District
of Georgia.  During October 2000, the lawsuits were  consolidated and in January
2001,  an amended  complaint was filed.  The lawsuit  asserts  securities  fraud
claims  based on,  among  other  things,  alleged  misstatements  and  omissions
concerning  the  Company's  1998  and  1999  financial  results  and  condition,
including various violations of generally accepted  accounting  principles.  The
lawsuit  purports to be brought on behalf of a class  consisting  of all persons
who purchased  the Company's  common stock in the period from April 1998 through
April 2000. During January 2002, a memorandum of understanding (MOU) was entered
into by the Company and plaintiffs'  counsel  outlining terms and conditions for
settlement of the suit. The MOU provides for a settlement  amount of $2,950,000,
$983,000 of which would be paid by the Company and  $1,967,000 of which would be
paid by the Company's insurance carrier.  The settlement is subject to notice to
the class,  approval by the court and other conditions.  If final court approval
is received and payment is made,  the Company will be released  from all further
claims held or made by the  shareholder  class with respect to matters raised in
the suit.  Court  approval is  anticipated  in the second  quarter of 2002.  The
Company's  portion of the  settlement  was accrued  during the fourth quarter of
2001  and  is  included  as  other  expense  in  the  accompanying  Consolidated
Statements of Operations.

      ATP is not a party to any other  legal  proceedings,  other  than  routine
claims and lawsuits arising in the ordinary course of its business. ATP does not
believe that such claims and lawsuits,  individually  or in the aggregate,  will
have a material adverse effect on the Company's consolidated financial position,
results of operations or cash flows.  Compliance with federal,  state, local and
foreign laws and  regulations  pertaining to the discharge of materials into the
environment, or otherwise relating to the protection of the environment, has not
had,  and is not  anticipated  to have,  a material  effect upon the cash flows,
earnings or competitive position of ATP.

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

     Not applicable.


                                       13
<PAGE>

                                     PART II

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

     ATP's common stock is traded on the  National  Market  System of the Nasdaq
Stock Market,  Inc. under the symbol ""TPX".  The following table sets forth the
high  and low  sales  prices  of ATP  common  stock  for the  calendar  quarters
indicated, as reported by the Nasdaq Stock Market, Inc.:

                                                      Market Price
                                                      ------------

     Fiscal Year Ended December 31,                   High         Low
     ------------------------------                   ----         ---

     2001
     Fourth Quarter.............................    $ 29.510     $ 15.070
     Third Quarter..............................    $ 19.620     $  7.950
     Second Quarter.............................    $  9.090     $  6.630
     First Quarter..............................    $  7.880     $  6.130

     2000
     Fourth Quarter.............................    $  8.468     $  2.750
     Third Quarter..............................    $  4.000     $  1.781
     Second Quarter.............................    $  7.937     $  3.218
     First Quarter..............................    $ 14.312     $  4.000

     On March 29, 2002, ATP had approximately  2,100 stockholders of record. The
last reported sales price of ATP's common stock on such date was $26.50.

     ATP has not paid  dividends  on its  common  stock  and does not  currently
intend to pay any cash dividends in the foreseeable future. The determination of
the amount of future cash  dividends to be declared and paid on the common stock
of ATP, if any, will depend upon ATP's  financial  condition,  earnings and cash
flows  from  operations,  the  level of its  capital  expenditures,  its  future
business  prospects  and other  factors that the Board of Directors of ATP deems
relevant.  In addition,  ATP's debt agreements contain covenants restricting the
payment of cash dividends to ATP's common stockholders.


                                       14
<PAGE>

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

     The selected  financial data presented  below as of and for the years ended
December 31, 1997 through  December 31, 2001, have been derived from the audited
financial  statements of ATP. The information  presented below should be read in
conjunction  with Item 7,  "Management's"  Discussion  and Analysis of Financial
Condition and Results of Operations," the consolidated  financial  statements of
ATP and related notes and other financial information included elsewhere in this
Annual Report on Form 10-K.

<TABLE>
<CAPTION>
                                                                                     As of and for the Year Ended:
                                                                             (in thousands, except per share information)
                                                                  ------------------------------------------------------------------
                                                                   Dec. 31,      Dec. 31,      Dec. 31,      Dec. 31,      Dec. 31,
                                                                     2001          2000          1999          1998          1997
                                                                  ----------    ----------    ----------    ----------    ----------
<S>                                                               <C>           <C>           <C>           <C>           <C>
Income Statement Data:
Net revenues                                                      $  198,408    $  170,725    $  159,777    $  142,617    $  116,870
Cost of revenues                                                     150,763       130,466       124,189       111,005        89,308
                                                                  ----------    ----------    ----------    ----------    ----------
Gross profit                                                          47,645        40,259        35,588        31,612        27,562
General and administrative
    expenses                                                          25,543        24,628        24,019        21,310        18,593
                                                                  ----------    ----------    ----------    ----------    ----------
Operating income                                                      22,102        15,631        11,569        10,302         8,969
Interest expense                                                       3,523         3,409         2,661         2,564         2,208
Other expense                                                          2,654           203            --            --            --
                                                                  ----------    ----------    ----------    ----------    ----------
Income before income tax expense                                      15,925        12,019         8,908         7,738         6,761
Income tax expense                                                     6,074         4,628         3,430         2,979         2,603
                                                                  ----------    ----------    ----------    ----------    ----------
Income from continuing operations                                      9,851         7,391         5,478         4,759         4,158

Income (loss) from discontinued operations
   (net of income taxes)                                              (1,379)      (14,713)       (8,638)         (760)           50
                                                                  ----------    ----------    ----------    ----------    ----------
Net income (loss)                                                 $    8,472    $   (7,322)   $   (3,160)   $    3,999    $    4,208
                                                                  ==========    ==========    ==========    ==========    ==========

EPS Data:
   Basic:
       Income from continuing operations                          $     1.79    $     1.37    $     1.02    $     0.89    $     0.98
       Income (loss) from discontinued operations                      (0.25)        (2.76)        (1.63)        (0.15)         0.01
                                                                  ----------    ----------    ----------    ----------    ----------
       Net income (loss)                                          $     1.54    $    (1.39)   $    (0.61)   $     0.74    $     0.99
                                                                  ==========    ==========    ==========    ==========    ==========

   Diluted:
       Income from continuing operations                          $     1.65    $     1.32    $     0.98    $     0.85    $     0.94
       Income (loss) from discontinued operations                      (0.24)        (2.66)        (1.57)        (0.14)         0.01
                                                                  ----------    ----------    ----------    ----------    ----------
       Net income (loss)                                          $     1.41    $    (1.34)   $    (0.59)   $     0.71    $     0.95
                                                                  ==========    ==========    ==========    ==========    ==========

Balance Sheet Data:
Working capital                                                   $   32,841    $   24,680    $   15,518    $   16,434    $   16,480
Total assets                                                         103,992        98,002       101,998       100,677        85,423
Long-term debt, including
    current portion                                                   20,066        27,068        25,924        23,161        18,787
Redeemable 8% cumulative
    preferred stock                                                       --         1,000         1,000         1,000         1,000
Common shareholders' equity                                           30,874        20,023        27,816        30,109        26,494
</TABLE>


                                       15
<PAGE>


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

     The  following   discussion   should  be  read  in  conjunction   with  the
consolidated  financial  statements of ATP and related notes contained elsewhere
in this Annual Report on Form 10-K.

Business Environment

     Historically,  approximately 60% to 80% of ATP's products and services have
been sold to the United States government  through prime contracts directly with
governmental  agencies,  primarily the DOD, or through  subcontracts  with other
governmental contractors.  In recent years, domestic and worldwide political and
economic  developments  have  significantly  affected  the markets for  advanced
technology defense products and services.  Significant recent  developments that
have  impacted  the  Company and the  defense  industry  in general  include the
terrorists'  attacks on the United States of September  11, 2001,  which exposed
defense  vulnerabilities  in security and our overall homeland defense,  and the
conclusions  of  the   Quadrennial   Defense  Review  (QDR),   which  reflect  a
transformation   to  a  military   readiness   policy  of  developing   specific
capabilities  for  overall  national  defense  compared to the  previous  policy
designed  for  defeating a specific  enemy  threat.  Transforming  the  nation's
defense to a  capabilities-based  approach  involves  creating the ability for a
more flexible military response with greater force mobility,  improved space and
missile defense capabilities and an increased emphasis on homeland defense.

      President  Bush's  proposed  DOD budget  for  fiscal  year 2003 and beyond
reflects  the  above-mentioned  increased  needs for  homeland  security and the
transformation of the national defense policy.  While there is no assurance that
the proposed DOD budget levels will be approved by Congress, the current defense
budget outlook  reflects growth in spending levels. A major portion of ATP's DOD
business  is  expected  to  be  funded  by  the   procurement,   operations  and
maintenance,  and research,  development,  test and  evaluation  segments of the
defense budget.  Budget  increases are projected for each of these segments over
the next several years.  Although there are uncertainties  relative to the level
of  growth  and the  amount of the  budget  that will be  allocated  to  defense
programs  in which the  Company  participates,  management  believes  that ATP's
experience and capabilities are well aligned with the U.S. defense priorities.

Accounting Policies

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses during the reporting  period.  In particular,  accounting for long-term
contracts  requires  management  estimates of future contract revenues and costs
used for preparing  estimates at contract  completion and  determining  contract
profitability reflected in the financial statements. Actual results could differ
from those estimates.

     Certain of our accounting  policies require higher degrees of judgment than
others in their  application.  These include  revenue  recognition  on long-term
contracts,  valuation of  inventories,  income tax  recognition  of deferred tax
items and accruals for loss contracts and contingencies.  Our policy and related
procedures for revenue  recognition on long-term  contracts and  inventories are
summarized below. In addition,  Note 1 to the Consolidated  Financial Statements
includes further discussion of our significant accounting policies.


                                       16
<PAGE>

     Revenues and anticipated  profits under  long-term  fixed price  production
contracts are recorded on the percentage of completion method, principally using
units-of-delivery as the measurement basis for effort accomplished.  Delivery of
units are generally  made upon  acceptance  by the customer in  accordance  with
contract  terms.  Revenues  under  certain  long-term  fixed  price  development
contracts which require a significant amount of non-recurring effort in relation
to total contract value are recorded based on the  accomplishment  of milestones
as specified by contract terms.  Revenues under cost reimbursable type contracts
are recorded as costs are incurred.  Amounts  representing  claims for equitable
adjustment  are  included in  estimates  of future  contract  revenues  used for
preparing estimates of contract profitability at completion only when management
believes that  realization is probable and amounts can be reasonably  estimated.
Estimated losses on contracts are recorded in full when identified.

     The  percentage  of  completion  method of  accounting  involves the use of
various  estimating  techniques  to project  costs at  completion  and  includes
estimates   of   recoveries   asserted   against   customers   for   changes  in
specifications.  These  estimates  involve  various  assumptions and projections
relative to the outcome of future  events,  including the quantity and timing of
product  deliveries.  Also  included  are  assumptions  relative to future labor
performance and rates, and projections  relative to material and overhead costs.
These assumptions involve various levels of expected  performance  improvements.
The Company reevaluates its contract estimates periodically and such changes are
reflected in results of  operations  as a change in  accounting  estimate in the
period the revisions are determined.

     Inventories,  other than inventoried costs relating to long-term  contracts
and programs, are valued at the lower of first-in, first-out cost or market (net
realizable value).  Inventory cost relating to long-term  contracts and programs
includes material, labor,  manufacturing overhead and tooling costs dedicated to
a contract  or  program.  Costs  attributed  to units  delivered  under  certain
long-term  contracts and programs are based on the estimated average cost of all
units to be  produced as  determined  under the  learning  curve  concept  which
anticipates a predictable decrease in unit costs as production techniques become
more efficient through repetition.  In accordance with industry practice,  costs
in inventory include amounts relating to contracts with long production  cycles,
some of which are not expected to be realized within one year. Customer progress
payments  received on long-term  contracts  are recorded as an offset to related
inventory balances.

     If  in-process  inventory  plus  estimated  costs to  complete  a  specific
contract  exceeds the anticipated  remaining sales value of such contract,  such
excess is charged to current  earnings,  thus  reducing  inventory  to estimated
realizable value.

Discontinued Operations

     On June 30, 2000, the Company  adopted a formal plan to sell its Structural
Core  Materials  segment,  which  consisted of the  operations of its Alcore and
Alcore Brigantine S.A. subsidiaries. On June 14, 2001, the Company completed the
sale of certain assets of Alcore and 100% of the stock of the Alcore  Brigantine
S.A. subsidiary to a subsidiary of the M.C. Gill Corporation.

     The following  discussion relates to the Company's results of operations as
restated to account for the Structural Core Materials  segment as a discontinued
operation for all years reported.


                                       17
<PAGE>

Results of Operations

     The following table sets forth, for the years indicated,  the components of
the statements of operations expressed as a percentage of revenues.

                                             2001          2000          1999
                                           -------       -------       -------

Net revenues                                 100.0%        100.0%        100.0%
Cost of revenues                              76.0%         76.4%         77.7%
                                           -------       -------       -------
Gross profit                                  24.0%         23.6%         22.3%
General and administrative
    expenses                                  12.9%         14.4%         15.0%
                                           -------       -------       -------
Operating income                              11.1%          9.2%          7.3%
Interest expense                               1.8%          2.0%          1.7%
Other expense                                  1.3%          0.1%          0.0%
                                           -------       -------       -------
Income before income taxes                     8.0%          7.1%          5.6%
Income tax expense                             3.1%          2.7%          2.1%
                                           -------       -------       -------
Income from continuing operations              4.9%          4.4%          3.5%
Loss from discontinued operations
   (net of income taxes)                      (0.7)%        (8.6)%        (5.4)%
                                           -------       -------       -------
Net income (loss)                              4.2%         (4.2)%        (1.9)%
                                           =======       =======       =======

     During 2001, the Company incurred certain  non-operating pre-tax charges of
$2.7 million  relating to a settlement of a class action lawsuit and legal costs
primarily associated with an investigation by the SEC. The Company also incurred
non-cash  expenses  in  2001  totaling  $0.9  million   (pre-tax)   relating  to
appreciation  in the market  value of Company  common stock held in trust by the
ATP  Deferred  Compensation  Plan.  The  Company  has  amended the plan so that,
commencing with the second quarter of 2002, no further income  statement  impact
will result from future changes in the price of the Company's shares held in the
trust.  During  2000,  the  Company  incurred  pre-tax  charges of $1.5  million
consisting of non-recurring  costs related to an aborted sale of the Company and
executive  severance,  and  non-operating  legal costs  associated  with the SEC
investigation.  The  following  is a  reconciliation  of  operating  results  as
reported using Generally Accepted  Accounting  Principles  ("GAAP") to Pro Forma
reporting   to  exclude   the   aforementioned   non-operating,   non-cash   and
non-recurring charges (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                                                         Income         Income From     Diluted EPS:
                                                         Net           Operating      Before Income     Continuing       Continuing
                                                      Revenues           Income        Tax Expense      Operations       Operations
                                                      ---------        ---------        ---------        ---------        ---------
<S>                                                   <C>              <C>              <C>              <C>              <C>
Year - 2001
  GAAP Reporting                                      $ 198,408        $  22,102        $  15,925        $   9,851        $    1.65
  Pro Forma Adjustments:
      Class action lawsuit settlement                        --               --              983              608             0.10
      Legal costs of investigation                           --               --            1,671            1,033             0.17
      Non-cash expense relating to
        appreciation in value of Company
        common stock held in connection
        with deferred compensation plan                      --              940              940              578             0.10
                                                      ---------        ---------        ---------        ---------        ---------
  Pro Forma Reporting                                 $ 198,408        $  23,042        $  19,519        $  12,070        $    2.02
                                                      =========        =========        =========        =========        =========

Year - 2000
  GAAP Reporting                                      $ 170,725        $  15,631        $  12,019        $   7,391        $    1.32
  Pro Forma Adjustments:
      Aborted sale of Company                                --              750              750              461             0.08
      Executive severance                                   525              525              323                              0.06
      Legal costs of investigation                           --               --              203              125             0.02
                                                      ---------        ---------        ---------        ---------        ---------
  Pro Forma Reporting                                 $ 170,725        $  16,906        $  13,497        $   8,300        $    1.48
                                                      =========        =========        =========        =========        =========
</TABLE>


                                       18
<PAGE>

Year Ended December 31, 2001 Compared with the Year Ended December 31, 2000

     Revenues  increased $27.7 million,  or 16.2% from $170.7 million in 2000 to
$198.4  million in 2001.  The  increase in revenues  for the year was  primarily
attributable  to  increased  deliveries  for  Aerospace  and  Defense  programs,
including ongoing programs for chemical and biological  detection and protection
systems,  tactical  deception  products,  shelter systems and advanced composite
components.  In  particular,  significant  sales  increases  resulted  on  ATP's
contracts for: (1) the Joint  Biological  Point Detection  System  (JBPDS),  (2)
upgrades and  refurbishments  of chemical  agent monitors used by the U.S. Armed
Forces,  (3)  Lightweight  Camouflage  Screen Systems  (LCSS),  and (4) advanced
composite  components  on several  military  aircraft  programs,  including  the
F-18E/F and C-17 aircraft.

     Gross  profit as a  percentage  of revenues  was 24.0% in 2001  compared to
23.6% in 2000.  The  increase  was  primarily  attributable  to a slightly  more
favorable mix of sales and cost efficiencies associated with increased sales.

General and administrative  expenses increased $0.9 million,  or 3.7% from $24.6
million in 2000 to $25.5 million in 2001.  General and  administrative  expenses
include  non-recurring charges of $1.3 million recorded in the second quarter of
2000,  including  costs incurred in connection with the termination of a January
2000 merger  agreement  and executive  severance  costs.  2001 expenses  include
non-cash charges of $0.9 million relating to increases in deferred  compensation
obligations  resulting from the appreciation  during 2001 in the market value of
Company  common  stock held in a rabbi  trust  pursuant  to the terms of the ATP
Deferred Compensation Plan. Although management believes that the Company has no
real economic exposure to these non-cash gains or losses associated with changes
in the deferred compensation obligation resulting from market value fluctuations
of shares of its common  stock held in the rabbi trust for  participants  in the
Plan, in accordance with Issue No. 97-14,  Accounting for Deferred  Compensation
Arrangements  Where Amounts Earned Are Held in a Rabbi Trust and Invested ("EITF
No.  97-14"),  as published by the Emerging  Issues Task Force of the  Financial
Accounting  Standards Board, the shares of Company stock held in the rabbi trust
are accounted for as treasury stock, and accordingly  general and administrative
expense  includes  adjustments  to  reflect  the  elimination  of  market  value
increases in the shares of Company  stock held in the rabbi trust.  In addition,
the Company has amended the Plan to require  investments  in Company stock to be
settled with Company stock so that,  commencing with the second quarter of 2002,
no further income  statement impact will result from future changes in the price
of the Company's shares held in the rabbi trust. Excluding the non-recurring and
non-cash charges, general and administrative expenses increased by $1.3 million,
and, as a percentage of revenues, decreased from 13.7% in 2000 to 12.4% in 2001.
The  increase  in general  and  administrative  dollar  expense,  excluding  the
non-recurring  and  non-cash  charges,  is  primarily  the  result of  increased
independent  research and development  spending and increased  healthcare costs.
The reduction of general and administrative expenses as a percentage of revenues
is attributable to the increased revenues in 2001 compared to 2000.

     Operating income was $22.1 million, or 11.1% of revenues, in 2001, compared
to $15.6 million, or 9.2% of revenues,  in 2000. The higher operating income for
2001  compared to 2000  results  partially  from the  non-recurring  general and
administrative  costs  of $1.3  million  incurred  in 2000 as  discussed  in the
previous  paragraph.  Excluding these  non-recurring  charges,  and the non-cash
general and administrative expenses of $0.9 million relating to the market value
increases in Company  stock held by the deferred  compensation  trust  discussed
above,  operating  income  increased  $6.1 million for 2001 compared to 2000, or
36.3%,  primarily  because of the  combination  of increased  revenues and gross
profits and relatively flat general and administrative expenses.


                                       19
<PAGE>

     Interest  expense  in 2001  increased  $114,000,  or 3.3%,  reflecting  the
combination  of a relatively  high effective  interest rate on the  subordinated
loan obtained in the fourth quarter of 2000 (and outstanding during all of 2001)
and a reduction  in the amount of interest  expense  allocated  to  discontinued
operations  in 2001  compared  to 2000  following  the  disposal  of the  Alcore
operations in June 2001.  These  increases  were mostly offset by lower interest
expense  on the  Company's  revolving  credit  facility  and  senior  term loans
resulting from a significant  reduction in the average  interest rates in effect
for these loans in 2001 compared to 2000.

     Other  expense  consists  of certain  legal and other  non-operating  costs
incurred in connection with the Company's governmental  investigations  relating
to Alcore and a class action shareholder  lawsuit.  Other expense increased from
$0.2 million in 2000 to $2.7 million in 2001. The increase was attributable to a
combination  of: (1) a fourth  quarter  2001  non-recurring  charge of  $983,000
representing  the  Company's   anticipated  share  of  costs  resulting  from  a
preliminary settlement agreement reached with plaintiffs' counsel on the pending
class  action  lawsuit,  and (2) an  increase  in  legal  costs  resulting  from
increased activity with the various Alcore  investigations  during 2001 compared
to 2000,  during which such costs were initially  incurred by the Company in the
fourth quarter.  Although the future legal costs of the investigations cannot be
predicted  with  certainty,  management  of ATP believes that such costs will be
significantly lower during 2002 compared to 2001.

     Income tax expense  was $6.1  million in 2001  compared to $4.6  million in
2000.  The increase  primarily  results from higher  income  before  taxes.  The
effective income tax rate was 38.2% for 2001 and 38.5% for 2000.

     Total loss from discontinued  operations  decreased by $13.3 million,  from
$14.7  million  in 2000 to $1.4  million  in 2001.  The 2000  loss  includes  an
after-tax  provision of $10.0 million for the estimated  loss on disposal of the
discontinued  Structural Core Material  business  segment,  including  estimated
future operating losses during the phase-out period of the discontinued segment.
Operating  losses incurred by the Structural Core Materials  segment during 2001
were charged to the Company's  reserve for loss on disposal of segment  recorded
as of December 31, 2000.  During the second quarter of 2001, an after-tax charge
of $1.4 million was recorded as a loss from  discontinued  operations to reflect
the  amount  by which  actual  operating  losses  of  Alcore  exceeded  previous
estimates,  and  revisions  of the final  selling  price of assets  sold and the
estimated net realizable  value of the retained assets of Alcore that are in the
process of being liquidated.

Year Ended December 31, 2000 Compared with the Year Ended December 31, 1999

     Revenues  increased  $10.9 million,  or 6.9% from $159.8 million in 1999 to
$170.7  million in 2000.  Positive  revenue  variations in 2000 compared to 1999
include:  (1) increased  deliveries of composite components on several long-term
aerospace and defense programs, including the F-18E/F and C-17 military aircraft
and the Airbus A330 and A340 commercial aircraft, (2) increased shipments of the
Company's commercial  composites products and (3) increased revenues on chemical
defense contracts,  primarily from the Multi-Purpose  Integrated  Chemical Agent
Detector (MICAD) program.

     Gross  profit as a  percentage  of revenues  was 23.6% in 2000  compared to
22.3%  in  1999.   The  increase  in  gross  profit   percentage  was  primarily
attributable to increased sales of the Commercial  Composites  business  segment
and cost  efficiencies  associated  with increased  sales from the other product
lines.


                                       20
<PAGE>

     General and administrative  expenses increased $0.6 million,  or 2.5%, from
$24.0  million in 1999 to $24.6  million  in 2000.  General  and  administrative
expenses  include  non-recurring  charges of $1.3 million recorded in the second
quarter of 2000,  including costs incurred in connection with the termination of
a January 2000 merger agreement and severance costs. Excluding the non-recurring
charges,  general and  administrative  expenses,  as a  percentage  of revenues,
decreased from 15.0% in 1999 to 13.7% in 2000, the result of higher revenues and
reduced general and administrative spending.

     Operating income was $15.6 million, or 9.2% of revenues,  in 2000, compared
to $11.6  million,  or 7.3% of revenues,  in 1999.  Excluding the  non-recurring
general and  administrative  costs of $1.3  million  discussed  in the  previous
paragraph,  operating  income was $16.9  million in 2000,  an  increase  of $5.3
million,  or 46.1%,  compared to 1999. The increase in operating  income results
primarily from increased revenues,  improved operating results of the Commercial
Composites  segment  and  increased  profits on  advanced  composite  components
delivered on certain Aerospace and Defense programs.

     Interest expense in 2000 increased $748,000, or 28.1%, primarily the result
of an increase in average loan balances  outstanding  and an increase in average
interest rates during 2000 compared to 1999.

     Income tax expense  was $4.6  million in 2000  compared to $3.4  million in
1999.  The increase  results from higher  income  before taxes as the  effective
income tax rate was 38.5% for both years.

     Total loss from  discontinued  operations  increased by $6.1 million,  from
$8.6  million  in 1999 to $14.7  million  in 2000.  The 2000  loss  includes  an
after-tax  provision of $10.0 million for the estimated  loss on disposal of the
discontinued Structural Core Material business segment.

Financial Condition and Liquidity

     Cash flow  provided by  operations  was $13.6  million for 2001 compared to
$8,000  of net cash  used in  operations  in 2000.  Working  capital,  excluding
short-term  debt  balances,  increased  $3.2  million in 2001 to $55.4  million.
Changes in working  capital  during  2001  included:  (1) an  increase  of $11.6
million in inventories,  reflecting a cost build-up to meet the  requirements of
generally higher business  activity  levels,  (2) an increase of $8.3 million in
accounts payable and accrued  expenses,  due to increased  inventory  levels, an
increase  in  accrued  income  taxes  resulting  from  higher net income in 2001
compared to 2000 and an increase in payments in advance from  certain  customers
on  long-term  contracts,  (3) a decrease of $1.7 million in prepaid and current
income taxes  resulting from the  application of prior year prepaid and deferred
tax asset balances to satisfy tax liabilities  generated by income earned in the
first half of 2001, (4) an increase in prepaid expenses and other current assets
of $1.3 million,  including  $875,000  representing  the current  portion of the
promissory note from the buyer of the Company's discontinued Alcore operation in
2001 and (5) an increase of $0.3 million in other  working  capital  components.
Net cash  used in  investing  activities  totaled  $0.9  million  in  2001,  the
combination of capital expenditures totaling $4.5 million offset by $3.6 million
of  cash  proceeds  from  the  disposal  of  certain  assets  of  the  Company's
discontinued Structural Core Materials business segment.

     On October 10, 2000,  the Company  entered into a new  financing  agreement
with its primary  lender.  At December 31, 2001, the Company's  credit  facility
with this lending  institution  totaled $41.2 million  consisting  of: (1) $27.0
million of revolving credit against eligible receivable and


                                       21
<PAGE>

inventory balances, (2) a $12.6 million term loan and (3) a $1.6 million capital
equipment  loan.  As of December 31, 2001,  the Company had  approximately  $9.2
million of unused borrowing  availability on this credit  facility,  net of $1.3
million of reserves  against the revolving loan  borrowing base for  outstanding
stand-by  letters of credit  commitments  ($0.8  million)  and other items ($0.5
million).  The credit  facility  matures on October 31,  2003.  The term loan is
payable  quarterly  based on a seven-year  amortization  period.  Equipment loan
principal  payments are made monthly based on a five-year  amortization  period.
The  agreement  also  stipulates  that the Company  will make  annual  mandatory
prepayments  of the term  loan  principal  in an  amount  equal to 40% of annual
excess cash flow, as defined by the agreement.  Such  prepayments are due within
ninety days of the end of the year, commencing with the year ending December 31,
2001.  The  prepayment  requirement  based  on  excess  cash  flow  for  2001 is
approximately $1.9 million,  which has been classified as short-term debt in the
Company's Consolidated Balance Sheet at December 31, 2001. The interest rates on
the  loans  are  set  quarterly  based  on  the  Company's  performance  against
debt-to-earnings  ratios  specified in the  agreement.  Interest rates can range
from LIBOR (the London Interbank Offered Rates) plus 2.75% to LIBOR plus 1.0% on
the revolving  loan and from LIBOR plus 3.25% to LIBOR plus 1.5% on the term and
equipment  loans.  Alternatively,  the Company may elect interest rates based on
the lending  institution's prime rate with the revolving loan ranging from prime
plus 0.50% to prime plus 0.25% and the term and  equipment  loans  ranging  from
prime plus 0.75% to prime plus 0.50%. Interest is paid monthly in arrears on all
loans.  The weighted  average  interest rates in effect at December 31, 2001 and
2000 for the revolving, term and equipment loans were as follows:

                                              2001         2000
                                              ----         ----
                 Revolving loans              3.30%        9.53%
                 Term loans                   3.97%        9.91%
                 Equipment loans              4.34%        9.94%

In  accordance  with the  financing  agreement,  the  Company  used  part of the
proceeds  received from the sale of certain  assets of its  discontinued  Alcore
operations  on June 14,  2001 to make a  one-time  principal  repayment  of $1.3
million on the term loan.  The  Company  is  subject  to several  financial  and
nonfinancial  covenants  under the credit  facility.  At December 31, 2001,  the
Company was in violation of a financial  covenant  limiting the amount of annual
capital  expenditures.  The  violation  was cured as a result of a waiver letter
dated February 15, 2002.

     On October 10, 2000,  the Company  entered into an agreement  with a lender
for a three year, $7,000,000 million loan in the form of a junior secured credit
facility.  The loan bears interest  payable monthly in arrears at an annual rate
of 12.5%,  and an additional  2.5% of  payment-in-kind  interest that is payable
currently,  or at  maturity at the  Company's  discretion.  The loan  matures on
October 31, 2003. In connection  with the loan, ATP also issued  warrants giving
the lender the right to purchase 320,000 shares of the Company's common stock at
an exercise price of $4.42 per share. On October 31, 2001, the lender  exercised
all of the 320,000 stock warrants issued in connection with the loan. In lieu of
paying the exercise  price to the Company in cash, the lender elected to convert
the  warrants  on a cashless  basis in  accordance  with the  provisions  of the
agreement.  As a result,  the  Company  issued  266,807 new shares of its common
stock to the lender and ATP received no cash  proceeds  from the  exercise.  The
lender  subsequently sold all of these shares on the public market.  The Company
is  subject to  several  financial  and  nonfinancial  covenants  under the loan
agreement.  At December  31,  2001,  the Company was in violation of a financial
covenant limiting the amount of annual capital  expenditures.  The violation was
cured as a result of a waiver letter dated February 28, 2002.

     During June 2001,  the Company  initiated  action to call its bonds payable
resulting from a


                                       22
<PAGE>

financing  agreement  with the State of Maryland  dated May 14, 1997.  The bonds
were fully redeemed by cash payment of  approximately  $1.9 million on August 1,
2001 pursuant to the optional redemption provisions of the financing agreement.

     During June 2001, the Company paid off all of the  outstanding  balances of
its loans  dated  July 7,  1997  from the  Maryland  Industrial  and  Commercial
Redevelopment   Fund  and  Harford  County,   Maryland.   The  payments  totaled
approximately  $0.6  million and were made using part of the  proceeds  received
from the sale of certain assets of its discontinued operations on June 14, 2001.

     During July 2001,  the Company paid $1.0 million to complete the redemption
of 1,000,000 shares of 8% mandatorily  redeemable preferred stock. Following the
redemption, the Company had no preferred stock outstanding.

     At  December  31,  2001,  the  Company's  backlog of orders  and  long-term
contracts  was  approximately  $714  million  compared to $559  million and $549
million at December 31, 2000 and 1999,  respectively.  The backlog includes firm
released orders of approximately $199 million,  $156 million and $146 million at
December 31, 2001, 2000 and 1999, respectively.  Released backlog represents the
estimated value of contracts for which ATP is authorized to incur costs, but for
which revenue has not yet been recognized. The released backlog consists of firm
contracts,  and although they can be and  sometimes are modified or  terminated,
the amount of  modifications  and  terminations  historically  has been  limited
compared to total contract volume.  The increase in backlog  reflects  increased
orders  received for biological and chemical  detection and protection  systems,
military  shelters  and  components  on several  advanced  composites  programs.
Approximately 74% of the Company's firm released backlog at December 31, 2001 is
expected to be delivered in 2002.

       As discussed above, the Company made capital  expenditures  totaling $4.5
million during 2001, which have been financed by a combination of cash flow from
operations  and increased  borrowings  under the  revolving  loan portion of the
Company's credit facility.  Capital  expenditures in 2001 consisted primarily of
machinery and  equipment  purchases  relating to specific  Aerospace and Defense
programs and information system investments.  The Company invested approximately
$8.7 million,  excluding Alcore, in capital equipment and facility  improvements
during the two-year period ending December 31, 1999. These investments were made
primarily in support of several new long-term  Aerospace  and Defense  contracts
that are now in full production, and facility and equipment upgrades relating to
NGV tank production. As a result of the capital investments made during 1998 and
1999, capital expenditures during 2000 totaled $1.0 million. Management believes
that  future  short-term  capital  spending  requirements  will be  limited to a
sustaining  maintenance  level plus  expenditures that will be cost justified by
anticipated  incremental  program revenues.  However,  the Company will consider
other future capital  expenditure  investments beyond the maintenance level when
such  investments  are deemed to be  strategic  or in the best  interests of the
Company and its stockholders.

       As previously discussed,  the Company received approximately $3.6 million
of cash  proceeds  from the  disposal  of  certain  assets  of the  discontinued
Structural Core Materials  business  segment on June 14, 2001. Among assets that
were  excluded  from  the  transaction  was  the  Company's  Belcamp,   Maryland
manufacturing facility. The Company is currently seeking a buyer for its Belcamp
facility,  but to date  the  Company  has not  entered  into  any  agreement  or
arrangement  with any third  party to purchase  the  facility.  The  facility is
recorded at its estimated net realizable value.


                                       23
<PAGE>

     Management  of ATP  believes  that cash  flows from  operations,  available
borrowings  under its current credit  facility and the  additional  subordinated
financing  obtained  during  October 2000 are adequate to sustain the  Company's
current  operating  level and  expected  growth for the next one to three years.
However,  should circumstances arise materially adversely affecting cash flow or
requiring capital  expenditures  beyond those anticipated by the Company,  there
can be no assurance that such funds will be available on commercially reasonable
terms, if at all.

     At December 31, 2001, the Company had contractual commitments to repay loan
obligations  and to make payments  under  operating  leases.  Payments due under
these long-term obligations are as follows (in thousands):

<TABLE>
<CAPTION>
                                                         Payments Due By Period
                                    --------------------------------------------------------------------
                                                   Less than                                      After
                                      Total         1 year        1-3 Years      4-5 Years       5 years
                                    --------       --------       --------       --------       --------
<S>                                 <C>            <C>            <C>            <C>            <C>
Debt Obligations (a)                $ 37,165       $ 22,562       $ 14,603       $     --       $     --

Operating Leases (b)                   5,560          1,364          1,953            648          1,595
                                    --------       --------       --------       --------       --------
      Total Contractual
      Cash Obligations              $ 42,725       $ 23,926       $ 16,556       $    648       $  1,595
                                    ========       ========       ========       ========       ========
</TABLE>

     (a)  Debt  obligations  include a $17.1 million balance on a loan resulting
          from the  Company's  revolving  line of credit that expires on October
          10, 2003. The revolving loan is classified as current on the Company's
          Consolidated Balance Sheet, and the entire loan balance is included in
          the total  payments due in the less than one-year  amount on the above
          schedule.

     (b)  The operating lease  obligations  exclude the Company's  obligation of
          $1,148,000 for the remaining four years and three months on a lease of
          a  manufacturing  facility  located  in Jessup,  Maryland  which is no
          longer being used by ATP in its  operations.  As of December 31, 2001,
          the Company has subleased  substantially  all of the Jessup  facility.
          Management  has  estimated  the amount of remaining  lease  obligation
          costs in excess of anticipated  future  sublease income to be $221,000
          at December 31,  2001,  and a liability of the same amount is included
          as an accrued expense on the Company's  Consolidated  Balance Sheet at
          December 31, 2001.

     The Company has entered into standby letter of credit  agreements and other
arrangements with financial  institutions primarily relating to the guarantee of
future  contract   performance.   At  December  31,  2001,  ATP  had  contingent
liabilities on outstanding letters of credit and other guarantees as follows:

<TABLE>
<CAPTION>
                                                      Commitment Expiration Per Period
                                    --------------------------------------------------------------------
                                                   Less than                                      After
                                      Total         1 year        1-3 Years      4-5 Years       5 years
                                    --------       --------       --------       --------       --------
<S>                                 <C>            <C>            <C>            <C>            <C>
Standby Letters of Credit           $    750       $     --       $    750       $     --       $     --

Other Guarantees                         140             --            140             --             --
                                    --------       --------       --------       --------       --------
      Total Commitments             $    890       $     --       $    890       $     --       $     --
                                    ========       ========       ========       ========       ========
</TABLE>


                                       24
<PAGE>

Risk Factors

     Certain of the statements  made and  information  contained in this report,
excluding historical information are "forward-looking  statements" as defined in
the  Private  Securities  Litigation  Reform Act of 1995.  Such  forward-looking
statements  involve risk and  uncertainties  that could cause actual  results or
outcomes to differ  materially.  Some of these risks and  uncertainties  are set
forth in  connection  with  the  applicable  statements.  Additional  risks  and
uncertainties  include, but are not limited to, changes in governmental spending
and  budgetary  policies,  governmental  laws and other  rules  and  regulations
surrounding various matters such as environmental remediation, contract pricing,
changing  economic and  political  conditions  in the United States and in other
countries,  international trading  restrictions,  outcome of union negotiations,
customer  product   acceptance,   our  success  in  program  pursuits,   program
performance, continued access to technical and capital resources, and supply and
availability of raw materials and  components.  All forecasts and projections in
this  report are  "forward-looking  statements,"  and are based on  management's
current  expectations  of our near-term  results,  based on current  information
available  pertaining to us, including the aforementioned  risk factors.  Actual
results could differ materially.

     Dependence  on Aerospace  and Defense  Industries.  The revenues of ATP are
concentrated in the aerospace and defense industries. Sales to non-aerospace and
non-defense  industries  are  anticipated  to  approximate  10% to 20% of  total
revenues  of ATP for the  foreseeable  future.  ATP's  success  will be  heavily
dependent  on its  ability  to  successfully  obtain  major new  defense  orders
currently  planned to be released by the United States government and government
prime  contractors,  as well as the  continued  strength  of the  aerospace  and
defense  industry.  No  assurances  can be  given  that  ATP  will  be  able  to
successfully obtain all or even a major portion of the targeted defense industry
orders anticipated to be placed. The commercial aerospace industry is a cyclical
business,  and the demand by  commercial  airlines  for new  aircraft  is highly
dependent upon a variety of factors, which historically have been related to the
stability and health of the United States and world economies.

     Risks of  Reductions  or  Changes in  Military  Expenditures.  The  primary
customers of ATP are agencies of the DOD. Sales under  contracts with the DOD or
under subcontracts that identify the DOD as the ultimate  purchaser  represented
approximately  74% of ATP's 2001  revenues.  Following a decade of decline,  the
United States  defense  budget has begun to stabilize and even increased in real
dollars over the last several  years.  A major  portion of ATP's DOD business is
expected to be funded by the  procurement  and research,  development,  test and
evaluation (RDT&E) segments of the defense budget. Procurement and RDT&E funding
is  expected to grow each year over the next  several  years based on the latest
DOD  budget  proposed  by the  President.  A  significant  portion  of ATP's DOD
business is also expected to be funded by the operations and maintenance portion
of the DOD budget,  which is expected to increase  significantly  in fiscal year
2003 followed by slightly  decreased to stable  funding  levels for fiscal years
2004 through 2007. A significant  decline or  reallocation  of the  procurement,
RDT&E or operations and maintenance  segments of the DOD budget could materially
and  adversely  affect  ATP's"sales  and  earnings.   The  loss  or  significant
curtailment  of ATP's  material  United  States  defense  contracts  would  also
materially and adversely affect ATP's future sales and earnings.

     Competition  and  Production  Materials.  The market for ATP's  products is
highly competitive.  ATP competes with numerous  competitors,  a number of which
possess  substantially  greater  financial,   marketing,   personnel  and  other
resources.  Continued  consolidation  of major  aerospace and defense  companies
could  result in program  cancellations  as well as  increased  demand for price
concessions.  This, together with increased  competition for available business,
could  translate into downward  pressure on gross margins with  resulting  lower
overall profit


                                       25
<PAGE>

margins.  Vendor prices for production materials such as resins, liquid and film
adhesives,  reinforcing  fiber  materials and other materials and supplies could
increase as demand for aircraft  parts and  assemblies  increase to match higher
build rates for commercial and military  aircraft.  Higher  material  prices and
demand for lower  aircraft  part and  assembly  prices  could  place  increasing
pressure on ATP's operating margins and net income. Although management believes
that the Company is well  positioned  to maintain or improve its place among its
competitors,  there  can be no  assurance  that  ATP  will be  able  to  compete
successfully in the future.

     Financial  Leverage.  ATP has a significant  amount of indebtedness,  which
could make it  difficult to obtain  additional  financing  for working  capital,
capital  expenditures,  acquisitions or other purposes.  Moreover,  the terms of
ATP's indebtedness impose various  restrictions and covenants on ATP which could
potentially  limit  ATP's  ability to respond  to market  conditions  or to take
advantage  of business  opportunities.  ATP's  ability to meet its debt  service
obligations  and to  reduce  total  debt  will  be  dependent  upon  its  future
performance,  which,  in turn,  will be  subject to  general  conditions  in the
aerospace and defense  industries  and to financial,  business and other factors
affecting the operations of ATP, many of which will be beyond its control.

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

     Amounts  representing  claims for  equitable  adjustment  are  included  in
estimates of future contract  revenues used for preparing  estimates of contract
profitability  at completion only when management  believes that  realization is
probable  and  amounts  can be  reasonably  estimated.  The amount  included  in
estimates of future contract revenues for outstanding  claims which had not been
finalized  was  approximately  $6.5 million as of December  31, 2001.  If ATP is
unsuccessful  in  recovering  these  amounts,  the  impact  on the  consolidated
financial statements could be significant.

     Work in process  inventories include costs on major long-term aerospace and
defense  programs  which  are  in the  early  stages  of  performance  and  have
experienced  actual costs to date in excess of the estimated average cost of all
units to be produced as determined under the learning curve concept.  Such costs
included in work in process  were  approximately  $14.5  million at December 31,
2001. The Company has assumed  additional orders beyond those currently included
in firm  released  backlog in its estimates of average unit cost of all units to
be  produced.  Recovery of the  deferred  production  costs is  dependent on the
number of units  ultimately  sold,  actual selling prices and associated  future
production costs.  Sales  significantly  under estimates or costs  significantly
over estimates could result in the realization of substantial  program losses in
future  years.  Included in the $14.5 million of work in process at December 31,
2001  related  to  these  contracts  is  approximately  $4.0  million  of  costs
associated with outstanding claims, the recovery of which is dependent on future
negotiation  and  settlement.   Of  the  remaining  $10.5  million  of  deferred
production costs relating to these contracts, $8.2 million would not be absorbed
in cost of sales based on existing firm orders at December 31, 2001.

     The Company  believes that  inflation has not had a material  effect on the
results of its operations in the periods covered by this report.


                                       26
<PAGE>

Recent Accounting Pronouncements

      In June 2001, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standard No. 142,  Goodwill and Other  Intangible  Assets
(SFAS No. 142), which is effective for the Company  beginning January 2002. SFAS
No. 142 addresses how intangible assets that are acquired individually or with a
group of other assets (but not those acquired in a business  combination) should
be accounted for in financial  statements upon their  acquisition.  SFAS No. 142
also addresses how goodwill and other intangible  assets should be accounted for
after they have been  initially  recognized  in the  financial  statements.  The
Company does not anticipate  that there will be a material impact on the results
of operations or financial position upon adoption of this standard.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to changes in interest rates  primarily  relating to
its $41.2 million  credit  facility.  However,  the carrying value of borrowings
under the credit facility  generally  approximate fair value due to the variable
rate nature of such  borrowings.  The interest rates are set quarterly  based on
the  Company's  performance  against  debt-to-earnings  ratios  specified in the
agreement.  Interest rates can range from LIBOR plus 2.75% to LIBOR plus 1.0% on
the revolving  loan and from LIBOR plus 3.25% to LIBOR plus 1.5% on the term and
equipment  loans.  Alternatively,  the Company may elect interest rates based on
the lending  institution's prime rate with the revolving loan ranging from prime
plus 0.5% to prime  plus 0.25% and the term and  equipment  loans  ranging  from
prime plus 0.75% to prime plus 0.50%.  At  December  31,  2001,  the Company had
$31.3  million  outstanding  under the  credit  facility  at a  weighted-average
interest rate of 3.63%.

     The Company has not entered into transactions  which subject it to material
foreign currency transaction gains and losses.

ITEM 8. FINANCIAL STATEMENTS


                                       27
<PAGE>

                          Independent Auditors' Report

The Board of Directors and Shareholders
Advanced Technical Products, Inc.:

We have  audited  the  accompanying  consolidated  balance  sheets  of  Advanced
Technical  Products,  Inc. and  subsidiaries  (the "Company") as of December 31,
2001  and  2000,  and  the  related   consolidated   statements  of  operations,
comprehensive  income  (loss),  and  cash  flows  for  each of the  years in the
three-year  period  ended  December  31,  2001.  These  consolidated   financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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 consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial position of Advanced Technical
Products,  Inc. and  subsidiaries at December 31, 2001 and 2000, and the results
of their operations and their cash flows for each of the years in the three-year
period  ended  December  31,  2001  in  conformity  with  accounting  principles
generally accepted in the United States of America.

                                                             /S/KPMG LLP

Atlanta, Georgia
February 22, 2002, except as to Note 7,
which is as of February 28, 2002


                                       28
<PAGE>

               ADVANCED TECHNICAL PRODUCTS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2001 and 2000

                (Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
                                                                                                              2001          2000
                                                                                                           ----------    ----------
<S>                                                                                                        <C>           <C>
                                         ASSETS
-----------------------------------------------------------------------------------------------------
CURRENT ASSETS:
    Cash and cash equivalents                                                                              $    1,549    $    1,666
    Accounts receivable (net of allowance for doubtful accounts of $306 in 2001 and
        $455 in 2000)                                                                                          26,256        25,811
    Inventories and costs relating to long-term contracts and programs in
        Process, net of progress payments                                                                      54,347        42,742
    Prepaid income taxes                                                                                           --         1,251
    Prepaid expenses and other current assets                                                                   2,555         1,252
    Deferred income taxes                                                                                       2,794         3,284
                                                                                                           ----------    ----------
                        Total current assets                                                                   87,501        76,006
                                                                                                           ----------    ----------

PROPERTY, PLANT AND EQUIPMENT:
    Buildings and improvements                                                                                  2,561         2,307
    Machinery and equipment                                                                                    19,249        16,696
    Construction in progress                                                                                    2,569           929
    Less-accumulated depreciation                                                                             (13,522)      (10,931)
                                                                                                           ----------    ----------
                        Net property, plant and equipment                                                      10,857         9,001
                                                                                                           ----------    ----------

DEFERRED INCOME TAXES                                                                                           1,105         2,819

NET ASSETS OF DISCONTINUED OPERATIONS                                                                           1,319         6,971

OTHER NONCURRENT ASSETS                                                                                         3,210         3,205
                                                                                                           ----------    ----------
                        Total assets                                                                       $  103,992    $   98,002
                                                                                                           ==========    ==========

                           LIABILITIES AND SHAREHOLDERS' EQUITY
-----------------------------------------------------------------------------------------------------
CURRENT LIABILITIES:
    Accounts payable                                                                                       $   19,911    $   13,259
    Accrued expenses                                                                                           12,187        10,570
    Short-term debt                                                                                            22,562        27,497
                                                                                                           ----------    ----------
                        Total current liabilities                                                              54,660        51,326

LONG-TERM LIABILITIES:
    Long-term debt, net of current portion                                                                     14,603        21,370
    Other liabilities                                                                                           3,855         4,283
                                                                                                           ----------    ----------
                        Total liabilities                                                                      73,118        76,979

Mandatorily redeemable preferred stock, $1.00 par value, 1,000,000 shares
    authorized, no shares issued and outstanding as of December 31, 2001,
    1,000,000 shares issued and outstanding as of December 31, 2000                                                --         1,000

SHAREHOLDERS' EQUITY:
    Preferred stock, undesignated, 1,000,000 shares authorized, no shares issued and outstanding                   --            --
    Common stock, $.01 par value, 30,000,000 shares authorized, 5,841,739 shares
       and 5,375,822  shares issued as of December 31, 2001 and 2000, respectively                                 58            54
    Additional paid-in capital                                                                                 19,883        17,151
    Retained earnings                                                                                          12,081         3,653
    Notes receivable from officers                                                                                 --          (135)
    Accumulated other comprehensive loss                                                                         (541)         (396)
                                                                                                           ----------    ----------
                                                                                                               31,481        20,327
    Less: Common stock purchased by deferred compensation trust (89,000 shares and 48,000 shares
        as of December 31, 2001 and 2000, respectively)                                                          (607)         (304)
                                                                                                           ----------    ----------
                        Total shareholders' equity                                                             30,874        20,023
                                                                                                           ----------    ----------
                        Total liabilities and shareholders' equity                                         $  103,992    $   98,002
                                                                                                           ==========    ==========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       29
<PAGE>

               ADVANCED TECHNICAL PRODUCTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For the Years Ended December 31, 2001, 2000 and 1999

                (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                        2001              2000              1999
                                                                                    -----------       -----------       -----------
<S>                                                                                 <C>               <C>               <C>
Revenues                                                                            $   198,408       $   170,725       $   159,777

Cost of revenues                                                                        150,763           130,466           124,189

General and administrative expenses                                                      25,543            24,628            24,019
                                                                                    -----------       -----------       -----------
        Operating income                                                                 22,102            15,631            11,569

Interest expense                                                                          3,523             3,409             2,661

Other expense                                                                             2,654               203                --
                                                                                    -----------       -----------       -----------
        Income before income tax expense                                                 15,925            12,019             8,908

Income tax expense                                                                        6,074             4,628             3,430
                                                                                    -----------       -----------       -----------
        Income from continuing operations                                                 9,851             7,391             5,478

Discontinued operations:
        Loss from operations of segment to be disposed of                                    --            (2,322)           (8,638)
        Provision for loss on disposal of business segment,
            including operating losses during the phase-out period                       (1,379)          (12,391)               --
                                                                                    -----------       -----------       -----------
        Loss from discontinued operations (net of income tax benefit)                    (1,379)          (14,713)           (8,638)

Net income (loss)                                                                   $     8,472       $    (7,322)      $    (3,160)
                                                                                    ===========       ===========       ===========

Net income (loss) per share:
        Basic:    Income from continuing operations                                 $      1.79       $      1.37       $      1.02
                  Loss from discontinued operations                                       (0.25)            (2.76)            (1.63)
                                                                                    -----------       -----------       -----------
                  Net income (loss)                                                 $      1.54       $     (1.39)      $     (0.61)
                                                                                    ===========       ===========       ===========

        Diluted:  Income from continuing operations                                 $      1.65       $      1.32       $      0.98
                  Loss from discontinued operations                                       (0.24)            (2.66)            (1.57)
                                                                                    -----------       -----------       -----------
                  Net income (loss)                                                 $      1.41       $     (1.34)      $     (0.59)
                                                                                    ===========       ===========       ===========

Weighted average number of common and common
    equivalent shares outstanding:
        Basic                                                                         5,466,857         5,337,775         5,273,214
                                                                                    ===========       ===========       ===========
        Diluted                                                                       5,958,845         5,532,786         5,503,905
                                                                                    ===========       ===========       ===========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       30
<PAGE>


               ADVANCED TECHNICAL PRODUCTS, INC. AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
              For the Years Ended December 31, 2001, 2000 and 1999

                             (Dollars in thousands)


                                                    2001       2000       1999
                                                  -------    -------    -------

Net income (loss)                                 $ 8,472    $(7,322)   $(3,160)

Other comprehensive income (loss):
       Minimum pension liability adjustment          (150)      (367)       601

       Foreign currency translation adjustment          5        (56)        51

                                                  -------    -------    -------
Comprehensive income (loss)                       $ 8,327    $(7,745)   $(2,508)
                                                  =======    =======    =======

          See accompanying Notes to Consolidated Financial Statements.


                                       31
<PAGE>

               ADVANCED TECHNICAL PRODUCTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Years Ended December 31, 2001, 2000 and 1999

                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                               2001           2000           1999
                                                                                            ---------      ---------      ---------
<S>                                                                                         <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                                         $   8,472      $  (7,322)     $  (3,160)
  Adjustments to reconcile net income (loss) to net cash provided by
    (used in) operating activities:
      Depreciation and amortization                                                             2,875          2,906          2,996
      Deferred income taxes                                                                     2,298         (1,195)        (2,287)
      Expense resulting from appreciation of Company stock held
            in deferred compensation trust                                                        940             --             --
      Other non-cash charges                                                                      523            136             --
      Estimated loss on disposition of discontinued operations                                     --         13,517             --
      Changes in operating assets and liabilities:
            Accounts receivable                                                                  (445)        (7,137)         5,391
            Inventories                                                                       (11,605)        (1,166)        (6,672)
            Other assets and liabilities                                                        1,131           (256)        (1,425)
            Accounts payable                                                                    6,652           (739)         1,745
            Accrued expenses                                                                    1,665            796          3,218
            Net assets of discontinued operations                                               1,081            452          5,897
                                                                                            ---------      ---------      ---------
                 Net cash provided by (used in) operating activities                           13,587             (8)         5,703
                                                                                            ---------      ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Capital expenditures                                                                     (4,497)        (1,020)        (3,018)
      Proceeds from disposal of structural core materials segment                               3,587             --             --
      Net investing activities of discontinued operations                                          31           (553)        (2,010)
                                                                                            ---------      ---------      ---------
                 Net cash used in investing activities                                           (879)        (1,573)        (5,028)
                                                                                            ---------      ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds of borrowings                                                                       --          7,146          3,163
      Repayments of borrowings                                                                (12,224)        (4,228)        (3,638)
      Proceeds from exercise of stock options and warrants                                        806             12             90
      Common stock issued under employee stock purchase plan                                      180            188            205
      Proceeds from repayment of officer loans                                                    135             --             --
      Cash dividends paid                                                                         (84)          (120)           (40)
      Payments under capital lease obligations                                                    (38)           (70)           (55)
      Redemption of preferred stock                                                            (1,000)            --             --
      Purchase of common stock for deferred compensation trust                                   (303)          (304)            --
      Net financing activities of discontinued operations                                        (297)           (32)          (962)
                                                                                            ---------      ---------      ---------
                 Net cash provided by (used in) financing activities                          (12,825)         2,592         (1,237)
                                                                                            ---------      ---------      ---------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                             (117)         1,011           (562)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                    1,666            655          1,217
                                                                                            ---------      ---------      ---------

CASH AND CASH EQUIVALENTS, END OF YEAR                                                      $   1,549      $   1,666      $     655
                                                                                            =========      =========      =========

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
      Assets acquired through capital leases                                                $      --      $      --      $     504

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
      Cash paid for interest                                                                $   3,911      $   4,347      $   3,911
      Cash paid for income taxes                                                            $     208      $     142      $   3,236
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       32
<PAGE>


                        ADVANCED TECHNICAL PRODUCTS, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2001, 2000 and 1999


1.   SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation

          The consolidated financial statements include the accounts of Advanced
          Technical   Products,   Inc.   (the   "Company"   or  "ATP")  and  its
          subsidiaries, all of which are 100% owned. The Company is incorporated
          in the state of  Delaware,  with  corporate  headquarters  located  in
          Roswell,  Georgia.  Principal manufacturing  operations are located in
          Marion, Virginia;  Lincoln,  Nebraska; Deland, Florida; and Glen Cove,
          New York.  The  Company's  subsidiaries  include:  Technical  Products
          Group,  Inc.,  Xcore,  Inc.  (formerly  known  as  Alcore,   Inc.,  or
          "Alcore"),  Marion  Properties,  Inc.,  Lincoln  Properties,  Inc. and
          Deland Properties,  Inc. All significant intercompany transactions and
          balances have been eliminated upon consolidation.

     Revenue Recognition

          Revenues  and   anticipated   profits  under   long-term  fixed  price
          production  contracts  are recorded on the  percentage  of  completion
          method,  principally using  units-of-delivery as the measurement basis
          for effort  accomplished.  Delivery of units are  generally  made upon
          acceptance by the customer in accordance with contract terms.

          Revenues under certain  long-term  fixed price  development  contracts
          which require a significant amount of non-recurring effort in relation
          to total contract value are recorded  based on the  accomplishment  of
          milestones  as  specified  by  contract  terms.  Revenues  under  cost
          reimbursable type contracts are recorded as costs are incurred.

          Amounts  representing claims for equitable  adjustment are included in
          estimates of future contract revenues used for preparing  estimates of
          contract  profitability  at completion only when  management  believes
          that realization is probable and amounts can be reasonably  estimated.
          The amounts  included in  estimates  of future  contract  revenues for
          outstanding  claims which had not been  finalized  were  approximately
          $6.5  million  and $7.4  million  as of  December  31,  2001 and 2000,
          respectively.

          Estimated losses on contracts are recorded in full when identified.


                                       33
<PAGE>

     Cash and Cash Equivalents

          Cash equivalents  consist of highly liquid financial  instruments with
          an original maturity of three months or less.

     Research and Development Costs

          Company-sponsored  research and development costs are reported as part
          of general and administrative expenses. Revenues and costs incurred in
          connection with customer-sponsored  research and development contracts
          are accounted for as contract revenues and costs.

     Inventories

          Inventories,  other  than  inventoried  costs  relating  to  long-term
          contracts and programs, are valued at the lower of first-in, first-out
          cost or market (net  realizable  value).  Inventory  cost  relating to
          long-term   contracts   and   programs   includes   material,   labor,
          manufacturing  overhead and tooling  costs  dedicated to a contract or
          program.  Costs attributed to units delivered under certain  long-term
          contracts and programs are based on the estimated  average cost of all
          units to be produced as  determined  under the learning  curve concept
          which  anticipates a predictable  decrease in unit costs as production
          techniques  become more efficient  through  repetition.  In accordance
          with industry practice, costs in inventory include amounts relating to
          contracts with long production cycles,  some of which are not expected
          to be realized within one year. Customer progress payments received on
          long-term  contracts  are  recorded as an offset to related  inventory
          balances.

     Use of Estimates

          The preparation of financial  statements in conformity with accounting
          principles generally accepted in the United States of America requires
          management to make estimates and assumptions  that affect the reported
          amounts of assets and liabilities and disclosure of contingent  assets
          and  liabilities  at the  date  of the  financial  statements  and the
          reported amounts of revenues and expenses during the reporting period.
          In particular,  accounting for long-term contracts requires management
          estimates of future  contract  revenues  and costs used for  preparing
          estimates   at   contract   completion   and   determining    contract
          profitability  reflected in the financial  statements.  Actual results
          could differ from those estimates.


                                       34
<PAGE>


     Fair Value of Financial Instruments

          The fair value of the Company's debt is estimated  based upon the cash
          flows discounted using the interest rates available to the Company for
          debt with similar terms and remaining  maturities.  The carrying value
          of the Company's debt approximates fair value due to the variable rate
          nature of the borrowings  and/or the short maturity of the borrowings.
          The carrying  value of all other  financial  instruments  approximates
          fair value due to the short-term nature of such instruments.

     Property, Plant and Equipment

          Property  additions  are  recorded  at cost.  Depreciation  is charged
          against operations over three to ten years for machinery and equipment
          and seven to forty years for buildings and improvements.  Improvements
          to leased  property  are  amortized  over the life of the lease or the
          estimated life of the improvement, whichever is shorter. Straight-line
          and  accelerated  methods  of  depreciation  are  used  for  financial
          reporting  and  accelerated  methods are used for tax  purposes  where
          permitted. Depreciation expense of continuing operations for the years
          ended December 31, 2001,  2000 and 1999 is $2,641,000,  $2,735,000 and
          $2,843,000, respectively.

     Earnings (Loss) Per Share

          Basic  earnings  (loss) per share is computed  by dividing  net income
          (loss) available for common shares by the  weighted-average  number of
          shares of common stock outstanding  during the year.  Diluted earnings
          (loss) per share is computed by dividing net income  (loss)  available
          for  common  shares by the sum of (1) the  weighted-average  number of
          shares of common stock outstanding during the period, (2) the dilutive
          effect of the assumed  exercise of stock  options  using the  treasury
          stock method and (3) the dilutive effect of other potentially dilutive
          securities.

     Stock Options

          The Company has adopted  Statement of Financial  Accounting  Standards
          ("SFAS")  No. 123,  Accounting  for  Stock-Based  Compensation,  which
          permits  entities to recognize as expense over the vesting  period the
          fair  value  of all  stock-based  awards  on the  date  of the  grant.
          Alternatively,  SFAS No. 123 allows  entities to continue to apply the
          provisions of Accounting  Principles  Board ("APB") Opinion No. 25 and
          provide  pro  forma  net  income  and  pro  forma   income  per  share
          disclosures for stock option grants as if the fair-value-based  method
          defined in SFAS No. 123 had been  applied.  The Company has elected to
          continue to apply the provisions of APB Opinion No. 25 and provide the
          pro forma disclosures of SFAS No. 123.


                                       35
<PAGE>

     Income Taxes

          Income taxes are accounted  for under the asset and liability  method.
          Deferred tax assets and  liabilities  are  recognized for the expected
          future  tax  consequences  attributable  to  differences  between  the
          financial   statement   carrying   amounts  of  existing   assets  and
          liabilities and their  respective tax bases and operating loss and tax
          credit carryforwards. Deferred tax assets and liabilities are measured
          using  enacted tax rates  expected  to apply to taxable  income in the
          years  in  which  those  temporary  differences  are  expected  to  be
          recovered   or  settled.   The  effect  on  deferred  tax  assets  and
          liabilities  of a change in tax rates is  recognized  in income in the
          period that includes the enactment date.

     Goodwill

          Goodwill,  which represents the excess of purchase price over the fair
          value of net assets acquired,  is amortized on the straight-line basis
          over the  estimated  useful life,  but not in excess of 40 years.  The
          Company  assesses  the  recoverability  of this  intangible  asset  by
          determining  whether the amortization of the goodwill balance over its
          remaining life can be recovered through  undiscounted future operating
          cash  flows  of  the  acquired  operation.   The  amount  of  goodwill
          impairment,  if any, is measured based on projected  discounted future
          operating  cash flows using a discount rate  reflecting  the Company's
          average  cost  of  funds.  The  assessment  of the  recoverability  of
          goodwill will be impacted if estimated future operating cash flows are
          not achieved.  During 2001, 2000 and 1999, no such goodwill impairment
          has been identified by the Company, other than that identified as part
          of  the  2000   provision  for  loss  on  disposal  of  the  Company's
          discontinued Structural Core Materials business segment (see Note 3).

          In June 2001, the Financial Accounting Standards Board issued SFAS No.
          142, Goodwill and Other Intangible Assets,  which is effective for the
          Company  beginning January 2002. SFAS No. 142 addresses how intangible
          assets that are acquired  individually or with a group of other assets
          (but not those acquired in a business combination) should be accounted
          for in financial statements upon their acquisition.  SFAS No. 142 also
          addresses how goodwill and other intangible assets should be accounted
          for  after  they  have  been  initially  recognized  in the  financial
          statements.  The  Company  does not  anticipate  that  there will be a
          material  impact on the results of  operations  or financial  position
          upon adoption of this standard.

     Long-Lived Assets

          In  accordance  with SFAS No. 121,  Accounting  for the  Impairment of
          Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed  Of, the
          Company  reviews for the  impairment  of  long-lived  assets  whenever
          events or changes in circumstances  indicate the carrying amount of an
          asset may not be recoverable. The carrying value of a long-lived asset
          is considered  impaired when the  anticipated  undiscounted  cash flow
          from  the  asset  is  separately  identifiable  and is less  than  its
          carrying  value.  In that  event,  a loss is  recognized  based on the
          amount by which  the  carrying  value  exceeds  the fair  value of the
          long-lived  asset.  Fair  value  is  determined  primarily  using  the
          anticipated cash flows discounted at a


                                       36
<PAGE>

          rate commensurate with the risk involved.  Losses on long-lived assets
          to be disposed of are determined in a similar manner, except that fair
          values are  reduced  for the cost to dispose.  During  2001,  2000 and
          1999, no such  impairment  losses have been identified by the Company,
          other than that  identified as part of the 2000  provision for loss on
          disposal  of the  Company's  discontinued  Structural  Core  Materials
          business segment (see Note 3).

     Foreign Currency Translation

          The local  currency  has been used as the  functional  currency in the
          country in which the Company  conducts  business outside of the United
          States.  The assets and liabilities  denominated in a foreign currency
          are  translated  into U.S.  dollars at the current rate of exchange at
          the balance sheet date and revenues and expenses are translated at the
          average monthly exchange rates.  The translation  gains and losses are
          included as a separate component of other comprehensive income (loss).
          Foreign currency  transaction  gains and losses included in results of
          operations are not material.

     Comprehensive Income (Loss)

          The  Company  applies  the  provisions  of  SFAS  No.  130,  Reporting
          Comprehensive   Income,   which   requires  the   reporting  of  other
          comprehensive income in addition to net income from operations.  Other
          comprehensive income (loss) for the Company consists of changes to its
          additional minimum pension liability and foreign currency  translation
          adjustments.

     Other Expense

          Other  expense  consists  primarily  of certain  legal and other costs
          incurred in connection with the Company's governmental  investigations
          relating to Alcore and a class  action  shareholder  lawsuit (see Note
          18).

2.   RESTATEMENT OF PREVIOUSLY REPORTED FINANCIAL STATEMENTS

     During  January  2000,  the  Company  learned of  possible  accounting  and
     financial reporting irregularities at its subsidiary,  Alcore, when certain
     financial records were seized in connection with a search warrant issued by
     the United  States  District  Court -  District  of  Maryland  as part of a
     governmental  investigation.  Additionally,  the Company was notified of an
     investigation  by the United  States  Securities  and  Exchange  Commission
     regarding these matters (see Note 18).

     After becoming aware of the possible  irregularities,  the Company  engaged
     special counsel and forensic  accountants to assist in its investigation of
     the  possible  irregularities.  As a result,  the  Company  has  previously
     restated  its 1998  consolidated  financial  statements  and its  quarterly
     financial  statements  for the first,  second and third  quarters  of 1999.
     Substantially all of the restatement adjustments relate to operations which
     have been  subsequently  classified as  discontinued by the Company and are
     contained in the


                                       37
<PAGE>

     restated   results  of   discontinued   operations   in  the   accompanying
     Consolidated Financial Statements (see Note 3).

     Certain  legal and other costs  incurred by the Company  during 2000 in its
     investigation of the  aforementioned  irregularities as well as other costs
     directly related to the aforementioned  governmental  investigations in the
     aggregate  amount of  approximately  $1.3 million have been included in the
     2000 loss from discontinued operations.

3.   DISCONTINUED OPERATIONS

     On June 30, 2000, the Company  adopted a formal plan to sell its Structural
     Core Materials segment, which consisted of the operations of its Alcore and
     Alcore  Brigantine  S.A.  subsidiaries.  On  June  14,  2001,  the  Company
     completed the sale of certain assets of Alcore and 100% of the stock of the
     Alcore  Brigantine S.A.  subsidiary (the  "Transaction") to a subsidiary of
     the M.C. Gill  Corporation.  The Alcore assets sold consisted  primarily of
     inventories and property and equipment. The selling price was approximately
     $5.0 million in the form of cash and a promissory  note.  Excluded from the
     Transaction were accounts receivable,  the Belcamp,  Maryland manufacturing
     facility and  substantially  all the liabilities of Alcore.  The Company is
     currently seeking a buyer for its Belcamp facility, but to date the Company
     has not entered into any agreement or  arrangement  with any third party to
     purchase  the  facility.  During the second  quarter of 2001,  an after tax
     charge of $1.4 million was recorded as a loss from discontinued  operations
     to reflect the amount by which actual  operating  losses of Alcore exceeded
     previous estimates, and revisions of the final selling price of assets sold
     and the estimated  net  realizable  value of the retained  assets of Alcore
     that are in the process of being liquidated.

     The promissory  note from the Alcore buyer totals  $1,250,000 in principal,
     and is to be paid as  follows:  $500,000  on June  13,  2002,  $375,000  on
     December 13, 2002 and $375,000 on June 13, 2003. In addition,  payments are
     to include  accrued  interest on the unpaid note  balance at the rate of 9%
     per  annum.  The  note  has  been  classified  with  assets  of  continuing
     operations in the accompanying Consolidated Balance Sheets.

     The  remaining net assets of  discontinued  operations at December 31, 2001
     following the Transaction  consist  primarily of the Belcamp  manufacturing
     facility  and  reserves  for other  liabilities  relating  to  discontinued
     operations. Net assets to be disposed of have been separately classified in
     the accompanying Consolidated Balance Sheets.

     Operating  results of the Structural Core Materials segment for all periods
     reported are shown  separately as results from  discontinued  operations in
     the accompanying  Consolidated  Financial  Statements.  Net revenues of the
     Structural Core Materials segment were approximately  $10.7 million,  $23.2
     million and $19.4 million for the years ended  December 31, 2001,  2000 and
     1999,  respectively.  These  amounts  are not  included  in revenues in the
     accompanying Consolidated Statements of Operations.


                                       38
<PAGE>

     Discontinued operation results, including income tax impact, are summarized
as follows for the years ended December 31, 2001, 2000 and 1999 (in thousands):

<TABLE>
<CAPTION>
                                                                                      2001          2000          1999
                                                                                   ----------    ----------    ----------
<S>                                                                                <C>           <C>           <C>
Loss from operations of segment to be disposed:
    Loss before taxes                                                              $       --    $   (3,775)   $  (13,142)
    Income tax benefit                                                                     --         1,453         4,504
                                                                                   ----------    ----------    ----------
    Net after tax                                                                  $       --    $   (2,322)   $   (8,638)
                                                                                   ==========    ==========    ==========

Provision for loss on disposal of business segment:

    Operating losses during the phase-out period:
         Loss before taxes:
                Incurred as of end of year                                         $       --    $   (2,294)   $       --
                Estimated future operating losses through date of disposal                 --        (1,300)           --
                                                                                   ----------    ----------    ----------
                Total operating losses during the phase-out period                         --        (3,594)           --
         Income tax benefit                                                                --         1,222            --
                                                                                   ----------    ----------    ----------
         Net after tax                                                                     --        (2,372)           --
                                                                                   ----------    ----------    ----------

    Estimated loss on disposal of business segment:
         Loss before taxes:                                                            (1,892)      (12,217)           --
         Income tax benefit                                                               513         2,198            --
                                                                                   ----------    ----------    ----------
         Net after tax                                                                 (1,379)      (10,019)           --
                                                                                   ----------    ----------    ----------

    Total provision for loss on disposal of business segment:
         Loss before taxes:                                                            (1,892)      (15,811)           --
         Income tax benefit                                                               513         3,420            --
                                                                                   ----------    ----------    ----------
         Net after tax                                                                 (1,379)      (12,391)           --
                                                                                   ----------    ----------    ----------

Total loss from discontinued operations:
    Loss before taxes                                                                  (1,892)      (19,586)      (13,142)
    Income tax benefit                                                                    513         4,873         4,504
                                                                                   ----------    ----------    ----------
    Net after tax                                                                  $   (1,379)   $  (14,713)   $   (8,638)
                                                                                   ==========    ==========    ==========

Loss per share:

    Basic:
         Loss from operations of segment to be disposed                            $       --    $    (0.44)   $    (1.63)
         Estimated loss on disposal of business segment                                 (0.25)        (2.32)           --
                                                                                   ----------    ----------    ----------
                Total loss from discontinued operations                            $    (0.25)   $    (2.76)   $    (1.63)
                                                                                   ==========    ==========    ==========

    Diluted:
         Loss from operations of segment to be disposed                            $       --    $    (0.42)   $    (1.57)
         Estimated loss on disposal of business segment                                 (0.24)        (2.24)           --
                                                                                   ----------    ----------    ----------
                Total loss from discontinued operations                            $    (0.24)   $    (2.66)   $    (1.57)
                                                                                   ==========    ==========    ==========
</TABLE>

Discontinued  operation results include general interest expense  allocations of
approximately  $522,000,  $933,000 and $984,000 for the years ended December 31,
2001, 2000 and 1999, respectively.


                                       39
<PAGE>


4.   SEGMENT REPORTING AND CUSTOMER CONCENTRATION

          The Company applies the provisions of SFAS No. 131,  Disclosures about
          Segments of an Enterprise and Related  Information,  which established
          standards for the manner in which public business  enterprises  report
          information about operating segments.

          The Company's operations include two reportable business segments: (1)
          Aerospace  and  Defense  and  (2)  Commercial  Composites.  All  other
          operating  segments  have  not met  the  quantitative  thresholds  for
          determining  reportable segments. A description and financial data for
          the segments are summarized below.

          Aerospace and Defense

          The  Aerospace  and Defense  markets  served by the Company  primarily
          consist of the United States government (Department of Defense), which
          the  Company  sells  to on a  prime  and  subcontract  basis,  and the
          commercial  aerospace  market.  The  Company  designs,   develops  and
          manufactures  a wide range of advanced  composite  products,  advanced
          electronic and electro-optical components and other integrated defense
          systems  for  this  market  segment.   Products  include  radomes  and
          composite  structures  for  high-performance  military and  commercial
          aviation,   lightweight  relocatable  shelters,  rocket  motor  cases,
          pressure  vessels,   fuel  tanks  for  military   aircraft,   advanced
          electronic  and  electro-optical  components,  biological and chemical
          warfare  detection  and  protection  systems,  metal bonded panels and
          other composite assemblies using fibers and reinforced plastics.  This
          reportable segment consists of four operating segments which have been
          aggregated for segment reporting purposes.

          Commercial Composites

          The Commercial  Composites segment designs and manufactures  composite
          parts  and  components  for the  automotive,  oil  and  gas and  other
          commercial industries,  including fuel tanks for natural gas vehicles,
          accumulator bottles, flexible drill pipe and other products.

          Other

          The remainder of the Company's  business  consists of operations which
          have  not  met  the  quantitative   thresholds  for  separate  segment
          disclosure.  Other consists  primarily of a segment that  manufactures
          electrical power switching  products for specialty  vehicles including
          recreational  vehicles,  motor homes,  conversion vans,  over-the-road
          trucks and leisure boats.


                                       40
<PAGE>


Selected  financial  data by  business  segment  as of and for the  years  ended
December 31, 2001, 2000 and 1999 follows (in thousands):

<TABLE>
<CAPTION>
                                                        2001              2000              1999
                                                     ----------        ----------        ----------
<S>                                                  <C>               <C>               <C>
     Net revenues
         (all from external customers)
         Aerospace and Defense                       $  171,510        $  140,336        $  133,214
         Commercial Composites                           18,801            21,668            16,663
         Other operating segments                         8,097             8,721             9,900
                                                     ----------        ----------        ----------
                 Total                               $  198,408        $  170,725        $  159,777
                                                     ==========        ==========        ==========

     Operating income (loss)
         Aerospace and Defense                       $   20,751        $   13,233        $   11,420
         Commercial Composites                            5,906             6,779             2,730
         Other operating segments                          (492)             (102)              941
         Corporate                                       (4,063)           (4,279)           (3,522)
                                                     ----------        ----------        ----------
                 Total                               $   22,102        $   15,631        $   11,569
                                                     ==========        ==========        ==========

     Identifiable assets
         Aerospace and Defense                       $   83,002        $   64,945        $   60,708
         Commercial Composites                            8,694             9,221             7,089
         Other operating segments                         2,185             2,563             3,020
         Corporate                                        8,792            14,302            10,822
                                                     ----------        ----------        ----------
                 Total                               $  102,673        $   91,031        $   81,639
                                                     ==========        ==========        ==========

     Capital expenditures
         Aerospace and Defense                       $    4,231        $      782        $    2,556
         Commercial Composites                              187               204               155
         Other operating segments                            79                34               207
         Corporate                                           --                --               100
                                                     ----------        ----------        ----------
                 Total                               $    4,497        $    1,020        $    3,018
                                                     ==========        ==========        ==========

     Depreciation and amortization
         Aerospace and Defense                       $    2,193        $    2,285        $    2,466
         Commercial Composites                              354               324               289
         Other operating segments                           108               156               144
         Corporate                                          220               141                97
                                                     ----------        ----------        ----------
                 Total                               $    2,875        $    2,906        $    2,996
                                                     ==========        ==========        ==========
</TABLE>

The  following  table  presents  the  geographic  location of the  customer  for
revenues  as of and for the years ended  December  31,  2001,  2000 and 1999 (in
thousands):

                                          2001          2000          1999
                                        --------      --------      --------
          United States                 $179,198      $151,979      $146,374
          Foreign countries               19,210        18,746        14,403
                                        --------      --------      --------
          Total                         $198,408      $170,725      $159,777
                                        ========      ========      ========


                                       41
<PAGE>

          Major Customer Information

          Revenues  from the U.S.  government on a prime or  sub-contract  basis
          during 2001,  2000,  and 1999 were  approximately  74%, 69% and 69% of
          total revenues, respectively.  Approximately 20%, 19% and 16% of total
          revenues for 2001, 2000 and 1999,  respectively,  were from The Boeing
          Company.  No other  customers  comprised 10% or more of total revenues
          for the periods reported. All of the revenues from the U.S. government
          and The Boeing Company reported were included as part of the Aerospace
          and Defense business segment.  More than 92% of total revenues were on
          a fixed-price basis for all periods reported.

          As a government contractor, the Company is exposed to certain inherent
          industry risks and uncertainties including technological obsolescence,
          changes in  government  policies,  dependence  on the federal  defense
          budget and annual congressional  appropriation and allotment of funds.
          Although the Company's major programs have been well supported  during
          recent years, future spending reductions and funding limitations could
          negatively impact future operations.

5.   INVENTORIES

          Inventories  at December 31, 2001 and 2000  consisted of the following
          (in thousands):

                                                   2001            2000
                                                 --------        --------
               Finished goods                    $  1,509        $  1,281
               Work in process                     39,161          29,555
               Raw materials                       18,699          13,560
               Progress payments                   (5,022)         (1,654)
                                                 --------        --------
                          Total                  $ 54,347        $ 42,742
                                                 ========        ========

          Work in  process  includes  costs on  major  long-term  aerospace  and
          defense programs which are in the early stages of performance and have
          experienced  actual costs to date in excess of the  estimated  average
          cost of all units to be  produced  as  determined  under the  learning
          curve   concept.   Such  costs   included  in  work  in  process  were
          approximately $14.5 million and $14.2 million at December 31, 2001 and
          2000,  respectively.  The Company has assumed additional orders beyond
          those currently  included in firm released backlog in its estimates of
          average  unit  cost  of all  units  to be  produced.  Recovery  of the
          deferred  production  costs  is  dependent  on  the  number  of  units
          ultimately   sold,   actual  selling  prices  and  associated   future
          production  costs.  Sales   significantly  under  estimates  or  costs
          significantly  over  estimates  could  result  in the  realization  of
          substantial  program  losses in future  years.  Included  in the $14.5
          million of work in  process  at  December  31,  2001  related to these
          contracts  is  approximately  $4.0  million of costs  associated  with
          outstanding  claims,  the  recovery  of which is  dependent  on future
          negotiation and settlement. Of the remaining $10.5 million of deferred
          production costs relating to these  contracts,  $8.2 million would not
          be absorbed in cost of sales based on existing firm orders at December
          31, 2001.


                                       42
<PAGE>

6.   LEASES

          The Company has various lease  agreements  for offices,  factories and
          equipment.  The longest lease obligation  extends to 2013. Most leases
          contain renewal options and some contain purchase  options.  No leases
          contain restrictions on the Company's activities concerning dividends,
          further leasing or additional debt.

          Future minimum rental  payments at December 31, 2001 under  agreements
          classified as operating leases with  noncancelable  terms in excess of
          one year are as follows (in thousands):

                  Year ending December 31:
                  2002                                  $ 1,364
                  2003                                    1,095
                  2004                                      858
                  2005                                      409
                  2006                                      239
                  Beyond 2006                             1,595
                                                        -------
                           Total                        $ 5,560
                                                        =======

          The schedule of operating  lease  obligations  excludes the  Company's
          obligation of $1,148,000 for the remaining four years and three months
          on a lease of a  manufacturing  facility  located in Jessup,  Maryland
          which is no longer being used by ATP in its operations. As of December
          31, 2001,  the Company has subleased  substantially  all of the Jessup
          facility.  Management  has  estimated  the amount of  remaining  lease
          obligation costs in excess of anticipated future sublease income to be
          $221,000 at December 31,  2001,  and a liability of the same amount is
          included as an accrued expense on the Company's  Consolidated  Balance
          Sheet at December 31, 2001.

          Rent  expense for the years ended  December  31,  2001,  2000 and 1999
          consisted of the following (in thousands):

                                              2001        2000        1999
                                            -------     -------     -------

                  Basic expense             $ 1,654     $ 1,686     $ 1,535
                  Sublease income              (251)       (254)       (254)
                                            -------     -------     -------
                  Rent expense, net         $ 1,403     $ 1,432     $ 1,281
                                            =======     =======     =======


                                       43
<PAGE>

7.   DEBT

          Short-term  debt  of the  Company  at  December  31  consisted  of the
          following (in thousands):

<TABLE>
<CAPTION>
                                                                         2001         2000
                                                                       --------     --------
<S>                                                                    <C>          <C>
                Revolving loans                                        $ 17,099     $ 21,799
                Current maturities of long-term debt                      5,463        5,698
                                                                       --------     --------
                         Total                                         $ 22,562     $ 27,497
                                                                       ========     ========
</TABLE>

          Long-term  debt  of  the  Company  at  December  31  consisted  of the
          following (in thousands):

<TABLE>
<CAPTION>
                                                                         2001         2000
                                                                       --------     --------
<S>                                                                    <C>          <C>
                Term loans                                             $ 12,563     $ 16,635
                Equipment loans                                           1,608        2,448
                Subordinated debt, net of  unamortized loan
                    discount of $1,104 in 2001and $1,627 in 2000          5,895        5,373
                Bonds payable                                                --        2,000
                Other long-term debt                                         --          612
                                                                       --------     --------
                         Total long-term debt                            20,066       27,068
                Less current portion                                      5,463        5,698
                                                                       --------     --------
                         Long-term debt, net of current portion        $ 14,603     $ 21,370
                                                                       ========     ========
</TABLE>

          Scheduled  maturities  of long-term  debt at December  31,  2001are as
          follows (in thousands):


                2002                                                   $  5,463
                2003                                                     14,603
                                                                       --------
                         Total                                         $ 20,066
                                                                       ========

          Revolving, Term and Equipment Loans

          On  October  10,  2000,  the  Company  entered  into  a new  financing
          agreement with its primary lender. At December 31, 2001, the Company's
          credit  facility with this lending  institution  totaled $41.2 million
          consisting of: (1) $27.0 million of revolving  credit against eligible
          receivable and inventory  balances,  (2) a $12.6 million term loan and
          (3) a $1.6 million  capital  equipment  loan. As of December 31, 2001,
          the  Company  had  approximately  $9.2  million  of  unused  borrowing
          availability on this credit facility,  net of $1.3 million of reserves
          against the revolving  loan borrowing  base for  outstanding  stand-by
          letters of credit  commitments  ($0.8  million)  and other items ($0.5
          million).

          The revolving,  term and equipment loans are secured by  substantially
          all of the Company's  assets.  The interest rates on the loans are set
          quarterly based on the Company's performance against  debt-to-earnings
          ratios specified in the agreement. Interest rates can range from LIBOR
          (the London Interbank  Offered Rates) plus 2.75% to LIBOR plus 1.0% on
          the revolving loan and from LIBOR plus 3.25% to LIBOR plus 1.5% on the
          term  and  equipment  loans.  Alternatively,  the  Company  may  elect
          interest  rates  based on the  lending  institution's  prime rate with
          rates on the revolving loan ranging from prime plus 0.5% to prime plus
          0.25% and rates on the term and  equipment  loans  ranging  from prime
          plus 0.75% to prime plus 0.50%.


                                       44
<PAGE>

          The weighted average interest rates in effect at December 31, 2001 and
          2000 for the revolving, term and equipment loans were as follows:

                                                  2001         2000
                                                  ----         ----
               Revolving loans                    3.30%        9.53%
               Term loans                         3.97%        9.91%
               Equipment loans                    4.34%        9.94%

          Interest  is paid  monthly in  arrears on all loans.  The term loan is
          payable quarterly based on a seven-year amortization period. Equipment
          loan  principal  payments  are  made  monthly  based  on  a  five-year
          amortization  period.  The agreement also  stipulates that the Company
          will make annual  mandatory  prepayments of the term loan principal in
          an amount equal to 40% of annual  excess cash flow,  as defined by the
          agreement.  Such  prepayments are due within ninety days of the end of
          the year,  commencing  with the year ending  December  31,  2001.  The
          prepayment   requirement  based  on  excess  cash  flow  for  2001  is
          approximately  $1.9 million,  which has been  classified as short-term
          debt in the Company's Consolidated Balance Sheet at December 31, 2001.
          In accordance with the financing  agreement,  the Company used part of
          the  proceeds  received  from  the  sale  of  certain  assets  of  its
          discontinued  operations  on  June  14,  2001  (see  Note 3) to make a
          one-time  principal  repayment of $1.3  million on the term loan.  The
          credit facility matures on October 31, 2003.

          The Company is subject to several financial and nonfinancial covenants
          under the credit  facility.  At December 31, 2001,  the Company was in
          violation  of a  financial  covenant  limiting  the  amount  of annual
          capital expenditures.  The violation was cured as a result of a waiver
          letter dated February 15, 2002.

          Subordinated Debt

          On October 10, 2000,  the Company  entered  into an  agreement  with a
          lender  for a three  year,  $7,000,000  million  loan in the form of a
          junior  secured  credit  facility.  The loan  bears  interest  payable
          monthly in arrears at an annual rate of 12.5%,  and an additional 2.5%
          of payment-in-kind  interest that is payable currently or at maturity,
          at the Company's discretion.  The loan matures on October 31, 2003. In
          connection  with the loan, ATP also issued  warrants giving the lender
          the right to purchase  320,000 shares of the Company's common stock at
          an exercise price of $4.42 per share. The warrant  agreement  provided
          the lender the right,  under  certain  circumstances,  to require  the
          Company to  repurchase  the  warrants  for an amount to be  determined
          based on the Company's financial performance, subject to a maximum cap
          of $1,750,000.

          The Company  allocated  the  $7,000,000  proceeds from the loan to the
          subordinated debt ($5,250,000) and stock warrants  ($1,750,000)  based
          on their respective fair values.  The fair value of the stock warrants
          is  reflected as a debt  discount  and is being  amortized as interest
          expense  over the  three  year  life of the debt  using  the  interest
          method.  The amount of amortization  recorded as interest  expense for
          the year ended  December 31, 2001 and 2000 was $523,000 and  $123,000,
          respectively.  The Company  included  the value  assigned to the stock
          warrants  in  other   long-term   liabilities   in  the   accompanying
          Consolidated Balance Sheet at December 31, 2000.

          On October 31, 2001,  the lender  exercised  all of the 320,000  stock
          warrants  issued in  connection  with the loan.  In lieu of paying the
          exercise  price to the Company in cash,  the lender elected to convert
          the warrants on a cashless basis in accordance with the


                                       45
<PAGE>

          provisions of the agreement.  As a result,  the Company issued 266,807
          new shares of its common  stock to the lender and ATP received no cash
          proceeds from the exercise.  The lender subsequently sold all of these
          shares  on  the  public  market.  As a  result  of the  stock  warrant
          exercise,  during 2001 the Company eliminated the long-term  liability
          of $1,750,000 recorded at the time the loan was obtained and increased
          shareholders' equity (additional paid-in capital) by a like amount.

          The Company is subject to several financial and nonfinancial covenants
          under the loan  agreement.  At December 31,  2001,  the Company was in
          violation  of a  financial  covenant  limiting  the  amount  of annual
          capital expenditures.  The violation was cured as a result of a waiver
          letter dated February 28, 2002.

          Bonds Payable

          Bonds  payable  result  from a financing  agreement  with the State of
          Maryland  dated  May  14,  1997 to  provide  $2.6  million  in 15 year
          tax-exempt industrial development bonds bearing interest at a variable
          rate adjusted weekly to finance the purchase of the Belcamp,  Maryland
          manufacturing  facility  and an adjacent  3.2 acre parcel of land.  On
          August 1, 2001,  the Company fully  redeemed the bonds pursuant to the
          optional redemption provisions of the financing agreement.

          Other Long-Term Debt

          On July 7, 1997, in conjunction  with the tax-exempt  bond  financing,
          the Company entered into a ten-year $810,000  Maryland  Industrial and
          Commercial  Redevelopment  Fund loan  agreement with interest set at a
          fixed  rate of 5.1%  annually,  plus a  five-year  $60,000  loan  from
          Harford  County,  Maryland  with interest set at a fixed rate of 5.5%.
          The  outstanding  balances  of the loans were paid off in full on June
          15, 2001 using part of the proceeds  received from the sale of certain
          assets of its discontinued operations on June 14, 2001 (see Note 3).

8.   RETIREMENT AND EMPLOYEE BENEFIT COSTS

          Defined Contribution Plans

          The Company has retirement and savings plans for  substantially all of
          the Company's employees which allow participants to make contributions
          up to 15% of their base pay via payroll deductions pursuant to Section
          401(k) of the Internal  Revenue Code.  Under the plan, the Company may
          make discretionary matching contributions. The Company's match for the
          2001 plan  year was 50% of each  participant's  pretax  contributions,
          limited  to 4% of their  salary.  The cost of the  employer  match for
          2001,   2000,   and  1999  was   $636,000,   $644,000  and   $588,000,
          respectively.

          Union  employees at the Glen Cove,  New York facility are covered by a
          defined  contribution  retirement plan, the cost of which was $32,000,
          $27,000 and $32,000 for 2001, 2000 and 1999, respectively.


                                       46
<PAGE>

          Defined Benefits Plans

          The  majority of hourly union  employees  of the  Company,  other than
          those at the Glen  Cove,  New York  facility,  are  covered by defined
          benefit  pension  plans with  benefits  generally  based on negotiated
          rates  and  years of  service.  The  Company's  funding  policy  is to
          contribute  annually the minimum  required  amount  determined  by its
          actuaries.

          The change in  benefit  obligation,  change in plan  assets and funded
          status of the defined benefit plans for 2001 and 2000 is summarized as
          follows (in thousands):

<TABLE>
<CAPTION>
                                                                  2001         2000
                                                                -------      -------
<S>                                                             <C>          <C>
                Change in benefit obligation:
                     Balance at beginning of year               $ 3,460      $ 2,832
                     Service cost                                   313          258
                     Interest cost                                  241          246
                     Actuarial (gain) loss                         (197)         295
                     Benefits paid                                 (244)        (171)
                                                                -------      -------
                     Balance at end of year                     $ 3,573      $ 3,460
                                                                =======      =======

               Change in plan assets:
                     Balance at beginning of year               $ 2,817      $ 2,087
                     Actual return on plan assets                  (208)        (164)
                     Employer contributions                         626        1,065
                     Benefits paid                                 (244)        (171)
                                                                -------      -------
                     Balance at end of year                     $ 2,991      $ 2,817
                                                                =======      =======

               Funded status:
                     Funded status at end of year               $  (582)     $  (643)
                     Unrecognized net actuarial loss                879          636
                     Unrecognized prior service cost                716          798
                                                                -------      -------
                     Prepaid benefit cost                       $ 1,013      $   791
                                                                =======      =======
</TABLE>

          The amounts recognized in the Consolidated  Balance Sheets at December
          31, 2001 and 2000 consist of (in thousands):

<TABLE>
<CAPTION>
                                                                  2001         2000
                                                                -------      -------
<S>                                                             <C>          <C>
                     Prepaid benefit cost                       $ 1,013      $   791
                     Additional minimum liability                (1,595)      (1,434)
                     Intangible asset                               716          798
                     Accumulated other comprehensive income         879          636
                                                                -------      -------
                     Prepaid benefit cost                       $ 1,013      $   791
                                                                =======      =======
</TABLE>

          The net  periodic  benefit cost of the defined  benefit  plans for the
          years ended  December 31,  2001,  2000 and 1999 by  components  was as
          follows (in thousands):

<TABLE>
<CAPTION>
                                                                    2001        2000        1999
                                                                   -----       -----       -----
<S>                                                                <C>         <C>         <C>
               Service cost                                        $ 313       $ 258       $ 359
               Interest cost                                         241         246         218
               Expected return on plan assets                       (248)       (202)       (111)
               Amortization of prior service cost                     82          82          82
               Amortization of actuarial loss                         15          --          34
                                                                   -----       -----       -----
                         Net periodic benefit cost                 $ 403       $ 384       $ 582
                                                                   =====       =====       =====
</TABLE>


                                       47
<PAGE>

          Assumptions used to measure the projected  benefit  obligation and the
          expected  long-term  rate of return on plan  assets as of  December 31
          were as follows:

<TABLE>
<CAPTION>
                                                                    2001        2000        1999
                                                                   -----       -----       -----
<S>                                                                <C>         <C>         <C>
                Discount rate                                       7.50%       7.50%       8.00%
                Expected return on plan assets                      8.00%       8.00%       8.00%
</TABLE>

          Deferred Compensation Plan

          The Company's deferred compensation plan allows selected employees and
          directors  to  defer  designated   portions  of  their   compensation.
          Participant  contributions are placed in a rabbi trust and invested as
          directed by the participant in equity and debt  securities,  including
          shares of the  Company's  common  stock.  All invested  contributions,
          other than those invested in shares of the Company's common stock, are
          stated at fair market  value,  and are  included  in other  noncurrent
          assets (Note 16). The deferred  compensation  liability is recorded at
          the fair value of the investments held in the trust and is included in
          other noncurrent  liabilities  (Note 17). In accordance with Issue No.
          97-14, Accounting for Deferred Compensation Arrangements Where Amounts
          Earned Are Held in a Rabbi Trust and  Invested,  as  published  by the
          Emerging  Issues  Task  Force of the  Financial  Accounting  Standards
          Board, the Company's stock held in the trust is recorded at historical
          cost  and  classified  as a  reduction  in  shareholders'  equity.  In
          addition,  general and  administrative  expense is charged or credited
          for  gains  and  losses,   respectively,   relating  to  market  value
          fluctuations  of  shares of  Company  common  stock  held in trust for
          participants  in the plan.  The expense  recorded in 2001  relating to
          these market value fluctuations  totaled $0.9 million. The expense had
          no impact on net cash  flows.  The  Company  has  amended  the plan to
          require  investments in Company stock to be settled with Company stock
          so that, commencing with the second quarter of 2002, no further income
          statement  impact will result from future  changes in the price of the
          Company's shares held in the rabbi trust.


                                       48
<PAGE>

9.   SHAREHOLDERS' EQUITY

          The  activity in the equity  accounts  for the period  January 1, 1999
          through December 31, 2001 is summarized as follows (in thousands):

<TABLE>
<CAPTION>

                                                                                                              Notes
                                                   Common Stock             Additional                      Receivable
                                            --------------------------        Paid-in        Retained          from
                                              Shares          Amount          Capital        Earnings        Officers
                                            ----------      ----------      ----------      ----------      ----------
<S>                                              <C>        <C>             <C>             <C>             <C>
Balance, December 31, 1998                       5,240      $       52      $   16,522      $   14,295      $     (135)

Exercise of stock options and warrants              46               1              89              --              --
Shares issued under employee stock plan             20              --             205              --              --
Net loss                                            --              --              --          (3,160)             --
Preferred dividends declared                        --              --              --             (80)             --
Additional minimum pension liability                --              --              --              --              --
Foreign currency translation gain                   --              --              --              --              --
                                            ----------      ----------      ----------      ----------      ----------
Balance, December 31, 1999                       5,306      $       53      $   16,816      $   11,055      $     (135)

Exercise of stock options and warrants              30              --              12              --              --
Shares issued under employee stock plan             40               1             187              --              --
Remeasurement of stock warrants                     --              --             136              --              --
Net loss                                            --              --              --          (7,322)             --
Preferred dividends declared                        --              --              --             (80)             --
Additional minimum pension liability                --              --              --              --              --
Common stock purchased by deferred
    compensation trust                             (48)
Foreign currency translation loss                   --              --              --              --              --
                                            ----------      ----------      ----------      ----------      ----------
Balance, December 31, 2000                       5,328      $       54      $   17,151      $    3,653      $     (135)

Exercise of stock options and warrants             435               4           2,552              --              --
Shares issued under employee stock plan             31              --             180              --              --
Net income                                          --              --              --           8,472              --
Preferred dividends declared                        --              --              --             (44)             --
Repayment of notes from officers                    --              --              --              --             135
Additional minimum pension liability                --              --              --              --              --
Common stock purchased by deferred
    compensation trust                             (41)
Foreign currency translation loss                   --              --              --              --              --
                                            ----------      ----------      ----------      ----------      ----------
Balance, December 31, 2001                       5,753      $       58      $   19,883      $   12,081      $       --
                                            ==========      ==========      ==========      ==========      ==========

<CAPTION>
                                                              Common Stock
                                              Accumulated     Purchased by
                                               Other Com-       Deferred
                                               prehensive     Compensation
                                              Income (Loss)       Trust           Total
                                               ----------      ----------      ----------
<S>                                            <C>             <C>             <C>
Balance, December 31, 1998                     $     (625)     $       --      $   30,109

Exercise of stock options and warrants                 --              --              90
Shares issued under employee stock plan                --              --             205
Net loss                                               --              --          (3,160)
Preferred dividends declared                           --              --             (80)
Additional minimum pension liability                  601              --             601
Foreign currency translation gain                      51              --              51
                                               ----------      ----------      ----------
Balance, December 31, 1999                     $       27      $       --      $   27,816

Exercise of stock options and warrants                 --              --              12
Shares issued under employee stock plan                --              --             188
Remeasurement of stock warrants                        --              --             136
Net loss                                               --              --          (7,322)
Preferred dividends declared                           --              --             (80)
Additional minimum pension liability                 (367)             --            (367)
Common stock purchased by deferred
    compensation trust                                               (304)           (304)
Foreign currency translation loss                     (56)             --             (56)
                                               ----------      ----------      ----------
Balance, December 31, 2000                     $     (396)     $     (304)     $   20,023

Exercise of stock options and warrants                 --              --           2,556
Shares issued under employee stock plan                --              --             180
Net income                                             --              --           8,472
Preferred dividends declared                           --              --             (44)
Repayment of notes from officers                       --              --             135
Additional minimum pension liability                 (150)             --            (150)
Common stock purchased by deferred
    compensation trust                                               (303)           (303)
Foreign currency translation loss                       5              --               5
                                               ----------      ----------      ----------
Balance, December 31, 2001                     $     (541)     $     (607)     $   30,874
                                               ==========      ==========      ==========
</TABLE>

          Under the 1997 Advanced  Technical  Products,  Inc.  Stock Option Plan
          (the "1997 Plan"),  the Company may grant  nonstatutory  and incentive
          stock  options to  employees  of the Company  for the  purchase of the
          Company's  common stock at an exercise price equal to at least 100% of
          the fair  market  value as of the  date of  grant  (110% of such  fair
          market value if the optionee owns more that 10% of the combined voting
          power of all  classes  of  stock  of the  Company).  The  Company  has
          authorized  300,000 shares of common stock for the 1997 Plan.  Options
          granted  through  December 31, 2001 have 10-year terms and vest at the
          rate of 20% on each of the five  anniversary  dates following the year
          of the grant. At December 31, 2001,  approximately  6,000 options were
          available for grant under the 1997 Plan.

          On September 12, 2000, the Company adopted the 2000 Advanced Technical
          Products, Inc. Stock Option Plan (the "2000 Plan"), which provides for
          stock option grants on terms  substantially the same as the 1997 Plan.
          The Company has authorized 500,000 shares of common stock for the 2000
          Plan. Options granted through December 31, 2001 have 10-year terms and
          vest  at the  rate  of 20% on  each  of  the  five  anniversary  dates
          following the year of the grant.  At December 31, 2001,  approximately
          302,000 options were available for grant under the 2000 Plan.


                                       49
<PAGE>

          On  November  6, 1997,  the Company  adopted  the  Advanced  Technical
          Products,  Inc.  Non-Employee  Directors  Stock Option Plan (the "1997
          Director  Plan"),  the terms of which  are the same as the 1997  Plan,
          except that options are to be granted only to non-employee  members of
          the Company's board of directors.  Stock options for 100,000 shares of
          common stock are  authorized  under this plan.  Options under the plan
          are automatically  granted and initial grants to purchase 7,500 shares
          were given to  directors  serving on  November 6, 1997.  In  addition,
          newly  elected  directors  will be granted 7,500 shares on the date of
          their  initial  election to the board.  The initial  options vest at a
          rate of 33 1/3 % on each  day  preceding  the  annual  meeting  of the
          stockholders  of the  Company for the three  years  subsequent  to the
          option grant.  Continuing  non-employee  directors also  automatically
          receive annual grants of options to purchase shares. Through 2000, the
          annual  grant  to each  non-employee  director  totaled  1,000  shares
          granted  immediately  following each annual  meeting of  stockholders.
          Beginning in 2001,  continuing  non-employee  directors  automatically
          receive  grants on June 15 and December 15 of each year. The amount of
          options  granted is  determined  by  dividing  $15,000 by the  closing
          market price of the  Company's  stock on the date of the grant.  These
          options  vest  100%  on  the  day  immediately  preceding  the  annual
          stockholders  meeting following the grant date and have 10-year terms.
          At December 31, 2001,  approximately  4,000 options were available for
          grant under the 1997 Director Plan.

          On September 12, 2000, the Company adopted the 2000 Advanced Technical
          Products,   Inc.  Non-Employee  Directors  Stock  Option  Plan,  which
          provides for stock option  grants on terms  substantially  the same as
          the 1997 Director Plan.  The Company has authorized  100,000 shares of
          common stock for the 2000 Director Plan. No options were granted under
          this plan as of December 31, 2001.

          A summary of stock option transactions for 2001, 2000 and 1999 follows
          (shares in thousands):

                                                             Weighted Average
                                             Stock Options       Exercise
                                              Outstanding         Price
                                              -----------         -----

               At December 31, 1998               514             $ 8.26

               Options granted                      6              13.50
               Options exercised                  (46)              1.96
               Options canceled                   (11)             15.00
                                                 ----

               At December 31, 1999               463               8.79

               Options granted                    401               3.29
               Options exercised                  (30)              0.41
               Options canceled                   (76)             12.11
                                                 ----

               At December 31, 2000               758               7.68

               Options granted                    173              14.32
               Options exercised                 (124)              5.06
               Options canceled                  (161)             13.85
                                                 ----

               At December 31, 2001               646               6.31
                                                 ====


                                       50
<PAGE>

          The  following  table  summarizes   information  about  stock  options
          outstanding at December 31, 2001 (shares in thousands):

<TABLE>
<CAPTION>
                                                                                Exercisable
                                                                            ----------------------
                                  Number of      Weighted-     Weighted-                 Weighted-
                                    Shares        Average       Average                   Average
                  Range of        Subject to     Remaining      Exercise    Number of     Exercise
              Exercise Prices       Option          Life         Price        Shares       Price
              ---------------     ----------     ---------     ---------    ---------    ---------
<S>                                  <C>         <C>            <C>            <C>        <C>
               $ 0.41-$ 4.99         448         8.1 years      $ 2.86         143        $ 1.96
               $ 5.00-$10.00          24         7.3 years        7.58           6          7.93
               $10.01-$15.00         162         5.9 years       14.92         117         14.89
               $15.01-$20.00         12          9.9 years       16.50          12         16.50
</TABLE>

          The Company  accounts  for these plans under APB Opinion No. 25, under
          which no compensation cost has been recognized.  Had compensation cost
          for these plans been determined  based on the fair value at grant date
          under the  fair-value-based  method in SFAS No. 123, the Company's net
          income  (loss)  would  have  been  changed  to the pro  forma  amounts
          indicated below (in thousands, except for per share amounts):

                                             2001        2000         1999
                                           -------     -------      -------
          Net income (loss):
              As reported                  $ 8,472     $(7,322)     $(3,160)
              Pro forma                      8,085      (7,618)      (3,449)

          Net income (loss) per share:
              As reported:
                   Basic                   $  1.54     $ (1.39)     $ (0.61)
                   Diluted                    1.41       (1.34)       (0.59)

              Pro forma:
                   Basic                   $  1.47     $ (1.44)     $ (0.67)
                   Diluted                    1.35       (1.39)       (0.64)

          The per share weighted  average fair value of options granted in 2001,
          2000 and 1999 was $9.58, $2.27 and $7.60,  respectively,  as estimated
          using  the  Black-Scholes  option-pricing  model  with  the  following
          assumptions:

                                          2001        2000        1999
                                          ----        ----        ----
          Risk free interest rate         4.80%       5.77%       5.95%
          Expected dividend yield            0%          0%          0%
          Expected stock volatility         50%         50%         45%
          Expected option life          10 years    10 years    7 years


                                       51
<PAGE>

          Stock Warrants

          A  summary  of stock  warrant  transactions  for  2001,  2000 and 1999
          follows (shares are in thousands):

                                                              Weighted Average
                                             Stock Warrants       Exercise
                                              Outstanding          Price
                                              -----------          -----
               At December 31, 1998                64              $ 6.91
               Warrants expired                    (4)              15.00

               At December 31, 1999                60                6.37
               Warrants granted                   320                4.42
               Warrants expired                   (10)               5.00

               At December 31, 2000               370                4.72
               Warrants exercised                (311)               4.36
               Warrants expired                   (55)               4.62

               At December 31, 2001                 4               32.32

          In connection with a loan agreement  entered into on October 10, 2000,
          ATP issued  warrants  giving the lender the right to purchase  320,000
          shares of the Company's common stock at an exercise price of $4.42 per
          share. Such warrants were exercised on October 31, 2001 (see Note 7).

          Certain warrant agreements contain anti-dilutive  provisions providing
          for certain adjustments in the exercise price and the number of shares
          to be received upon exercise in the event of subsequent sales of stock
          by the Company below the initial warrant exercise price.

          During 2000, the Company extended the expiration date of approximately
          27,000  warrants to March 31, 2001.  The fair value of the warrants as
          estimated   at  the  date  of   extension   using  the   Black-Scholes
          option-pricing  model was  approximately  $136,000.  This  amount  was
          charged to general and administrative expense during 2000.


                                       52
<PAGE>

          Employee Stock Purchase Plan

          On October 29, 1998, the Company  adopted the 1998 Advanced  Technical
          Products, Inc. Employee Stock Purchase Plan to encourage substantially
          all  employees  of the  Company to remain in its employ and to have an
          opportunity  to acquire a proprietary  interest in the Company.  Under
          the plan,  employees may elect to use payroll  withholdings to acquire
          shares of the Company's  common stock at a per share price  reflecting
          fair market value at the  beginning or end of each  calendar  quarter,
          whichever is lower.  The Company has  authorized  1,000,000  shares of
          common stock under the plan. A summary of shares issued under the plan
          for 2001, 2000 and 1999 follows (shares in thousands):

<TABLE>
<CAPTION>
                                                                2001       2000      1999
                                                                ----       ----      ----
<S>                                                            <C>        <C>       <C>
                Number of shares issued                           31         40        20

                Weighted average price of shares issued        $5.91      $4.75     $9.96
</TABLE>

          Stockholder Rights Plan

          On March 3, 2000,  the Company  adopted a  stockholder  rights plan to
          assist ATP's  stockholders in realizing fair value and equal treatment
          in the event of any attempted  unsolicited takeover of the Company and
          to protect the Company and its stockholders  against coercive takeover
          tactics.  Under the plan, a dividend of one preferred  stock  purchase
          right was declared for each share of common stock  outstanding  at the
          close of  business on the record  date,  March 10,  2000.  No separate
          certificates  evidencing  the rights  will be issued  unless and until
          they  become  exercisable.   The  rights  generally  will  not  become
          exercisable until a person or group acquires 15 percent or more of ATP
          common stock in a  transaction  that is not approved in advance by the
          board of directors. In that event, each right will entitle the holder,
          other than the unapproved acquirer and its affiliates,  to acquire, by
          payment of the then-applicable  exercise price, initially $38, subject
          to adjustment, shares of ATP common stock with a market value equal to
          two  times  the  exercise  price.  In  addition,  if the  rights  were
          triggered by such a non-approved  attempted  acquisition  and ATP were
          thereafter to be acquired in a merger in which all  stockholders  were
          not treated alike,  stockholders with unexercised  rights,  other than
          the  unapproved  acquirer  and its  affiliates,  would be  entitled to
          purchase  common  stock of the  acquirer  with a value  of  twice  the
          exercise price of the rights.

10.  MANDATORILY REDEEMABLE PREFERRED STOCK

          On  July  20,  2001,  the  Company  redeemed  all  of  the  previously
          outstanding   1,000,000   shares  of  8%  cumulative  and  mandatorily
          redeemable  preferred  stock for cash equal to $1.00 per  share,  plus
          accumulated and unpaid dividends of $44,000.

11.  RELATED-PARTY TRANSACTIONS

          During  2001,  certain  officers  of the  Company  repaid  outstanding
          promissory  notes in the  aggregate  amount of  $134,865,  which  were
          issued to the Company in a prior year as


                                       53
<PAGE>

          consideration  for the paid-in  capital in excess of par value for the
          shares of stock  they own.  As of  December  31,  2001,  there were no
          officer loans or notes outstanding.

          A  director  of the  Company is also a  managing  director  of Allen &
          Company  Incorporated  ("Allen"),  which rendered financial consulting
          services  to the  Company  in 1999,  including  the  preparation  of a
          fairness  opinion in  connection  with a proposed  merger of ATP.  The
          Company paid Allen $100,000 in 2000 and $150,000 in 1999 for financial
          advisory services rendered.

          On January 1, 2002,  a director  of the  Company  was  appointed  as a
          senior team member of Cypress International,  Inc. ("Cypress"),  which
          rendered business development and marketing consulting services to the
          Company  in  2001.  The  Company  paid  Cypress  $53,000  in 2001  for
          consulting services rendered and related expenses.

12.  TECHNOLOGICAL EXPENDITURES

          Technological  expenditures,  excluding reimbursed  projects,  for the
          years  ended  December  31,  2001,  2000  and  1999  consisted  of the
          following (in thousands):

                                              2001        2000         1999
                                            -------     -------      -------

               Research and development     $   721     $   208      $   417
               Engineering and other            174          77          370
                                            -------     -------      -------
                     Total                  $   895     $   285      $   787
                                            =======     =======      =======

          The Company was also reimbursed $11.6 million, $13.3 million and $13.8
          million under  federally  funded  research and  development  contracts
          during the years ended December 31, 2001, 2000 and 1999, respectively.

13.  INCOME TAXES

          The  combined  provision  for U.S.  federal  and  state  income  taxes
          allocated  to income from  continuing  operations  for the years ended
          December  31,  2001,  2000 and 1999  consisted  of the  following  (in
          thousands):

                                              2001        2000         1999
                                            -------     -------      -------

               Current                      $ 3,776     $ 5,823      $ 5,717
               Deferred                       2,298      (1,195)      (2,287)
                                            -------     -------      -------
               Total income tax expense     $ 6,074     $ 4,628      $ 3,430
                                            =======     =======      =======


                                       54
<PAGE>

          The federal  statutory tax rate for the years ended December 31, 2001,
          2000 and 1999 is reconciled to the effective tax rate as follows:

                                                 2001      2000      1999
                                                 ----      ----      ----
               Federal statutory rate            34.0%     34.0%     34.0%
               State and local taxes, net
                 of federal effect                3.6       3.7       3.7
               Other, net                         0.6       0.8       0.8
                                                 ----      ----      ----
               Effective tax rate                38.2%     38.5%     38.5%
                                                 ====      ====      ====

          The tax effects of temporary differences that give rise to significant
          portions of the  deferred tax assets and  liabilities  at December 31,
          2001 and 2000 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                    2001           2000
                                                                                  --------       --------
<S>                                                                               <C>            <C>
                Deferred tax assets-
                   Excess of tax over book capitalized inventory costs            $    418       $    355
                   Reserves not deductible until paid                                2,747          2,819
                   Allowance for doubtful accounts                                     118            175
                   Estimated loss on disposal of discontinued segment                1,302          3,670
                   Other                                                               701            245
                   Net operating loss carryforwards                                  2,051          3,058
                                                                                  --------       --------
                        Total deferred tax assets                                    7,337         10,322

               Deferred tax liabilities-
                   Depreciation                                                      1,309          1,925
                                                                                  --------       --------

                   Net deferred tax asset before valuation allowance                 6,028          8,397

                   Valuation allowance                                              (2,129)        (2,294)
                                                                                  --------       --------
                   Net deferred tax asset                                         $  3,899       $  6,103
                                                                                  ========       ========
</TABLE>

          The Company has net operating loss carryforwards of approximately $2.6
          million which were generated from operations of the Company's Lunn and
          Alcore divisions prior to its merger with ATP. Such  carryforwards may
          be applied  against  future taxable income and expire at varying dates
          between  2005 and 2012.  As a result of the merger and the  subsequent
          ownership  change  of  Lunn,  the  timing  of the  realization  of the
          Company's net operating loss  carryforwards  is subject to Section 382
          of the Internal  Revenue Code ("Section  382").  Section 382 generally
          provides  that, if a corporation  undergoes an ownership  change,  the
          amount of taxable  income  that the  corporation  may offset  with net
          operating loss carryforwards is subject to an annual  limitation.  The
          Company's  annual  limitation  under  Section  382  through  2000  was
          approximately  $1,020,000.  Beginning in 2001,  the  estimated  annual
          limitation was reduced to  approximately  $255,000,  the result of the
          utilization of all of the operating loss carryforwards relating to the
          Alcore division in 2000.

          In addition,  Alcore has  generated an estimated  net  operating  loss
          carryforward  of  approximately  $21.2  million  for state  income tax
          purposes.  Such  carryforwards  may be applied  against future taxable
          income at the  state  income  tax  level and  expire in 2018 and 2019.
          Valuation  allowances of $1,167,000 and $1,463,000 were established at
          December 31, 2001 and 2000,  respectively,  representing  reserves for
          the state income tax effect for


                                       55
<PAGE>

          all of the net deferred tax assets generated from the Alcore losses. A
          valuation  allowance  of $962,000  and  $831,000  was  established  at
          December 31, 2001 and 2000, respectively, for the estimated portion of
          the loss on disposal of discontinued business segment which may not be
          currently deductible in the year of disposal.

          In assessing  the  realizability  of deferred  tax assets,  management
          considers  whether it is more likely than not that some portion or all
          of the  deferred  tax  assets  will  not  be  realized.  The  ultimate
          realization of deferred tax assets is dependent upon the generation of
          future  taxable  income  during the periods in which  those  temporary
          differences  become  deductible.  Management  considers  the scheduled
          reversal  of deferred  tax assets and  liabilities,  projected  future
          taxable income and tax planning  strategies in making this assessment.
          As of December 31, 2001, it is management's assessment that it is more
          likely than not that the Company  will realize the benefits of all the
          deductible  differences  recorded at that date,  with the exception of
          the potential tax benefits at the state income tax level of the Alcore
          net operating loss  carryforward and for certain of the costs included
          in the loss on disposal of discontinued segment.

14.  EARNINGS (LOSS) PER SHARE

          Earnings (loss) per share are calculated as follows (in thousands):

<TABLE>
<CAPTION>
                                                                           2001             2000             1999
                                                                         --------         --------         --------
<S>                                                                      <C>              <C>              <C>
          Income from continuing operations                              $  9,851         $  7,391         $  5,478
          Less:  preferred stock dividends accrued                            (44)             (80)             (80)
                                                                         --------         --------         --------
          Income from continuing operations available
               for common shares                                         $  9,807         $  7,311         $  5,398
                                                                         ========         ========         ========

          Loss from discontinued operations                              $ (1,379)        $(14,713)        $ (8,638)
                                                                         ========         ========         ========

          Net income (loss)                                              $  8,472         $ (7,322)        $ (3,160)
          Less: preferred stock dividends accrued                             (44)             (80)             (80)
                                                                         --------         --------         --------

          Net income (loss) available for common shares                  $  8,428         $ (7,402)        $ (3,240)
                                                                         ========         ========         ========

          Weighted average number of common shares outstanding:
                       --Basic                                              5,467            5,338            5,273
                        Add: assumed stock conversions, net
                        of assumed treasury stock purchases:
                           --stock options                                    359              166              195
                           --stock warrants                                   133               29               36
                                                                         --------         --------         --------
                       --Diluted                                            5,959            5,533            5,504
                                                                         ========         ========         ========
</TABLE>


                                       56
<PAGE>

15.  ACCRUED EXPENSES

          Accrued  expenses  at  December  31,  2001 and 2000  consisted  of the
          following (in thousands):

<TABLE>
<CAPTION>
                                                                                                  2001          2000
                                                                                                -------       -------
<S>                                                                                             <C>           <C>
               Payroll and other compensation                                                   $ 6,045       $ 6,257
               Accrued income taxes                                                               2,001            --
               Medical expenses                                                                     963         1,032
               Accrued litigation settlement (see Note 18)                                          983            --
               Loss on operating lease obligation (see Note 6)                                      221           334
               Interest expense                                                                     206           463
               Other                                                                              1,768         2,484
                                                                                                -------       -------
                          Total                                                                 $12,187       $10,570
                                                                                                =======       =======
</TABLE>

16.  OTHER NONCURRENT ASSETS

          Other  noncurrent  assets  as  of  December  31,  2001  and  2000  are
          summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                                  2001          2000
                                                                                                -------       -------
<S>                                                                                             <C>           <C>
               Goodwill, net of accumulated amortization of
                  $87 in 2001 and $66 in 2000                                                   $   746       $   767
               Intangible asset - defined benefit pension plans                                     716           798
               Assets of non-qualified deferred compensation plan (see Note 8)                      713           765
               Other                                                                              1,035           875
                                                                                                -------       -------
                          Total                                                                 $ 3,210       $ 3,205
                                                                                                =======       =======
</TABLE>

17.  OTHER LIABILITIES

          Other  long-term  liabilities  as of  December  31,  2001 and 2000 are
          summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                                  2001          2000
                                                                                                -------       -------
<S>                                                                                             <C>           <C>
               Liability under stock warrant agreement (see Note 7)                             $    --       $ 1,750
               Additional minimum pension liability                                               1,595         1,434
               Liability under non-qualified deferred compensation plan (see Note 8)              2,260         1,069
               Other                                                                                 --            30
                                                                                                -------       -------
                          Total                                                                 $ 3,855       $ 4,283
                                                                                                =======       =======
</TABLE>

18.  CONTINGENCIES

          On October 7, 1999,  the New York Office of the Attorney  General,  on
          behalf of the New York State Department of Environmental  Conservation
          ("NYSDEC"),  sent a letter to the Company, claiming that the Company's
          Lunn Industries  division ("Lunn") is a potentially  responsible party


                                       57
<PAGE>

          ("PRP")  with  respect to  contamination  at the  Babylon  Landfill in
          Babylon,  New York. NYSDEC alleges that Lunn sent waste to the Babylon
          Landfill  and that Lunn is  jointly  and  severally  liable  under the
          Comprehensive  Environmental Response,  Compensation and Liability Act
          for NYSDEC's  response costs in addition to interest,  enforcement and
          future  costs.  According  to  NYSDEC,  there  are  currently  13 PRPs
          identified for the Babylon  Landfill.  NYSDEC documents  indicate that
          Lunn  did  transmit  waste to the  Babylon  Landfill,  although  it is
          currently  unclear to what extent Lunn contributed to contamination of
          the landfill. Accordingly, the Company cannot at present determine the
          extent of its  liability,  if any.  The Company has not  recorded  any
          liability for the contingency as of December 31, 2001.

          During  January 2000, the Company  learned of possible  accounting and
          financial  reporting  irregularities at its subsidiary,  Alcore,  when
          certain  financial  records  were seized in  connection  with a search
          warrant  issued by the United  States  District  Court -  District  of
          Maryland as part of a  governmental  investigation.  Additionally,  in
          January  2000,  the Company was  notified of an  investigation  by the
          United States  Securities and Exchange  Commission  ("SEC")  regarding
          these matters.

          On July 23,  2001,  the United  States  Attorney  for the  District of
          Maryland unsealed a criminal  indictment against Alcore's former chief
          executive  officer  ("CEO"),  alleging  that he engaged in  securities
          fraud and other offenses. A criminal information was also filed by the
          United  States  Attorney   against  Alcore's  former  chief  financial
          officer,  who  pleaded  guilty on  October  4,  2001,  to one count of
          conspiracy to make false statements.  Simultaneously,  the SEC filed a
          civil complaint against the two individuals, alleging securities fraud
          and other offenses. The employment of these individuals was terminated
          by the Company in March  2000.  Alcore was sold by the Company in June
          2001.  The  Company  retained  Alcore's  liabilities,   including  any
          liabilities associated with the Government's  investigations.  Neither
          the  Company nor Alcore was named as a  defendant  in the  proceedings
          brought against the two individuals by the U.S. Attorney and the SEC.

          In June 2001,  the  Company  was  notified by the SEC staff that it is
          evaluating  whether to recommend  that the SEC bring an action against
          the  Company  and  members of its  management  for  violations  of the
          antifraud and other provisions of the federal securities laws based on
          failure to discover the  activities  at Alcore  referred to above.  In
          July 2001, the Company, James Carter, a former Chairman and CEO of the
          Company and a current director of the Company, and Garrett Dominy, the
          current CEO and a director of the Company,  each made so-called "Wells
          submissions"  to the SEC stating why they believe that they should not
          be  charged  with  violations  of  the  federal   securities  laws  in
          connection with the Alcore investigation.  Additional submissions were
          made in  September  and  October  of 2001 and  February  of 2002.  The
          outcome of the SEC's investigation of the Company is uncertain at this
          time. Based on information  currently available,  however, the Company
          believes that the SEC's investigation will not have a material adverse
          impact on its financial position or future results of operations.

          The Company and certain of its Officers and Directors  have been named
          in a number of lawsuits  filed  during July 2000 in the United  States
          District  Court for the Northern  District of Georgia.  During October
          2000, the lawsuits were  consolidated  and in January 2001, an amended
          complaint was filed. The lawsuit asserts securities fraud claims based
          on, among other things, alleged misstatements and omissions concerning
          the Company's 1998 and 1999 financial results and condition, including
          various violations of generally accepted  accounting  principles.  The
          lawsuit  purports to be brought on behalf of a class consisting of all
          persons who purchased  the  Company's  common stock in the period from
          April 1998 through April 2000. During January


                                       58
<PAGE>

          2002, a memorandum  of  understanding  ("MOU") was entered into by the
          Company and  plaintiffs'  counsel  outlining  terms and conditions for
          settlement  of the suit.  The MOU provides for a settlement  amount of
          $2,950,000,  $983,000  of  which  would  be  paid by the  Company  and
          $1,967,000 of which would be paid by the Company's  insurance carrier.
          The  settlement  is subject to notice to the  class,  approval  by the
          court and other  conditions.  If final court  approval is received and
          payment is made,  the Company will be released from all further claims
          held or made by the  shareholder  class with respect to matters raised
          in the suit.  Court  approval is  anticipated in the second quarter of
          2002.  The Company's  portion of the settlement was accrued during the
          fourth  quarter  of 2001  and is  included  as  other  expense  in the
          accompanying Consolidated Statements of Operations.

19.  SUMMARY OF QUARTERLY INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                     2001 Quarters
                                                          --------------------------------------------------------------------
                                                            First          Second         Third        Fourth       Total Year
                                                          ---------      ---------      ---------     ---------      ---------
                                                                         (in thousands, except per share data)
<S>                                                       <C>            <C>            <C>           <C>            <C>
     Net revenues                                         $  42,342      $  52,083      $  43,603     $  60,380      $ 198,408

     Operating income                                         3,854          6,692          3,846         7,710         22,102

     Income from continuing operations                        1,571          3,353          1,403         3,524          9,851

     Loss from discontinued operations                           --         (1,379)            --            --         (1,379)

     Net income                                               1,571          1,974          1,403         3,524          8,472

     Earnings (loss) per share - diluted:
            Income from continuing operations                  0.26           0.56           0.23          0.57           1.65
            Loss from discontinued operations                    --          (0.23)            --            --          (0.24)
            Net income                                         0.26           0.33           0.23          0.57           1.41
</TABLE>

<TABLE>
<CAPTION>
                                                                                     2000 Quarters
                                                          --------------------------------------------------------------------
                                                            First          Second         Third        Fourth       Total Year
                                                          ---------      ---------      ---------     ---------      ---------
                                                                         (in thousands, except per share data)
<S>                                                          <C>            <C>            <C>          <C>            <C>
     Net revenues                                            41,359         44,709         42,089        42,568        170,725

     Operating income                                         3,560          3,335          4,396         4,340         15,631

     Income from continuing operations                        1,721          1,565          2,209         1,896          7,391

     Loss from discontinued operations                       (1,614)        (1,412)            --       (11,687)       (14,713)

     Net income (loss)                                          107            153          2,209        (9,791)        (7,322)

     Earnings (loss) per share - diluted:
            Income from continuing operations                  0.31           0.28           0.40          0.33           1.32
            Loss from discontinued operations                 (0.29)         (0.26)            --         (2.05)         (2.66)
            Net income (loss)                                  0.02           0.02           0.40         (1.72)         (1.34)
</TABLE>


                                       59
<PAGE>

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

Not Applicable.


                                    PART III

ITEM 10. DIRECTORS AND OFFICERS OF THE REGISTRANT

     For information concerning directors and executive officers of the Company,
see the information  set forth following the caption  "ELECTION OF DIRECTORS" in
the  Company's  definitive  proxy  statement  to be filed no later than 120 days
after  the  end of the  fiscal  year  covered  by this  Form  10-K  (the  "Proxy
Statement"), which information is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

     The information set forth following the caption "EXECUTIVE COMPENSATION" in
the Company's Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND OF MANAGEMENT

     The information set forth following the caption  "ELECTION OF DIRECTORS" in
the Company's Proxy Statement is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  set  forth  following  the  caption   "TRANSACTIONS  WITH
DIRECTORS,  OFFICERS  AND  AFFILIATES"  in  the  Company's  Proxy  Statement  is
incorporated herein by reference.


                                       60
<PAGE>

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

(a)  The following documents are filed as part of this report:

     1.   Financial Statements:

          Independent auditor's report

          Consolidated balance sheets at December 31, 2001 and 2000

          Consolidated statements of operations for the years ended December 31,
          2001, 2000 and 1999

          Consolidated  statements of comprehensive  income (loss) for the years
          ended December 31, 2001, 2000 and 1999

          Consolidated statements of cash flows for the years ended December 31,
          2001, 2000 and 1999

          Notes to consolidated financial statements

     2.   Financial Statement Schedules:

          None


                                       61
<PAGE>

     3.   Exhibits:

      Exhibit
         No.                                 Description
         ---                                 -----------

          2.1       Agreement  and  Plan of  Merger  dated  June 6,  1997 by and
                    between Lunn  Industries,  Inc. and TPG  Holdings,  Inc., as
                    amended by Amendment  to Agreement  and Plan of Merger dated
                    August 22, 1997 by and between Lunn Industries, Inc. and TPG
                    Holdings,    Inc.    (exhibits   and   schedules    omitted)
                    (incorporated  by reference to Exhibit 2.1 to the  Company's
                    Current Report on Form 8-K dated November 14, 1997).

          3.1       Amended and Restated  Certificate  of  Incorporation  of the
                    Company  (incorporated  by  reference  to  Exhibit  3 to the
                    Company's  Quarterly  Report on Form  10-QSB  for the period
                    ended September 30, 1997).

          3.2       Bylaws of the Company  (incorporated by reference to Exhibit
                    3.2 of the Company's Quarterly Report on Form 10-QSB for the
                    period ended September 30, 1996).

          10.1      Lease covering the Jessup,  Maryland Plant  (incorporated by
                    reference to the  Company's  Annual  Report on Form 10-K for
                    the year ended December 31, 1992).

          10.2      Lease for the Company's facilities located in Glen Cove, New
                    York dated January 1, 1995 between  Grill Leasing Corp.  and
                    Lunn Industries,  Inc. (incorporated by reference to Exhibit
                    10.12 to the Company's  Quarterly  Report on Form 10-QSB for
                    the period ended March 31, 1995).

          10.3      Amendment to the Company's 1994 Stock Incentive Plan adopted
                    at the 1996 Annual  Shareholders  Meeting on  September  26,
                    1996  (incorporated  by  reference  to  Exhibit  10.1 to the
                    Company's  Quarterly  Report on Form  10-QSB  for the period
                    ended September 30, 1996).

          10.4      Engagement  letter  dated  February  21,  1996  between  the
                    Company and J.E.  Sheehan & Co.,  Inc. for the  placement of
                    3.5  million  shares  of the  Company's  common  stock  in a
                    private placement (incorporated by reference to Exhibit 10.1
                    to the Company's  Quarterly Report on Form 10-QSB for period
                    ended March 31, 1996).

          10.5      Credit  Agreement  dated  November  22,  1996  between  Lunn
                    Industries,  Inc. and Alcore,  Inc. and First Union National
                    Bank of Maryland (incorporated by reference to Exhibit 10.26
                    to the  Company's  Annual Report on Form 10-KSB for the year
                    ended December 31, 1996).

          10.6      Promissory Note dated November 15, 1996 payable to the order
                    of First Union  National Bank of Maryland  (incorporated  by
                    reference to Exhibit 10.27 to the Company's Annual Report on
                    Form 10-KSB for the year ended December 31, 1996).

          10.7      Security  Agreement  dated  November  22, 1996  between Lunn
                    Industries,  Inc. and Alcore,  Inc. and First Union National
                    Bank of Maryland (incorporated by reference to Exhibit 10.28
                    to the  Company's  Annual Report on Form 10-KSB for the year
                    ended December 31, 1996).

          10.8      Loan  Agreement  dated as of May 1,  1997  between  Maryland
                    Industrial    Development   Authority   and   Alcore,   Inc.
                    (incorporated  by reference to Exhibit 10.2 to the Company's
                    Current Report on Form 8-K dated June 2, 1997).


                                       62
<PAGE>

          10.9      Trust  Indenture  dated  as of May  1,  1997  by  and  among
                    Maryland Industrial  Development Financing Authority,  First
                    Union National Bank of Virginia and Branch Banking and Trust
                    Company  (incorporated  by  reference to Exhibit 10.3 to the
                    Company's Current Report on Form 8-K dated June 2, 1997).

          10.10     Promissory  Note  dated May 15,  1997  payable  to  Maryland
                    Industrial  Development  Financing  Authority for the sum of
                    $2.6 million  (incorporated  by reference to Exhibit 10.1 to
                    the  Company's  Current  Report  on Form 8-K  dated  June 2,
                    1997).

          10.11     Guaranty   Agreement   dated   May  1,  1997  made  by  Lunn
                    Industries,  Inc. in favor of First Union  National  Bank of
                    North Carolina (incorporated by reference to Exhibit 10.4 to
                    the  Company's  Current  Report  on Form 8-K  dated  June 2,
                    1997).

          10.12     Letter of Credit and Reimbursement  Agreement by and between
                    Alcore, Inc. and First Union National Bank of North Carolina
                    dated May 1, 1997 (incorporated by reference to Exhibit 10.5
                    to the  Company's  Current  Report on Form 8-K dated June 2,
                    1997).

          10.13     Security  Agreement  dated  as of May 1,  1997 by and  among
                    Alcore,  Inc., Lunn  Industries,  Inc.,  First Union Bank of
                    North   Carolina,   The  Maryland   Industrial   Development
                    Financing   Authority  and  First  Union  National  Bank  of
                    Maryland  (incorporated  by reference to Exhibit 10.2 to the
                    Company's Current Report on Form 8-K dated June 2, 1997).

          10.14     Loan and Security  Agreement dated December 27, 1996, by and
                    among  Fleet  Capital  Corporation  and  Technical  Products
                    Group,  Inc., Marion  Properties,  Inc., Deland  Properties,
                    Inc. and Lincoln Properties, Inc. (incorporated by reference
                    to Exhibit 10.14 to the Company's Annual Report on Form 10-K
                    for the year ended December 31, 1997).

          10.15     First  Amendment to Loan and Security  Agreement  dated June
                    10,  1997,  by  and  among  Fleet  Capital  Corporation  and
                    Technical  Products Group,  Inc., Marion  Properties,  Inc.,
                    Deland  Properties,   Inc.  and  Lincoln  Properties,   Inc.
                    (incorporated by reference to Exhibit 10.15 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.16     Second  Amendment  to  Loan  and  Security  Agreement  dated
                    October 31, 1997, by and among Fleet Capital Corporation and
                    Technical  Products Group,  Inc., Marion  Properties,  Inc.,
                    Deland  Properties,   Inc.  and  Lincoln  Properties,   Inc.
                    (incorporated by reference to Exhibit 10.16 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.17     Secured Promissory Note payable to Fleet Capital Corporation
                    executed  by  Technical   Products   Group,   Inc.,   Marion
                    Properties,   Inc.,  Deland  Properties,  Inc.  and  Lincoln
                    Properties, Inc. (incorporated by reference to Exhibit 10.17
                    to the  Company's  Annual  Report  on Form 10-K for the year
                    ended December 31, 1997).

          10.18     Equipment   Promissory   Note   payable  to  Fleet   Capital
                    Corporation  executed by  Technical  Products  Group,  Inc.,
                    Marion Properties, Inc., Deland Properties, Inc. and Lincoln
                    Properties, Inc. (incorporated by reference to Exhibit 10.18
                    to the  Company's  Annual  Report  on Form 10-K for the year
                    ended December 31, 1997).

          10.19     Form of Commercial  Net Building and Ground Lease of Lincoln
                    Air Park West by


                                       63
<PAGE>

                    and between  Brunswick  Corporation and Airport Authority of
                    the City of Lincoln,  Nebraska,  together with form of Lease
                    Extension  Agreement,  regarding  various  facilities of the
                    Lincoln  Composites  Division  located in Lincoln,  Nebraska
                    (incorporated by reference to Exhibit 10.19 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.20     Lease dated October 15, 1997 by and between LPR  Partnership
                    and  Technical  Products  Group,  Inc.,  through the Lincoln
                    Composites Division,  regarding premises located in Lincoln,
                    Nebraska  (incorporated by reference to Exhibit 10.20 to the
                    Company's  Annual  Report  on Form  10-K for the year  ended
                    December 31, 1997).

          10.21*    Amended and Restated Employment  Agreement dated November 1,
                    1997  by  and  between  the  Company  and  James  S.  Carter
                    (incorporated by reference to Exhibit 10.21 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.22*    Amended and Restated Employment  Agreement dated November 1,
                    1997 by and  between  the  Company  and  Garrett  L.  Dominy
                    (incorporated by reference to Exhibit 10.22 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.23*    1997 Advanced  Technical  Products,  Inc.  Stock Option Plan
                    (incorporated by reference to Exhibit 10.23 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.24*    Form of Incentive Stock Option Agreement for options granted
                    under Advanced  Technical  Products,  Inc. Stock Option Plan
                    (incorporated by reference to Exhibit 10.24 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.25*    Advanced Technical  Products,  Inc.  Non-Employee  Directors
                    Stock  Option Plan  (incorporated  by  reference  to Exhibit
                    10.25 to the  Company's  Annual  Report on Form 10-K for the
                    year ended December 31, 1997).

          10.26*    Form of  Nonqualified  Stock  Option  Agreement  for options
                    granted under Advanced Technical Products, Inc. Non-Employee
                    Directors  Stock Option Plan  (incorporated  by reference to
                    Exhibit  10.26 to the  Company's  Annual Report on Form 10-K
                    for the year ended December 31, 1997).

          10.27*    Technical  Products Group, Inc.  Deferred  Compensation Plan
                    (incorporated by reference to Exhibit 10.27 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.28*    Rabbi Trust Agreement  executed in connection with Technical
                    Products   Group,    Inc.    Deferred    Compensation   Plan
                    (incorporated by reference to Exhibit 10.28 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.29     Lease  Agreement  dated  January 21, 1998 by and between FRP
                    Lakeside  L.P.,  as landlord,  and Alcore,  Inc.,  as tenant
                    (incorporated by reference to Exhibit 10.29 to the Company's
                    Quarterly Report on Form 10-Q for the quarterly period ended
                    April 3, 1998).

          10.30     Lease  Agreement dated April 14, 1998 by and between Mansell
                    Overlook 200,  LLC, and Advanced  Technical  Products,  Inc.
                    (incorporated by reference to Exhibit 10.29 to


                                       64
<PAGE>

                    the  Company's   Quarterly  Report  on  Form  10-Q  for  the
                    quarterly period ended April 3, 1998).

          10.31     Amended and Restated Loan and Security Agreement dated March
                    31,  1998  between  Advanced   Technical   Products,   Inc.,
                    Alcore,Inc.,   Technical   Products  Group,   Inc.,   Marion
                    Properties,   Inc.,  Deland  Properties,  Inc.  and  Lincoln
                    Properties,  Inc.,  collectively,  as  borrower,  and  Fleet
                    Capital Corporation, as lender (incorporated by reference to
                    Exhibit 10.31 to the Company's Quarterly Report on Form 10-Q
                    for the quarterly period ended July 3, 1998).

          10.32     First  Amendment to Amended and  Restated  Loan and Security
                    Agreement  dated  June  26,  1998  by and  between  Advanced
                    Technical Products,  Inc., Alcore,  Inc., Technical Products
                    Group,  Inc., Marion  Properties,  Inc., Deland  Properties,
                    Inc.  and  Lincoln  Properties,   Inc.,   collectively,   as
                    borrower,   and  Fleet   Capital   Corporation,   as  lender
                    (incorporated by reference to Exhibit 10.32 to the Company's
                    Quarterly Report on Form 10-Q for the quarterly period ended
                    July 3, 1998).

          10.33     Second Amended and Restated Equipment  Promissory Note dated
                    June 26,  1998,  executed  by Advanced  Technical  Products,
                    Inc., Alcore,  Inc.,  Technical Products Group, Inc., Marion
                    Properties,  Inc., Deland  Properties,  Inc. and Properties,
                    Inc.  (incorporated  by  reference  to Exhibit  10.33 to the
                    Company's  Quarterly  Report on Form 10-Q for the  quarterly
                    period ended July 3, 1998).

          10.34     Lease  Agreement dated May 11, 1998 by and between George W.
                    Hendricks   and  Barbara  J.   Hendricks   and  the  Lincoln
                    Composites  Division of Advanced  Technical  Products,  Inc.
                    (incorporated by reference to Exhibit 10.34 to the Company's
                    Quarterly Report on Form 10-Q for the quarterly period ended
                    October 2, 1998).

          10.35     Advanced  Technical  Products,   Inc.  1998  Employee  Stock
                    Purchase  Plan  dated  October  29,  1998  (incorporated  by
                    reference to the Company's  Proxy  Statement on Schedule 14A
                    dated October 1, 1999).

          10.36     Agreement and Plan of Merger dated  September 3, 1999 by and
                    among Advanced  Technical  Products,  Inc., ATP  Acquisition
                    Corp.  and ATP Holding Corp.  (incorporated  by reference to
                    the Company's  Proxy Statement on Schedule 14A dated October
                    1, 1999).

          10.37     Advanced  Technical  Products,  Inc.  401 (k) Plan  Adoption
                    Agreement   dated  September  16,  1999   (incorporated   by
                    reference to Exhibit 10.37 to the Company's Annual Report on
                    Form 10-K for the year ended December 31, 1999).

          10.38     January 2000  Agreement and Plan of Merger dated January 28,
                    2000 by and among  Advanced  Technical  Products,  Inc., ATP
                    Acquisition  Corp.  and ATP Holding Corp.  (incorporated  by
                    reference to Exhibit 2.1 to the Company's  Current Report on
                    Form 8-K dated January 28, 2000).

          10.39     Termination Agreement and Plan dated January 28, 2000 by and
                    among Advanced  Technical  Products,  Inc., ATP  Acquisition
                    Corp. and ATP Holding Corp.


                                       65
<PAGE>

                    (incorporated  by reference to Exhibit 2.2 to the  Company's
                    Current  Report on Form 8-K dated January 28, 2000).

          10.40     Rights Agreement dated March 3, 2000 between the Company and
                    American  Stock  Transfer & Trust  Company,  as Rights Agent
                    (incorporated  by reference to Exhibit 4.1 to the  Company's
                    Current Report on Form 8-K dated March 9, 2000).

          10.41*    Amendment to Amended and Restated Employment Agreement dated
                    March 30,  2000 by and  between  the  Company and Garrett L.
                    Dominy  (incorporated  by reference to Exhibit  10.43 to the
                    Company's  Annual  Report  on Form  10-K for the year  ended
                    December 31, 1999).

          10.42*    Amendment to Amended and Restated Employment Agreement dated
                    March  30,  2000 by and  between  the  Company  and James S.
                    Carter  (incorporated  by reference to Exhibit  10.44 to the
                    Company's  Annual  Report  on Form  10-K for the year  ended
                    December 31, 1999).

          10.43     Amendment to Letter of Credit and Reimbursement Agreement by
                    and between Alcore, Inc. and First Union National Bank dated
                    May 12, 2000 (to be filed by amendment).

          10.44     Pledge and Security  Agreement  made by Alcore,  Inc. to and
                    for the benefit of First Union  National  Bank dated May 12,
                    2000 (to be filed by amendment).

          10.45     Second  Amended and  Restated  Loan and  Security  Agreement
                    dated  October  10,  2000 by and  among  Advanced  Technical
                    Products,  Inc.,  Alcore,  Inc.,  Technical  Products Group,
                    Inc., Marion Properties,  Inc., Deland Properties,  Inc. and
                    Lincoln Properties,  Inc.,  collectively,  as borrower,  and
                    Fleet  Capital  Corporation,  as  Agent  and a  Lender , and
                    Certain  Lenders,  as Lenders  (incorporated by reference to
                    Exhibit  10.45 to the  Company's  Annual Report on Form 10-K
                    for the year ended December 31, 2000).

          10.46     Loan and Security  Agreement  dated  October 10, 2000 by and
                    among  Back  Bay  Capital  Funding,  LLC,  the  Lender,  and
                    Advanced Technical Products,  Inc., Alcore,  Inc., Technical
                    Products  Group,  Inc.,  Marion  Properties,   Inc.,  Deland
                    Properties, Inc. and Lincoln Properties, Inc., collectively,
                    as Borrower  (incorporated  by reference to Exhibit 10.46 to
                    the Company's  Annual Report on Form 10-K for the year ended
                    December 31, 2000).

          10.47     Agreement  for the  Purchase  and Sale of Assets dated as of
                    May 15,  2001,  by and among  Advanced  Technical  Products,
                    Inc.,   Alcore,   Inc.,   and   Alcore   Acquisition   Corp.
                    (incorporated  by reference to Exhibit 2.1 to the  Company's
                    Current Report on Form 8-K dated May 16, 2001).

          21.1      List of subsidiaries of Advanced Technical Products, Inc.

          23.1      Consent of KPMG LLP.

*    Indicates management contract or compensatory plan or arrangement.

(b)  Reports on Form 8-K:

     None


                                       66
<PAGE>


                                   SIGNATURES

     Pursuant to the  requirements  of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its  behalf  by the  undersigned,  thereunto  duly  authorized,  in the  City of
Roswell, State of Georgia, on April 1, 2002

ADVANCED TECHNICAL PRODUCTS, INC.


                                               /S/ JAMES P. HOBT
                                               -------------------------------
                                               James P. Hobt
                                          (a)  Vice President

                                          (b)  Chief Financial Officer

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

<TABLE>
<CAPTION>
          Signature                               Title                          Date
          ---------                               -----                          ----
<S>                                 <C>                                      <C>
     /S/ JAMES P. HOBT        ,           Chief Financial Officer and        April 1, 2002
------------------------------                 Treasurer,
       James P. Hobt                (Principal Financial Officer and
                                      Principal Accounting Officer)


   /S/ GARRETT L. DOMINY      ,           Chief Executive Officer,           April 1, 2002
------------------------------                  President
     Garrett L. Dominy                (Principal Executive Officer)
                                              and Director


    /S/ GARY L. FORBES                   Chairman of the Board,              April 1, 2002
------------------------------                and Director
      Gary L. Forbes


    /S/ JAMES S. CARTER                         Director                     April 1, 2002
------------------------------
      James S. Carter


 /S/ JOHN H. TILELLI, JR.                       Director                     April 1, 2002
------------------------------
   John H. Tilelli, Jr.


   /S/ ROBERT C. SIGRIST                        Director                     April 1, 2002
------------------------------
     Robert C. Sigrist
</TABLE>


                                       67
<PAGE>

<TABLE>
<S>                                             <C>                          <C>
 /S/ LAWRENCE E. WESNESKI                       Director                     April 1, 2002
------------------------------
   Lawrence E. Wesneski


    /S/ SAM P. DOUGLASS                         Director                     April 1, 2002
------------------------------
     Sam P. Douglass


     /S/ JOHN M. SIMON                          Director                     April 1, 2002
------------------------------
       John M. Simon


   /S/ JOHNNIE E. WILSON                        Director                     April 1, 2002
------------------------------
     Johnnie E. Wilson
</TABLE>


                                       68
<PAGE>


                                  EXHIBIT INDEX


      Exhibit
         No.                                 Description
         ---                                 -----------

          2.1       Agreement  and  Plan of  Merger  dated  June 6,  1997 by and
                    between Lunn  Industries,  Inc. and TPG  Holdings,  Inc., as
                    amended by Amendment  to Agreement  and Plan of Merger dated
                    August 22, 1997 by and between Lunn Industries, Inc. and TPG
                    Holdings,    Inc.    (exhibits   and   schedules    omitted)
                    (incorporated  by reference to Exhibit 2.1 to the  Company's
                    Current Report on Form 8-K dated November 14, 1997).

          3.1       Amended and Restated  Certificate  of  Incorporation  of the
                    Company  (incorporated  by  reference  to  Exhibit  3 to the
                    Company's  Quarterly  Report on Form  10-QSB  for the period
                    ended September 30, 1997).

          3.2       Bylaws of the Company  (incorporated by reference to Exhibit
                    3.2 of the Company's Quarterly Report on Form 10-QSB for the
                    period ended September 30, 1996).

          10.1      Lease covering the Jessup,  Maryland Plant  (incorporated by
                    reference to the  Company's  Annual  Report on Form 10-K for
                    the year ended December 31, 1992).

          10.2      Lease for the Company's facilities located in Glen Cove, New
                    York dated January 1, 1995 between  Grill Leasing Corp.  and
                    Lunn Industries,  Inc. (incorporated by reference to Exhibit
                    10.12 to the Company's  Quarterly  Report on Form 10-QSB for
                    the period ended March 31, 1995).

          10.3      Amendment to the Company's 1994 Stock Incentive Plan adopted
                    at the 1996 Annual  Shareholders  Meeting on  September  26,
                    1996  (incorporated  by  reference  to  Exhibit  10.1 to the
                    Company's  Quarterly  Report on Form  10-QSB  for the period
                    ended September 30, 1996).

          10.4      Engagement  letter  dated  February  21,  1996  between  the
                    Company and J.E.  Sheehan & Co.,  Inc. for the  placement of
                    3.5  million  shares  of the  Company's  common  stock  in a
                    private placement (incorporated by reference to Exhibit 10.1
                    to the Company's  Quarterly Report on Form 10-QSB for period
                    ended March 31, 1996).

          10.5      Credit  Agreement  dated  November  22,  1996  between  Lunn
                    Industries,  Inc. and Alcore,  Inc. and First Union National
                    Bank of Maryland (incorporated by reference to Exhibit 10.26
                    to the  Company's  Annual Report on Form 10-KSB for the year
                    ended December 31, 1996).

          10.6      Promissory Note dated November 15, 1996 payable to the order
                    of First Union  National Bank of Maryland  (incorporated  by
                    reference to Exhibit 10.27 to the Company's Annual Report on
                    Form 10-KSB for the year ended December 31, 1996).

          10.7      Security  Agreement  dated  November  22, 1996  between Lunn
                    Industries,  Inc. and Alcore,  Inc. and First Union National
                    Bank of Maryland (incorporated by reference to Exhibit 10.28
                    to the  Company's  Annual Report on Form 10-KSB for the year
                    ended December 31, 1996).

          10.8      Loan  Agreement  dated as of May 1,  1997  between  Maryland
                    Industrial    Development   Authority   and   Alcore,   Inc.
                    (incorporated  by reference to Exhibit 10.2 to the Company's
                    Current Report on Form 8-K dated June 2, 1997).


                                       69
<PAGE>


          10.9      Trust  Indenture  dated  as of May  1,  1997  by  and  among
                    Maryland Industrial  Development Financing Authority,  First
                    Union National Bank of Virginia and Branch Banking and Trust
                    Company  (incorporated  by  reference to Exhibit 10.3 to the
                    Company's Current Report on Form 8-K dated June 2, 1997).

          10.10     Promissory  Note  dated May 15,  1997  payable  to  Maryland
                    Industrial  Development  Financing  Authority for the sum of
                    $2.6 million  (incorporated  by reference to Exhibit 10.1 to
                    the  Company's  Current  Report  on Form 8-K  dated  June 2,
                    1997).

          10.11     Guaranty   Agreement   dated   May  1,  1997  made  by  Lunn
                    Industries,  Inc. in favor of First Union  National  Bank of
                    North Carolina (incorporated by reference to Exhibit 10.4 to
                    the  Company's  Current  Report  on Form 8-K  dated  June 2,
                    1997).

          10.12     Letter of Credit and Reimbursement  Agreement by and between
                    Alcore, Inc. and First Union National Bank of North Carolina
                    dated May 1, 1997 (incorporated by reference to Exhibit 10.5
                    to the  Company's  Current  Report on Form 8-K dated June 2,
                    1997).

          10.13     Security  Agreement  dated  as of May 1,  1997 by and  among
                    Alcore,  Inc., Lunn  Industries,  Inc.,  First Union Bank of
                    North   Carolina,   The  Maryland   Industrial   Development
                    Financing   Authority  and  First  Union  National  Bank  of
                    Maryland  (incorporated  by reference to Exhibit 10.2 to the
                    Company's Current Report on Form 8-K dated June 2, 1997).

          10.14     Loan and Security  Agreement dated December 27, 1996, by and
                    among  Fleet  Capital  Corporation  and  Technical  Products
                    Group,  Inc., Marion  Properties,  Inc., Deland  Properties,
                    Inc. and Lincoln Properties, Inc. (incorporated by reference
                    to Exhibit 10.14 to the Company's Annual Report on Form 10-K
                    for the year ended December 31, 1997).

          10.15     First  Amendment to Loan and Security  Agreement  dated June
                    10,  1997,  by  and  among  Fleet  Capital  Corporation  and
                    Technical  Products Group,  Inc., Marion  Properties,  Inc.,
                    Deland  Properties,   Inc.  and  Lincoln  Properties,   Inc.
                    (incorporated by reference to Exhibit 10.15 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.16     Second  Amendment  to  Loan  and  Security  Agreement  dated
                    October 31, 1997, by and among Fleet Capital Corporation and
                    Technical  Products Group,  Inc., Marion  Properties,  Inc.,
                    Deland  Properties,   Inc.  and  Lincoln  Properties,   Inc.
                    (incorporated by reference to Exhibit 10.16 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.17     Secured Promissory Note payable to Fleet Capital Corporation
                    executed  by  Technical   Products   Group,   Inc.,   Marion
                    Properties,   Inc.,  Deland  Properties,  Inc.  and  Lincoln
                    Properties, Inc. (incorporated by reference to Exhibit 10.17
                    to the  Company's  Annual  Report  on Form 10-K for the year
                    ended December 31, 1997).

          10.18     Equipment   Promissory   Note   payable  to  Fleet   Capital
                    Corporation  executed by  Technical  Products  Group,  Inc.,
                    Marion Properties, Inc., Deland Properties, Inc. and Lincoln
                    Properties, Inc. (incorporated by reference to Exhibit 10.18
                    to the  Company's  Annual  Report  on Form 10-K for the year
                    ended December 31, 1997).

          10.19     Form of Commercial  Net Building and Ground Lease of Lincoln
                    Air Park West by


                                       70
<PAGE>


                    and between  Brunswick  Corporation and Airport Authority of
                    the City of Lincoln,  Nebraska,  together with form of Lease
                    Extension  Agreement,  regarding  various  facilities of the
                    Lincoln  Composites  Division  located in Lincoln,  Nebraska
                    (incorporated by reference to Exhibit 10.19 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.20     Lease dated October 15, 1997 by and between LPR  Partnership
                    and  Technical  Products  Group,  Inc.,  through the Lincoln
                    Composites Division,  regarding premises located in Lincoln,
                    Nebraska  (incorporated by reference to Exhibit 10.20 to the
                    Company's  Annual  Report  on Form  10-K for the year  ended
                    December 31, 1997).

          10.21*    Amended and Restated Employment  Agreement dated November 1,
                    1997  by  and  between  the  Company  and  James  S.  Carter
                    (incorporated by reference to Exhibit 10.21 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.22*    Amended and Restated Employment  Agreement dated November 1,
                    1997 by and  between  the  Company  and  Garrett  L.  Dominy
                    (incorporated by reference to Exhibit 10.22 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.23*    1997 Advanced  Technical  Products,  Inc.  Stock Option Plan
                    (incorporated by reference to Exhibit 10.23 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.24*    Form of Incentive Stock Option Agreement for options granted
                    under Advanced  Technical  Products,  Inc. Stock Option Plan
                    (incorporated by reference to Exhibit 10.24 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.25*    Advanced Technical  Products,  Inc.  Non-Employee  Directors
                    Stock  Option Plan  (incorporated  by  reference  to Exhibit
                    10.25 to the  Company's  Annual  Report on Form 10-K for the
                    year ended December 31, 1997).

          10.26*    Form of  Nonqualified  Stock  Option  Agreement  for options
                    granted under Advanced Technical Products, Inc. Non-Employee
                    Directors  Stock Option Plan  (incorporated  by reference to
                    Exhibit  10.26 to the  Company's  Annual Report on Form 10-K
                    for the year ended December 31, 1997).

          10.27*    Technical  Products Group, Inc.  Deferred  Compensation Plan
                    (incorporated by reference to Exhibit 10.27 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.28*    Rabbi Trust Agreement  executed in connection with Technical
                    Products   Group,    Inc.    Deferred    Compensation   Plan
                    (incorporated by reference to Exhibit 10.28 to the Company's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997).

          10.29     Lease  Agreement  dated  January 21, 1998 by and between FRP
                    Lakeside  L.P.,  as landlord,  and Alcore,  Inc.,  as tenant
                    (incorporated by reference to Exhibit 10.29 to the Company's
                    Quarterly Report on Form 10-Q for the quarterly period ended
                    April 3, 1998).

          10.30     Lease  Agreement dated April 14, 1998 by and between Mansell
                    Overlook 200,  LLC, and Advanced  Technical  Products,  Inc.
                    (incorporated by reference to Exhibit 10.29 to


                                       71
<PAGE>


                    the  Company's   Quarterly  Report  on  Form  10-Q  for  the
                    quarterly period ended April 3, 1998).

          10.31     Amended and Restated Loan and Security Agreement dated March
                    31,  1998  between  Advanced   Technical   Products,   Inc.,
                    Alcore,Inc.,   Technical   Products  Group,   Inc.,   Marion
                    Properties,   Inc.,  Deland  Properties,  Inc.  and  Lincoln
                    Properties,  Inc.,  collectively,  as  borrower,  and  Fleet
                    Capital Corporation, as lender (incorporated by reference to
                    Exhibit 10.31 to the Company's Quarterly Report on Form 10-Q
                    for the quarterly period ended July 3, 1998).

          10.32     First  Amendment to Amended and  Restated  Loan and Security
                    Agreement  dated  June  26,  1998  by and  between  Advanced
                    Technical Products,  Inc., Alcore,  Inc., Technical Products
                    Group,  Inc., Marion  Properties,  Inc., Deland  Properties,
                    Inc.  and  Lincoln  Properties,   Inc.,   collectively,   as
                    borrower,   and  Fleet   Capital   Corporation,   as  lender
                    (incorporated by reference to Exhibit 10.32 to the Company's
                    Quarterly Report on Form 10-Q for the quarterly period ended
                    July 3, 1998).

          10.33     Second Amended and Restated Equipment  Promissory Note dated
                    June 26,  1998,  executed  by Advanced  Technical  Products,
                    Inc., Alcore,  Inc.,  Technical Products Group, Inc., Marion
                    Properties,  Inc., Deland  Properties,  Inc. and Properties,
                    Inc.  (incorporated  by  reference  to Exhibit  10.33 to the
                    Company's  Quarterly  Report on Form 10-Q for the  quarterly
                    period ended July 3, 1998).

          10.34     Lease  Agreement dated May 11, 1998 by and between George W.
                    Hendricks   and  Barbara  J.   Hendricks   and  the  Lincoln
                    Composites  Division of Advanced  Technical  Products,  Inc.
                    (incorporated by reference to Exhibit 10.34 to the Company's
                    Quarterly Report on Form 10-Q for the quarterly period ended
                    October 2, 1998).

          10.35     Advanced  Technical  Products,   Inc.  1998  Employee  Stock
                    Purchase  Plan  dated  October  29,  1998  (incorporated  by
                    reference to the Company's  Proxy  Statement on Schedule 14A
                    dated October 1, 1999).

          10.36     Agreement and Plan of Merger dated  September 3, 1999 by and
                    among Advanced  Technical  Products,  Inc., ATP  Acquisition
                    Corp.  and ATP Holding Corp.  (incorporated  by reference to
                    the Company's  Proxy Statement on Schedule 14A dated October
                    1, 1999).

          10.37     Advanced  Technical  Products,  Inc.  401 (k) Plan  Adoption
                    Agreement   dated  September  16,  1999   (incorporated   by
                    reference to Exhibit 10.37 to the Company's Annual Report on
                    Form 10-K for the year ended December 31, 1999).

          10.38     January 2000  Agreement and Plan of Merger dated January 28,
                    2000 by and among  Advanced  Technical  Products,  Inc., ATP
                    Acquisition  Corp.  and ATP Holding Corp.  (incorporated  by
                    reference to Exhibit 2.1 to the Company's  Current Report on
                    Form 8-K dated January 28, 2000).

          10.39     Termination Agreement and Plan dated January 28, 2000 by and
                    among Advanced  Technical  Products,  Inc., ATP  Acquisition
                    Corp. and ATP Holding Corp.


                                       72
<PAGE>


                    (incorporated  by reference to Exhibit 2.2 to the  Company's
                    Current  Report on Form 8-K dated January 28, 2000).

          10.40     Rights Agreement dated March 3, 2000 between the Company and
                    American  Stock  Transfer & Trust  Company,  as Rights Agent
                    (incorporated  by reference to Exhibit 4.1 to the  Company's
                    Current Report on Form 8-K dated March 9, 2000).

          10.41*    Amendment to Amended and Restated Employment Agreement dated
                    March 30,  2000 by and  between  the  Company and Garrett L.
                    Dominy  (incorporated  by reference to Exhibit  10.43 to the
                    Company's  Annual  Report  on Form  10-K for the year  ended
                    December 31, 1999).

          10.42*    Amendment to Amended and Restated Employment Agreement dated
                    March  30,  2000 by and  between  the  Company  and James S.
                    Carter  (incorporated  by reference to Exhibit  10.44 to the
                    Company's  Annual  Report  on Form  10-K for the year  ended
                    December 31, 1999).

          10.43     Amendment to Letter of Credit and Reimbursement Agreement by
                    and between Alcore, Inc. and First Union National Bank dated
                    May 12, 2000 (to be filed by amendment).

          10.44     Pledge and Security  Agreement  made by Alcore,  Inc. to and
                    for the benefit of First Union  National  Bank dated May 12,
                    2000 (to be filed by amendment).

          10.45     Second  Amended and  Restated  Loan and  Security  Agreement
                    dated  October  10,  2000 by and  among  Advanced  Technical
                    Products,  Inc.,  Alcore,  Inc.,  Technical  Products Group,
                    Inc., Marion Properties,  Inc., Deland Properties,  Inc. and
                    Lincoln Properties,  Inc.,  collectively,  as borrower,  and
                    Fleet  Capital  Corporation,  as  Agent  and a  Lender , and
                    Certain  Lenders,  as Lenders  (incorporated by reference to
                    Exhibit  10.45 to the  Company's  Annual Report on Form 10-K
                    for the year ended December 31, 2000).

          10.46     Loan and Security  Agreement  dated  October 10, 2000 by and
                    among  Back  Bay  Capital  Funding,  LLC,  the  Lender,  and
                    Advanced Technical Products,  Inc., Alcore,  Inc., Technical
                    Products  Group,  Inc.,  Marion  Properties,   Inc.,  Deland
                    Properties, Inc. and Lincoln Properties, Inc., collectively,
                    as Borrower  (incorporated  by reference to Exhibit 10.46 to
                    the Company's  Annual Report on Form 10-K for the year ended
                    December 31, 2000).

          10.47     Agreement  for the  Purchase  and Sale of Assets dated as of
                    May 15,  2001,  by and among  Advanced  Technical  Products,
                    Inc.,   Alcore,   Inc.,   and   Alcore   Acquisition   Corp.
                    (incorporated  by reference to Exhibit 2.1 to the  Company's
                    Current Report on Form 8-K dated May 16, 2001).

          21.1      List of subsidiaries of Advanced Technical Products, Inc.

          23.1      Consent of KPMG LLP.

*    Indicates management contract or compensatory plan or arrangement.


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