##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period Ended April 2, 2006
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Transition period from  to
 Commission File Number 000-08193
 ARGON ST, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    38-1873250(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 12701 Fair Lakes Circle, Suite 800, Fairfax, Virginia 22033
 (703) 322-0881
  þ o
  o þ o
  o þ




---



##### 



ARGON ST, INC. AND SUBSIDIARIES
FORM 10-Q QUARTERLY REPORT
 FOR THE QUARTER ENDED APRIL 2, 2006
 TABLE OF CONTENTS
 PART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (Unaudited)Condensed Consolidated Balance Sheets at April 2, 2006 and September 30, 2005
    
    
    3Condensed Consolidated Statements of Earnings for the
three and six months ended April 2, 2006 and April 3, 2005
    
    
    4Condensed Consolidated Statements of Cash Flows for the
six months ended April 2, 2006 and April 3, 2005
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6-11Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12-22Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risks
    
    
    22Item 4.
    
    Controls and Procedures
    
    
    22PART II. OTHER INFORMATIONItem 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    22Item 5.
    
    Other Information
    
    
    23Item 6.
    
    Exhibits
    
    
    23Signatures
    
    
    25Exhibits
    
    
    26-28
 2




---



##### 



ARGON ST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 April 2, 2006
    
    
    September 30, 2005(unaudited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    62,238,000
    
    
    
    $      4,064,000Accounts receivable, net
    
    
    78,159,000
    
    
    
    103,577,000Inventory
    
    
    1,523,000
    
    
    
    1,166,000Income taxes receivable
    
    
    1,179,000
    
    
    
    2,464,000Deferred income tax asset
    
    
    2,073,000
    
    
    
    1,742,000Prepaids and other
    
    
    1,156,000
    
    
    
    888,000TOTAL CURRENT ASSETS
    
    
    146,328,000
    
    
    
    113,901,000Property, equipment and software, net
    
    
    15,757,000
    
    
    
    14,896,000Advances and cash held in escrow
    
    
    
    
    
    
    10,900,000Goodwill
    
    
    115,135,000
    
    
    
    107,956,000Intangibles, net
    
    
    2,155,000
    
    
    
    1,219,000Other assets
    
    
    706,000
    
    
    
    962,000TOTAL ASSETS
    
    $
    280,081,000
    
    
    
    $  249,834,000LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESLine of Credit
    
    $
    
    
    
    
    $    11,000,000Accounts payable and accrued expenses
    
    
    9,082,000
    
    
    
    26,857,000Accrued salaries and related expenses
    
    
    10,041,000
    
    
    
    8,848,000Deferred revenue
    
    
    4,453,000
    
    
    
    7,139,000Notes payable  current
    
    
    
    
    
    
    56,000Capital lease obligations  current
    
    
    19,000
    
    
    
    19,000Deferred rent
    
    
    320,000
    
    
    
    61,000TOTAL CURRENT LIABILITIES
    
    
    23,915,000
    
    
    
    53,980,000Deferred income tax liability, long term
    
    
    619,000
    
    
    
    1,979,000Deferred
rent  net of current
    
    
    1,699,000
    
    
    
    1,799,000Capital lease obligations  net of current
    
    
    53,000
    
    
    
    63,000Commitments and contingencies
    
    
    
    
    
    
    STOCKHOLDERS EQUITYCommon stock:$.01 Par Value, 100,000,000 shares
authorized,
22,195,872 and 20,153,878 shares issued
at April 2, 2006 and September 30, 2005
    
    
    222,000
    
    
    
    202,000Additional paid in capital
    
    
    209,980,000
    
    
    
    158,458,000Treasury stock at cost, 126,245 shares
    
    
    (534,000
    )
    
    
    (534,000
    )Retained earnings
    
    
    44,127,000
    
    
    
    34,002,000Accumulated other comprehensive loss
    
    
    
    
    
    
    (115,000
    )TOTAL STOCKHOLDERS EQUITY
    
    $
    253,795,000
    
    
    
    $  192,013,000TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    280,081,000
    
    
    
    $  249,834,000
  3




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##### 



ARGON ST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
 Second Quarter Ended
    
    
    Six Months EndedApril 2, 2006
    
    
    April 3, 2005
    
    
    April 2, 2006
    
    
    April 3, 2005CONTRACT REVENUES
    
    $
    55,681,000
    
    
    $
    55,952,000
    
    
    $
    123,788,000
    
    
    $
    112,462,000COST OF REVENUES
    
    
    43,977,000
    
    
    
    43,641,000
    
    
    
    96,862,000
    
    
    
    88,979,000GENERAL AND ADMINISTRATIVE
EXPENSES
    
    
    4,805,000
    
    
    
    4,496,000
    
    
    
    10,780,000
    
    
    
    7,831,000INCOME FROM OPERATIONS
    
    
    6,899,000
    
    
    
    7,815,000
    
    
    
    16,146,000
    
    
    
    15,652,000OTHER INCOME (EXPENSE)Interest income
    
    
    389,000
    
    
    
    205,000
    
    
    
    516,000
    
    
    
    345,000Interest expense
    
    
    (34,000
    )
    
    
    (7,000
    )
    
    
    (161,000
    )
    
    
    (9,000
    )355,000
    
    
    
    198,000
    
    
    
    355,000
    
    
    
    336,000INCOME BEFORE INCOME TAXES
    
    
    7,254,000
    
    
    
    8,013,000
    
    
    
    16,501,000
    
    
    
    15,988,000PROVISION FOR INCOME TAXES
    
    
    2,732,000
    
    
    
    3,069,000
    
    
    
    6,376,000
    
    
    
    6,124,000NET INCOME
    
    $
    4,522,000
    
    
    $
    4,944,000
    
    
    $
    10,125,000
    
    
    $
    9,864,000EARNINGS PER SHARE (Basic)
    
    $
    0.21
    
    
    $
    0.25
    
    
    $
    0.48
    
    
    $
    0.50EARNINGS PER SHARE (Diluted)
    
    $
    0.20
    
    
    $
    0.24
    
    
    $
    0.46
    
    
    $
    0.48WEIGHTED-AVERAGE SHARES
OUTSTANDINGBasic
    
    
    22,006,000
    
    
    
    19,751,000
    
    
    
    21,185,000
    
    
    
    19,584,000Diluted
    
    
    22,618,000
    
    
    
    20,676,000
    
    
    
    21,855,000
    
    
    
    20,537,000
  4




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##### 



ARGON ST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
 Six Months EndedApril 2, 2006
    
    
    April 3, 2005Cash flows from operating activitiesNet income
    
    $
    10,125,000
    
    
    $
    9,864,000Adjustments to reconcile net income to net cash provided by
(used in) operating activities:Depreciation and amortization
    
    
    2,715,000
    
    
    
    2,095,000Deferred income tax benefit
    
    
    (471,000
    )
    
    
    (496,000
    )Stock-based compensation
    
    
    886,000
    
    
    
    Tax benefit of stock option exercises
    
    
    
    
    
    
    3,040,000Change in:Billed accounts receivable
    
    
    25,048,000
    
    
    
    (3,424,000
    )Unbilled accounts receivable
    
    
    1,803,000
    
    
    
    (1,654,000
    )Inventory
    
    
    (357,000
    )
    
    
    (347,000
    )Prepaids and other
    
    
    31,000
    
    
    
    (222,000
    )Accounts payable and accrued expenses
    
    
    (17,709,000
    )
    
    
    (710,000
    )Accrued salaries and related expenses
    
    
    411,000
    
    
    
    (831,000
    )Deferred revenue
    
    
    (2,686,000
    )
    
    
    (1,010,000
    )Income taxes receivable
    
    
    1,285,000
    
    
    
    (4,971,000
    )Deferred rent
    
    
    159,000
    
    
    
    289,000Net cash provided by operating activities
    
    
    21,240,000
    
    
    
    1,623,000Cash flows from investing activitiesAcquisitions of property, equipment and software
    
    
    (1,909,000
    )
    
    
    (2,292,000
    )Reduction in advances and cash held in escrow
    
    
    10,900,000
    
    
    
    Radix
Technologies, Inc. acquisition, net of cash acquired
    
    
    (9,935,000
    )
    
    
    Acquisition of ProDesign Solutions, LLC net of cash acquired
    
    
    (1,712,000
    )
    
    
    Net cash used in investing activities
    
    
    (2,656,000
    )
    
    
    (2,292,000
    )Cash flows from financing activitiesRepayment on line of credit, net of borrowings
    
    
    (11,000,000
    )
    
    
    Payment on note payable
    
    
    (56,000
    )
    
    
    (112,000
    )Payments on capital leases
    
    
    (10,000
    )
    
    
    Tax benefit of stock option exercises
    
    
    1,512,000
    
    
    
    Proceeds from exercise of stock options
    
    
    1,932,000
    
    
    
    2,794,000Proceeds from employee stock purchase plan exercises
    
    
    444,000
    
    
    
    476,000Proceeds from secondary offering
    
    
    46,768,000
    
    
    
    Net cash provided by financing activities
    
    
    39,590,000
    
    
    
    3,158,000Net increase in cash and cash equivalents
    
    
    58,174,000
    
    
    
    2,489,000Cash and cash equivalents, beginning of period
    
    
    4,064,000
    
    
    
    29,732,000Cash and cash equivalents, end of period
    
    $
    62,238,000
    
    
    $
    32,221,000Supplemental disclosureIncome taxes paid
    
    $
    4,051,000
    
    
    $
    8,485,000Interest expense paid
    
    $
    161,000
    
    
    $
    9,000
  5




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##### 



ARGON ST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
 1. BASIS OF PRESENTATION
       6




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##### 



2. EARNINGS PER SHARE
  Second Quarter Ended
    
    Six Months EndedApril 2, 2006
    
    April 3, 2005
    
    April 2, 2006
    
    April 3, 2005Net Income
    
    $
    4,522,000
    
    
    $
    4,944,000
    
    
    $
    10,125,000
    
    
    $
    9,864,000Weighted Average Shares Outstanding  Basic
    
    
    22,006,000
    
    
    
    19,751,000
    
    
    
    21,185,000
    
    
    
    19,584,000Basic Earnings Per Share
    
    $
    0.21
    
    
    $
    0.25
    
    
    $
    0.48
    
    
    $
    0.50Effect of Dilutive Securities:Net Shares Issuable Upon Exercise of Stock Options
    
    
    612,000
    
    
    
    925,000
    
    
    
    670,000
    
    
    
    953,000Weighted Average Shares Outstanding  Diluted
    
    
    22,618,000
    
    
    
    20,676,000
    
    
    
    21,855,000
    
    
    
    20,537,000Diluted Earnings Per Share
    
    $
    0.20
    
    
    $
    0.24
    
    
    $
    0.46
    
    
    $
    0.48
 3. STOCK-BASED COMPENSATION
     7




---



##### 



Fair Value Determination
   Expected Volatility.
 Risk-free Interest Rate.
 Dividend Yield.
 Expected Term.
 Exercise Factor.
 Post-vest Percentage.
 Stock Compensation Expense
   8




---



##### 



Stock Option Activity
   AggregateIntrinsicNumber
    
    
    Weighted-Average
    
    
    Valueof Shares
    
    
    Exercise Price
    
    
    (in thousands)Shares under option, September 30, 2005
    
    
    1,741,127
    
    
    $
    8.75Options granted
    
    
    527,300
    
    
    $
    29.48Options exercised
    
    
    (301,899
    )
    
    $
    6.39
    
    
    $
    7,004Options cancelled and expired
    
    
    (44,500
    )
    
    $
    21.22Shares under option, April 2, 2006
    
    
    1,922,028
    
    
    $
    14.52
    
    
    $
    28,408Options exercisable at April 2, 2006
    
    
    857,672
    
    
    $
    11.39
    
    
    $
    15,361Shares reserved for equity awards at
April 2, 2006
    
    
    1,011,472
  Weighted-AverageOptions
    
    Remaining
    
    Weighted-AverageRange of Exercise Price
    
    Outstanding
    
    Contractual Life
    
    Exercise Price$0.10  $0.90
    
    
    241,148
    
    
    5.1
    years
    
    $
    0.63$2.25  $4.63
    
    
    341,860
    
    
    
    6.1
    
    
    
    4.03$5.00  $6.88
    
    
    299,220
    
    
    
    7.5
    
    
    
    5.70$7.54  $17.63
    
    
    224,000
    
    
    
    6.7
    
    
    
    12.68$20.40  $29.87
    
    
    815,800
    
    
    
    9.0
    
    
    
    26.76
 Weighted-AverageOptions
    
    Remaining
    
    Weighted-AverageRange of Exercise Price
    
    Exercisable
    
    Contractual Life
    
    Exercise Price$0.10  $0.90
    
    
    164,148
    
    
    4.9
    years
    
    $
    0.51$2.25  $4.63
    
    
    126,164
    
    
    
    5.3
    
    
    
    3.91$5.00  $6.88
    
    
    83,860
    
    
    
    7.4
    
    
    
    5.74$7.54  $17.63
    
    
    224,000
    
    
    
    6.7
    
    
    
    12.68$20.40  $29.87
    
    
    259,500
    
    
    
    7.6
    
    
    
    22.63
 Pro Forma Disclosures
  9




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##### 



Second Quarter Ended
    
    
    Six Months EndedApril 3, 2005
    
    
    April 3, 2005Net Income
    
    $
    4,944,000
    
    
    $
    9,864,000Add: Stock-based employee compensation expense included
In reported net income, net of related tax effects
    
    
    
    
    
    
    Less: Total stock-based employee compensation expense
determined under fair value method of all awards, net
of related tax effects
    
    
    337,000
    
    
    
    685,000Pro forma net income
    
    $
    4,607,000
    
    
    $
    9,179,000Earnings per share:Basic  as reported
    
    $
    0.25
    
    
    $
    0.50Basic  pro forma
    
    $
    0.23
    
    
    $
    0.47Earnings per share:Diluted  as reported
    
    $
    0.24
    
    
    $
    0.48Diluted  pro forma
    
    $
    0.22
    
    
    $
    0.45
 4. REVOLVING LINE OF CREDIT
    5. ACQUISITIONS
 Radix Technologies, Inc.
  10




---



##### 



ProDesign Solutions, LLC
  6. RELATED PARTY TRANSACTIONS
  7. SECONDARY OFFERING
  11




---



##### 



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Forward-looking Statements
  Overview
 General
  Revenues
   12




---



##### 



Second Quarter Ended
    
    Six Months EndedContract Type
    
    April 2, 2006
    
    April 3, 2005
    
    April 2, 2006
    
    April 3, 2005Cost reimbursable contracts
    
    
    28
    %
    
    
    17
    %
    
    
    23
    %
    
    
    16
    %Fixed-price contracts
    
    
    58
    %
    
    
    78
    %
    
    
    67
    %
    
    
    79
    %Time and material contracts
    
    
    14
    %
    
    
    5
    %
    
    
    10
    %
    
    
    5
    %
  Backlog
    13




---



##### 



April 2, 2006
    
    
    April 3, 2005Funded
    
    $
    187,592,000
    
    
    $
    219,507,000Unfunded
    
    
    31,005,000
    
    
    
    5,755,000Total
    
    $
    218,597,000
    
    
    $
    225,262,000
   Cost of Revenues
  Stock-Based Compensation Expense
    14




---



##### 



General and Administrative Expenses
  Interest Income and Expense
   Research and Development
   Deferred Revenue
    15




---



##### 



Critical Accounting Practices and Estimates
 General
  Revenue and Cost Recognition
 General
 Accounting for Performance of Construction-Type and Production-Type Contracts. .
  Indirect rate variance
   16




---



##### 



Award Fee Recognition
  Goodwill
  Stock-based Compensation
  17




---



##### 



Historical Operating Results
 Fiscal quarter ended April 2, 2006 compared to fiscal quarter ended April 3, 2005
  Second Quarter Ended
    
    Increase (Decrease)April 2, 2006
    
    April 3, 2005
    
    2006 Compared To 2005Contract revenues
    
    $
    55,681,000
    
    
    $
    55,952,000
    
    
    $
    (271,000
    )Cost of revenues
    
    $
    43,977,000
    
    
    $
    43,641,000
    
    
    $
    336,000General and administrative expenses
    
    $
    4,805,000
    
    
    $
    4,496,000
    
    
    $
    309,000Interest income and interest expense
    
    $
    355,000
    
    
    $
    198,000
    
    
    $
    157,000Provision for income taxes
    
    $
    2,732,000
    
    
    $
    3,069,000
    
    
    $
    (337,000
    )Net income
    
    $
    4,522,000
    
    
    $
    4,944,000
    
    
    $
    (422,000
    )
 Contract Revenues:
  Cost of Revenues:
  General and Administrative Expenses:
  Interest Income and Interest Expense:
  18




---



##### 



Provision for Income Taxes:
  Net Income:
  Six Months Ended April 2, 2006 compared to Six Months Ended April 2, 2005
  Six Months Ended
    
    Increase 2006April 2, 2006
    
    April 3, 2005
    
    Compared to 2005Contract revenues
    
    $
    123,788,000
    
    
    $
    112,462,000
    
    
    $
    11,326,000Cost of revenues
    
    
    96,862,000
    
    
    
    88,979,000
    
    
    
    7,883,000General and
administrative expenses
    
    
    10,780,000
    
    
    
    7,831,000
    
    
    
    2,949,000Interest income and
interest expense
    
    
    355,000
    
    
    
    336,000
    
    
    
    19,000Provision for income taxes
    
    
    6,376,000
    
    
    
    6,124,000
    
    
    
    252,000Net income
    
    
    10,125,000
    
    
    
    9,864,000
    
    
    
    261,000
 Contract Revenues:
  Cost of Revenues:
  19




---



##### 



General and Administrative Expenses:
  Interest Income and Interest Expense:
  Provision for Income Taxes:
  Net Income:
  Analysis of Liquidity and Capital Resources
 Cash
  Line of Credit
    20




---



##### 



Cash Flows
    Contractual Obligations and Commitments
  Due in
    
    
    Due in
    
    
    Due in
    
    
    Due in
    
    
    Due inTotal
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    ThereafterCapital leases
    
    $
    72,000
    
    
    $
    10,000
    
    
    $
    20,000
    
    
    $
    20,000
    
    
    $
    20,000
    
    
    $
    2,000
    
    
    
    Operating leases
    
    
    25,338,000
    
    
    
    3,036,000
    
    
    
    6,028,000
    
    
    
    6,043,000
    
    
    
    3,829,000
    
    
    
    1,675,000
    
    
    
    4,727,000Total
    
    $
    25,410,000
    
    
    $
    3,046,000
    
    
    $
    6,048,000
    
    
    $
    6,063,000
    
    
    $
    3,849,000
    
    
    $
    1,677,000
    
    
    $
    4,727,000
  Total
    
    Less Than 1 Year
    
    1-3 YearsLetters of credit
    
    $
    1,516,000
    
    
    $
    540,000
    
    
    $
    976,000
  Market Risks
  21




---



##### 



Cash and Cash Equivalents:
  Interest Rates:
  Foreign Currency:
  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
  ITEM 4. CONTROLS AND PROCEDURES
 (a)
    
    Our management has evaluated, with the participation of the our Chief Executive
Officer and Chief Financial Officer, the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this Quarterly Report on Form 10-Q.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures are effective to ensure that
information we are required to disclose in reports that we file or submit under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange Commission rules
and forms.(b)
    
    During the last quarter, there were no significant changes in our internal
controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the
Securities Exchange Act of 1934, as amended) that have materially affected these
controls, or are reasonably likely to materially affect these controls subsequent to
the evaluation of these controls.
 PART II  OTHER INFORMATION
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  a)
    
    The inspector of election tabulated the following votes for the election of
directors:
 22




---



##### 



Number of Votes In
    
    Number of VotesNominee for Office
    
    Favor
    
    WithheldTerry L. Collins
    
    
    19,884,851
    
    
    
    96,983S. Kent Rockwell
    
    
    19,884,861
    
    
    
    96,973Victor F. Sellier
    
    
    19,808,068
    
    
    
    173,766Thomas E. Murdock
    
    
    19,883,776
    
    
    
    98,058David C. Karlgaard
    
    
    19,905,581
    
    
    
    76,253Peter A. Marino
    
    
    19,783,227
    
    
    
    243,607Robert McCashin
    
    
    19,690,095
    
    
    
    291,739John Irvin
    
    
    19,809,523
    
    
    
    172,311Lloyd A. Semple
    
    
    19,640,266
    
    
    
    341,568
 b)
    
    The inspector of election tabulated the following votes for the proposal to
ratify and approve an amendment to the Argon ST, Inc. 2002 Stock Incentive Plan to
increase the number of shares of Common Stock issuable thereunder from 946,000 to
1,946,000:
 Number of Votes In
    
    Number of Votes
    
    Abstentions andFavor
    
    Against
    
    Broker Non-Votes11,026,190
    
    
    1,015,512
    
    
    
    7,940,132
 ITEM 5. OTHER INFORMATION
  ITEM 6. EXHIBITS
 ExhibitNumber
    Description of Exhibit2.1
    
    
    Agreement and Plan of
Merger dated as of
June 7, 2004, by and
between Sensytech,
Inc. and Argon
Engineering
Associates, Inc.
(incorporated by
reference to Exhibit
2.1 of the Companys
Registration
Statement on Form S-4
filed on July 16,
2004, Registration
Statement No.
333-117430)3.1
    
    
    Amended and Restated
Certificate of
Incorporation of the
Company (incorporated
by reference to
Exhibit 3.1 of the
Companys
Registration
Statement on Form
S-1(Registration
Statement No.
333-98757) filed on
August 26, 2002)3.1.1
    
    
    Amendment to the
Companys Amended and
Restated Certificate
of Incorporation
(incorporated by
reference to Exhibit
3.1 the Companys
Current Report on
Form 8-K filed
October 5, 2004
covering Items 2.01,
5.01, 5.02, 8.01 and
9.01 of Form 8-K)3.1.2
    
    
    Amendment, dated
March 15, 2005 to the
Companys Amended and
Restated Certificate
of Incorporation
(incorporated by
reference to Exhibit
3.1.2 to the
Companys Quarterly
Report on Form 10-Q
for the quarterly
period ended April 5,
2005, filed May 11,
2005)3.2
    
    
    Amended and Restated
Bylaws of the Company
(incorporated by
reference to Exhibit
13(a)(i) of the
Companys Annual
Report on Form 10-KSB
for the fiscal year
ended September 30,
2001)4.1
    
    
    Form of Common Stock
Certificate
(incorporated by
reference to Exhibit
4.3 to the Companys
Registration
Statement on Form S-3
(Registration
Statement No.
333-128211) filed on
September 9, 2005)10.1
    
    
    Amended and Restated
Line of Credit
Agreement with Bank
of America
(incorporated by
reference to Exhibit
10.1 of the Companys
Registration
Statement on Form S-1
(Registration
Statement No.
333-98757) filed on
August 26, 2002
 23




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##### 



10.1.1
    
    
    Fifth Amendment to
Second Amended and
Restated Financing
and Security
Agreement
(incorporated by
reference to Exhibit
10.1 of the Companys
Current Report on
Form 8-K dated March
31, 2006 and filed
April 6, 2006)10.2+
    
    
    Argon ST, Inc. 2002
Stock Incentive Plan
(incorporated by
reference to Appendix
A to the Companys
Definitive Proxy
Statement on Schedule
14A filed January 27,
2006)10.2.1
    
    
    Form of Stock Option
Agreement under Argon
ST 2002 Stock
Incentive Plan
(incorporated by
reference to Exhibit
10.2.1 to the
Companys Annual
Report on Form 10-K
for fiscal year ended
September 30, 2005,
filed December 14,
2005)10.3+
    
    
    Argon Engineering
Associates, Inc.
Stock Plan
(incorporated by
reference to Exhibit
10.3 to the Companys
Annual Report on Form
10-K for the fiscal
year ended September
30, 2004, filed
December 14, 2004)10.5+
    
    
    Retention Agreement
dated February 17,
2004, by and between
the Company and S.
Kent Rockwell
(incorporated by
reference to Exhibit
10.4 of the Companys
Registration
Statement on Form S-4
(Registration
Statement No.
333-117430) filed on
July 16, 2004)16.1
    
    
    Letter of
PricewaterhouseCoopers
LLP regarding change
in certifying
accountant
(incorporated by
reference to Exhibit
16.1 to the Companys
Current Report on
Form 8-K covering
Items 4.01 and 9.01
of Form 8-K, filed
October 5, 2004)16.2
    
    
    Letter of Watkins,
Meegan, Drury &
Company, L.L.C.
regarding change in
certifying accountant
(incorporated by
reference to Exhibit
16.2 to the Companys
Current Report on
Form 8-K covering
Items 4.01 and 9.01
of Form 8-K, filed
October 5, 2004)31.1*
    
    
    Certification of the
Companys Chief
Executive Officer
pursuant to Rule
13a-14(a)/15d-14(a)
under the Securities
Exchange Act31.2*
    
    
    Certification of the
Companys Chief
Financial Officer
pursuant to Rule
13a-14(a)/15d-14(a)
under the Securities
Exchange Act32.1**
    
    
    Certification
pursuant to Rule
13a-14(b)/15d-14(b)
under the Securities
Exchange Act and
Section 1350 of
Chapter 63 of Title 8
of the United States
Code
 
 *
    
    Filed herewith**
    
    Furnished herewith+
    
    Indicates management contract or compensatory plan or arrangement 24




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##### 



SIGNATURES
  ARGON ST, INC.(Registrant)By: /s/ Terry L. CollinsTerry L. Collins, Ph.D.Chairman, Chief Executive Officer and PresidentBy: /s/ Victor F. SellierVictor F. SellierVice President  Business Operations, Chief Financial
Officer, Secretary and Treasurer
  25