|UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWASHINGTON,
D.C. 20549


FORM 10-Q


(Mark One)
|----------------------------------------------------------------------------------------------

|[X] |  | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- |  | ---------------------------------------------------------------------------------------

|For the Quarterly
Period Ended: March 30, 2001



OR
|----------------------------------------------------

|[  ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- |  | ----------------------------------------------------------------------------------------

|For the transition
period from ______________ to ________________


Commission File Number
0-1298


ADVANCED TECHNICAL
PRODUCTS, INC.(Exact name of Issuer as Specified in Its Charter)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                | 
|------------------------------- | 
|Delaware                        | 
|(State or Other Jurisdiction of | 
|Incorporation or Organization)  | 

|200 Mansell Ct. East,
Suite 505, Roswell, Georgia 30076 (Address of Principal Executive Offices)


(770) 993-0291
(Issuers
Telephone Number, Including Area Code)


(Former Address, if
Changed Since Last Report)



Indicate by check mark
whether the Registrant (1) filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act during the past 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 [  ]
|------- |  | -------

|The aggregate number of
shares of Common Stock outstanding as of May 10, 2001 was 5,458,794.
1
|----------------------------------------------------------------------------------------------

|ADVANCED TECHNICAL
PRODUCTS, INC.


INDEX
|-----------------------------------------

|                                                                                | 
|------------------------------------------------------------------------------- | 
|PART I. FINANCIAL INFORMATION                                                   | 
|                                                                                | 
|Item 1. Financial Statements (unaudited)                                        | 
|                                                                                | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results | 
|of Operations                                                                   | 
|                                                                                | 
|Discontinued Operations                                                         | 
|Results of Operations                                                           | 
|Financial Condition and Liquidity                                               | 
|Recent Accounting Pronouncements                                                | 
|Forward Looking Statements - Cautionary Factors                                 | 
|                                                                                | 
|Item 3. Quantitative and Qualitative Disclosures About Market Risk              | 
|                                                                                | 
|PART II. OTHER INFORMATION                                                      | 
|                                                                                | 
|Item 1. Legal Proceedings                                                       | 
|                                                                                | 
|Item 2. Changes in Securities and Use of Proceeds                               | 
|                                                                                | 
|Item 3. Defaults Upon Senior Securities                                         | 
|                                                                                | 
|Item 4. Submission of Matters to a Vote of Security Holders                     | 
|                                                                                | 
|Item 5. Other Information                                                       | 
|                                                                                | 
|Item 6. Exhibits and Reports on Form 8-K                                        | 

|2
|-

|ADVANCED TECHNICAL
PRODUCTS, INC. AND SUBSIDIARIESCONDENSED
CONSOLIDATED BALANCE SHEETSAS OF MARCH
30, 2001 AND DECEMBER 31, 2000


(UNAUDITED, IN
THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                        | March 30,2001 | December 31,2000
|----------------------------------------------------------------------- | ------------- | ----------------
|ASSETS                                                                  |               |                 
|                                                                        |              
|CURRENT ASSETS:                                                         |              
|Cash and cash equivalents                                               |               | $     1,143     
|Accounts receivable (net of allowance for doubtful accounts of $473 and |              
|$455 at March 30, 2001 and December 31, 2000, respectively)             |               | 27,581          
|Inventories and costs relating to long-term contracts and programs in   |              
|process, net of progress payments                                       |               | 43,782          
|Prepaid income taxes                                                    |               | 433             
|Other prepaid expenses                                                  |               | 1,131           
|Deferred income taxes                                                   |               | 3,284           
|                                                                       
|Total current assets                                                    |               | 77,354          
|                                                                       
|                                                                        |              
|NONCURRENT ASSETS:                                                      |              
|Property, plant and equipment                                           |               | 20,419          
|Less-accumulated depreciation                                           |               | (11,580         
|                                                                       
|Net property, plant and equipment                                       |               | 8,839           
|                                                                       
|                                                                        |              
|Deferred income taxes                                                   |               | 2,819           
|Net assets of discontinued operations                                   |               | 7,947           
|Other noncurrent assets                                                 |               | 3,450           
|                                                                       
|Total assets                                                            |               | $ 100,409       
|                                                                       
|                                                                        |              
|LIABILITIES AND SHAREHOLDERS EQUITY                                    |              
|                                                                        |              
|CURRENT LIABILITIES:                                                    |              
|Accounts payable                                                        |               | $   15,262      
|Accrued expenses                                                        |               | 11,127          
|Short-term debt                                                         |               | 26,132          
|Current portion of capital lease obligations                            |               | 41              
|                                                                       
|Total current liabilities                                               |               | 52,562          
|                                                                        |              
|LONG-TERM LIABILITIES:                                                  |              
|Long-term debt, net of current portion                                  |               | 20,559          
|Capital lease obligations, net of current portion                       |               | 19              
|Other liabilities                                                       |               | 4,253           
|                                                                       
|Total liabilities                                                       |               | 77,393          
|                                                                        |              
|Mandatorily redeemable preferred stock, $1.00 par value,                |              
|1,000,000 shares authorized, issued and outstanding;                    |              
|redemption amount of $1.00 per share                                    |               | 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, 5,450,473   |              
|shares and 5,375,822 shares issued and outstanding as of March 30, 2001 |              
|and December 31, 2000, respectively                                     |               | 55              
|Additional paid-in capital                                              |               | 17,374          
|Retained earnings                                                       |               | 5,204           
|Notes receivable from officers                                          |               | (135            
|Accumulated other comprehensive loss                                    |               | (482            
|                                                                       
|Total shareholders equity                                              |               | 22,016          
|                                                                       
|Total liabilities and shareholders equity                              |               | $ 100,409       
|                                                                       

|See accompanying Notes
to Condensed Consolidated Financial Statements.


3
|--------------------------------------------------------------------------

|ADVANCED
TECHNICAL PRODUCTS, INC. AND SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONSFOR THE
QUARTERS ENDED MARCH 30, 2001 AND MARCH 31, 2000


(UNAUDITED,
IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                       | 2001 | 2000     
|------------------------------------------------------ | ---- | ---------
|Revenues                                               |      | $42,342  
|                                                       |     
|Cost of revenues                                       |      | 32,895   
|                                                       |     
|General and administrative expenses                    |      | 5,593    
|                                                      
|Operating income                                       |      | 3,854    
|                                                       |     
|Interest expense                                       |      | 979      
|                                                       |     
|Other expense                                          |      | 321      
|                                                      
|Income before income tax expense                       |      | 2,554    
|                                                       |     
|Income tax expense                                     |      | 983      
|                                                      
|Income from continuing operations                      |      | 1,571    
|                                                       |     
|Discontinued operations:                               |     
|Loss from operations of segment to be disposed of, net |     
|of income tax benefit                                  |      |         
|                                                      
|Net Income                                             |      | $  1,571 
|                                                      
|                                                       |     
|Net income per share:                                  |     
|Basic:   Income from continuing operations             |      | $    0.28
|Loss from
discontinued operations                      |      |         
|                                                      
|Net income                                             |      | $    0.28
|                                                      
|                                                       |     
|Diluted:  Income from continuing operations            |      | $    0.26
|Loss from discontinued operations                      |      |         
|                                                      
|Net income                                             |      | $    0.26
|                                                      
|                                                       |     
|Weighted average number of common and common           |     
|equivalent shares outstanding:                         |     
|Basic                                                  |      | 5,443    
|                                                      
|Diluted                                                |      | 5,859    
|                                                      

|See accompanying Notes
to Condensed Consolidated Financial Statements.
4
|------------------------------------------------------------------------

|ADVANCED
TECHNICAL PRODUCTS, INC. AND SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE
QUARTERS ENDED MARCH 30, 2001 AND MARCH 31, 2000


(UNAUDITED,
IN THOUSANDS)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                            | 2001 | 2000    
|----------------------------------------------------------- | ---- | --------
|CASH FLOWS FROM OPERATING ACTIVITIES:                       |      |         
|Net income                                                  |      | 1,571   
|Adjustments to reconcile net income to net cash provided by |     
|operating activities:                                       |     
|Depreciation and amortization                               |      | 708     
|Other non-cash charges                                      |      | 113     
|Changes in operating assets and liabilities:                |     
|Accounts receivable                                         |      | (1,770  
|Inventories                                                 |      | (1,040  
|Accounts payable                                            |      | 2,003   
|Accrued expenses                                            |      | 618     
|Net assets of discontinued operations                       |      | (929    
|Other assets and liabilities                                |      | 853     
|                                                           
|Net cash provided by operating activities                   |      | 2,127   
|                                                           
|                                                            |     
|CASH FLOWS FROM INVESTING ACTIVITIES:                       |     
|Capital expenditures                                        |      | (487    
|Net investing activities of discontinued operations         |      | (4      
|                                                           
|Net cash used in investing activities                       |      | (491    
|                                                           
|                                                            |     
|CASH FLOWS FROM FINANCING ACTIVITIES:                       |     
|Proceeds of borrowings                                      |      |        
|Repayments of borrowings                                    |      | (2,289  
|Proceeds from exercise of stock options and warrants        |      | 185     
|Common stock issued under employee stock purchase plan      |      | 39      
|Cash dividends paid                                         |      | (40     
|Payments under capital lease obligations                    |      | (11     
|Net financing activities of discontinued operations         |      | (43     
|                                                           
|Net cash used in financing activities                       |      | (2,159  
|                                                           
|                                                            |     
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS        |      | (523    
|                                                            |     
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD              |      | 1,666   
|                                                           
|                                                            |     
|CASH AND CASH EQUIVALENTS, END OF PERIOD                    |      | $ 1,143 
|                                                           
|                                                            |     
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:           |     
|Cash paid for interest                                      |      | $ 1,244 
|Cash paid for income taxes                                  |      | $      

|See accompanying Notes
to Condensed Consolidated Financial Statements.
5
|------------------------------------------------------------------------

|ADVANCED
TECHNICAL PRODUCTS, INC.AND
SUBSIDIARIES


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)


1.  BASIS OF
PRESENTATION


The
accompanying unaudited Condensed Consolidated Financial Statements of Advanced
Technical Products, Inc. and Subsidiaries (the Company or
ATP) have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the quarter ended March 30, 2001 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2001. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Companys Form 10-K for the year ended
December 31, 2000.


2. 
DISCONTINUED OPERATIONS


On
June 30, 2000, the Company adopted a formal plan to sell its Structural Core
Materials segment, which consists of the operations of the Alcore and Alcore
Brigantine S.A. subsidiaries. In March 2001, the Company announced that it had
entered into a letter of intent for the sale of certain assets of Alcore and
100% of the stock of the Alcore Brigantine S.A. subsidiary (the
Transaction). Consummation of the Transaction is subject to, among
other things, satisfactory completion of due diligence by the purchaser,
execution and delivery of a definitive purchase agreement and certain third
party approvals. The Company anticipates the Transaction will be closed during
the second quarter of 2001.


Assets
and liabilities of the Structural Core Materials segment to be disposed of
consisted of the following at March 30, 2001 and December 31, 2000 (in
thousands):
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                        | March 30,2001 | December 31,2000
|--------------------------------------- | ------------- | ----------------
|Cash                                    |               | $      293      
|Accounts receivable                     |               | 2,313           
|Inventories                             |               | 5,171           
|Prepaid expenses                        |               | 67              
|Property, plant and equipment           |               | 11,569          
|Other noncurrent assets                 |               | 5,123           
|Accounts payable                        |               | (1,044          
|Accrued expenses                        |               | (282            
|Long-term debt                          |               | (1,253          
|Capital lease obligations               |               | (1,214          
|Reserve for loss on disposal of segment |               | (12,796         
|                                       
|Net assets to be disposed of            |               | $   7,947       
|                                       

|6
|-

|Net
assets to be disposed of have been separately classified in the accompanying
Condensed 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
Condensed Consolidated Financial Statements. Net revenues of the Structural Core
Materials segment were approximately $6.5 million and $5.3 million for the
quarters ended March 30, 2001 and March 31, 2000, respectively. These amounts
are not included in revenues in the accompanying Condensed Consolidated
Statements of Operations. In addition, operating results for the quarter ended
March 31, 2000 have been restated to show results of the Structural Core
Materials segment separately.


3. INVENTORIES


Inventories
at March 30, 2001 and December 31, 2000 consisted of the following (in
thousands):
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                  | March 30, 2001 | Dec. 31, 2000
|----------------- | -------------- | -------------
|Finished goods    |                | $   1,653    
|Work in process   |                | 29,288       
|Raw materials     |                | 17,460       
|Progress payments |                | (4,619       
|                 
|Total inventories |                | $ 43,782     
|                 

|4.  DEBT


Debt
is summarized as follows (in thousands):
|--------------------------------------------------------

|                                            | March 30,2001 | Dec. 31,2000
|------------------------------------------- | ------------- | ------------
|Short-term debt:                            |               |             
|Revolving loans                             |               | $20,489     
|Current portion of long-term debt           |               | 5,643       
|                                           
|                                            |               | $26,132     
|                                           
|Long-term debt:                             |              
|Term loans                                  |               | $15,942     
|Equipment loans                             |               | 2,238       
|Subordinated debt, net of  unamortized loan |              
|discount                                    |               | 5,486       
|Bonds payable                               |               | 1,945       
|Other long-term debt                        |               | 591         
|                                           
|Total long-term debt                        |               | 26,202      
|Less current portion                        |               | 5,643       
|                                           
|Long-term debt, net of current portion      |               | $20,559     
|                                           

|Revolving,
Term and Equipment Loans


On
October 10, 2000, the Company entered into a new financing agreement with its
primary lender. At March 30, 2001, the Companys credit facility with this
lending institution totaled $45.1 million consisting of: (1) $27.0 million of
revolving credit against eligible receivable and inventory balances, (2) a $15.9
million term loan and (3) a $2.2 million capital equipment loan. As of March 30,
2001, the Company had approximately $4.5 million of unused borrowing
availability on this credit facility, net of $2.1 million of reserves against
the revolving loan borrowing base for outstanding stand-by letters of credit
commitments ($1.4 million) and other items ($0.7 million).
7
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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 loan 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%.


Interest
is paid monthly in arrears on all loans. The term loan is payable quarterly
based on a seven-year amortization period. The equipment loan is payable monthly
based on a five-year amortization period. The credit facility matures on October
31, 2003.


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 at
maturity. 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
warrants are exercisable at any time prior to the fifth anniversary of the
credit facility closing. Alternatively, at any time after 18 months from the
closing, but prior to the expiration of the warrants, the lender may elect to
require the Company to repurchase each warrant for an amount equal to 10% of
ATPs EBITDA (earnings before interest, taxes, depreciation and
amortization) divided by 320,000 (the Put Option). The Put Option is
subject to a maximum cap of $1,750,000. In the event of an exercise of the Put
Option resulting in a repurchase price of $1,000,000 or greater, the Company has
the right to satisfy up to 50% of the obligation by issuing a promissory note to
the lender, with principal payments amortized evenly over 18 months. In
addition, the Company has a call right in the event that the holders of the
warrants initiate a demand registration or elect to exercise their piggyback
registration rights in accordance with the agreement. The loan is secured by
substantially all of the Companys assets.


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 Company has included the value assigned to the
stock warrants in other long-term liabilities in the accompanying Condensed
Consolidated Balance Sheet at March 30, 2001.


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 honeycomb manufacturing facility and an
adjacent 3.2 acre parcel of land. The Company has entered into an interest rate
swap agreement with a financial institution to fix the interest rate on the tax
exempt bonds at 5.07% through 2012. The bonds require annual principal payments
of $220,000 for 2001 through 2004 and $140,000 for 2005 through 2012, and are
secured by a letter of credit agreement between the Company and a bank. On May
12, 2000, the letter of credit agreement was amended for a period extending to
May 15, 2001. As a condition of the amended agreement, ATP delivered collateral
to the bank in the form of qualified investment securities as defined with a
value of $100,000 as of the date of execution of the amendment. Additional
collateral in $150,000 increments was delivered on or before each of July 1,
August 1, September 1, and October 1, 2000. The Company is subject to several
financial and nonfinancial covenants under this financing agreement. At March
30, 2001, the Company was in violation of a financial covenant. It is
anticipated that the lender will waive this and future violations, which are
expected by the Company during 2001. However, since such future waivers are not
assured, the Company has classified the total amount of the bonds as current at
March 30, 2001. On March 16, 2001 the letter of credit agreement was extended to
August 16, 2001.


In January
2001, the Company adopted SFAS 133, Accounting for Derivative Instruments and Hedging Activities
(SFAS 133), which required the Company to record derivative financial
instruments at fair value.  The adoption of SFAS 133 had no material impact upon adoption
or on the results of operations for the quarter ended March 30, 2001.
8
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5.  EARNINGS
PER SHARE


Earnings
per share (EPS) are calculated as follows (in thousands):
|---------------------------------------------------------------------------------------------

|                                            | March 30,2001 | March 31,2000
|------------------------------------------- | ------------- | -------------
|Income from continuing operations           |               | $ 1,571      
|Less:  preferred stock dividends accrued    |               | (20          
|                                           
|Income from continuing operations available |              
|for common shares                           |               | $ 1,551      
|                                           
|                                            |              
|Loss from discontinued operations           |               | $           
|                                           
|                                            |              
|Net income                                  |               | $ 1,571      
|Less:  preferred stock dividends accrued    |               | (20          
|                                           
|Net income available for common shares      |               | $ 1,551      
|                                           
|Weighted average number of common shares    |              
|outstanding:                                |              
|Basic                                      |               | 5,443        
|Add: assumed stock conversions, net of      |              
|assumed treasury stock purchases:           |              
|stock options                              |               | 303          
|stock warrants                             |               | 113          
|                                           
|Diluted                                    |               | 5,859        
|                                           

|9
|-

|6.  SEGMENT
REPORTING


Segment
financial information is summarized as follows (in thousands):
|----------------------------------------------------------------------------------------------

|                                        | QuarterEnded
|--------------------------------------- | ------------
|
|Revenues (all from external customers): |             
|Aerospace and Defense                   |             
|Commercial Composites                   |             
|Other operating segments                |             
|                                       
|Total                                   |             
|                                       
|                                        |             
|Operating income (loss):                |             
|Aerospace and Defense                   |             
|Commercial Composites                   |             
|Other operating segments                |             
|Corporate                               |             
|                                       
|Total                                   |             
|                                       

|7.  COMPREHENSIVE
INCOME


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. The Companys other comprehensive
loss for the quarters ended March 30, 2001 and March 31, 2000 consisted of
foreign currency translation adjustments totaling $86,000 and $37,000,
respectively. Comprehensive income totaled $1,485,000 and $70,000 for the
quarters ended March 30, 2001 and March 31, 2000, respectively.


8. 
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 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 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 March 30, 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, the Company has been notified of an investigation by the United
States Securities and Exchange Commission regarding these matters. The Company
and management are cooperating fully with these investigations. The outcomes of
these investigations are uncertain at this time.
10
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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 January 2001, the lawsuits were
consolidated and 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. The Company intends to defend itself vigorously. It is not
possible to predict the impact that these lawsuits may have on the Company, nor
is it possible to predict whether any other suits or claims may arise out of
these matters in the future. However, it is possible that the present or future
lawsuits, and any investigations or proceedings arising out of the same or
related facts, depending on their outcome, could have a material adverse impact
on the Companys financial condition or results of operations in one or
more future periods.
11
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 2.  Managements
Discussion and Analysis of Financial Condition and Results of Operations


The
following discussion and analysis should be read in conjunction with the
Condensed Consolidated Financial Statements and Notes thereto included elsewhere
herein.



Discontinued
Operations


On
June 30, 2000, the Company adopted a formal plan to sell its Structural Core
Materials segment, which consists of the operations of the Alcore, Inc. and
Alcore Brigantine S.A. subsidiaries. Operating results of the Structural Core
Materials segment are shown separately as a discontinued operation in the
accompanying Condensed Consolidated Financial Statements. See Note 2 of the
Condensed Consolidated Financial Statements of the Company.



Results of
Operations


Quarter Ended March 30, 2001 Compared with the Quarter Ended March 31, 2000


Revenues
for the quarter ended March 30, 2001 increased $1.0 million compared to the
quarter ended March 31, 2000, or 2.4%, from $41.3 million in 2000 to $42.3
million in 2001. The increase in revenues was primarily attributable to
increased sales on Aerospace and Defense programs, including the Volcano
launcher system and the Lightweight Camouflage Screen Systems (LCSS).


Gross
profit as a percentage of revenues was 22.3% in the first quarter of 2001,
compared to 21.9% in the first quarter of 2000. The increase was primarily
attributable to improved profitability resulting from a more favorable mix of
sales.


General
and administrative expenses for the first quarter of 2001 totaled $5.6 million,
compared to $5.5 million in the first quarter of 2000. As a percentage of
revenues, general and administrative expenses decreased from 13.3% in 2000 to
13.2% in 2001. The reduction of general and administrative expenses as a
percentage of revenues is primarily attributable to the increased revenues in
2001.


Operating
income was $3.9 million, or 9.1% of sales, for the first quarter of 2001,
compared to $3.6 million, or 8.6% of sales, for the first quarter of 2000. The
increased operating income results from the combination of increased revenues
and gross profits and relatively flat general and administrative expenses.


Interest
expense in 2001 increased $218,000 for the first quarter, from $761,000 in 2000
to $979,000 in 2001, primarily the result of higher interest rates in effect
during 2001 compared to the same period of 2000.


Other
expense consists of certain legal and other costs incurred in connection with
the Companys governmental investigations relating to Alcore and a class
action shareholder lawsuit.


Income
taxes decreased $95,000 for the quarter, reflecting the relative change in
income before taxes. The effective income tax rate for continuing operations was
38.5% for all periods reported.


Total
loss from discontinued operations decreased $1.6 million for the first quarter
of 2001 compared to the first quarter of 2000. Operating losses incurred by the
Structural Core Materials segment during the first quarter of 2001 were charged
to the Companys reserve for loss on disposal of segment recorded as of
December 31, 2000. As a result, there was no loss from discontinued operations
reflected on the Companys Condensed Consolidated Statement of Operations
in 2001.
12
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|Financial
Condition and Liquidity


Cash
flow provided by operations was $2.1 million for the first quarter of 2001
compared to $1.2 million for the same period in 2000. Working capital, excluding
short-term debt balances, decreased $1.3 million in the first quarter of 2001 to
$50.9 million. Changes in working capital during the quarter ended March 30,
2001 included: (i) an increase of $1.8 million in accounts receivable, resulting
primarily from an increase in revenues in the last month of the quarter, (ii) an
increase of $2.6 million in accounts payable and accrued expenses, reflecting an
increase in payments in advance from certain customers on long-term contracts
and increased inventory levels, (3) an increase of $1.0 million in inventories,
reflecting generally higher business activity levels, (4) a decrease of $0.8
million in prepaid income taxes resulting from the application of prior year
prepaid tax balances to satisfy tax liabilities generated by income earned in
2001 and (5) a decrease of $0.7 million in other working capital components. Net
cash used in investing activities totaled $0.5 million in the first quarter of
2001 and resulted exclusively from capital expenditures.


The
Companys primary loan agreement includes a total credit facility of $45.1
million consisting of: (1) $27.0 million of revolving credit against eligible
receivable and inventory balances, (2) a $15.9 million term loan and (3) a $2.2
million capital equipment loan. As of March 30, 2001, the Company had
approximately $4.5 million of unused borrowing availability on this credit
facility, net of $2.1 million of reserves against the revolving loan borrowing
base for outstanding stand-by letters of credit commitments ($1.4 million) and
other items ($0.7 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%. Interest is
paid monthly in arrears on all loans. The term loan is payable quarterly based
on a seven-year amortization period. The equipment loan is payable monthly based
on a five-year amortization period. The credit facility matures on October 31,
2003.


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 at
maturity. 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
warrants are exercisable at any time prior to the fifth anniversary of the
credit facility closing. Alternatively, at any time after 18 months from the
closing, but prior to the expiration of the warrants, the lender may elect to
require the Company to repurchase each warrant for an amount equal to 10% of
ATPs EBITDA (earnings before interest, taxes, depreciation and
amortization) divided by 320,000 (the Put Option). The Put Option is
subject to a maximum cap of $1,750,000. In the event of an exercise of the Put
Option resulting in a repurchase price of $1,000,000 or greater, the Company has
the right to satisfy up to 50% of the obligation by issuing a promissory note to
the lender, with principal payments amortized evenly over 18 months. In
addition, the Company has a call right in the event that the holders of the
warrants initiate a demand registration or elect to exercise their piggyback
registration rights in accordance with the agreement. The loan is secured by
substantially all of the Companys assets.
13
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|At
March 30, 2001, the Companys backlog of orders and long-term contracts was
approximately $561 million, compared to $559 million and $539 million at
December 31, 2000 and March 31, 2000, respectively. The backlog includes firm
released orders of approximately $175 million, $156 million and $133 million at
March 30, 2001, December 31, 2000 and March 31, 2000, respectively.


As
discussed above, the Company has made capital expenditures totaling $0.5 million
during the first quarter of 2001, which have been financed by increased
borrowings under the revolving loan portion of the Companys credit
facility. The Company invested approximately $13.8 million 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, management
believes that future short-term capital spending requirements will be limited to
a normal sustaining maintenance level plus a relatively low amount of
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 critical to the Companys growth.


The
Company also anticipates its plan to sell its Structural Core Materials segment
will generate additional future cash proceeds. The Company presently anticipates
disposal of the segment during the second quarter of 2001. See Note 2 to the
Condensed Consolidated Financial Statements of the Company.


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 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.


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.


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



Recent
Accounting Pronouncements


The
Company adopted the provisions of SFAS No. 133 effective beginning January
2001. The new Statement requires all derivatives to be recorded on the balance
sheet at fair value and establishes accounting treatment for three types of
hedges: hedges of changes in the fair value of assets, liabilities or firm
commitments, hedges of the variable cash flows of forecasted transactions, and
hedges of foreign currency exposures of net investments in foreign operations.
The adoption of this standard had no material impact upon adoption or on the results of
operations for the quarter ended March 30, 2001.
14
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|Forward
Looking Statements  Cautionary Factors


This
Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are those that do not state historical fact and are inherently
subject to risk and uncertainties. The forward-looking statements contained herein
include, without limitation, statements about the Companys expectations, beliefs,
intentions, or strategies regarding the future, and are based on current expectations and
information available to the Company. Such forward-looking statements entail various
risks and uncertainties which could cause actual results to differ materially from those
projected in such forward-looking statements. Such risks and uncertainties, which can
cause actual results to differ materially from those described herein, include the risks
and uncertainties associated with the pending governmental investigations and litigation
involving the Company. For additional information identifying such risks and
uncertainties, see the Companys 2000 Annual Report on Form 10-K (Item 7, under the
heading Factors Affecting Future Operating Results).




Item 3.  Quantitative
and Qualitative Disclosures About Market Risk


The
Company is exposed to changes in interest rates primarily relating to its $45.1
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 March 30, 2001, the Company had
$38.7 million outstanding under the credit facility at a weighted-average
interest rate of 8.42%.


In
addition, the Company has $1,945,000 of bonds payable at March 30, 2001 for
which it has entered an interest rate swap agreement with a financial
institution to fix the interest rate at 5.07% through the year 2012. In January 2001,
the Company adopted SFAS 133, which required the Company to record derivative financial instruments
at fair value.   The adoption of SFAS 133 had no material impact upon adoption or on the results of
operations for the quarter ended March 30, 2001.


The
Company has not entered into transactions which subject it to material foreign
currency transaction gains and losses.
15
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|PART II OTHER
INFORMATION



Item 1.  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 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 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 identified 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 March 30, 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, the Company has been notified of an investigation by the United
States Securities and Exchange Commission regarding these matters. The Company
and management are cooperating fully with these investigations. The outcomes of
these investigations are uncertain at this time.


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 January 2001, the lawsuits were
consolidated and 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. The Company intends to defend itself vigorously. It is not
possible to predict the impact that these lawsuits may have on the Company, nor
is it possible to predict whether any other suits or claims may arise out of
these matters in the future. However, it is possible that the present or any
future lawsuits, and any investigations or proceedings arising out of the same
or related facts, depending on their outcomes, could have a material adverse
impact on the Companys financial condition or results of operations in one
or more future periods. The Company has not recorded any liability for these
lawsuits as of March 30, 2001.
16
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|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 adverse effect upon the cash
flows, earnings or competitive position of ATP.



Item 2. 
Changes in Securities and Use of Proceeds


Not
applicable.



Item 3.  Defaults
Upon Senior Securities


Not
applicable.



Item 4. 
Submission of Matters to a Vote of Security Holders


Not
applicable.



Item 5.  Other
Information


Not
applicable.



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

| |  | (a) |  | Exhibits
| |  | --- |  | --------

| | Not
applicable.
| | ---------------

| |  | (b) |  | Reports
on Form 8-K.
| |  | --- |  | --------------------

| | Not
applicable.
| | ---------------

|17
|--

|SIGNATURES


In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                    | 
|------------------- | 
|                    | 
|                    | 
|                    | 
|                    | 
|Dated: May 11, 2001 | 
|                    | 
|                    | 

|18
|--